[Federal Register: October 2, 2008 (Volume 73, Number 192)]
[Proposed Rules]
[Page 57281-57297]
[DOCID:fr02oc08-20]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 109

[Docket No. PHMSA-2005-22356]
RIN 2137-AE13

Hazardous Materials: Enhanced Enforcement Authority Procedures

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
Department of Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: PHMSA is proposing to issue rules implementing certain
inspection, investigation, and enforcement authority conferred on the
Secretary of Transportation by the Hazardous Materials Transportation
Safety and Security Reauthorization Act of 2005. The proposed rules
would establish procedures for: (1) The inspection and opening of
packages to identify undeclared or non-compliant shipments; (2) the
temporary detention and inspection of suspicious packages; and (3) the
issuance of emergency orders (restrictions, prohibitions, recalls, and
out-of-service orders) to address unsafe conditions or practices posing
an imminent hazard. These new inspection and enforcement procedures
will enhance DOT's ability to respond immediately and effectively to
conditions or practices that pose serious threats to life, property, or
the environment.

DATES: Comments must be received by December 1, 2008.

ADDRESSES: You may submit comments by any of the following methods:
     U.S. Government Regulations.gov Web site: http://
www.regulations.gov. Use the search tools to find this rulemaking and
follow the instructions for submitting comments.
     U.S. Mail or private delivery service: Docket Operations,
U.S. Department of Transportation, West Building, Ground Floor, Room
W12-140, Routing Symbol M-30, 1200 New Jersey Avenue, SE., W12-140,
Washington, DC 20590-0001.
     Fax: 1-202-493-2251.
     Hand Delivery: To Docket Operations, Room W12-140 on the
ground floor of the West Building, 1200 New Jersey Avenue, SE.,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays:
    Instructions: You must include the agency name and docket number,
PHMSA-05-22356 or the Regulatory Identification Number (RIN) for this
rulemaking at the beginning of your comment. Note that all comments
received will be posted without change to the U.S. Government
Regulations.gov Web site: http://www.regulations.gov., including any
personal information provided. Please see the Privacy Act section of
this document.

FOR FURTHER INFORMATION CONTACT: Jackie K. Cho or Vincent M. Lopez,
Office of Chief Counsel,<PHONE_NUMBER>, Pipeline and Hazardous
Materials Safety Administration.

SUPPLEMENTARY INFORMATION:

I. Background

    Under authority delegated by the Secretary of Transportation
(Secretary), four agencies within DOT enforce the Hazardous Materials
Regulations (HMR), 49 CFR parts 171-180 and other regulations,
approvals, special permits, and orders issued under Federal Hazardous
Material Transportation Law (Hazmat Law), 49 U.S.C. 5101 et seq.; the
Federal Aviation Administration (FAA), 49 CFR 1.47(j)(1); Federal
Railroad Administration (FRA), 49 CFR 1.49(s)(1); Federal Motor Carrier
Safety Administration (FMCSA), 49 CFR 1.73(d)(1); and Pipeline and
Hazardous Materials Safety Administration (PHMSA), 49 CFR 1.53(b)(1).
The Secretary has delegated authority to each respective operating
administration to exercise the enhanced inspection and enforcement
authority conferred by the Hazardous Materials Transportation Safety
and Security Reauthorization Act of 2005 (HMTSSRA). 71 FR 52751, 52753
(Sept. 7, 2006). The United States Coast Guard (USCG) is authorized to
enforce the HMR in connection with certain transportation or shipment
of hazardous materials by water. This authority originated with the
Secretary and was first delegated to USCG prior to 2003, when USCG was
made part of the Department of Homeland Security. Enforcement authority
over ``bulk transportation of hazardous materials that are loaded or
carried on board a vessel without benefit of containers or labels, and
received and handled by the vessel without mark or count, and
regulations and exemptions governing ship's stores and supplies'' was
also transferred in 2003. DHS Delegation No. 0170.1(2)(103) & 2(104);
see also 6 U.S.C. 458(b), 551(d)(2). The USCG inspects portable tanks
and freight containers primarily under two laws: the Safe Container Act
46 U.S.C. 80501 et seq. with its implementing regulations found in 46
CFR 450-453, and 49 U.S.C Chapter 51 Transportation of Hazardous
Material as it relates to waterborne transportation. DOT will
coordinate its inspections, investigations, and enforcements aboard
vessels and waterfront facilities, as defined in 33 CFR 126.3, with the
USCG to avoid duplicative or conflicting efforts. Moreover, nothing
proposed herein would affect USCG's enforcement authority with respect
to transportation of hazardous materials.

A. Need for Enhanced Enforcement Authority

    Each year, about three billion tons of hazardous materials are
transported in the United States. United States Government
Accountability Office, Undeclared Hazardous Materials: New DOT Efforts
May Provide Additional Information on Undeclared Shipments, GAO-06-471,
at 9 (March 2006) (GAO Report). Under DOT-mandated safety standards,
including suitable packaging and handling, nearly all of these
shipments move through the system safely and without incident. When
incidents do occur, DOT-mandated labels and other forms of hazard
communication provide transportation employees and emergency responders
the information necessary to mitigate the consequences. Together, these
risk controls provide a high degree of protection. Yet their
effectiveness depends largely on compliance by hazmat offerors,
beginning with proper classification and packaging of hazardous
materials. When a package containing hazardous materials is placed in
transportation without regard to HMR requirements, the effectiveness of
all other risk controls is compromised, increasing both the likelihood
of an incident and the severity of consequences. Accordingly, we have
long considered undeclared shipments of hazardous materials to be a
serious safety issue. The HMR define

``undeclared hazardous material'' as a material ``offered for
transportation in commerce without any visible indication to the person
accepting the hazardous material for transportation that a hazardous
material is present, on either an accompanying shipping document, or
the outside of a transport vehicle, freight container, or package''
that is subject to the hazardous materials communication standards. 49
CFR 171.8.
    Approximately 1.2 million hazardous materials shipments are
transported daily; of those, approximately 800,000 involve
consolidations, intermodal, or intramodal transfers and in-transit
storage. 68 FR at 67751 (Dec. 3, 2003). These figures do not include
the unknown numbers of hazardous materials shipments that are
undeclared and, accordingly, less readily accounted for. To detect and
deter hidden shipments of hazardous materials, PHMSA's predecessor
agency amended the HMR in 2004 to require persons who discover
shipments of undeclared hazardous materials to report these incidents
to the agency. 49 CFR 171.16(a)(4). These requirements were intended,
in part, to ``define the extent of the problem, establish trends, and
help gauge the effectiveness of efforts to reduce undeclared
shipments.'' 68 FR 67746, 67754. In 2005, offerors and carriers
reported about 1,000 incidents of undeclared hazardous materials, 70 of
which involved shipments entering the United States from abroad. GAO
Report at 28.
    FAA enforcement statistics show that undeclared hazardous materials
are a frequent and persistent problem. In 1993, FAA reported 420
enforcement cases involving undeclared hazardous materials shipments.
Seven years later, the number of such enforcement cases rose to 1,716.
    Hidden hazardous materials pose a significant threat to
transportation workers, emergency responders, and the general public.
By definition, an undeclared shipment does not include markings or
documentation designed to communicate the material's hazards in the
event of an accidental release. And experience demonstrates that
undeclared hazardous materials are more likely to be packaged
improperly and, consequently, more likely to be released in
transportation. Moreover, it is likely that terrorists who seek to use
hazardous materials to harm Americans will move those materials as
hidden shipments. Accordingly, although the presence of undeclared
hazardous materials by no means demonstrates wrongful intent, we cannot
expect to target willful violations and security threats by limiting
inspections and enforcement to declared shipments. One way to address
the problem of undeclared shipments is by expanding our inspection
authority to permit an enforcement officer to open and examine packages
suspected to contain hazardous materials. This expanded enforcement
authority would also provide us with a tool to identify declared
hazardous materials shipments that nonetheless may not have been
prepared in accordance with the HMR requirements.
    DOT's experience enforcing Federal hazmat law and the HMR also
suggests a need for expedited procedures to address imminent safety
hazards. Imminent hazards, by definition, require immediate
intervention to reduce the substantial likelihood of death, serious
illness, severe personal injury, or a substantial endangerment to
health, property, or the environment. Under current statutory law, DOT
may obtain relief against a hazmat safety violation posing an imminent
hazard only by court order. Even with such a threat present, the DOT
operating administration seeking such relief must coordinate with the
Department of Justice (DOJ) to file a civil action against the
offending party, and seek and obtain a restraining order or preliminary
injunction. As a practical matter, judicial relief could rarely be
obtained before the hazardous transportation movement is complete. The
streamlined administrative remedies implemented in this rulemaking will
materially enhance our ability to prevent unsafe movements of hazardous
materials and reduce related risks.

B. Statutory Amendments to Inspection, Investigation, and Enforcement
Authority

    On August 10, 2005, the President signed the Safe, Accountable,
Flexible, Efficient Transportation Equity Act: A Legacy for Users
(SAFETEA-LU), which included the Hazardous Materials Transportation
Safety and Security Reauthorization Act of 2005 (HMTSSRA) as Title VII
of the statute, 119 Stat. 1891. Section 7118 of HMTSSRA revised 49
U.S.C. 5121 to read:

    --In paragraph (c)(1) that a designated officer, employee, or
agent of the Secretary of Transportation:
    (A) May inspect and investigate, at a reasonable time and in a
reasonable manner, records and property relating to a function
described in section 5103(b)(1);
    (B) Except in the case of packaging immediately adjacent to its
hazardous material contents, may gain access to, open, and examine a
package offered for, or in, transportation when the officer,
employee, or agent has an objectively reasonable and articulable
belief that the package may contain a hazardous material;
    (C) May remove from transportation a package or related packages
in a shipment offered for or in transportation for which--
    (i) Such officer, employee, or agent has an objectively
reasonable and articulable belief that the package may pose an
imminent hazard; and
    (ii) Such officer, employee, or agent contemporaneously
documents such belief in accordance with procedures set forth in
guidance or regulations prescribed under subsection (e);
    (D) May gather information from the offeror, carrier, packaging
manufacturer or tester, or other person responsible for the package,
to ascertain the nature and hazards of the contents of the package;
    (E) As necessary, under terms and conditions specified by the
Secretary, may order the offeror, carrier, packaging manufacturer or
tester, or other person responsible for the package to have the
package transported to, opened, and the contents examined and
analyzed, at a facility appropriate for the conduct of such
examination and analysis; and
    (F) When safety might otherwise be compromised, may authorize
properly qualified personnel to assist in the activities conducted
under this subsection.
    --In paragraph (c)(3) that, in instances when, as a result of an
inspection or investigation under this subsection, an imminent
hazard is not found to exist, the Secretary, in accordance with
procedures set forth in regulations prescribed under subsection (e),
shall assist--
    (A) In the safe and prompt resumption of transportation of the
package concerned; or
    (B) In any case in which the hazardous material being
transported is perishable, in the safe and expeditious resumption of
transportation of the perishable hazardous material.
    --In subsection (d) that,
    (1) In General.--If, upon inspection, investigation, testing, or
research, the Secretary determines that a violation of a provision
of this chapter, or a regulation prescribed under this chapter, or
an unsafe condition or practice, constitutes or is causing an
imminent hazard, the Secretary may issue or impose emergency
restrictions, prohibitions, recalls, or out-of-service orders [as
defined in paragraph (d)(5)], without notice or an opportunity for a
hearing, but only to the extent necessary to abate the imminent
hazard.
    (2) Written Orders.-The action of the Secretary under paragraph
(1) shall be in a written emergency order that-
    (A) Describes the violation, condition, or practice that
constitutes or is causing the imminent hazard;
    (B) States the restrictions, prohibitions, recalls, or out-of-
service orders issued or imposed; and
    (C) Describes the standards and procedures for obtaining relief
from the order.
    (3) Opportunity for Review.--After taking action under paragraph
(1), the Secretary shall provide for review of the action under

section 554 of title 5 if a petition for review is filed within 20
calendar days of the date of issuance of the order for the action.
    (4) Expiration of Effectiveness of Order.--If a petition for
review of an action is filed under paragraph (3) and the review
under that paragraph is not completed by the end of the 30-day
period beginning on the date the petition is filed, the action shall
cease to be effective at the end of such period unless the Secretary
determines, in writing, that the imminent hazard providing a basis
for the action continues to exist.

119 Stat. at 1902-1905.
    Congress enacted HMTSSRA in part to combat the problem of
undeclared hazardous materials shipments. While section 7118 of HMTSSRA
(Section 7118), which amended 49 U.S.C. 5121, enhances DOT's authority
to discover undeclared hazardous materials shipments, the application
of this enforcement authority is not limited to undeclared shipments.
On a broader scale, Section 7118 promotes the Department's inspection
and enforcement authority ``to more effectively identify hazardous
materials shipments and to determine whether those shipments are made
in accordance with the [H]azardous [M]aterials [R]egulations.'' H.
Conf. Rep. No. 109-203, at 1079 (2005), reprinted in 2005 U.S.C.C.A.N.
452, 712. Congress reasoned that the Department needed enhanced
inspection and enforcement authority to ensure that ``DOT officials,
law enforcement and inspection personnel * * * have the tools necessary
to accurately determine whether hazardous materials are being
transported safely and in accordance with the relevant law and
regulations.'' H. Conf. Rep. No. 109-203, at 1081, 2005 U.S.C.C.A.N. at
714. Section 7118 carries out this directive by authorizing DOT
employees to access, open and examine a package (except for the
packaging that is immediately adjacent to the suspected hazardous
material's contents) that was offered for, or is in transportation in
commerce, when those employees have an objectively reasonable and
articulable belief that the shipment may contain a hazardous material,
remove the package from transportation when the shipment may pose an
imminent hazard, order the shipment to be transported, opened, and
tested at an appropriate facility, as necessary, and permit the
shipment to resume its transportation when an inspection does not
identify an imminent hazard.
    Following enactment of HMTSSRA, several interested parties
recommended that PHMSA issue regulations that adopt the traditional
notice and comment rulemaking procedure rather than the temporary
regulations prescribed by statute. PHMSA agrees that the traditional
notice and comment rulemaking is necessary. As described further below,
this rulemaking presents several critical factual and policy issues
warranting public comment and development of an administrative record.

II. Summary of Proposals in This NPRM

    This NPRM proposes procedures to implement the expanded enforcement
authority conferred in HMTSSRA. These procedures would apply to
hazardous materials safety compliance and enforcement activities
conducted by PHMSA, FAA, FRA, and FMCSA inspection personnel.
Specifically, we are proposing procedures to enable DOT inspectors to
open, detain, and remove a hazardous materials shipment from
transportation in commerce, and order the package to be transported to
a facility to analyze its contents. In addition, we are proposing
procedures for issuing emergency orders to address imminent hazards. As
proposed, these procedures will apply in a number of contexts and
circumstances:
     We are proposing procedures under which an inspector may
open a package to determine whether it contains an undeclared hazardous
material or otherwise does not comply with applicable regulatory
requirements. These procedures apply to the opening of an overpack,
outer packaging, freight container, or other packaging component not
immediately adjacent to the hazardous material. Inspectors will not
open single packagings (such as cylinders, portable tanks, cargo tanks,
or rail tank cars) nor will inspectors open the innermost receptacle of
a combination packaging.
     We are proposing procedures under which an inspector may
temporarily remove a package or shipment from transportation when the
inspector believes that the package or shipment poses an imminent
hazard. Such a belief may arise from a compliance problem identified as
a result of opening the package or from conditions observed through an
inspection that does not include opening the package. As proposed, the
inspector may remove a package or shipment from transportation on his
or her own authority provided he records his belief in writing. An
inspector may temporarily remove any type of package or shipment from
transportation if he or she has a ``reasonable and articulable belief''
that the package poses an imminent hazard.
     We are proposing procedures under which an inspector may
order the person in possession of or responsible for the package to
transport the package and its contents to a facility that will examine
and analyze its contents. An inspector may issue such an order for any
type of package or shipment, not merely those packages for which
package opening is authorized. As proposed, the inspector may issue
this order on his own authority provided he documents his reasoning.
     We are proposing procedures under which an inspector will
assist in preparing a package for safe and prompt transportation if,
after a complete examination of a package initially thought to pose an
imminent hazard, no imminent hazard is found. If the package has been
opened, the inspector will assist in reclosing the package in
accordance with the packaging manufacturer's closure instructions or an
alternate closure method approved by PHMSA, marking the package to
indicate that it was opened and reclosed in accordance with DOT
procedures, and returning it to the person from whom it was obtained.
     We are proposing procedures for the issuance of an out-of-
service (OOS) order if, after complete examination of a package
initially thought to pose an imminent hazard, an imminent hazard is
indeed found to exist. The OOS order effects the permanent removal of
the package from transportation by prohibiting its movement until it
has been brought into compliance with all applicable regulatory
requirements. An OOS order may be issued for any type of packaging or
shipment. For example, in the case of motor carriers, DOT will apply
the Commercial Vehicle Safety Alliance (CVSA) OOS criteria for
hazardous materials in identifying an imminent hazard for which an OOS
order may be issued.
     We are proposing procedures for the issuance of an
emergency order when PHMSA, FAA, FMCSA, or FRA determines that a non-
compliant shipment or an unsafe condition or practice is causing an
imminent hazard. As proposed, the PHMSA, FAA, FMCSA, or FRA
Administrator may issue an emergency order without advance notice or
opportunity for a hearing. The emergency order may be issued in
conjunction with or in place of an OOS order. The emergency order may
impose emergency restrictions, prohibitions, or recalls and may be
issued for any type of shipment and for any unsafe condition posing an
imminent hazard, not merely unsafe conditions related to packaging.

III. Summary of Comments

    PHMSA published a notice on January 25, 2006 (71 FR 4207), inviting
interested persons to participate in a series of public meetings to
comment on the agency's implementation of section 7118. The notice
identified 11 possible topics on which PHMSA would begin a discussion
at the public meetings. The topics were:

    (1) The types of outer packagings that could be opened by an
inspector, if the person in possession of the package does not agree
to open the package himself.
    (2) Whether the legal standard for opening an outer packaging--
i.e., an objectively reasonable and articulable belief that the
package may pose an imminent hazard--needs further explanation in
the regulations.
    (3) The locations at which a package would be observed and the
relevance of this fact to the manner of opening the outer packaging
and, if no imminent hazard is found, the manner of reclosing the
package for further transportation in compliance with the HMR.
    (4) The amount of time required to open an outer packaging,
examine the inner container(s) or receptacle(s) and, if no imminent
hazard is found, reclose the package for further transportation in
compliance with the HMR.
    (5) The circumstances under which a person would be required to
have a package transported, opened, and the contents examined and
analyzed, at an appropriate facility.
    (6) The time and cost for the facility to examine and analyze
the contents of a package which would be examined and analyzed at an
appropriate facility.
    (7) The value of the contents of a package which would be
examined and analyzed at an appropriate facility.
    (8) The effect upon offeror or transporter subject to an
emergency action or order, including removing a package from
transportation or ordering a restriction, prohibition, recall, or
OOS order to abate an imminent hazard.
    (9) Conditions that would be appropriate for including in an
emergency restriction, prohibition, recall, or OOS order, such as
allowing a vehicle to be moved to a safe location for inspection or
vehicle repairs.
    (10) The time and cost of preparing a petition for review of an
emergency action or order.
    (11) The criteria necessary to seek relief from the issuance of
an emergency action or order.

71 FR at 4208 (Jan. 25, 2006).
    PHMSA convened public meetings on February 21, 2006, in Dallas,
Texas; March 8, 2006, in Washington, DC; and March 15, 2006, in
Seattle, Washington; in which the agency invited interested persons to
comment on the agency's implementation of section 7118 within the
context of the above 11 topics and any other issues of interest. The
material comments both oral and written elicited from these meetings
are summarized below. (Transcripts of these meetings are available on
the U.S. Government Regulations.gov Web site at http://
www.regulations.gov.)

(1) Types of Outer Packagings That Could Be Opened By an Inspector

    Several participants (Brumbaugh, Jackson, McElhoe, Rinehart,
Roberts, Surovi, Tobin, Association of Hazmat Shippers (AHS), Alaska
Airlines, Boeing Company, Dangerous Goods Advisory Council (DGAC) and
Tyco Healthcare (Tyco)) expressed concern about how DOT intends to
exercise its new enforcement authority, i.e., identifying undeclared
shipments or non-compliant shipments and the procedures DOT would
follow when opening such packages during an inspection. Additionally,
the International Vessel Operators Hazardous Materials Association
(VOHMA) and Council on Safe Transportation of Hazardous Articles
(COSTHA) questioned the manner in which section 7118 would apply to
carriers given that carriers may not open packages that they do not
own. Others suggested that DOT should limit the exercise of its
enhanced inspection and enforcement authority to an offeror's facility
to minimize the risk of a hazardous material release during
transportation and to direct enforcement effort toward the parties most
responsible for ensuring proper packaging and certification.
    PHMSA Response: As discussed above, the primary objectives of DOT's
enhanced inspection and enforcement authority are to discover and
prevent undeclared shipments of hazardous materials that would
otherwise pose imminent hazards in transportation. This authority,
however, is not limited to undeclared hazardous material shipments. If
a shipment, whether or not it is a declared hazardous material, is
found to be leaking; is improperly marked, labeled or packaged; or the
shipping paper indicates a potential problem, a DOT inspector may
invoke this authority to open and examine the shipment to determine the
scope of the problem and potential hazard. In addition, if the shipment
poses an imminent hazard, the inspector may remove it from
transportation. The procedures governing such inspections are
enumerated under proposed section 109.3(b) and discussed in the
section-by-section analysis below. In other words, PHMSA intends for
DOT inspectors to use their enhanced inspection authority to verify
that hazardous materials shipments are packaged, marked, and labeled in
compliance with DOT requirements.
    The package opening authority, however, applies only to an
overpack, outer packaging, freight container, or other packaging
component that is not immediately adjacent to the hazardous material it
contains. Thus, as proposed, DOT inspectors will not open packagings
that serve as the primary means of containment (such as cargo tanks,
portable tanks, railroad tank cars, or cylinders) and will not open
inner packagings of combination packages (such as the bottles inside a
fiberboard box or test tubes inside an infectious substances triple
packaging). In any case, this proposed rule in no way limits the
Department's general inspection and investigation authority under 49
U.S.C. 5103(b)(1). The final rule will authorize certain additional
investigatory techniques and remedies, without limiting DOT's existing
authority with respect to the safe transportation, including security,
of hazardous materials in intrastate, interstate, and foreign commerce.
Section 5103(b) also grants the Secretary regulatory authority with
respect to security in the transportation of hazardous materials.
Therefore, the authority to issue emergency orders is not limited to
safety; rather, it is foreseeable that this authority may be invoked in
a case of national emergency to address potential security violations
involving the transportation of hazardous materials.
    PHMSA foresees that DOT hazardous materials inspections will
continue at offeror or carrier fixed facilities or terminals. But we
note that inspections may be conducted at other locations within the
Department's jurisdiction, consistent with the authority conveyed by
section 7118, depending upon the relevant circumstances and as
necessary to promote the interest of public safety. PHMSA recognizes
that detaining a shipment may impact a commercial transaction involving
the package in transit and will make every effort to avoid unnecessary
delays and interruptions.
    The instances in which this authority may be invoked are heavily
fact-specific and situation-dependent. Thus, it would not serve the
interest of public safety to limit the context in which this authority
may be exercised. Though we will make every effort to avoid unnecessary
delays and shipment interruptions, the authority granted in SAFETEA-LU
is sufficiently specific and particularized, authorizing designated DOT
agents to open a package in transportation if that agent has an
objectively reasonable and articulable belief that the package may
contain a hazardous material, irrespective of the location at which the
package is identified.

    With respect to comments regarding carriers' ability to open
packages, we do not intend this rulemaking to affect contractual or
other legal rights or obligations surrounding the carrier-shipper
relationship. Although carriers and shippers may wish to clarify or
address their contractual arrangements, the regulatory procedures we
are proposing do not depend on carriers' consent or assistance in
opening packages. Should a carrier refuse consent, section 7118
authorizes an agent of the Secretary to open the package himself or
herself or to order the package to be transported to an appropriate
facility at which it may be opened and examined. In any case, we
consider contract negotiations among private entities beyond the scope
of this rulemaking.
    The operating administrations responsible for enforcement of the
HMR--PHMSA, FMCSA, FAA, and FRA--all worked together under PHMSA's
leadership to develop this proposed rule. This NPRM proposes
regulations that establish a clear, basic outline of the procedures all
four operating administrations will use to implement DOT's new
enforcement authority. To provide for uniformity across modes of
transportation and separate enforcement staffs, the regulations
proposed in this NPRM must be broad and provide a common framework. The
operating administrations are also developing a joint operations manual
to address issues particular to a specific mode of transportation or
regulated industry. It is our intent that the joint operations manual
will be publically available on PHMSA's Web site at the time of
issuance of the Final Rule. The proposed regulations set out a
framework for the procedures PHMSA, FMCSA, FAA, and FRA will employ
when conducting inspections or investigations, thus ensuring
consistency in approaches and enforcement measures among modes of
transportation. A Final Rule, implemented with the guidance of an
operational manual, will ensure that this authority, especially a
finding of an imminent hazard, is used effectively yet judiciously. It
will focus and direct an informed enforcement effort to address
problems with undeclared shipments of hazardous material and other
packaging communication requirements while preventing the additional
authority from being misused as an exploratory tool or without reasoned
deliberation.

(2) The Meaning and Application of Objectively Reasonable and
Articulable Belief That a Package May Pose an Imminent Hazard

    Commenters raised two critical questions regarding the legal
standards that determine whether DOT may open a shipment and detain and
remove it from transportation. The American Trucking Association (ATA),
COSTHA, DaRuBa Enterprises (DaRuBa), Arrowhead Industrial Services,
DGAC, VOHMA, and Tyco contend that the operative term ``objectively
reasonable and articulable belief'' requires further explanation. AHS,
COSTHA, and VOHMA also requested clarification on what the term
``imminent hazard'' means. Finally, several interested persons,
including DGAC, ATA, and the Institute of Makers of Explosives (IME)
questioned how PHMSA would define these terms in the regulatory text.
    PHMSA Response: The proposed rule defines ``objectively reasonable
and articulable belief'' as ``a belief based on particularized and
identifiable facts that provide an objective basis to believe or
suspect.'' See proposed Sec.  109.1. The proposed rule defines
``imminent hazard'' as ``the existence of a condition relating to
hazardous material that presents a substantial likelihood that death,
serious illness, severe personal injury, or a substantial endangerment
to health, property, or the environment may occur before the reasonably
foreseeable completion date of a formal proceeding begun to lessen the
risk of that death, illness, injury, or endangerment.'' See proposed
Sec.  109.1. This proposed definition of ``imminent hazard'' is
consistent with the statutory definition of the term found in 49 U.S.C.
5102(5). Both of these terms determine whether the Department may
detain, open, and examine a suspect shipment for the presence of
hazardous material in its contents and/or remove the package from
transportation in commerce.
    PHMSA starts with the premise that an offeror that places articles
in a closed and opaque container has a legitimate expectation of
privacy and retains a possessory interest in those items when they are
being transported in commerce. Jacobsen, 466 U.S. at 113, 114; U.S. v.
Villarreal, 963 F.2d at 773. The hazardous materials transportation
industry, however, is closely regulated, meaning that a person engaging
in this industry has a reduced expectation of privacy. U.S. v. V-1 Oil
Company, 63 F.3d 909, 911 (9th Cir. 1995), cert. denied, 517 U.S. 1208
(1996). DOT therefore is authorized to conduct warrantless and
unannounced inspections of an entity that offers or transports
hazardous material in commerce to determine its level of compliance
with the Hazmat Law and HMR under the ``administrative search''
doctrine. Id. at 913.
    When the government asserts control of the shipment and its
contents, e.g., by detaining the package from further transportation,
it has conducted a seizure subject to the Fourth Amendment. Jacobsen,
466 U.S. at 120. Nevertheless, brief investigative detentions are
authorized, provided there is a reasonable articulable suspicion that
the shipment does not comply with regulatory requirements. V-1 Oil
Company v. Means, 94 F.3d 1420, 1424 (10th Cir. 1996). Known as a
``Terry'' stop after the landmark decision, Terry v. Ohio, 392 U.S. 1
(1968), such an investigative stop is permitted when an inspector can
``point to specific and articulable facts which, taken together with
rational inferences from those facts, reasonably warrant'' the
detention. Terry, 392 U.S. at 21. The inspector must have
particularized and identifiable facts, i.e., some articulable basis, to
believe that a Federal statute or regulation has been violated. See
Brierley v. Schoenfeld, 781 F.2d 838, 841 (10th Cir. 1986). Terry
employs a ``less demanding standard than probable cause and requires a
showing considerably less than preponderance of the evidence.''
Illinois v. Wardlow, 528 U.S. 119, 123 (2000). (In contrast, probable
cause means ``a fair probability that contraband or evidence of a crime
will be found.'' Alabama v. White, 496 U.S. 325, 330 (1990)). In short,
DOT need only establish a ``minimal level of objective justification''
to detain, open, and inspect a shipment that may have hidden or
undeclared hazardous materials. See U.S. v. Sokolow, 490 U.S. 1, 7
(1989).
    Accordingly, an inspector would need to produce facts establishing
that the official reasonably believed that a noncomplying condition
existed. U.S. v. Delfin-Colina, 464 F.3d 392, 398 (3d Cir. 2006). An
inchoate hunch or guess would be insufficient: an inspector is required
to set out evidence supporting the detention. Alabama, 496 U.S. at 329-
30; see also 59 FR 7448, 7454 (Feb. 15, 1994) (FRA ``reasonable cause''
testing standard requires reasonable suspicion). The information relied
upon may come from a variety of sources, including but not limited to
the following: package appearance, identity of offeror or carrier, an
odor emanating from a container, and anonymous tips. U.S. v. Wheat, 278
F.3d 722, 726 (8th Cir. 2001), cert. denied, 537 U.S. 850 (2002). The
basis for reasonable

suspicion would center on the totality of circumstances experienced by
the inspector and the official's skill and experience in determining
whether an investigative stop would be justified. Brierley, 781 F.2d at
841. The Department therefore would afford its inspectors reasonable
discretion in making reasonable suspicion findings in light of the
flexible nature of Terry and its progeny.
    While this proposed regulation implements the Department of
Transportation's enforcement authority, it does not in any way affect
Department of Homeland Security (DHS) agents exercising their statutory
authority at points of entry. Therefore, DOT's standards for the
inspection and detention of packagings, vehicles or persons, including
a requirement of an objectively reasonable and articulable belief that
a package may contain a hazardous material, do not apply to DHS, which
operates under separate statutory and regulatory authorities.
    Finally, Department officials would exercise reasonable, intrusive
means when stopping a shipment from continuing in transportation in
commerce. An inspector would be authorized to hold a package at a
terminal or depot until qualified personnel or shipping papers arrived
to ascertain its contents. The inspector also would be permitted to
order the shipment to be moved to an appropriate facility when
necessary to safely conduct an inspection. See Means, 94 F.3d at 1427.
The inspector would release the shipment for transportation when the
underlying objectives of the detention had been met.
    The term imminent hazard has been defined in the hazmat law for
many years (49 U.S.C. 5102(5)) and PHMSA proposes to retain that
definition without change. An imminent hazard exists when an unsafe
condition or practice, or a combination thereof, causes, or is causing,
a situation that is likely to result in serious injury or death, or
significant property or environmental damage if not discontinued
immediately. The proposed rule would authorize a designated DOT
inspector to remove a package from transportation if the inspector has
an objectively reasonable and articulable belief that the package may
pose an imminent hazard, provided that he contemporaneously documents
such belief in accordance with the regulations issued under section
7118(e).
    In summary, this proposed rule would provide three new enhanced
enforcement tools. First, a Department inspector would be permitted to
stop, open, and examine a shipment when he or she has a reasonable
suspicion that the package contains a hazardous material. Depending on
the circumstances, a package may be suspicious even if it bears no
mark, label, or shipping paper indicating the presence of a hazardous
material. In other cases, a package could be marked or labeled
incorrectly, thus causing the inspector to believe that the package
contains hazardous material. Misidentification of the package contents
can have serious safety implications, well justifying use of the
package opening authority to inspect HMR compliance. Listing of an
incorrect UN identification number, for example, could result in
improper segregation, handling, and/or response measures. Likewise, the
inspector could elect to open a package that is properly marked and
labeled but that appears not to comply with other regulatory
requirements or otherwise presents an imminent hazard.
    Second, the Department inspector or delegated official would be
authorized to remove the package and related packages in the shipment
from transportation in commerce and order their delivery to an
appropriate facility for testing and analysis when he or she has
determined that an imminent hazard may exist. A finding of imminent
hazard is not a prerequisite to the detention, opening and examination
of a package suspected of containing a hazardous material. Third, upon
further investigation, PHMSA on its own initiative, or after advice and
recommendation from the other modal officials, may issue a recall of an
entire packaging design if it presents an imminent hazard.

(3) Reclosing Packages

    Several commenters expressed concern about the reclosing of
packages after they have been opened. Allergan, COSTHA, Delta Airlines,
and Rykos expressed concern about preserving the integrity of a package
after it has been opened and found not to contain an undeclared
hazardous material. The regulated community also was interested in
learning about the manner in which DOT intends to reclose certain
packagings that have been opened in transit, including specification
packaging; refrigeration packaging; specific-mode packaging;
pharmaceutical manufacturing and healthcare products packaging;
overnight or express delivery packaging; and packages containing
expensive, valuable, or perishable products. American President Lines
(APL), the Association of American Railroads, Nuclear Energy Institute,
and Rykos inquired about reclosing packagings that require specialized
seals, and the ATA suggested that DOT develop a seal or tape to
identify that a package has been opened to ensure against rejection
upon delivery. Finally, American Eagle Airlines, Brookwarehousing
Corporation, COSTHA, DGAC, International Warehouse Logistics
Association (IWLA), United Parcel Service, and VOHMA advised that PHMSA
should consider whether small businesses or carrier terminals are
properly equipped to reclose a package that is already in transit at
the time DOT conducts an inspection.
    PHMSA Response: The Department is developing internal operational
procedures to address the proper closure of packaging in accordance
with the HMR. As part of these procedures, we are considering affixing
a DOT-specific tape over the packaging that identifies the agency and
the inspector who opened the package in question. These procedures will
be covered within the joint operations manual discussed above in the
section entitled ``Types of Outer Packages that could be Opened by
Inspectors.''
    We are sensitive to concerns about reclosing shipments that are
opened during a hazardous materials inspection. The availability of
qualified personnel, equipment, accessibility, and other capabilities
are factors we are considering for the guidelines on reclosing
shipments after conducting inspections. PHMSA thus solicits further
comments from the public on these and other factors in reclosing
packages and the manner and materials available to prevent release of
hazardous materials.

(4) Amount of Time Required To Open and Examine an Outer Packaging

    The ATA and VOHMA expressed concern that enhanced inspections may
delay their business operations and questioned whether exercising this
authority may impact carriers' other existing regulatory requirements.
For example, ATA expressed concern that the amount of time required to
open and examine a package may potentially affect a carrier's
obligation to comply with hours of service requirements under the
Federal Motor Carrier Safety Regulations. Moreover, VOHMA stated that
if a package is opened in accordance with this enhanced authority,
inspectors may not be able to restore every package in accordance with
the manufacturer's instructions, and thus the package could become
noncompliant with other regulatory

requirements or be refused by the consignee.
    PHMSA Response: We believe that the package opening authority can
be exercised without undue interference with business operations. DOT
will take reasonable measures to narrow the scope of an enhanced
inspection to determine compliance with the HMR and will remove a
shipment from transportation only when there is a reasonable basis for
suspecting that the package may pose an imminent hazard.
Correspondingly, the Department will limit the time of such inspections
to minimize transportation delays when we can do so without
compromising transportation safety. We request comments relating to any
time-sensitive standards or consignment contracts mandated by law that
may be affected by a final rule.
    The implementation of this enhanced authority will not waive or
supersede any other regulatory requirements. The packages must be
reclosed and shipped in accordance with the HMR. An inspector who
exercises this enhanced authority will take action to facilitate the
resumption of transportation in commerce if the package is found to be
in compliance with the HMR. If the package is not in compliance, the
package will not be returned to the stream of commerce until the
package is brought into conformance with the HMR.

(5) When a Package Must Be Transported and Analyzed at an Appropriate
Facility

    The ATA and DGAC inquired about which entity would transport a
hazardous material package to an offsite facility, pay to transport,
and test the material subject to this authority.
    PHMSA Response: The operating administration requiring the testing
will pay for the transportation and analysis of the material if the
package is found to be in compliance with the HMR. If the material is
found to be packaged in violation of the HMR, the costs for the
transportation and analysis of the material would be taken into
consideration at the time any civil penalty is assessed against the
party responsible for the violation (usually the offeror). Furthermore,
nothing herein is intended to relieve any entity or person of hazmat
clean-up costs under Federal, State, or local laws as enforced by other
Federal government agencies (e.g., Environmental Protection Agency,
Bureau of Alcohol Tobacco, Firearms, and Explosives, and Occupational
Safety and Health Administration).

(6) Effect on Offeror or Transporter Subject to an Emergency Action or
Order

    Commenters addressed the issue of the impact that an emergency
order may have on an offeror or transporter that is subject to its
requirements. Their primary concern was the effect that an emergency
order may have on commercial operations relating to pre-transportation
and transportation functions that are regulated by the HMR.
    PHMSA Response: PHMSA understands that an emergency order may
affect commercial operations of offerors or transporters that perform
regulated activities. Indeed, because issuance of an emergency order
does not require a finding of noncompliance, it is possible that such
an order could require a regulated entity to alter or amend otherwise
lawful practices or transactions. The circumstances warranting such
extraordinary action are necessarily fact-specific and, in all
likelihood, rarely encountered. In any case, DOT intends to tailor the
remedy to the imminent hazard present, issuing only the appropriate
restriction, prohibition, recall, or out-of-service order necessary to
abate the condition. We will use this enforcement tool judiciously, as
a means of addressing imminent hazards and not as a substitute for
rulemaking or other measures for addressing emergent risks.

(7) Liability

    Commenters also raised the issue of whether DOT or its operating
administrations would be liable for any damages to business operations
when an inspector conducts an enhanced inspection or when a modal
administration issues an emergency order. In particular, the interested
persons asked whether the Federal government would be responsible for
compensatory, consequential, or incidental damages incurred by any
regulated entity that had its shipments contaminated, damaged, delayed,
destroyed, or removed from service as a result of an enhanced
inspection or emergency order.
    PHMSA Response: PHMSA acknowledges that the exercise of enhanced
inspection and enforcement authority occasionally may result in the
breach of packages and/or delay of shipments that have been offered and
transported in full compliance with regulatory requirements. Although
we will strive to minimize such effects, we believe the public benefits
to be gained through enhanced inspection and enforcement measures
justify the increased burdens. The exercise of enhanced inspection and
enforcement authority in accordance with the proposed rule will protect
life, property, and the environment, and improve the performance of the
transportation system by reducing risks posed by undeclared and other
noncompliant hazardous materials shipments.
    To minimize burdens on the transportation system, the Department
will take measures to target and manage its exercise of enhanced
inspection and enforcement remedies. Such measures include training its
inspectors to exercise appropriate discretion while carrying out their
inspection tasks consistently with HMTSSRA and a final rule. In any
case, we do not expect DOT to bear financial responsibility for private
costs related to our exercise of enhanced inspection and enforcement
authority. Under the discretionary function exception, the Federal Tort
Claims Act (FTCA) would bar any common law tort action against the
Department or operating administration based on such activities. See 28
U.S.C. 2680(a); United States v. S.A. Empresa de Viacao Aerea Rio
Grandense, 467 U.S. 797, 809-10 (1984) (``Varig Airlines'')
(discretionary function exemption was intended to exempt claims
stemming from Federal agencies' regulatory activities); Hylin v. U.S.,
755 F.2d 551, 553 (7th Cir. 1985) (discretionary function exception
prohibits tort claims against government for inspection and enforcement
activities requiring exercise of discretion); Mid-South Holding Co. v.
United States, 225 F.3d 1201, 1206 (11th Cir. 2000) (discretionary
function exception applies to any discretionary act irrespective of
``administrative level at which it is authorized or taken''); Wells v.
United States, 655 F. Supp. 715, 720 (D.D.C. 1987) (government's
discretionary acts in regulating private conduct ``are presumptively
exempt from liability''), aff'd, 851 F.2d 1471 (D.C. Cir. 1988), cert.
denied, 488 U.S. 1029 (1989); cf., Roundtree v. United States, 40 F.3d
1036 (9th Cir. 1994) (FAA not liable in suspending operating
certificate under FTCA's discretionary function exception).

(8) Training of Inspectors

    APL and DGAC recommended that DOT properly train the inspectors who
will exercise the enhanced inspection and enforcement authority in the
field. They contend training is essential to ensure that well-defined
inspections are conducted, enforcement actions are measured, and the
public (and the inspectors themselves) are protected.
    PHMSA Response: PHMSA agrees that the DOT inspectors conducting

enhanced inspections will need to be trained on carrying out such
inspections. Inspectors will also be trained on utilizing an
enforcement remedy commensurate with the non-complying condition or
imminent hazard identified and having the requisite knowledge in
repackaging shipments that have been opened. The inspectors also will
need to be trained on various scenarios in which they will need to
order a shipment to be transferred to an appropriate facility for
testing and analysis. Because all Department inspectors will have the
same general training and modal specific instruction (as discussed
above in the section on ``Types of Outer Packages that could be Opened
by Inspectors''), PHMSA is confident that inspectors will be proficient
in applying the enhanced inspection and enforcement regulations to
inspections conducted at offeror or carrier facilities.

(9) State Participation in the Federal Hazardous Materials Inspection
Program

    APL, ATA, IME, and Prezant Consulting cautioned that DOT and State
inspectors conducting hazardous materials inspections need to be
consistent in carrying out the regulations implementing the enhanced
inspection and enforcement authority.
    PHMSA Response: The proposed rule is limited in scope to authorized
Federal enforcement employees of PHMSA, FRA, FAA, and FMCSA. The
proposed regulations and underlying statutory authority are Federal;
they would not empower State officials to exercise the enhanced
inspection and enforcement authority. All emergency orders under this
enhanced enforcement authority will be issued solely by the Federal
government, not State participants. These proposed regulations are not
intended to be part of the Motor Carrier Safety Assistance Program
(MCSAP) or the Rail Safety State participation program. However, the
proposed regulations would not limit the States from passing similar
statutes or from promulgating similar regulations for their hazardous
materials transportation enforcement officials.

(10) Communications/Notification to Parties

    APL, IWLA, DaRuBa, and Tyco expressed concern about notifying
offerors and consignees about a possible delay in arrival because DOT
intended to open a package for inspection.
    PHMSA Response: PHMSA believes that all parties responsible for a
shipment that is opened or removed from transportation need to be
notified of the action taken. DOT inspectors will be required to
communicate the findings made and enforcement measures taken to the
appropriate offeror, recipient, and carrier of the package, and the
expected delay or detention based on the condition of the shipment,
location of the inspection, and need and availability of personnel,
equipment, and other resources to reclose the package to safely resume
its transportation.

(11) Assumption of Control of Detained Shipment

    Commenters questioned who would assume control of a package when an
inspection found undeclared hazardous material or determined that the
shipment may pose an imminent hazard, and when such control would
commence.
    PHMSA Response: The offeror tendering the package or the carrier
transporting the shipment retains custody of the shipment until the
government asserts or exercises dominion or control over the package
and its contents. Jacobsen, 466 U.S. at 120. Once an inspector opens
the package to continue the inspection or detain or remove the shipment
from transportation, the Department will become the responsible
custodian for the package. If a package is opened but does not pose an
imminent hazard, and is otherwise in compliance with the HMR, the
inspector will assist in reclosing the package, at which point custody
will revert to the offeror or carrier, and reenter the transportation
stream. If a package is non-compliant before it is opened, and it is
later found not to pose an imminent hazard, the offeror or carrier will
resume custody of the package at the conclusion of the investigation.
It is the ultimate responsibility of the offeror to bring any such
package into compliance.
    This proposed rule contemplates DOT informing the private party of
the government's intent to assert and relinquish control of the
shipment and the measures it will take to safeguard and reclose the
package until it is safe to resume its movement in transportation.
PHMSA welcomes comments on the parties' expectations when the
government exercises control of a package and whether further
clarification of possessory interest is necessary.

Section-by-Section Analysis

    PHMSA proposes to add part 109 to Title 49, Code of Federal
Regulations, prescribing standards and procedures governing exercise of
enhanced inspection and enforcement authority by DOT operating
administrations. Below is an analysis of the proposed regulatory
provisions.

Section 109.1 Definitions

    This section contains a comprehensive set of definitions. PHMSA
proposes to promulgate these definitions in order to clarify the
meaning of important terms as they are used in the text of this
proposed rule. Several terms introduce concepts new to the HMR. These
definitions require further discussion as set forth below. Other terms
defined in this rule are borrowed from the Hazmat Law at 49 U.S.C. 5102
and are used in their statutory meaning.
    Administrator and Agent of the Secretary or agent are proposed to
identify the parties authorized by delegation from the Secretary to
carry out the functions of the proposed rule. Administrator is defined
as the head official of each operating administration within DOT to
whom the Secretary has delegated authority under 49 CFR part 1 and any
person employed by an operating administration to whom the
Administrator has delegated authority to carry out this rule. Likewise,
Agent of the Secretary or agent means a Federal officer or employee,
including an inspector, investigator, or specialist authorized by the
Secretary or Administrator to conduct inspections or investigations
under the Hazmat Law and HMR.
    Chief Safety Officer or CSO refers to the Assistant Administrator
for PHMSA who is appointed in competitive service by the agency's
Administrator. See 49 U.S.C. 108(e).
    Emergency order is defined as an emergency restriction,
prohibition, recall, or out-of-service (OOS) order. (The term ``out-of-
service order'' is defined below.) As proposed, an Administrator, and
in the case of an OOS order, an agent of the Secretary would be
authorized to impose an equitable remedy restricting, prohibiting,
recalling, or removing from service a package that contains a hazardous
material. An emergency order is the type of extraordinary relief
available to address imminent hazard circumstances.
    Freight container is defined as it is defined in 49 CFR 171.8 and
has been included in this section for clarity and ease of referral.
    Immediately adjacent to the hazardous material contained in the
package means a packaging that is in direct contact with the hazardous
material, or otherwise serves as the primary means of containment of
the hazardous material.

    As defined by statute, imminent hazard means ``the existence of a
condition that presents a substantial likelihood that death, serious
illness, severe personal injury, or a substantial endangerment to
health, property, or the environment may occur before the reasonably
foreseeable completion date of a formal proceeding begun to lessen the
risk of that death, illness, injury, or endangerment.'' 49 U.S.C.
5102(5). Restated, an imminent hazard exists when any condition is
likely to result in serious injury or death, or significant property or
environmental damage if not discontinued immediately. Cf. Sen. Rep. No.
98-424, at 12 (1984), reprinted in 1984 U.S.C.C.A.N. 4785, 4796
(definition of ``imminent hazard'' under the Motor Carrier Safety Act).
    Objectively reasonable and articulable belief is defined in this
proposed rule as a belief based on discrete facts or indicia that
provide a reasonable basis to believe or suspect that a shipment may
contain a hazardous material. The term, which is discussed above in the
context of DOT inspections of hazardous materials shipments, codifies
the temporary stop and detention principle often referred to as a
``Terry'' stop, referring to Terry v. Ohio, 392 U.S. 1 (1968). The
reasonable suspicion standard must be more than an ``inchoate and
unparticularized suspicion or `hunch[,]' '' id. at 27, meaning that a
reasonable person possessing the same information as the inspector had
must have believed that the action taken was appropriate. Id. at 21-22.
In determining whether an officer or agent had such a reasonable
suspicion, courts consider the ``totality of the circumstances.'' See
Schneckloth v. Bustamonte, 412 U.S. 218 (1973). At its core, the term
refers to an investigatory stop in which there is particularized
suspicion based on observations made, inferences drawn, and deductions
made that the shipment does not comply with the Hazmat Law or HMR. See
generally, U.S. v. Cortez, 449 U.S. 411, 417-18 (1981).
    The brief investigative detention enables the inspectors to conduct
a more thorough inspection to determine the level of compliance with
the Hazmat Law or HMR and is reasonably related in scope to the
circumstances justifying the detention. See Means, 94 F.3d at 1424;
U.S. v. McSwain, 29 F.3d 558, 561 (10th Cir. 1994). This legal standard
authorizes minimally intrusive conduct to detain a shipment for a short
duration when articulable facts and circumstances suggest that a
package contains undeclared hazardous materials. See McSwain, 29 F.3d
at 561. The agency notes that the standard authorizes inspectors to
employ reasonable intrusive means, but not the least intrusive means,
to conduct an inspection, meaning that safety and security measures may
justify moving a package to another site when necessary to carry out an
inspection. See Means, 94 F.3d at 1427.
    Out-of-service (OOS) order is defined as a written requirement
issued by an agent of the Secretary prohibiting further movement or
operation of an aircraft, vessel, motor vehicle, train, railcar,
locomotive, transport vehicle, or freight container, portable tank, or
other package until certain conditions have been satisfied. An order is
similar in concept and application to a special notice for repairs that
FRA issues for freight cars, locomotives, passenger equipment, and
track segments. See 49 CFR part 216. The definition covers transport
vehicles and packages that are unsafe for further movement, requiring
that the equipment be removed from transportation until repairs are
made or safety conditions are met. PHMSA believes that an OOS order is
appropriate when equipment or a shipment is unsafe for further service
or presents an unreasonable or unacceptable risk to safety, creating an
imminent hazard at a given instant.
    Packaging as defined in this part is more expansive than the
definition provided at 49 CFR 171.8. In this part, proposed Sec.  109,
the term includes a freight container, intermediate bulk container,
overpack, or trailer as a receptacle to contain a hazardous material.
As proposed, the regulatory text would authorize DOT inspectors to
open, detain, and remove from transportation such container or
enclosure units when circumstances warrant.
    Perishable refers to a hazardous material that may experience
accelerated decay, deterioration, or spoilage. PHMSA envisions
etiologic agents, such as biological products, infectious substances,
medical waste, and toxins as perishable commodities that will require
special handling.
    Properly qualified personnel means a company, partnership,
proprietorship, or individual who is qualified to inspect, examine,
open, remove, test, or transport hazmat shipments.
    Remove means to keep a package from entering into the stream of
transportation in commerce; to take a package out of the stream of
transportation in commerce by physically detaining a package that was
offered for transportation in commerce; or stopping a package from
continuing in transportation in commerce. The term is defined to make
clear that if a DOT inspector has an objectively reasonable and
articulable belief that a package may pose an imminent hazard, that
inspector is authorized to stop, detain, and prevent the further
transportation in commerce of that package until the imminent hazard is
abated.
    Safe and expeditious refers to appropriate measures or procedures
available to minimize any delays in resuming the movement of a
perishable hazardous material.
    Trailer is added to set out the contours of another type of package
that is subject to this rule. Although a trailer and freight container
perform the same function, a trailer has a chassis, hitch, and tires
attached to the unit, enabling it to travel as a cargo unit attached to
a tractor.

Section 109.3 Inspections and Investigations

    Proposed Sec.  109.3 sets out the inspections and investigations
that agents of the Secretary (e.g., DOT inspectors) would be authorized
to conduct in implementing the HMTSSRA. Of significance, this section
would implement section 7118 by enabling inspectors to open, detain,
and remove a hazardous material shipment from transportation in
commerce, and order the package to be transported to a facility that
can analyze its contents.
    Paragraph (a) of Sec.  109.3 reiterates the authority to initiate
inspections and investigations as provided by 49 U.S.C. 5121(a), which
has been delegated to the operating administrations and redelegated to
the inspectors by internal delegation. The operating administrations
focus their inspection resources on the mode of transportation that
they oversee. See 49 CFR 1.47(j)(1) (FAA), 1.49(s)(1) (FRA), 1.53(b)(1)
(PHMSA), and 1.73(d)(1) (FMCSA). Nevertheless, operating
administrations may ``use their resources for DOT-wide purposes, such
as inspections of shippers by all modes of transportation.'' 65 FR
49763, 49764 (Aug. 15, 2000). DOT believes that broad delegation
authority is necessary to address cross-modal and intermodal issues to
combat undeclared hazardous materials shipments. Id. at 49763.
Accordingly, DOT inspectors would be authorized to carry out the
enhanced inspection and enforcement authority rule across different
modes of transportation.
    Proposed Sec.  109.3(b) sets out the enhanced inspection process
when conducting hazardous materials inspections. Inspectors must
present their credentials for examination upon request under 49 U.S.C.
5121(c)(2) and may gather information by interviewing,

photocopying, photographing, and audio and video recording during
inspections or investigations. The inspections or investigations may be
conducted at any pre-transportation or transportation facility wherever
a hazardous material is offered, transported, loaded, or unloaded or
stored incidental to the hazardous material movement, provided they are
performed ``at a reasonable time and in a reasonable manner.'' See 49
U.S.C. 5121(c)(1)(A); 49 CFR 171.1. PHMSA interprets ``reasonable
time'' to mean an entity's regular business hours. PHMSA believes
``reasonable manner'' means that DOT inspectors may gather information
from any entity or source that is related to the transportation of
hazardous materials in commerce whenever hazardous material operations
or work connected to such operations are being performed. See generally
H.R. Rep. No. 96-1025, at 14 (1980), reprinted in 1980 U.S.C.C.A.N.
3830, 3839. DOT also may issue and serve administrative subpoenas for
documents or other tangible things when such evidence is necessary to
assist an inspection or investigation. Each operating administration
would serve the subpoena in accordance with its own regulations. See 14
CFR 13.3 (FAA), 49 CFR 105.45-.55 (PHMSA), 49 CFR 209.7 (FRA), and 49
CFR 386.53 (FMCSA). PHMSA believes that this provision would enable DOT
to gather information from any source, including the offeror, carrier,
packaging manufacturer or tester responsible for the shipment, to learn
about the nature of the contents of the package. This process would
promote communication and cooperation by all concerned parties and
enable the Department to detect and deter undeclared hazardous material
shipments.
    Proposed Sec.  109.3(b)(4) implements the authority conferred by 49
U.S.C. 5121(c)(1) to enable DOT inspectors to take enhanced inspection
and enforcement action. Under Sec.  109.3(b)(4)(i), inspectors may open
an overpack, outer packaging, freight container, or other package
component that is not immediately adjacent to the hazardous material
contents and inspect the inside of the receptacle or container for
undeclared hazardous material, provided that the officials have an
objectively reasonable and articulable belief that the shipment
contains hazardous material. (Please see above for PHMSA's discussion
of the meaning and application of ``objectively reasonable and
articulable belief.'') Therefore, shipments such as plastic bottles or
drums, which are in direct contact with a hazardous material, will not
be opened pursuant to this authority. PHMSA expects DOT inspectors to
exercise this enhanced authority at locations through which hazardous
materials are shipped and transported, including port facilities, weigh
stations, international border crossings, interchange points,
intermodal facilities, and terminals to identify undeclared hazardous
material shipments or other noncompliant shipments that are offered for
transportation, or being transported, in commerce.
    The enhanced inspection authority builds on the existing authority
to conduct warrantless inspections. Under the administrative search
doctrine, a company engaged in a closely regulated activity, such as
hazardous materials transportation, has no Fourth Amendment protection
against unannounced compliance inspections. See V-1 Oil, 63 F.3d at 913
(FRA's warrantless and unannounced inspection of a hazardous materials
transportation facility is constitutional); see also U.S. v. Burger,
482 U.S. 691 (1987); Skinner, 489 U.S. at 625 (railroad industry is
pervasively regulated to ensure safety); U.S. v. Mendoza-Gonzalez, 363
F.3d 788, 794 (8th Cir. 2004) (commercial trucking is a closely
regulated industry); Means, 94 F.3d at 1426 (motor carrier industry is
closely regulated); Suburban O'Hare Com'n v. Dole, 787 F.2d 186, 188
(7th Cir.) (aviation industry is closely regulated), cert. denied, 479
U.S. 847 (1986). The proposed rule would enable inspectors who already
have unconditional access to property relating to hazardous material
transportation to more closely examine certain shipments. In all cases,
DOT inspections are limited by time, place, and manner in which a
package may be opened. The statute (49 U.S.C. 5121) limits the
discretion of the inspectors, delineating the scope of inspections and
defining the objective circumstances in which the package opening
authority may be exercised. These limitations promote uniform
application of the enhanced inspection authority, while leaving
inspectors sufficient discretion to respond effectively to
circumstances encountered in the field. We note that DOT's use of
unannounced, warrantless inspections has survived legal and
constitutional challenge, as reflected in the cases cited above.
Although evidence gathered in hazmat inspections or investigations
could later serve as the basis for criminal prosecution, our use of
warrantless inspections serves a legitimate and lawful purpose:
detecting and deterring undeclared hazardous material shipments. See
Skinner, 489 U.S. at 620-21 n.5 (1989) (FRA inspection program served
lawful purpose and was not a pretext to collect evidence for criminal
law enforcement purposes).
    Proposed Sec.  109.3(b)(4)(ii) implements 49 U.S.C. 5121(c)(1)(C)
by permitting a DOT inspector to remove from transportation in commerce
a package (including a freight container) when the inspector has an
objectively reasonable and articulable belief that the package contains
a hazardous material and may pose an imminent hazard. PHMSA intends to
employ this remedy when necessary to suspend or restrict the
transportation of a shipment that is deemed unsafe. See S. Rep. No.
101-444, at 10 (1990), reprinted in 1990 U.S.C.C.A.N. 4595, 4604.
Should this condition exist, the inspector must document the basis for
removing the package from transportation as soon as practicable,
including the findings that the shipment contained a hazardous material
and the imminent hazard identified. The documentation requirement
safeguards the inspection and enforcement process by requiring DOT to
specifically describe the hazard present and substantiate the need to
remove the shipment from the stream of commerce. The documentation will
chronicle the activities and events culminating in removing the package
from transportation. The documentation must provide sufficient
justification to pursue further investigation into the contents of a
package. This section further provides that an inspector must limit
this removal to a reasonable duration of time in order to determine
whether the package may pose an imminent hazard.
    Section 109.3(b)(4)(iii), which implements 49 U.S.C. 5121(c)(1)(E),
proposes that an agent of the Secretary may order the party in
possession of the package, or otherwise responsible for the shipment,
to have it transported to, opened, and examined at an appropriate
facility if it is not practicable to examine the contents of a package
at the time of the stop. This provision would enable DOT to facilitate
learning about the nature of the product inside the shipment by
permitting delivery of the shipment to a facility that is capable of
identifying the contents. PHMSA intends for DOT to employ this remedy
only when an on-site inspection is inadequate or a facility has the
sophisticated personnel, equipment, and information technology to
assist in the inspection or investigation. Qualified personnel may be
asked to assist DOT when the inspectors open,

detain, or remove a shipment, if it is possible that a package may
experience a leak, spill, or release. Proposed Sec.  109.3(b)(4)(iv)
provides this authorization.
    Under proposed Sec.  109.3(b)(5), an inspector would make a
reasonable effort to assist in preparing a shipment to reenter
transportation after opening or detaining the package if the shipment
does not pose an imminent hazard and reentry in transportation is
otherwise practicable. The inspector or a designee would reclose the
package in accordance with the packaging manufacturer's instructions or
other procedures approved by PHMSA's Associate Administrator for
Hazardous Materials Safety. The inspector would then mark and certify
that the shipment was opened and reclosed, and return the shipment for
transportation, as quickly as practicable. Additionally, the inspector
would assist in the safe and expeditious movement of a shipment that
contains a perishable material once it is determined that the package
does not present an imminent hazard. These measures, of course, presume
that the package otherwise complies with the HMR. The Department's
operating administrations would not be responsible for bringing an
otherwise non-specification or non-compliant package into compliance
and resuming its movement in commerce. If the package did not comply
with the HMR, the fact that a DOT official opened it in the course of
an inspection or investigation would not make DOT or its inspector
responsible for bringing the package into compliance.
    At this juncture, PHMSA is soliciting comments from interested
parties about appropriate closure measures that would reseal opened
packages. In particular, we seek comments from manufacturers of
receptacles, containers, or other units that perform a containment
function for hazardous material and hope to learn of equipment,
instruments, and types of resealment that may be used to reclose a
shipment. PHMSA is further requesting comments or suggestions from
manufacturers, packaging companies, offerors, and carriers about the
appropriate manner of reclosing a shipment containing a perishable
material, including medical material such as radiopharmaceuticals and
radionuclides, for prompt re-transportation. PHMSA also is
contemplating using a special tape that would identify that the package
was opened by a DOT inspector. The agency requests comments on whether
tape or another adhesive would provide adequate notice that a DOT
inspector opened a shipment.
    Proposed Sec.  109.3(b)(6) addresses the situation in which a
package is found to present an imminent hazard. This section would
authorize the Administrator of each operating administration, or his/
her designee, to issue an OOS order prohibiting the movement of a
package until the imminent hazard is abated and the package has been
brought into compliance with the HMR. Consequently, if an inspector
determines that a package presents an imminent hazard, the carrier or
other person in possession of, or responsible for, the package must
remove the package from transportation until it is brought into
compliance with the HMR. OOS orders ensure that if a package presents
an imminent hazard, immediate action is taken to abate that hazard.
Proposed paragraph (b)(6)(i) provides that a package subject to an OOS
order may be moved from the place where it is first discovered to
present an imminent hazard to the nearest location where remedial
action can be taken to abate the hazard and bring the package into
compliance with the HMR, provided that before the move, the agent
issuing the OOS order is notified of the planned move. Proposed
paragraph (b)(6)(ii) would require that the recipient of an OOS order
notify the agent who issued the order when the package is brought into
compliance with the HMR.
    Proposed paragraph (b)(6)(iii) provides an appeal process for a
recipient of an OOS order to challenge the issuance of the order. The
appeal process proposed for OOS orders is consistent with the appeal
process proposed for other types of emergency orders set forth in
proposed Sec.  109.5(e)-(h), discussed below.
    Section 109.3(c) proposes that the operating administration would
close the investigative file and inform the subject party of the
decision when the agency determines that no further action is
necessary. This provision clarifies when an investigation concludes and
states that DOT will notify respondent that the file has been closed
without prejudice to further investigation.

Section 109.5 Emergency Orders

    Proposed Sec.  109.5, which implements 49 U.S.C. 5121(d) authorizes
DOT operating administrations to issue emergency orders to remove
hazardous materials shipments from transportation in commerce without
advance notice or an opportunity for a hearing. This section governs
the issuance of emergency restrictions, prohibitions, OOS orders, and
recalls, all of which fit within the purview of an emergency order.
(See above for PHMSA's meaning and application of the term ``emergency
order.'')
    The predicate for issuing an emergency order is a violation of the
Hazmat Law or HMR, or an unsafe condition or practice, whether or not
it violates an existing statutory or regulatory requirement, which
amounts to or is causing an imminent hazard. PHMSA believes that such
an extraordinary remedy is necessary to address emergency situations or
circumstances involving a hazard of death, illness, or injury to
persons affected by an imminent hazard. Cf. United Transp. Union v.
Lewis, 699 F.2d 1109, 1113 (11th Cir. 1983) (FRA emergency order
authority is necessary to abate unsafe conditions or practices that
extend to hazard of death or injury to persons); 49 U.S.C. 46105(c)
(FAA is authorized to issue orders to meet existing emergency relating
to safety in air commerce); 49 U.S.C. 521(b)(5) (FMCSA permitted to
order a motor carrier OOS when vehicle or operation constitutes an
imminent hazard to safety, i.e., ``substantially increases the
likelihood of serious injury or death if not discontinued
immediately''). The Department intends that each operating
administration issue an emergency order only after an inspection,
investigation, testing, or research determines that an imminent hazard
exists that requires exercising this enforcement tool to eliminate the
particular hazard and protect public safety. See House Conf. Rep. No.
109-203 at 1080, 2005 U.S.C.C.A.N. at 714; see generally H.R. Rep. No.
96-1025, at 12, reprinted in 1980 U.S.C.C.A.N. 3830, 3837 (``purpose of
the emergency powers provision is to vest administrative discretion in
the Secretary to protect the public safety''). The order must
articulate a sufficient factual basis that addresses the emergency
situation warranting prompt prohibitive action. As proposed, the
operating administrations would be conferred authority to take
immediate measures to address a particular safety or security threat.
    Proposed paragraph (a) outlines the critical elements that must be
established before an agency may issue an emergency order. Principally,
the order must be in writing and describe the violation, condition or
practice that is causing the imminent hazard; enumerate the terms and
conditions of the order; be circumscribed to abate the imminent hazard;
and inform the recipient that it may seek administrative review of the
order by filing a petition

with PHMSA's CSO. In other words, the order must be narrowly tailored
to the discrete and specific safety hazard and identify the corrective
action available to remedy the hazard. Due to the urgent nature of the
action, a petitioner would have 20 calendar days to file the petition
after the emergency order is issued. See 49 U.S.C. 5121(d)(3). (The
time period that would apply is proposed at paragraph (a)(4), which
adopts, in pertinent part, Fed. R. Civ. P. 6(a)). The proposed
provision would ensure that the operating administrations employ
uniform procedures and standards when issuing emergency orders and
provides a degree of certainty and predictability to the regulated
community about the requisite elements to establish a prima facie
emergency order.
    PHMSA proposes providing a party with administrative due process
rights to seek redress of an emergency order, and thus, proposed
paragraph (b) sets forth requirements for filing a petition for
administrative review of an emergency order. The petition: (1) Must be
in writing; (2) specifically state which part of the emergency order is
being appealed; (3) include all information and arguments in support
thereof; and (4) indicate whether a formal administrative hearing is
requested. Should a petitioner request a hearing, the party must detail
the material facts in dispute giving rise to the hearing request. The
petition also must be addressed to PHMSA's CSO with a copy transmitted
to the Chief Counsel of the operating administration issuing the
emergency order. Proposed paragraph (c) provides that the Office of
Chief Counsel of the operating administration that issued the emergency
order may file a response, including appropriate pleadings, with the
CSO within five days after receiving the petition. PHMSA proposes this
short turnaround to enable the issuing operating administration to
present evidence and argument supporting the emergency order. PHMSA
notes that Congress mandated that DOT must resolve the petition within
30 days of its receipt unless the operating administration issues a
subsequent order extending the original order, pending review of the
petition. See 49 U.S.C. 5121(d)(4).
    Under proposed paragraph (d), the CSO would review the petition and
response and issue a decision within 30 days upon receipt of the
petition if the petitioner does not request a formal hearing or the
petition fails to assert material facts in dispute. The CSO's decision
would constitute final agency action in this instance. Alternatively,
if the petition contains a request for a formal hearing and states
material facts in dispute, the CSO would assign the petition to DOT's
Office of Hearings. PHMSA thus proposes designating the CSO as the
first line of review of emergency orders. It is possible that the CSO
would amend, affirm, lift, modify, stay, or vacate the emergency order
upon review.
    PHMSA believes that the CSO should serve as the primary adjudicator
of petitions. Designating a single decision maker to handle all
petitions will promote consistency in the application of review
standards. The CSO is the leading safety authority in PHMSA, which is
the agency that issues the HMR, interprets the Hazmat Law and its
implementing regulations, and oversees DOT's hazardous materials
transportation program.
    Proposed paragraphs (e) through (h) set out the administrative
hearing procedures that the Department's Office of Hearings would
employ. Upon receiving the petition from the CSO, the Chief
Administrative Law Judge would assign it to an Administrative Law Judge
(ALJ), who would schedule and conduct an ``on the record'' hearing
under 5 U.S.C. 554, 556, and 557. PHMSA believes that a petitioner
should be afforded a formal hearing that addresses the merits of a
petition to ensure that a record is created in a proceeding that will
form the basis for final agency action and judicial review, if
necessary.
    Paragraph (e) provides that an ALJ may administer oaths and
affirmations, issue subpoenas as authorized by each operating
administration's regulations, enable the parties to engage in
discovery, and conduct settlement conferences and hearings to resolve
disputed factual issues. PHMSA expects ALJs to conduct efficient and
expeditious proceedings, including controlling discovery actions, to
enable the parties to obtain relevant information and present material
arguments at a hearing within the time parameters established.
    Paragraph (f) permits a petitioner to appear in person or through
an authorized representative. The representative need not be an
attorney. The operating administration, however, would be represented
by an attorney from its Office of Chief Counsel. Paragraph (g)
delineates the service rules governing the emergency order and review
process. Generally, parties may effect service by electronic
transmission via e-mail (with the pertinent document in Adobe PDF
format attached) or facsimile, certified or registered mail, or
personal delivery. Additionally, the operating administration that
issued the emergency order must identify the list of persons, including
the Department's docket management system, to receive the order and
serve it by ``hand delivery,'' unless such delivery is not practicable.
The agency will also publish a notice of the emergency order in the
Federal Register as soon as practicable after the order's issuance.
    Paragraph (h) proposes requiring the ALJ to issue a report and
recommendation when the record is closed. The decision must contain
factual findings and legal conclusions based on legal authorities and
evidence presented on the record. Critically, the decision must be
issued within 25 days after the CSO receives the petition. Under
paragraph (i), which codifies 49 U.S.C. 5121(d)(4), the emergency order
will no longer be effective if the ALJ or CSO has not ruled on the
petition within 30 days of the CSO's receipt of the petition, unless
the Administrator who issued the emergency order determines in writing
that the imminent hazard continues to exist. The order then would
remain in effect pending the disposition of the petition unless stayed
or modified by the Administrator. PHMSA maintains that this provision
is necessary to ensure that the order is extended to abate the imminent
hazard.
    Paragraph (j) would provide that an aggrieved party may file a
petition for reconsideration of the ALJ's report and recommendation
within one day of the issuance of the decision. The CSO then must issue
a final agency decision no later than 30 days from the receipt of the
petition for review, unless a subsequent emergency order is issued. In
that case, the CSO would have three calendar days to render the
decision after receiving the petition for reconsideration. The CSO's
decision on the merits of a petition for reconsideration would
constitute final agency action.
    Paragraph (k) would enable an aggrieved party to seek judicial
review of either the CSO's administrative decision or the CSO's
adoption of the ALJ's report and recommendation. Judicial review would
be available in an appropriate U.S. Court of Appeals under 49 U.S.C.
5127, 49 U.S.C. 20114(c), 28 U.S.C. 2342, and 5 U.S.C. 701-706. All
parties should note that the filing of a petition will not stay or
modify the force and effect of final agency action unless otherwise
ordered by the appropriate U.S. Court of Appeals.
    Paragraph (l) would specify the computation of time in the
adjudications process.

Section 109.7 Emergency Recalls

    Section 109.7 implements 49 U.S.C. 5121(d). Generally, PHMSA
received

new recall authority in HMSSTRA to work hand in hand with our previous
authority under 49 U.S.C. 5103(b)(1)(A)(iii) to prescribe regulations
for the safe transportation, including security, of hazardous materials
in intrastate, interstate, and foreign commerce. Specifically, PHMSA
proposes to implement the authority to recall packagings, containers,
or package components which were improperly designed, manufactured,
fabricated, inspected, marked, maintained, reconditioned, repaired, or
tested but sold as qualified DOT packages, containers, or packaging
components for use in the transportation of hazardous materials in
commerce.

Section 109.9 Remedies Generally

    In addition to seeking relief in Federal court with respect to an
imminent hazard, this proposed section defines the need for general
remedies available through litigation. As such, an Administrator may
also request the Attorney General bring an action in the appropriate
U.S. district court for all other necessary or appropriate relief,
including, but not limited to, injunctive relief, punitive damages, and
assessment of civil penalties as provided by 49 U.S.C. 5122(a).
Proposed Sec.  109.11 would authorize an Administrator to request DOJ
to bring a cause of action in the appropriate U.S. district court
seeking legal and equitable relief, including civil penalties, punitive
damages, temporary restraining orders, and preliminary and permanent
injunctions, to enforce the Hazmat Law, HMR, or an order, special
permit, or approval issued.

Rulemaking Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This NPRM is published under the authority of 49 U.S.C. 5103(b)
which authorizes the Secretary to prescribe regulations for the safe
transportation, including security, of hazardous material in
intrastate, interstate, and foreign commerce and under the authority of
49 U.S.C. 5121(e). If adopted as proposed, the final rule would revise
PHMSA's inspection and enforcement procedures in PHMSA's regulations to
implement 49 U.S.C. 5121(c) and (d), as amended by HMTSSRA.
Specifically, this proposed rule implements the enhanced inspection and
enforcement authority mandated by section 7118 by enabling DOT to open,
detain, and remove packages from transportation where appropriate, and
issue emergency orders limiting or restricting packages from
transportation. The NPRM carries out the statutory mandate and
clarifies DOT's role and responsibility in ensuring that hazardous
materials are being safely transported and promoting the regulated
community's understanding and compliance with regulatory requirements
applicable to specific situations and operations.

B. Executive Order 12866 and DOT Regulatory Policies and Procedures

    This NPRM is a significant regulatory action under section 3(f) of
Executive Order 12866 and, therefore, was reviewed by the Office of
Management and Budget. This rule is also significant under the
Regulatory Policies and Procedures of the DOT (44 FR 11034). A copy of
the regulatory evaluation is available for review in the docket.

C. Executive Orders 13132 and 13084

    This NPRM has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132 (``Federalism''). As
amended by HMTSSRA, 49 U.S.C. 5125(i) provides that the preemption
provisions in Federal hazardous material transportation law do ``not
apply to any procedure * * * utilized by a State, or Indian tribe to
enforce a requirement applicable to the transportation of hazardous
material.'' Accordingly, this proposed rule has no preemptive effect on
state, local, or Indian tribe enforcement procedures and penalties, and
preparation of a federalism assessment is not warranted.
    This NPRM has also been analyzed in accordance with the principles
and criteria contained in Executive Order 13084 (``Consultation and
Coordination with Indian Tribal Governments''). Because this proposed
rule does not significantly or uniquely affect the communities of the
Indian tribal governments and does not impose substantial direct
compliance costs, the funding and consultation requirements of
Executive Order 13084 do not apply.

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires an
agency to review regulations to assess their impact on small entities
unless the agency determines that a rule is not expected to have
significant impact on a substantial number of small entities. Based on
the assessment in the preliminary regulatory evaluation I hereby
certify that, while the proposed rule will affect a substantial number
of small businesses, there will be no significant economic impact. This
proposal applies to offerors and carriers of hazardous materials, some
of which are small entities; however, there will not be any economic
impact on any person who complies with Federal hazardous materials law
and the regulations and orders issued under that law.
    Potentially affected small entities. The proposals in this NPRM
will apply to persons who perform, or cause to be performed, functions
related to the transportation of hazardous materials in transportation
in commerce. This includes offerors of hazardous materials and persons
in physical control of a hazardous material during transportation in
commerce. Such persons may primarily include motor carriers, air
carriers, vessel operators, rail carriers, temporary storage
facilities, and intermodal transfer facilities. Unless alternative
definitions have been established by the agency in consultation with
the Small Business Administration, the definition of ``small business''
has the same meaning as under the Small Business Act (15 CFR parts 631-
657c). Therefore, since no such special definition has been
established, PHMSA employs the thresholds (published in 13 CFR 121.201)
of 1,500 employees for air carriers (NAICS Subgroup 481), 500 employees
for rail carriers (NAICS Subgroup 482), 500 employees for vessel
operators (NAICS Subgroup 483), $18.5 million in revenues for motor
carriers (NAICS Subgroup 484), and $18.5 million in revenues for
warehousing and storage companies (NAICS Subgroup 493). Of the
approximately 116,000 entities to which the proposals in this NPRM
would apply (104,000 of which are motor carriers), we estimate that
about 90 percent are small entities.
    Potential cost impacts. The NPRM proposal to implement the enhanced
enforcement and investigation authority applies to all persons subject
to the HMR. We expect the exercise of this authority will produce a
deterrent effect far beyond the number of packages actually detained,
opened, or removed from transportation. Over a ten-year period, we
estimate the proposed rule would result in the reduction of 40,299,701
undeclared shipments of hazardous material across three modes of
transportation (air, rail, and highway), and the avoidance of 63
serious incidents and 2,104 non-serious incidents. The estimated costs
to industry are fairly minimal; we estimate $45,997 in total cost to
the industry over ten years.
    Potential costs savings. Although the potential cost of
implementing this enhanced enforcement authority could total $2,307,897
for the four operating administrations, the potential benefit

from avoiding incidents total $9,697,748 over a ten-year period.
    Alternate proposals for small business. In accordance with the
Regulatory Flexibility Act, we also considered whether special
standards should be developed to minimize the regulatory burden on
small businesses. In the case of compliance standards, it is sometimes
possible to establish exceptions or different requirements for small
businesses without compromising the overall objectives of the rule.
However, we have concluded that such relief is not appropriate for the
rules at issue here, pertaining to inspection procedures and safety
remedies. Although DOT may well consider companies' relative sizes in
deciding how to allocate inspection resources, once an inspection or
investigation is underway, the size of an individual entity has no
proper bearing on the exercise of enhanced inspection and enforcement
authority. In the case of a suspicious package, for instance, the risk
to public safety and need for enforcement action does not depend on the
size of the company responsible for the hazard.

E. Paperwork Reduction Act

    PHMSA has analyzed this proposed rulemaking in accordance with the
Paperwork Reduction Act of 1995 (PRA). The PRA requires Federal
agencies to minimize paperwork burden imposed on the American public by
ensuring maximum utility and quality of federal information, ensuring
the use of information technology to improve Government performance,
and improving the federal government's accountability for managing
information collection activities. This proposal contains no new
information collection requirements subject to the PRA as the
requirements applicable to all collections of information conducted or
sponsored by a federal agency do not apply to a collection of
information ``during the conduct of a civil action to which the United
States or any official or agency thereof is apart, or during the
conduct of an administrative action, investigation, or audit involving
an agency against specific individuals or entities'' (5 CFR 1320.4).

F. Unfunded Mandates Reform Act of 1995

    The proposal in this NPRM would not impose unfunded mandates under
the Unfunded Mandates Act of 1995. The proposed rule would not result
in annual costs of $100 million or more, in the aggregate, to any of
the following: State, local, or Indian tribal governments, or the
private sector, and is the least burdensome alternative to achieve the
objective of the proposed rule.

G. Environmental Assessment

    The National Environmental Policy Act, 42 U.S.C. 4321-4375,
requires that Federal agencies analyze proposed actions to determine
whether an action will have a significant impact on the human
environment. The Council on Environmental Quality (CEQ) regulations
order Federal agencies to conduct an environmental review considering
(1) the need for the proposed action (2) alternatives to the proposed
action (3) probable environmental impacts of the proposed action and
alternatives and (4) the agencies and persons consulted during the
consideration process. 40 CFR 1508.9(b).
1. Purpose and Need
    Congress enacted HMTSSRA in part to combat the problem of
undeclared hazardous materials shipments. The broader authority of
HMTSSRA allows the Department to identify hazardous materials shipments
and to determine whether those shipments are made in accordance with
the HMR. Congress determined that this authority would equip DOT
officials and inspection personnel with the necessary tools to
accurately determine whether hazardous materials are being transported
safely and in accordance with the relevant law and regulations. See
Background section of the preamble to this NPRM, supra.
2. Alternatives
    Because this NPRM addresses a Congressional mandate, we have
limited latitude in defining alternative courses of action. The option
of taking no action would be both inconsistent with Congress' direction
and undesirable from the standpoint of safety and enforcement. Failure
to implement the new authority would perpetuate the problem of
undeclared hazardous material shipments and resulting incidents or
releases. It would also leave PHMSA and other operating administrations
without an effective plan to abate an imminent safety hazard.
3. Analysis of Environmental Impacts
    The selected alternative could result in decreasing the likelihood
of an incident, or a release of hazardous material, e.g., explosives,
flammables, or corrosives. These hazardous materials could ignite,
leak, or react with other material, thereby causing fires and
explosions in confined spaces such as aircraft or vessels. If such
incidents occurred while an aircraft or vessel is in transportation,
the consequences would likely threaten human health and the
environment. If hazardous material shipments are not properly marked,
labeled, packaged, and handled, every person who comes into contact
with the shipment could be at risk. Emergency responders would not be
able to extinguish a fire in the most effective and timely manner
because an undeclared shipment would not contain the correct hazard
communications, thus possibly exacerbating the situation or prolonging
the public's exposure to a release.
4. Consultations and Public Comment
    Before preparing this NPRM, we held a series of public meetings and
invited all interested persons to offer comments on topics related to
this proposed rule. We received no comments regarding environmental
concerns.

H. Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
spring and fall of each year. The RIN contained in the heading of this
document can be used to cross-reference this action with the Unified
Agenda.

I. Privacy Act

    Anyone is able to search the electronic form of all comments
received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
complete Privacy Act Statement in the Federal Register published on
April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit
http://www.regulations.gov.

List of Subjects in 49 CFR Part 109

    Definitions, Inspections and investigations, Emergency orders,
Imminent hazards, Remedies generally.

The Rule

    In consideration of the foregoing, PHMSA proposes to add a new part
109 to Title 49, Subtitle B, Chapter 1, Subchapter A to read as
follows:

PART 109--INSPECTION AND INVESTIGATION PROCEDURES

Sec.
109.1 Definitions.
109.3 Inspections and investigations.
109.5 Emergency orders.
109.7 Emergency recalls.

109.9 Remedies generally.

    Authority: 49 U.S.C. 5101-5127, 44701; Pub. L. 101-410 Sec.  4
(28 U.S.C. 2461 note); Pub. L. 104-121 Sec. Sec.  212-213; Pub. L.
104-134 Sec.  31001; 49 CFR 1.45, 1.53.

Sec.  109.1  Definitions.

    All terms defined in 49 U.S.C. 5102 are used in their statutory
meaning. Other terms used in this part are defined as follows:
    Administrator means the head of any operating administration within
the Department of Transportation, and includes the Administrators of
the Federal Aviation Administration, Federal Motor Carrier Safety
Administration, Federal Railroad Administration, and Pipeline and
Hazardous Materials Safety Administration, to whom the Secretary has
delegated authority in part 1 of this title, and any person within an
operating administration to whom an Administrator has delegated
authority to carry out this part.
    Agent of the Secretary or agent means an officer, employee, or
agent authorized by the Secretary to conduct inspections or
investigations under the Federal hazardous material transportation law.
    Chief Safety Officer or CSO means the Assistant Administrator of
the Pipeline and Hazardous Materials Safety Administration.
    Emergency order means an emergency restriction, prohibition,
recall, or out-of-service order.
    Freight container means a package configured as a reusable
container that has a volume of 64 cubic feet or more, designed and
constructed to permit being lifted with its contents intact and
intended primarily for containment of smaller packages (in unit form)
during transportation.
    Immediately adjacent means a packaging that is in direct contact
with the hazardous material or is otherwise the primary means of
containment of the hazardous material.
    Imminent hazard means the existence of a condition relating to
hazardous material that presents a substantial likelihood that death,
serious illness, severe personal injury, or a substantial endangerment
to health, property, or the environment may occur before the reasonably
foreseeable completion date of a formal proceeding begun to lessen the
risk of that death, illness, injury, or endangerment.
    Objectively reasonable and articulable belief means a belief based
on particularized and identifiable facts that provide an objective
basis to believe or suspect that a package may contain a hazardous
material.
    Out-of-service order means a written requirement issued by the
Secretary, or a designee, that an aircraft, vessel, motor vehicle,
train, railcar, locomotive, other vehicle, transport unit, transport
vehicle, freight container, portable tank, or other package not be
moved or cease operations until specified conditions have been met.
    Packaging means any receptacle, including, but not limited to, a
freight container, intermediate bulk container, overpack, or trailer,
and any other components or materials necessary for the receptacle to
perform its containment function in conformance with the minimum
packing requirements of this subchapter. For radioactive materials
packaging, see Sec.  173.403 of this subchapter.
    Perishable hazardous material means a hazardous material that is
subject to significant risk of speedy decay, deterioration, or
spoilage.
    Properly qualified personnel means a company, partnership,
proprietorship, or individual who is technically qualified to perform
designated tasks necessary to assist an agent in inspecting, examining,
opening, removing, testing, or transporting packages.
    Remove means to keep a package from entering the stream of
transportation in commerce; to take a package out of the stream of
transportation in commerce by physically detaining a package that was
offered for transportation in commerce; or stopping a package from
continuing in transportation in commerce.
    Safe and expeditious means prudent measures or procedures designed
to minimize delay.
    Trailer means a non-powered motor vehicle designed for transporting
freight that is drawn by a motor carrier, motor carrier tractor, or
locomotive.

Sec.  109.3  Inspections and investigations.

    (a) General. An Administrator may initiate an inspection or
investigation to determine compliance with Federal hazardous material
transportation law, or a regulation, order, special permit, or approval
prescribed or issued under the Federal hazardous material
transportation law, or any court decree or order relating thereto.
    (b) Inspections and investigations. Inspections and investigations
are conducted by designated agents of the Secretary who will, upon
request, present their credentials for examination. Such an agent is
authorized to:
    (1) Administer oaths and receive affirmations in any matter under
investigation.
    (2) Gather information by any reasonable means, including, but not
limited to, interviewing, photocopying, photographing, and video- and
audio-recording in a reasonable manner.
    (3) Serve subpoenas for the production of documents or other
tangible evidence if, on the basis of information available to the
agent, the evidence is relevant to a determination of compliance with
the Federal hazardous material transportation law, regulation, order,
special permit, or approval prescribed or issued under the Federal
hazardous material transportation law, or any court decree or order
relating thereto. Service of a subpoena shall be in accordance with the
requirements of the agent's operating administration as set forth in 14
CFR 13.3 (Federal Aviation Administration); 49 CFR 209.7 (Federal
Railroad Administration), 49 CFR 386.53 (Federal Motor Carrier Safety
Administration), and 49 CFR 105.45-105.55 (Pipeline and Hazardous
Materials Safety Administration).
    (4) When an agent has an objectively reasonable and articulable
belief that a package offered for or in transportation in commerce may
contain a hazardous material, the agent may:
    (i) Stop movement of the package in transportation and gather
information from any person to learn the nature and contents of the
package;
    (ii) Open any overpack, outer packaging, freight container, or
other component of the package that is not immediately adjacent to the
hazardous materials contained in the package and examine the inner
packaging(s) or packaging components;
    (iii) Remove the package and related packages in a shipment or a
freight container from transportation in commerce when the agent has an
objectively reasonable and articulable belief that the package may pose
an imminent hazard, provided the agent records this belief in writing
as soon as practicable;
    (iv) Order the person in possession of, or responsible for, the
package to have the package transported to, opened, and the contents
examined and analyzed by, a facility capable of conducting such
examination and analysis; and,
    (iv) Authorize qualified personnel to assist in the activities
conducted under this paragraph (b)(4).
    (5) If, after an agent exercises an authority under paragraph
(b)(4), an imminent hazard is not found to exist, the agent shall
assist in preparing the package for safe and prompt transportation,
when practicable, by reclosing the package in accordance with the
packaging manufacturer's

closure instructions or an alternate closure method approved by PHMSA's
Associate Administrator for Hazardous Materials Safety; marking and
certifying the reclosed package to indicate that it was opened and
reclosed in accordance with this paragraph (b)(5); and returning the
package to the person from whom the inspector obtained it, as soon as
practicable. For a package containing a perishable material, the agent
shall assist in resuming the safe and expeditious transportation of the
package as soon as practicable after determining that the package
presents no imminent hazard.
    (6) If, after an inspector exercises an authority under paragraph
(b)(4), and an imminent hazard is found to exist, the Administrator or
his/her designee may issue an out-of-service order prohibiting the
movement of the package until the package has been brought into
compliance with Subchapter C of Title 49 of the Code of Federal
Regulations. Upon receipt of the out-of-service order, the person in
possession of, or responsible for, the package shall remove the package
from transportation until it is brought into compliance:
    (i) A package subject to an out-of-service order may be moved from
the place where it was found to present an imminent hazard to the
nearest location where the package can be brought into compliance,
provided, that the agent that issued the out-of-service order is
notified before the move.
    (ii) The recipient of the out-of-service order shall notify the
operating administration that issued the order when the package is
brought into compliance.
    (iii) Upon receipt of an out-of-service order, a recipient may
appeal the decision of the agent issuing the order to PHMSA's Chief
Safety Officer. A petition for review of an out-of-service order must
meet the requirements of Sec.  109.5(b), and the procedures set forth
in Sec.  109.5(c)-(h) apply.
    (c) Termination. When the facts disclosed by an investigation
indicate that further action is not necessary at that time, the
Administrator will close the investigative file without prejudice to
further investigation and notify the person being investigated of the
decision.

Sec.  109.5  Emergency orders.

    (a) Determination of imminent hazard. When an Administrator
determines that a violation of a provision of the Federal hazardous
material transportation law, or a regulation or order prescribed under
that law, or an unsafe condition or practice, constitutes or is causing
an imminent hazard, as defined in Sec.  109.1, the Administrator may
issue or impose emergency restrictions, prohibitions, recalls, or out-
of-service orders, without advance notice or an opportunity for a
hearing. The basis for any action taken under this section shall be set
forth in writing which must--
    (1) Describe the violation, condition, or practice that constitutes
or is causing the imminent hazard;
    (2) Set forth the terms and conditions of the emergency order;
    (3) Be limited to the extent necessary to abate the imminent
hazard; and,
    (4) Advise the recipient that it may request review of the
emergency order by filing a petition for review with PHMSA's Chief
Safety Officer within 20 calendar days of the date the order is issued.
    (b) A petition for review must--
    (1) Be in writing;
    (2) State with particularity each part of the emergency order that
is sought to be amended or rescinded and include all information,
evidence and arguments in support thereof;
    (3) State whether a formal hearing in accordance with 5 U.S.C. 554
is requested. The petition must specifically state the material facts
in dispute giving rise to the request for a hearing; and,
    (4) Be addressed to: Chief Safety Officer (ATTN: Office of Chief
Counsel, PHC-10), Pipeline and Hazardous Materials Safety
Administration, U.S. Department of Transportation, 1200 New Jersey
Avenue, SE., East Building, Washington, DC 20590, with a copy
transmitted to the Chief Counsel of the operating administration
issuing the emergency order. The petition for review may be hand
delivered or sent by first-class mail, facsimile<PHONE_NUMBER>), or
electronically (PHMSACHIEFCOUNSEL@dot.gov). A signed original and one
copy of any petition for review must be personally delivered or mailed
to: Docket Operations, U.S. Department of Transportation, West
Building, Ground Floor, Room W12-140, Routing Symbol M-30, 1200 New
Jersey Avenue, SE., Washington, DC 20590-0001.
    (c) Response to the petition for review. An attorney designated by
the Office of Chief Counsel of the operating administration issuing the
emergency order may file a response, including appropriate pleadings,
with the Chief Safety Officer within five calendar days of receipt of
the petition by the Chief Counsel of the operating administration
issuing the emergency order.
    (d) Chief Safety Officer Responsibilities: Upon receipt of a
petition for review of an emergency order, the Chief Safety Officer
shall immediately assign the petition for review to the Office of
Hearings when the petition requests a formal hearing and states
material facts in dispute. The Chief Safety Officer shall issue an
administrative decision on the merits within 30 days of receipt of the
petition when it does not request a formal hearing or fails to state
material facts in dispute. In this case, the Chief Safety Officer's
decision constitutes final agency action.
    (e) Hearings--Formal hearings shall be conducted by an
Administrative Law Judge assigned by the Chief Administrative Law Judge
of the Office of Hearings. The Administrative Law Judge may:
    (1) Administer oaths and affirmations;
    (2) Issue subpoenas as provided by the appropriate agency
regulations (49 CFR 209.7, 49 CFR 105.45, 14 CFR 13.3, 49 CFR 386.53;
and 49 U.S.C. 502 and 31133);
    (3) Adopt the relevant Federal Rules of Civil Procedure for the
United States District Courts for the procedures governing the hearings
when appropriate;
    (4) Adopt the relevant Federal Rules of Evidence for United States
Courts and Magistrates for the submission of evidence when appropriate;
    (5) Take or cause depositions to be taken;
    (6) Examine witnesses at the hearing;
    (7) Rule on offers of proof and receive relevant evidence;
    (8) Convene, recess, adjourn or otherwise regulate the course of
the hearing;
    (9) Hold conferences for settlement, simplification of the issues,
or any other proper purpose; and,
    (10) Take any other action authorized by or consistent with the
provisions of this part and permitted by law that may expedite the
hearing or aid in the disposition of an issue raised therein.
    (f) Parties. The petitioner may appear and be heard in person or by
an authorized representative. The operating administration issuing the
emergency order shall be represented by an attorney designated by its
respective Office of Chief Counsel.
    (g) Service.
    (1) Each petition, pleading, motion, notice, order, or other
document required to be served under this section shall be served
personally, by registered or certified mail, or electronically by e-
mail or facsimile, except as otherwise provided herein. The emergency
order shall identify the list of persons, including the Department's
Docket Management System, to be served and may be updated as necessary.
The emergency order shall also be published

in the Federal Register as soon as practicable after its issuance.
    (2) Each order, pleading, motion, notice, or other document shall
be accompanied by a certificate of service specifying the manner in
which and the date on which service was made.
    (3) The emergency order shall be served by ``hand delivery,''
unless such delivery is not practicable.
    (4) Service upon a person's duly authorized representative
constitutes service upon that person.
    (h) Report and recommendation. The Administrative Law Judge shall
issue a report and recommendation at the close of the record. The
report and recommendation shall:
    (1) Contain findings of fact and conclusions of law and the grounds
for the decision based on the material issues of fact or law presented
on the record;
    (2) Be served on the parties to the proceeding; and
    (3) Be issued no later than 25 days after receipt of the petition
for review by the Chief Safety Officer.
    (i) Expiration of order. If the Chief Safety Officer, or the
Administrative Law Judge, where appropriate, has not disposed of the
petition for review within 30 days of receipt, the emergency order
shall cease to be effective unless the Administrator issuing the
emergency order determines, in writing, that the imminent hazard
providing a basis for the emergency order continues to exist. The
requirements of such an extension shall remain in full force and effect
pending decision on a petition for review unless stayed or modified by
the Administrator.
    (j) Reconsideration.
    (1) A party aggrieved by the Administrative Law Judge's report and
recommendation may file a petition for reconsideration with the Chief
Safety Officer within one calendar day of issuance of the report and
recommendation. The opposing party may file a response to the petition
within one calendar day.
    (2) The Chief Safety Officer shall issue a final agency decision
within three calendar days, but no later than 30 days after receipt of
the original petition for review.
    (3) The Chief Safety Officer's decision on the merits of a petition
for reconsideration constitutes final agency action.
    (k) Appellate review. A person aggrieved by the final agency action
may petition for review of the final decision in the appropriate Court
of Appeals for the United States as provided in 49 U.S.C. 5127. The
filing of the petition for review does not stay or modify the force and
effect of the final agency.
    (l) Time. In computing any period of time prescribed by this part
or by an order issued by the Administrative Law Judge, the day of
filing of the petition for review or of any other act, event, or
default from which the designated period of time begins to run shall
not be included. The last day of the period so computed shall be
included, unless it is a Saturday, Sunday, or Federal holiday, in which
event the period runs until the end of the next day which is not one of
the aforementioned days.

Sec.  109.7  Emergency recalls.

    PHMSA's Associate Administrator, Office of Hazardous Materials
Safety, may issue an emergency order mandating the immediate recall of
any packaging; packaging component; or container certified,
represented, marked, or sold as qualified for use in the transportation
of hazardous materials in commerce when the continued use of such item
would constitute an imminent hazard. All petitions for review of such
an emergency order will be governed by the procedures set forth at
Sec.  109.5(b).

Sec.  109.9  Remedies generally.

    An Administrator may request the Attorney General to bring an
action in the appropriate United States district court seeking
temporary or permanent injunctive relief, punitive damages, assessment
of civil penalties as provided by 49 U.S.C. 5122(a), and any other
appropriate relief to enforce the Federal hazardous material
transportation law, regulation, order, special permit, or approval
prescribed or issued under the Federal hazardous material
transportation law.

    Issued in Washington, DC on September 26, 2008 under authority
delegated in 49 CFR part 1.
David K. Lehman,
Acting Associate Administrator for Hazardous Materials Safety.
 [FR Doc. E8-23248 Filed 10-1-08; 8:45 am]

BILLING CODE 4910-60-P