On December 21, 2006, the Pipeline and Hazardous Materials Safety Administration (PHMSA), a modal administration of the U.S. Department of Transportation (DOT), published Notice of Proposed Rulemaking HM-232E – Hazardous Materials: Enhancing Rail Transportation Safety and Security for Hazardous Materials Shipments. HM-232E proposes to amend the Hazardous Materials Regulations (HMR) to impose additional, security-related requirements on rail carriers of certain classes of hazardous materials. The comment period for HM-232E ends on February 20, 2007.

Notably, the preamble to HM-232E states that the rulemaking is only the first step in a multiphase effort by DOT and the Department of Homeland Security (DHS) “to assess and secure the transportation of hazardous materials in all transportation modes to create an end-to-end secure supply chain.” Thus, while HM-232E is of immediate importance to rail carriers of hazardous materials, regulated entities who offer or carry hazardous materials in any mode of transportation should follow these regulatory developments, and should consider participating in the public comment process for the proposed rule. Of particular concern to regulated entities may be the lingering uncertainty about which agency, DOT or DHS, will take the lead in regulating hazardous materials transportation security.

DOT’s efforts also represent only one component of newly proposed homeland security regulations pertaining to hazardous materials and rail security. On December 21, 2006, DHS proposed complementary regulations affecting rail transportation security in general, but imposing particular requirements related to hazardous materials shipping and storage. The DHS rulemaking is the subject of the January 8, 2007 Alston & Bird Advisory entitled “Proposed Homeland Security Regulations to Affect Rail Operators and Certain Hazardous Material Facilities.”

Summary of HM-232E

The HMR currently require offerors and transporters of certain classes of hazardous materials to develop and implement security plans and to train their employees to recognize and respond to possible security threats. Regulatory approval of security plans is not required. HM-232E proposes to impose additional security requirements on rail carriers of hazardous materials that DOT has deemed to “present the greatest rail transportation safety and security risk,” and thus to be “the most attractive targets for terrorists.”

These include the following hazardous materials: (1) more than 5,000 lbs in a single carload of certain kinds of explosives; (2) bulk quantities of toxic by inhalation materials; and (3) highway-route controlled quantities of certain radioactive materials. HM-232E invites commenters to identify whether the proposed requirements should apply to any other classes of hazardous materials, such as flammable gases, flammable liquids, “or other materials that could be weaponized.”

In large measure, HM-232E embodies operating practices endorsed by the Association of American Railroads and already implemented by the rail industry. Specifically, HM-232E proposes to require rail carriers of affected hazardous materials to do the following:

  • Recordkeeping. Compile, on a yearly basis, data on the number of shipments and aggregate amount of each subject hazardous materials commodity that was transported over each of their rail route segments.
  • Routing. Include in their security plans an evaluation, according to specified security criteria, of the rail transportation routes over which the specified materials are transported and of the most practicable alternative shipping routes. Rail carriers would be required to “utilize these analyses to transport these materials over the safest and most secure commercially practicable routes.”
  • Delays. Address in their security plans the security risks associated with shipments delayed in transit and notify storage facilities or consignees when there is a significant delay in the delivery of subject hazardous materials, or when subject hazardous materials are delivered.
  • Inspections. Conduct visual security inspections of rail cars containing hazardous materials for signs of tampering or the introduction of an improvised explosive device.

HM-232E also reiterates DOT’s position that the Hazardous Material Transportation Law, the Rail Safety Act and the Commerce Clause of the U.S. Constitution preempt state, local and tribal governments from interfering with the routing decisions of rail carriers that transport hazardous materials. The proposed rule therefore offers additional support that, absent a waiver from PHMSA, state, local or tribal government limitations on such routing decisions are prohibited.

Remaining Questions Concerning Jurisdiction

Before the terrorist attacks of September 11, 2001, the regulation of hazardous materials transportation focused primarily on ensuring the safety of such shipments from an accidental release. After September 11, however, DOT and other agencies realized the threat posed by a terrorist attack on hazardous materials and/or the movement of hazardous materials along the transportation infrastructure.

On November 19, 2001, the Aviation Transportation and Security Act created the Transportation Security Administration (TSA) as an agency of DOT. The Act empowered TSA to issue regulations pertaining to “security in all modes of transportation.” One year later, Congress enacted the Homeland Security Act of 2002 (HSA), creating DHS and explicitly conferring on DOT the authority to regulate hazardous materials security. Also pursuant to the HSA, TSA was relocated from DOT to DHS on March 1, 2003. The departure of TSA left considerable uncertainty as to which entity, DOT or DHS, had ultimate authority over hazardous materials transportation security issues.

In August 2005, Congress passed the Hazardous Materials Safety and Security Reauthorization Act, providing greater authority for DOT and TSA to regulate hazardous materials transportation with security, rather than safety, in mind. Congress did little to clarify which agency had primary authority over the issue. Among other things, the Reauthorization Act charged TSA with implementing some aspects of a program requiring background checks for individuals seeking hazardous materials endorsements on commercial drivers’ licenses. It also granted DOT inspectors broader authority to investigate and remove hazardous materials from transportation, and authorized DOT to take emergency regulatory action to deal with certain “imminent hazards” related to the transport of hazardous materials.

Perhaps in recognition of the jurisdictional ambiguity, DOT’s Research and Special Programs Administration (the predecessor to the PHMSA) and TSA jointly published an August 14, 2004 Notice in the Federal Register on “Enhancing Rail Transportation Security for Toxic Inhalation Hazard Materials.” The notice acknowledged that TSA’s “authority with respect to transportation security is comprehensive and supported with specific powers related to the development and enforcement of security plans, regulations, and other requirements,” but that “DHS and DOT share responsibility for hazardous materials transportation security.” The notice invited public comment on a wide variety of proposals to increase the security of hazardous materials shipments. HM-232E is the next stage of this rulemaking effort, and clearly takes into consideration many of the commenters’ concerns with the August 2004 Notice.

To resolve some of the uncertainty surrounding their respective jurisdiction, DOT and DHS on September 27, 2004 entered into a Memorandum of Understanding whose “primary objective” was “to develop procedures by which the two departments can continue to improve their cooperation and coordination in promoting the safe, secure, and efficient movement of people and goods throughout the transportation system.” The parties fleshed out their arrangement with two annexes, signed on August 7, 2006 and September 28, 2006, respectively.

The annexes provide some clarity with respect to enforcement authority, as do HM-232E and the recent DHS rulemaking. These indicate that the Federal Railroad Administration (FRA), an agency of DOT, and TSA will attempt to coordinate enforcement efforts, leaving FRA inspectors to enforce hazardous materials rail security requirements promulgated by DOT and TSA inspectors to enforce security requirements imposed by DHS. Allocating enforcement responsibility, however, is easier than deciding which agency will regulate which aspects of hazardous materials transportation security, to say nothing of resolving which agency will take the lead role in regulating the security of hazardous materials in commerce.

Neither the governing statutes, the proposed regulations, nor the Memorandum of Understanding between DOT and DHS resolves this issue. So long as DOT and DHS can work harmoniously and keep their regulations consistent, this ambiguity should not pose significant issues for regulated entities. It remains to be seen, however, whether administrative comity will prevail as the agencies continue to propose security rules affecting other modes of hazardous materials transportation.