Hauling Dangerous Waste--Feds Drag Their Feet
Article from State Legislatures, April 17, 1998
By James B. Reed
More public safety and lower administrative costs. What government agency wouldn't jump on a program promising that? The Office of Motor Carriers, apparently.
At least, that's the belief of a hard working group of state administrators of hazardous material transportation. They have tested the program and are shaking their heads at the intransigence of the OMC, an arm of the Federal Highway Administration.
"OMC is on the verge of squandering an important opportunity," says Steve Lesser, transportation director for the Public Utilities Commission of Ohio. Ohio is one of four states that applied the model program in 1994. "We have a uniform and efficient system that can be applied nationally, that is supported by an unusual political alliance of industry and the states. OMC needs to move forward with a federal rule now," Lesser says.
As part of a compromise in 1990 to avert outright federal preemption of state permit programs for "hazmat" transportation, Congress chartered a working group of state and local officials to devise a uniform approach for registration and permit forms and procedures. The organization consisted of 28 elected and appointed officials from 22 states and several organizations. A three-year effort by the group, dubbed the Alliance for Uniform Hazmat Transportation Procedures, produced a near unanimous report in 1993 (New Jersey objected for fear of losing its strict hazardous waste regulations and fee revenue).
It called for a reciprocal, uniform, base state system of ensuring hazmat transportation safety. A trucker's home state would issue the uniform registration and permit and collect fees. Reciprocity would exist among states that issue permits. Additional information would be required of transporters of hazardous waste because of its negative economic value and the consequent temptation to dispose of it illegally. States that choose to not regulate in such a manner would not have to. States would retain individual enforcement authority. A governing board of participating states would oversee the uniform administration of the program and settle disputes. Participating states would (and the four do) use the same forms and procedures. The alliance was financially supported by the Federal Highway Administration and a liaison from OMC served as a resource to the alliance. (See State Legislatures, October 1993, "Hauling Hazardous Materials Safely.")
Minnesota, Nevada, Ohio and West Virginia tested the recommendations and found the program to be administratively workable, cost effective and acceptable to the regulated industry. The program increased safety through a stricter scrutiny of hazmat carriers and better compliance with other safety rules. That helped persuade the Illinois Legislature to enact the program effective next month.
Now the decision is in the hands of rule makers in the Office of Motor Carriers, who have several options. They could mandate the exact program recommended by the working group, an outcome desired by the five participating states and others, state law enforcement organizations and the regulated industry. Or they could mandate something else. Or they could do nothing, maintaining the status quo of five uniform states and nearly 70 different programs in the other states. A final option is that if 26 states adopt it, OMC would be forced to issue a federal rule.
To Preempt or Not: That is the Question?
The kicker from the deal to avoid outright preemption in 1990 is that the state-developed uniform program would preempt existing state programs. Federal preemption is almost always distasteful to legislators. The one-size-fits-all federal approach rankles states, often leading to complications for them. But a case can be made for eliminating "purposeless diversity" in areas that lend themselves to uniformity and where compliance costs could be reduced without harming public safety and welfare. Like many things, though, purposeless diversity is in the eye of the beholder.
To some extent, the regulation of hazardous material transportation has been such a case. From the beginning, with the passage of the Hazardous Material Transportation Act of 1974, there was a presumption of federal preeminence in promoting safety through uniformity. Thus, federal standards prevail in the classification, labeling, marking, packaging, routing and placarding of hazardous materials. But latitude for states existed in such areas as registration and permit requirements. Over time, however, the regulated industry bristled at many of these inconsistent state requirements and launched a political and legal attack to eliminate them. Their preference would be no state requirements. Duplication and redundancy of state programs "created intolerable burdens for interstate carriers," according to the Association for Waste Hazardous Materials Transporters.
By creating the alliance, the Hazardous Materials Transportation Uniform Safety Act forestalled preemption in 1990 and gave states the opportunity to formulate a more uniform approach using the best practices currently existing. And that's precisely what happened. Through an open process that included industry and environmental representatives, a strong, state-based, but nationally uniform, program was devised. To the uninformed that might appear to be an oxymoron. But as Minnesota, Nevada, Ohio and West Virginia have proved, it's a program that works.
If OMC issues the uniform program as a rule, all states with similar regulations would be required to adopt it. Those states not choosing to do so could opt out. Though the uniform program would preempt some existing state programs, many believe that this will forestall total preemption by a weaker Federal Highway Administration permit process and the possible elimination of state fees that support critical safety programs. "The uniform program consists of the best existing safety practices of the states with all the vulnerable parts taken out," says Ohio's Lesser.
It's a Program That Works
States using the model program like it. "The best aspect has been the education of the carriers in our state on safety regulations, insurance and other compliance aspects," says Loretta Bitner, administrator of the West Virginia Public Service Commission uniform program. The education aspect of the permit process is coupled with state ability to suspend or revoke the permits of continual "bad actors," explains Ohio's Lesser. Ward Briggs, who oversees Minnesota's Department of Transportation program, says it "offers assurance up front that carriers are safe."
National transportation industry associations strongly support the uniform program. "It is a very effective program, with very positive benefits for industry. It reaffirms federal standards, reduces paperwork, recommends a legal fee formula and levels the regulatory playing field for all carriers," says Cynthia Hilton of the Association of Waste Hazardous Materials Transporters. Todd Iverson with the Minnesota Trucking Association concurs. "Uniformity is key. Even though the application form is somewhat complex, our members appreciate only doing the paperwork once."
Indeed, a 1996 study found that the administrative cost to comply is about one-tenth of that for current applications for state and local hazardous materials permits. Moreover, hazardous waste transporters benefit even more, on average saving more than 500 hours and $20,000 in administrative costs annually. Before, one interstate carrier had to submit numerous applications; now one application works in five states.
States Take a Look
Illinois became the fifth state to adopt the uniform program. "The threat of a lawsuit over fees brought Illinois into the program," explains Mike Nechvatal with the Illinois Environmental Protection Agency. Industry questioned his state about its use of transportation permit fees that were "inconsistent with the federal requirement that fees on hazmat transportation be used for hazmat transportation purposes." Illinois will officially start up its program July 1.
Michigan looked seriously at joining the program this year, and legislation is pending in both houses. The Michigan State Police support the program as a way to improve compliance with hazardous materials regulations, but the Department of Environmental Quality thinks each state should retain more flexibility than the uniform program allows.
Tennessee entertained legislation this year, but it became embroiled in a dispute over which agency would run the program and the disposition of an existing permit program and $650 fee. Oklahoma also considered legislation this year.
Interest has been expressed in many states including Colorado, Missouri, New York, Wisconsin and Wyoming. Officials in these states see the benefits of the uniform approach and the advantage of influencing the evolution of the program to meet their needs, but are sitting on the sidelines until the federal government acts. With the strictest existing programs in the country, California and New Jersey have studied the uniform program extensively and had representation on the original working group, but are skeptical about how rigorously other states would implement it, given the prospect of immediate reciprocity.
Other potential state entrants are hesitating due to lack of federal action. They want to see the rule issued by the federal government before moving ahead. These states don't want to adopt the existing uniform program and then have to change if the federal rule is different.
The path to a federal rule has been tortuous. The alliance and industry anticipated quick action following the pilot test evaluation in March 1996. But all who were intimately involved were troubled by the notice issued by OMC's parent agency, the Federal Highway Administration (FHWA) a few months later. It was hardly recognizable as the original recommendation. The alliance responded by letter, "Overall, we are extremely disappointed that the notice misrepresents both the purpose...and the process by which the alliance arrived at its recommendations."
In the notice, FHWA mixed the well-developed alliance program in with five other possible initiatives. Even those familiar with the various efforts had trouble deciphering the hodgepodge of proposals. The botched attempt to link several related efforts in one notice backfired, and few bothered to comment. FHWA interpreted the lack of comment as lack of support for the uniform program. Jim McCauley, liaison from OMC to the alliance, said the first notice elicited only 20 responses, "not the level of response appropriate for implementing a program of this scope. We were surprised by the light turnout of opinion." But some of the 20 responses represented consolidated comments by many organizations on behalf of their constituents.
State representatives were also irritated by the fact that the FHWA notice didn't mention that it might ignore the recommendations, which is what happened for an entire year.
Congressional pressure finally forced FHWA to speed up its process. Congressman Nick Rahall of West Virginia, convinced of the program's effectiveness in his state, sharply questioned OMC chief George Reagle at a public hearing in November 1997. FHWA's accomplishments were not stellar, Rahall said. Out of several jobs it was assigned with the 1990 hazmat legislation, it has accomplished none of them, including the uniform program rule. Bureaucratic inertia was thwarting the will of Congress. The pressure created by Rahall was bolstered by a meeting of all the key players in the office of U.S. Senator Jay Rockefeller in February 1998.
The feds finally moved. On March 11, a letter went out from FHWA to the governors asking for comments on the uniform program. The formal Federal Register notice appeared on March 31. Comments from all interested parties are sought by June 29. OMC's McCauley says that his agency's reading of the statute suggests that the endorsement of at least 26 states is needed in order to move ahead. "We have no reluctance to move one way or another. We are seeking broad support. This is a sincere effort to find out what the states want, and we will act according to the viewpoints expressed."
FHWA's doubts about the program are apparent though. Its letter to the governors says that the alliance is recommending preemption of state programs, skipping the fact that Congress mandated the limited preemption. And the letter stresses the potential costs to states, ignoring any mention of safety benefits. The notice declares that not enough evidence of effectiveness or state support has been presented to date to justify issuing a rule. McCauley notes, "Despite $600,000 of federal funding and five years of effort, only five states have adopted the program."
But the first four states voluntarily adopted the uniform program using federal funds to help pay for the transition; no continued funding is being offered by FHWA to entice additional states. Even though the uniform program is attractive to many states, without the carrot of money or the stick of a mandate, states are unlikely to change.
Why FHWA's hesitation? Some believe its true agenda is to kill the uniform program and go forward with its own "safety permit" that would preempt all existing state programs. It proposed such a rule in 1993 using the judicially discredited federal motor carrier safety rating process as a permit system. More recently, FHWA actions seem to favor complete federal preemption of state permit programs through a one-stop federal computer assessment of motor carrier safety. In its proposal for reauthorization of transportation programs, FWHA suggested a new study on state permitting and registration, a notion called ludicrous by Paul Bomgardner of the American Trucking Associations (ATA). But Jim McCauley insists, "We don't have a dog in this fight. We support uniformity and reciprocity. We will go which ever way it comes out."
It's the Money, Stupid
A related battle has ensued over state "flat fees," which are not preempted by federal law but have been under assault by ATA. It just won a case against a hazardous waste transportation fee in New Jersey that a judge decided was in violation of the Commerce Clause. Fees in Maine, Massachusetts and Wisconsin have been struck down over the last seven years. ATA's Paul Bomgardner says his organization will continue to fight flat taxes wherever they are found.
Though not part of its specific charge, the alliance decided to recommend a new "apportioned" fee system to overcome ongoing legal challenges of state flat fees by ATA, thereby lending revenue stability to state registration and permit programs. Flat fees have been found unconstitutional because they nick all payees the same regardless of their proportional impact and presence in the state. The apportioned fee devised by the alliance more fairly spreads the costs of regulating hazardous materials transportation in a state among interstate and intrastate carriers. The fee takes into account a carrier's mileage in the state and the amount of hazardous materials transportation in the state.
But the shifting of program costs to intrastate carriers is a consequence of not assessing a flat fee, and this has had repercussions in Minnesota. In-state carriers do not benefit from apportioning of operations among the states as interstate carriers do: They conduct all their operations in a single state. Thus the petroleum marketers, who operate primarily within Minnesota, convinced the Legislature that they paid too much in fees. This complaint, in part, led to Minnesota's decision to withdraw from the uniform program last October. It rejoined in March after action by the Legislature to reauthorize the program and give intrastate carriers a break on the fee. Thus, the alliance recommended fee is not perfect, but it is some protection against legal challenge by ATA.
For Steve Lesser, the financial toll suffered by New Jersey in losing its hazardous waste transportation fee is a key incentive for implementing the uniform program. "State programs are threatened by the twin menace of ATA lawsuits and federal preemption. The uniform program avoids these problems."
For those states willing to move ahead, the collective advice from the current administrators is to involve the regulated industry from the start. Identify and sort out the turf lines among existing state agency programs, and study the revenue needed to operate the program in order to set the correct fee. Be prepared to go electronic, counsels Jim Rhode, administrator for the Nevada Highway Patrol uniform program. "A reciprocal, nationally uniform permit system can't be run out of a file cabinet in someone's office," adds Lesser.
For Nancy Brown, former Kansas state representative and chairwoman of the governing board that oversees the uniform program, the benefits are clear. "There is not a governor or state legislator who is not looking for ways to make state government more effective and more efficient. The reciprocal program benefits the states by distributing the burden of regulating the nation's interstate carriers among the states. This allows the base state to conduct a more thorough review of the operations of a carrier for which it has responsibility, rather than conducting a less stringent review of every carrier that enters its jurisdiction."
States that have adopted the program hope OMC acts soon. But the law does contain another option for a national uniform program-OMC must issue a rule if it's adopted by 26 states. With just five on board, the road to 26 is long and winding, especially given the fact that no federal transition money is available. But uniformity has proved beneficial, and both the states and the industry plan to persevere in extending the advantages of uniform forms and procedures nationally. They are jointly approaching Congress to clarify its support of the uniform program and appropriate funds to bring additional states on board.
To comment on the uniform program, see the Federal Register, March 31, 1998, pages 15362-15375. Written comments are due by June 29, 1998. The March 15, 1996, alliance evaluation report can be found on the Internet at this web site.