Hazardous Materials: Advancing Safety of Highway, Rail, and Vessel Transportation

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

II. Background

A. Railroad Safety Advisory Committee

B. AAR Authority To Approve the Design of Tank Cars and Quality Assurance Programs

1. Introduction

2. Tank Car Design Approval

3. Tank Car Facility Quality Assurance Program

4. Tank Car Facility Definition

5. Tank Car Facility and Design Certifying Engineer Registration

6. AAR Specifications for Tank Cars Incorporation by Reference

7. Tank Car Linings and Coatings

8. Editorial Revision to §§ 180.501 and 180.513

C. Cargo Tank Regulatory Amendments

D. Cargo Tank Marking for Petroleum Distillate Fuels

E. P-1712

F. P-1724

G. P-1735

III. Overview

A. Rail

B. Highway

C. Vessel

D. Multi-Modal

IV. Section-by-Section Review

V. Regulatory Analyses and Notices

A. Statutory/Legal Authority

B. Executive Order 12866, 14094, and DOT Regulatory Policies and Procedures

C. Executive Order 13132

D. Executive Order 13175

E. Regulatory Flexibility Act and Executive Order 13272

F. Paperwork Reduction Act

G. Unfunded Mandates Reform Act of 1995

H. Draft Environmental Assessment

I. Privacy Act

J. Executive Order 13609 and International Trade Analysis

K. National Technology Transfer and Advancement Act

L. Executive Order 13211

M. Cybersecurity and Executive Order 14082

N. Severability

I. Executive Summary

The Pipeline and Hazardous Materials Safety Administration (PHMSA) proposes to amend the requirements for the transportation of hazardous materials set out in the Hazardous Materials Regulations (HMR) (49 Code of Federal Regulations (CFR) parts 171 to 180) and 49 CFR part 107. This rulemaking aims to amend provisions specific to the highway, rail, and vessel transportation of hazardous materials.

In this notice of proposed rulemaking (NPRM), PHMSA proposes to reform modal specific requirements in the HMR. PHMSA expects that the adoption of these proposals will maintain or enhance the safe transportation of hazardous materials while increasing the clarity of the HMR, and therefore decreasing compliance burdens. The proposed amendments also reflect changing conditions and trends that affect the safe transportation of hazardous materials while still maintaining or enhancing safety. The following are some of the more noteworthy subjects covered by proposed revisions:

• Rail tank car use requirements as recommended by the Rail Safety Advisory Committee (RSAC);
• Rail tank car and service equipment design approval requirements;
• Highway cargo tank specifications and requalification requirements; and
• Marking requirements for cargo tanks that contain multiple petroleum distillate fuels.

In this rulemaking, PHMSA solicits comment from the public and regulated community on these proposed amendments, specifically pertaining to the need for, benefits, and costs of the proposed amendments; impact on safety; public interest; and any other relevant concerns. In its preliminary regulatory impact analysis (PRIA), PHMSA concluded that the aggregate benefits of the proposed amendments justify their aggregate costs. PHMSA estimates annualized net benefits at a two percent discount rate of approximately $97.3 million per year. Details on the estimated cost savings and benefits of this rulemakings can be found in the PRIA, which is available in the public docket for this rulemaking.

II. Background

The Federal Hazardous Materials Transportation Act (HMTA; 49 U.S.C. 5101 et seq.) at 49 U.S.C. 5103 gives the Secretary general authority to issue regulations for the safe transportation of hazardous materials in commerce. The Secretary delegates the above statutory authorities to PHMSA at 49 CFR 1.97.

A. Railroad Safety Advisory Committee

RSAC is a Federal Advisory Committee established by the U.S. Secretary of Transportation in accordance with the Federal Advisory Committee Act (5 U.S.C. App. 2) to provide information, advice, and recommendations to the Federal Railroad Administration (FRA) Administrator on matters relating to railroad safety. In 1996, FRA established RSAC to develop new regulatory standards, through a collaborative process, with all segments of the rail community working together to fashion mutually satisfactory solutions on safety regulatory issues. PHMSA participates in RSAC when issues related to hazardous material transportation are discussed, and participated in the development of the proposed recommendations in this rulemaking. On November 5, 2015, the RSAC accepted Task No. 15-04: “Hazardous Materials Issues,” which assigned the Hazardous Materials Issues Working Group (HMIWG) to consider several revisions to the HMR to enhance the safety of hazardous materials transported by rail. Consensus-approved regulatory change proposals were developed by the HMIWG and forwarded to the RSAC for consideration. On May 25, 2017, the RSAC voted and approved HMIWG's consensus recommendations of changes to the HMR (hereafter referred to as the consensus recommendations) and submitted the suggested revisions to FRA. FRA subsequently recommended that PHMSA initiate a rulemaking to propose and adopt the consensus recommendations. In this rulemaking, PHMSA proposes to adopt the RSAC consensus recommendations with some modifications. Note that not all of the consensus recommendations are proposed as received. Rather, this rulemaking includes some revisions to the recommendations to better fit the construction of the HMR; to provide more appropriate amendatory instruction to the Office of the Federal Register; and to address some technical issues discovered during detailed review of the proposed regulatory text that was provided in the recommendation.

The consensus recommendations propose to make amendments to update, clarify, or remove existing requirements that are outdated or unnecessary. They propose the following changes, among others: (1) require tank car facilities to apply for and receive a DOT registration letter from PHMSA assigning a registration number prior to qualifying tank cars for service; (2) incorporate by reference updated versions of certain industry standards, including the Association of American Railroads (AAR) Manual of Standards and Recommended Practices Section C-III Specifications for Tank Cars (M-1002); and (3) revise the requirements for One-Time Movement Approvals (OTMAs). These changes are discussed in greater detail later in “Section IV. Section-by-Section Review.”

On August 27 and 28, 2013, FRA held a public meeting to invite stakeholders and the public to participate in a comprehensive review of part 174 of the HMR, to improve the safety of railroad transportation of hazardous materials. Specifically, FRA sought comment on identifying provisions of part 174—Carriage by Rail—that are outdated, unclear, no longer necessary, present an undue economic burden on the regulated community, are inconsistent with other North American standards and regulations (such as those issued by the AAR and Transport Canada), do not sufficiently address modern safety concerns, or do not sufficiently address technological advancements and procedural changes in the railroad operating environment. FRA included specific requests for comment on the public meeting agenda for a review of definitions and abbreviations (§ 171.8); notice to train crews (§ 174.24); nonconforming or leaking packages (§ 174.50); packagings, cargo tanks, and multi-unit tank car tanks in Tank-on-Flatcar (TOFC) and Container-on-Flatcar (COFC) service (§§ 174.61 and 174.63), tank car unloading (§ 174.67); switching placarded railcars, transport vehicles, freight containers and bulk packagings (§ 174.83); position of railcars (§ 174.85); as well as an open discussion on part 174. In its consensus recommendations, the RSAC addressed many of the issues identified and discussed during this public meeting. See “Section IV. Section-by-Section Review” for discussion of specific proposed changes because of the public meeting comments and RSAC deliberations.

B. AAR Authority To Approve the Design of Tank Cars and Quality Assurance Programs

1. Introduction

The design, construction, maintenance, and qualification of tank cars used to transport hazardous materials are complex regulatory topics. Tank cars are the largest type of hazardous materials packaging in use in surface transportation, and the consequence of failure during transportation can be—and has been—catastrophic. The HMR currently delegate tank car and service equipment design approval and tank car facility Quality Assurance Program (QAP) approval to the AAR Tank Car Committee (TCC). The AAR TCC is a body of representatives drawn from the railroads, tank car shippers, and the tank car manufacturing, maintenance, and repair industry. The AAR TCC approves tank car designs and manages QAP approval, as well as develops its own standards for the design and operation of tank cars. PHMSA and FRA provide regulatory oversight to the AAR TCC approval process to ensure the committee is operating within the HMR's purview. The process by which the AAR TCC approves tank car and service equipment designs, materials, and construction, and conversion or alteration, is not specified in § 179.3; however, typically the committee votes on the proposed designs, materials, and construction, and conversion or alteration based on AAR TCC staff review of design drawings and/or service trial results. The approval of QAPs is handled similarly via a vote of the AAR TCC after the facility has been audited by AAR Bureau of Explosives auditors. Audit scheduling, procedure, and recommendation for approval or denial is conducted wholly at the discretion of the AAR.

The HMR require each tank car facility to maintain a QAP that meets the requirements of § 179.7, with the intent that a properly implemented QAP will:

• Ensure the qualified tank car conforms to the requirements of the applicable specification and regulations;
• Identify any defects in the tank car manufacturing, repair, inspection, testing, and qualification or maintenance program; and
• Prevent any non-conformity from recurring.

Specifically, tank car facility QAPs must—at a minimum—address the elements in § 179.7(b)-(e), including verification of construction materials, monitoring and control of processes, and qualification of personnel.

PHMSA and FRA initiated a review of the current regulations in part 179—Specifications for Tank Cars—that require both tank car design and tank car facility QAPs to be approved by the AAR TCC. Additionally, PHMSA and FRA recognize that the scope of the definition of tank car facility has created confusion among tank car shippers and in the tank car manufacturing and maintenance industry. In this rulemaking, PHMSA proposes to revise the definition of tank car facility to reduce confusion and uncertainty in the regulated community. In conjunction with the other rail-specific changes proposed in this rule, this change will improve safety of rail transportation through increased awareness of who qualifies as a tank car facility and who specifically must comply with the HMR requirements for that facility ( see “Section II.B.4 Tank Car Facility Definition” for further discussion on this issue).

PHMSA and FRA have determined that the current system requiring AAR approval for tank car facility QAPs and tank car designs creates a regulatory bottleneck without commensurate safety benefits for the regulated industry. As such, PHMSA proposes revisions to the current system to relieve confusion and increase the efficiency of the approval process ( see “Section II.B.2 Tank Car Design Approval” and “Section II.B.3 Tank Car Facility Quality Assurance Program” for further discussion of these issues). The proposed revisions are intended to increase the efficiency of the tank car design and QAP approval process, without compromising safety, by increasing governmental oversight of regulated entities through a registration program. The following is a brief summary of proposed changes to the approval processes and the definition of tank car facility which PHMSA discusses in greater detail later in this section:

A. Remove the requirement for tank car and service equipment designs to be approved solely by the AAR TCC and replace it with a requirement for tank car designs to be approved by a tank car Design Certifying Engineer (DCE) registered with PHMSA. This proposed requirement closely mirrors the process for highway cargo tank design review and approval.

B. Remove the requirement for tank car facilities to have a QAP approved by the AAR and replace it with a requirement for tank car facilities to register with PHMSA, maintain a QAP, and certify that it meets the § 179.7 quality assurance program requirements.

C. Revise the definition of tank car facility to clarify that the definition applies to facilities that qualify a tank car for service, and to clarify what activities require qualification of a tank car.

D. Add a registration program for tank car DCEs and tank car facilities.

E. Revise the incorporation by reference (IBR) of specific chapters and appendices of the 2014 edition of the AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification M-1002 ( i.e., AAR Specifications for Tank Cars) to correspond to the above proposals ( i.e., removing the requirement to comply with the specific sections of M-1002 that require AAR approval).

F. Revise the requirements for coating and lining inspection of tank cars to clarify what is expected.

G. Revise § 180.513—Repairs, alterations, conversions, and modifications—to clarify that tank car facilities must include the tank car owner's qualification and maintenance program into their QAP to correct an incorrect reference to including the tank car owner's QAP. Generally, a tank car owner is not subject to QAP requirements.

2. Tank Car Design Approval

Federal hazardous material transportation regulations have delegated the authority to approve tank car and service equipment designs to the AAR—and various predecessor organizations—since at least 1927. As provided in § 179.3, the AAR TCC has authority to approve tank car designs, materials and construction, conversion, or alteration of tank car tanks under the specifications of part 179. By way of example, § 179.100-12(a) requires that manway nozzles must be of approved design of forged or rolled steel for steel tanks. In this context, pursuant to the definition in § 179.2, “approved” refers to approval by the AAR TCC.

Although PHMSA has delegated the authority to approve tank car designs, the current state of the AAR's autonomous approval process presents inefficiencies when insufficient resources are available to process approval applications, resulting in unnecessary delays and increased costs for the tank car design and manufacturing community. As such, PHMSA and FRA propose to remove the requirement that tank car and service equipment designs receive approval solely through the AAR TCC before they are used in hazardous materials (hazmat) service. PHMSA and FRA propose to replace AAR TCC design approval with alternative approval by a tank car DCE, similar to the design approval structure for highway cargo tanks. The proposed tank car DCE requirement will include registration with PHMSA, and registrations will be subject to termination for cause, with the intent to create a more transparent, accountable tank car design approval system without any impact on the safety of such approved tank cars. “Design certifying engineer” is a defined term in the HMR in § 171.8, and currently only applies to engineers who can determine that a cargo tank design meets applicable DOT specification standards. PHMSA and FRA propose to revise the definition of DCE to include persons able to determine that a tank car meets applicable DOT specification standards. PHMSA and FRA propose that a tank car DCE must:

• Have an engineering degree and at least one year of work experience in tank car structural or mechanical design; or
• Be registered currently as a professional engineer by an appropriate authority of a state of the United States or a province of Canada.

As proposed, a tank car DCE may not use their experience in cargo tank structural or mechanical design to meet the experience requirement for tank car design, and vice versa for a cargo tank DCE. Based on our knowledge of the cargo tank and tank car industries, PHMSA believes it is unlikely that a company would attempt to register a single engineer as both a tank car and cargo tank DCE. In the event this does occur, PHMSA would allow a single engineer to be registered as both a tank car and cargo tank DCE; however, they will need to acquire separate registrations: a cargo tank DCE registration as specified in subpart F of part 107, and a tank car DCE registration as specified in the proposed new subpart J of part 107. PHMSA has determined that maintaining separate registrations in the event that a single person holds both will simplify recordkeeping and enforcement by preventing unintended administrative hang-ups if one registration is allowed to lapse or termination proceedings are initiated. PHMSA requests comments on this proposed registration process.

Currently, the tank car design approval process is managed by the AAR TCC (see § 179.3). PHMSA and FRA attend AAR TCC meetings and participate in AAR TCC working groups on specific issues; however, the agencies do not manage the day-to-day operations of the AAR TCC. PHMSA and FRA have no voting power in the committee and little involvement in the day-to-day process by which the AAR TCC reviews and approves tank car designs. PHMSA and FRA retain full authority to set tank car safety standards through the adoption of tank car design specification requirements in part 179, and tank car use requirements in part 173. To provide additional context, there are approximately 130 instances in part 179 where the HMR requires that a tank car design feature ( e.g., the manner in which a tank car tank is attached to the car structure) or item of service equipment ( e.g., a valve) be “approved.” This approval is issued by the AAR TCC when the Committee determines that tank car tank or equipment is in compliance with the requirements of the HMR. The AAR TCC is the only entity granted the authority to issue such approvals for tank car tanks and service equipment in the HMR.

PHMSA and FRA have determined that—based on experience participating in the current AAR TCC process—the process for tank car design approval is conducted in such a way that increases costs and delays to the regulated community, without a commensurate increase in safety that would justify these delays. The HMR create a single-source, prescriptive system, because only AAR TCC has the authority to approve an application for a tank car design, material of construction, conversion, or alteration under part 179 specifications. The HMR requirements for the review of a tank car design are well understood and include compliance with part 179 and other considerations that a tank car design must take into account ( e.g., lading properties, material compatibility, operating temperatures, etc.). There is little doubt that there are many engineers in the United States with tank car structural or mechanical design experience who could review and certify that a tank car's design meets the HMR requirements. Replacing AAR TCC approval with DCE approval as proposed will create a system that increases efficiency in the tank car design approval market by expanding the pool of authorized tank car design approval sources without impacting the safety of tank cars used to transport hazardous materials. The proposed system also includes documentation requirements for DCEs that will facilitate improved government oversight of the design approval process via periodic audits, and it would allow DCE registrations to be terminated for cause as further discussed below.

PHMSA and FRA expect that an individual with an engineering degree and tank car design experience or a registered professional engineer—thus meeting the § 171.8 definition of a tank car DCE—will be able to review the design of a tank car or service equipment and determine whether the design complies with the tank car specification requirements. This proposal will improve government oversight of the tank car approval process. Currently, PHMSA and FRA have limited ability to take enforcement action against the TCC for failures to comply with the requirements of the HMR. The current TCC design review procedures have allowed non-compliant tank cars to enter transportation, posing risks to lives and the environment. When non-compliant cars are discovered in transportation, FRA takes immediate action to protect rail workers and the public. This can include issuing a railworthiness directive to address the non-compliance. Audits of the TCC tank car design review process conducted by the Department have revealed systemic operational and processing issues within the TCC—specifically—that the TCC utilizes, approves, and certifies Independent Third Party (ITP) individuals for reviewing and verifying that the application meets all AAR and DOT design requirements. These audit findings still have not been addressed to date. Additionally, in the recent past, the TCC elected not to review and approve new designs for DOT-106 and DOT-110 multi-unit tank car tanks (commonly known as “ton tanks”). The TCC's decision not to review and approve DOT-106 and DOT-110 designs created significant disruption for a packaging manufacturer and their customers. As a result, PHMSA expended resources to develop and issue a Special Permit to allow the construction and use of these packagings to avoid disruption to commercial activities caused by the TCC's decision not to complete the role assigned to them in § 179.3. PHMSA and FRA are also concerned that the current system allows TCC to regulate entry to the market by controlling the approval process. Major tank car and service equipment ( e.g., valve) manufacturers are represented on the TCC. This creates a potential conflict of interest for the TCC when considering approval applications from firms that compete with companies its members represent. PHMSA and FRA have determined that due to unaddressed issues in the AAR TCC approval process, a recent history of a decision not to perform the role assigned in the HMR, and the potential for incumbent tank car industrial concerns to impact entry of competitors into the marketplace, we can no longer justify delegating authority for tank car design approval to the AAR TCC.

PHMSA and FRA expect that costs for reviewing and approving tank car designs will decrease by removing the single-source approval and the barriers of entry to the business of tank car design approval. The implementation of the proposed tank car DCE program will maintain at least an equivalent level of safety of tank car design by ensuring tank car DCEs maintain and adhere to a detailed written procedure to evaluate the compliance of a tank car design with the HMR's tank car specification and usage requirements. PHMSA and FRA will be able to exert substantially greater oversight over tank car DCEs than the AAR TCC, both through the modification, suspension, and termination procedures proposed in this NPRM, as well as through the civil and criminal penalty procedures applicable to all persons who perform activities subject to the HMR through 49 CFR parts 107, 109, and 49 U.S.C. 5123-5124.

PHMSA, in conjunction with our highway modal partner FMCSA, has experience overseeing a DCE program for the design approval of bulk hazardous materials packages intended for highway transportation through the existing cargo tank DCE program. This experience makes us confident that private sector engineers, operating under governmental oversight through a registration program, can safely and effectively review a package ( i.e., a tank) design and ensure it complies in all respects with the relevant design requirements of the HMR. PHMSA and FRA intend to maintain direct oversight on the tank car design process through regular audits of tank car DCEs and reserve the right to terminate a tank car DCE registration for cause. Causes for registration termination include: (1) because of a change in circumstances the registration is no longer needed or would no longer be granted if applied for; (2) the application contained inaccurate or incomplete information and it would not have been granted had accurate and complete information been provided; (3) the application contained deliberately inaccurate or incomplete information; or (4) the registration holder knowingly violated the terms of the registration or an applicable requirement of 49 CFR Chapter I in a manner demonstrating lack of fitness to conduct the activity for which the registration is required. PHMSA emphasizes that criteria (4) can be used to bring enforcement action and potential modification, suspension, or termination proceedings against a tank car DCE who fails to maintain and follow an adequate written procedure that is used to verify conformance with the requirements of the HMR. See “Section IV. Section 107.911” for additional information on the termination of a tank car DCE registration.

By clearly describing the processes and procedures that the DCE must follow to approve a tank car design, PHMSA and FRA expect a high level of safety for tank car designs will be maintained. PHMSA proposes to require the DCE to review the same information and drawings currently required in the AAR Form 4-2. This commonality with existing design records is intended to minimize disruption during the transitional period and maximize tank car and service equipment manufacturer and DCE familiarity with the required documentation. The requirements proposed in §§ 179.3 and 179.5 are intended to create an accountable, auditable, criteria-based tank car design approval system that is more transparent to government oversight than the current system. The proposed requirements in §§ 179.3 and 179.5 are primarily based on the requirement for a tank car DCE to develop, maintain, and adhere to a written procedure describing the process used to verify a tank car or service equipment's design with the requirements of the HMR. This detailed procedure must include acceptance and rejection criteria for each tank car or service equipment design element approved by the DCE, which demonstrate the tank car or service equipment will meet the requirements of part 179 and retain the hazardous contents of the packaging in all normal conditions of transportation for the designed life of the packaging. PHMSA and FRA investigators and engineers will evaluate the detailed procedures during periodic audits to ensure the procedures adequately maintain compliance with part 179, and that the DCE is following the procedures. These general procedural requirements proposed in §§ 179.3 and 179.5 will allow tank car DCEs to determine the most efficient workflow for their business needs, while providing a clear basis for evaluation of a tank car DCE's procedures. These standards also provide a clear framework for PHMSA and FRA to conduct audits and determine whether lapses in a tank car DCE's performance warrant the issuance of a Notice of Probable Violation, or, in serious cases, initiation of modification, suspension, or termination proceedings.

The DCE registration program also may facilitate greater technological advancements in tank car and service equipment designs by facilitating greater access to tank car and service equipment design certification services. The proposed rule would enable other entities to approve tank car designs, potentially leading to more processing of innovative designs that meet the existing performance standards and their subsequent use in the transportation arena. In addition, opening these services up to other entities—rather than maintain the design approval process solely with AAR TCC—may increase competition within the industry as additional DCEs are registered and begin to provide tank car design approvals. This competition is expected to result in potential cost reductions for the regulated community.

To adequately oversee tank car DCEs, PHMSA and FRA propose to require that each DCE register with PHMSA and provide information on the types of design reviews the DCE will conduct. This will allow PHMSA and FRA to audit DCEs to ensure they are properly reviewing each tank car or service equipment design and only issuing approvals to those designs that meet the requirements of part 179. Each DCE must develop procedures, including acceptance and rejection criteria for the approval process, which demonstrate that the tank car or service equipment will meet the requirements of part 179 and the design level of reliability and safety for the hazardous materials service for which the tank car is intended. The registration requirement is necessary to assist PHMSA and FRA in performance of their oversight responsibilities to ensure all tank car DCEs are performing their design reviews with appropriate rigor, and thus that tank car designs are suitable for hazmat transportation. See discussion in section “Section II.B.5 Tank Car Facility and Design Certifying Engineer Registration” for additional details on the proposed registration program.

Therefore, PHMSA proposes to remove reference to AAR approval for tank car designs wherever it appears in the subchapter. A DCE registered with PHMSA would fill the tank car design approval role currently delegated to the AAR. Authorizing qualified individuals, registered with PHMSA, to review and certify tank car designs under PHMSA and FRA oversight will increase the level of safety provided by the HMR while increasing design review efficiency for the tank car design and manufacturing community. Finally, PHMSA notes this would not exclude the AAR staff or TCC members from registering as DCEs to continue to perform these approvals; however, it removes exclusive delegation and opens the market to all those who are qualified. AAR TCC may continue to provide approval services commercially, provided they register with PHMSA and follow the same requirements proposed in this NPRM that other tank car DCEs must follow.

3. Tank Car Facility Quality Assurance Program

Tank car facilities, as defined in § 179.2, are required to have a QAP that—among other items—has the means to detect non-conformities in the tank car manufacturing, repair, inspection, testing, and qualification or maintenance processes. Currently, each tank car facility's QAP must meet the requirements of § 179.7, which requires that the QAP be approved by the AAR. In this rulemaking, PHMSA proposes to remove the requirement that AAR approve a tank car facility's QAP. As a substitute, we propose to replace this requirement with a requirement that tank car facilities must register with PHMSA, certify that they maintain a QAP that meets the requirements of § 179.7, and include an executive summary of their QAP with their registration statement. As proposed, the registration program will improve safety through increased PHMSA and FRA situational awareness of tank car facility activities and provide mechanisms to address non-compliance. PHMSA proposes to allow modification, suspension, or termination of a tank car facility registration for the following causes: (1) because of a change in circumstances, that the registration is no longer needed or would no longer be granted if applied for; (2) the application contained inaccurate or incomplete information and it would not have been granted had accurate and complete information been provided; (3) the application contained deliberately inaccurate or incomplete information; or (4) the registration holder knowingly violated the terms of the registration or an applicable requirement of 49 CFR Chapter I in a manner demonstrating lack of fitness to conduct the activity for which the registration is required. PHMSA emphasizes that criteria (4) above can be used to bring enforcement action and initiate modification, suspension, and termination proceedings against a tank car facility that fails to adhere to their QAP. A tank car facility's failure to adhere to a QAP could create unacceptable risks in the rail system and may cause unsafe tank cars to enter transportation.

The creation of the QAP requirement for tank car facilities was initiated based on a National Transportation Safety Board (NTSB) safety recommendation (R-88-63) issued in response to a September 8, 1987, incident involving the release of butadiene from a tank car in New Orleans, Louisiana. In 1993, the Research and Special Programs Administration (RSPA)—PHMSA's predecessor agency—proposed the creation of the QAP requirement and definition of tank car facility in an NPRM (HM-201). The primary intent of this requirement—as discussed in the preamble of HM-201—is to ensure each tank car manufacturing or repair facility has procedures in place to detect any nonconformity in the tank car manufacturing, maintenance, or repair process and has the means to prevent its recurrence.

In 1995, RSPA created the definition for the term “tank car facility” and a requirement for each tank car facility to maintain a QAP meeting the requirements of § 179.7 in final rule HM-175A and HM-201, and made minor revisions to the requirements in a 1996 HM-175A and HM-201 corrections final rule. The requirements of § 179.7 have not been modified substantively since.

PHMSA and FRA have found that the requirement for only AAR to review and approve each tank car facility's QAP creates an undue cost burden on the facility and creates delays in approving facility operation that hinder commerce. Additionally, PHMSA and FRA's experience auditing tank car facilities with QAPs approved by AAR TCC have revealed significant compliance issues with the current QAP approval process. For example, PHMSA and FRA have knowledge that on at least one occasion—over the course of many months—AAR did not take action on a facility that failed AAR Bureau of Explosives QAP audits. These negative findings demonstrated the facility's failure to maintain an effective QAP and, therefore, the company's inability to safely perform their tank car qualification functions as required by the HMR. Specifically, AAR did not take action to remove the certification of a tank car facility in Shoshone, Wyoming, (Wasatch Railroad Contractors) that had failed multiple QAP audits. This inaction allowed the facility to continue to operate without an effective QAP. FRA and PHMSA raised concerns that AAR has not adopted procedural changes to prevent this type of failure ( e.g., by immediately addressing findings) from recurring. Subsequently, on April 22, 2021, two employees were killed in an explosion while working inside a tank car. FRA and PHMSA believe corrective action by AAR and the facility may have prevented such an incident by not allowing continued work on tank cars. In 2022, the owner of Wasatch Railroad Contractors was found guilty of five counts of wire fraud and one count of knowing endangerment for knowingly exposing employees to asbestos and placing them in imminent danger of death or serious bodily injury.

Additionally, as part of AAR TCC's current QAP approval process, AAR requires that tank car facilities bear the expense on an initial certification audit and annual recertification audits thereafter. The initial certification process often takes several months, and the tank car facility has no recourse under the current HMR requirements but to accept AAR's timeline and fees. Additionally, the audit process does not increase the level of safety commensurate with the costs and delays it imposes. FRA inspectors regularly find violations of the HMR at facilities that AAR authorizes to operate through the current QAP approval process. FRA issues findings, tickets, and notices of probable violation to tank car facilities when it discovers non-compliance. When violations are systemic or significant, FRA uses its railworthiness authority to address similarly situated cars or fleets of cars.

Therefore, PHMSA and FRA propose to remove the requirement that tank car facilities submit their QAPs for approval to AAR and replace it with a requirement that each tank car facility register with PHMSA and certify that it has created and is maintaining a QAP that meets the requirements of § 179.7. As part of the registration requirement, PHMSA and FRA propose that the registrant must submit an executive summary of its QAP, demonstrating compliance with the elements required in § 179.7(b). Facilities may submit certifications from outside organizations, such as an external auditor, to serve as the executive summary or submit their own executive summary documents. PHMSA will administer the registration program for facilities, and FRA—in conjunction with PHMSA—will oversee tank car facility QAPs through regular facility compliance audits. PHMSA and FRA have limited oversight and control over the current AAR approval process for tank car facility QAPs. However, the observations that have been conducted, coupled with our enforcement oversight of the tank car fleet, provide PHMSA and FRA with significant concerns that the current system of AAR audits provides limited safety benefits compared to the burdens imposed. PHMSA and FRA expect the registration program combined with regular compliance audits by government personnel will maintain an equivalent or greater level of safety to the current requirements while reducing administrative delays caused by the AAR process. PHMSA and FRA emphasize that adhering to a rigorous QAP is critical for a tank car facility to ensure that the tank cars qualified for service at the facility meet the requirements of the tank car's specification and regulations. See “Section II.B.5. Tank Car Facility and Design Certifying Engineer Registration” for additional details on the proposed registration program.

PHMSA recognizes that this topic is the subject of an open petition P-1770 submitted by AAR on October 21, 2022. This petition requests the removal of the AAR approval requirement for QAPs in accordance with § 179.7. The AAR petition requests that PHMSA replace AAR approval of QAPs with a requirement for tank car facilities to comply with an industry standard known as “AAR M-1003—Specification for Quality Assurance.” As described above, PHMSA believes that a performance-based approach to QAPs—along with registration with the Department and self-certification—is the best option. Our proposal allows for the use of accepted industry standards for quality assurance programs to meet the proposed safety requirements, but does not mandate one standard over another. This allows tank car facilities to implement the performance elements in the most appropriate manner for their operations. Therefore, in this NPRM, PHMSA is not proposing to incorporate by reference AAR M-1003 into § 179.7. PHMSA will consider any comments on this topic with respect to this NPRM as it evaluates petition P-1770.

4. Tank Car Facility Definition

PHMSA and FRA are aware that there is uncertainty in the tank car community related to the scope of the definition of “tank car facility.” This uncertainty impacts both tank car shippers and tank car manufacturers (including service equipment manufacturers). On October 8, 2019, PHMSA, in conjunction with FRA, issued Letter of Interpretation Reference No. 19-0117 addressing the definition of “tank car facility.” PHMSA proposes to revise the definition of “tank car facility” consistent with Letter of Interpretation Reference No. 19-0117 so that the definition applies only to the facility that qualifies the tank car for service. That is, for example, an equipment manufacturer of a pressure valve used in the construction of a tank car is not a tank car facility solely on the basis of manufacturing a component part of a specification tank car. The determining factor on the applicability of the “tank car facility” definition is whether the facility qualifies a tank car for service. The tank car facility that qualifies the tank car for service is responsible for ensuring the conformity of the entire tank car, including service equipment, with the approved specification. Additionally, PHMSA proposes to revise the definition of “service equipment” in § 180.503 to clarify what constitutes “service equipment” consistent with our expectations in revising the definition of a tank car facility. Service equipment is pressure or lading retaining equipment. Examples include pressure relief devices, valves, manway covers, devices used for loading and unloading, interior heating coils, and vents.

To address the community of tank car shippers: PHMSA's and FRA's position, as reflected in the proposed definition, is that the removal of service equipment from the tank car and replacement or re-installation of the service equipment is a qualification event and triggers the need for a leakage pressure test ( see § 180.509(j)) to verify the tank car is leak tight at the connection. These functions must be conducted by a tank car facility, as defined in part 179, because the service equipment requires a leakage pressure test to ensure the connection to the tank car is qualified for its intended service. A leakage pressure test is a qualification event and must be performed by a tank car facility. Any action that triggers a qualification event requires a tank car facility to perform the qualification prior to placing the tank car into transportation. However, to be clear, a facility that only operates service equipment for loading and unloading purposes is not a tank car facility.

To address the community of tank car component manufacturers, repair facilities and manufacturers: PHMSA's and FRA's position, as reflected in the proposed definition, is that a facility that only manufactures, maintains, or repairs service equipment is not a tank car facility. The facility that qualifies the completed tank car for service after installation of the service equipment is the tank car facility. The facility that qualifies the tank car for service is responsible for ensuring the compliance of the packaging with the requirements of part 179, even those functions that they did not directly perform ( e.g., manufacturing a valve). The tank car facility's QAP must encompass all work done on the tank car and its components prior to qualification of the tank car.

Tank car facilities that meet the proposed revised definition of tank car facility in § 179.2 must have the knowledge and skill to ensure appropriate conformance with the requirements of parts 179 and 180. As qualification is the final step in the tank car manufacturing or maintenance process, only requiring the facilities that qualify tank cars ( i.e., facilities that have the “last touch”) to have a QAP reduces this requirement to a small subset of the total number of facilities that perform work related to tank cars, while still maintaining the high level of safety under the HMR. PHMSA and FRA emphasize the scope of the definition of “qualification” remains unchanged. Therefore, as proposed, tank car shippers and component suppliers are not subject to the administrative burdens associated with the creation and maintenance of QAPs, unless they perform qualification activities ( e.g., removal and replacement of a valve or other service equipment on a tank car). PHMSA and FRA emphasize that all facilities that perform a function subject to the HMR are responsible for performing it correctly and in conformance with all applicable requirements, regardless of whether they meet the definition of a “tank car facility.”

Tank car facilities are responsible for ensuring all material installed onto the tank car meets the requirements of the specification and the regulations at the time the tank car is qualified for service. PHMSA and FRA understand that long-standing policy in the tank car industry had required tank car component manufacturers to maintain AAR-approved QAPs. This policy was confirmed in previously issued (and since revoked) PHMSA Letters of Interpretation Reference Nos. 15-0124 and 18-0029. While these letters are no longer valid, and have not been valid since 2019, at the time they were written they aligned with generally accepted industry practice and addressed a safety issue created by production of valves and other tank car service equipment by unapproved sub-contractors without adequate oversight. As proposed in this NPRM, the facility that qualifies the tank car for service is responsible for ensuring the tank car and all equipment necessary for the tank car's operation meets the applicable requirements of the HMR and any other applicable standards.

5. Tank Car Facility and Design Certifying Engineer Registration

As previously discussed, PHMSA and FRA propose to require that tank car facilities and tank car DCEs register with PHMSA prior to conducting regulated activities. PHMSA and FRA expect that a registration program for both tank car facilities and tank car DCEs is a more efficient alternative for the tank car industry while providing at least an equivalent level of safety. Direct monitoring of registered tank car facilities and tank car DCEs through site visits and audits will maintain the existing safety standards established in the HMR.

Therefore, PHMSA, in conjunction with FRA, proposes to create subpart J in part 107 for tank car facility and tank car DCE registration. The creation of a tank car facility registration program was agreed to in the RSAC process; however, PHMSA proposes to implement the tank car facility registration program in a format different than what appears in the RSAC consensus recommendations. In the RSAC proposal, the tank car facility registration was added to the existing cargo tank facility registration subpart ( i.e., part 107, subpart F). After reviewing the RSAC proposal, PHMSA and FRA have determined that it would be confusing to both the cargo tank and tank car communities to attempt to insert tank car-specific facility and DCE registration language into part 107, subpart F. PHMSA proposes to place the tank car facility and tank car DCE registration requirements in a new subpart to reduce confusion and highlight the tank car-specific nature of these programs. However, some of the proposed language is similar to the part 107, subpart F requirements for cargo tanks and cargo tank motor vehicles.

For tank car facilities, PHMSA proposes to require that each facility, i.e. each separate physical location with a unique street address, submit a separate registration. This will allow PHMSA and FRA to oversee each facility that qualifies tank cars more effectively by establishing the physical addresses and activities of each facility. Each registration statement must be signed by a principal, officer, partner, or employee of the facility responsible for compliance with the applicable requirements of the HMR, certifying knowledge of those requirements. In their registration statement, each tank car facility must list the qualification functions the tank car facility will perform and identify the types of DOT specification or special permit tank cars they intend to qualify.

For DCEs, PHMSA proposes to require each person, as defined in § 171.8, who conducts review of a tank car or service equipment design must register with PHMSA. Each engineer employed to conduct the design reviews must be individually named in the registration and will receive a unique, separate identifier associated with the company's DCE registration. If an engineer is employed as a DCE to conduct design reviews of tank cars or service equipment and begins operating as a DCE for another company, or as self-employed, then the engineer must inform PHMSA and will then receive a new registration number.

PHMSA also proposes the ability to modify, suspend, or terminate both tank car facility and tank car DCE registrations for cause in new § 107.911. Further, procedures for a tank car facility or DCE to follow to request reconsideration and appeal a decision to modify, suspend, or terminate a registration are proposed in new §§ 107.913 and 107.915, respectively. Modification, suspension, and termination determinations for tank car facility and DCE registrations will be made by the Associate Administrator for Safety, FRA. Similarly, requests for reconsideration must also be submitted to the Associate Administrator for Safety, FRA, and appeal of the reconsideration decision to the FRA Administrator.

6. AAR Specifications for Tank Cars Incorporation by Reference

The AAR has developed a comprehensive industry standard for the construction and maintenance of tank cars, the AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification, M-1002 (AAR Specifications for Tank Cars). Currently, § 171.7 incorporates by reference the December 2000 edition of the AAR Specifications for Tank Cars throughout parts 173 (Shippers-General Requirements for Shipments and Packagings), 179 (Specifications for Tank Cars), and 180 (Continuing Qualification and Maintenance of Packagings). In many sections, especially in part 179, the HMR only references a specific section, such as an appendix, of the document. To clarify the IBR structure of M-1002, the RSAC agreed to separately list the individual chapters and appendices of the of AAR Specifications for Tank Cars in the HMR's consolidated IBR section (§ 171.7). This will clearly denote to the reader the relevant chapter or appendix of the document that applies in a particular section of the HMR. This change will also provide PHMSA and FRA greater flexibility when incorporating by reference future editions of the standard. For example, if PHMSA and FRA do not concur on the content of a particular chapter or appendix, it would not prevent other chapters or appendices from being incorporated by reference.

The RSAC also agreed to update the standard from the December 2000 edition to the November 2014 edition. The 2014 edition of the AAR Specifications for Tank Cars also addresses NTSB Safety Recommendation R-12-007, issued on March 2, 2012. R-12-007 recommends that PHMSA adopt AAR's revised design standards for center sill and draft sill attachments. AAR redesigned center and draft sill attachments in response to NTSB Safety Recommendation R-12-009. Chapter 6 of the 2014 edition of the AAR Specifications for Tank Cars, which is proposed for adoption into § 179.10, includes the new sill attachment standards for newly built tank cars. Therefore, the proposed IBR update helps PHMSA address NTSB Safety Recommendation R-12-007.

This NPRM proposes to update the IBR of the AAR Specifications for Tank Cars to the 2014 edition and to incorporate by reference separately each relevant chapter and appendix, as agreed to in the RSAC process. Due to the proposed removal of AAR's sole process for review and approval of tank car designs, certain appendices and sections are no longer necessary to IBR. Several appendices and sections that require designs and QAPs to be sent to AAR for approval would no longer be relevant ( see “Section II.B.2. Tank Car Design Approval). Therefore, PHMSA does not propose to IBR Appendix B, Appendix L, and Appendix U of the AAR Specifications for Tank Cars into the HMR.

Additionally, PHMSA proposes to update the edition of the AAR Manual of Standards and Recommended Practices, Section C—II Specifications for Design, Fabrication and Construction of Freight Cars, Chapter 5 to the 2011 edition from the 1988 edition, as agreed in RSAC.

PHMSA proposes to IBR the 2014 edition of the AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification M-1002 (AAR Specifications for Tank Cars) Chapter 2, section 2.2.1.2 into § 179.102-3. This proposed amendment creates an HMR requirement for shell and head material Charpy impact testing at time of manufacture for pressure tank cars that transport poisonous-by-inhalation material. Because this requirement has been in place through AAR interchange standards since 2005, PHMSA expects there will be no additional burden placed on tank car manufacturers. This proposed IBR also addresses NTSB Safety Recommendation R-19-001, which requests that PHMSA promulgate a final standard for pressure tank cars used to transport poison inhalation hazard/toxic inhalation hazard materials that includes enhanced fracture toughness requirements for tank heads and shells.

PHMSA proposes to incorporate by reference the 2014 edition of the AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification M-1002 (AAR Specifications for Tank Cars) Chapter 3, into §§ 173.241, 173.242, and 173.247. Chapter 3 contains the requirements for manufacturing AAR specification tank cars. Sections 173.241, 173.242, and 173.247 are the packaging sections that authorize the use of AAR specification tank cars. Currently, these sections reference specific AAR specification tank cars, but provide no information as to how these cars are constructed, or what version of the AAR Specifications for Tank Cars they must meet. Incorporating by reference only Chapter 3 into these sections ensures that AAR specification tank cars are manufactured to a standard that PHMSA and FRA have reviewed and determined is acceptable for hazardous materials transportation. If the specifications of the AAR tank cars referenced in §§ 173.241, 173.242, and 173.247 are ever changed in a future edition of the AAR Specifications for Tank Cars, PHMSA and FRA will need to review the revised specifications before authorizing the tank cars for hazardous material service. Incorporation by reference of a specific edition of the AAR Specifications for Tank Cars in §§ 173.241, 173.242, and 173.247 ensures PHMSA will be able to review any future changes to the construction specification prior to authorizing the new specification for hazardous materials transportation.

Finally, PHMSA proposes to correct an error in the HMR and RSAC's proposed IBR text. Currently, the HMR incorporates by reference the AAR Manual of Standards and Recommended Practices, Section C—III, Specifications for Tank Cars, Specification M-1002 (AAR Specifications for Tank Cars), Chapter 6, November 2014 in § 179.400-6. This citation is incorrect; the correct IBR document for design loads of outer jackets is AAR Manual of Standards and Recommended Practices, Section C—II Specifications for Design, Fabrication and Construction of Freight Cars, Chapter 6. Therefore, PHMSA proposes to IBR Section C—II, Chapter 6 into § 179.400-6.

7. Tank Car Linings and Coatings

The HMR prescribes requirements for the inspection of tank car linings in § 180.509(i). On May 22, 2019, the Railway Supply Institute (RSI) requested a Letter of Interpretation on the applicability of the inspection requirements of § 180.509(i). Specifically, RSI asked whether linings and coatings solely used to protect product purity ( i.e., the lining or coating plays no role in protecting the tank from corrosion or reactivity) are subject to the inspection requirements of § 180.509(i).

In Letter of Interpretation Reference No. 19-0117, PHMSA and FRA provided clarification on inspection requirements for linings and coatings. Specifically, the requirements of § 180.509(i) apply only to internal tank car linings and coatings that are applied to protect the tank from a material that is corrosive or reactive to the tank. As noted in the preamble of the final rule HM-216B, PHMSA and FRA are aware of incidents where a material was loaded into a tank car with a defective or incompatible lining which caused a reaction with the tank car. In these instances, the tank lining owners expected the lining was there to protect product purity when in fact it served to protect the tank. It is the responsibility of the tank lining owner to determine whether the internal lining or coating is solely for product purity purposes.

To address confusion on the applicability of tank car lining and coating inspections, PHMSA proposes an editorial revision of the requirements of § 180.509(i)(1), adding the phrase “used to transport hazardous materials corrosive or reactive to the tank” to the second sentence of (i)(1). The proposed revision clearly indicates that tank car linings and coatings are only subject to the inspection requirements of part 180 if they are used to protect the tank from material corrosive or reactive to the tank. PHMSA expects that this clarification will improve compliance with this inspection requirement and therefore improve safety. PHMSA requests comment on this proposal.

8. Editorial Revisions to §§ 180.501 and 180.513

Section 180.501 contains the general requirements for the qualification and maintenance of tank cars. In this NPRM, PHMSA proposes to replace the phrase “owner's qualification program” with “owner's qualification and maintenance program” to maintain alignment with the scope of part 180, subpart F, and the existing references to “qualification and maintenance program” in §§ 179.7 and 180.513.

Section 180.513 provides the requirements to repair, alter, convert, and modify tank cars. PHMSA, in conjunction with FRA, adopted this section into the HMR in HM-216B. Section 180.513(b) outlines responsibilities of a tank car facility. The last sentence in § 180.513(b) contains wording that does not communicate the requirement accurately. Specifically, at the end of paragraph (b), it currently states, “a tank car facility must incorporate the owner's Quality Assurance Program into their own Quality Assurance Program.” The sentence contains an incorrect reference to an equipment owner's QAP. Tank car owners are not subject to the part 179 QAP requirements unless they also operate a tank car facility. The last sentence should make a general reference to a tank car owner's qualification and maintenance program and not a QAP that is required of tank car facilities. The requirement should read, “a tank car facility must incorporate the owner's qualification and maintenance program into their own Quality Assurance Program.” Therefore, PHMSA proposes to replace the first appearance of the phrase “Quality Assurance Program” in the last sentence of § 180.513(b) with the phrase “qualification and maintenance program.”

C. Cargo Tank Regulatory Amendments

PHMSA, in conjunction with the Federal Motor Carrier Safety Administration (FMCSA), developed proposed amendments specific to enhancing safe highway transportation of hazardous materials. A portion of the proposed items were initially identified during two technical information sessions sponsored by National Tank Truck Carriers, Inc. (NTTC) and Truck Trailer Manufacturer's Association (TTMA) in 2005. During these meetings, PHMSA and FMCSA began developing a list of issues, concerns, and requests for clarifications to be considered in a future rulemaking. Moreover, PHMSA and FMCSA have identified numerous advancements in industry practice, as well as potential safety incidents, over the course of the past 17 years. This rulemaking aims to address the safety concerns raised by industry stakeholders.

Additionally, PHMSA and FMCSA continue to review enforcement actions, letters of interpretation, and information received from cargo tank manufacturers and testing facilities, in efforts to identify appropriate revisions to the HMR.

D. Cargo Tank Marking for Petroleum Distillate Fuels

In an advance notice of proposed rulemaking (ANPRM) HM-213E, PHMSA addressed United Nations identification number (UN ID number) marking of cargo tank motor vehicles containing petroleum distillate fuels in response to a Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act of 2016) Congressional mandate and two petitions for rulemaking (P-1667 and P-1668 ). The PIPES Act of 2016 mandate stated that “[n]ot later than 90 days after the date of enactment of this Act, the Secretary of Transportation shall issue an [ANPRM] to take public comment on the petition for rulemaking dated October 28, 2015, titled `Corrections to Title 49 CFR 172.336 Identification numbers; special provisions' (P-1667).”

The central issue addressed in the HM-213E ANPRM was whether a cargo tank motor vehicle transporting different types of petroleum distillate fuels ( e.g., gasoline, diesel fuel, kerosene, and fuel oil) over the course of multiple trips should be permitted to display the UN ID number of the fuel with the lowest flash point, even when that fuel is not being transported ( e.g., display “1203”—the UN ID number for gasoline—when the cargo tank contains only diesel fuel).

As detailed in table 1, PHMSA received 14 sets of comments to the HM-213E ANPRM.