[Federal Register Volume 77, Number 169 (Thursday, August 30, 2012)]
[Proposed Rules]
[Pages 52636-52650]
[FR Doc No: 2012-21360]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 107, 172, and 173

[Docket No. PHMSA-2010-0320 (HM-257)]
RIN 2137-AE70

Hazardous Materials: Revision to Fireworks Regulations (RRR)

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

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: PHMSA is proposing to revise the Hazardous Materials
Regulations applicable to the approval of Division 1.4G consumer
fireworks (UN0336 Fireworks) and establish DOT-approved fireworks
certification agencies that will provide an alternative to the approval
process for Division 1.4G consumer fireworks. PHMSA is also proposing
to revise procedural regulations pertaining to certification agencies.
These proposed actions, if adopted, will clarify regulations with
respect to PHMSA's fireworks approval process and provide regulatory
flexibility in seeking authorization for the transportation of Division
1.4G consumer fireworks.

DATES: Comments must be received by October 29, 2012. To the extent
possible, PHMSA will consider late-filed comments as a final rule is
developed.

ADDRESSES: You may submit comments by identification of the docket
number (PHMSA-2010-0320 (HM-257)) by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting
comments.
     Fax: 1-202-493-2251.
     Mail: 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.
     Hand Delivery: To Docket Operations, Room W12-140 on the
ground floor of the West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
    Instructions: All submissions must include the agency name and
docket number for this notice at the beginning of the comment. All
comments received will be posted without change to the Federal Docket
Management System

(FDMS), including any personal information.
    Docket: For access to the dockets to read background documents or
comments received, go to http://www.regulations.gov or DOT's Docket
Operations Office (see ADDRESSES).

FOR FURTHER INFORMATION CONTACT: Rob Benedict, or Lisa O'Donnell,
Standards and Rulemaking Division, Office Hazardous Materials Safety,
Pipeline and Hazardous Materials Safety Administration, U.S. Department
of Transportation, 1200 New Jersey Avenue SE., Washington, DC 20590, at
(202) 366-8553.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
III. Proposed Amendments
IV. Summary Review of Proposed Amendments
V. Regulatory Analyses and Notices
    A. Statutory/Legal Authority for This Rulemaking
    B. Executive Order 12866, 13563, and DOT Regulatory Policies and
Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act, Executive Order 13272, and DOT
Procedures and Policies
    F. Paperwork Reduction Act
    G. Regulatory Identifier Number (RIN)
    H. Unfunded Mandates Reform Act of 1995
    I. Environmental Assessment
    J. Privacy Act
    K. International Trade Analysis
    L. National Technology Transfer and Advancement Act
VI. List of Subjects

I. Executive Summary

    The pyrotechnic industry is a global logistics supply chain
comprised of mostly foreign fireworks manufacturers and domestic
importers, retailers, distributors, and consumers. Prior to the
transportation into and throughout the U.S., all explosives, including
Division 1.4 consumer fireworks, must be classed, approved, and issued
a DOT EX classification approval number (EX number) by PHMSA. The EX
number is a unique identifier that indicates a firework device has been
classed and approved for transportation into and throughout the U.S.
    PHMSA is committed to maintaining the exemplary transportation
safety record that Division 1.4G consumer fireworks have displayed over
the past forty years, but seeks to reduce burden and increase
flexibility for the regulated community by providing an alternative to
PHMSA's approval process. PHMSA has conducted an intensive
retrospective review of the fireworks approval program and has
determined that there is a delay in the processing of EX approval
applications under the current regulatory scheme. PHMSA proposes an
alternative option for Division 1.4G consumer fireworks in which
applicants will submit applications for certification to a Fireworks
Certification Agency (FCA), in lieu of submitting applications for
approval to PHMSA. To ensure oversight of the proposed FCAs, this
proposal includes reporting and recordkeeping requirements.
    Additionally, PHMSA is proposing to define consumer fireworks and
clarify the approval process for designation as a certification agency.
    This NPRM affects the following entities and proposes the following
requirements:

------------------------------------------------------------------------
           Affected entities                        Proposals
------------------------------------------------------------------------
 Division 1.4G consumer           Provide for
 fireworks manufacturers complying with   alternative method to certify
 Part 173.                                Division 1.4G consumer
 Division 1.4G consumer           fireworks for transportation.
 fireworks importers complying with       Require retention of a
 Part 173.                                record by certifying agencies,
 Division 1.4G consumer           manufacturers and importers
 fireworks transporters complying with    indicating a Division 1.4G
 Part 173.                                consumer fireworks
 FCAs certifying compliance       classification has been
 with the requirements for Division       certified in a manner
 1.4G consumer fireworks.                 consistent with the proposed
 State and local fire service     requirements.
 and law enforcement agencies that        Clarify approval
 utilize Division 1.4G consumer           process for designation as a
 fireworks classifications and            certification agency and
 approvals under the HMR to enforce       provide for reconsideration of
 additional state and local               decisions to modify,
 requirements and bans.                   terminate, or suspend a
 Lighter Testing Agencies......   designation.
 Package Testing Laboratories..
------------------------------------------------------------------------

    To monetize the costs and benefits of the proposals in this NPRM,
PHMSA used a number of assumptions to develop a base case. The overall
costs and benefits of the proposals are dependent on the assumption
that all affected entities are currently complying with the regulations
and that 50 to 90 percent of applicants will choose a DOT-approved FCA
to certify that Division 1.4G consumer fireworks complies with the
American Pyrotechnics Association's (APA) Standard 87-1 (IBR, see Sec.
171.7), in lieu of filing an approval application with PHMSA.\1\ We
believe this alternative process will be attractive to the fireworks
industry as it will expedite the transportation process without
compromising the current level of safety, enable shipments of Division
1.4G consumer fireworks to reach the market in a more timely manner,
and consequently provide a cost savings. Cost in this scenario,
includes the cost attributed to shipments that are delayed while
approval applications are pending with PHMSA.
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    \1\ PHMSA based the percentage range (fifty to ninety percent)
used in this rulemaking on the fact that over eighty percent of
firework importers and manufacturers voluntarily participate in
American Fireworks Standards Laboratory (AFSL) testing program to
comply with the Consumer Product Safety Commission (CPSC)
requirements. A range was chosen to demonstrate some level of
uncertainty and to provide a tolerance for fluctuations in use of
FCAs.
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    Costs associated with the proposals are primarily comprised of fees
that FCAs may assess on manufacturers of Division 1.4G fireworks. There
may also be costs associated with proposed recordkeeping
requirements.\2\ Benefits will be derived from the expedited processing
of consumer fireworks applications, resulting in faster time to market
for each firework device. PHMSA estimates that the economic effects of
this rulemaking, once finalized and adopted, will be sustained
indefinitely. However, because of the difficulty of and uncertainty
associated with forecasting industry effects into the far future, we
assume a 10-year timeframe to outline, quantify, and monetize the costs
and benefits of the

proposals and to demonstrate the net effects of the proposals.
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    \2\ PHMSA assumed that, absent relevant information on document
retention practices of the fireworks industry, 50 percent of records
will be stored in paper format and 50 percent of records will be
stored in electronic format. Based on this assumption PHMSA
estimated the record keeping cost to be approximately $610 per U.S.
importer/manufacturer per year.
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    If the proposals in this NPRM are adopted, PHMSA estimates total
annual benefits will be between approximately $14.5 million and $26.5
million, and total annual costs will be between $4 million and $7
million, resulting in total annual net benefits of between $11 million
and $19 million. The table below summarizes the calculated cost and
benefits associated with the NPRM.

                           Annual Net Benefits
------------------------------------------------------------------------
                                      Low redirected    High redirected
                                     application rate   application rate
                                          (50%)              (90%)
------------------------------------------------------------------------
                                BENEFITS
------------------------------------------------------------------------
  Expected Annual Private-Sector          $14,680,000        $26,430,000
   Benefits of Expedited
   Verification...................
                                   -------------------------------------
    TOTAL ANNUAL BENEFITS.........         14,680,000         26,430,000
------------------------------------------------------------------------
                                  COSTS
------------------------------------------------------------------------
Record Retention Costs:
    Costs of 2 Additional Years of             10,200             58,000
     Paper Record Retention, All
     U.S. Importers per year......
                                   -------------------------------------
    Cost for Required Electronic           Negligible         Negligible
     Storage Space, All U.S.
     Importers and Manufacturers
     per year.....................
                                   -------------------------------------
        Total Annual Record                    10,200             58,000
         Retention Costs..........
FCA Processing Costs:
    Costs of application                    3,937,500          7,087,500
     processing conducted by FCAs
     **...........................
                                   -------------------------------------
        Total Annual FCA                    3,937,500          7,087,500
         Processing Costs.........
                                   -------------------------------------
            TOTAL ANNUAL COSTS....          3,947,700          7,145,500
                                   -------------------------------------
                TOTAL ANNUAL NET           10,732,300         19,284,500
                 BENEFITS.........
------------------------------------------------------------------------

    PHMSA estimates the 10-year present value of the net benefits is
about $80 million to $143 million (discounted at a 3 percent rate) or
$55 million to $98 million (discounted at a 7 percent rate). PHMSA
concludes that the aggregate benefits justify the aggregate costs. A
summary of the range of expected annual costs and benefits is provided
in the table below.\3\
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    \3\ Figures are rounded.

Annual Benefit ($2012)................  $14.5-26.5 million.
Annual Cost ($2012)...................  $4-7 million.
Benefit-Cost Ratio....................  3.70-3.71.
Net Benefit...........................  $11-19 million.

    PHMSA requests specific comments on the analysis underlying these
estimates, including the percentage of entities that will choose to
have their 1.4G consumer fireworks certified by FCAs instead of being
approved by PHMSA, the manner in which records will be kept (i.e.,
electronic or paper), the estimated cost of the recordkeeping
requirements, the number of affected entities (e.g., manufacturers and
importers), and the estimated fee an FCA would charge for
certification. We are also asking for general comments or suggestions
regarding approaches to reduce the costs of this rule while maintaining
or increasing the benefits. Additionally, PHMSA seeks comments on
possible changes that might improve the rule and increase regulatory
flexibility.

II. Background

    The requirements for the classification and packaging of Class 1
explosive materials are specified in Subpart C of Part 173 of the
Hazardous Materials Regulations (HMR; 49 CFR parts 171--180). Fireworks
are considered a Class 1 explosive material and must be classified
under one of five hazard divisions and compatibility groups (1.1G,
1.2G, 1.3G, 1.4G, and 1.4S). As currently specified in Subpart C of
Part 173 of the HMR, prior to transportation into and within the U.S.,
all explosives, including fireworks, must be approved and assigned a
classification by PHMSA based on actual testing. Division 1.3 and 1.4
fireworks may also be approved in accordance with the American
Pyrotechnics Association (APA) Standard 87-1.

PHMSA's Current Fireworks Regulations

    Division 1.1 fireworks must be examined by a DOT-approved
explosives test laboratory and assigned a recommended shipping
description, division, and compatibility group in accordance with
Sec. Sec.  173.56(b), 173.56(f) or 173.56(i). Division 1.3 and 1.4
fireworks may either be approved in accordance with Sec. Sec.
173.56(b), 173.56(f) or 173.56(i), or in accordance with Sec.
173.56(j), which provides an option for obtaining an EX number and
approval without prior testing by a DOT-approved explosives test
laboratory.
    Section 173.56(j) requires that the firework device is manufactured
in accordance with APA Standard 87-1 and passes a thermal stability
test. An applicant requesting PHMSA approval based on Sec.  173.56(j)
submits an application that contains required information specified in
APA Standard 87-1. For example, the standard requires that the size of
the device, as well as the various formulas and weights of each type of
chemical composition contained in the device must be specified in the
application. Only formulas containing chemicals identified in APA
Standard 87-1, Table of ``Standard Fireworks Chemicals'' can be
approved under the provisions of APA Standard 87-1. PHMSA has expanded
on the Table of ``Standard Fireworks Chemicals'' to further detail
chemicals that are permitted and prohibited in consumer fireworks
devices.\4\ The manufacturer must submit a signed application with a
detailed diagram of the device and certify that

the device complies with APA Standard 87-1.
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    \4\ PHMSA's expanded list of permitted and prohibited chemicals
for consumer fireworks devices can be found at the following URL:
http://www.phmsa.dot.gov/staticfiles/PHMSA/DownloadableFiles/Hazmat/Regulations/Approved%20and%20Prohibited%20Fireworks%20Chemicals-02-21-2012.pdf.
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    While both Sec. Sec.  173.56(b) and 173.56(j) require the applicant
to submit an application to PHMSA's Approvals and Permits Division for
approval, the HMR provides a couple of alternatives. Under Sec.
173.56(i), if experience or other data demonstrates that the hazard of
a firework device containing an explosive chemical composition is
greater or less than indicated according to the definition and criteria
specified in Sec. Sec.  173.50, 173.56, and 173.58, the Associate
Administrator may specify a classification (including determining that
it is forbidden from transportation), or except the device from the
HMR. The HMR also permits the transport of firework devices the
Associate Administrator approves on the basis of an approval issued by
the competent authority of a foreign government, or when examination of
the explosive by a person approved by the Associate Administrator is
impracticable, on the basis of reports of tests conducted by
disinterested third parties, as specified in Sec.  173.56(f).

Regulatory Review of PHMSA's Fireworks Program

    On May 10, 2012, President Obama issued Executive Order 13610
(Identifying and Reducing Regulatory Burdens) reaffirming the goals of
Executive Order 13563 (Improving Regulation and Regulatory Review)
issued January 18, 2011, and Executive Order 12866 (Regulatory Planning
and Review) issued September 30, 1993. Executive Order 13610 directs
agencies to prioritize ``those initiatives that will produce
significant quantifiable monetary savings or significant quantifiable
reductions in paperwork burdens while protecting public health,
welfare, safety, and our environment.'' Executive Order 13610 further
instructs agencies to give consideration to the cumulative effects of
their regulations, including cumulative burdens, and prioritize reforms
that will significantly reduce burdens.
    Executive Order 13563, which supplements Executive Order 12866,
directs federal agencies to periodically review existing significant
regulations, retrospectively analyze rules that may be outmoded,
ineffective, insufficient, or excessively burdensome, and modify,
streamline, expand, or repeal regulatory requirements that are no
longer justified. Agencies are also directed to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public.
    In light of these Executive Orders and the President's continued
efforts to streamline government regulations, we have evaluated our
fireworks approval program to identify areas where we can improve
efficiency, reduce burdens, and increase regulatory flexibility without
diminishing safety. Specifically, we analyzed the timeline for
reviewing applications for approval of fireworks devices. We found that
over the past two years, PHMSA has reviewed roughly 30,000 applications
for approval of fireworks devices. Approximately seventy-five percent
of these applications sought approval for Division 1.4G consumer
fireworks devices.
    Due to the high volume of applications submitted for Division 1.4G
consumer fireworks devices, the approximate review time per application
is 120 days. Review time may be extended if applications are rejected
for minor flaws, such as mathematical errors, or denied for safety
issues. If an application is rejected, the applicant often resubmits
the application placing it at the end of the review queue. If an
application is denied, the applicant may file for reconsideration and
subsequently may appeal to the Administrator; thereby delaying the
final disposition of the application.
    Consequently, the delay in processing applications can have an
economic impact on the fireworks industry. For example, the lengthy
approval process interrupts the supply chain and delays devices from
reaching retail stores, which results in substantial revenue losses for
U.S. importers, distributors and retail stores, many of whom are small
businesses. Also, manufacturers of fireworks devices often charge U.S.
purchasers storage fees for devices purchased that are pending approval
and cannot be transported into and throughout the U.S.
    After significant review of our fireworks program, we have
identified areas that should be modified to decrease the delay in
processing approvals. PHMSA is proposing to revise the HMR to provide
an alternative option that will expedite the process for obtaining
authorization to transport Division 1.4G consumer fireworks into and
throughout the U.S., without compromising the current level of safety.
PHMSA believes the revisions proposed in this NPRM will reduce burdens
and enhance flexibility for the regulated community, while maintaining
an equivalent level of safety provided in the HMR.\5\
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    \5\ Over the past forty years, there have been 35 reported
transportation incidents in the U.S. involving fireworks that were
declared hazardous materials. During this same period, there has
never been a death or major injury attributed to fireworks while in
transportation when there was compliance with the regulations. While
there have been two incidents that resulted in fatalities in that
forty year period, both involved the improper setup or storage of
display fireworks, and were not attributed to the transportation of
Division 1.4G consumer fireworks. Detailed hazardous materials
incident reports for hazardous materials incidents specified in
Sec.  171.16 may be found at the PHMSA Web site at the following
URL: https://hazmatonline.phmsa.dot.gov/IncidentReportsSearch/Search.aspx.
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III. Proposed Amendments

    In an effort to reduce regulatory burden and provide regulatory
flexibility, without diminishing safety, PHMSA proposes structural
changes to the regulations relating to PHMSA's fireworks program. Under
the proposed revision, PHMSA will continue to approve Division 1.4G
consumer fireworks in accordance with the current requirements
specified in Sec. Sec.  173.56(b), 173.56(f), 173.56(i), or 173.56(j).
In addition to the current approval process, PHMSA proposes a new
alternative that will permit manufacturers to apply to a DOT-approved
Fireworks Certification Agency (FCA) to review and certify that
Division 1.4G consumer fireworks comply with APA Standard 87-1 and are
safe for transportation in commerce. To provide oversight of the DOT-
approved FCAs, PHMSA is proposing reporting and recordkeeping
requirements. PHMSA is also proposing to revise subpart E of part 107
to clarify the approval process for designation as a certification
agency and provide for reconsideration of decisions to modify,
terminate, or suspend a designation.

Fireworks Certification Agency (FCA)

    The proposed alternative process for Division 1.4G consumer
fireworks will parallel the current requirements under Sec.  173.56(j),
except that, rather than submitting an approval application to PHMSA,
the manufacturer or their U.S. designated agent will submit a
certification application to a DOT-approved FCA to review and certify
that the firework devices match the chemical compositions, sizes, and
weights detailed in the application and that they meet the defining
criteria set forth in APA Standard 87-1 to be classified as a Division
1.4G consumer firework.
    In addition, PHMSA proposes to require the DOT-approved FCA conduct
a physical examination of a sample of the Division 1.4G consumer
firework design. This proposal is consistent with the requirements for
other DOT-approved certification agencies. A DOT-approved FCA will be
analogous to lighter certification agencies, which certify lighter
designs, and independent

inspection agencies, which evaluate and certify cylinder manufacturers.
These entities physically examine the product (i.e., lighters or
cylinders) to determine whether the product meets certain criteria
specified in the HMR to ensure safe transportation of the product.
Likewise, PHMSA proposes to require the DOT-approved FCAs physically
examine a sample of the Division 1.4G consumer firework design type
prior to initial shipment to determine whether the device meets the
requirements of APA Standard 87-1 and matches the dimensions, chemical
composition, and device type specified in the application for
certification.
    To become a DOT-approved FCA, the applicant will be required to
submit an application with all procedures it will use to review and
certify Division 1.4G consumer fireworks, in accordance with the
provisions in subpart E of part 107. These procedures will be designed
by the applicant; however, PHMSA will review the applicant's procedures
to determine whether they are adequate to certify compliance with APA-
Standard 87-1 and whether they provide an equivalent or greater level
of safety to the current approval process. PHMSA plans to develop a
guidance document for FCAs addressing standard procedures for the
certification of Division 1.4G consumer fireworks.
    Any domestic or foreign entity may apply to become a DOT-approved
FCA provided that it is not directly or indirectly controlled by, or
have a financial involvement with, any entity that manufactures,
transports, or imports fireworks, except for providing services as an
FCA. To qualify as a DOT-approved FCA, each applicant must: (1) Meet
specific criteria designed to ensure that the FCA is an impartial,
independent, unbiased, and qualified entity; (2) submit an application,
including certification procedures; and (3) successfully complete a
facility inspection performed by PHMSA. To meet the specific
qualification criteria, the applicant will be required to demonstrate
knowledge of the applicable regulations, including subpart C of part
173 of the HMR and the APA standard 87-1, the ability to review and
evaluate design drawings and applications in accordance with the APA
standard 87-1, and the ability to review and evaluate the
qualifications of materials and fabrication procedures. If approved,
PHMSA will issue an approval and an identifying number unique to that
FCA. This number will provide traceability and enable PHMSA to seek
corrective action or suspend or terminate certification authority if
the requirements of the HMR or the FCA approval are not met.

Fireworks Identification Scheme

    Currently, all Division 1.4G fireworks devices are approved by
PHMSA and assigned an EX number that represents that the fireworks
article or device is in compliance with the classification requirements
of the HMR. A current EX number approval begins with the letters ``EX''
followed by the year of issuance (e.g. 2012), the month of issuance,
(e.g. 07), and the approval number issued that month, where ``0001''
indicates the first approval of the month. An example of the entire
string of numbers appears as follows: ``EX2012070001.''
    To differentiate between an approval issued by PHMSA and a DOT-
approved FCA certification, PHMSA proposes to use an FX numbering
scheme. Instead of issuing an EX number and approval through PHMSA for
a fireworks device, which is an inherently governmental function that
cannot be reassigned, the DOT-approved FCA will issue a unique
identifier (FX number) for devices it certifies as Division 1.4G
consumer fireworks. The FX number will identify the DOT-approved FCA,
the device, and the manufacturer. An example of an FX number would be
``FX123-456.'' In this example ``123'' will correspond to the DOT-
approved FCA conducting the review and certification. This portion of
the numbering sequence will be issued to the FCA by PHMSA. The ``456''
will represent a unique certification identifier traceable to both the
manufacturer of the Division 1.4G consumer firework device and the
device itself. This portion of the numbering sequence will be issued by
the DOT-approved FCA. Each Division 1.4G consumer firework certified in
this manner will be required to be marked and labeled in accordance
with subpart D and E of part 172. As with EX numbers, marking the
package with the FX number will not be required provided the FX number
for each fireworks device is indicated on an accompanying shipping
paper. The introduction of the FX numbering scheme will result in some
Division 1.4G consumer fireworks being assigned an EX number when
approved by PHMSA, and others being assigned an FX number when
certified by a DOT-approved FCA.
    Given the long history and wide recognition of the EX numbering
scheme, PHMSA seeks specific comments on the supply chain implications,
the economic impact and safety concerns associated with the proposed FX
numbering system, as well as comments on how to implement the changes
if they are adopted. For example, will the use of different alpha
designators (i.e., EX and FX) pose complications or confusion within
the transportation system?
    PHMSA also seeks comments regarding alternative methods that may be
used to identify Division 1.4G consumer fireworks devices that have
been certified by a DOT-approved FCA, including suggestions in the
alpha-numeric sequence that will facilitate transport while providing a
clear distinction between PHMSA approved devices and devices certified
by an FCA as compliant with APA standard 87-1.
Reporting and Recordkeeping Requirements
    PHMSA is proposing specific reporting and recordkeeping
requirements to ensure that the DOT-approved FCAs are correctly
certifying Division 1.4G consumer fireworks and are in compliance with
the HMR and the FCA approval. As a condition of the FCA approval, each
DOT-approved FCA will be required to submit to PHMSA electronic reports
of the results of all devices submitted for certification on a schedule
specified in the approval.
    Additionally, for each firework device certified and issued an FX
number, the DOT-approved FCA that reviewed the application, the
manufacturer, and the importer will be required to maintain the
device's thermal stability test report and a copy of the application.
Currently, most consumer fireworks manufactured or assembled in the
U.S. and those imported into the U.S. are voluntarily tested to ensure
that they comply with the Consumer Product Safety Commission (CPSC)
requirements. The testing facility, the manufacturers, and the
importers utilizing this voluntary process are required to maintain
records of these tests for three years.\6\ As it is current industry
practice for importers to maintain similar records under the CPSC
requirements, there will be limited additional paperwork burden for
importers. The DOT-approved FCA will also be required to maintain a
copy of the certification procedures used for each device certified. We
propose that

FCAs, manufacturers and importers maintain these records for a period
of five years; however, PHMSA will maintain the records for up to 10
years consistent with current practices for other approvals. The
Associate Administrator, or designated official, may inspect the DOT-
approved FCA's facilities and records to verify compliance with the
recordkeeping requirements, the HMR, and the FCA approval.
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    \6\ Importers and domestic manufacturers participating in a
voluntary program implemented by American Fireworks Standards
Laboratory (AFSL) may use the test results obtained from AFSL to
support certifications that the tested fireworks comply with all
rules, bans, standards, or regulations applicable under the Consumer
Product Safety Improvement Act of 2008. AFSL estimates that over 80%
of U.S. importers and manufacturers currently utilize this voluntary
program. All Participants in this voluntary program must maintain
all records and documents for three (3) years from date of
generation. See http://www.afsl.org/images/Domestic_Certification_Program_Final_012511.pdf (last visited June 12, 2012).
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    PHMSA recognizes that under the proposed system manufacturers or
their U.S. designated agents may attempt to submit duplicate
applications to both a DOT-approved FCA and to PHMSA concurrently. As
this new process is designed to promote efficiency while maintaining
safety, the submission of duplicate applications under both processes
may result in confusion, slower processing, and diminished safety. With
this in mind, PHMSA proposes to require a signed certification
statement on all applications submitted to either PHMSA or a DOT-
approved FCA stating that an application was not submitted to any other
entity. PHMSA will be able to verify that duplicative applications are
not being submitted by reviewing the certification reports the DOT-
approved FCAs will be required to submit to PHMSA. If a manufacturer or
its U.S. designated agent submits identical applications to both a DOT-
approved FCA and PHMSA, the manufacturer and its U.S. designated agent
will be in violation of the HMR and the approval and may be fined under
18 United States Code, or imprisoned for not more than 5 years, or
both, except the maximum amount of imprisonment may be 10 years in any
case in which the violation involves the release of a hazardous
material which results in death or bodily injury to any person (See
Sec.  107.333).
    PHMSA anticipates that the proposed alternative certification
process will reduce the processing time that it takes to evaluate an
application. As a result, economic burdens caused by a delay in
processing approvals will be reduced. Further, it may also promote
innovation and potentially create new jobs, as currently no DOT-
approved FCAs exist. Additionally, PHMSA will continue to require that
Division 1.4G consumer fireworks comply with all other requirements in
the HMR, including the shipping paper, marking, labeling, placarding,
and incident reporting requirements to ensure safety is not diminished.
    Should the proposed alternative option be adopted in a future
rulemaking, PHMSA plans to develop a guidance document addressing
standard operating procedures for the certification of Division 1.4G
consumer fireworks. The publication of this guidance document will
coincide with the final rule publication.
    PHMSA seeks general comments on the proposed changes to the
fireworks program. PHMSA seeks specific comments on the need for
revision of the fireworks program, the economic impact of the proposed
changes, safety concerns associated with the proposed changes, as well
as comments on how to implement the changes if they are adopted. PHMSA
also seeks comments on whether the proposed record retention period of
five years is adequate or if the retention period should be expanded to
address the longer shelf life of some consumer fireworks. In addition,
PHMSA invites all stakeholders and affected entities, including the
CPSC, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Customs
and Border Patrol, and state and/or local fire and police departments
to comment on the proposals.

IV. Summary Review of Proposed Amendments

    In an effort to reduce regulatory burden and provide industry more
flexibility, we are proposing structural changes to the regulations
relating to PHMSA's fireworks program. Specifically, PHMSA proposes to
revise the requirements in five sections (Sec. Sec.  107.402, 107.403,
172.320, 173.56 and 173.59), add two new sections (Sec. Sec.  173.64
and 173.65), and reserve one section (Sec.  107.405). The specific
revisions and additions to these sections are detailed below by topic.

Fireworks Approval Program

    We propose moving the current requirements of Sec.  173.56(j) to a
standalone new Sec.  173.64 entitled ``Exceptions for Division 1.3 and
1.4 Fireworks.'' In addition, we propose the addition of a new Sec.
173.65 entitled ``Exceptions for Division 1.4G Consumer Fireworks''
that will detail the alternative certification process for Division
1.4G consumer fireworks. To correspond to the changes proposed in this
NPRM, we will revise the entry ``UN0336 Fireworks'' in Sec.  172.101
Hazardous Materials Table. Further, a definition for ``consumer
firework'' will be added to Sec.  173.59. No modifications are proposed
for Sec. Sec.  173.56(f) and 173.56(i).
    The hazard communication requirements for Division 1.4G consumer
fireworks will be specified in paragraph (c) of the new Sec.  173.65
and the revised Sec.  172.320. Specifically, Sec.  172.320 will be
revised to reflect the addition of FX numbers.

Fireworks Certification Agency (FCA)

    The process for applying for an approval to operate as a DOT-
approved FCA will be found in the proposed revised Sec.  107.402
entitled ``Application for designation as a certification agency.''
General application requirements for designation as a certification
agency will be moved to Sec.  107.402(b). No new general application
requirements are being proposed in this NPRM. Application requirements
specific to Packing and Lighter Certification Agencies will be moved to
Sec.  107.402(c). No new application requirements specific to Packing
and Lighter Certification Agencies are being proposed in this NPRM.
Application requirements to become a DOT-approved FCA will be found in
the proposed Sec.  107.402(d).
    To clarify and provide consistency in the procedural process for
designation as a certification agency, the subpart E heading will be
entitled ``Designation of Certification Agencies.'' The words ``as an
approval or'' will be removed from Sec.  107.402. The word ``approval''
will be replaced with ``certification'' in the Sec.  107.403 heading.
    Reconsideration for a denial of designation as a fireworks
certification agency will be found in Sec.  107.403(c), which will be
revised to provide that the procedural requirements of subpart H of
this part apply to the process for reconsideration of denials of
designations. A new subparagraph (d) will be added to Sec.  107.403 to
provide that the procedural requirements of subpart H of this part will
also apply to the process for modification, suspension, and termination
of designations. Section 107.405 will be deleted and reserved.
    An overview of the proposed process to be recognized by PHMSA as a
DOT-approved FCA is detailed in Figure 1 below.

[GRAPHIC] [TIFF OMITTED] TP30AU12.059

Alternative Process for Division 1.4G Consumer Fireworks

    The procedures for a manufacturer of Division 1.4G consumer
fireworks or its U.S. designated agent to submit an application for
certification to a DOT-approved FCA will be specified in the new Sec.
173.65(a). These requirements parallel those currently in Sec.
173.56(j); however, they address certification by a DOT-approved FCA,
as opposed to PHMSA approval, and describe that fireworks utilizing
this review process will be issued an FX number, in lieu of an EX
number. The current approval process will continue to be available;
however, manufacturers and their U.S. designated agents may voluntarily
use the FCA process as an alternative.
    Diagrams of the current (Figure 2) and proposed (Figure 3) consumer
fireworks application processes are shown below.

[GRAPHIC] [TIFF OMITTED] TP30AU12.060

[GRAPHIC] [TIFF OMITTED] TP30AU12.061

Reporting and Recordkeeping Requirements

    DOT-approved FCA reporting requirements on certification activities
will be found in Sec.  107.402(d)(8). Recordkeeping requirements
requiring the manufacturer, importer, and fireworks certification
agency to maintain a record or an electronic image of the record
demonstrating compliance with Sec.  173.65 will be found in Sec.
173.65(b).

V. Regulatory Analyses and Notices

A. Statutory/Legal Authority for This Rulemaking

    This notice of proposed rulemaking (NPRM) is published under the
authority of the Federal Hazardous Materials Transportation Law, 49
U.S.C. 5101 et seq. Section 5103(b) authorizes the Secretary to
prescribe regulations for the safe transportation, including security,
of hazardous material in intrastate, interstate, and foreign commerce.
This NPRM provides an alternative to the current process for approving
Division 1.4G consumer fireworks more quickly and efficiently, without
compromising safety. Furthermore, section 5120(b) authorizes the
Secretary of Transportation to ensure that, to the extent practicable,
regulations governing the transportation of hazardous materials in
commerce are consistent with standards adopted by international
authorities.

B. Executive Order 13610, Executive Order 13563, Executive Order 12866,
and DOT Regulatory Policies and Procedures

    This NPRM is not considered a significant regulatory action under
section 3(f) Executive Order 12866 and, therefore, was not reviewed by
the Office of Management and Budget (OMB). The proposed rule is not
considered a significant rule under the Regulatory Policies and
Procedures order issued by the U.S. Department of Transportation (44 FR
11034).
    Executive Order 13563 is supplemental to and reaffirms the
principles, structures, and definitions governing regulatory review
that were established in Executive Order 12866 Regulatory Planning and
Review of September 30, 1993. Executive Order 13563, issued January 18,
2011, notes that our nation's current regulatory system must not only
protect public health, welfare, safety, and our environment but also
promote economic growth, innovation, competitiveness, and job
creation.\7\ Further, this executive order urges government agencies to
consider regulatory approaches that reduce burdens and maintain
flexibility and freedom of choice for the public. In addition, federal
agencies are asked to periodically review existing significant
regulations, retrospectively analyze rules that may be outmoded,
ineffective, insufficient, or excessively burdensome, and modify,
streamline, expand, or repeal regulatory requirements in accordance
with what has been learned.
---------------------------------------------------------------------------

    \7\ See http://www.whitehouse.gov/the-press-office/2011/01/18/improving-regulation-and-regulatory-review-executive-order.
---------------------------------------------------------------------------

    Executive Order 13610, issued May 10, 2012, urges agencies to
conduct retrospective analyses of existing rules to examine whether
they remain justified and whether they should be modified or
streamlined in light of changed circumstances, including the rise of
new technologies.\8\
---------------------------------------------------------------------------

    \8\ See http://www.gpo.gov/fdsys/pkg/FR-2012-05-14/pdf/2012-11798.pdf.
---------------------------------------------------------------------------

    By building off of each other, these three Executive Orders require
agencies to regulate in the ``most cost-effective manner,'' to make a
``reasoned determination that the benefits of the intended regulation
justify its costs,'' and to develop regulations that ``impose the least
burden on society.''
    PHMSA has evaluated our fireworks approval program for
effectiveness and identified areas that could be modified to enhance
the program and increase flexibility for the regulated community. In
this NPRM, the proposed amendments to the HMR will not impose increased
compliance costs on the regulated industry. By proposing to amend the
HMR to allow for an alternative to the approval process for Division
1.4G consumer firework devices, PHMSA will reduce regulatory burden and
increase flexibility to industry, while maintaining an equivalent level
of safety.
    A summary of the regulatory evaluation used to support the
proposals presented in this NPRM are discussed below.
Regulatory Evaluation
    For the regulatory evaluation of this NPRM, PHMSA assumes:
     Between 50 and 90 percent of applicants will choose to
file a Division 1.4G consumer fireworks application with a DOT-approved
FCA instead of filing an application with PHMSA.
     Domestic manufacturers and importers of Division 1.4G
fireworks that participate in the voluntary CPSC Domestic Testing
Program will choose certification by a DOT-approved FCA.
     The existing DOT-approved explosive test laboratories will
likely apply for approval as a DOT-approved FCA.
     A 10-year timeframe to outline, quantify, and monetize the
costs and benefits of the proposal and to demonstrate the net effects
of the proposal
    PHMSA's current fireworks approval process has proven effective in
achieving a high level of transportation safety. This high level of
transportation safety is demonstrated by the fact that no
transportation incidents resulting in death or serious injury have been
attributed to the transport of consumer fireworks in the past 40 years.
While continuing to maintain this high level of safety, we expect the
implementation of the proposals in this NPRM will result in the
benefits outweighing the costs.
    We anticipate the primary costs will be (1) costs attributed to the
proposed five year recordkeeping requirement; and (2) potential fees
assessed by the DOT-approved FCAs for certification services. The
recordkeeping costs will apply to DOT-approved FCAs, manufactures that
choose certification by a DOT-approved FCA, and importers of fireworks
certified by a DOT-approved FCA. The proposed recordkeeping requirement
is similar to the requirement that requires participants in the
voluntary CPSC Domestic Testing Program keep a certification of
compliance with CPSC standards for three years. This documentation
contains much of the same information PHMSA proposes to require.
Assuming the domestic manufacturers and importers of Division 1.4G
consumer fireworks that participate in the voluntary CPSC Domestic
Testing Program will choose certification by a DOT-approved FCA, we
anticipate the recordkeeping costs will be minimal. While the proposed
recordkeeping requirement is similar to CPSC's recordkeeping
requirement, PHMSA acknowledges that the retention requirement being
two years longer than CPSC's requirement may impose some cost. Also,
there may be recordkeeping costs for those who do not participate in
the voluntary CPSC Domestic Testing Program.
    PHMSA assumes that a DOT-approved FCA will likely assess an
explicit cost for its certification services and fireworks
manufacturers will individually consider their business' potential to
benefit from expedited processing against the expected costs of this
certification fee. PHMSA anticipates the benefits of certification
derived from the expedited processing of consumer fireworks
applications,

resulting in faster time to market for each firework device, outweighs
the cost of any fees assessed by the DOT-approved FCA. PHMSA also
anticipates these benefits will be realized without diminishing the
exemplary transportation safety record that Division 1.4G consumer
fireworks have demonstrated over the past forty years. The benefit-cost
ratio for this NPRM is estimated to be between 3.70 and 3.71. These
benefit and cost figures depend on the assumptions mentioned above.
    Total annual benefits derived from this NPRM are expected to be
approximately between $14.5 and 26.5 million, and total annual costs
are expected to be approximately between $4 and $7 million with total
annual net benefits of approximately between $11 and $19 million. Based
on this net positive value, we conclude that adopting the proposed
requirements will result in an increase in overall societal welfare.
    The 10-year present value of the net benefits is approximately $80
million to $143 million (discounted at a 3 percent rate) or $55 million
to $98 million (discounted at a 7 percent rate). We expect adopting
this proposal will make regulation of hazardous materials more
efficient, provide regulatory relief to industry, and have no negative
effect on the safe transportation of hazardous materials in the United
States. A summary of the annual costs and benefits and calculated
annual net benefits is displayed in the table below.

                         Annual Net Benefits \9\
------------------------------------------------------------------------
                                       Low redirected    High redirected
                                         application       application
                                         rate  (50%)       rate  (90%)
------------------------------------------------------------------------
                                BENEFITS
------------------------------------------------------------------------
Expected Annual Private-Sector             $14,680,000       $26,430,000
 Benefits of Expedited Verification.
                                     -----------------------------------
    TOTAL ANNUAL BENEFITS...........        14,680,000        26,430,000
------------------------------------------------------------------------
                                  COSTS
------------------------------------------------------------------------
Record Retention Costs:
    Costs of 2 Additional Years of              10,200            58,000
     Paper Record Retention, All
     U.S. Importers per year........
                                     -----------------------------------
    Cost for Required Electronic            Negligible        Negligible
     Storage Space, All U.S.
     Importers and Manufacturers per
     year...........................
                                     -----------------------------------
        Total Annual Record                     10,200            58,000
         Retention Costs............
FCA Processing Costs:
    Costs of application processing          3,937,500         7,087,500
     conducted by FCAs \10\.........
                                     -----------------------------------
        Total Annual FCA Processing          3,937,500         7,087,500
         Costs......................
                                     -----------------------------------
            TOTAL ANNUAL COSTS......         3,947,700         7,145,500
                                     -----------------------------------
                TOTAL ANNUAL NET            10,732,300        19,284,500
                 BENEFITS...........
------------------------------------------------------------------------

C. Executive Order 13132

    This proposed rule has been analyzed in accordance with the
principles and criteria contained in Executive Order 13132
(``Federalism''), and the President's memorandum on ``Preemption''
published in the Federal Register on May 22, 2009 (74 FR 24693). This
proposed rule will preempt State, local, and Indian tribe requirements
but does not propose any regulation that has substantial direct effects
on the States, the relationship between the national government and the
States, or the distribution of power and responsibilities among the
various levels of government. Therefore, the consultation and funding
requirements of Executive Order 13132 do not apply.
---------------------------------------------------------------------------

    \9\ Figures are rounded.
    \10\ Cost calculated by multiplying the estimated cost of $700
per application by number of Division 1.4G consumer firework
applications redirected to an FCA (i.e. for 50% redirected 5,625 x
$700 and for 90%.
---------------------------------------------------------------------------

    The Federal hazardous materials transportation law, 49 U.S.C. 5101-
5128, contains an express preemption provision (49 U.S.C. 5125 (b))
that preempts State, local, and Indian tribe requirements on the
following subjects:
    (1) The designation, description, and classification of hazardous
materials;
    (2) The packing, repacking, handling, labeling, marking, and
placarding of hazardous materials;
    (3) The preparation, execution, and use of shipping documents
related to hazardous materials and requirements related to the number,
contents, and placement of those documents;
    (4) The written notification, recording, and reporting of the
unintentional release in transportation of hazardous material; and
    (5) The design, manufacture, fabrication, marking, maintenance,
recondition, repair, or testing of a packaging or container
represented, marked, certified, or sold as qualified for use in
transporting hazardous material.
    This proposed rule addresses all the covered subject areas above.
If adopted as final, this rule will preempt any State, local, or Indian
tribe requirements concerning these subjects unless the non-Federal
requirements are ``substantively the same'' as the Federal
requirements. Furthermore, this proposed rule is necessary to update,
clarify, and provide relief from regulatory requirements.
    Federal hazardous materials transportation law provides at Sec.
5125(b)(2) that, if DOT issues a regulation concerning any of the
covered subjects, DOT must determine and publish in the Federal
Register the effective date of Federal preemption. The effective date
may not be earlier than the 90th day following the date of issuance of
the final rule and not later than two years after the date of issuance.
PHMSA has determined that the effective date of Federal preemption for

these requirements will be one year from the date of publication of a
final rule in the Federal Register.

D. Executive Order 13175

    This NPRM has been analyzed in accordance with the principles and
criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because this NPRM 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
13175 do not apply.

E. Regulatory Flexibility Act, Executive Order 13272, and DOT
Procedures and Policies

    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 a
significant impact on a substantial number of small entities. The total
number of U.S. importers that are expected to be impacted by the
proposed rulemaking is estimated to be between 62 and 206. PHMSA chose
to use a range to reflect an uncertainty in the number of U.S.
importers. This uncertainty is a result of the high turnover in the
fireworks industry resulting in large year-to-year fluctuations in the
number of importers. This range is a result of combining estimated
import data with data provided by a consumer fireworks trade
association. The figure of 62 was derived from import data obtained
from a publically available business directory and PHMSA's approvals
database; while the figure of 206 was derived from statistics provided
by AFSL, a consumer fireworks trade association. Specifically, the
figure of 206 is derived from the AFSL Consumer Fireworks Membership
list that shows 175 members. AFSL claims to represent 85 percent of all
U.S. consumer fireworks importers in the U.S., therefore, we calculated
a total of 206 (175/.85 = 206). PHMSA believes the actual number of
U.S. importers lies somewhere between 62 and 206. PHMSA estimates the
number of U.S. manufacturers to be five, based on the number of hazmat
registrants. This results in a range from 67 to 211 U.S. manufacturers
and importers. PHMSA seeks comment specifically on the accuracy of
these numbers.
    The proposed rule provides an additional, voluntary option for
manufacturers to apply to a DOT-approved FCA for certification of
Division 1.4 consumer fireworks, in lieu of submitting an application
to PHMSA for approval. The expected costs associated with this
rulemaking relate to recordkeeping since copies of documentation will
have to be retained for two additional years over current practice (for
U.S. importers and fireworks manufacturers who elect to examine and
certify new devices with an FCA instead of seeking an approval from
PHMSA). Fireworks manufacturers may pay fees assessed by FCAs for
certification services. PHMSA assumes that most will see the benefits
of FCA certification as justifying the fees involved. However, the
costs are voluntary costs.
    Benefits of the proposed certification option will be derived from
the expedited processing of consumer fireworks applications, resulting
in faster time to market for each firework device. Benefits may be
realized from the reduction in PHMSA's approvals application workload,
which allows for administrative cost savings and more resources for
PHMSA Approvals and Permits staff. These resources may allow for
additional scrutiny to higher risk hazardous materials approvals
applications. Total annual benefits are expected to be between
approximately $14.5 million and $26.5 million, and total annual costs
are expected to be approximately between $4 and $7 million, resulting
in total annual net benefits of between approximately $11 million and
$19 million.
    Overall, by proposing increased regulatory flexibility, this
proposed rule should reduce the compliance burden on the regulated
industry, including small entities, without compromising transportation
safety. Therefore, we certify that this proposed rulemaking will not
have a significant or negative economic impact on a substantial number
of small entities. Further information on the estimates and assumptions
used to evaluate the potential impacts to small entities is available
in the Regulatory Impact Assessment that has been placed in the public
docket for this rulemaking. In this notice, PHMSA is soliciting
comments on the number of affected entities and the preliminary
conclusion that the proposals in this NPRM will not cause a significant
economic impact on a substantial number of small entities.
    This notice has been developed in accordance with Executive Order
13272 (``Proper Consideration of Small Entities in Agency Rulemaking'')
and DOT's procedures and policies to promote compliance with the
Regulatory Flexibility Act to ensure that potential impacts of draft
rules on small entities are properly considered.

F. Paperwork Reduction Act

    PHMSA currently has an approved information collection under OMB
Control Number 2137-0557, entitled ``Approvals for Hazardous
Materials,'' with an expiration date of May 31, 2014. While this NPRM
may result in a slight increase in the annual burden and cost to OMB
Control Number 2137-0557 for proposed minor record-keeping requirements
under Sec. Sec.  173.64 and 173.65, this NPRM should result in a
decrease in the burden on the fireworks industry by increasing
regulatory flexibility, which will provide manufacturers of Division
1.4 consumer fireworks with an alternative that should be more
efficient than the current approval process.
    Under the Paperwork Reduction Act of 1995, no person is required to
respond to an information collection unless it has been approved by OMB
and displays a valid OMB control number. Section 1320.8(d), title 5,
Code of Federal Regulations requires that PHMSA provide interested
members of the public and affected agencies an opportunity to comment
on information and recordkeeping requests.
    This notice identifies revised information collection requests that
PHMSA will submit to OMB for approval based on the requirements in this
proposed rule. PHMSA has developed burden estimates to reflect changes
in this proposed rule and estimates that the information collection and
recordkeeping burdens will be revised as follows:

OMB Control No. 2137-0557:

    Increase in Annual Number of Respondents: 211.
    Increase in Annual Responses: 5,175.
    Increase in Annual Burden Hours: 430.
    Increase in Annual Burden Costs: $14,875.

    PHMSA specifically requests comments on the information collection
and recordkeeping burdens associated with developing, implementing, and
maintaining these requirements for approval under this proposed rule.
    Requests for a copy of this information collection should be
directed to Steven Andrews or T. Glenn Foster, Office of Hazardous
Materials Standards (PHH-12), Pipeline and Hazardous Materials Safety
Administration, 1200 New Jersey Avenue SE., Washington, DC 20590-0001,
Telephone<PHONE_NUMBER>.
    Address written comments to the Dockets Unit as identified in the
ADDRESSES section of this rulemaking. We must receive comments
regarding information collection burdens prior to the close of the
comment period identified in the DATES section of this

rulemaking. In addition, you may submit comments specifically related
to the information collection burden to the PHMSA Desk Officer, Office
of Management and Budget, at fax number<PHONE_NUMBER>.

G. 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
April and October of each year. The RIN contained in the heading of
this document can be used to cross-reference this action with the
Unified Agenda.

H. Unfunded Mandates Reform Act of 1995

    This proposed rule does not impose unfunded mandates under the
Unfunded Mandates Reform Act of 1995. It does not result in costs of
$141.3 million or more to either state, local or tribal governments, in
the aggregate, or to the private sector, and is the least burdensome
alternative that achieves the objective of the rule.

I. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended
(42 U.S.C. 4321-4347), and implementing regulations by the Council on
Environmental Quality (40 CFR part 1500) require Federal agencies to
consider the consequences of Federal actions and prepare a detailed
statement on actions that significantly affect the quality of the human
environment.
    The purpose of this rulemaking is to allow for an alternative to
the approval process for Division 1.4G consumer fireworks. The
alternatives considered in the environmental analysis include: (1) the
proposed action, that is, permitting an alternative process for
Division 1.4G consumer fireworks to be certified by a DOT-approved FCA;
and (2) the ``no action'' alternative, meaning that the regulatory
scheme will stay the same and the proposed new alternative will not be
implemented. PHMSA believes that both alternatives present little or no
environmental impact on the quality of the human environment because
both alternatives deal with the processing of applications.
Furthermore, the proposed amendments only affect the authorization
process that deems Division 1.4G consumer fireworks safe for transport
and has no impact on any other transport requirements (e.g. packaging,
hazard communication, etc.). The proposed action would provide an
additional application process that would not impact the exemplary
safety record that Division 1.4G consumer fireworks have demonstrated
over the past forty years. Therefore, PHMSA has initially determined
that the implementation of the proposed rule will not have any
significant impact on the quality of the human environment. PHMSA,
however, invites comments about environmental impacts that the proposed
rule might pose.

J. 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.dot.gov.

K. International Trade Analysis

    Under E.O. 13609, agencies must consider whether the impacts
associated with significant variations between domestic and
international regulatory approaches are unnecessary or may impair the
ability of American business to export and compete internationally. In
meeting shared challenges involving health, safety, labor, security,
environmental, and other issues, international regulatory cooperation
can identify approaches that are at least as protective as those that
are or will be adopted in the absence of such cooperation.
International regulatory cooperation can also reduce, eliminate, or
prevent unnecessary differences in regulatory requirements.
    Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as
amended by the Uruguay Round Agreements Act (Pub. L. 103-465),
prohibits Federal agencies from establishing any standards or engaging
in related activities that create unnecessary obstacles to the foreign
commerce of the United States. For purposes of these requirements,
Federal agencies may participate in the establishment of international
standards, so long as the standards have a legitimate domestic
objective, such as providing for safety, and do not operate to exclude
imports that meet this objective. The statute also requires
consideration of international standards and, where appropriate, that
they be the basis for U.S. standards.
    PHMSA participates in the establishment of international standards
in order to protect the safety of the American public. We have assessed
the effects of the proposed rule, and find that because the proposed
alternative process mirrors the current approval process, it will not
cause unnecessary obstacles to foreign trade. Accordingly, this
rulemaking is consistent with Executive Order 13609 and PHMSA's
obligations under the Trade Agreement Act, as amended.

L. National Technology Transfer and Advancement Act

    The National Technology Transfer and Advancement Act of 1995 (15
U.S.C. 272 note) directs federal agencies to use voluntary consensus
standards in their regulatory activities unless doing so would be
inconsistent with applicable law or otherwise impractical. Voluntary
consensus standards are technical standards (e.g. specification of
materials, test methods, or performance requirements) that are
developed or adopted by voluntary consensus standard bodies.
    This proposed rulemaking involves one technical standard: American
Pyrotechnics Association (APA), APA Standard 87-1 Standard for
Construction and Approval for Transportation of Fireworks, Novelties,
and Theatrical Pyrotechnics, December 1, 2001 version. This technical
standard is listed in 49 CFR 171.7.

VI. List of Subjects

49 CFR Part 107

    Administrative practice and procedure, Hazardous materials
transportation, Penalties, Reporting and recordkeeping requirements.

49 CFR Part 172

    Education, Hazardous materials transportation, Hazardous waste,
Labeling, Markings, Packaging and containers, Reporting and
recordkeeping requirements.

49 CFR Part 173

    Hazardous materials transportation, Packaging and containers,
Radioactive materials, Reporting and recordkeeping requirements,
Uranium.

    In consideration of the foregoing, 49 CFR chapter I is proposed to
be amended as follows:

PART 107--HAZARDOUS MATERIALS PROGRAM PROCEDURES

    1. The authority citation for part 107 continues to read as
follows:

    Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 4
(28 U.S.C. 2461 note), Pub. L. 104-121 sections 212-213; Pub. L.
104-134 section 31001; 49 CFR 1.45 and 1.53.
    2. In Part 107, revise subpart E to read as follows:

Subpart E--Designation of Certification Agency

Sec.  107.402  Application for designation as a certification agency.

    (a) Any person seeking designation as a certification agency must
apply in writing to the Associate Administrator for Hazardous Materials
Safety (PHH-32), Department of Transportation, East Building, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001. Alternatively, the
application with any attached supporting documentation in an
appropriate format may be submitted by facsimile (fax) to: (202) 366-
3753 or<PHONE_NUMBER> or by electronic mail (email) to:
<EMAIL_ADDRESS>Each application must be signed and certified to be
correct by the applicant or, if the applicant is an organization, by an
authorized officer or official representative of the organization. Any
false statement or representation, or the knowing and willful
concealment of a material fact, may subject the applicant to
prosecution under the provisions of 18 U.S.C. 1001, and result in the
denial or termination of a designation.
    (b) Each application for designation as a certification agency must
be in English and include the following information:
    (1) Name and address of the applicant, including place of
incorporation if a corporation. In addition, if the applicant is not a
resident of the United States, the name and address of a permanent
resident of the United States designated in accordance with Sec.
105.40 to serve as agent for service of process.
    (2) A statement that the applicant will allow the Associate
Administrator or a designated official to inspect its records and
facilities in so far as they relate to the certification activities and
will cooperate in the conduct of such inspections.
    (3) Any additional information relevant to the applicant's
qualifications, if requested by the Associate Administrator.
    (4) Information required by the provisions in subpart H of this
part.
    (c) Packaging and Lighter Certification Agencies. In addition to
the requirements in (b), the application must include the following
information:
    (1) A listing, by DOT specification (or special permit) number, or
U.N. designation, of the types of packagings for which certification
authority is sought.
    (2) A personnel qualifications plan listing the qualifications that
the applicant will require of each person to be used in the performance
of each packaging certification function. As a minimum, these
qualifications must include:
    (i) The ability to review and evaluate design drawings, design and
stress calculations;
    (ii) A knowledge of the applicable regulations of subchapter C of
this chapter and, when applicable, U.N. standards; and
    (iii) The ability to conduct or monitor and evaluate test
procedures and results; and
    (iv) The ability to review and evaluate the qualifications of
materials and fabrication procedures.
    (3) A statement that the applicant will perform its functions
independent of the manufacturers and owners of the packagings
concerned.
    (4) If the applicant's principal place of business is in a country
other than the United States, a copy of the designation from the
Competent Authority of that country delegating to the applicant an
approval or designated agency authority for the type of packaging for
which a DOT designation is sought, and a statement that the Competent
Authority also delegates similar authority to U.S. Citizens or
organizations having designations under this subpart from PHMSA.
    (d) Fireworks Certification Agency. Prior to reviewing, and
certifying Division 1.4G consumer fireworks for compliance with APA
Standard 87-1 as specified in part 173 of this chapter, a person must
apply to, and be approved by, the Associate Administrator to act as a
firework certification agency. A person approved as a firework
certification agency is not a PHMSA agent or representative. In
addition to (b), the application must include the following
information:
    (1) Name, address, and country of each facility where Division 1.4G
consumer fireworks test results and application materials are reviewed
and certified;
    (2) Detailed description of the applicant's qualifications and
ability to inspect, review, and certify that the requirements specified
by part 173 of this chapter have been meet. At a minimum, these
qualifications must include ability to:
    (i) Review and evaluate design drawings, fabrication procedures,
and applications to certify that they are in accordance with the APA
Standard 87-1; and
    (ii) Evaluate thermal stability test procedures and results.
    (3) Detailed description of the operating procedures to be used by
the firework certification agency to review, and certify that a
Division 1.4G consumer fireworks application meets the requirements
specified by part 173 of this chapter;
    (4) Name, address, and principal business activity of each person
having any direct or indirect ownership interest in the applicant
greater than three percent and any direct or indirect ownership
interest in each subsidiary or division of the applicant;
    (5) Name and a statement of qualifications of each individual the
applicant proposes to employ to inspect, review, and certify test
results and certify that application materials comply with APA Standard
87-1;
    (6) A statement that the applicant will perform its functions
independent of the manufacturers, transporters, importers, and owners
of the fireworks; and
    (7) A signed certification declaring that the information provided
in the approval application is true and correct and the application has
not been submitted to any other entity, and the date on which this
certification was signed.
    (8) If approved, the results of fireworks certification evaluation
must be submitted to PHMSA on a schedule and in a manner specified in
the DOT-issued designation approval.
* * * * *

Sec.  107.403  Designation of certification agencies.

* * * * *
    (c) Within 30 days of an initial denial of an application under
paragraph (b) of this section, the application may file an amended
application. If the application for designation is denied, the
applicant may file for reconsideration in accordance with the
provisions in subpart H of this part.
    (d) The provisions in subpart H will apply to the modification,
suspension, and termination of an approval submitted under this
subpart.
* * * * *

Sec.  107.405  Termination of certification agencies.

* * * * *

Sec.  107.405  [Reserved]

* * * * *

PART 172--HAZARDOUS MATERIALS TABLE, SPECIAL PROVISIONS, HAZARDOUS
MATERIALS COMMUNICATIONS, EMERGENCY RESPONSE INFORMATION, TRAINING
REQUIREMENTS, AND SECURITY PLANS

    3. The authority citation for part 172 continues to read as
follows:

    Authority:  49 U.S.C. 5101-5128, 44701; 49 CFR 1.53.

    4. In Sec.  172.101, the Hazardous Materials Table is amended by
revising entries under ``[REVISE]'' in the appropriate alphabetical
sequence to read as follows:

Sec.  172.101  Purpose and use of hazardous materials table.

* * * * *

                                                                            Sec.   172.101--Hazardous Materials Table
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                (8) Packaging (Sec.            (9) Quantity            (10) Vessel
                                                                                Special             173.***)                   limitations              stowage
                              Hazardous materials descriptions    Hazard   Identification          Label  provisions ---------------------------------------------------------------------------
          Symbols                and proper shipping names       class or       Nos.         PG    codes     (Sec.                                                    Cargo
                                                                 division                                  172.102)   Exceptions    Non-     Bulk      Passenger    aircraft   Location    Other
                                                                                bulk             aircraft/rail    only
(1)                          (2)..............................       (3)           (4)      (5)     (6)        (7)         (8A)     (8B)       (8C)          (9A)      (9B)       (10A)   (10B)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                             [REVISE]

                                                                                * * * * * * *
                             Fireworks........................      1.4G       UN 0336       II    1.4G        108           65       62     None       Forbidden     75 kg          06

                                                                                * * * * * * *
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    5. In Sec.  172.320, paragraph (b) and paragraph (d) are revised to
read as follows:

Sec.  172.320  Explosive hazardous materials.

* * * * *
    (b) Except for fireworks approved in accordance with Sec.  173.64
of this subchapter, a package of Class 1 materials may be marked as
follows, in lieu of the EX number required by paragraph (a) of this
section:
    (1) With a national stock number issued by the Department of
Defense or identifying information, such as a product code required by
regulations for commercial explosives specified in 27 CFR part 555, if
the national stock number or identifying information can be
specifically associated with the EX number assigned; or
    (2) For Division 1.4G consumer fireworks, with a FX number issued
by a fireworks certification agency approved in accordance with 49 CFR
part 107 subpart E and classified in accordance with Sec.  173.65.
* * * * *
    (d) The requirements of this section do not apply if the EX number,
FX number, product code or national stock number of each explosive item
described under a proper shipping description is shown in association
with the shipping description required by Sec.  172.202(a) of this
part. Product codes and national stock numbers must be traceable to the
specific EX number assigned by the Associate Administrator or FX number
assigned by a DOT approved fireworks certification agency.
* * * * *

PART 173--SHIPPERS--GENERAL REQUIREMENTS FOR SHIPMENTS AND
PACKAGINGS

    6. The authority citation for part 173 continues to read as
follows:

    Authority: 49 U.S.C. 5101-5128, 44701; 49 CFR 1.45, 1.53.

    7. In Sec.  173.56, the introductory text for paragraph (b) is
revised to read as follows, and paragraph (j) is removed and reserved.

Sec.  173.56  New explosives--definitions and procedures for
classification and approval.

* * * * *
    (b) Examination, classification and approval. Except as provided in
Sec. Sec.  173.64 and 173.65 of this subpart, no person may offer a new
explosive for transportation unless that person has specified to the
examining agency the ranges of composition of ingredients and
compounds, showing the intended manufacturing tolerances in the
composition of substances or design of articles which will be allowed
in that material or device, and unless it has been examined, classed
and approved as follows:
* * * * *
    (j) [Reserved]
* * * * *
    8. In Sec.  173.59, add new definition for ``consumer firework'' in
appropriate alphabetical sequence to read as follows:

Sec.  173.59  Description of terms for explosives.

* * * * *
    Consumer firework. Any completed firework device that is packaged
in a form intended for use by the public that complies with the
construction, performance, chemical composition, and labeling
requirements codified by the U.S. Consumer Product Safety Commission in
Title 16, CFR parts 1500 and 1507. A consumer firework does not include
firework devices, kits or components banned by the U.S. Consumer
Product Safety Commission in 16 CFR 1500.17 (a)(8).
* * * * *
    9. Add new section Sec.  173.64 to read as follows:

Sec.  173.64  Exceptions for Division 1.3 and 1.4 fireworks.

    (a) Notwithstanding the requirements of Sec.  173.56(b), Division
1.3 and 1.4 fireworks (see Sec.  173.65 for Division 1.4G consumer
fireworks) may be classed and approved by the Associate Administrator
without prior examination and offered for transportation if the
following conditions are met:
    (1) The fireworks are manufactured in accordance with the
applicable requirements in APA Standard 87-1 (IBR, see Sec.  171.7 of
this subchapter);
    (2) The device must pass a thermal stability test conducted by a
third-party laboratory, or the manufacturer. The test must be performed
by maintaining the device, or a representative prototype of a large
device such as a display shell, at a temperature of 75 [deg]C
(167[emsp14][deg]F) for 48 consecutive hours. When a device contains
more than one component, those components that could be in physical
contact with each other in the finished device must be placed in
contact with each other during the thermal stability test;
    (3) The manufacturer applies in writing to the Associate
Administrator following the applicable requirements in APA Standard 87-
1, and is notified in writing by the Associate

Administrator that the fireworks have been classed, approved, and
assigned an EX number. Each application must be complete and include
all relevant background data and copies of all applicable drawings,
test results, and any other pertinent information on each device for
which approval is being requested. The manufacturer must sign the
application and certify that the device for which approval is requested
conforms to APA Standard 87-1, that the descriptions and technical
information contained in the application are complete and accurate, and
that no duplicate application has been submitted to a DOT-approved
fireworks certification agency. If the application is denied, the
manufacturer will be notified in writing of the reasons for the denial.
The Associate Administrator may require that the fireworks be examined
by an agency listed in Sec.  173.56(b)(1).
* * * * *
    10. Add new section Sec.  173.65 to read as follows.

Sec.  173.65  Exceptions for Division 1.4G Consumer Fireworks.

    (a) Notwithstanding the requirements of paragraphs Sec. Sec.
173.56(b), 173.56(f), 173.56(i), and 173.64, Division 1.4G consumer
fireworks may be offered for transportation provided the following
conditions are met:
    (1) The fireworks are manufactured in accordance with the
applicable requirements in APA Standard 87-1 (IBR, see Sec.  171.7 of
this subchapter);
    (2) The device must pass a thermal stability test. The test must be
performed by maintaining the device, or a representative prototype of
the device at a temperature of 75 [deg]C (167[emsp14][deg]F) for 48
consecutive hours. When a device contains more than one component,
those components that could be in physical contact with each other in
the finished device must be placed in contact with each other during
the thermal stability test;
    (3) The manufacturer of the Division 1.4G consumer firework applies
in writing to a DOT-approved fireworks certification agency, and is
notified in writing by the fireworks certification agency that the
firework has been:
    (i) Evaluated, and examined, as required, for a Division 1.4G
consumer firework;
    (ii) Certified that it complies with APA Standard 87-1, and meets
the requirements of this section; and
    (iii) Assigned an FX number followed by a corresponding
certification report identifier (e.g., FX-XXX-YYY, where XXX represents
the firework certification agency and YYY represents the certification
report identifier that is traceable to the specific manufacturer and
firework device transported).
    (4) The manufacturer's application must be complete and include
relevant background data, copies of all applicable drawings, test
results, and any other pertinent information on each device for which
certification is being requested. The manufacturer must sign the
application and certify that the device for which certification is
requested conforms to APA Standard 87-1, that the descriptions and
technical information contained in the application are complete and
accurate, and that no duplicate applications have been submitted to
PHMSA. If the application is denied, the DOT-approved fireworks
certification agency must notify the manufacturer in writing of the
reasons for the denial. Following the issuance of a denial from a DOT-
approved fireworks certification agency, a manufacturer may submit the
denial and original application to PHMSA for reconsideration in
accordance with subpart H.
    (b) Recordkeeping requirements. Following the certification of each
Division 1.4G consumer firework as permitted by paragraph (a) of this
section, the manufacturer, importer, and fireworks certification agency
must maintain a record or an electronic image of the record
demonstrating compliance with this section. This record must be
accessible at or through its principal place of business and be made
available, upon request, to an authorized official of a Federal, State,
or local government agency at a reasonable time and location. A copy of
this record must be retained for five years after the material is
imported. Records complying with firework requirements of other Federal
or international agencies may be used to satisfy the recordkeeping
requirements of this paragraph to the extent that such records address
the recordkeeping components specified in this section. For Division
1.4G consumer fireworks certified by a DOT-approved fireworks
certification agency, the record must include:
    (1) The FX number of the entity that certified that the firework
device complies with APA Standard 87-1, including a certification
report identifier that is traceable to the manufacturer and specific
firework device transported;
    (2) A copy of the approval application submitted to the DOT-
approved fireworks certification agency; and
    (3) A copy of any certification documentation completed by the
fireworks certification agency in accordance with the DOT-approved
procedures.
    (c) Hazard Communication. Following the certification of each
Division 1.4G consumer firework as permitted by paragraph (a) of this
section, each package containing a Division 1.4G consumer firework must
be marked and labeled in accordance with subpart D and E of part 172.
* * * * *

    Issued in Washington, DC, on August 24, 2012, under authority
delegated in 49 CFR part 106.
Magdy El-Sibaie,
Associate Administrator for Hazardous Materials Safety, Pipeline and
Hazardous Materials Safety Administration.
[FR Doc. 2012-21360 Filed 8-29-12; 8:45 am]
BILLING CODE 4910-60-P