to whether or not to take enforcement action, but is not necessarily
seeking access to privileged and confidential information.

Item 12: ``With respect to cases where enforcement action is taken, is
the state actually exercising its civil penalty authority? Does the
amount of the civil penalties assessed reflect the seriousness of the
incident? Are remedial orders given to the violator legally
enforceable?''

    AGA, API and AOPL supported the focus on utilization of civil
penalties to enforce excavation damage prevention laws. API and AOPL
supported PHMSA's proposed threshold criteria to determine whether a
state has established and exercised authority to assess civil penalties
for violation of one-call laws. They noted that most of the other
criteria listed in the ANPRM derive from these criteria and demonstrate
that laws are in place and being enforced.
    AGA and others, including several pipeline operators, commented
that fines and penalties should be significant enough to affect
behaviors, yet they should not be so high that they give excavators
incentive to be deceitful or fearful of reporting damages due to the
potential repercussions. They consider that fines and penalties should
escalate for repeat and willful violators, particularly those who have
a history of being counseled on the importance of adhering to all safe
digging laws and practices. They also commented that the maximum fine
or penalty for any Federal administrative enforcement actions taken
within state jurisdiction should be no more than the maximum amount
cited in the state law, even if that state's enforcement has been
deemed inadequate. They commented that maximum penalties in 49 U.S.C.
60122(a) should not be used for excavation damage prevention law
enforcement as they are excessive for excavation damage prevention
programs and can have adverse unintended consequences.
    Nicor commented that the state's one-call statute should set forth
aggravating or mitigating factors in determining the civil penalty.
They also commented that when considering a history of noncompliance,
excavator violations should not aggravate the penalty calculation for
locating and marking violations, and vice versa, and that penalty
assessments should be transparent to all excavators.
    Paiute Pipeline and Southwest Gas Corporation commented that
PHMSA's evaluation of a state's enforcement program should consider
whether the state has the ability to exercise its authority to assess
civil penalties and whether it is fair and consistent in doing so. They
also noted that not all damage incidents warrant financial penalties,
and PHMSA should not limit its review to only penalties of a financial
nature. They acknowledged that civil penalties are part of an effective
excavation damage prevention program; however, they commented that in
some states excavation damage prevention training has been effectively
mandated in lieu of civil penalties.

Response

    PHMSA's primary interests with regard to state civil penalties for
violations of excavation damage prevention law are that: (1) Civil
penalty authority exists within the state, and 2) the state uses civil
penalty authority to deter violation of state excavation damage
prevention laws. PHMSA proposes to assess these two factors through a
review of state law/regulation and records of past enforcement actions.
PHMSA does not intend to hold states to an overly-prescriptive
construct of civil penalty authority or to an overly-prescriptive civil
penalty fee schedule. Sanctions other than civil penalties may have the
desired effect of deterring non-compliant behavior. State excavation
damage prevention enforcement records should be made available to the
public to the extent practicable. PHMSA seeks comment on these issues.

Item 13: ``Are annual statistics on the number of excavation damage
incidents, investigations, enforcement actions, penalties proposed, and
penalties collected by the state made available to PHMSA and the
public?''

    AGA agreed that statistics are useful to understand trends and
areas deserving attention, that past enforcement actions are one
barometer of the enforcement activity in the state, and that past
reports of enforcement against excavators should be reviewed for the
type of excavator that is being fined or penalized. AGA also

commented that other items should be considered to determine whether or
not enforcement has been active and effective, but noted that many
states only collect data on excavation damages involving natural gas
pipelines. AGA commented that each state should be expected to
establish some clear, minimum reporting guidelines for the state
enforcement agency, but that PHMSA should not expect the various state
reporting guidelines to be uniform.
    NAPSR commented that although annual statistics are important,
PHMSA should not place much emphasis on comparing the states against
each other on the basis of these parameters. It noted that there is
bound to be significant variability between the states due to factors
including, but not limited to, the volume of excavation activity in the
state, the density of the underground infrastructure, the number of
one-call centers, the resources available to the entity in charge of
enforcement, and the political climate in the state with respect to the
prevailing preference as to what the excavation damage prevention law
should cover.
    Paiute Pipeline and Southwest Gas Corporation commented that having
data available to the public is not the standard for which a state's
program should be judged. They consider that damage incident
investigations, enforcement actions, and penalties proposed or
collected should not be provided to the general public without
providing a clear and concise description of the information, as most
of the general public has limited knowledge of, or experience with, the
information that would be provided.
    Nicor commented that statistics collected should include damages by
all excavators and on all facilities, not just pipelines. Paiute and
Southwest Gas Corporation noted that data from the CGA DIRT could be
used for analyzing excavation damages; however, providing damage
information to DIRT is not mandated in all states.
    NUCA commented that timely gathering of damage data is important,
as is the type of information collected. However, NUCA considers that
damages incurred by the excavator should be collected as well. This
should include costs to the excavator in cases where a facility is hit
because of a failure to locate and mark facilities accurately in a
timely fashion, including any damage to the excavator's equipment or
property, and any downtime incurred by the excavator while the true
location of underground facilities is determined.
    Washington Transportation Builders Association commented that its
industry is concerned that contractors will be singled out for
incidents that were caused by others, such as mismarked utilities and
failure to address utilities during the design process, and that PHMSA
should determine what are appropriate ``annual stats on damage
incidents'' to report to the public.
    API and AOPL commented that the reporting requirements suggested as
a basis for evaluation could have the effect of requiring duplicate (or
even triplicate) reporting for pipeline operators and/or other
regulated entities. They noted that given that recently proposed
revisions to PHMSA's own accident and incident reports (7000.1 and
7000.2) would collect, and CGA's DIRT report already collects,
significant information about excavation damage incidents, PHMSA should
consider changing the reporting requirements by which a state program
is judged to allow for the use of the CGA or PHMSA data. Similarly, the
WUCA commented that state agencies and PHMSA should explore means to
share reported information electronically rather than imposing
additional reporting requirements.
    The Michigan Public Service Commission (PSC) commented that
reportable information should include the nature of the incident, the
cause of the incident, the extent of service interruptions, property
damage, evacuations, injuries and fatalities, and that product loss
would be factored into the total dollar amount of the incident.

Response

    Variability among the states makes it difficult to seek
standardized information pertaining to excavation damage incidents,
investigations, enforcement actions, penalties proposed, and penalties
collected. Variability also makes it difficult to compare state
enforcement programs. PHMSA does, however, propose under criterion 3
that availability of this type of information to the general public be
a factor in evaluating state enforcement programs because public
understanding and involvement of state enforcement can help to drive
more effective enforcement.

Additional Comments Related to Section IV.A

    Commenters were also invited to comment on additions and
alternatives to the items listed in the ANPRM, as noted above, that may
be equally suitable for the purpose of evaluating the adequacy of state
excavation damage prevention law enforcement programs.

Clarification

    PST and several other commenters noted that state excavation damage
prevention programs apply to many utilities besides pipelines, and that
it is unclear from the ANPRM whether a state's entire excavation damage
prevention program, including other utilities such as waterlines,
sewer, electric, etc., will be judged or whether PHMSA will only review
how excavation damage prevention is working for pipelines. PST
commented that it is also unclear whether PHMSA intends to expand its
authority to include damage to utilities other than pipelines, and if
not, what effect PHMSA's selective enforcement of only the part of the
program regarding pipelines will have on a state's more comprehensive
excavation damage prevention program. Will states be driven to create
two separate excavation damage prevention programs? What would be the
unintended consequences of not regulating utilities other than
pipelines? Similarly, the TRA commented that the proposed rule should
distinguish between enforcing one-call laws and pipeline facility
excavation damage prevention. TRA noted that one-call laws in many
states cover many different types of utilities, and that it appears
that a state may meet the requirements stated in the PIPES Act by
enforcing pipeline facility excavation damage prevention without
exercising the same level of authority over other underground
utilities, such as water, sewer, telecommunications and electricity.
    PST also commented that it concurs with the general criteria set
out in the ANPRM for determining whether a state's enforcement program
is adequate, and the use of the nine elements from the PIPES Act as a
foundation for excavation damage prevention law enforcement programs.
However, it noted that PHMSA also needs to consider and clarify:
    1. Whether each criterion is of equal importance or if a relative
weight should be assigned to each;
    2. Whether the failure of a state to meet a single criterion
results in the state's damage prevention program being inadequate; and,
    3. Whether the failure to meet certain ``core'' criteria or attain
a ``passing'' score (based on relative weights of each criterion) will
trigger an ``inadequacy'' determination.

Response

    PHMSA proposes to review the adequacy of states' excavation damage
prevention law enforcement programs.

However, PHMSA's regulatory authority extends only to pipelines subject
to PHMSA's pipeline safety regulations. PHMSA does not have the
authority to enforce Federal excavation damage prevention standards in
cases of damage to underground utilities other than pipelines. Despite
PHMSA's limited regulatory authority, PHMSA believes that if states
implement effective enforcement programs that are driven by the goal of
preventing excavation damage to pipelines, other utilities and
excavation damage prevention stakeholders will benefit. PHMSA does not
intend for states to develop separate excavation damage prevention
programs for pipelines and other utilities.
    PHMSA proposes in this notice to use seven criteria to evaluate
state enforcement programs. PHMSA, however, will not take a one-size-
fits-all approach. Because of the wide variability among state
enforcement programs, PHMSA believes these reviews must take into
account the experiences of each state and limit comparison between
state programs.
    PHMSA's primary goal in evaluating the adequacy of state excavation
damage prevention law enforcement programs is to seek clear evidence
that:
     State laws/regulations are adequate to protect underground
infrastructure from excavation damage;
     The state has a designated authority responsible for
enforcement of the excavation damage prevention law;
     The enforcement authority has a reliable means of learning
about excavation damage incidents and possible violations of state
excavation damage prevention law; and,
     Enforcement authority is exercised effectively, including
the use of civil penalties, to ensure compliance with state excavation
damage prevention law.
    There are multiple ways a state can meet the more subjective
criteria. Reviews of state enforcement programs would entail detailed
conversations with excavation damage prevention stakeholders at the
state level and must allow for some flexibility to permit a thorough
and accurate review of state enforcement programs.
    PHMSA strongly believes that excavation damage prevention law
enforcement is a state responsibility. Overly prescriptive Federal
criteria for the review of state enforcement programs would be counter
to this principle. This rulemaking is intended to provide limited,
backstop Federal administrative enforcement authority regarding
excavation damage to pipelines in states PHMSA finds to have inadequate
enforcement programs and to encourage those states to enhance their
existing excavation damage prevention programs or to implement programs
to include effective enforcement through the use of civil penalties.

Criteria for Review of SDP Enforcement Programs

    AGC of Texas recommended that when evaluating the adequacy of a
state's excavation damage prevention program, PHMSA should include
criteria for a mandatory positive response system, which requires
operator and excavator participation, enforceable with penalties.
    The WUCA commented that state excavation damage prevention law
enforcement processes should include an appeals process that includes
an appeals board with members who have adequate knowledge of design and
construction administration processes, allowing them to assign
responsibility to the appropriate party. They commented that failure to
assign responsibility to the appropriate parties, such as operators,
one-call centers, locators and design engineers, creates uncontrollable
risk for contractors.
    API and AOPL commented that PHMSA should establish clear guidelines
and criteria for determining which state excavation damage prevention
programs are effective and effectively enforced, and noted that these
criteria should be based on transparent data, where available, but
should not impose additional data collection on the states. AGA noted
that the most important criteria are the ones involving timely
reporting of pipeline damages, a universal requirement for all parties
to notify the one-call center prior to excavation, establishment of a
single agency responsible for oversight of excavation damage prevention
laws, and an effective enforcement process. AGA also commented that the
criteria regarding the evaluation of state programs, as listed in the
ANPRM, appears thorough, but acknowledged that how the criteria are
weighted and actually evaluated is open to several different
approaches.
    Several commenters expressed support for the need and intent of the
proposed rulemaking, the development of criteria by which to evaluate
state excavation damage prevention programs, and Federal administrative
enforcement, if needed, when state enforcement is deemed inadequate.
EPPG commented that a ``standard model'' for enforcement of excavation
safety is needed to ensure existing state programs are not audited
against unsettled standards. However, EPPG commented that Federal
administrative enforcement intervention should not occur prior to a
state being audited and provided an opportunity to improve on any
deficiencies.
    NAPSR expressed the view that most of the items listed in the ANPRM
are subjective and that additional examination of the assessment
factors may be required to further eliminate some of the subjectivity.
Alternatively, they suggested there may be need to develop some non-
mandatory guidance to provide added detail.
    PST commented that if PHMSA decides to create a situation where a
state can be found to have a program that is ``nominally adequate,''
PHMSA needs to define clearly what this means and how a state can
achieve an ``adequate'' status. PST's preference would be for PHMSA to
clearly communicate possible areas where improvements could be made in
a state's program rather than to create a hard to define status of
``nominally adequate.'' They encouraged PHMSA to create criteria that
are clear enough that a state's program is either adequate or
inadequate.
    Spectra Energy commented that PHMSA criteria should weigh whether
state excavation damage prevention laws include requirements for
excavators to notify the state and the pipeline operator if they damage
a pipeline during excavation and whether enforcement procedures exist
for instances of non-compliance.
    TRA commented that the threshold criterion for evaluating the
adequacy of a state's excavation damage prevention program should
include the lack of exemptions to the state's excavation damage
prevention laws, such as exemptions for state agencies, municipalities,
agricultural entities, railroads, and other groups of excavators. TRA
cautioned, however, that it, and likely other state regulatory
agencies, does not have authority to make changes to the state pipeline
excavation damage prevention law. To minimize exemptions, much effort
and time must be expended to reach consensus regarding the entities to
be exempted and to determine the extent of an exemption. While TRA
agrees with the threshold criteria noted in the ANPRM, TRA asserted
that as part of the evaluation to determine the adequacy of a state's
enforcement of its pipeline excavation damage prevention law, the
state's record of progress in strengthening its law should be
considered. Every effort should be made to allow a state to continue
working with stakeholders to improve pipeline excavation damage
prevention laws without Federal intervention.

    AGA commented that PHMSA should build flexibility into how it
applies the performance criteria for the 13 criteria listed in the
ANPRM. AGA noted that several of the items listed do not lend
themselves to a simple rating or score, or even a definitive `yes' or
`no' evaluation. For example, a state may require all parties to call
before they dig, but it may give certain exemptions when the type of
excavation involves the use of hand tools, noting that CGA's 2008 DIRT
report indicates that 22 states fall into this category. AGA wondered
how this type of scenario would affect a state's evaluation.

Response

    PHMSA does not propose to include a criterion for a mandatory
positive response system that requires operator and excavator
participation. PHMSA believes this criterion is outside the scope of
this rulemaking.
    Effective excavation damage prevention enforcement programs require
adequate processes for identifying the at-fault party in damage
incidents to enable action to be taken against the at-fault party in
any enforcement case. PHMSA does not consider this proposed rule to
unfairly target excavators for enforcement action, but instead to
address an enforcement gap in pipeline safety excavation damage
prevention.
    PHMSA does not propose to make a distinction between ``nominally
adequate'' and ``adequate'' state enforcement programs. The proposed
criteria for evaluating state enforcement programs are designed to
establish the threshold for minimum adequacy of state enforcement
programs. PHMSA intends to deem state enforcement programs either
adequate or inadequate through use of the review criteria and processes
outlined in this NPRM. PHMSA does not propose to use weighted criteria
in the evaluation.

B. Administrative Process

    Section IV.B of the ANPRM sought comment on the administrative
procedures available to a state that elects to contest a notice of
inadequacy, should it receive one. It noted that the procedures would
likely involve a ``paper hearing'' process where PHMSA would notify a
state that it considers its excavation damage prevention law
enforcement inadequate (i.e., following its annual review), and the
state would then have an opportunity to submit written materials and
explanations. PHMSA would then make a final written determination
including the reasons for the decision. The administrative procedures
would also likely provide for an opportunity for the state to petition
for reconsideration of the decision, and would likely allow the state
to show later that it has improved its excavation damage prevention law
enforcement program to an adequate level and request that PHMSA
discontinue Federal administrative enforcement in that state.
    The ANPRM asked for comments regarding whether the described
process would strike the right balance between the Congressional
directive to PHMSA to undertake Federal administrative enforcement,
where necessary, while providing a state with a fair and efficient
means of showing that the state's enforcement program is adequate.
    Section IV.B suggested that PHMSA would likely evaluate state
excavation damage prevention enforcement programs on an annual basis,
considering factors such as those set forth in Section IV.A. It noted
that this annual review would likely include a review of all of the
enforcement actions taken by the state over the previous year.
    Section IV.B noted that if the state's enforcement program is
ultimately deemed inadequate in its most recent annual review, direct
Federal administrative enforcement against an excavator who violated
Federal requirements and damaged a pipeline in that state could proceed
without further process.
    The ANPRM also asked if the process should enable PHMSA to evaluate
a state enforcement decision concerning an individual incident during
the course of the year and potentially conduct Federal administrative
enforcement where a state deemed ``nominally adequate'' in its most
recent annual review decided not to undertake enforcement for an
incident that PHMSA believes may warrant enforcement action.

Process for Determining the Adequacy of State Enforcement

    PUCO commented that the administrative due process for determining
whether a state program is ``inadequate,'' as stated in the ANPRM, is
very general and appears to be an informal process. PUCO noted that it
is unclear whether the determination that a state program is
``inadequate'' is to be made by the head of PHMSA, PHMSA regional
managers, a board or panel at PHMSA, or some other entity altogether.
    The WUCA commented that PHMSA should provide information and
guidance that will clearly outline what the state must do to create an
acceptable damage enforcement program by PHMSA's standards.
    The Greater Chicago Damage Prevention Council commented that it
endorses the development and implementation of best practices to
prevent damage to pipelines and other underground facilities, but that
it opposes enactment of the proposed rule. Its opposition is based on
the following regarding Section IV, Paragraph B--Administrative
Process: The proposed rule: (a) Fails to use imperative language and
speaks in generalities, such as, what ``the process would likely
involve;'' (b) is devoid of elements mandating PHMSA provide those
states deemed ``inadequate'' or ``nominally adequate'' with detailed
evaluation results that support PHMSA's determination; (c) fails to
provide adequate due process in the appeal of PHMSA's determination; in
fact, there is no appeal process identified relative to PHMSA's
``final'' determination, other than to try again next year; (d) offers
the state no opportunity whatsoever to undertake corrective action or
improvement prior to PHMSA undertaking enforcement actions; and (e)
fails to ``strike the right balance between the Congressional directive
to PHMSA to undertake Federal administrative enforcement where
necessary while providing a state with a fair and efficient means of
showing that the state's enforcement program is adequate.'' The Council
also noted that the proposed rule fails to meet ``Element 7,''
stipulated in the Rule as mandatory for a ``comprehensive damage
prevention program.'' The commenter noted that the proposed rule is
limited to PHMSA regulated pipelines and excludes all other underground
facilities. It considers that by undertaking enforcement actions
relating only to pipelines, PHMSA creates a de facto dual enforcement
system, which in itself is a key criterion in determining whether an
enforcement program is adequate. Therefore, the proposed rule
establishes an ``inadequate enforcement program'' and should not be
implemented.

Response

    This NPRM proposes a clearly-defined process for determining the
adequacy of state enforcement programs. PHMSA is authorized by Congress
through the PIPES Act of 2006 to pursue this rulemaking. The ANPRM was
designed to solicit input from interested stakeholders on how to
construct the proposed rule. To the extent the ANPRM used the term
``likely'' in discussing a given approach, it only means that PHMSA has
not made any final decisions on anything at the ANPRM or NPRM stage.
Once the final

rule is published, the word likely will not appear in the text of any
final requirement.
    PHMSA agrees that specific reasoning should be provided for any
declaration of state excavation damage law enforcement program
inadequacy. In addition, PHMSA would evaluate states' progress on a
yearly basis to assess adequacy. PHMSA proposes to make public the
results of the reviews of state excavation damage prevention law
enforcement programs. As noted above, comparisons of states are not
practical given the wide variety seen in state enforcement programs.

Findings

    Missouri PSC commented that a state's enforcement program should
either be deemed adequate or not adequate; a process that would set
``levels'' of adequacy would simply be more subjective. Similarly, API
and AOPL noted that a state either has an adequate program or it
doesn't, and that the state should not be held in ``limbo'' and should
not constantly be second-guessed. They agree that if a state program is
deemed deficient then PHMSA should work with the state to make it
better.
    The WUCA commented that if a written statement is provided to the
state notifying it of an inadequate excavation damage prevention law
enforcement program, specific reasoning must be provided for the
ruling. Additionally, rather than a ``likely'' opportunity to provide a
showing at a later time, if deemed inadequate, a clear policy should be
developed.
    AGC commented that the administrative procedures should include
public notice of PHMSA's determination of inadequacy in the Federal
Register with a detailed explanation of the circumstances justifying
PHMSA's determination.
    Paiute Pipeline and Southwest Gas Corporation commented that PHMSA
should not pursue a comparison of one state to another, but should only
evaluate individual states through review of their excavation damage
prevention programs, including state laws and enforcement authority.

Response

    PHMSA is proposing to have state excavation damage prevention law
enforcement programs be deemed either adequate or inadequate; PHMSA is
not proposing to establish levels of adequacy. PHMSA intends to
continue its SDP grant program, one-call grant program, and various
other initiatives designed to assist states with improving their
excavation damage prevention programs. These initiatives were described
in more detail in the ANPRM.

Federal Administrative Enforcement

    Regarding the precept in the ANPRM, ``If the state's enforcement
program is ultimately deemed inadequate, direct Federal administrative
enforcement against an excavator who violated the state's damage
prevention law and damaged a pipeline in that state could proceed,''
AGA commented:
     PHMSA should also consider what will trigger Federal
administrative enforcement action. Is damage the only trigger or is
there a potential for enforcement action due to repeated complaints
from operators of reckless excavation activities? (e.g., no
notification to 811; failure to hand-expose pipeline; etc.)
     The process should not allow PHMSA to evaluate a state
enforcement decision that has already been made.
     Only states determined to have an inadequate program
should have the possibility of PHMSA intervention.
    Like AGA, APGA, AGC, others commented that PHMSA should not
evaluate a state's enforcement decision concerning an individual damage
incident in a state where PHMSA has found the enforcement program to be
adequate or nominally adequate. Instead, APGA suggested PHMSA should
consider whether certain high profile events received adequate
enforcement action by the state in the course of its periodic review of
the state's overall enforcement program.
    NAPSR strongly suggested that only the states with inadequate
programs be subject to PHMSA examination of enforcement decisions made
at the state level, and only after PHMSA determines the principal
factor of the state's inadequacy has been repeated failure to enforce
the law against clear cases of egregious violations. Similarly, Nicor
stated that if a state is deemed nominally adequate, the state's
enforcement decision concerning an individual event should be upheld,
but PHMSA should provide guidance to that state so that it improves its
program for the next review. EPPG noted that if PHMSA took action in a
state that had passed the most recent assessment of its enforcement
program, it would undermine the purpose of the assessment itself.
    EPPG commented that PHMSA should define how enforcement
responsibility between PHMSA and the state would be implemented. EPPG
noted that as important as it is to identify and intercede in states
found to have inadequate one-call enforcement, it is also important to
clarify how enforcement responsibility should be conducted elsewhere.
Excavators should not be exposed to multiple, divergent and possibly
conflicting enforcement authorities and standards, and the standards
and procedures should clearly define which agency will have
jurisdiction.
    NUCA commented to reemphasize the importance of balanced
enforcement in that Federal administrative enforcement against an
excavator who violated the state's excavation damage prevention law
should be coupled with Federal administrative enforcement against
pipeline operators who fail to locate and mark their pipelines
accurately in accordance with the law.
    API and AOPL commented that they question the efficacy of direct
Federal administrative enforcement against an excavator who violates a
state's excavation damage prevention law and damages a pipeline. They
noted that state one-call laws vary with respect to elements such as
notification time, ticket life, tolerance zone, and white lining.
Without a Federal minimum standard to support Federal administrative
enforcement, they do not believe it is appropriate or practical for
PHMSA to enforce state laws evenly or consistently.
    AGC noted that the goal of enforcement should be to fairly arrive
at rational outcomes, such as education and penalties that correspond
to the gravity of the violation, without imposing unnecessarily high
transaction costs on any participant, including the enforcement
authority.
    PST offered comments/questions regarding consequences to states
that choose to be inadequate. PST noted that ``PHMSA should clearly
define in the NPRM what the consequences are for a state that is found
to have an ``inadequate'' or ``nominally adequate'' excavation damage
prevention program. Will excavation damage prevention grants/monies be
the only thing affected or will other state funding and authority be
penalized as well?'' Additionally, PST noted ``While we agree with
PHMSA and Congress that states have a responsibility to ensure a system
is in place to protect underground pipelines, what are the consequences
if a state chooses to ignore that responsibility in hopes that PHMSA
will take it on? Will the financial consequences or loss of authority
be greater than the possible short-term financial benefits to a state
faced with a budget crisis? Is PHMSA staffed and funded adequately to
take on such a greater enforcement role?''

Response

    PHMSA intends to evaluate the existence and adequacy of state
excavation damage prevention law enforcement programs. PHMSA is
proposing that this will be done, in part, by reviewing state
enforcement records to ascertain whether a state is effectively
applying its enforcement authority, assuming such authority is provided
for in state excavation damage prevention law. PHMSA proposes to
evaluate states' pipeline damage investigation practices to ensure they
are adequate to determine the at-fault party for excavation damage
incidents. As noted, excavators will be subject to Federal
administrative enforcement only in states determined to have inadequate
enforcement programs, and PHMSA is proposing to make decisions
regarding Federal administrative enforcement in those states on a case-
by-case basis.
    Balanced enforcement of excavation damage prevention laws is
important. As appropriate, PHMSA is proposing to enforce either this
rule (once it is final) against excavators or existing regulations
applicable to pipeline operators and their contractors against the at-
fault party. PHMSA has enforced existing excavation damage prevention
regulations applicable to pipeline operators. PHMSA believes that
enforcement of existing excavation damage prevention regulations
applicable to pipeline operators, at both state and Federal levels, is
a deterrent to non-compliant behavior and reduces excavation damage to
pipelines.
    PHMSA does not have authority to enforce state laws and has
included the proposed Federal requirements for excavators in this
proposed rulemaking.
    PHMSA proposes to consider state enforcement program adequacy to be
a factor in determining state pipeline safety grant funding levels
(after a lengthy grace period). PHMSA believes this approach will
provide a financial disincentive for states to disregard their
enforcement responsibility. PHMSA is seeking comment on this
conclusion.

Appeals

    Several commenters, including API, AOPL, PUCO, and Michigan
Consolidated Gas, commented that states should be provided
opportunities to respond to and appeal PHMSA's decisions on the
adequacy of a state enforcement program. PUCO noted that procedures for
determining the adequacy of a state's program and the process for
appeals for reconsideration should be more fully described, and include
a requirement for PHMSA to review and respond to any petition for
reconsideration within a certain time frame. API, AOPL, Nicor, and
Panhandle Energy support the development of administrative procedures
that would be available for states that elect to contest a notice of
inadequacy. Nicor noted that this would afford the state a fair and
efficient means of showing that the enforcement program is adequate.
    PUCO noted that a definition of ``nominally adequate,'' a
description of how states may be qualified as ``nominally adequate,''
and a listing of the implications of this designation for state
programs should be provided.
    MidAmerican Energy noted that the ``paper hearing'' process
described in the ANPRM would be appropriate.

Response

    The criteria PHMSA will use to determine the adequacy of state
enforcement programs and the administrative process for a state to
appeal a determination of inadequacy are proposed in this NPRM.

Civil Penalties

    AGC commented that PHMSA must consider education as an alternative
or supplement to civil or other penalties, and in cases where financial
penalties are assessed revenues generated must be reserved to finance
excavation damage prevention education and technologies used in support
of excavation damage prevention activities.

Response

    Enforcement tools other than civil penalties, such as compliance
orders, can be useful tools for enforcement of excavation damage
prevention laws. However, PHMSA believes that civil penalty authority
and effective use of that authority are essential components of
effective excavation damage prevention law enforcement programs. PHMSA
does not propose to require the use of sanctions other than those
provided in existing pipeline safety statutes or regulations.

Costs

    API and AOPL noted that PHMSA may consider using its grant
resources, such as the SDP grants, to encourage state compliance with
the elements of this rulemaking. That may require changes to the
existing grant criteria that could be included in a proposed and final
rule.

Response

    PHMSA agrees that the SDP grant program can be targeted to improve
state excavation damage prevention law enforcement programs, and PHMSA
does have discretion in weighting the evaluation criteria applicable to
SDP grant applications. However, PHMSA has not proposed any changes to
the SDP grant criteria in this proposed rule.

Process

    AGC commented that subsequent to public hearings, a commission
should be convened to establish a predetermined timeline in which
states must meet certain benchmarks demonstrating steps to address
inadequacies and that any penalties or enforcement be coupled with
direct enforcement against pipeline operators who fail to accurately
locate and mark facilities.
    The Texas pipeline associations commented that the first step in
the process used to determine the adequacy of a state's program should
be an evaluation of each state's program against a common set of known
factors. They commented that once PHMSA completes its evaluation, the
state should be permitted to comment on the evaluation before it is
finalized. They also consider that excavation damage prevention
stakeholders should be given an opportunity to comment on the
evaluation. When a final determination has been made and a state's
program is found inadequate in some respect, the state should be
provided an opportunity to make improvements to its program.
    API and AOPL commented that PHMSA should use a multi-step process
when determining whether a state's program is inadequate, perhaps
including preliminary determinations, interim determinations, and
eventually final determinations. They also noted that at each step of
the process, PHMSA should clearly describe, in functional rather than
prescriptive terms, changes required for a state's program to be deemed
adequate. They commented that the process for this provision should be
the same as is currently used in the state certification program and
that assessment of a state's program should be at the program level,
not at an individual case level. API and AOPL also consider that enough
time should be granted at each step of the process to allow states time
to modify their programs as needed at the legislative and/or regulatory
level. This process should, however, be completed expeditiously to
ensure that compliance is timely and the public interest is preserved.
    Similarly, PST commented that the administrative process for states
to contest notices of inadequacy described in the ANPRM seems fair to
the states. Among the concerns PST expressed, however, are the time
periods that

would be established for: (1) PHMSA to issue a notice of inadequacy
after its annual review; (2) a state to contest this notice; (3) PHMSA
to make a final written determination; (4) a state to petition for
reconsideration; and (5) PHMSA to rule on the petition for
reconsideration. PHMSA needs to strike the right balance between
waiting too long to intervene and not waiting long enough.
    The Texas pipeline associations echoed this comment in that the
opportunity for a state to make improvements must take into account an
appropriate time period for the state agency to make the required
improvements in a manner complying with state law. These time periods
will need to be tailored to each situation because some may require
legislative action while others may only require an internal agency
policy change. They noted that while Federal administrative enforcement
may be necessary in some states, reasonable efforts should be exerted
and sufficient time provided to promote adequate state-based
enforcement of excavation damage programs. They suggested that there
may be situations where PHMSA could facilitate discussions between
state stakeholders to establish a plan to address certain deficiencies.
    Missouri PSC commented that the process outlined in the ANPRM
appears to strike an appropriate balance between the Congressional
directive to PHMSA to undertake Federal administrative enforcement
while providing a state with a fair and efficient means of showing that
its enforcement program is adequate. However, Missouri PSC noted
further comments may well be necessary depending on the provisions of
the actual proposed rule.
    NAPSR questioned how PHMSA would anticipate seeking information
from other agencies in those states where the enforcement agency is not
the state pipeline safety agency?

Response

    PHMSA does not propose to convene a commission to establish a
predetermined timeline in which states must meet benchmarks
demonstrating steps to address inadequacies in their damage prevention
enforcement programs. PHMSA believes the state enforcement program
evaluation criteria proposed in this NPRM, in effect, establish
benchmarks.
    PHMSA has proposed the process for evaluation of state enforcement
programs and the process by which states may contest notices of
inadequacy. PHMSA does not propose to consider excavation damage
prevention stakeholder comments on state enforcement program
evaluations.
    PHMSA proposes to evaluate the states' enforcement programs whether
they are administered by state pipeline agencies or other state
authorities. PHMSA proposes to communicate the implications of this
proposed rule with state enforcement authorities outside of state
pipeline safety agencies, including attorneys general, state police
agencies, and other authorities, as required.
    PHMSA would plan to make its determination as to the adequacy of a
state program as soon as practicable after completion of the state
annual review. A state would then have 30 days from receipt of the
notice of inadequacy to respond.

Review Cycle

    API and AOPL noted that PHMSA should require annual reviews of
state excavation damage prevention programs, but such reviews should be
initiated after initial adequacy determinations have been completed.
They noted that annual reviews should focus on continuing effectiveness
indicators (i.e., whether or not excavation damage incidents are
declining) and not simply on whether every incident has merely been
documented and investigated.
    NAPSR commented that the frequency of review of a state excavation
damage prevention program should be tailored to the level of adequacy
initially determined for the program, using criteria included in the
final rule resulting from this ANPRM. Thus, states with the lowest
level of initial adequacy could be reviewed annually, while states with
higher levels could be reviewed less often. NAPSR also noted that the
ANPRM speaks about an annual review that will likely include a review
of all of the enforcement actions taken by the state over the previous
year, and questioned whether this would be the state liaison asking a
few additional questions during the annual evaluation or something more
substantial with extensive documentation.
    Similarly, Paiute Pipeline and Southwest Gas Corporation suggested
that if a state is found nominally adequate in its most recent annual
review, PHMSA should recommend placing the state on a staggered review
period, such as two or more years. They commented, however, that if a
state is found to be inadequate, PHMSA should recommend continuing with
an annual review to assist the state in enhancing its excavation damage
prevention program.
    Michigan Consolidated Gas commented that considering the state has
the funding and resources to administer its enforcement program, a
periodic review is acceptable, but suggested that yearly is not
necessary.
    MidAmerican Energy commented that an annual review of a state's
excavation damage prevention law enforcement program would be
appropriate with the provision that a state should be allowed to
petition PHMSA to show that its previously inadequate enforcement
program has been upgraded so that Federal administrative enforcement is
no longer required.

Response

    PHMSA agrees that annual reviews of state excavation damage
prevention law enforcement programs should include reviews of program
effectiveness indicators and is proposing this in the NPRM. However,
PHMSA believes it appropriate to include program adequacy as part of
its annual review process, but does not propose to include additional
evaluation of continuing effectiveness indicators.

Standards

    API and AOPL commented that PHMSA should consider the establishment
of minimum standards for critical elements of state one-call laws, such
as, but not limited to, notification time, tolerance zones and white-
lining (or otherwise denoting the area of intended proposed
excavation).
    EPPG and Panhandle Energy also noted that prior to an audit by
Federal authorities of any state program, a clear and understood
``standard'' should be prepared that a state can be audited against and
met. EPPG supports the ANPRM's annual audit proposal of state programs
but is concerned that this effort could draw unnecessary resources away
from PHMSA's other safety programs. Therefore, EPPG advocated a
``standard,'' which is understood by all parties that could be more
quickly used as an audit tool during the annual audit.

Response

    The criteria for review of state enforcement programs are proposed
in this NPRM and PHMSA welcomes comment on these criteria. However,
PHMSA is not proposing a model state one-call law or other audit
standard in this rulemaking.

State Resources

    APGA expressed concern that the review process may become very time
consuming for both PHMSA and the states, which would have the
unintended effect of diverting limited resources away from the
excavation damage prevention effort. APGA

considers that there should be further discussion about exactly what
this review would entail before a rule is proposed.
    Michigan Consolidated Gas commented that PHMSA should consider when
evaluating a state's enforcement program that this proposed process can
be influenced by the ability of the state to carry out enforcement
(i.e., state resources, funding, volume of complaints, etc.).
Similarly, the Michigan PSC commented that PHMSA must be flexible
depending upon the resources given to the state to provide for an
adequate program.

Response

    The state enforcement program review process should not be too time
consuming or divert resources away from excavation damage prevention
responsibilities. The review criteria and process in this proposed rule
have been written to be as simple as possible to address this concern.
However, PHMSA is seeking comment on this conclusion.
    Resources can affect the ability of a state to meet its excavation
damage prevention law enforcement responsibilities. However, PHMSA does
not propose to assess state enforcement resources, but instead to
assess state enforcement records. If state resources are insufficient
to enforce the state excavation damage prevention law adequately, state
enforcement records are likely to reflect the insufficiency.

C. Federal Requirements for Excavators

    Section IV.C of the ANPRM sought comment on the establishment of
the Federal requirements for excavators that PHMSA would be enforcing
in a state that PHMSA has found to have an inadequate enforcement
program. It noted that at a minimum the standards will reflect the
words cited in the PIPES Act regarding requirements for excavators.
    Section IV.C gave examples to which some commenters addressed
specifically, including:
     Should the Federal requirements for excavators be limited
to the minimum requirements reflected in the PIPES Act or should they
be more detailed and extensive?
     Will implementing the 911 requirement cause any unintended
consequences in practice?
     Are there suggested alternatives to these standards?
    The ANPRM also suggested that the CGA Best Practices and API
Recommended Practice 1166, Excavation Monitoring and Observation
(November 2005), could be used to inform the development of such
standards.

Federal Requirements

    Several commenters, including AGA, API, AOPL, Michigan Consolidated
Gas, and others, support establishing a Federal requirement for
excavators. They noted that the minimum requirements in the PIPES Act
and the U.S. Code are sufficient for establishing Federal requirements,
and that keeping it simple is the most effective approach. API and AOPL
commented that the proposed requirements should lead to greater
pipeline safety by making excavators more aware of their one-call
responsibilities and the consequences of failing to comply with state
laws and regulations. AGA commented, however, that the ANPRM was
unclear whether PHMSA intends to try and impose these standards on
excavators that might include homeowners, land owners, private
contractors, and other utilities.
    AGC commented that if PHMSA deems a state's excavation damage
prevention law enforcement program inadequate, the basic premises in
the ANPRM are reasonable. AGC suggested that PHMSA should refer to the
CGA Best Practices as a template for guidance standards in the absence
of appropriate state standards until a determination of the adequacy of
the state excavation damage prevention program is made.
    Similarly, EPPG fully supports the development of a Federal
requirement that PHMSA could use to determine if a state's excavation
safety program is adequate but that PHMSA should not be the sole, or
even primary, developer of this standard. A national consensus standard
should be developed by all the various stakeholders, including Federal
and state agency regulators, industry, the excavation community,
members of the public, one-call organizations, and other excavation-
affected parties.
    GulfSafe commented that setting standards for excavators would
bring some consistency to the excavation community, especially for
those excavators who consistently work in multiple states. GulfSafe
also considers it important that any prescriptive rule use the CGA Best
Practices as a foundation for the rule to gain acceptance in the
excavation community. The organization noted that the CGA Best
Practices have long been a consensus based approach that has understood
that one size doesn't fit all and has made allowances for geography and
soil types as well as local practices. Best Practices are intended to
be voluntary, not prescriptive, and there is evidence that they are
working.
    The APGA opposes establishment of Federal requirements for
excavators and considers that PHMSA should defer to existing state laws
where they prescribe excavation damage prevention requirements. APGA
considers that creating a Federal requirement that would overrule state
requirements only if the state is found not to be enforcing its
excavation damage prevention law would create confusion in both the
excavation and utility communities as to which requirements apply. APGA
noted that only where a state has no standards for such activities
should PHMSA apply Federal requirements. On the other hand, API and
AOPL consider that while conditions vary from state-to-state and that
``one size does not fit all,'' PHMSA should establish minimum
requirements through a notice and comment rulemaking process.
    MidAmerican Energy Company commented that the minimum requirements
presented in the ANPRM are an appropriate starting point, and that if
experience reveals that additional or revised requirements are
necessary, then revisions can be made based on the documented record.
However, they noted that any additional or revised standards should
consider that state excavation damage prevention laws pertain to more
than just pipelines--they pertain to all types of underground
facilities. It does not appear to be practical or prudent to approach
this set of issues soley from a pipeline-only perspective, or to
promote a ``one size fits all'' approach to underground facilities
excavation damage prevention.
    Missouri PSC, Paiute Pipeline, and Southwest Gas Corporation
commented that Federal requirements limited to the minimum requirements
reflected in the referenced Federal statute should be sufficient.
However, Missouri PSC noted that Federal requirements should also refer
to any state statutory provisions that are either more stringent or
different in practice (such as damages being reported to the one-call
center rather than the pipeline operator directly). EPPG and Panhandle
Energy support the development of a template that PHMSA could use to
determine if a state's excavation safety program is adequate. Panhandle
considers that a national consensus standard or recommended practice
should be developed by all the involved stakeholders, including Federal
and state agency regulators, industry, the excavation community,
members of the public, one-call organizations, and other excavation-
affected parties. EPPG and Panhandle consider that a national consensus
standard should address the issues mentioned in the ANPRM in

Section IV.C, at a minimum, but should also address many other issues
including, among others:
     Expectations of individual state's programs; expectations
of excavators, regardless of legal or contractual affiliation.
     Types of excavators covered by the standard (all
excavators regardless of affiliation).
     Individual state's abilities to contest an annual Federal
audit's findings.
     Physical excavation guidelines (locating, marking,
communications, etc.).
     The role of one-call programs.
     Excavation damage reporting requirements.
     Description of excavator's responsibilities prior to and
following any excavation, including any spill or damaging incident to
the pipeline operator.
     Requirements to contact 911 if any release of product or
natural gas occurs.
     Establishment of a mechanism to ensure the state receives
reports of pipeline damage incidents in a timely manner.
     Use of ``emergency'' excavation processes.
     Excavation investigation requirements if pipeline damage
occurs.
     Explicit state authority.
     Enforcement documentation requirements.
     Reference to other useful guidance documents, such as the
Common Ground Alliance's work.
     Due process criteria for excavators if liability is found.
    EPPG noted that some of these issues may not be suitable for a
national consensus standard, and enforcement provisions are left out
altogether since they are not suitable for a national consensus
standard, but those not included in a standard could be incorporated
within a future PHMSA ``state guide'' for excavation safety.
    Michigan PSC commented that more detailed and extensive
requirements are not necessary and may be in direct conflict with
various states' laws. It also asked that ``excavator'' be defined. For
example, will homeowners be subject to the Federal requirements?
    NAPSR commented that PHMSA should not undermine state requirements
with a second layer of excavator standards, but should defer to the
individual states in such matters. They noted that the Federal law
appears to define the expectations for excavators reasonably and
provides a basis for enforcement. If PHMSA adopts regulations further
defining what standards it believes an excavator should be held to, it
risks creating two sets of standards, state and Federal, which
excavators must follow. Due to the diversity of state requirements, the
Federal requirements would undoubtedly contain inconsistencies and
conflicts with the standards of at least some states.
    Nicor commented that one aspect of the minimum standards that is
inadequate involves the locating and marking of facilities for which
ownership is unclear. During this period prior to completion, such
facilities may be left unmarked after a call to the one-call system. As
an example, Nicor noted that in a new subdivision, it is often unclear
who has ownership of and responsibility for locating and marking sewer
and water lines prior to completion, at which point the property owner
or municipality takes ownership.
    NUCA commented that the proposed Federal requirements effectively
cover the primary responsibilities of the excavator, and are consistent
with past DOT excavation damage prevention messages, such as the ``Dig
Safely'' initiative of the 1990s. However, NUCA noted that utilization
of ``location information'' is too vague for inclusion in a new Federal
requirement. General information of underground pipeline facilities
should never substitute for meeting all of the operator's locating and
marking responsibilities.
    Ohio PUC commented that requirements for pipeline operators and
excavators should parallel, and PHMSA should consider providing
guidance on how it intends to evaluate liability and enforcement if an
excavator damages a pipeline system due to a pipeline owner/operator
failing to mark underground lines or marking them incorrectly or
inaccurately. Ohio PUC also commented that any Federal requirements
should avoid specific requirements for marking standards that may
conflict with reasonable and appropriate marking standards developed by
individual states.
    The PST commented that there are a number of issues that need to be
addressed if PHMSA imposes Federal requirements on excavators when
PHMSA deems a state to have an inadequate enforcement program. For
example: (1) Will these standards be permanent or will excavators again
be held to state standards once the state program is deemed adequate?
(2) What happens if the state enforcement program is deemed inadequate
but some of the state's standards or requirements are more stringent
than the Federal government's? Will PHMSA impose its lesser standards?
(3) If the standards revert to those of the state once the enforcement
program is deemed adequate, it is conceivable that excavators would
only be required to meet the Federal requirements for a short period of
time (from one annual review to another). Should this happen,
excavators are likely to become confused about their compliance
responsibilities.
    Southern California Gas and California Gas and Electric prefer that
the standards for excavators for reporting damage should define
``damage'' in more detail, similarly to California Government Code
4216.4.(c). They noted that all damage, even coating or cathodic
protection wire damage, can affect the integrity of the pipeline over
time.
    The three Texas pipeline associations commented that it is probably
best if PHMSA adopts some set of Federal requirements for excavation
damage prevention to be enforced in situations where a state program is
determined to be inadequate. They noted that if the scope of a state
agency's excavation damage prevention standards was not the source of
the finding of inadequacy, it would be least disruptive to all aspects
of industry for PHMSA to simply enforce the existing state standards.
They further noted that this approach may cause some legal and
practical issues for PHMSA to provide consistent enforcement. It could
represent a significant challenge for PHMSA to educate its staff on the
large variety of state standards that they would need to enforce.
    USIC Locating Services' comments indicate that it is in favor of
establishing standards for excavators with regard to: the use of a
mandatory 72-hour notice requirement; limiting the scope of a ticket to
1,320 feet; use of a 24'' tolerance zone on either side of the buried
facility; requiring white-marking (as opposed to just suggesting white-
marking); emergency locate requests made by excavators; and strict
penalties levied against excavators abusing emergency locate
provisions.
    The Wisconsin Transportation Builders Association (WTBA) commented
that industry is concerned about the emphasis being placed solely on
the excavator. They noted that while some requirements may be
appropriate and helpful, they will nearly always create unintended
consequences such as unnecessary cost and uncontrollable risk.
According to the WTBA, there is rarely discussion regarding who is
responsible for costs associated with unexpected delays to contractors.
These costs are substantial and continue to affect the cost of public
projects adversely.

Response

    PHMSA proposes to apply Federal requirements to all excavators,
with the exception of homeowners excavating with hand tools on their
own property, in states PHMSA deems to have inadequate excavation
damage prevention law enforcement programs. The term ``excavator'' is
defined in this proposed rule. PHMSA cannot enforce state laws in the
absence of Federal requirements because, to the extent state
requirements go above and beyond the minimum Federal laws, PHMSA has no
authority to enforce such requirements. Development of Federal
requirements is, therefore, a prerequisite to Federal administrative
enforcement. The standards proposed in this NPRM are designed to
establish minimum requirements for excavators to avoid excavation
damage to pipelines.
    PHMSA does not propose to develop the Federal requirements through
a consensus process, but rather through this rulemaking process. PHMSA
used the PIPES Act to inform the development of the proposed Federal
requirements.
    This proposed rule does not refer to any state standards; PHMSA
believes to do so could create an overly-prescriptive set of standards.
Different states have different geographic and demographic conditions
and an effective damage prevention program for one state may not
necessarily work for another. However, PHMSA considers the proposed
Federal regulations to be the minimal standard that is basic to any
effective excavation damage prevention law enforcement program. Because
state and Federal requirements will never be enforced simultaneously,
the existence of a Federal requirement should not present any conflicts
with existing state requirements for excavators. However, PHMSA is
seeking comment on this issue. PHMSA does recognize that excavators
should be informed of the Federal requirements in states where those
standards will apply. To that end, PHMSA intends to continue to work
with excavator trade associations, state agencies and one-call centers,
the Common Ground Alliance, and other key excavation damage prevention
stakeholders to communicate the requirements of the final rule and the
adequacy status of each state as broadly as possible.
    As we have stated previously, PHMSA's statutory enforcement
authority pertains only to excavation damage prevention as it relates
to pipelines. Because PHMSA has no jurisdiction over sewer and water
facility operators, this proposed rule does not address those
operators' responsibilities.
    Requirements for pipeline operators regarding locating and marking
their facilities are clearly defined in existing pipeline safety
regulations (49 CFR Parts 190-199). PHMSA will continue to enforce
existing Federal excavation damage prevention regulations applicable to
pipeline operators if investigations reveal that pipeline operators
fail to comply with those regulations. PHMSA does not propose to amend
the standards currently applicable to pipeline operators in this
rulemaking proceeding.
    PHMSA considered the comments regarding one-call standards, but
believes those types of standards would be overly-prescriptive and
confusing for the purposes of this proposed rule. This proposed
rulemaking does not impede any party's legal rights to pursue
restitution of damages from any other party involved in a damage
incident.

Implementing 911 Requirement

    AGA commented that implementation of the 911 requirement can result
in some unintended consequences that may actually cause behaviors and
actions that are detrimental to pipeline safety. It noted that as a
practice in responding to 911 calls being made, fire departments often
bill their costs to the excavator and in some circumstances the natural
gas utility. Very often, the excavator is a professional contractor. As
a result, excavators are having second thoughts about dialing 911 when
damage results in a leak, particularly on smaller diameter plastic pipe
that is viewed as an ``easy'' repair for professional contractors who
think they have the ability and the means to make an acceptable repair.
Having unqualified personnel making repairs on natural gas lines can
lead to catastrophic consequences.
    AGA also noted that natural gas utilities try to foster a culture
that encourages a contractor to notify the gas utility promptly when a
pipe is dented or nicked, its coating scratched, or even when a tracer
wire is cut or anode wire broken. The motivation for the utility is
that it can respond and determine what repair actions are needed, to
ensure the pipe will not fail or leak at some point in the future, and
that the pipe can be located in response to future excavation activity.
The utilities have developed relationships with contractors so that
they trust they will not be billed in circumstances where the
contractors are forthcoming and can demonstrate they have made a
reasonable attempt to dig responsibly and follow one-call and state
statutes.
    AGA, Missouri PSC, NUCA, Southern California Gas, California Gas
and Electric, and others expressed concern that the volume of calls
resulting from this requirement may be unmanageable and could result in
limited emergency response resources being used in situations that
really do not necessitate an emergency response. AGA, Southern
California Gas, and California Gas and Electric noted, for example,
that as a result fire departments could have to respond to every
excavation damage incident reported via 911, including breaks on small
diameter service lines where the gas may be safely venting to the
atmosphere and public safety is generally not threatened. The response
of fire departments to potentially thousands of inconsequential
excavation damages could compromise their ability to respond to other
events that are actually life-threatening emergencies. Missouri PSC was
aware of one major gas distribution operator that is having its
practice of advising excavators to call 911 questioned by local
emergency officials.
    MidAmerican Energy Company, Paiute Pipeline and Southwest Gas
Corporation commented that the 911 requirement should not be mandated
for all releases of hazardous materials. If a violation of the
excavation damage prevention laws results in a public safety emergency
that may endanger life or cause serious bodily harm or damage to
property, then, as for any public safety emergency, the use of the 911
telephone notification system would be appropriate. Otherwise, calling
911 should not be necessary.
    Regarding emergency responders, NUCA commented that the proposed
rule should address the role of first responders in situations where
the escape of flammable, toxic, or corrosive product is released as a
result of damage to an underground pipeline. NUCA noted that if a 911
call is made, the responders must be trained in how to respond to the
situation effectively. NUCA noted that traditionally, representatives
from the company that owns the gas or hazardous liquid pipeline are
best educated and equipped to handle these situations.
    Nicor commented that the 911 requirement is most appropriate when
someone other than the pipeline owner or operator damages the pipeline.
Operators who accidentally damage their own facilities should have the
flexibility of calling 911 if they need further assistance in making an
area safe. As a basis, Nicor cited that pipeline operators are also
sometimes excavators and that provisions should be developed for
instances where an

operator's excavation crew accidentally damages its own facility and
that results in a release of natural gas. The crews are trained and
qualified to handle emergency response and to make repairs. Often
times, the release of gas is secured very quickly and should not
warrant calling 911. Additionally, after responding to a 911 call
involving excavator damage and a release of natural gas from a
pipeline, some fire departments have sent invoices to natural gas
operators for costs incurred for hazmat response. Nicor noted that the
inability of an operator to exercise discretion in calling 911 may lead
to strained relationships between natural gas pipeline operators and
fire departments.
    NUCA, Paiute Pipeline and Southwest Gas Corporation commented that
PHMSA should specify that excavators must call 911 if the ``damage
results in the escape of any flammable, toxic, or corrosive gas or
liquid,'' as specified in the PIPES Act, instead of trying to include
all of these under the umbrella of ``hazardous products.'' They noted
that excavators are not emergency responders, and the regulation should
be as specific as possible to distinguish between natural gas and other
gases or liquids to identify what products are considered ``hazardous''
by PHMSA.
    Michigan PSC noted that implementing the 911 requirement will not
cause any unintended consequences in practice. Paiute and Southwest Gas
Corporation also commented that all API RP 1162 related communications
and activities should promote the requirement of calling 911 if a
pipeline damage incident causes a release of product. They also noted
that although they cannot reference any empirical evidence that
identifies any unintended consequences of implementing the 911
requirement, as excavators become better educated on this requirement,
calls to emergency response agencies will likely increase.

Response

    PHMSA considered all of the comments pertaining to implementing the
911 requirement. The PIPES Act requires excavators to promptly call the
911 emergency telephone number if a damage results in the escape of any
flammable, toxic, or corrosive gas or liquid that may endanger life or
cause serious bodily harm or damage to property. PHMSA understands that
excavators and utility operators are sometimes required to reimburse
911 centers for the cost of dispatching emergency response personnel to
a damage site. Therefore, PHMSA is proposing that excavators must call
911 in these instances, but may exercise discretion as to whether to
request that the 911 operator dispatch emergency response personnel to
the damage site. PHMSA welcomes additional comments on the 911 issue.

Reference to API RP 1166

    AGA commented that API RP 1166 does not apply in developing
standards for excavators in that it does not apply to natural gas
distribution operators. AGA noted that this standard is a useful
resource for gas transmission pipeline operators, but that the decision
to monitor and possibly observe any excavation activity is at the
discretion of the pipeline operator.
    Several commenters noted that the CGA Best Practices and API
Recommended Practice 1166 could be used to inform the development of
such standards, but that the minimum requirements stated in 49 U.S.C.
60114 are appropriate. Paiute Pipeline and Southwest Gas Corporation
commented that PHMSA should refrain from citing best practices from any
organization, publication or individual entity as regulation.

Response

    PHMSA is not proposing to use API RP 1166 to inform the development
of the Federal requirement for enforcement and believes the
requirements stated in the PIPES Act are appropriate.

D. Adjudication Process

    Section IV.D of the ANPRM sought comment on the adjudication
process that PHMSA would use if it cited an excavator for failure to
comply with Federal requirements established by this rulemaking process
in a state where PHMSA has deemed the enforcement program inadequate.
It noted that at a minimum, an excavator that allegedly violated the
applicable requirement would have the right to: receive written notice
of the allegations, including a description of the factual evidence
supporting the allegations; file a written response to the allegations;
request a hearing; be represented by counsel if the excavator chooses;
examine the evidence; submit relevant information and call witnesses on
his or her behalf; and otherwise contest the allegations of violation.
Hearings would likely be held at one of PHMSA's five regional offices
or via teleconference. The hearing officer would be an attorney from
PHMSA's Office of Chief Counsel. The excavator would also likely have
the opportunity to petition for reconsideration of the agency's
administrative decision and judicial review of final agency action
would be available to the same extent it is available to a pipeline
operator.
    Commenters were invited to submit their views on this process or
suggest alternatives. For example:
     Is the process too formal in the sense that excavators
contesting a citation would have to prepare a written response for the
record and potentially appear before a hearing officer?
     Is the process not formal enough in the sense that it does
not provide for formal rules of evidence, transcriptions, or discovery?
Or does this process strike the right balance by being efficient and at
the same time providing enough formality that excavators feel the
process is fair and their due process rights are maintained?
     How should the civil penalty criteria found in 49 U.S.C.
60122(b) apply to excavators?

All Parties

    AGC and NUCA commented that the adjudication process outlined by
PHMSA seems fair; however, PHMSA must carefully consider that if an
excavator is not found to be at fault, excavators must maintain the
right to pursue damages for downtime and the ability to recover legal
expenses. Allowing excavators all rights to due process should be
recognized, and the same privileges afforded to others subject to
Federal administrative enforcement (i.e., pipeline operators) should be
afforded to excavators. NUCA noted that ensuring excavators the right
to pursue damages (i.e., downtime expenses), must be considered when
establishing a new Federal adjudication process. NUCA also noted that
excavators regularly lose significant revenue in downtime expenses
after having to shut down projects because of underground facilities
that were either not marked or marked inaccurately. According to NUCA,
this is an enormous financial problem facing professional excavators,
and one that must be addressed in the PHMSA regulation. AGC agreed that
hearings should be open to the public and conducted at one of PHMSA's
five regional offices or an alternative location accessible to all
parties.
    MidAmerican Energy Company also noted that participation in any
process should not preclude the ability to pursue further legal
remedies a participant may determine to be appropriate.
    USIC Locating Services commented that whatever process is
established should provide interested parties a right of intervention
so that the resulting record accurately reflects the positions of all
affected parties.

    Nicor noted that excavators who are also operators of pipelines
regulated under 49 CFR Part 192 already fall under the enforcement
requirements of Subpart B in 49 CFR Part 190. If PHMSA determines that
it must take enforcement action against other excavators the same
process could be followed.

Response

    PHMSA agrees that an excavator must maintain the right to pursue
damages for downtime and the ability to recover legal expenses if the
excavator is not found to be at fault in an excavation damage incident
investigation; this proposed rule does not infringe upon those rights.
In addition, this proposed rule is intended to establish adjudication
procedures that protect the rights of excavators to due process. PHMSA
also believes that interested parties should have the opportunity to
attend and observe hearings and the opportunity to request intervention
status within the PHMSA adjudication process so that the resulting
record accurately reflects the position of all affected parties.

Appeals

    AGC commented that the excavator should have the opportunity to
petition for reconsideration of PHMSA's administrative decision, and
judicial review of final agency action should be available to the same
extent it is available to a pipeline operator. Similarly, the three
Texas pipeline associations commented that there should be an appeals
process for a party to challenge the outcome of the hearing.

Response

    The process for an excavator to request reconsideration or appeal a
finding of violation by PHMSA is provided in this proposed rule.

Arbitration and Advisory Committees

    Spectra Energy commented that each state should have a clearly
defined process for arbitration or review of enforcement actions for
violations of excavation damage prevention regulations. Spectra
suggested that one possible method is to have an independent panel that
would review and recommend final enforcement action. The panel should
include members that represent the one-call center, pipeline operators
and the excavator community.

Response

    As noted above, committees composed of representatives of all
excavation damage prevention stakeholders to advise enforcement
agencies are a proven method of ensuring fair and balanced excavation
damage prevention law enforcement. Such may be the case with
arbitration committees. While PHMSA does not propose to use an advisory
committee for Federal administrative enforcement proceedings, PHMSA
does not object to a state's use of an advisory committee in the state
enforcement process.

Civil Penalties

    AGA noted that PHMSA must distinguish between levying any fines on
entities or persons engaged in excavation damage prevention activities,
as opposed to the fines and enforcement actions PHMSA traditionally
takes against pipeline operators under 49 U.S.C. 60122(a). Similarly,
Paiute Pipeline and Southwest Gas Corporation commented that the
penalty criteria found in 49 U.S.C. 60122(b) are excessive to the
average excavator and to the average excavation damage.
    Paiute Pipeline, Southwest Gas Corporation, and Missouri PSC
commented that PHMSA should work with the individual states on invoking
civil penalties in their individual laws. Missouri PSC agreed,
commenting that unless the civil penalty provisions existing in a
state's law are the reason a state's enforcement program is deemed
inadequate, the state's penalties should be applied rather than the
Federal penalties.
    Paiute Pipeline and Southwest Gas Corporation commented that the
adjudication process outlined is generally adequate, but to make the
process fair and efficient a step should be added allowing an alleged
violator to accept PHMSA's recommendation for a reduced penalty and
agreement to take some remedial action such as attending an educational
seminar on underground excavation damage prevention and pipeline
safety.
    WTBA commented that civil penalties should not apply to excavators
unless there was a truly unlawful act of negligence.
    MidAmerican Energy Company agreed that the penalty criteria found
in 49 U.S.C. 60122(b) are reasonable to consider in evaluating the
amount of a civil penalty to assess for a violation of the one-call
provisions. MidAmerican also questions whether the violator's (1)
ability to pay and (2) any effect on the ability of the violator to
continue doing business are necessarily relevant criteria in all cases.
MidAmerican noted that the remainders of the penalty criteria appear to
provide the flexibility for the agency to tailor the assessment of a
civil penalty to the specific circumstances of a particular violation.
It considers that ``an egregious violation or a pattern of violations
evidencing an intentional or negligent disregard of the one-call
provisions could present a serious threat to the public safety. In
those, hopefully unusual, cases, the dangers presented by an excavator
continuing to exhibit such a callous disregard for the public safety
should take precedence over the effect that the assessment of a civil
penalty might have on the violator's ability to pay or to continue
doing business. The Illinois administrative regulations also contain
these two penalty criteria.''
    The three Texas pipeline associations commented that regardless of
process, any person or entity found guilty of violating the Federal
requirements should face financial penalties that provide incentives
for future compliance and reflect the seriousness of the violation.

Response

    PHMSA proposes to use the civil penalty provisions described in 49
U.S.C. 60101 et seq. as a basis for civil penalties levied against
excavators subject to this proposed rule. PHMSA believes this approach
is preferable to establishing alternate civil penalty provisions
specific to this proposed rule. PHMSA proposes to take into account a
violator's ability to pay, ability to continue to do business, and the
seriousness of the violation when determining appropriate civil
penalties. PHMSA seeks comment on the proposed use of civil penalties.

Formality

    AGA, AGC, MidAmerican Energy, and Missouri PSC agree that the
adjudication process noted in the ANPRM is not too formal. API, AOPL,
and NUCA all support the process as described. API and AOPL commented
that the adjudication should allow the hearing officer sufficient
flexibility to conduct the proceeding promptly and efficiently, such
that decisions may be rendered without undue delay.
    Panhandle Energy and EPPG both suggested that the processes defined
in 49 CFR Part 190 be followed. Spectra Energy Transmission noted that
when an enforcement action relating to violation of excavation damage
prevention regulations is initiated, the excavator and pipeline
operator should have the opportunity for a hearing.
    AGA commented that the adjudication process must be a formal one,
where the excavator is able to defend his or her actions, explaining
how and why the damage occurred, and to contest an alleged violation.
AGA and

AGC both noted that the adjudication process must provide for formal
rules of evidence, transcriptions, and discovery, to conduct fair
proceedings that ensure all parties' rights to due process are
maintained. AGC commented that a formal adjudication process should be
adopted to preserve the rights of an excavator charged with a
violation. The process should include the right(s) to: receive written
notice of the allegations, including a description of the evidence the
allegations are based on; allow for a submission in response to the
allegations; and, allow for an informal hearing with counsel if
necessary. AGC also noted that the adjudication procedure should
thoroughly examine the evidence and allow for submission of relevant
information and testimony from witnesses to adjudicate the allegation
of violation thoroughly.
    MidAmerican Energy commented that while the proposed process
strikes the appropriate balance, strict adherence to the formal rules
of evidence or extensive discovery is not necessary or appropriate.
MidAmerican also suggested that transcripts could be optional at the
expense of the state or requesting party.
    Paiute Pipeline and Southwest Gas Corporation commented that the
adjudication process should remain at the state level, and not a formal
Federal process. They noted that excavators would appreciate the
efficiency of maintaining the adjudication process at the state level,
and that if damages are involved, there is always the claim/court
system for excavators, operators and states with enforcement authority
for billable and damage awards. They consider that PHMSA should only
step in when the entire program is deemed inadequate, and should not
mandate enforcement at the Federal level but rather partner with the
states to enhance the enforcement at the state or local level. They
consider that PHMSA's support of states and their excavation damage
prevention programs will ultimately provide the excavation damage
prevention authority and enforcement PHMSA is seeking with the proposed
rulemaking procedures. They commented that PHMSA may want to include a
provision for the excavating community to submit a request for Federal
involvement if they feel the process is unfair and their rights are not
being maintained at the state level.
    WTBA commented that the proposed process appears to be too formal
and does not sound like an ``informal hearing.'' It noted that there
must be an opportunity for a true informal hearing, at a location near
the project, to discuss actual facts of the incident. It also commented
that an informal hearing must involve individuals that are
knowledgeable of construction and design that are capable of
determining whether reasonable efforts were made by all parties
involved.
    APGA agrees that enforcement proceedings should be conducted at the
PHMSA regional office level rather than headquarters. APGA also noted
that Virginia has an excavation damage prevention law enforcement
program that involves a panel comprised of excavators, facility owners
and others to advise on the appropriate level of penalties, if any.
APGA suggests that PHMSA consider whether a similar system could work
for any Federal administrative enforcement actions.

Response

    The majority of commenters support PHMSA's approach for the
adjudication process proposed in this NPRM and that the process is
sufficiently formal to protect the rights of excavators to due process,
but not so formal as to be overly burdensome for alleged violators.
    PHMSA is not proposing to use an advisory panel modeled after
Virginia's excavation damage prevention program, but instead to follow
the process described in this proposed rule.

E. Existing Requirements Applicable to Owners and Operators of Pipeline
Facilities

    Section IV.E of the ANPRM invited commenters to submit their
feedback and comments on the adequacy of PHMSA's existing requirements
for pipeline operators to participate in one-call organizations,
respond to dig tickets, and perform their locating and marking
responsibilities. Under existing pipeline safety regulations 49 CFR
192.614 for gas pipelines and 49 CFR 195.442 for hazardous liquid
pipelines, operators are required to have written excavation damage
prevention programs that require, in part, that the operator provide
for marking its pipelines in the area of an excavation for which the
excavator has submitted a locate request.
    Comments could address, for example, whether PHMSA should consider
making the existing regulatory requirements more detailed and explicit
in terms of:
     The amount of time for responding to locate requests;
     The accuracy of facility locating and marking; or
     Making operator personnel available to consult with
excavators following receipt of an excavation notification.

Federal One-Call

    No commenters that addressed the existing pipeline safety damage
prevention regulations, 49 CFR 192.614 and 195.442, considered these
requirements to be inadequate, nor did they believe that PHMSA needed
to make these requirements more detailed or specific. Several commented
that to do otherwise would lead to confusion where the Federal
requirements were different from state standards.
    Commenters suggested that PHMSA should enforce states' laws and
that states already have the ability to establish more detailed
regulations on pipeline operators for facility locating and marking.
AGA considers that it is not logical for PHMSA to suggest that Federal
requirements addressing one-call types of issues can be imposed at the
national level. They consider that adding more details at the Federal
level will be problematic since it may conflict with existing state
regulations and cannot take unique state laws into consideration. AGA
also commented that no language in the Federal regulations is necessary
regarding the ability of excavators to request a consultation or job-
site meeting with underground facility operators, since most one-call
centers already have a procedure for this.
    AGC suggested that PHMSA encourage state regulatory authorities to
equally enforce state laws applicable to underground facility owners
and operators who fail to respond to a location request or fail to take
reasonable steps, in response to such a request. AGC also noted that
state enforcement programs should consider the costs involved for
excavators when they incur downtime due to a violation by an operator
or a locator.
    Nicor commented that state authorities must make enforcement of
owner/operator requirements a higher priority and should consider the
CGA Best Practices.
    API and AOPL commented that pipeline operators should be held to
the same standards as other facility owners and excavators, and should
be held accountable to respond to locate requests in a timely and
accurate manner. They noted, however, that they do support regulations,
such as those in California (CA Govt. Code Section 4216-4216.9), that
impose more explicit and additional requirements for both the owner and
the excavator when excavating in close proximity to high priority,
subsurface installations.
    GulfSafe commented that offshore operators are exempt from being
members of a one-call system. It noted

that this was an appropriate exemption at the time it was written but
may need revisiting as technology has progressed over the past two
decades to be a more practicable solution to prevent damages offshore.
GulfSafe also suggested that this is the suitable time to address the
enforcement issue that goes along with this exemption, since there are
large differences in state laws regarding offshore pipelines and
enforcement may fall to Federal agencies by default.
    Ancillary to this concern, Michigan Consolidated Gas commented that
PHMSA consider the excavator's ability to call in an unreasonable
number of tickets per day causing resource allocation issues for locate
personal. Also, Michigan PSC recommended that all meetings between an
excavator and operator be documented and digital pictures be taken at
job-sites prior to excavation activity.

Response

    PHMSA does not have the authority to enforce state laws. PHMSA
believes that specifying the number of tickets per day an excavator can
create, as well as how meetings between excavators and operators should
be documented as part of the Federal requirement is not appropriate
given the ``backstop'' (i.e., Federal enforcement only in the absence
of adequate state enforcement) nature and use of the Federal authority.
In addition, PHMSA believes that addressing the exemption for offshore
operators is outside the scope of this NPRM.

V. Regulatory Analysis and Notices

    The proposed rule would amend the Federal Pipeline Safety
Regulations (49 CFR Parts 190-199) to establish criteria and procedures
PHMSA will use to determine the adequacy of state pipeline excavation
damage prevention law enforcement program.

Statutory/Legal Authority for This Rulemaking

    PHMSA's general authority to publish this proposed rulemaking and
prescribe pipeline safety regulations is codified at 49 U.S.C. 60101 et
seq. Section 2(a) of the PIPES Act (Pub. L. 109-468) authorizes the
Secretary of Transportation to enforce pipeline damage prevention
requirements against persons who engage in excavation activity in
violation of such requirements provided that, through a proceeding
established by rulemaking, the Secretary has determined that the
relevant state's enforcement is inadequate to protect safety.

Executive Order 12866, Executive Order 13563, and DOT Policies and
Procedures

    This proposed rule is a significant regulatory action under section
3(f) of Executive Order 12866 (58 FR 51735) and 13563, therefore, was
reviewed by the Office of Management and Budget. This proposed rule is
significant under the Regulatory Policies and Procedures of the
Department of Transportation (44 FR 11034).
    Executive Orders 12866 and 13563 require agencies to regulate in
the ``most cost-effective manner,'' to make a ``reasoned determination
that the benefits of the intended regulation justify its costs,'' and
to develop regulations that ``impose the least burden on society.''
    Because excavation damage is one of the major causes of pipeline
incidents, the expected benefits of this rulemaking action are an
increased deterrent to violations of one-call requirements and the
attendant reduction in pipeline incidents and accidents caused by
excavation damage. Failure to use an available one-call system is a
known cause of pipeline accidents.
    A regulatory evaluation containing a statement of the purpose and
need for this rulemaking and an analysis of the costs and benefits is
available in the docket.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), PHMSA
must consider whether rulemaking actions would have a significant
economic impact on a substantial number of small entities. Pursuant to
5 U.S.C. 603, PHMSA has made an initial determination that the proposed
rule will not have a significant economic impact on a substantial
number of small entities. This determination is based on the minimal
cost to excavators to call the one-call center. In addition, the
proposed rule is procedural in nature and its purpose is to set forth
an administrative enforcement process for actions that are already
required. The proposed rule would appear to have no material effect on
the costs or burdens of compliance for regulated entities, regardless
of size. Thus, the marginal cost, if any, that would be imposed by the
rule on regulated entities, including small entities, would not be
significant. Based on the facts available about the expected impact of
this rulemaking, I certify that this proposed rulemaking will not have
a significant economic impact on a substantial number of small
entities. PHMSA invites public comments on this certification.
    Since the Regulatory Flexibility Act does not require an initial
(or final) regulatory flexibility analysis when a rule will not have a
significant economic impact on a substantial number of small entities,
such an analysis is not necessary for this proposed rule. Nonetheless,
PHMSA invites public comment on the proposed rule's effect on the
costs, profitability, competitiveness of, and employment in small
entities to ensure that no significant economic impact on a substantial
number of small entities would be overlooked. The following information
is provided to assist in such comment:

Description of the small entities to which the proposed rule will
apply.

    In general, the enforcement process set forth in the proposed rule
will potentially apply to any person conducting excavation activity in
the vicinity of a pipeline who fails to call the one-call center or
otherwise violates applicable requirements. The rule does not apply to
homeowners excavating with hand tools on their own property. A precise
estimate of the number of small entities is not currently feasible
because Federal administrative enforcement will only be considered in
states that do not have an adequate enforcement program and
determinations on state programs turn on a number of factors that will
require a factual analysis on a case-by-case basis. PHMSA seeks any
information or comment on these issues, as noted below.

Description of the projected reporting, recordkeeping and other
compliance requirements of the proposed rule, including an estimate of
the classes of small entities that will be subject to the requirement
and the type of professional skills necessary for preparation of the
report or record.

    This proposed rule imposes no additional reporting costs to
businesses, including small businesses. The proposed rule is procedural
in nature and its purpose is to set forth an administrative enforcement
process for actions that are already required. The costs impacts
associated with this proposed rulemaking would be imposed on Federal
and state governments.

Identification, to the extent practicable, of all relevant Federal
rules that may duplicate, overlap or conflict with the proposed rule.

    PHMSA is unaware of any duplicative, overlapping, or conflicting
Federal rules. As noted below, PHMSA seeks comments and information
about any such rules, as well as any industry

rules or policies that would conflict with the requirements of the
proposed rule.

Description of any significant alternatives to the proposed rule that
accomplish the stated objectives of applicable statutes and that
minimize any significant economic impact of the proposed rule on small
entities.

    PHMSA seeks comments and information about any alternatives such
as: (1) Establishment of differing compliance or reporting requirements
or timetables that take into account the resources available to small
entities; (2) clarification, consolidation, or simplification of
compliance and reporting requirements under the rule for such small
entities; (3) any exemption from coverage of the rule, or any part
thereof, for such small entities.

Executive Order 13175

    PHMSA has analyzed this proposed rule according to the principles
and criteria in Executive Order 13175, ``Consultation and Coordination
With Indian Tribal Governments.'' Because this proposed rule would not
significantly or uniquely affect the communities of the Indian tribal
governments or impose substantial direct compliance costs, the funding
and consultation requirements of Executive Order 13175 do not apply.

Paperwork Reduction Act

    Pursuant to 5 CFR 1320.8(d), PHMSA is required to provide
interested members of the public and affected agencies with an
opportunity to comment on information collection and recordkeeping
requests. PHMSA estimates that the proposals in this rulemaking will
cause an increase to the currently approved information collection
titled ``Gas Pipeline Safety Program Certification and Hazardous Liquid
Pipeline Safety Program Certification'' identified under Office of
Management and Budget (OMB) Control Number 2137-0584. Based on the
proposals in this rule, PHMSA estimates a 20% increase to states with
gas pipeline safety program certifications/agreements. PHMSA estimates
the increase at 12 hours per respondent for a total increase of 612
hour (12 hrs*51 respondents). As a result, PHMSA will submit an
information collection revision request to OMB for approval based on
the requirements in this proposed rule. The information collection is
contained in the pipeline safety regulations, 49 CFR Parts 190-199. The
following information is provided for that information collection: (1)
Title of the information collection; (2) OMB control number; (3)
Current expiration date; (4) Type of request; (5) Abstract of the
information collection activity; (6) Description of affected public;
(7) Estimate of total annual reporting and recordkeeping burden; and
(8) Frequency of collection. The information collection burden for the
following information collection will be revised as follows:
    Title: Gas Pipeline Safety Program Certification and Hazardous
Liquid Pipeline Safety Program Certification.
    OMB Control Number: 2137-0584.
    Current Expiration Date: 6/30/2012.
    Abstract: A state must submit an annual certification to assume
responsibility for regulating intrastate pipelines, and certain records
must be maintained to demonstrate that the state is ensuring
satisfactory compliance with the pipeline safety regulations. PHMSA
uses that information to evaluate a state's eligibility for Federal
grants.
    Affected Public: State and local governments.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 67.
    Total Annual Burden Hours: 4,532 (this estimate includes an
increase of 612 hours).
    Frequency of Collection: Annually and occasionally at states'
discretion.
    Requests for a copy of this information collection should be
directed to Cameron Satterthwaite, Office of Pipeline Safety (PHP-30),
Pipeline Hazardous Materials Safety Administration (PHMSA), 2nd Floor,
1200 New Jersey Avenue SE., Washington, DC 20590-0001, Telephone (202)
366-4595.

Comments are invited on:
    (a) The need for the proposed collection of information for the
proper performance of the functions of the agency, including whether
the information will have practical utility;
    (b) The accuracy of the agency's estimate of the burden of the
revised collection of information, including the validity of the
methodology and assumptions used;
    (c) Ways to enhance the quality, utility, and clarity of the
information to be collected; and
    (d) Ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques.
    Send comments directly to the Office of Management and Budget,
Office of Information and Regulatory Affairs, Attn: Desk Officer for
the Department of Transportation, 725 17th Street NW., Washington, DC
20503. Comments should be submitted on or prior to June 1, 2012.

Unfunded Mandates Reform Act of 1995

    This proposed rule would not impose unfunded mandates under the
Unfunded Mandates Reform Act of 1995. It would not result in costs of
$141 million, adjusted for inflation, or more in any one year to either
state, local, or tribal governments, in the aggregate, or to the
private sector, and is the least burdensome alternative that achieves
the objective of the proposed rulemaking.

National Environmental Policy Act

    PHMSA analyzed this proposed rule in accordance with section
102(2)(c) of the National Environmental Policy Act (42 U.S.C. 4332),
the Council on Environmental Quality regulations (40 CFR Parts 1500-
1508), and DOT Order 5610.1C, and has preliminarily determined that
this action will not significantly affect the quality of the human
environment. A preliminary environmental assessment of this rulemaking
is available in the docket and PHMSA invites comment on environmental
impacts of this rule, if any.

Executive Order 13132

    PHMSA has analyzed this proposed rule according to the principles
and criteria of Executive Order 13132 (``Federalism''). A rule has
implications for federalism under Executive Order 13132 if it has a
substantial direct effect on state or local governments, on the
relationship between the national government and the states, or on the
distribution of powers and responsibilities among the various levels of
government.
    The Federal pipeline safety statutes in 49 U.S.C. 60101, et seq.,
create a strong Federal-state partnership for ensuring the safety of
the Nation's interstate and intrastate pipelines. That partnership
permits states to regulate intrastate pipelines after they certify to
PHMSA, among other things, that they have and are enforcing standards
at least as stringent as the Federal requirements, and are promoting a
damage prevention program. PHMSA provides Federal grants to states to
cover a large portion of their pipeline safety program expenses, and
PHMSA also makes grants available to assist in improving the overall
quality and effectiveness of their damage prevention programs.
    In recognition of the value of this close partnership, PHMSA has
made and continues to make every effort to ensure that our state
partners have the

opportunity to provide input on this rulemaking. For example, at the
ANPRM stage, PHMSA sought advice from the National Association of State
Pipeline Safety Representatives (NAPSR) and offered NAPSR officials the
opportunity to meet with PHMSA and discuss issues of concern to the
states. As a result of these consultation efforts with state officials
and their comments on the ANPRM, PHMSA became aware of state concerns
regarding the rigorousness of the criteria for program effectiveness.
PHMSA has taken these concerns into account in developing the proposed
criteria in the NPRM. State and local governments will be able to raise
any other federalism issues during the comment period for this NPRM and
we invite state and local officials with an interest in this rulemaking
to comment on any impacts to their governments.
    Under the proposed rule, Federal administrative enforcement against
an excavator that violates damage prevention requirements would be
taken only in the demonstrable absence of enforcement by a state
authority. Additionally, the proposed rule would establish a framework
for evaluating state programs individually so that the exercise of
Federal administrative enforcement in one state has no effect on the
ability of all other states to continue to exercise state enforcement
authority. This proposed rule would not preempt state law in the state
where the violation occurred, or any other state, but would authorize
Federal enforcement in the limited instance explained above. Finally, a
state that establishes an effective damage prevention enforcement
program has the ability to be recognized by PHMSA as having such a
program.
    For the reasons discussed above, and based on the results of our
consultations with the states, PHMSA has concluded the proposed rule
will not have a substantial direct effect on the states, the
relationship between the national government and the states, or the
distribution of power and responsibilities among the various levels of
government. In addition, this proposed rule does not impose substantial
direct compliance costs on state and local governments. Accordingly,
the consultation and funding requirements of Executive Order 13132 do
not apply.

Executive Order 13211

    This proposed rule is not a ``significant energy action'' under
Executive Order 13211 (Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use). It is not
likely to have a significant adverse effect on supply, distribution, or
energy use. Further, the Office of Information and Regulatory Affairs
has not designated this proposed rule as a significant energy action.

Privacy Act Statement

    Anyone may search the electronic form of all comments received for
any of our dockets. You may review DOT's complete Privacy Act Statement
in the Federal Register published on April 11, 2000 (70 FR 19477) or
visit http://dms.dot.gov.

List of Subjects

49 CFR Part 196

    Administrative practice and procedure; Pipeline safety; Reporting
and recordkeeping requirements.

49 CFR Part 198

    Grant programs-transportation; Pipeline safety; Reporting and
recordkeeping requirements.

    For the reasons discussed in the preamble, PHMSA proposes to amend
49 CFR Subchapter D as follows:
    1. Part 196 is added to read as follows:

PART 196--PROTECTION OF UNDERGROUND PIPELINES FROM EXCAVATION
ACTIVITY

Subpart A--General
Sec.
196.1 What is the purpose and scope of this part?
196.3 Definitions.
Subpart B--One-Call Damage Prevention Requirements
Sec.
196.101 What is the purpose and scope of this subpart?
196.103 What must an excavator do to protect underground pipelines
from excavation-related damage?
196.105 Are there any exceptions to the requirement to use one-call
before digging?
196.107 What must an excavator do if a pipeline is damaged by
excavation activity?
196.109 What must an excavator do if damage to a pipeline from
excavation activity causes a leak where product is released from the
pipeline?
196.111 What if a pipeline operator fails to respond to a locate
request or fails to accurately locate and mark its pipeline?
Subpart C--Administrative Enforcement Process
Sec.
196.201 What is the purpose and scope of this subpart?
196.203 What is the administrative process PHMSA will use to conduct
enforcement proceedings for alleged violations of excavation damage
prevention requirements?
196.205 Can PHMSA assess administrative civil penalties for
violations?
196.207 What are the maximum administrative civil penalties for
violations?
196.209 May other civil enforcement actions be taken?
196.211 May criminal penalties be imposed?

     Authority: 49 U.S.C. 60101 et seq.

Subpart A--General

Sec.  196.1  What is the purpose and scope of this part?

    This part prescribes the minimum requirements that excavators must
follow to protect underground pipelines from excavation-related damage.
It also establishes an enforcement process for violations of these
requirements.

Sec.  196.3  Definitions.

    Damage or excavation damage means any impact that results in the
need to repair or replace a pipeline due to a weakening, or the partial
or complete destruction, of the pipeline, including, but not limited
to, the pipe, its protective coating, lateral support, cathodic
protection or the housing for the line device or facility.
    Excavation means any operation using non-mechanical or mechanical
equipment or explosives used in the movement of earth, rock or other
material below existing grade. This includes, but is not limited to,
augering, blasting, boring, demolishing, digging, ditching, dredging,
drilling, driving-in, grading, plowing-in, pulling-in, ripping,
scraping, trenching, and tunneling. This does not include homeowners
excavating on their own property with hand tools.
    Excavator means any person or legal entity, public or private,
proposing to or engaging in excavation.
    One-call means a notification system through which a person can
notify pipeline operators of planned excavation to facilitate the
locating and marking of any pipelines in the excavation area.
    Pipeline means all parts of those physical facilities through which
gas, carbon dioxide, or a hazardous liquid moves in transportation,
including, but not limited to, pipe, valves, and other appurtenance
attached or connected to pipe, pumping units, compressor units,
metering stations, regulator stations, delivery stations, holders,
fabricated assemblies, and breakout tanks.

Subpart B--One-Call Damage Prevention Requirements

Sec.  196.101  What is the purpose and scope of this subpart?

    This subpart prescribes the minimum requirements that excavators
must follow to protect underground pipelines from excavation-related
damage.

Sec.  196.103  What must an excavator do to protect underground
pipelines from excavation-related damage?

    Prior to commencing excavation activity where an underground gas or
hazardous liquid pipeline may be present, the excavator must:
    (a) Use an available one-call system before excavating to notify
operators of underground pipeline facilities of the timing and location
of the intended excavation;
    (b) If underground pipelines exist in the area, wait for the
pipeline operator to arrive at the excavation site and establish and
mark the location of its underground pipeline facilities before
excavating;
    (c) Excavate with proper regard for the marked location of
pipelines an operator has established by respecting the markings and
taking all practicable steps to prevent excavation damage to the
pipeline; and
    (d) Make additional use of one-call as necessary to obtain locating
and marking before excavating if additional excavations will be
conducted at other locations.

Sec.  196.105  Are there any exceptions to the requirement to use one-
call before digging?

    Homeowners using only hand tools, rather than mechanized excavating
equipment, on their own property are not required to use a one-call
prior to digging.

Sec.  196.107  What must an excavator do if a pipeline is damaged by
excavation activity?

    If a pipeline is damaged in any way by excavation activity, the
excavator must report such damage to the pipeline operator, whether or
not a leak occurs, at the earliest practicable moment following
discovery of the damage.

Sec.  196.109  What must an excavator do if damage to a pipeline from
excavation activity causes a leak where product is released from the
pipeline?

    If damage to a pipeline from excavation activity causes the release
of any flammable, toxic, or corrosive gas or liquid from the pipeline
that may endanger life or cause serious bodily harm or damage to
property or the environment, the excavator must immediately report the
release of hazardous products to appropriate emergency response
authorities by calling 911. Upon calling the 911 emergency telephone
number, the excavator may exercise discretion as to whether to request
emergency response personnel be dispatched to the damage site.

Sec.  196.111  What if a pipeline operator fails to respond to a locate
request or fails to accurately locate and mark its pipeline?

    PHMSA may enforce existing requirements applicable to pipeline
operators, including those specified in 49 CFR 192.614 and 195.442 and
49 U.S.C. 60114 if a pipeline operator fails to respond to a locate
request or fails to accurately locate and mark its pipeline. The
limitation in Sec.  60114(f) does not apply to enforcement taken
against pipeline operators and excavators working for pipeline
operators.

Subpart C--Enforcement

Sec.  196.201  What is the purpose and scope of this subpart?

    This subpart describes the enforcement authority and sanctions
exercised by the Associate Administrator, OPS for achieving and
maintaining pipeline safety under this Part. It also prescribes the
procedures governing the exercise of that authority and the imposition
of those sanctions.

Sec.  196.203  What is the administrative process PHMSA will use to
conduct enforcement proceedings for alleged violations of excavation
damage prevention requirements?

    PHMSA will use the existing adjudication process for alleged
pipeline safety violations set forth in 49 CFR Part 190, Subpart B.
This process provides for notification that a probable violation has
been committed, a 30-day period to respond including the opportunity to
request an administrative hearing, the issuance of a final order, and
the opportunity to petition for reconsideration.

Sec.  196.205  Can PHMSA assess administrative civil penalties for
violations?

    Yes. When the Associate Administrator, OPS has reason to believe
that a person has violated any provision of the 49 U.S.C. 60101 et seq.
or any regulation or order issued thereunder, including a violation of
excavation damage prevention requirements under this Part and 49 U.S.C.
60114(d) in a state with an excavation damage prevention law
enforcement program PHMSA has deemed inadequate under 49 CFR Part 198,
Subpart D, PHMSA may conduct a proceeding to determine the nature and
extent of the violation and to assess a civil penalty.

Sec.  196.207  What are the maximum administrative civil penalties for
violations?

    The maximum administrative civil penalties that may be imposed are
specified in 49 U.S.C. Sec.  60122.

Sec.  196.209  May other civil enforcement actions be taken?

    Whenever the Associate Administrator, OPS has reason to believe
that a person has engaged, is engaged, or is about to engage in any act
or practice constituting a violation of any provision of 49 U.S.C.
60101 et seq., or any regulations issued thereunder, PHMSA, or the
person to whom the authority has been delegated, may request the
Attorney General to bring an action in the appropriate U.S. District
Court for such relief as is necessary or appropriate, including
mandatory or prohibitive injunctive relief, interim equitable relief,
civil penalties, and punitive damages as provided under 49 U.S.C.
60120.

Sec.  196.211  May criminal penalties be imposed for violations?

    Yes. Criminal penalties may be imposed as specified in 49 U.S.C.
60123.

PART 198--REGULATIONS FOR GRANTS TO AID STATE PIPELINE SAFETY
PROGRAMS

    2. The authority citation for part 198 is amended to read as
follows:

    Authority:  49 U.S.C. 60101 et seq.; 49 U.S.C. 6101 et seq.; 49
CFR 1.53.

    3. 49 CFR Part 198 is amended by adding a new Subpart D to read as
follows:
Subpart D--State Damage Prevention Enforcement Programs
Sec.
198.51 What is the purpose and scope of this subpart?
198.53 When and how will PHMSA evaluate state damage prevention
enforcement programs?
198.55 What criteria will PHMSA use in evaluating the effectiveness
of state damage prevention enforcement programs?
198.57 What is the process PHMSA will use to notify a state that its
damage prevention enforcement program appears to be inadequate?
198.59 How may a state respond to a notice of inadequacy?
198.61 How is a state notified of PHMSA's final decision?
198.63 How may a state with an inadequate damage prevention law
enforcement program seek reconsideration by PHMSA?

Subpart D-- State Damage Prevention Enforcement Programs

Sec.  198.51  What is the purpose and scope of this subpart?

    This subpart establishes standards for effective state damage
prevention enforcement programs and prescribes the administrative
procedures available to a state that elects to contest a notice of
inadequacy.

Sec.  198.53  When and how will PHMSA evaluate state excavation damage
prevention law enforcement programs?

    PHMSA conducts annual program evaluations and certification reviews
of state pipeline safety programs. PHMSA will also conduct annual
reviews of state excavation damage prevention law enforcement programs.
PHMSA will use the criteria described in Sec.  198.55 as the basis for
the reviews, utilizing information obtained from any state agency or
office with a role in the state's excavation damage prevention law
enforcement program. If PHMSA finds a state's enforcement program
inadequate, PHMSA may take immediate enforcement against excavators in
that state. The state will have five years from the date of the finding
to make program improvements that meet PHMSA's criteria for minimum
adequacy. A state that fails to establish an adequate enforcement
program in accordance with 49 CFR 198.55 within five years of the
finding of inadequacy may be subject to reduced grant funding
established under 49 U.S.C. 60107. The amount of the reduction will be
determined using the same process PHMSA currently uses to distribute
the grant funding; PHMSA will factor the findings from the annual
review of the excavation damage prevention enforcement program into the
49 U.S.C. 60107 grant funding distribution to state pipeline safety
programs. The amount of the reduction in 49 U.S.C. 60107 grant funding
shall not exceed 10% of prior year funding. If a state fails to
implement an adequate enforcement program within five years of a
finding of inadequacy, the Governor of that state may petition the
Administrator of PHMSA, in writing, for a temporary waiver of the
penalty, provided the petition includes a clear plan of action and
timeline for achieving program adequacy.

Sec.  198.55  What criteria will PHMSA use in evaluating the
effectiveness of state damage prevention enforcement programs?

    (a) PHMSA will use the following criteria to evaluate the
effectiveness of a state excavation damage prevention enforcement
program:
    (1) Does the state have the authority to enforce its state
excavation damage prevention law through civil penalties?
    (2) Has the state designated a state agency or other body as the
authority responsible for enforcement of the state excavation damage
prevention law?
    (3) Is the state assessing civil penalties for violations at levels
sufficient to ensure compliance and is the state making publicly
available information that demonstrates the effectiveness of the
state's enforcement program?
    (4) Does the enforcement authority (if one exists) have a reliable
mechanism (e.g., mandatory reporting, complaint-driven reporting, etc.)
for learning about excavation damage to underground facilities?
    (5) Does the state employ excavation damage investigation practices
that are adequate to determine the at-fault party when excavation
damage to underground facilities occurs?
    (6) At a minimum, does the state's excavation damage prevention law
require the following:
    a. Excavators may not engage in excavation activity without first
using an available one-call notification system to establish the
location of underground facilities in the excavation area.
    b. Excavators may not engage in excavation activity in disregard of
the marked location of a pipeline facility as established by a pipeline
operator.
    c. An excavator who causes damage to a pipeline facility:
    i. Must report the damage to the owner or operator of the facility
at the earliest practical moment following discovery of the damage; and
    ii. If the damage results in the escape of any flammable, toxic, or
corrosive gas or liquid that may endanger life or cause serious bodily
harm or damage to property, must promptly report to other appropriate
authorities by calling the 911 emergency telephone number or another
emergency telephone number.
    (7) Does the state limit exemptions for excavators from its
excavation damage prevention law? A state must provide to PHMSA a
written justification for any exemptions for excavators from state
damage prevention requirements. PHMSA will make the written
justifications available to the public.
    (b) PHMSA may also consider individual enforcement actions taken by
a state in evaluating the effectiveness of a state's damage prevention
enforcement program.

Sec.  198.57  What is the process PHMSA will use to notify a state that
its damage prevention enforcement program appears to be inadequate?

    PHMSA will issue a notice of inadequacy to the state in accordance
with 49 CFR Sec.  190.5. The notice will state the basis for PHMSA's
determination that the state's damage prevention enforcement program
appears inadequate for purposes of this subpart and set forth the
state's response options.

Sec.  198.59  How may a state respond to a notice of inadequacy?

    A state receiving a notice of inadequacy will have 30 days from
receipt of the notice to submit a written response to the PHMSA
official that issued the notice. In its response, the state may include
information and explanations concerning the alleged inadequacy or
contest the allegation of inadequacy and request the notice be
withdrawn.

Sec.  198.61  How is a state notified of PHMSA's final decision?

    PHMSA will issue a final decision on whether the state's damage
prevention enforcement program has been found inadequate in accordance
with 49 CFR 190.5.

Sec.  198.63  How may a state with an inadequate excavation damage
prevention law enforcement program seek reconsideration by PHMSA?

    At any time following a finding of inadequacy, the state may
petition PHMSA to reconsider such finding based on changed
circumstances including improvements in the state's enforcement
program. Upon receiving a petition, PHMSA will reconsider its finding
of inadequacy promptly and will notify the state of its decision on
reconsideration promptly but no later than the time of the next annual
certification review.

    Issued in Washington, DC on March 26, 2012.
Jeffrey D. Wiese,
Associate Administrator for Pipeline Safety.
[FR Doc. 2012-7550 Filed 3-30-12; 8:45 am]
BILLING CODE 4910-60-P