
[Federal Register Volume 80, Number 141 (Thursday, July 23, 2015)]
[Rules and Regulations]
[Pages 43835-43869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17259]



[[Page 43835]]

Vol. 80

Thursday,

No. 141

July 23, 2015

Part II





Department of Transportation





-----------------------------------------------------------------------





 Pipeline and Hazardous Materials Safety Administration





-----------------------------------------------------------------------





49 CFR Parts 196 and 198





 Pipeline Safety: Pipeline Damage Prevention Programs; Final Rule

  Federal Register / Vol. 80 , No. 141 / Thursday, July 23, 2015 / 
Rules and Regulations  

[[Page 43836]]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 196 and 198

[Docket No. PHMSA-2009-0192; Amdt. No. 196-1; 198-7]
RIN 2137-AE43


Pipeline Safety: Pipeline Damage Prevention Programs

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

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: Pursuant to the Pipeline Inspection, Protection, Enforcement, 
and Safety (PIPES) Act of 2006, this final rule establishes review 
criteria for State excavation damage prevention law enforcement 
programs as a prerequisite for PHMSA to conduct an enforcement 
proceeding against an excavator in the absence of an adequate 
enforcement program in the State where a pipeline damage prevention 
violation occurs. This final rule amends the pipeline safety 
regulations to establish the following: Criteria and procedures for 
determining the adequacy of State pipeline excavation damage prevention 
law enforcement programs; an administrative process for making State 
adequacy determinations; the Federal requirements PHMSA will enforce in 
States with inadequate excavation damage prevention law enforcement 
programs; and the adjudication process for administrative enforcement 
proceedings against excavators where Federal authority is exercised. 
The development of the review criteria and the subsequent determination 
of the adequacy of State excavation damage prevention law enforcement 
programs is intended to encourage States to develop effective 
excavation damage prevention law enforcement programs to protect the 
public from the risk of pipeline ruptures caused by excavation damage 
and allow for Federal administrative enforcement action in States with 
inadequate enforcement programs.

DATES: This final rule is effective January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Sam Hall, Program Manager, PHMSA, by 
email at sam.hall@dot.gov or by telephone at 804-556-4678, or Larry 
White, Attorney Advisor, PHMSA, by email at lawrence.white@dot.gov or 
by telephone at 202-366-9093.

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of the Regulatory Action

    The purpose of this final rule is to reduce pipeline accidents and 
failures resulting from excavation damage by strengthening the 
enforcement of pipeline damage prevention requirements. Based on 
incident data PHMSA has received from pipeline operators, excavation 
damage is a leading cause of natural gas and hazardous liquid pipeline 
failure incidents.\1\ Excavation damage means any excavation activity 
that results in the need to repair or replace a pipeline due to a 
weakening, or the partial or complete destruction, of the pipeline, 
including, but not limited to, the pipe, appurtenances to the pipe, 
protective coatings, support, cathodic protection or the housing for 
the line device or facility. Better, more effective enforcement of 
State excavation damage prevention laws, such as the requirement to 
``call before you dig,'' is a key to reducing pipeline excavation 
damage incidents. Though all States have a damage prevention program, 
some States may not adequately enforce their State damage prevention 
laws. Under section 2(a)(1) of the PIPES Act (Pub. L. 109-468), PHMSA 
developed criteria and procedures for determining whether a State's 
enforcement of its excavation damage prevention laws is adequate. Under 
the PIPES Act, such a determination is a prerequisite for PHMSA if the 
agency finds it necessary to conduct an administrative enforcement 
proceeding against an excavator for violating Federal excavation 
standards.
---------------------------------------------------------------------------

    \1\ Data from the U.S. Department of Transportation, PHMSA 
Office of Pipeline Safety, Incident and Accident Reports of Gas 
Distribution, Gas Transmission & Gathering and Hazardous Liquid 
Pipeline Systems. Pipeline incident and accident summaries are 
available on PHMSA Stakeholders Communication Web site at: http://primis.phmsa.dot.gov/comm/Index.htm?nocache=3320.
---------------------------------------------------------------------------

B. Summary of the Major Provisions of the Regulatory Action

    Pursuant to the PIPES Act of 2006, this final rule amends the 
Federal pipeline safety regulations to establish the following: (1) 
Criteria and procedures PHMSA will use to determine the adequacy of 
State pipeline excavation damage prevention law enforcement programs; 
(2) an administrative process for States to contest notices of 
inadequacy from PHMSA should they elect to do so; (3) the Federal 
requirements PHMSA will enforce against excavators for violations in 
States with inadequate excavation damage prevention law enforcement 
programs; and (4) the adjudication process for administrative 
enforcement proceedings against excavators where Federal authority is 
exercised. The establishment of regulations specifying the criteria 
that PHMSA will use to evaluate a State's excavation damage prevention 
law enforcement program is a prerequisite for PHMSA to conduct an 
enforcement proceeding against an excavator in the absence of an 
adequate enforcement program in a State where a damage prevention 
violation occurs.

C. Costs and Benefits

    The total first year costs of this rulemaking action is estimated 
to be $658,145. The following years, the costs are estimated to be 
approximately $183,145 per year. The total cost of this alternative 
over 10 years, with a 3% discount rate is $2,084,132 and at a 7% 
percent discount rate is $1,720,214. The average annual benefits of 
this alternative range from $4,642,829 to $14,739,141. Evaluating just 
the lower range of benefits over 10 years results in a total benefit of 
over $38,000,000, with a 3% discount rate, and over $31,000,000, with a 
7% discount rate. Therefore, the estimated benefits of this alternative 
far outweigh the relatively minor costs, both annually and over ten 
years.

II. Background

A. Pipeline Incidents Caused by Excavation Damage

    Excavation damage is a leading cause of natural gas and hazardous 
liquid pipeline failure incidents. From 1988 to 2012, 188 fatalities, 
723 injuries, 1,678 incidents, and $474,759,544 in estimated property 
damages were reported as being caused by excavation damage on all PHMSA 
regulated pipeline systems in the United States, including onshore and 
offshore hazardous liquid, gas transmission, and gas distribution 
lines.\2\
---------------------------------------------------------------------------

    \2\ Data from the U.S. Department of Transportation, PHMSA 
Office of Pipeline Safety, Incident and Accident Reports of Gas 
Distribution, Gas Transmission & Gathering and Hazardous Liquid 
Pipeline Systems. Pipeline incident and accident summaries are 
available on PHMSA Stakeholders Communication Web site at: http://primis.phmsa.dot.gov/comm/Index.htm?nocache=3320.
---------------------------------------------------------------------------

    While excavation damage is the cause of a significant number of all 
pipeline failure incidents, it is cited as the cause of a relatively 
higher number of natural gas distribution incidents. In 2005, PHMSA 
initiated and sponsored an investigation of the risks and threats to 
gas distribution systems. This investigation was conducted through the 
efforts of four joint work/study

[[Page 43837]]

groups, each of which included representatives of the stakeholder 
public, the gas distribution pipeline industry, State pipeline safety 
representatives, and PHMSA. The areas of their investigations included 
excavation damage prevention. The Integrity Management for Gas 
Distribution, Report of Phase I Investigations (DIMP Report) was issued 
in December 2005.\3\ As noted in the DIMP Report, the Excavation Damage 
Prevention work/study group reached four key conclusions:
---------------------------------------------------------------------------

    \3\ This report is available in the rulemaking docket.
---------------------------------------------------------------------------

     Excavation damage poses by far the single greatest threat 
to distribution system safety, reliability, and integrity; therefore, 
excavation damage prevention presents the most significant opportunity 
for improving distribution pipeline safety.
     States with comprehensive damage prevention programs that 
include effective enforcement have a substantially lower probability of 
excavation damage to pipeline facilities than States that do not. The 
lower probability of excavation damage translates to a substantially 
lower risk of serious incidents and consequences resulting from 
excavation damage to pipelines.
     A comprehensive damage prevention program requires nine 
important elements to be present and functional for the program to be 
effective. All stakeholders must participate in the excavation damage 
prevention process. The elements are:
    1. Enhanced communication between operators and excavators.
    2. Fostering support and partnership of all stakeholders in all 
phases (enforcement, system improvement, etc.) of the program.
    3. Operator's use of performance measures for persons performing 
locating of pipelines and pipeline construction.
    4. Partnership in employee training.
    5. Partnership in public education.
    6. Enforcement agencies' role as partner and facilitator to help 
resolve issues.
    7. Fair and consistent enforcement of the law.
    8. Use of technology to improve all parts of the process.
    9. Analysis of data to continually evaluate/improve program 
effectiveness.
     Federal action is needed to support the development and 
implementation of damage prevention programs that includes effective 
enforcement as a part of the State's pipeline safety program. This is 
consistent with a State's pipeline safety program's objectives, which 
are to ensure the safety of the public by addressing threats to the 
distribution infrastructure. Federal action must include provisions for 
ongoing funding, such as Federal grants, to support State pipeline 
safety efforts. This funding is intended to be in addition to, and 
independent of, existing Federal funding of State pipeline safety 
programs.
    Other studies have indicated that improvements in State damage 
prevention enforcement can contribute to lowering excavation damage 
rates. A 2009 Mechanical Damage Final Report, prepared on behalf of 
PHMSA, concluded that excavation damage continues to be a leading cause 
of serious pipeline failures and that better one-call enforcement is a 
key gap in damage prevention.\4\ In that regard, the report noted that 
most jurisdictions have established laws to enforce one-call 
notification compliance; however, the report noted that many pipeline 
operators consider lack of enforcement to be degrading the 
effectiveness of one-call programs. The report cited that in 
Massachusetts, 3,000 violation notices were issued from 1986 to the 
mid-1990s, contributing to a decrease of third-party damage incidents 
on all types of facilities from 1,138 in 1986 to 421 in 1993. The 
report also cited findings from another study that enforcement of the 
one-call notification requirement was the most influential factor in 
reducing the probability of pipeline strikes and that the number of 
pipeline strikes is proportionate to the degree of enforcement.\5\
---------------------------------------------------------------------------

    \4\ Mechanical Damage Final Report, Michael Baker Jr., Inc., 
April 2009.
    \5\ Effectiveness of Prevention Methods for Excavation Damage, 
Chen, Q. and Chebaro, M., C FER Report L110, June 2006.
---------------------------------------------------------------------------

    With respect to the effectiveness of current regulations, the 
report stated that an estimated two-thirds of pipeline excavation 
damage is caused by third parties and found that the problem is 
compounded if the pipeline damage is not promptly reported to the 
pipeline operator so that corrective action can be taken. It also noted 
``when the oil pipeline industry developed the survey for its voluntary 
spill reporting system--known as the Pipeline Performance Tracking 
System--it recognized that damage to pipelines, including that 
resulting from excavation, digging, and other impacts, is also 
precipitated by operators (first parties) and their contractors (second 
parties).''
    Finally, the report found that for some pipeline excavation damage 
data that was evaluated, ``in more than 50 percent of the incidents, 
one-call associations were not contacted first.'' In addition, 
``failure to take responsible care, to respect the instructions of the 
pipeline personnel, and to wait the proper time accounted for 50 
percent of the incidents.''

B. State Damage Prevention Programs

    States have historically been the primary enforcers of pipeline 
damage prevention requirements, and while this final rule will allow 
PHMSA to conduct Federal enforcement where necessary, PHMSA's view is 
that States should remain the primary enforcers of these requirements 
to the greatest extent possible. In analyzing the need for Federal 
enforcement authority, PHMSA notes that there is considerable 
variability among the States in terms of physical geography, population 
density, underground infrastructure, excavation activity, and economic 
activity. For example, South Dakota is a rural, agricultural State with 
a relatively low population density. In contrast, New Jersey is more 
densely populated and is host to a greater variety of land uses, denser 
underground infrastructure, and different patterns of excavation 
activity. These differences between States equate to differences in the 
risk of excavation damage to underground infrastructure, including 
pipelines. Denser population often means denser underground 
infrastructure; rural and agricultural States have different 
underground infrastructure densities and excavation patterns than more 
urbanized States.
    There is no single, comprehensive national damage prevention law 
setting forth requirements for excavators. On the contrary, all 50 
States in the United States have a law designed to prevent excavation 
damage to underground utilities. However, these State laws vary 
considerably, and no two State laws are identical. Therefore, 
excavation damage prevention stakeholders in each State are subject to 
different legal and regulatory requirements. Variances in State laws 
include excavation notice requirements, damage reporting requirements, 
exemptions from the requirements of the laws for excavators and/or 
utility operators, provisions for enforcement of the laws, and many 
others. PHMSA has developed a tool to better understand the variability 
in these State laws at http://primis.phmsa.dot.gov/comm/DamagePreventionSummary.htm.

C. PHMSA Damage Prevention Efforts

    Prior to developing this final rule, PHMSA has made extensive 
efforts over many years to improve excavation damage prevention as it 
relates to

[[Page 43838]]

pipeline safety. These efforts have included outreach, grants, and 
funding of cooperative agreements with a wide spectrum of excavation 
damage prevention stakeholders including:
     Public and community organizations
     Excavators and property developers
     Emergency responders
     Local, State, and Federal government agencies
     Pipeline and other underground facility operators
     Industry trade associations
     Consensus standards organizations
     Environmental organizations
    These initiatives are described in detail in the Advance Notice of 
Proposed Rulemaking (ANPRM) on this subject that PHMSA published in the 
Federal Register on October 29, 2009 (74 FR 55797).

D. The Pipeline Inspection, Protection, Enforcement, and Safety Act of 
2006.

    On December 29, 2006, PHMSA's pipeline safety program was 
reauthorized by the enactment of the PIPES Act. The PIPES Act provides 
for enhanced safety and environmental protection in pipeline 
transportation, enhanced reliability in the transportation of the 
Nation's energy products by pipeline, and other purposes. Major 
portions of the PIPES Act focus on damage prevention, including 
additional resources in the form of State damage prevention grants, 
clear program guidelines as well as additional enforcement authority to 
encourage States to develop and sustain effective excavation damage 
prevention programs. The PIPES Act identifies nine elements that 
effective damage prevention programs should include. These are 
essentially identical to the nine elements noted in the DIMP Report 
discussed in the previous subsection.
    The PIPES Act gave PHMSA limited authority to conduct 
administrative civil enforcement proceedings against excavators who 
damage pipelines in a State that has failed to adequately enforce its 
excavation damage prevention laws. Specifically, Section 2 of the PIPES 
Act provides that the Secretary of Transportation may take civil 
enforcement action against excavators who:
    1. Fail to use the one-call notification system in a State that has 
adopted a one-call notification system before engaging in demolition, 
excavation, tunneling, or construction activity to establish the 
location of underground facilities in the demolition, excavation, 
tunneling, or construction area;
    2. Disregard location information or markings established by a 
pipeline facility operator while engaging in demolition, excavation, 
tunneling, or construction activity; and
    3. Fail to report excavation damage to a pipeline facility to the 
owner or operator of the facility promptly, and report to other 
appropriate authorities by calling the 911 emergency telephone number 
if the damage results in the escape of any flammable, toxic, or 
corrosive gas or liquid that may endanger life or cause serious bodily 
harm or damage to property.
    Section 2 of the PIPES Act limited the Secretary's ability to take 
civil enforcement action against these excavators unless the Secretary 
determined that the State's enforcement of its damage prevention laws 
is inadequate to protect safety.

E. Advance Notice of Proposed Rulemaking

    On October 29, 2009, PHMSA published an ANPRM (74 FR 55797) to seek 
feedback and comments regarding the development of criteria and 
procedures for determining whether States are adequately enforcing 
their excavation damage prevention laws and for conducting Federal 
administrative enforcement, if necessary. The ANPRM also outlined 
PHMSA's excavation damage prevention initiatives and described the 
requirements of the PIPES Act, which authorizes PHMSA to conduct this 
rulemaking action. The comments received on the ANPRM were generally 
supportive of the need for this rulemaking.

F. Notice of Proposed Rulemaking

    On April 2, 2012, PHMSA published a Notice of Proposed Rulemaking 
(NPRM) (77 FR 19800) that reflected the comments and input received in 
connection with the ANPRM. The NPRM proposed to respond to the 
congressional mandate specified in Section 2 of the PIPES Act and 
included proposed amendments to Title 49, Code of Federal Regulations 
(CFR) to establish the following:
    1. Criteria and procedures PHMSA would use to determine the 
adequacy of State pipeline excavation damage prevention law enforcement 
programs. PHMSA would first need to determine that the State's 
enforcement program is inadequate before conducting an administrative 
enforcement proceeding against an excavator for violating Federal 
requirements;
    2. An administrative process for States to contest notices of 
inadequacy from PHMSA should the States elect to do so;
    3. The Federal requirements PHMSA would enforce in States with 
inadequate excavation damage prevention law enforcement programs; and
    4. The adjudication process for administrative enforcement 
proceedings against excavators where Federal authority is exercised.

III. Advisory Committees Meeting

    On December 12, 2012, the Gas Pipeline Advisory Committee \6\ and 
the Liquids Pipeline Advisory Committee \7\ met jointly in Alexandria, 
Virginia. The Committees are statutorily mandated advisory committees 
that advise PHMSA on proposed safety standards, risk assessments, and 
safety policies for natural gas and hazardous liquids pipelines. Both 
committees were established under the Federal Advisory Committee Act 
(Pub. L. 92-463, 5 U.S.C. App. 1) and the pipeline safety laws (49 
U.S.C. 60115). Each committee consists of 15 members, with membership 
evenly divided among the Federal and State governments, the regulated 
industry, and the public. The Committees advise PHMSA on the technical 
feasibility, practicability, and cost-effectiveness of each proposed 
pipeline safety standard.
---------------------------------------------------------------------------

    \6\ Officially designated as the Technical Pipeline Safety 
Standards Committee.
    \7\ Officially designated as the Technical Hazardous Liquid 
Pipeline Safety Standards Committee.
---------------------------------------------------------------------------

    During the meeting, the Committees considered the NPRM to establish 
excavation damage prevention enforcement actions applicable to third-
party excavators. To assist the Committees in their deliberations, 
PHMSA presented a description and summary of the major issues for 
comment. These issues are (1) the criteria for evaluating State 
enforcement programs, (2) the Federal excavation standard, and (3) the 
incentives for States to implement adequate enforcement programs.
    After discussion, both Committees separately voted to recommend 
that PHMSA implement the NPRM with certain changes. Specifically, the 
Committees recommended as follows:
    (1) The Liquids Advisory Committee voted unanimously, and the gas 
advisory committee voted 10-to-1 that the Notice of Proposed Rulemaking 
as published in the Federal Register, in terms of the criteria for 
evaluating State enforcement programs, is technically feasible, 
reasonable, cost-effective, and practicable if the following changes 
are considered:
     PHMSA develops a policy, incorporated into the preamble of 
the final rule, that clarifies the scope and applicability of the State 
evaluation criteria. The policy will address the

[[Page 43839]]

relative importance and intent of each of the criteria and the three 
items identified in paragraph 9 of a document provided by member 
Pierson.\8\
---------------------------------------------------------------------------

    \8\ At the Advisory Committees' meeting, member Pierson 
representing the pipeline industry submitted a written 
recommendation for the members' consideration.
---------------------------------------------------------------------------

    The three items of paragraph 9 are:
     PHMSA should look beyond enforcement actions in evaluating 
a State damage prevention program. PHMSA should consider using a broad 
range of factors, such as a State's investigation processes, standards 
for excavators, excavator education efforts, and commitment to 
continued improvement.
     The criteria to determine whether a State damage 
prevention program is deemed adequate should also include consideration 
of whether the State's one-call centers are required to provide a 
mandatory positive response to locate requests. A mandatory positive 
response will ensure that an excavator is aware of whether owners/
operators have marked the requested area prior to the beginning of an 
excavation, consistent with Common Ground Alliance (CGA) Best Practice 
4-9.
     To engage stakeholders in the process of determining the 
adequacy of a State's program, the administrative process for States 
should be amended to include public comment. PHMSA should accept public 
comment on the adequacy of a State's damage prevention program.
    The Liquids Advisory Committee voted unanimously and the Gas 
Advisory Committee voted 10-to-1 to recommend that PHMSA implement the 
NPRM with the changes reflected.
    (2) Both Committees unanimously voted that the NPRM as published in 
the Federal Register, in terms of the proposed Federal excavation 
standard, is technically feasible, reasonable, cost-effective, and 
practicable if the following changes are considered:
     Eliminate the homeowner exemption.
     PHMSA develops a policy, incorporated into the preamble of 
the final rule that clarifies the scope and applicability of the 
Federal excavation standard. The policy will address triggers for 
Federal enforcement, how PHMSA will consider State exemptions in 
enforcement decisions, and how the Federal excavation standard will be 
applied in States with inadequate enforcement programs.
     In addition, the items 2 through 5 and 7 as provided by 
member Pierson, should be considered for incorporation into the final 
rule (including the policy as appropriate).
    The items are:
196.109--Discretion to Dispatch 911 Emergency Personnel
     PHMSA's proposed Sec.  196.109 states that, ``Upon calling 
the 911 emergency telephone number, the excavator may exercise 
discretion as to whether to request emergency response personnel be 
dispatched to the damage site.'' PHMSA should eliminate the discretion 
of the excavator in determining whether emergency personnel should be 
dispatched.
196.103--Excavator Responsibilities
     To foreclose ignorance as a reason for noncompliance, 
PHMSA should edit Sec.  196.103, which lists an excavator's obligations 
to protect underground pipelines from excavation-related damage. 
Section 196.103 should be revised to read ``Prior to commencing 
excavation activity the excavator must:''
196.107 & 196.109--Stop Work Provisions
     A ``stop work'' provision should be incorporated into the 
regulations, which would require excavators to stop work if a pipeline 
is damaged in any way by excavation activity until the operator of the 
pipeline has had an opportunity to assess the damage. Consistent with 
CGA Best Practice 5-25, PHMSA should also require the excavator to take 
reasonable measures to protect those in immediate danger, the general 
public, property, and the environment until the facility owner/operator 
or emergency responders have arrived and completed their assessment of 
the situation.
196.107--Backfilling Locations
     PHMSA should include a requirement that an excavator may 
not backfill a site where damage or a near miss has occurred until the 
operator has been provided an opportunity to inspect the site.
Reporting Time Frame
     PHSMA should not include an upper time frame for reporting 
emergency release of hazardous products to appropriate authorities by 
calling 911. Excavators should ``promptly'' report incidents.
    (3) The liquids advisory committee voted 8-to-1, and the gas 
advisory committee voted 8-to-3, that the NPRM as published in the 
Federal Register, in terms of the incentives for States to implement 
adequate enforcement programs, is technically feasible, reasonable, 
cost-effective, and practicable if the following changes are 
considered:
     Retain the potential penalty to base grants but consider 
lowering the percentage that may be affected.
     Develop a policy, incorporated into the preamble of the 
final rule that clarifies how base grants will be calculated by 
including the State program evaluation criteria defined in the final 
rule.
     Reduce the grace period (Sec.  198.53) from 5 years to 3 
years.
     Ensure the Governors of States with inadequate enforcement 
are directly informed of PHMSA's findings, including potential 
consequences to base grant funding.

PHMSA's Response to the Committees' Recommendations

    With respect to Item 1, PHMSA has considered the Committees' 
recommended changes to the criteria for evaluating State enforcement 
programs. PHMSA has developed a policy, outlined below in this 
preamble, which clarifies the scope and applicability of the State 
evaluation criteria. The policy addresses the relative importance and 
intent of each of the criteria.
    PHMSA has also considered the three items identified in paragraph 9 
of the document provided by member Pierson. With regard to the first 
item, which addresses the factors PHMSA should consider when evaluating 
State enforcement programs, PHMSA believes that the seven criteria 
listed in section Sec.  198.55 of this final rule are adequate for 
evaluating the effectiveness of a State damage prevention enforcement 
program. PHMSA recognizes that there are many factors, such as 
excavator education and continual improvement, which contribute to 
effective damage prevention programs; however, this final rule is 
intended to address damage prevention enforcement and not other program 
elements.
    With regard to the second item offered by member Pierson, the term 
``positive response'' refers to communication with the excavator prior 
to excavation to ensure that all contacted pipeline operators have 
located and marked their underground facilities. PHMSA agrees that 
positive response ensures that an excavator is aware of whether 
operators have marked an area prior to the beginning of excavation. 
PHMSA supports CGA Best Practice 4-9. However, PHMSA did not propose in 
the NPRM to review States' use of positive response in determining the 
adequacy of State enforcement programs, which means that the concept 
has not been subject to public or stakeholder review. In addition, 
PHMSA believes that positive response is outside the scope of this 
rulemaking,

[[Page 43840]]

which is focused on evaluating State enforcement programs. Therefore, 
PHMSA has not included positive response in the criteria listed in 
Sec.  198.55 of this final rule.
    PHMSA also did not propose in the NPRM to engage stakeholders in 
the process of determining the adequacy of a State's enforcement 
program, as suggested in the third item from member Pierson. Like 
positive response, the concept of stakeholder review of State programs 
has not been subject to stakeholder and public review. Additionally, 
PHMSA believes that engaging stakeholders in determining the adequacy 
of State programs would be overly cumbersome for both PHMSA and the 
States and would result in significant delays in the determination 
process.
    With respect to Item 2, PHMSA has considered the Committees' 
recommendation to consider changes to the proposed Federal excavation 
standard. In response to the Committees' recommendation, PHMSA has 
eliminated the homeowner exemption originally proposed in Sec.  
196.105. PHMSA eliminated the homeowner exemption because homeowners 
excavating on their own property without first calling 811 poses a 
significant risk of excavation damage to pipelines. PHMSA has also 
developed a policy, incorporated into the preamble of this final rule, 
which clarifies the scope and applicability of the Federal excavation 
standard. The policy addresses triggers for Federal enforcement, how 
PHMSA will consider State exemptions in enforcement decisions, and how 
the Federal excavation standard will be applied in States with 
inadequate enforcement programs. This policy document will be posted on 
the agency's Web site.
    PHMSA also addressed the other items provided by member Pierson. 
PHMSA has eliminated the phrase, ``Upon calling the 911 emergency 
telephone number, the excavator may exercise discretion as to whether 
to request emergency response personnel be dispatched to the damage 
site'' from Sec.  196.109 and the phrase, ``where an underground gas or 
hazardous liquid pipeline may be present'' from Sec.  196.103. With 
regard to Sec. Sec.  196.107 and 196.109, PHMSA has not incorporated a 
``stop work'' provision into the regulation. This provision was not 
proposed in the NPRM and has not received review from stakeholders and 
the public. Likewise, PHMSA has not incorporated requirements 
consistent with CGA Best Practice 5-25 for the same reason. With regard 
to Sec.  196.107, PHMSA has not included in the final rule a provision 
disallowing backfilling because the provision was not proposed in the 
NPRM and has not received review from stakeholders and the public. With 
regard to the Reporting Time Frame, PHMSA has modified the proposed 
Sec.  196.109 to reflect the recommendations.
    With regard to Item 3, PHMSA has considered the Committees' 
recommendation to consider changes to the proposed incentives for 
States to implement adequate enforcement programs. As suggested, PHMSA 
has retained the potential penalty to base grants and has lowered the 
percentage of base grants that may be affected from 10 percent to four 
percent. However, PHMSA has not reduced the grace period noted in Sec.  
198.53 from 5 years to 3 years. PHMSA believes that some States may 
need a full 5 years to successfully update their State damage 
prevention laws to implement an adequate enforcement program. PHMSA has 
also developed a policy, incorporated into this preamble, which 
clarifies how base grants will be calculated by including the State 
program evaluation criteria defined in Sec.  198.55. The policy also 
addresses PHMSA's process for notifying Governors of States with 
inadequate programs, including potential consequences to base grant 
funding. PHMSA reserves the right to modify these policies in the 
future, if necessary.

Policies

    PHMSA will prepare stand-alone documents and post them on the 
agency's Web site for the following two policies: State Enforcement 
Program Evaluation Criteria, and Federal Enforcement Policy.
State Enforcement Program Evaluation Criteria
    The criteria PHMSA will use to evaluate the adequacy of State 
damage prevention law enforcement programs are listed in Sec.  198.55 
of this final rule. The criteria are:
     Does the State have the authority to enforce its State 
excavation damage prevention law using civil penalties and other 
appropriate sanctions for violations?
     Has the State designated a State agency or other body as 
the authority responsible for enforcement of the State excavation 
damage prevention law?
     Is the State assessing civil penalties and other 
appropriate sanctions for violations at levels sufficient to deter 
noncompliance and is the State making publicly available information 
that demonstrates the effectiveness of the State's enforcement program?
     Does the enforcement authority (if one exists) have a 
reliable mechanism (e.g., mandatory reporting, complaint-driven 
reporting) for learning about excavation damage to underground 
facilities?
     Does the State employ excavation damage investigation 
practices that are adequate to determine the responsible party or 
parties when excavation damage to underground facilities occurs?
     At a minimum, do the State's excavation damage prevention 
requirements include the following:
    a. Excavators may not engage in excavation activity without first 
using an available one-call notification system to establish the 
location of underground facilities in the excavation area.
    b. Excavators may not engage in excavation activity in disregard of 
the marked location of a pipeline facility as established by a pipeline 
operator.
    c. An excavator who causes damage to a pipeline facility:
    i. Must report the damage to the operator of the facility at the 
earliest practical moment following discovery of the damage; and
    ii. If the damage results in the escape of any PHMSA regulated 
natural and other gas or hazardous liquid, must promptly report to 
other appropriate authorities by calling the 911 emergency telephone 
number or another emergency telephone number.
     Does the State limit exemptions for excavators from its 
excavation damage prevention law? A State must provide to PHMSA a 
written justification for any exemptions for excavators from State 
damage prevention requirements. PHMSA will make the written 
justifications available to the public.
    The evaluation will involve all of the criteria, and the final 
determination will be based on the totality of the review. The 
following policy describes the manner in which PHMSA intends to apply 
the criteria. As experience with adequacy reviews is gained, PHMSA may 
modify this approach as necessary.
    Criteria 1 and 2 guidance:
     Criteria 1 and 2 are pass/fail.
     If the answer to either of the questions posed in criteria 
1 or 2 is ``no,'' the State excavation damage prevention law 
enforcement program will likely be deemed inadequate.
    Criterion 3 guidance:
     PHMSA will seek records that demonstrate that the State 
enforcement agency is using its enforcement authority and imposing 
appropriate sanctions for violations. If a State cannot demonstrate use 
of its enforcement authority, the State enforcement

[[Page 43841]]

program will likely be deemed inadequate.
     PHMSA expects States to maintain records that demonstrate 
whether the rate of excavation damage incidents is being reduced as a 
result of enforcement. The result of PHMSA's review of a State's 
records in this regard will not, by itself, render a State enforcement 
program inadequate.
     PHMSA expects State enforcement programs to generally make 
damage prevention law enforcement information and statistics available 
to the public via a Web site. PHMSA does not expect States to violate 
any State laws, jeopardize any ongoing enforcement case, or post 
information that would violate the privacy of individuals as defined by 
State or Federal law. The result of PHMSA's review of the public 
availability of a State's information and statistics will not, by 
itself, render a State enforcement program inadequate.
    Criterion 4 guidance:
     PHMSA will review how State enforcement programs learn 
about excavation damage to underground pipelines. In particular, PHMSA 
will be looking for reporting mechanisms that encourage parity in the 
application of enforcement resources. For example, does the reporting 
mechanism identify potential violations of law by both excavators and 
pipeline operators? If the State enforcement program learns of 
violations via road patrols that specifically target excavators without 
valid excavation tickets, how does the State also learn about 
violations of other provisions of State damage prevention laws, such as 
operators' failure to locate and mark pipelines? Also, PHMSA will 
review the State's methods for making stakeholders aware of the process 
and requirements for reporting damage incidents to the enforcement 
authority.
     The result of PHMSA's review of a State's program under 
criterion 4 will not, by itself, render a State enforcement program 
inadequate.
    Criterion 5 guidance:
     PHMSA expects State enforcement programs to be balanced 
with regard to how they apply enforcement authority.
     PHMSA expects enforcement programs to be focused on the 
responsibilities of not only excavators, but also of utility owners and 
operators.
     PHMSA seeks patterns of enforcement activity that 
demonstrate that penalties are applied to the responsible party or 
parties in excavation damage incidents and not consistently to only one 
stakeholder group.
     The result of PHMSA's review of a State's program under 
criterion 5 will not, by itself, render a State enforcement program 
inadequate.
    Criterion 6 guidance:
     PHMSA will review State requirements to ensure they 
address the basic Federal requirements in the PIPES Act for excavators, 
such as using an available one-call system.
     The result of PHMSA's review of a State's requirements 
will not, by itself, render the State's enforcement program inadequate.
    Criterion 7 guidance:
     PHMSA expects States to document the exemptions provided 
in State damage prevention laws for excavators and one-call membership, 
and any such exemptions should not be too broad. Documentation should 
include the types of exemptions included in State law and any reason 
for the exemptions, such as data or other evidence that justifies the 
exemptions.
     The result of PHMSA's review of a State's program under 
criterion 7 will not, by itself, render a State enforcement program 
inadequate.
    The criteria are listed in order of greatest to least importance. 
That is, criteria 1 and 2 and a portion of criterion 3 are pass/fail, 
while criteria 4 through 7 are not pass/fail. PHMSA may declare a State 
enforcement program inadequate if the State's program does not satisfy 
a combination of the criteria as described above. PHMSA will notify in 
writing the Governor's office or other appropriate State authority of a 
State deemed to have an inadequate enforcement program.
    States that PHMSA deems to have inadequate enforcement programs may 
be subject to reductions in pipeline safety grant funding as described 
in Sec.  198.53 of this final rule. PHMSA will use the existing process 
for calculating base grants but is considering a policy that would 
incorporate and/or substitute the evaluation criteria in Sec.  198.55 
for the criteria that are currently used for evaluating State damage 
prevention programs. PHMSA may modify its policies, as necessary, for 
determining how inadequate enforcement programs may impact pipeline 
safety grant funding.
Federal Enforcement Policy
    PHMSA may enforce the Federal excavation standard defined in 49 CFR 
part 196, as established by this final rule, in States that PHMSA has 
deemed to have inadequate damage prevention law enforcement programs. 
The following policy describes the scope and applicability of the 
Federal excavation standard.
    PHMSA may use its enforcement authority, as limited by the law and 
this final rule, in any excavation damage case involving a violation of 
this standard in a State where a finding of inadequacy has been made. 
PHMSA generally will focus its limited resources on serious violations 
that have the potential to directly impact safety.
    PHMSA will determine if Federal enforcement action is warranted on 
a case-by-case basis. PHMSA will seek to use its enforcement authority 
in cases where PHMSA believes Federal enforcement against an excavator 
is appropriate and will deter future infractions (PHMSA already 
exercises its enforcement authority against pipeline operators who 
commit violations).
    PHMSA is flexible with regard to how it learns about excavation 
damage incidents that may warrant Federal enforcement action. PHMSA may 
learn about incidents through complaints from stakeholders, incident 
reports, the media, and other mechanisms.
    PHMSA acknowledges that most State damage prevention laws and 
regulations are more specific than the Federal excavation standard 
defined in this final rule. The Federal excavation standard forms the 
``floor'' and sets forth the basic requirements for excavators so that 
its application can be fair and consistent even in States with very 
different requirements. When determining whether to take Federal 
enforcement action for an alleged violation of the Federal excavation 
standard, PHMSA will be cognizant of the damage prevention practices of 
the State in which the alleged violation occurred. For example, PHMSA 
will be sensitive to exemptions, waiting periods, tolerance zones, and 
other specific requirements that States could have applied to 
excavators in the State prior to the determination of inadequacy.

IV. Summary and Response to Comments

    PHMSA received 40 comments from pipeline trade associations, 
excavation and construction trade associations, the National 
Association of Pipeline Safety Representatives (NAPSR), PHMSA State 
partners, the CGA, State one-call organizations and one-call service 
providers, utility locating trade associations, the American Farm 
Bureau Federation (AFBF), the Association of American Railroads (AAR), 
the Gas Processors Association (GPA), pipeline operators, utility 
locating companies, pipeline safety consultants, and citizens.
    List of Commenters:

1. American Farm Bureau Federation (AFBF)
2. American Gas Association (AGA)

[[Page 43842]]

3. American Public Gas Association (APGA)
4. Association of Oil Pipe Lines (AOPL) and American Petroleum 
Institute (API)
5. Associated General Contractors of America (AGC)
6. Association of American Railroads (AAR)
7. Black Hills Corporation
8. Bob Fenton
9. Center Point Energy (CenterPoint)
10. Common Ground Alliance (CGA)
11. Distribution Contractors Association (DCA)
12. Emily Krafjack (2 separate comments)
13. Emma K.
14. Gas Processors Association (GPA)
15. Industry Perspective (AGA, AGC, AOPL, API, DCA, NUCA, and NULCA)
16. Interstate natural Gas Association of America (INGAA)
17. Iowa Association of Municipal Utilities (IAMU)
18. Iowa One Call
19. Iowa Utilities Board (IUB)
20. Kansas Corporation Commission (KCC)
21. Kern River
22. MidAmerican Energy Company (MidAmerican)
23. Missouri Public Service Commission (Missouri PSC)
24. National Association of Pipeline Safety Representatives (NAPSR)
25. National Grid
26. National Utility Contractors Association of Ohio (NUCA of Ohio)
27. National Utility Contractors Association (NUCA)
28. National Utility Locating Contractors Association (NULCA)
29. New York State Department of Public Service (NPDPS)
30. Northern Natural Gas
31. National Utility Contractors Association of Pennsylvania (NUCA of 
Pennsylvania)
32. Ohio Gas Association (OGA)
33. Oleksa and Associates, Inc. (Oleksa)
34. Paiute Pipeline Company (Paiute)
35. Pennsylvania One Call System, Inc. (Pennsylvania One Call)
36. Qualified One Call Systems (Oleksa comments repeated)
37. Southwest Gas Corporation (Southwest)
38. Tennessee Regulatory Authority (TRA)
39. Texas Pipeline Association (TPA)
40. Texas Pipeline Safety Coalition

General Comments

    Most of the comments were supportive of the NPRM. PHMSA's State 
partners have concerns regarding the potential reduction of State base 
grant funding to States with inadequate excavation damage prevention 
law enforcement programs. A few State partners questioned the authority 
given to PHMSA by the PIPES Act to take enforcement action in States 
with inadequate excavation damage prevention law enforcement programs. 
A few comments were out of the scope of this rulemaking, either because 
the comments were on a specific State's excavation damage program or 
because the comments were regarding pipeline safety more generally.

Comments Requesting PHMSA To Include All Nine Elements

    Associated General Contractors of America (AGC), Distribution 
Contractors Association (DCA), National Utility Locating Contractors 
Association (NULCA), National Utility Contractors Association of Ohio 
(NUCA of Ohio), and Southwest Gas Corporation (Southwest) commented 
that not only enforcement but also all other elements should be 
considered when evaluating the effectiveness of State excavation damage 
prevention programs.
    AGC and DCA suggested that PHMSA take into account all nine 
elements (as defined in the PIPES Act of 2006) when evaluating the 
effectiveness of State damage prevention programs and take a holistic 
and comprehensive approach to reviewing current State damage prevention 
measures. AGC stated that the proposed standards place too much 
emphasis on enforcement and the excavator, and too little emphasis on 
the owner/operator and locators' responsibilities for timely and 
accurate locates. The AGC is supportive of PHMSA taking a position to 
evaluate States' overall damage prevention programs but suggests that 
PHMSA make its intentions clearer in the final rule. NULCA and NUCA 
stated that because the nine elements are supported by a broad range of 
stakeholders, including the CGA, they should be the sole basis for the 
evaluation of State programs.
Response
    PHMSA agrees that the overall effectiveness of State damage 
prevention programs can be assessed by evaluating States' commitment to 
and implementation of the nine elements. To that end, PHMSA has worked 
with State partners to conduct regular reviews of State damage 
prevention programs by characterizing States' level of implementation 
of the nine elements. The results of these reviews are available on 
PHMSA's Web site at http://primis.phmsa.dot.gov/comm/SDPPCDiscussion.htm. However, the scope of this rulemaking pertains to 
the enforcement of State excavation damage prevention laws. Section 2 
of the PIPES Act states that PHMSA may not conduct an enforcement 
proceeding unless the State's enforcement program is determined to be 
inadequate to protect safety. While other aspects of State damage 
prevention programs are essential to the effectiveness of those 
programs, the scope of this rulemaking is limited to the enforcement of 
State damage prevention laws.
    With regard to the comment from AGC pertaining to the proposed 
standards placing too much emphasis on enforcement and the excavator 
and too little on the owner/operator and locators' responsibilities for 
timely and accurate locates, PHMSA believes that the final rule 
appropriately addresses the intent of Congress. PHMSA and its State 
partners have long had the authority to enforce the existing damage 
prevention regulations that are applicable to pipeline operators. These 
existing regulations (49 CFR 192.614 and 195.442) require pipeline 
operators to develop and implement damage prevention programs and to 
locate their facilities in an accurate and timely manner when in 
receipt of an excavation notice. In the context of this final rule, if 
PHMSA conducts an enforcement proceeding in a State with an inadequate 
enforcement program, PHMSA will ensure that enforcement is applied to 
the responsible party, whether it is an excavator or a pipeline 
operator. PHMSA also actively encourages its State partners to enforce 
the existing damage prevention regulations that are applicable to 
pipeline operators.

Comments Recommending That PHMSA Hold Public Meetings/Provide Education

    DCA, NUCA, and NUCA of Ohio suggested that PHMSA hold additional 
public meetings before the agency issues a final rule. DCA and NUCA of 
Ohio believe the proposed criteria for determining the adequacy of a 
State damage prevention enforcement program are sufficient, but 
recommend that, prior to moving forward with its enforcement authority 
in a given State, PHMSA should invite all government and industry 
stakeholders to a discussion about the alleged problems with the 
State's enforcement practices. They recommended that in order to meet 
Element 2 of the PIPES Act, which calls for participation by operators, 
excavators, and other stakeholders, PHMSA should ensure that all 
interested stakeholders are invited to

[[Page 43843]]

the table. NUCA stated that the final rule would result in significant 
impacts to PHMSA's regulated community; therefore, significant outreach 
and education is needed for stakeholders that will be impacted by this 
rulemaking action.
    The Pennsylvania One Call System, Inc. (Pennsylvania One Call) 
stated that enforcement should be used as a means of modifying 
behavior. Pennsylvania One Call advised PHMSA to be mindful of States' 
different methods to achieve the same end of damage prevention. For 
example, Pennsylvania's Underground Utility Line Protection Act 
provides for a range of enforcement tools that include warning letters, 
administrative sanctions, fines, and criminal penalties to encourage 
proper behavior by covered parties.
Response
    PHMSA gathered considerable stakeholder input that informed the 
development of the final rule and provided opportunity for public 
participation and comment. PHMSA published an ANPRM on this topic in 
2009 to gather stakeholder input prior to publishing the NPRM. PHMSA 
also developed a video, made available on the PHMSA Web site, which 
summarized the NPRM and invited comments.
    In the context of this final rule, PHMSA does not intend to invite 
all government and industry stakeholders to a discussion about the 
alleged problems with a State's enforcement practices prior to 
proceeding with enforcement action in a given State. However, PHMSA 
does welcome the opportunity to participate in those discussions as a 
matter of course. PHMSA agrees that this rulemaking will require 
considerable outreach and education for stakeholders impacted by this 
final rule.
    PHMSA is mindful of States' various enforcement methods as 
described by Pennsylvania One Call. These enforcement methods are 
effective in many States. PHMSA believes that the ability of a State to 
enforce its damage prevention law, specifically with civil penalties, 
is essential to an effective enforcement program because it deters 
noncompliance and ensures a level playing field for businesses that 
adhere to the requirements.

Comments Requesting Cost Recovery for Excavators' Downtime

    NUCA requested that PHMSA include cost consideration for 
excavators' downtime when excavation damage is due to pipeline 
operators' failure to locate and mark pipelines properly. NUCA stated 
that pipeline owners or operators are often not subject to the same 
types of penalties that excavators are, are not required to reimburse 
excavators for any of their expenses, and are often subject to 
significantly lower fines. NUCA stated that in some States, for 
example, excavators that damage pipelines must reimburse owners or 
operators up to three times the expenses, can be prevented from bidding 
on certain projects, and can be fined up to $10,000. NUCA suggested 
PHMSA include in the final rule that ``where a pipeline is hit because 
of the failure to locate and mark the pipeline accurately in a timely 
fashion and the excavator is not at fault, owners or operators and/or 
their contractors (including locators) should be required to reimburse 
excavators for their costs.'' NUCA stated that this should include any 
damages to the excavator's equipment or property and any downtime 
incurred by the excavator while the true location of the pipeline is 
determined. NUCA stated that because these losses could be significant 
when an excavator is required to shut down a project due to the 
pipeline being not marked or marked inaccurately, this problem must be 
addressed by PHMSA.
Response
    This final rule does not infringe upon any party's right or ability 
to pursue cost recovery related to downtime. As NUCA itself pointed 
out, downtime is a compensatory liability matter and has nothing to do 
with damage prevention. It would be an inappropriate use of Federal 
regulations to entitle any specific group to downtime compensation. 
Since PHMSA did not propose in the NPRM to include the language 
suggested by NUCA, the language has not been made available for public 
comment and cannot be included in the final rule. PHMSA believes 
downtime is not within the scope of this rulemaking.

Comments Supporting the Proposed Rule

    Association of Oil Pipe Lines (AOPL) and American Petroleum 
Institute (API) are in strong support of the final rule and urge PHMSA 
to issue and implement a final rule expeditiously to help advance the 
ultimate goal of zero pipeline incidents. AOPL and API support PHMSA's 
proposed criteria for evaluating State excavation damage prevention law 
enforcement programs for minimum adequacy. The Ohio Gas Association 
(OGA) stated that it endorses PHMSA's efforts to bring national 
uniformity to the enforcement of pipeline damage prevention laws. The 
Texas Pipeline Association (TPA) stated that it is supportive of the 
proposed Federal damage prevention and enforcement requirements as well 
as the proposed regulations on State program evaluation. TPA 
recommended that these regulations be adopted in order to encourage 
effective enforcement.
    Ms. Emily Krafjack recommended that PHMSA adopt all proposed 
regulatory language and noted that all gathering line classes could 
benefit from the NPRM. Ms. Emma K. commented in general support of 
pipeline safety.
Response
    PHMSA appreciates the comments in support of promulgating a final 
rule expeditiously.

Comments Opposing the Proposed Rule

    The Iowa Utilities Board (IUB), the Kansas Corporation Commission 
(KCC), and the Tennessee Regulatory Authority (TRA) are not in support 
of the NPRM. The IUB believes the notification standards in the final 
rule would conflict with the law of the State in which excavation is to 
be performed if the State's law includes the definitions used to 
determine when notice of excavation is required. The IUB agrees with 
PHMSA that there is no authority for or expectation of PHMSA 
enforcement of any provision of State law that goes above and beyond 
what PHMSA is authorized to enforce in 49 U.S.C. 60114(d). The IUB 
stated that PHMSA must still recognize the system established by State 
law when considering enforcement of Part 196.
    The IUB further indicated that PHMSA does not have authority over 
excavators except as provided in 49 U.S.C. 60114(d). Nor would 49 CFR 
part 196 apply to persons other than excavators. The IUB stated that 
the proposed language of this final rule exceeds the scope of the 
specific law on which it is based and asserts broader authority than 
Federal law permits. The IUB stated that if the intent of the proposed 
Sec.  196.205 is to make the point that PHMSA can take civil penalty 
action against excavators who violate 49 CFR part 196 provided the 
conditions of 49 U.S.C. 60114(f) have been met, then the final rule 
should be clarified. The IUB stated that 49 U.S.C. 60114(f) says PHMSA 
may find State enforcement is inadequate only if it does not (in 
PHMSA's estimation) adequately enforce that State's damage prevention 
laws. The IUB believes that PHMSA does not have the power to challenge 
a State law due to perceived inadequacies in areas other than adequate 
enforcement of that State law.

[[Page 43844]]

    KCC believes PHMSA taking direct enforcement action against 
excavators will likely cause confusion and uncertainty in the excavator 
community. State damage prevention laws regulate many types of 
underground utilities in addition to protecting underground pipelines 
subject to regulation by PHMSA and subject to the standards established 
by PHMSA under 49 U.S.C. 60114(d). KCC stated that currently, 49 CFR 
part 198 requires States to address underground utility damage 
prevention on their own terms, taking into account the State's 
demographics and political process to structure laws and regulations 
best suited for the operations of its regulated community. However, 
under PHMSA's proposal, KCC believes that the potential exists that on-
going attempts to tweak the State law in order to meet PHMSA's evolving 
``adequacy'' requirements may upset the delicate legislative balance 
established in the Kansas Underground Utility Damage Prevention Act and 
potentially lead to a double standard: One set of rules for excavators 
working in the vicinity of natural gas and hazardous liquid pipelines, 
and another set of rules for all other excavators.
    KCC stated that PHMSA proposes to establish its own Federal 
standards in those States where PHMSA deems the State's enforcement 
efforts ``inadequate'' and questioned why PHMSA would not merely 
enforce the State standards. KCC stated that PHMSA's NPRM does not 
include any exemptions, whereas the State program includes State-
specific exemptions from the requirements of the State program for 
certain categories of ``excavators.'' In doing so, PHMSA goes well 
beyond stepping in to enforce State standards where a determination has 
been made that the State's enforcement programs are inadequate. KCC 
stated its view that 49 U.S.C. 60114(f) does not authorize such action.
    TRA stated that it is concerned that the approach PHMSA proposes in 
the NPRM to penalize States that implement and operate pipeline 
excavation damage prevention law enforcement programs that do not meet 
what the TRA considers to be potentially ambiguous Federal standards is 
not sound policy. Rather than using the penalty of withholding funding, 
the TRA advises PHMSA that an incentive, like increased funding or more 
flexibility in use of existing funding, is more appropriate for States 
that implement sufficient pipeline excavation damage prevention law 
enforcement programs. If PHMSA finds that a State pipeline excavation 
damage prevention law enforcement program is inadequate, the TRA is 
concerned that such a finding may be misinterpreted as a finding about 
a State's efforts to promote pipeline safety through inspections.
    TRA commented that review of State excavation damage prevention law 
enforcement programs is part of PHMSA's annual review of a State's 
overall pipeline safety program. Therefore, to avoid such 
misunderstanding by the public, the TRA recommends that if PHMSA finds 
a State excavation damage prevention enforcement program deficient, 
PHMSA should clearly state that the finding does not imply that a 
State's pipeline safety program is inadequate in protecting the public. 
Also, Texas Pipeline Safety Coalition provided red line edits to the 
proposed regulatory language.
Response
    PHMSA recognizes that the proposed Federal excavation standard is 
less specific than many existing State damage prevention laws. In 
particular, State laws are often more specific than the proposed 
Federal rule in the areas of what constitutes excavation, exemptions 
established by State laws, notification standards, and what 
specifically is enforceable. This final rule is intended, in part, to 
establish Federal ``backstop'' enforcement authority in States with 
inadequate damage prevention law enforcement programs. As has been 
explained at length in the ANPRM and the NPRM, the Federal authority 
will only be used when the State has not been adequately enforcing its 
law. This position is clarified in the enforcement policy in the 
preamble of this final rule. Additionally, in response to the TRA's 
comments, it is important to note that incentives and grant funding 
have been made available to build State damage prevention programs. It 
is only the States that truly fail at damage prevention enforcement 
where excavators will be subject to Federal authority. Finally, if 
PHMSA finds a State's damage prevention enforcement program inadequate, 
that is not the same as PHMSA finding the State's entire pipeline 
safety program inadequate.
    PHMSA disagrees with the IUB's comment that the NPRM asserts 
broader authority than the law permits. One aspect of a State's damage 
prevention authority is the extent to which the appropriate State 
authority is able to execute and enforce it. Whether a given State's 
law does not provide enforcement mechanisms or a State has such 
enforcement mechanisms but is not exercising its enforcement authority, 
the PIPES Act provides authority for PHMSA to establish and exercise 
Federal authority to ensure effective enforcement.
    A major goal of this final rule is to encourage States to adopt and 
sustain adequate damage prevention law enforcement programs. However, 
PHMSA has limited ability to encourage States to do so. In addition to 
incentivizing States with grant funds, one way PHMSA can encourage 
States is by making a portion of a State's base grant funding dependent 
upon that State having an adequate damage prevention law enforcement 
program. PHMSA currently makes base grant funding dependent upon the 
adequacy of some aspects of States' damage prevention programs. This 
position, which defines how the State program evaluation criteria will 
be applied, is clarified in the policy in the preamble of this final 
rule.

On PHMSA's Request for Comment on Its View That State and Federal 
Requirements Will Not Be Enforced Simultaneously; the Existence of a 
Federal Requirement Should Not Present Any Conflicts With Existing 
State Requirements for Excavators

    KCC stated that it believes that the final rule could result in 
simultaneous Federal and State enforcement actions. KCC also stated its 
belief that PHMSA has not rejected the possibility of taking Federal 
enforcement action on an incident that occurred before the State 
program was ruled inadequate. KCC stated that it believes significant 
due process considerations exist that, if ignored by PHMSA, may later 
undermine PHMSA's own ability to take appropriate enforcement actions 
when PHMSA's enforcement actions are subject to judicial scrutiny. KCC 
seeks a definitive recognition from PHMSA on the limitations imposed on 
PHMSA's authority to take such an enforcement action.
    New York State Department of Public Service (NYDPS) believes that 
PHMSA has not fully considered the potential for Federal regulations 
and State laws to be enforced at the same time. NYDPS stated that it 
needs to be fundamental to all State excavation damage prevention 
programs that a call to 811 will notify all utilities of the 
excavator's intent to excavate at a particular work site and that there 
is one set of rules that applies to the State damage prevention 
program. Even if PHMSA deems a State program inadequate, the State law 
will not be repealed by this action and would remain in effect. The 
regulations proposed contemplate this because they assume a one-call 
system is actively operating in the State. NYDPS is

[[Page 43845]]

concerned that the imposition of a Federal program may have the 
deleterious effect of causing confusion among one-call laws and 
systems. This may be particularly true in instances where a State's law 
goes beyond Federal regulations in its application or requirements. 
While there may only be 1 one-call center that takes notices of intent 
to excavate under both the Federal and State programs, it would be up 
to the excavators and operators to ensure that their employees 
understand the different requirements in States that have been deemed 
inadequate. NYDPS believes PHMSA should fully consider these impacts. 
Also Missouri Public Service Commission (Missouri PSC) stated that the 
proposed Federal regulations are the minimal standard. It is not clear, 
however, whether a determination that a State's damage prevention 
program is inadequate would preclude that State from pursuing 
violations of the State damage prevention laws.
Response
    PHMSA can assure these commenters that it will not pursue Federal 
enforcement action if a State has an adequate enforcement program in 
accordance with this final rule. Likewise, PHMSA will not take 
enforcement action on incidents that occurred in a State before that 
State's enforcement program was deemed inadequate. Additionally, PHMSA 
will not enforce State standards, but will instead enforce the minimum 
Federal standards defined in this final rule. When conducting 
enforcement, PHMSA will be considerate of State practices and 
exemptions in the application of the minimal standard defined in this 
final rule.
    As we have stated repeatedly in the ANPRM and the NPRM, PHMSA has 
no intention of taking over the damage prevention responsibilities of 
States. PHMSA's enforcement authority is intended to backstop State's 
enforcement authority. This final rule only impacts States deemed to 
have inadequate enforcement programs. If a State is exercising its 
damage prevention enforcement authority, there is no reason to believe 
there will be any need for Federal enforcement. If a State has not been 
exercising its authority, and PHMSA exercises Federal authority, PHMSA 
would not expect that State to suddenly start exercising its authority 
on the very same violation that was the subject of a Federal 
enforcement action. A State that decides to begin exercising its 
authority should petition to have the finding of inadequacy lifted and 
begin enforcement once it is lifted and should not ``overfile'' on a 
Federal case.
    If PHMSA determines a State's excavation enforcement program is 
inadequate, it is unlikely that the State is conducting enforcement. 
Conversely, if a State is enforcing its damage prevention law, it is 
unlikely that PHMSA would deem that State's enforcement program 
inadequate. Therefore, it is unlikely that Federal and State 
enforcement would be applied simultaneously. If instances arise where 
Federal and State enforcement could potentially be applied 
simultaneously, PHMSA will work cooperatively with the State 
enforcement agency to ensure that enforcement is applied fairly and 
consistently. PHMSA strongly encourages States to enforce their own 
damage prevention laws.

On PHMSA's Request for Comments on Ways or Mechanisms That PHMSA Can 
Utilize To Become Aware of Excavation Damage Incidents

    Missouri PSC stated that the lack of a mechanism to notify PHMSA of 
excavation damages to pipelines is an obvious weakness in the NPRM. 
Under Missouri statute, damages are required to be reported to the 
Missouri One Call System (MOCS). Operator data compiled by the Missouri 
PSC indicates, on average, operators are aware of about 200 excavation 
damages to intrastate natural gas pipelines each month; yet, the MOCS 
is not receiving nearly that many reports. If a State is found to have 
an inadequate damage prevention program, PHMSA would have to require 
operators to report damages to their facilities or institute a 
complaint-driven mechanism to become aware of damages.
Response
    As stated in previous responses to other comments, PHMSA's goal is 
to act as a Federal backstop enforcement authority to States. PHMSA 
does not intend to conduct enforcement for all excavation damages in 
States with inadequate enforcement programs. On the contrary, PHMSA's 
limited Federal enforcement resources will likely only be applied in 
limited cases. To that end, PHMSA will learn about violations of this 
final rule through existing channels (i.e., PHMSA-required incident 
reports, National Response Center reports, and the media), and the 
final rule does not require Federal reporting at this time.

On Whether the Evaluation Criteria Should Be Weighted

    KCC believes the adequacy of State enforcement of State safety 
programs must be evaluated on a holistic basis that would necessarily 
include weighting the criteria. It is important to KCC to have a law in 
place and the ability to administer the law with appropriate 
performance metrics. How the laws are administered--and at what level 
fines are imposed--is less important to KCC if the desired results of 
damage prevention are being achieved. The KCC suggested that the seven 
proposed criteria should be ordered as follows in importance: 1, 2, 6, 
4, 5, 7, and 3. The KCC asked PHMSA to note the additional criteria 
found in 49 CFR 198.55(b), which allow PHMSA to take unilateral action 
based on an individual State enforcement action, should not be 
considered in the evaluation of an effective program.
    Missouri PSC agrees with PHMSA that weighting the criteria would be 
difficult. On the other hand, Missouri PSC recommends PHMSA provide 
clarification as to whether each of the criteria items in 6(a), 6(b), 
6(c)(i), and 6(c)(ii) carry the same ``weight'' as the other criteria 
items--i.e., whether there are seven items in the criteria or 10--
including the four issues in item 6. In giving a ``weight'' or point 
value to each of the criteria, the Missouri PSC recommends PHMSA 
provide additional clarification as to whether there is an expectation 
or quantification of the criteria a State would have to achieve to be 
considered ``adequate.'' Finally, the Missouri PSC recommends PHMSA 
provide additional clarification as to whether certain criteria are 
considered critical and/or essential for a program to be evaluated as 
adequate.
Response
    PHMSA believes that some of the criteria for evaluating State 
enforcement programs, as proposed in the NPRM, should be considered 
more important than others because some criteria are more critical and/
or essential than others. For example, if a State does not have 
enforcement authority provided by State law, then that State's 
enforcement program should be automatically considered inadequate. 
However, the matter of exemptions, while important, is less critical. 
PHMSA has included a policy in the preamble of this final rule that 
defines how the criteria will be applied when evaluating State 
enforcement programs. In addition, PHMSA will post a policy document on 
the agency's Web site. The adequacy determination involves a complex 
judgment based on multiple factors, and we will not attempt to discuss 
definitive or deterministic outcomes in all possible scenarios here.
    In order to use Federal enforcement authority in a State, PHMSA 
must first

[[Page 43846]]

declare the State's damage prevention law enforcement program 
inadequate. PHMSA will not take unilateral Federal enforcement action 
in a State that has an adequate enforcement program. However, PHMSA may 
evaluate individual State enforcement actions in assessing the adequacy 
of enforcement programs. No determination of State enforcement program 
adequacy will be based solely upon a single State enforcement action. 
Instead, PHMSA may evaluate the overall program, including past 
enforcement cases, to gain a better understanding of the adequacy of 
the State enforcement program within the context of the criteria listed 
in Sec.  198.55 of this final rule.

On PHMSA's Request for Comment on Whether the Criteria for Evaluating 
the Adequacy of State Excavation Damage Prevention Law Enforcement 
Programs Are Clear, Well[hyphen]Defined, Consistent, and as Simple as 
Possible

    KCC responded that consistent application of the criteria would be 
difficult, at best, because of what it considers to be the lack of 
well[hyphen]defined terms, phrases, and procedures on how the criteria 
will be applied. KCC suggested that PHMSA include additional guidance 
in the final rule on how the agency will define and apply such phrases 
as ``sufficient levels,'' ``demonstrates effectiveness,'' and 
``consider individual enforcement actions.''
Response
    PHMSA agrees that additional guidance is necessary regarding the 
application of the criteria that will be used to evaluate the adequacy 
of State damage prevention law enforcement programs. PHMSA has included 
a policy that defines this guidance in the preamble of this final rule 
and will post a policy document on the agency's Web site.

On PHMSA's Request for Comments Regarding Using a Determination of 
State Enforcement Program Adequacy To Be a Factor in Determining State 
Pipeline Safety Grant Funding Levels

    Missouri PSC stated it recognizes that the only incentive or 
disincentive that PHMSA has to make States comply with the damage 
prevention criteria is to reduce grant funding if the State does not 
have and/or enforce what are deemed by PHMSA to be adequate damage 
prevention laws. However, legislative action is required to make 
changes to Missouri's excavation damage prevention statute, and the 
legislative actions are outside the control of the Missouri PSC. An 
adequate damage prevention program is only a portion of a State's 
overall pipeline safety program. Not having adequate funding for the 
entire pipeline safety program reduces the effectiveness of Missouri's 
overall pipeline safety program. The result would be that Missouri 
could have an inadequate damage prevention program and an inadequate 
pipeline safety program.
Response
    PHMSA does not intend to render State pipeline safety programs 
inadequate through the reduction of base grant funding. The reduction 
of base grant funding for States with inadequate enforcement programs 
is one tool available to PHMSA to incentivize States to implement 
effective enforcement programs. However, base grant funding is not the 
only incentive PHMSA can use. PHMSA will provide other incentives for 
States to implement adequate enforcement programs, including 
notification to the Governor explaining PHMSA's findings of enforcement 
program inadequacy and the potential safety and financial consequences 
for the State, publishing PHMSA's findings of inadequacy on PHMSA's 
public Web sites, giving grant funding to States for building 
stakeholder support for improved enforcement programs, and giving 
ongoing support to stakeholders in their efforts to improve enforcement 
programs. PHMSA may be able to provide additional support and 
incentives.

On 911 Notification by the Excavator

    Missouri PSC stated that the PIPES Act of 2006 requires excavators 
to promptly call the 911 emergency telephone number if damage results 
in specific circumstances; however, the Missouri PSC asserts PHMSA's 
position in the NPRM is unreasonable. The Commission stated that 
discretion should be allowed as to when a call to 911 is warranted 
subject to whether (1) there is an emergency and 911 is called to 
dispatch emergency personnel; or (2) there is not an emergency and 
emergency personnel are not required. The Missouri PSC stated that the 
911 operator should not be notified of damage to a pipeline unless 
emergency services are needed. The Federal Communications Commission 
and many communications companies have adopted ``311'' as the non-
emergency number. Calling 911 to report damage in a non-emergency 
situation may obligate the 911 operator to dispatch even though the 
caller indicates emergency response personnel are not required at the 
damage site.
Response
    The PIPES Act requires excavators to promptly call the 911 
emergency telephone number if a damage results in the escape of any 
flammable, toxic, or corrosive gas or liquid. PHMSA believes that a 
call to 911 in such circumstances is fundamental to public safety.

Federal One-Call System

    Oleksa suggested that PHMSA review the various one-call systems, 
determine whether or not they are ``qualified,'' and publish a list of 
``qualified'' one-call systems on the PHMSA Web site.
Response
    By simply dialing 811, the national call-before-you-dig telephone 
number, damage prevention stakeholders will be connected to a qualified 
one-call system as defined in 49 CFR 192.614 and 195.442.

Comments on the Proposed Regulatory Language

PART 196--PROTECTION OF UNDERGROUND PIPELINES FROM EXCAVATION 
ACTIVITY

Subpart A--General


Sec.  196.1  What is the purpose and scope of this part?

    AGA suggested that the new part 196 should include requirements for 
excavators to follow a tolerance zone, which explicitly states the 
forms of ``softer excavation'' that are allowed in the immediate area 
of the marked location of the pipeline that would include hand-digging 
and vacuum excavation. AGA stated that these concepts are consistent 
with the excavation best practices in Chapter 5 of the Common Ground 
Alliance Best Practices 9.0. Part 196 should include language about the 
excavator having to take steps to protect and even expose the pipeline 
using soft excavation methods to confirm accuracy of the markings. 
Also, AGA recommended a maximum of a 1-hour time limit for excavators 
to report damage to the pipeline operator. In addition, AGA requested 
that proposed Sec.  196.107 be amended to state that an excavator may 
not backfill a site where damage has occurred until the operator has 
been provided an opportunity to inspect the pipeline at the excavation 
site.
    AOPL and API stated that the minimum threshold requirements for a 
State damage prevention program should include an incident notification 
requirement. They believe, however,

[[Page 43847]]

that a 2-hour notification ceiling, as suggested in the NPRM, appears 
unnecessarily prescriptive. They recommended that the standard for 
excavators to ``promptly'' report incidents to operators should remain 
effective without a mandated notification period. On the other hand, 
Missouri PSC stated that its regulations require notification of 2 
hours following discovery by the operator, or as soon as practical if 
emergency efforts to protect life and property would be hindered. 
Missouri PCS stated that no issues have been identified with this time 
frame and recommended a 2-hour time limit for excavators to report 
damages.
    Paiute and Southwest recommended that PHMSA require immediate 
notification of any damage to the pipeline operator. They stated that 
an excavator does not have the knowledge to determine the severity of a 
dent or gouge and/or whether or not the damage requires immediate 
repair.
    PHMSA affirms the Common Ground Alliance Best Practices regarding 
soft excavation methods. However, PHMSA has not included tolerance zone 
and/or soft excavation requirements in this final rule. Tolerance zone 
and soft excavation requirements are very specific requirements and 
should be left to the States. Federal imposition of these requirements 
would establish double standards in States with similar requirements. 
PHMSA reiterates that one of the purposes of this final rule is to 
provide backstop damage prevention law enforcement authority in States 
with inadequate enforcement programs; the purpose is not to dictate 
overly specific requirements of safe excavation. PHMSA believes that 
the purpose of the Federal enforcement program is to provide a minimum 
standard. Further, as stated in the enforcement policy in the preamble 
of this final rule, PHMSA intends to consider the requirements of State 
damage prevention laws when conducting Federal enforcement proceedings, 
including State requirements regarding tolerance zones and soft 
excavation practices.
    PHMSA agrees with API and AOPL regarding the requirements that 
excavators ``promptly'' report excavation damages to pipeline 
operators. PHMSA does not intend to create more specific standards than 
States that already define damage reporting timeframes. PHMSA will 
consider State requirements for reporting timeframes in instances of 
Federal enforcement.


Sec.  196.3  Definitions.

Excavation/Exemptions

    The AFBF believes that, based on the current definition in the 
NPRM, normal agricultural and farm tillage practices would be 
considered excavation. AFBF believes the failure to exempt farmers and 
ranchers from the requirements of one-call laws prior to ``excavation'' 
is impractical and not workable for today's agricultural producers. 
AFBF requested that an explicit exemption for normal agricultural 
practices be given.
    AAR believes that the NPRM's definition of ``excavation'' is 
unclear from the perspective of railroad maintenance-of-way activities. 
AAR stated that if railroads were subject to one-call requirements for 
their maintenance-of-way activities, there would be hundreds, if not 
thousands, of calls daily. AAR believes routine maintenance-of-way 
activities should not be subject to one-call notification requirements.
    The Interstate Natural Gas Association of America (INGAA) stated 
that it opposes the last sentence of the proposed definition of 
excavation because it excludes homeowners excavating on their own 
property with hand tools. However, INGAA stated that it has no 
objection to the homeowner exemption to homeowners or occupants using 
only hand tools, rather than mechanized excavating equipment, including 
power augers, on their own property and digging no deeper than 12 
inches below natural grade.
    TPA stated that, with the growing use of plastic pipe in 
distribution, transmission, and gathering pipelines, the risk to 
pipeline infrastructure from hand digging increases. Plastic pipe can 
be punctured or severed by common digging tools used by homeowners. 
Beyond the damage to the pipeline infrastructure, excavation damage to 
plastic pipes would pose a risk to the homeowner. Rather than granting 
a blanket exemption to homeowners, TPA recommends that PHMSA limit the 
exemption to homeowner excavations by hand digging to depths of no more 
than 16 inches. TPA stated that, while the homeowner exemption should 
be limited, PHMSA should add an exclusion to the definition that would 
permit probing by an operator.
    TPA also stated that the proposed definition of ``Excavation,'' in 
Sec.  196.3 introduces ambiguity by the phrase ``below existing 
grade.'' It is not uncommon for the grade of the land above a pipeline 
to vary at different points along the pipeline. TPA stated that because 
the proposed regulations do not contain any further guidance on these 
matters, it would, at least initially, fall to individual excavators to 
determine if they are engaging in ``excavation'' and whether they are 
subject to the regulations. TPA also stated that once a pipeline is 
installed, erosion and prior land grading would impact the amount of 
cover for the pipeline. TPA stated that there is no reason to take 
these risks when the alternative is to make a phone call and wait a 
couple of days for a pipeline to be marked. Therefore, TPA urges PHMSA 
to remove the phrase ``below existing grade'' from the definition of 
excavation.
    AGC stated that the term ``excavator,'' and thus the focus of 
Federal enforcement proceedings where the excavator is at fault, should 
refer to all parties doing digging work including, but not limited to, 
State agencies, municipal entities, agricultural entities, and 
railroads. State excavation damage prevention laws and enforcement 
should also apply equally to pipeline operators and their contract 
excavators and locators. However, AGC agrees that some exemptions can 
be justified with data, and these exemptions can only be determined at 
the State level, while many of the existing ones should be carefully 
scrutinized by PHMSA and eliminated if they present a danger to buried 
facilities.
    The Black Hills Corporation opposes the exemption to homeowners 
using hand tools from requiring the use of a ``Call Before You Dig'' 
one-call system as well as from any Federal administrative enforcement 
action because it goes against the public safety educational drive for 
``Call Before You Dig'' messages. Also, the Iowa Association of 
Municipal Utilities (IAMU) stated that exemptions to homeowners using 
hand tools are in direct conflict with most one-call laws across the 
country.
    Iowa One Call believes that the proposed excavation definition 
would specifically exclude homeowners excavating on their own property 
with hand tools. The Iowa One Call stated that this exclusion is 
inconsistent with Iowa law and directly conflicts with the State's 
damage prevention public awareness and outreach communications campaign 
and program initiatives; however, Iowa One Call believes that some Iowa 
exceptions, such as opening a grave in a cemetery, normal residential 
gardening, operations in a solid waste disposal site which has planned 
for underground facilities, and normal farming operations, are 
judicious. To exclude these types of well-developed State exceptions 
would be impractical and possibly unrealistic.

[[Page 43848]]

    NAPSR stated that the proposed definition of excavation only covers 
operations performed below existing grades, which may lead to 
confusion, especially in cases where excavation activities are 
performed, backfilled, and graded on multiple occasions over a period 
of time. The proposed definition of excavation specifically excludes 
homeowners excavating on their own property with hand tools and would 
directly conflict with many State laws and with State and national 
awareness initiatives. NAPSR stated that any person performing 
excavation activities, including homeowners, should be encouraged to 
call for utility locates and wait the required time allowed for marking 
before excavation begins, pursuant to State regulations and 
requirements. Therefore, NAPSR stated that the definition of excavation 
should not exclude hand digging by homeowners, and the sentence ``This 
does not include homeowners excavating on their own property with hand 
tools'' should be removed from the definition of ``excavation'' in 
Sec.  196.3.
    The IUB stated that 49 U.S.C. 60114(d)(1) requires excavators to 
use the one-call notification system of the State; therefore, the 
definition of excavation in the NPRM should defer to the definition of 
the State in which the excavation is proposed. The IUB stated the 
homeowner exclusion would directly conflict with many State laws and 
with State and national awareness initiatives to encourage landowners 
to call for utility locates before digging, and therefore, hand digging 
by homeowners should not be excluded. However, the IUB stated that 
excluding farm operations is impractical and unrealistic. Also, NUCA 
requested that the ``excavator'' definition should include examples 
such as excavator, contractor excavator, in-house excavators, 
municipalities, etc.
    Northern Natural Gas supports the reduction of exemptions to one-
call damage prevention laws. Northern suggested no exemptions. As for 
farming operations, Northern recommended a requirement for one-call 
notification whenever the farming operation penetrates the soil to a 
depth of 12 inches or greater. Northern stated that examples requiring 
a one-call notification for farm work would include mechanical soil 
sampling, drain tiling, chisel plowing, sub-soiling, ripping, 
terracing, and waterway or post installation. Also, OGA stated that 
there should not be a homeowner exemption because there must be the 
universal acceptance of the requirement to ``Call Before You Dig.''
Response
    Most of the comments regarding the definition of excavation are 
focused on how the definition of the term will be interpreted in light 
of existing exemptions from the requirements of State damage prevention 
laws. The definition of excavation in this final rule is intentionally 
broad and inclusive. However, PHMSA recognizes that the definition of 
excavation in this final rule is broader and more generic than many of 
the definitions of excavation in State damage prevention laws. State 
laws are specific about which classes of excavators and/or which types 
of excavation are or are not exempt from State law. In conducting 
Federal enforcement, PHMSA will be considerate of the definitions of 
excavation, including exemptions applicable to excavators, in State 
damage prevention laws. However, PHMSA may choose to pursue Federal 
enforcement actions against excavators who egregiously and/or 
negligently damage pipelines in disregard of safety, regardless of 
whether those excavators are exempt from State law. PHMSA's enforcement 
policy is defined in the preamble to this final rule.
    PHMSA agrees with the comments from INGAA, TPA, IAMU, the Black 
Hills Corporation, Iowa One Call, and NAPSR that oppose an exemption 
for homeowners excavating on their own property with hand tools. The 
exemption for homeowners has been removed from this final rule. PHMSA 
has not included any exemptions for excavations in this final rule. 
Exemptions in this final rule could create confusion regarding the 
applicability of State and Federal standards. Instead, PHMSA will be 
considerate of State exemptions in exercising Federal enforcement 
authority.
    PHMSA has not clarified the types of excavators to whom the final 
rule applies, as suggested by NUCA. The definition of the term 
``excavation'' is broad enough to encompass all types of excavators 
regardless of their relationships to other entities.
    PHMSA agrees with TPA regarding the need to eliminate the phrase 
``below existing grade'' from the definition of ``excavation.'' The 
definition of ``excavation'' has been updated accordingly.

Damage/Excavation Damage

    AOPL and API believe revising the definition of damage or 
excavation damage in this section would provide greater clarity. They 
requested that because nicks, coating scrapes, and damage to cathodic 
protection wiring or appurtenances could affect the integrity of the 
pipeline, the word ``impact'' in the definition should be replaced with 
the term ``excavation activity.'' They stated that damage can be caused 
without physical impact: coating can be worn while pulling up trees or 
digging out roots in close proximity to a pipe; cathodic protection 
wiring can be cut, broken, or disconnected as a result of stresses 
created by heavy loading due to improper backfilling; or external 
loading itself can create undue stress on the pipe, creating an unsafe 
condition. Damage can also be caused when the support under the 
pipeline is taken away. Therefore, they requested a broader definition 
that would encompass a broad range of activities that impact safety.

Response

    PHMSA agrees with AOPL and API regarding the need for greater 
clarity in the definition of damage or excavation damage. The 
definition of these terms has been modified to address these concerns.

Pipeline

    NAPSR stated that the proposed definition of ``pipeline'' does not 
cover all appurtenances of a pipeline structure, only those ``attached 
or connected to pipe . . .'' This would exclude tracer wire systems or 
other devices, such as radio frequency identification or other 
electronic marking system (EMS) devices, used to facilitate proper 
locating and marking of the operator's infrastructure. NAPSR 
recommended that the definition of ``pipeline'' be written to include 
tracer wire and other devices used to facilitate proper locating and 
marking of the operator's infrastructure. NUCA requested that the 
pipeline definition should clearly describe the types of pipelines to 
which the final rule will apply, such as gathering, transmission, and 
distribution (including gas mains and service lines), as defined in 
existing laws and regulations, so everyone understands exactly what 
types of lines are included.
Response
    PHMSA agrees with NAPSR about the need for the definition of 
``pipeline'' to be expanded to include tracer wire and other devices 
used to facilitate proper locating and marking of the operator's 
infrastructure. PHMSA also agrees with NUCA regarding the need to 
clearly describe the types of pipelines to which the final rule will 
apply. The definition of ``pipeline'' has been modified accordingly.

[[Page 43849]]

Tolerance Zone

    TPA suggests that PHMSA add a definition of ``tolerance zone'' to 
Sec.  196.3. TPA stated that such a definition is critical to 
determining the accuracy of the locate markings and the area where 
``proper regard'' must be used by an excavator as required by proposed 
Sec.  196.103(c). Without the addition of this definition, PHMSA will 
be repeatedly placed in a difficult enforcement situation if a dispute 
arises between the excavator and the operator about the accuracy of the 
marking or the type of excavation practices used near the pipeline. 
Although the States have many different standards for a tolerance zone, 
the least controversial standard to use for a Federal standard would be 
CGA's Best Practice 5-19, which defines the tolerance zone as the width 
of the facility plus 18 inches on either side of the outside edge of 
the underground facility on a horizontal plane. TPA suggested that this 
definition or a similar definition would facilitate enforcement and 
enhance the protection of pipeline infrastructure and public safety.
Response
    PHMSA has not included a definition of ``tolerance zone'' in this 
final rule. State laws are often specific about tolerance zones, and 
PHMSA does not wish to create confusion by establishing an excavation 
standard that is more specific or more restrictive than some State 
standards. Instead, when conducting Federal enforcement, PHMSA will be 
mindful of tolerance zones as defined by the law in the State where 
PHMSA is conducting enforcement.

Subpart B--One-Call Damage Prevention Requirements


Sec.  196.101  What is the purpose and scope of this subpart?

    TPA suggested that the title of this Subchapter should be revised 
by deleting the word ``One-Call'' because the proposed Subpart B 
includes most of the excavation practice requirements, operator 
locating requirements, and One-Call process. TPA also urges PHMSA to 
add a provision to Subpart B requiring excavators and operators to 
report any damage to pipeline facilities using the CGA Damage 
Information Reporting Tool (DIRT). TPA stated that this provision 
should also impose a time limit for reporting so that the relevant data 
is captured as soon as possible after the damage event occurs.
Response
    PHMSA agrees with TPA's suggestion to remove the word ``One-Call'' 
from the title of this subpart. The title has been changed from ``One-
Call Damage Prevention Requirements'' to ``Damage Prevention 
Requirements.'' PHMSA disagrees with TPA's suggestion to require 
excavators and operators to report damages to the CGA DIRT database. 
The CGA DIRT database was developed as a voluntary system. Further, 
PHMSA does not own or control the CGA DIRT database, and PHMSA believes 
it would be inappropriate to require the use of CGA DIRT database 
through regulation.


Sec.  196.103  What must an excavator do to protect underground 
pipelines from excavation-related damage?

    NAPSR, NYDPS, AGA, INGAA, DCA, NUCA of Ohio, AOPL and API stated 
that in Sec.  196.103, the language ``where an underground gas or 
hazardous liquid pipeline may be present'' would directly conflict with 
many State laws and with State and national awareness initiatives. They 
stated that the excavator should always call for staking prior to 
excavating. They stated that there is no way for an excavator to 
determine if a pipeline may be present without a staking request. 
Therefore, they recommended that the language ``where an underground 
gas or hazardous liquid pipeline may be present'' be removed or 
modified from Sec.  196.103.
    NAPSR stated that the language in Sec.  196.103(b), which reads, 
``If the underground pipelines exist in the area, wait for the pipeline 
operator to arrive at the excavation site and establish and mark the 
location of its underground pipeline facilities before excavating,'' 
fails to define what is meant by ``in the area'' and does not specify 
the amount of time in which the operator is expected to ``wait for the 
pipeline operator to arrive'' and ``mark the location.'' NAPSR 
recommended that the term ``area'' should be better defined, the time 
between calling for locates and the beginning of excavation should be 
specified, and actions an excavator is to take when an operator fails 
to establish and mark the location of its underground facilities should 
be specified.
    TPA stated that to increase the clarity of Sec.  196.103, PHMSA 
should restructure the section by creating two major subsections, with 
one addressing activities prior to excavation and the other addressing 
activities during excavation. Also, TPA suggested that at least 2 
business days should be required for the line locate request through a 
notification center before the planned beginning of an excavation. TRA 
stated that such a standard is consistent with the CGA Best Practices. 
TPA suggests revisions similar to CGA Best Practices 5-17 and 5-19 and 
believes these revisions should not be controversial. TPA provided 
recommended language to modify the proposed language in Sec.  196.103. 
TPA stated that if PHMSA does not adopt TPA's recommendations, it 
suggests that the introductory language to Sec.  196.103 be revised to 
read, ``Prior to and during excavation activity. . .'' to clarify the 
complete time period when the requirements of proposed Sec.  196.103 
apply.
    Pennsylvania One Call suggested that Sec.  196.103(a) should be 
amended to provide that an excavator must furnish the one-call center 
with specific location information consistent with State law, 
regulation, or practice because it believes that the current language 
does not address this matter.
    NUCA suggested that the language in Sec.  196.103(b) should require 
excavators to wait a prescribed time period (established by State law) 
for pipeline operators to arrive at the excavation site and mark the 
location of underground pipeline facilities. AOPL and API requested 
that the language in Sec.  196.103(b) stating that an excavator shall 
``. . . wait for the pipeline operator to arrive at the excavation site 
and establish and mark the location of its underground pipeline 
facilities before excavating,'' be rephrased to read ``Wait for 48 
hours from the time of placing a one-call notification prior to 
excavation, to permit the pipeline operator to arrive at the excavation 
site and establish and mark the location of its underground pipeline 
facilities.'' They suggested that if the call is placed on a weekend, 
the 48-hour notification period would commence the next business 
morning, and excavation may proceed if the excavator has received an 
affirmative response from all underground utility operators as marked 
or cleared.
    NAPSR stated that Sec.  196.103(c) is vague and does not adequately 
address what ``proper regard'' or ``respecting the marks'' means. NAPSR 
stated that to clarify the section, PHMSA should add a reference to the 
CGA best practices for safe excavation around an underground facility.
    AGA stated that Sec.  196.103(d) seems unnecessary because a 
marking request is understood to be required at ``other'' locations. 
DCA questions the need for Sec.  196.103(d) that would require 
excavators to ``. . . make additional use of one-call as necessary to 
obtain locating and marking before excavating if additional excavations 
will be

[[Page 43850]]

conducted at other locations.'' DCA stated that the requirement seems 
redundant. Excavators would have to comply with the requirements set 
forth in Sec.  196.103(a), (b) and (c) for ``additional excavations'' 
that would be conducted at other locations.
    AOPL and API recommended that Sec.  196.103(d) state that, prior to 
commencing excavation activity where an underground gas or hazardous 
liquid pipeline may be present, the excavator must ``make additional 
use of one-call as necessary to obtain locating and marking before 
excavating if additional excavations will be conducted at other 
locations.'' They stated that the language appears to only require the 
use of one-call for excavations that are to be conducted at other 
locations. Since some State laws require the additional use of one-call 
for excavations that continue at the same location, AOPL and API 
recommended that the clause ``. . . if additional excavations will be 
conducted at other locations,'' be deleted, and that PHMSA replace the 
phrase with the language ``. . . or a locate request or markings have 
expired and a new one-call notification is required per applicable 
state law'' in its place.
Response
    PHMSA agrees with the comments of NAPSR, NYDPS, AGA, INGAA, DCA, 
NUCA of Ohio, AOPL, and API regarding the need to remove the language 
``where an underground gas or hazardous liquid pipeline may be 
present'' from Sec.  196.103. The section has been updated to reflect 
the change. In addition, PHMSA has not adopted the recommendation from 
NAPSR concerning wait times and actions to be taken when an operator 
fails to mark its facilities. These issues are typically well-defined 
in State law. PHMSA intends to be considerate of State law when 
conducting Federal enforcement proceedings.
    PHMSA has not restructured the section by creating two major 
subsections, as suggested by TPA. However, PHMSA has revised the 
introductory language for the section to read, ``Prior to and during 
excavation activity . . .'' to clarify the time period when the 
requirements of the section apply.
    PHMSA has not adopted the suggestions from Pennsylvania One Call 
and NUCA regarding amending the section to require that excavators 
furnish the one-call center with information and wait the prescribed 
time required by State law. The enforcement policy in the preamble of 
this final rule provides that PHMSA will be considerate of State 
requirements when conducting Federal enforcement proceedings.
    PHMSA has not adopted the recommendations of AOPL and API regarding 
including specific language pertaining to wait times in Sec.  
196.103(b). PHMSA does not wish to create Federal requirements that 
differ vastly from State requirements. Excavators in each State should 
already be familiar with the wait time requirements of State damage 
prevention laws. A different Federal wait time requirement may create 
confusion. PHMSA will be considerate of the requirements of State laws 
in instances of Federal enforcement.
    PHMSA agrees with NAPSR that the proposed Sec.  196.103(c) is 
generic. PHMSA has clarified the section in the final rule, but the 
section is left intentionally generic to allow for the variability in 
State damage prevention laws, which PHMSA will consider in any Federal 
enforcement case. PHMSA has not made any references to CGA Best 
Practices in the section.
    PHMSA disagrees with the comments of AGA and DCA regarding the 
redundant nature of the proposed Sec.  196.103(d). PHMSA has not 
removed this section from the final regulatory language. This language 
is taken directly from the PIPES Act, and PHMSA considers it essential 
to preventing excavation damage to pipelines.
    PHMSA agrees with the comments from AOPL and API regarding Sec.  
196.103(d). However, PHMSA has not replaced the current language with 
the language they recommended. The language AOPL and API recommended 
refers specifically to State law, which PHMSA has no authority to 
enforce. Therefore, the phrase ``. . . if additional excavations will 
be conducted at other locations'' has been deleted and replaced with 
the phrase ``. . . to ensure that underground pipelines are not damaged 
by excavation.''


Sec.  196.105  Are there any exceptions to the requirement to use one-
call before digging?

    NAPSR stated that, in Sec.  196.105, the exemption for homeowners 
conflicts with many State laws and with State and national awareness 
initiatives. However, NAPSR commented that State laws may include 
reasonable exemptions to the requirement to use one-call before digging 
such as opening a grave in a cemetery, landfill operations, and tilling 
for agricultural purposes. Therefore, NAPSR believes that any 
requirements or exceptions on when to use the one-call system before 
digging should be deferred to the State law.
    MidAmerican Energy Company (MidAmerican) stated that it is 
concerned with the homeowner exemption language in Sec.  196.105, and 
it believes that it would be safer and more appropriate to always 
require the homeowner to call for a locate than leaving it to the 
homeowner's discretion.
    AGA stated that the exception from Federal enforcement for 
homeowners using hand tools on their own property under Sec.  196.105 
is to simply attempt to establish a reasonable boundary around the 
excavation damages PHMSA would be considering for enforcement action in 
those States with inadequate programs. Therefore, AGA recommended that 
hand digging to shallow depths be allowed for any party since digging 
with hand tools to shallow depths (less than 12 inches in depth) is 
typically not one of the highest risks among third party excavations in 
States with an inadequate program. AGA suggested that PHMSA delete the 
sentence ``This does not include homeowners excavating on their own 
property with hand tools'' since it is likely to cause confusion and is 
unnecessary if the language in Sec.  196.105 is amended. AGA also 
stated that it agrees with PHMSA's use of the word ``exception'' under 
Sec.  196.105 since its incorporation into a Federal excavation 
standard is very different from the one-call exemptions that exist at 
the State level. AGA stated that consideration should also be given to 
whether or not a farmer is a ``homeowner'' and if so, whether their 
exception would be for their entire property or just for their farm. 
AGA pointed out that Page 25 of CGA's 2010 DIRT Report shows that 
``occupant/farmer'' is the excavator involved in 10 percent to 17 
percent of the events collected for six of the eight One-Call System 
International Regions, and AGA believes this is a significant issue.
    INGAA stated that homeowners using hand tools to dig more than 12 
inches deep should not be exempt from contacting one-call and opposes 
the Sec.  196.105 language that would exempt homeowners from contacting 
one-call before digging with hand tools.
    TPA stated that Sec.  196.105 should be revised to read as follows: 
``. . . provided that the homeowner does not dig deeper than 16 
inches.''
    NUCA stated that in Sec.  196.107 homeowners should not be exempted 
from calling one-call before excavation activity.
Response
    PHMSA agrees with the comments regarding the need to eliminate the 
proposed exemption for homeowners.

[[Page 43851]]

This exemption has been removed from the regulatory language. The final 
regulatory language is silent on the subject of exemptions/exceptions.


Sec.  196.107  What must an excavator do if a pipeline is damaged by 
excavation activity?

    AOPL and API requested that Sec.  196.107 be amended to state that 
an excavator may not backfill a site where damage or a near miss has 
occurred until the operator has been provided an opportunity to inspect 
the site. In addition, AOPL and API suggested that a stop work 
requirement be included in Sec.  196.107 as, ``If a pipeline is damaged 
in any way by excavation activity, the excavator must immediately stop 
work at that location and report such damage to the pipeline operator, 
whether or not a leak occurs. Work may not resume at the location until 
the pipeline operator determines it is safe to do so.''
    CenterPoint stated that in Sec.  196.107 the excavator should not 
backfill a pipeline if it is damaged by the excavator, and the 
excavator should remain on site and leave the damaged area accessible 
to the operator unless it would be unsafe or impractical to do so. If 
the damaged area is not left accessible, the excavator should leave 
clear markings to assist the operator with finding the damage.
    Kern River stated that Sec.  196.107 should first require that work 
be stopped immediately and the pipeline operator be contacted 
immediately since the excavator is not qualified to make a 
determination of the extent of the damage caused to a pipeline.
    NAPSR recommended that Sec.  196.107 state ``. . . if a pipeline is 
damaged in any way by excavation activity, the excavator must report 
such damage to the pipeline operator.'' NAPSR stated that consideration 
should be given to requiring the excavator to also notify the one-call 
center in the event of damage to an underground facility and/or a 
release of product to make sure there is a centralized location for the 
reporting of damages and a method of proper documentation of pipeline 
damages due to excavation.
    NYDPS stated that Sec.  196.107 requires excavators to notify the 
pipeline operator if the facility is damaged in any way by the 
excavation activities. The NPRM would require notification at the 
``earliest practicable moment,'' but the NPRM indicates that PHMSA is 
considering requiring notification in no less than 2 hours. NYDPS 
stated that, instead of requiring a specific notification time, it 
believes that the language in the NPRM is preferable. NYDPS recommended 
that the regulation require, after the evacuation of employees and any 
other endangered persons, ``immediate notification'' by the excavator 
to the operator of any contact or damage to the pipeline, since this 
language is somewhat less open to interpretation and less subjective 
than the ``earliest practicable moment.''
    On the other hand, TPA stated that Sec.  196.107 should be revised 
to include a time limit by which an excavator must notify the operator 
of damage to a pipeline. TPA stated that even if there is no release of 
product, an operator needs to get to the damage site as soon as 
possible to assess the situation and take any necessary remedial 
action. TPA suggested that the time limit be 2 hours following 
discovery of the damage. TPA also suggested that Sec.  196.107 should 
be revised to include a requirement that an excavator not backfill any 
portion of a damaged pipeline without the operator's approval.
    Pennsylvania One Call stated that Sec.  196.107 be amended to cover 
not only damage to a pipeline but also physical contact with a pipeline 
because this would prevent an excavator from exercising discretion to 
determine whether contact did or did not result in damage, and mere 
contact could create damage to pipeline coating.
Response
    While PHMSA understands the comments from AOPL, API, CenterPoint, 
and Kern River regarding stop work and backfill requirements, PHMSA has 
not included these requirements in the final rule. These requirements 
would be very difficult to communicate in States with inadequate 
enforcement programs. The requirements would also be different from the 
requirements of State damage prevention laws in most cases. PHMSA does 
not wish to create confusion or create a scenario under which 
excavators would be subject to Federal enforcement of a requirement of 
which they would likely not be aware.
    PHMSA has considered requiring excavators to notify the one-call 
center, in addition to the pipeline operator, in the event of 
excavation damage to a pipeline. PHMSA does not believe this 
requirement should be included in the final rule. One-call centers are 
not necessarily equipped to accept damage reports in every State. 
NAPSR's recommendation, therefore, could create an undue burden on both 
excavators and one-call centers and could lead to confusion among 
damage prevention stakeholders.
    In response to the comments from NYDPS and TPA regarding the time 
limit for notice of damage to pipeline operators, PHMSA believes that 
the language proposed in the NPRM is practical and enforceable. 
Establishing a specific timeline may create confusion among 
stakeholders in States where PHMSA has Federal enforcement authority.
    In response to the Pennsylvania One Call, PHMSA believes the 
definition of the terms ``damage/excavation damage'' in Sec.  196.3 is 
broad enough to encompass all of the types of excavation damage that 
may have an impact on pipeline integrity and safety.


Sec.  196.109  What must an excavator do if damage to a pipeline from 
excavation activity causes a leak where product is released from the 
pipeline?

    AGA suggested in Sec.  196.109, PHMSA add a requirement that an 
excavator responsible for damage that results in the escape of 
dangerous fluids or gasses must take actions to protect the public 
until the arrival of the operator or public safety personnel in a 
manner consistent with the second half of CGA Best Practice 5-25: ``The 
excavator takes reasonable measures to protect everyone in immediate 
danger, the general public, property, and the environment until the 
facility owner/operator or emergency responders arrive and complete 
their assessment.'' AGA suggested that in Sec.  196.109, PHMSA delete 
``Upon calling the 911 emergency telephone number, the excavator may 
exercise discretion as to whether to request emergency response 
personnel be dispatched to the damage site,'' because this type of 
decision should rest with the 911 operator not the excavator.
    NAPSR commented that in Sec.  196.109, if the incident is such that 
it ``may endanger life or cause serious bodily harm,'' then emergency 
personnel should always respond to the site; the excavator should not 
be making a ``judgment call'' at this point. NAPSR recommended that the 
sentence ``Upon calling the 911 emergency telephone number, the 
excavator may exercise discretion as to whether to request emergency 
response personnel be dispatched to the damage site'' be removed from 
the proposed language in this section.
    AOPL and API and INGAA suggested that Sec.  196.109 should specify 
that if damage to a pipeline from excavation activity causes the 
release of any material, either gas or liquid, from the pipeline, the 
excavator must immediately stop work at that location and report the 
release to appropriate emergency response authorities by calling 911. 
Excavators should be required to contact the pipeline operator to 
notify them of the release after contacting the appropriate emergency

[[Page 43852]]

response authorities. Work should not resume at the location until the 
pipeline operator determines the work can be resumed.
    Kern River stated that Sec.  196.109 should first require that work 
be stopped immediately, next that the damage be reported to appropriate 
emergency response authorities, and finally that the pipeline operator 
be promptly notified.
    MidAmerican commented that Sec.  196.109 requires excavators to 
immediately report the release of hazardous products to the appropriate 
emergency response authorities by calling 911. Once the 911 emergency 
telephone number is called, Sec.  196.109 would allow excavators the 
discretion of whether to request that emergency response personnel be 
dispatched to the damage site. MidAmerican stated that it believes that 
an exception should be made to the requirement to call 911 for pipeline 
operators who damage their own pipelines. Pipeline operators' personnel 
are directly on-site and can see that the necessary repairs can be made 
safely and expeditiously without the need to first contact emergency 
response personnel.
    NUCA, NUCA of Ohio, DCA, and Pennsylvania One Call stated that the 
``911 requirement'' in Sec.  196.109 presents a ``Pandora's box'' to 
the excavation community. They stated that professional excavators are 
not first responders. Expecting a contract excavator to accurately 
determine if the product released following excavation damage is one 
that can ``cause serious bodily harm or damage property or the 
environment'' is outside their responsibilities. They stated that the 
decision as to whether a 911 call ought to result in a dispatch of 
emergency responders is a matter to be decided by the 911 center, not 
the excavator. They encourage PHMSA to revise or delete this provision 
in the final rule. NUCA agrees with PHMSA's proposal for calling 911 
except for the excavator needing to maintain the option to exercise 
discretion on whether it is necessary for the 911 dispatcher to send 
emergency response personnel. NUCA stated that in many situations, all 
the excavator may need to do is inform the owner/operator that the 
pipeline was damaged so the pipeline operator can respond with the 
personnel who are best educated and equipped to handle the situation.
    TPA stated that Sec.  196.109 should be revised in three ways. 
First, to prevent the excavators using their discretion to call 911, 
the phrase, ``that may endanger life or cause serious bodily harm or 
damage to property or the environment'' should be deleted. Second, to 
eliminate any ambiguity in the final rule concerning when 911 should be 
contacted, the phrase, ``of hazardous products,'' which occurs 
immediately following the second occurrence of the word, ``release,'' 
in the first sentence of the Section, should be deleted. Third, the 
phrase, ``in addition to contacting the operator,'' should be added to 
the end of the first sentence of the Subsection to clarify that the 
operator needs to be contacted first.
Response
    PHMSA disagrees with AGA's suggestion of requiring compliance with 
CGA Best Practice 5-25. While PHMSA supports CGA Best Practices 
(including Best Practice 5-25), PHMSA does not intend to require 
compliance with the Best Practices through this regulation. PHMSA 
agrees with AGA's and NAPSR's suggestion of removing the phrase, ``Upon 
calling the 911 emergency telephone number, the excavator may exercise 
discretion as to whether to request emergency response personnel be 
dispatched to the damage site'' from Sec.  196.109. The phrase has been 
removed from the final regulatory language. PHMSA agrees with the 
suggestions from AOPL, API, INGAA, and NUCA regarding the need for 
excavators to contact 911 and the pipeline operator if excavation 
damage causes a release. PHMSA has removed from the final rule the 
proposed option for excavators to exercise discretion as to whether 
emergency response personnel be dispatched to a damage site. For 
reasons already noted in previous responses to comments, PHMSA 
disagrees with the idea of requiring excavators to stop work because of 
challenges related to communication and enforcement of the requirement.
    PHMSA disagrees with MidAmerican's belief that an exception to the 
911 requirement be made for operators who damage their own pipelines. 
The PIPES Act of 2006 requires the call to 911 in cases of excavation 
damage that result in releases, regardless of who is conducting the 
excavation.
    PHMSA has made the changes to Sec.  196.109 as recommended by TPA, 
with one exception. PHMSA has not included the phrase, ``in addition to 
contacting the operator,'' as recommended by TPA because contacting the 
operator after excavation damage occurs is already required under Sec.  
196.107.
    PHMSA has also modified Sec.  196.109 from the originally proposed 
``any flammable, toxic, or corrosive gas or liquid from the pipeline 
that may endanger life or cause serious bodily harm or damage to 
property or the environment'' to ``any PHMSA regulated natural and 
other gas or hazardous liquid as defined in parts 192, 193 or 195.'' 
PHMSA made this change to ensure consistency with existing PHMSA 
regulations.


Sec.  196.111  What if a pipeline operator fails to respond to a locate 
request or fails to accurately locate and mark its pipeline?

    NAPSR stated that Sec.  196.111 states that ``PHMSA may enforce 
existing requirements applicable to pipeline operators, including those 
specified in 49 CFR 192.614 and 195.442 and 49 U.S.C. 60114 . . .'' 
However, most State regulations are more stringent than Sec. Sec.  
192.614, 195.442, and 60114, which generally cover only the broad 
basics and do not include as detailed compliance requirements as State 
law. NAPSR stated that PHMSA would not have a way of knowing if the 
pipeline operator fails to respond. In addition, it is not clear to 
NAPSR whether additional reporting requirements on pipeline operators 
or excavators, or both, would be established. NAPSR stated that State 
laws, regulations, and rules usually provide specific and detailed 
requirements for when an operator fails to respond to a locate request 
or fails to accurately locate and mark its pipelines. Therefore, NAPSR 
stated that any requirements concerning failure to respond or 
accurately locate needs to defer to the State law in the State where 
the event occurred.
    Pennsylvania One Call requested that Sec.  196.111 be amended to 
make it clear that PHMSA's direct role in State enforcement normally 
will be limited to those situations where (a) the State lacks 
enforcement authority, or (b) the State systematically refuses (by 
action or inaction) to utilize the authority it has.
    NUCA stated that Sec.  196.111 should include action against the 
owner/operator that results in reimbursement to the contractor for 
financial losses due to the owner/operators' failure to locate and/or 
accurately mark the pipeline. NUCA stated that this requirement would 
encourage pipeline owner/operators to respond to a request for ``a 
locate'' in a timely manner.
    TPA stated that Sec.  196.111 requires enforcement for the failure 
of an operator to accurately locate and mark its pipeline, but there is 
no standard in part 196 establishing the requirements for accurate 
locating and marking. TRA suggested that, to make sure pipeline 
operators accurately locate and mark their pipelines under the Federal 
damage prevention requirements,

[[Page 43853]]

Sec.  196.111 should be revised by adding a sentence that reads as 
follows: ``A locate mark will be considered accurate if it is located 
anywhere within the tolerance zone.''
Response
    In response to the comments from NAPSR, PHMSA will be considerate 
of State laws and regulations when conducting Federal enforcement. The 
policy in this preamble further clarifies PHMSA's position. States 
often do not enforce 49 CFR 192.614 and 195.442. PHMSA believes that 
enforcement of these regulations, applicable to pipeline operators, 
ensures fairness in the damage prevention process and that pipeline 
operators take their damage prevention responsibilities seriously.
    In response to the comments from Pennsylvania One Call, Sec.  
196.111 will only be enforced in States with damage prevention law 
enforcement programs that PHMSA deems inadequate.
    For reasons stated in response to another comment above, PHMSA 
disagrees with NUCA's recommendation that Sec.  196.111 should include 
action against the owner/operator requiring reimbursement to the 
excavator for financial losses due to an owner/operators' failure to 
locate and/or accurately mark a pipeline.
    PHMSA disagrees with TPA's recommendation to include in Sec.  
196.111 a sentence that reads as follows: ``A locate mark will be 
considered accurate if it is located anywhere within the tolerance 
zone.'' PHMSA has not defined a tolerance zone in this final rule. In 
conducting Federal enforcement, PHMSA will be considerate of State 
requirements for accurate marking, consistent with the enforcement 
policy included in the preamble to this final rule.

Subpart C--Enforcement


Sec.  196.203  What is the administrative process PHMSA will use to 
conduct enforcement proceedings for alleged violations of excavation 
damage prevention requirements?

and


Sec.  196.205  Can PHMSA assess administrative civil penalties for 
violations?

    AOPL and API requested that PHMSA clarify whether civil penalties 
in Sec.  196.205 are intended to be used for failure to report a near-
miss, or whether civil penalties will only be issued for damage and 
release events. They suggested that PHMSA should clarify that civil 
penalties may be imposed pursuant to the enforcement authority granted 
in subpart C, even if an excavator violates the subpart but does not 
cause damage. They support a case-by-case approach to imposing 
penalties, support weighing the facts and circumstances in each case, 
and support PHMSA's discretion to assess civil penalties regarding 
near-misses based on its investigation as to the excavator's efforts at 
communicating near-miss information. On the other hand, CenterPoint and 
the IUB were skeptical of the effectiveness of near-miss reporting. 
CenterPoint stated that the most difficult aspect of reporting near 
misses may be defining exactly what one is and stated that 
investigating possible near misses to determine if they are reportable 
would also tie up limited resources. IUB questioned if meaningful or 
accurate data would be collected by such a requirement. IUB stated that 
excavators would have little incentive to report near-misses that would 
otherwise likely go unnoticed, and the reports would bring potential 
penalties and shame. More rigorous (and expensive) monitoring of 
excavators by operators would also be of little benefit, as near misses 
would most likely occur during excavations where one-call was not 
notified, and the operator would be unaware that an excavation, let 
alone a near miss, had occurred. IUB suggested no rule on near-miss 
reporting be adopted on the basis that it is unlikely to provide 
worthwhile information.
    AOPL and API stated that they support PHMSA's recommendations for 
establishing administrative procedures for a State wishing to challenge 
a finding of inadequacy. They also supported PHMSA's proposed 
adjudication process to be used by excavators for pipeline safety 
violations. Although no prescriptive timeframe is recommended, they 
suggested that PHMSA ensures that these processes be completed 
expeditiously. AOPL and API also suggested that the right to request 
the Attorney General to bring an action for relief, as necessary or 
appropriate, including mandatory or prohibitive injunctive relief, 
interim equitable relief, civil penalties, and punitive damages, be 
retained by the Administrator of PHMSA, or a designated authority, as 
authorized in 49 CFR 190.25.
    AGC supported the administrative process outlined in the NPRM. AGC 
suggested, however, that in the process of the paper hearing that 
happens after the initial finding of inadequacy, PHMSA should request 
input from all stakeholders in the State with the inadequacy rating. 
AGC also suggested that in the penalty phase, PHMSA should consider 
education as an alternative or supplement to civil or other penalties 
and in cases where financial penalties are assessed, and/or that 
revenues generated must be reserved to finance damage prevention 
education and technologies used in support of damage prevention 
activities.
    CenterPoint suggested that PHMSA should adopt a complaint-based 
administrative procedure as the primary trigger of the enforcement 
process provided in proposed Sec. Sec.  196.205 and 196.207. 
CenterPoint commented that State and, if necessary, Federal criminal 
and civil penalties should be imposed to repeat excavation damage 
offenders who do not respond to any amount of monetary fines.
    Paiute and Southwest stated that the process outlined within the 
NPRM is lengthy and potentially ineffective in dealing with an at-fault 
excavator. The administrative process defined in the NPRM could develop 
into 12-to-24 month interplay between the defending State and PHMSA 
before any enforcement action is taken with the excavator. An excavator 
should not be penalized for the inadequacy of a State's enforcement 
program by receiving a second fine from PHMSA upon the finding that a 
State's enforcement activities are inadequate. Additionally, they 
stated that an excavator would not be given credit for any improvements 
they may have made immediately following the infraction. Paiute and 
Southwest encourage the development of a process for determining the 
adequacy of a State's enforcement program in advance of an infraction 
and prior to invoking Federal administrative enforcement. They stated 
that PHMSA should first determine if the State's program is effective, 
notify the State of the inadequacies, and allow time for the State to 
take the steps necessary to improve their program. Then, PHMSA should 
initiate Federal enforcement immediately following an infraction should 
the State fail to improve its program.
    DCA and NUCA of Ohio stated that PHMSA proposes to apply the same 
adjudication process for these new regulations as is used for other 
pipeline safety violations included in 49 CFR part 190. They suggested 
that improvements could be made to the logistical provisions in the 
final rule for excavators to address alleged violations of the Federal 
excavation standard. They stated that it is overly burdensome to expect 
professional excavators to travel to PHMSA regional offices that have 
jurisdiction over several States. Also, NULCA stated that PHMSA 
proposes to use the same adjudication process for these new regulations 
as is used for other pipeline safety violations

[[Page 43854]]

included in 49 CFR part 190. It believes that the process described in 
the NPRM is fair and consistent with current Federal law.
    Paiute and Southwest commented that licensed, professional 
excavators should be aware of the damage prevention laws in the 
State(s) in which they do business and thus be held accountable for 
following the excavation law within those State(s). They stated that 
excavators should be required to follow the same adjudication process 
as pipeline operators as set forth in 49 CFR part 190. They also stated 
that the proposed adjudication process for homeowners would be unfair.
Response
    PHMSA does not intend to require reporting of near misses. A more 
detailed explanation of PHMSA's enforcement policy is included in the 
preamble to this final rule.
    PHMSA agrees with the comments from AOPL and API regarding the 
proposed administrative procedures for a State wishing to challenge a 
finding of inadequacy as well as the process to be used by excavators 
for pipeline safety violations. PHMSA intends to ensure that the 
processes are completed expeditiously. PHMSA also agrees with AOPL and 
API regarding the need for PHMSA to retain the right to request the 
Attorney General to bring an action for relief as authorized in 49 CFR 
190.25.
    PHMSA does not intend to request input from all stakeholders in 
determining the adequacy of a State's damage prevention law enforcement 
program as suggested by AGC. The adequacy of enforcement programs will 
be assessed using the criteria listed in Sec.  198.55. Further, PHMSA 
does not intend to impose education requirements or other alternative 
or supplemental enforcement actions in addition to civil penalties in 
cases where financial penalties are assessed. Alternative enforcement 
actions would be overly cumbersome for PHMSA to administer.
    PHMSA will consider complaints as a trigger for the enforcement 
process proposed in Sec. Sec.  196.205 and 196.207. However, PHMSA will 
not consider complaints to be the only trigger for enforcement action. 
Additional information is available in the enforcement policy in the 
preamble to this final rule.
    As originally proposed and as described in this final rule, and as 
recommended by Paiute and Southwest, PHMSA intends to determine the 
adequacy of State enforcement programs before exercising any Federal 
enforcement authority in States with inadequate programs.
    PHMSA recognizes that the adjudication process in 49 CFR part 190 
for violators of pipeline safety regulations could be burdensome for 
excavators if excavators are expected to travel to PHMSA regional 
offices. PHMSA regularly conducts these hearings via teleconference, 
which should relieve alleged violators of any requirement to travel.
    PHMSA disagrees with the comments from Paiute and Southwest 
regarding the fairness of the proposed adjudication process for 
homeowners. PHMSA does not intend to make special accommodations for 
homeowners who violate pipeline safety regulations.


Sec.  196.207  What are the maximum administrative civil penalties for 
violations?

    AGA stated that it is concerned that the civil penalty should 
always be restricted to the State's maximum penalty. AGA stated that 
excessive Federal penalties would actually serve as a deterrent for an 
excavator in reporting damage or perhaps even tempt individuals to make 
their own unauthorized repairs to a pipeline rather than notifying the 
operator. AGA stated that either way, this issue is a legitimate 
concern that could lead to unsafe conditions.
Response
    PHMSA recognizes AGA's concern about the potential for excessive 
penalties to create an unsafe condition. However, PHMSA cannot restrict 
Federal civil penalties to maximum State penalties in States with no 
civil penalty authority. PHMSA will assess penalties pursuant to 49 CFR 
190.225.


Sec.  196.209  May other civil enforcement actions be taken?

    IUB commented that Sec.  196.209 proposes additional types of civil 
enforcement actions against any person believed to have violated any 
provision of 49 U.S.C. 60101 et seq. or any regulation issued there 
under. IUB stated that this language would include any person, not just 
excavators, for any alleged violation of any Federal pipeline safety 
law or rule instead of just those related to damage prevention. IUB 
believes that this language far exceeds the scope of Part 196 and the 
law on which it is based.
Response
    In response to the comment from IUB, Sec.  196.209 is consistent 
with 49 CFR 190.235.


Sec.  196.211  May criminal penalties be imposed for violations?

    NUCA recommended that, to ensure all parties are aware of potential 
penalty amounts, Sec.  196.211 should include the penalties specified 
in 49 U.S.C. 60122.
Response
    PHMSA has chosen to reference 49 U.S.C. 60122 with regard to civil 
penalties instead of noting the penalty amounts listed in 49 U.S.C. 
60122. The maximum civil penalties in 49 U.S.C. 60122 are subject to 
change.

PART 198--REGULATIONS FOR GRANTS TO AID STATE PIPELINE SAFETY 
PROGRAMS

Subpart D--State Damage Prevention Enforcement Programs


Sec.  198.53  When and how will PHMSA evaluate state excavation damage 
prevention law enforcement programs?

    Missouri PSC stated that it understands PHMSA's incentive to make 
States comply with the damage prevention criteria is to reduce grant 
funding; however, Missouri's pipeline safety legislative actions are 
outside the control of the Missouri PSC. An adequate damage prevention 
program is only a portion of a State's overall pipeline safety program 
and, therefore, reducing the grant for an inadequate damage prevention 
program would mean not having adequate funding for the entire pipeline 
safety program, which would reduce the effectiveness of Missouri's 
overall pipeline safety program.
    The IUB recommended that this portion of the NPRM be deleted in its 
entirety. The IUB stated that the section was not required or 
contemplated by Congress, the proposed penalty to State base grants is 
disproportionate and excessive, and it has the potential to drive 
States out of the Federal/State pipeline safety partnership. The IUB 
believes that this NPRM requires a public meeting for PHMSA to take 
evidence on the impact of such an onerous provision on State programs, 
and suggested that if public meetings are not possible, PHMSA should 
enter discussion with NAPSR on what a reasonable level of penalty on 
States might be.
    IUB stated, with regard to Sec.  198.53, that Congress directed 
PHMSA to develop ``through a rulemaking proceeding, procedures for 
determining inadequate State enforcement of penalties.'' PHMSA was not 
directed to take punitive action against States whose enforcement was 
deemed inadequate. IUB argued that the proposed grant penalties for 
States with

[[Page 43855]]

inadequate enforcement programs are unsupported by the law, unwarranted 
and unnecessary, and beyond the scope of this rulemaking; in addition, 
the amount of penalty proposed is disproportionate, excessive, and the 
deductions are cumulative.
    IUB commented that a State pipeline safety program that is 
dependent on the PHMSA base grant would soon be unable to conduct a 
pipeline safety program and would be forced to withdraw or would be 
decertified from the program. IUB stated that the Federal grant 
reduction would likely drive States out of the pipeline safety program. 
IUB stated that even if a State would adopt new one-call enforcement 
provisions that PHMSA would find adequate, under the grant payment 
limitations of 49 U.S.C. 60107(b), it could take years for a State to 
recover from the loss of funding. IUB believes that no other single 
provision of PHMSA State program oversight could have an impact this 
devastating on the Federal/State pipeline safety partnership or the 
contributions of States to pipeline safety.
    NAPSR stated that Sec.  198.53 proposes that ``PHMSA will also 
conduct annual reviews of state excavation damage prevention law 
enforcement programs'' and ``if PHMSA finds a state's enforcement 
program inadequate, PHMSA may take immediate enforcement against 
excavators in that state'' and that ``a state that fails to establish 
an adequate enforcement program in accordance with 49 CFR 198.55 within 
five years of the finding of inadequacy may be subject to reduced grant 
funding established under 49 U.S.C. 60107.'' NAPSR stated that the 
proposed language further states that ``the amount of the reduction in 
49 U.S.C. 60107 grant funding shall not exceed 10% of prior year 
funding.'' NAPSR stated that a 10% reduction in a State's pipeline 
safety program base grant is disproportionate and excessive, especially 
when compared with the point allocations of the other parts of the 
annual evaluation scoring (i.e., incident investigations, field 
inspections), and penalizing a State that is in need of additional 
resources to implement an ``adequate'' program does nothing but 
increase the difficulty of making the necessary changes, which may 
require legislative action that is beyond the control of the State 
agency. NAPSR stated that it believes the proposed penalty for States 
that are deemed by PHMSA to have inadequate excavation damage 
prevention law enforcement programs is unnecessary, unjustified, and 
excessive, and this provision should be removed from the proposed 
language, or at a minimum, should be reevaluated to determine a more 
equitable and reasonable level of penalty.
    American Public Gas Association (APGA) stated that it believes that 
any grant funding cuts should be limited to State Damage Prevention 
grants, and the general pipeline safety funding (base grants) for the 
State should not be reduced. APGA stated that in many States, the 
pipeline safety agency is not the agency responsible for enforcing 
damage prevention laws. In most States, the legislature must act to 
enact effective damage prevention, and the pipeline safety agency is 
under the legislature. Therefore, neither the damage prevention grants 
program nor the general pipeline safety grants program is sufficiently 
large enough to overcome legislative resistance, but cutting pipeline 
safety grants would negatively affect the resources available for 
pipeline safety in a particular State.
    AGA suggested a 5-year grace period after the initial determination 
of inadequacy is too long and suggested a 3-year grace period during 
which PHMSA should consider any incremental improvements to a State's 
damage prevention program before reducing base grant funding. Also, 
AOPL and API suggested a 2-year grace period. However, DCA supported 
the administrative process and believes that allowing State authorities 
5 years to make program improvements to meet PHMSA's criteria is 
appropriate. TPA is fully supportive of the use of PHMSA's annual 
program evaluations and certification reviews as the vehicle under 
which to conduct evaluations of State damage prevention programs as 
proposed in Sec.  198.53. However, TPA considers the proposed 5-year 
grace period too long for the improvement of a State damage prevention 
program that is found to be inadequate. TPA recommended a grace period 
be limited to 3 years. Also, TPA recommended that a fixed time limit be 
placed on the temporary waiver period of no more than 2 years. In 
addition, TPA recommended that if a State program is found to be 
inadequate, PHMSA not begin enforcement during the 3-year grace period.
    AOPL and API supported PHMSA's proposal that a State's base grant 
funding can be impacted due to a determination that the State's 
excavation damage prevention program is inadequate. They stated that 
funding reductions may serve as an appropriate incentive for States to 
reform inadequate programs expeditiously, but should be coupled with 
other incentives to remedy inadequate programs. They commented that 
States are granted ample opportunity to address program deficiencies 
prior to such a determination and are similarly provided opportunities 
to demonstrate improvements within programs following this 
determination. The 10 percent cap on funding reductions would ensure 
that significant fluctuations in funding do not occur. AOPL and API 
suggested that those States that demonstrate reductions in damage rates 
as a result of effective enforcement should qualify to receive 
additional grant money, serving as a positive incentive to continually 
improve programs.
    TPA urged PHMSA to limit its funding reductions proposed in Sec.  
198.53 to 10 percent of the Federal excavation damage prevention funds 
allocated to a State. TPA stated that while reducing overall funding 
levels by 10 percent might provide PHMSA with a bigger stick, it would 
adversely impact a State's ability to maintain an adequate pipeline 
safety program in all other respects. Such a result is contrary to the 
overall goal of PHMSA to promote and support all aspects of pipeline 
safety.
Response
    In response to Missouri PSC's comments regarding incentives, PHMSA 
understands that the State's legislative actions are outside the 
complete control of the Missouri PSC. The same holds true for most 
States. Accordingly, PHMSA does not intend to arbitrarily reduce State 
base grant funding. Base grant funding levels are currently determined, 
in part, through an evaluation of State damage prevention programs. 
This final rule simply refines the criteria by which State damage 
prevention programs are evaluated. It is not PHMSA's goal to weaken 
State pipeline safety programs by reducing base grant funding. However, 
PHMSA, as a granting Federal agency, must use the financial incentives 
at its disposal to encourage States to adopt adequate excavation damage 
prevention enforcement programs. In addition to base grant incentives, 
PHMSA also intends to directly notify the Governors of States that 
PHMSA has determined to have inadequate enforcement programs. This 
notification to Governors may help encourage positive legislative 
action. Finally, PHMSA offers two grants--the State Damage Prevention 
grants and the one-call grants--that are available to States for 
improving damage prevention programs, including enforcement programs.
    In response to the IUB, PHMSA has not removed the proposed penalty 
to State base grants for failure to

[[Page 43856]]

implement adequate enforcement programs. PHMSA currently calculates 
State base grant funding levels based upon a variety of factors, 
including damage prevention programs. This rulemaking simply changes 
the criteria upon which damage prevention programs are assessed. PHMSA 
has opted not to hold public meetings to discuss this provision. It is 
not PHMSA's intent to drive States out the Federal/State pipeline 
safety partnership. Instead, it is PHMSA's intent to provide incentives 
to States with inadequate enforcement programs to adopt adequate 
enforcement programs. PHMSA has reduced the proposed penalty from a 
maximum of 10 percent of prior year funding to a maximum of four 
percent of prior year funding.
    As a granting agency under 49 U.S.C. 60107, PHMSA has the ability 
to use base grant funding levels as an incentive for improvements to 
State pipeline safety programs. The deductions are not intended to be 
cumulative.
    PHMSA recognizes the IUB's concerns regarding potential reductions 
in base grant funding. PHMSA will take these concerns into 
consideration when determining the amount of potential reductions. 
States that are deemed to have inadequate enforcement programs will 
have a grace period of 5 years before any penalties take place. PHMSA 
will also notify Governors of determinations of inadequacy. PHMSA 
believes that adequate enforcement of State damage prevention laws is 
important enough to warrant the base grant incentive. PHMSA believes 
that States should enforce their own damage prevention laws and that 
enforcement is an essential part of a strong pipeline safety program.
    In response to the comments from NAPSR regarding the proposed base 
grant penalty amount, PHMSA has reduced the maximum penalty to four 
percent. PHMSA does recognize that implementing an adequate State 
program may take legislative action that is beyond the complete control 
of PHMSA's State partners.
    In response to the comments from AGA and APGA, PHMSA believes that 
limiting the discretionary State Damage Prevention grants would provide 
no incentive for States to implement adequate enforcement programs. On 
the contrary, the State Damage Prevention grants are made to improve 
damage prevention programs, including enforcement programs, and are a 
positive incentive for improvement.
    PHMSA believes that given that some of PHMSA's State partners have 
limited influence over legislative processes, States should have a 
generous 5-year grace period after a finding of enforcement program 
inadequacy before base grant funding is reduced.
    PHMSA recognizes AOPL's and API's comments about the need for 
additional incentives for State enforcement program improvement. PHMSA 
intends to work with State stakeholders to encourage improvement in 
States with inadequate enforcement programs. However, PHMSA cannot 
increase State base grant funding for good performance due to the way 
base grant levels are calculated. PHMSA may only reduce base grant 
funding for ineffective State pipeline safety programs, including 
inadequate State damage prevention enforcement programs.
    PHMSA agrees with TPA's comments regarding exercising caution when 
determining reductions to State base grants.


Sec.  198.55  What criteria will PHMSA use in evaluating the 
effectiveness of State damage prevention enforcement programs?

General Comments on Sec.  198.55

    KCC stated that PHMSA's approach toward providing a transparent 
evaluation process using the seven criteria listed in paragraph (a) of 
Sec.  198.55 appears to be trumped by paragraph (b) of that section. 
Paragraph (b) would allow PHMSA to deem a State program inadequate if 
PHMSA did not agree with an enforcement action taken by the State. What 
is not clear in the NPRM is whether PHMSA could find a State program 
inadequate based only on a single, individual State enforcement action, 
assume jurisdiction over the same excavator, and initiate Federal 
charges. If a State program is deemed inadequate based on a single 
State enforcement action, KCC asked, how does a State rectify that 
situation without putting the excavator in double jeopardy? KCC 
believes that due process and 49 U.S.C. 60114(f) requires that any 
Federal determination of inadequacy of a State's enforcement efforts 
must be made before PHMSA initiates Federal enforcement activities, and 
then the applicable Federal standards may be given only prospective 
effect. KCC also believes that 49 U.S.C. 60114(f) prohibits PHMSA from 
determining a State's enforcement of its damage prevention laws is 
inadequate until PHMSA establishes the procedures for making such a 
determination. KCC believes that while some of PHMSA's criteria in the 
proposed Sec.  198.55(a) are well defined, others can best be described 
as concepts. KCC believes that PHMSA has not offered sufficient 
guidance (procedures) on how it will carry out the proposals found in 
the NPRM.
    Missouri PSC commented that PHMSA stated ``PHMSA's primary interest 
with regard to state civil penalties [for violations of excavation 
damage prevention law] is that (1) civil penalty authority exists 
within the state, and (2) civil penalty authority is used by the state 
consistently enough to deter violation of state excavation damage 
prevention laws.'' Missouri PSC would like clarification as to whether 
those two criteria are more important than the other criteria, and if 
they are, they should be identified as mandatory requirements.
    AGA stated that PHMSA's ultimate goal should be to ensure there is 
effective and consistent enforcement of excavation damage prevention 
laws and regulations at the State level. AGA and its members are 
supportive of the NPRM and are encouraged by the possibilities of 
stronger enforcement in States determined to have inadequate 
enforcement programs. However, AGA stated that before a State's damage 
prevention program is evaluated, PHMSA should consider what 
circumstances will actually trigger Federal enforcement action in 
States that have been evaluated and found to have inadequate damage 
prevention programs. AGA also stated that there should be a mechanism 
to proactively address repeat offenders who have a history of damaging 
pipelines due to risky behaviors or who have failed to report damages 
to the pipeline operator.
    AGA stated that because enforcement of pipeline safety regulations 
is often assigned to State public utility commissions that only have 
jurisdiction over pipeline operators and the enforcement of excavation 
laws, related violations may rest with other State agencies having 
broader jurisdiction over excavators. AGA cautioned PHMSA not to create 
perverse incentives that spur excessive enforcement actions against 
pipeline operators alone. In AGA's opinion, pipeline operators are 
often the victims of excavation law violations. AGA suggests that PHMSA 
should create incentive for State agencies assigned the task of 
enforcing one-call violations against third-party excavators or 
underground utilities that fail to properly locate and mark their lines 
in a timely fashion.
    AGA suggested that PHMSA examine State damage prevention 
performance metrics (damages per 1,000 locate requests) to determine if 
the State is performing adequately or is improving. The Association 
suggested that damages per 1,000 requests should only be used

[[Page 43857]]

to gauge an individual State's improvement over time without comparing 
the metric to other States or determine adequate performance. AGA 
suggested that PHMSA collect data on the number of enforcement actions 
taken against excavators and operators by the State authority in order 
to determine overall enforcement effectiveness. In addition, AGA 
suggested that PHMSA have an annual evaluation of excavation programs 
in States that are close to being inadequate (or are found to be 
inadequate) and a more general evaluation of excavation programs in 
those States that are far above the threshold.
    CenterPoint asked that PHMSA provide enough time for a State 
program to be deemed adequate or better before the agency takes actions 
against a State so that PHMSA will never have to assume jurisdiction.
    AGC stated that PHMSA should encourage State regulatory authorities 
to equally enforce State laws applicable to underground facility owners 
and operators who fail to respond to a location request or fail to take 
reasonable steps in response to such a request. Without accurate 
locating and marking, contractors are put in harm's way. APGA supports 
the efforts of PHMSA to encourage States to adopt and enforce effective 
excavation damage prevention programs. Pennsylvania One Call stated 
that State 811 centers have an audience that is larger than the 
pipelines covered by Federal statute. Pipelines are only one part of 
the facilities and parties covered by State one-call statutes, and 
PHMSA should avoid creating a situation where it places itself in 
conflict with enforcement policies mandated under State law that apply 
to all other covered parties, or creates a dual enforcement system at 
the State level.
    NUCA stated that it opposes a permanent Federal role in State 
enforcement activities. NUCA suggested that the same enforcement 
requirements should be applied equally to all excavators, no matter 
their relationship to pipeline owners or operators. When an incident 
occurs, excavators working in-house for a pipeline owner or operator, 
and third-party contractors working under contract for pipeline owners 
or operators, should be treated as any other excavator. NUCA also 
suggested PHMSA consider adding one more element to the nine already-
listed requirements for a comprehensive damage prevention program: The 
item should require all excavators and pipeline operators or owners to 
report near misses and/or mismarks to the State one-call (dig safe) 
system and/or Damage Information Reporting Tool (DIRT) that is 
sponsored by the Common Ground Alliance.
    NUCA of Ohio stated that PHMSA's jurisdiction is limited to the 
natural gas and hazardous liquid pipelines; however, State policymakers 
will inevitably look at this regulation when adjusting their laws and 
enforcement practices subject to water, sewer, electric, 
telecommunications, and other underground infrastructure. To ensure the 
largest impact on damage prevention, PHMSA must encourage States to 
consider protection of all underground facilities when adjusting their 
safe digging programs and the enforcement of damage prevention 
requirements. Also, Southwest stated that an effective damage 
prevention program should lead to an overall reduction in damages to 
all underground facilities, not just natural gas and hazardous liquid 
pipelines, and PHMSA should take this into account when determining the 
adequacy of a State's program.
    On PHMSA's request for comments concerning the issue of evaluating 
State programs on an incident-by-incident basis, KCC stated that it 
agrees with PHMSA that an annual review of the adequacy of enforcement 
of the State program would be less burdensome for the State. KCC stated 
that incident-by-incident evaluation is impractical given PHMSA's 
budgetary constraints. In addition, consistent with due process 
considerations, Federal enforcement actions could only be implemented 
prospectively and, therefore, incident-specific review would do little 
to rectify even glaring omissions or deficiencies in the State 
enforcement program. KCC, however, stated that the NPRM does not 
prohibit PHMSA from evaluating a State program based on a single 
incident. KCC suggested that PHMSA state in the rulemaking that the 
``adequacy'' of State enforcement programs will be determined on the 
basis of an annual review.
    Paiute and Southwest stated that they believe mandating adherence 
to specific criteria without consideration of alternate methodologies 
may be challenging for States due to staffing levels and varying 
legislative environments. Therefore, they believe that an effective 
damage prevention program should lead to an overall reduction in 
damages to all underground facilities, and not just natural gas and 
hazardous liquids pipelines. They suggested that PHMSA take this into 
account when determining the adequacy of a State's program. They 
suggested the States utilize data from the CGA's DIRT. They stated that 
this existing mechanism provides comprehensive data essential for 
learning about damages to all underground facilities statewide, not 
only those to natural gas and hazardous liquids pipelines. They stated 
that all stakeholders have a shared responsibility in damage 
prevention, and States should have knowledge of all underground damages 
when determining the effectiveness and/or necessary enhancements to 
their enforcement program.
    AGA suggested that PHMSA should define an evaluation system using 
the criteria listed in the NPRM and make it transparent so that the 
public can see exactly which actions must be taken in order for a 
particular State's excavation program to become adequate. AGA suggested 
that there be a multi-stakeholder advisory council to flesh out the 
evaluation process after the regulation has been finalized. PHMSA would 
still conduct the evaluation, but the advisory council would provide 
guidance on how to perform that evaluation such as the following: What 
considerations should be made in evaluating each of the criteria 
listed; what data/information would be used in making the evaluation 
(and where to obtain the data/information); how to conduct the overall 
evaluation with respect to the various criteria reviewed and evaluated; 
how to address criteria where data/information is missing or non-
existent; how to determine whether or not a State's grant funding 
should be reduced; if the State is taking some actions to improve its 
damage prevention program under a waiver submission; and, the advisory 
council could be comprised of anyone with experience in damage 
prevention. AGA stated that implementing an advisory council will help 
PHMSA gain support for the evaluations performed for each State.
    CenterPoint Energy stated that it supports using the listed 
criteria, but the level of acceptability for each one needs to be set 
as pass/fail. If the criteria are properly established, absence of any 
one should be a basis for a finding of inadequacy. Any fine structure 
should be tied to a fund used to develop and execute a program to raise 
public awareness.
    KCC stated that in the Commission's opinion, before subjective 
requirements, such as those presented in the NPRM, are enforceable, 
PHMSA should have the burden of proof to demonstrate how a State's 
program is ineffective by showing performance metrics that compare to 
other States of similar demographics.

[[Page 43858]]

    On whether the proposed criteria strikes the right balance between 
establishing standards for minimum adequacy of State enforcement 
programs without being overly prescriptive, TRA stated that it 
appreciates PHMSA's acknowledgement that it is a State's prerogative to 
craft its own laws and regulations. TRA recommended that States should 
be granted maximum flexibility to implement excavation damage 
prevention law enforcement programs with the only provision that it 
meet minimum Federal standards, and those minimum standards should, 
however, be clear. TRA suggested that as an alternative, PHMSA could 
comment on State legislative efforts, prior to passage, to provide 
guidance as to whether they comply with PHMSA standards. Input by PHMSA 
in the form of explicit minimum standards or comment on legislation is 
the only way that a State can know it would not meet PHMSA's standards 
for excavation damage prevention law enforcement program.
    KCC asked if a State program could be determined ``inadequate'' if 
only one criterion is not met to PHMSA's satisfaction, whether PHMSA 
provides guidance on the more subjective terms, and whether PHMSA's 
State partners be offered the opportunity to provide feedback on the 
guidance. KCC stated that without an opportunity to comment on any 
guidance that would be the true framework of the regulation, KCC 
believes that the rulemaking would lack due process and fail to satisfy 
the procedural requirements of the Administrative Procedure Act.
Response
    In response to the comments from KCC, paragraph (b) in the proposal 
was not intended to trump paragraph (a) in the proposed Sec.  198.55. 
Paragraph (b) is intended to allow PHMSA to consider individual 
enforcement actions taken by a State in the overall evaluation of a 
State's enforcement program. PHMSA will not make an adequacy 
determination based on a single enforcement action taken by a State but 
will evaluate enforcement actions taken by a State in the context of 
the evaluation criteria. PHMSA agrees that any Federal determination of 
inadequacy of a State's enforcement efforts must be made before PHMSA 
initiates Federal enforcement proceedings, and that the applicable 
Federal standards may be given only prospective effect. PHMSA has 
offered guidance regarding the scope and applicability of the 
evaluation criteria in the preamble to this final rule.
    In response to Missouri PSC, PHMSA has clarified the scope and 
applicability of the evaluation criteria in the policy included in the 
preamble to this final rule.
    PHMSA agrees with AGA's comments regarding PHMSA's ultimate goal to 
encourage effective and consistent enforcement of State excavation 
damage prevention laws and regulations. PHMSA has considered what 
circumstances will trigger Federal enforcement, as described in the 
enforcement policy in the preamble to this final rule. PHMSA has not 
developed a mechanism to proactively address repeat offenders who have 
a history of damaging pipelines because PHMSA is concerned primarily 
with enforcing future violations of regulations and not addressing past 
behavior.
    PHMSA understands AGA's concerns regarding creating the wrong 
incentives that may spur unfair or inequitable enforcement programs. 
PHMSA does not believe the final rule, as written, will create these 
kinds of incentives. However, PHMSA will monitor the implementation of 
this final rule with consideration provided to AGA's concerns.
    PHMSA acknowledges AGA's suggestion to examine State damage 
prevention performance metrics. However, State and Federal data that 
would enable this type of analysis are limited. PHMSA will review any 
data made available by the States in making a determination of 
enforcement program adequacy. PHMSA also acknowledges AGA's suggestion 
to evaluate marginal State programs on a more frequent basis. However, 
PHMSA does not intend to make determinations of marginal adequacy; 
rather, PHMSA will deem a State enforcement program either adequate or 
inadequate.
    PHMSA agrees with CenterPoint`s comment regarding providing enough 
time for State programs to be deemed adequate before PHMSA contemplates 
reducing State base grant funding. PHMSA will provide a 5-year grace 
period after the first determination of inadequacy to ensure States 
have time to improve their enforcement programs before base grants are 
affected. However, in States deemed to have inadequate enforcement 
programs, PHMSA will have the authority to take immediate enforcement 
actions against excavators if necessary and appropriate.
    PHMSA agrees with AGC's comments regarding the need to equally 
enforce damage prevention requirements applicable to operators. To that 
end, PHMSA will work to ensure that enforcement is applied to the 
responsible parties in a damage incident. Fair and equitable 
enforcement will require thorough investigation of incidents and 
enforcement of applicable Federal regulations. PHMSA acknowledges the 
comments from Pennsylvania One Call and believes the final rule and the 
accompanying policies in the preamble to the final rule largely avoid 
the creation of dual enforcement systems at the State level.
    PHMSA agrees with NUCA and opposes a permanent Federal role in 
State enforcement activities. Enforcement of State damage prevention 
laws is a State responsibility. PHMSA also agrees that this final rule 
should be applied equally to all excavators, regardless of their 
relationship to pipeline operators. PHMSA disagrees with NUCA's 
recommendation to require reporting of near misses and/or mismarks to 
State one-call systems and/or the Damage Information Reporting Tool. 
PHMSA believes this requirement would be out of the scope this 
rulemaking. PHMSA strongly encourages the use of data to analyze State 
damage prevention programs and encourages the States to collect damage 
and near-miss information for such purposes.
    PHMSA acknowledges the comments from NUCA of Ohio and Southwest 
regarding the potential impact of this final rule. However, PHMSA 
regulatory authority extends only to specific pipelines, and PHMSA has 
attempted to be cautious in not unduly influencing other aspects of 
damage prevention. PHMSA believes that implementing adequate 
enforcement programs specifically for improving pipeline safety could 
lead to other changes in State enforcement programs that may result in 
reductions in the rate of excavation damage to all underground 
facilities.
    With regard to the comments from KCC regarding incident-by-incident 
analysis, PHMSA agrees. PHMSA will not evaluate a State program based 
on its handling of a single incident, but instead will evaluate a State 
program based on the criteria stated in Sec.  198.55.
    PHMSA agrees with the comments from Paiute and Southwest regarding 
the holistic nature of damage prevention programs, but PHMSA must also 
be cognizant of PHMSA's mission and scope of regulatory authority, 
which is limited to pipelines. PHMSA is in favor of using DIRT for a 
variety of analytical purposes, but PHMSA will not use DIRT for 
evaluating State enforcement programs. DIRT data is consolidated at the 
regional level, and PHMSA has no access to State-specific data. In 
addition,

[[Page 43859]]

information in DIRT is submitted on a voluntary, anonymous basis by 
damage prevention stakeholders.
    PHMSA agrees with AGA's suggestion to define a transparent 
evaluation system using the criteria listed in the final rule. PHMSA 
has developed a policy in the preamble of this final rule that 
clarifies the evaluation system. At this time, PHMSA does not intend to 
implement AGA's recommendation to convene a multi-stakeholder advisory 
council to further refine the evaluation process. PHMSA may consider 
the idea in the future.
    PHMSA acknowledges CenterPoint Energy's recommendation to route 
civil penalties to a fund that could be used to develop a public 
awareness program. However, PHMSA is limited by law with regard to how 
civil penalties are collected. Civil penalties collected by PHMSA go 
directly to the U.S. Treasury.
    PHMSA acknowledges KCC's comments regarding the comparison of 
States. However, past efforts by many damage prevention stakeholders to 
compare the performance of States to one another has proven impossible 
for a variety of reasons. PHMSA will not compare State enforcement 
programs to one another but will review available records that 
demonstrate performance trends within States.
    In response to the suggestion from TRA regarding influencing State 
legislative efforts, PHMSA does not generally attempt to directly 
influence the State legislative process. However, if requested, PHMSA 
does work with States to provide information and guidance regarding 
PHMSA enforcement policies and other programs.
    In response to the comments from KCC regarding how the evaluation 
criteria will be applied, PHMSA has developed a policy that addresses 
the scope and applicability of the evaluation criteria in the preamble 
of this final rule. This policy is not equivalent to regulation and is 
subject to change as PHMSA implements this regulation over time.

Comments on Sec.  198.55(a)(2)

    Kern River stated that Sec.  198.55(a)(2) should require 
designation of a State agency, such as the State's Attorney General's 
Office, to enforce local damage prevention laws in a fair and effective 
manner. Kern River stated that it is important that enforcement remains 
a responsibility of the State and not be relinquished to local 
authorities where mechanisms, such as penalties or fines for violators, 
may not provide sufficient incentive for excavators to utilize the 
local one-call system.
Response
    PHMSA agrees with Kern River that States should be responsible for 
enforcing damage prevention laws. However, PHMSA is not requiring that 
enforcement be conducted solely by a State agency. The proposed 
criterion at Sec.  198.55(a)(2) focuses on enforcement at the State 
level but does not preclude enforcement by designated bodies other than 
State agencies. PHMSA does not wish to be overly prescriptive about who 
conducts enforcement within the State.

Comments on Sec.  198.55(a)(3)

    KCC stated that this criterion is vague and does not provide any 
guidance on how PHMSA would define sufficient levels or how the State 
would demonstrate effectiveness. Therefore, KCC seeks clarification on 
whether open records act requests are sufficient means of making 
information available to demonstrate effectiveness. Also, the KCC asks 
if PHMSA envisions each State preparing and filing a report on the 
State's enforcement program in order to demonstrate effectiveness and, 
if so, what would the report entail.
    Paiute and Southwest stated that States can achieve effective 
enforcement by imposing remedial actions in lieu of civil penalties, 
such as through program awareness and/or mandated damage prevention 
training. As an example, Nevada has effectively enforced its damage 
prevention program through mandated damage prevention training for at-
fault excavators. Other States may have established additional actions 
that have also been effective. Paiute and Southwest agree when civil 
penalties are warranted, they should be at levels sufficient to ensure 
compliance; however, they believe PHMSA should regard all effective 
actions taken by a State as part of its damage prevention program just 
as important as civil penalties. They believe that any publicly 
available damage and enforcement data should be comprehensive enough to 
demonstrate the effectiveness of the enforcement program while 
maintaining the confidentiality of the parties involved.
    AOPL and API commented that where States use alternative 
enforcement mechanisms in addition to civil penalties in Sec.  
198.55(a)(3), PHMSA should consider effective alternatives to civil 
penalties when assessing whether States have undertaken actions to 
ensure compliance.
    The IUB and NAPSR stated that Sec.  198.55(a)(3) contains two 
separate and unrelated provisions: One about assessment of civil 
penalties, and another about publicizing information on the enforcement 
program. They stated that if both provisions were adopted, these should 
be separated into two sections. However, they recommended that the 
second part should not be adopted. They stated that publicizing 
enforcement actions is not of itself an act of enforcement and should 
not be used to judge if State enforcement is effective.
    On whether State excavation damage prevention enforcement records 
should be made available to the public to the extent practicable, KCC 
believes the phrase ``to the extent practicable'' is vague. KCC 
suggested that PHMSA modify the NPRM to allow an open records act 
requirement similar to the Federal Freedom of Information Act 
requirements as an effective means of meeting this criterion.
    Pennsylvania One Call recommended that Sec.  198.55(a)(3) be 
amended to clarify that the size of the fine would be relative to the 
damage caused and the frequency of damage. Participation in a remedial 
education program may be a substitute for all or part of a fine where 
appropriate for the first offense. They also recommended that language 
should be inserted to reflect that transparency, while desirable as a 
general matter, may not always be possible under State law or may not 
be useful in settlement negotiations.
    TRA suggested that in Sec.  198.55(a)(3), the word ``ensure'' be 
replaced with the word ``promote,'' because no amount of civil 
penalties can ever ensure compliance.
    Southwest stated that any publicly available damage and enforcement 
data should be comprehensive enough to demonstrate the effectiveness of 
the enforcement program while maintaining the confidentiality of the 
parties involved.
Response
    In response to the comments from the KCC, PHMSA has developed a 
policy in the preamble to this final rule that clarifies how the 
evaluation criteria will be applied. In addition, PHMSA will post a 
policy document on the agency's Web site. PHMSA does not envision each 
State preparing and filing a report on the State's enforcement program. 
PHMSA staff will evaluate State damage prevention enforcement programs 
as part of the annual certification of State pipeline safety partners. 
PHMSA does not believe open records acts--or Freedom of Information Act 
(FOIA) requests--constitute a sufficient means of making enforcement 
information available to the public. PHMSA prefers to see enforcement 
records proactively

[[Page 43860]]

shared (via a Web site, for example), assuming the records can be 
shared legally and with regard to the rights of involved parties.
    PHMSA acknowledges the comments from Paiute and Southwest regarding 
the use of alternative enforcement actions, in lieu of civil penalties, 
to promote compliance with damage prevention laws. PHMSA will consider 
the adequacy of all enforcement actions taken by a State. PHMSA will 
also evaluate whether State law provides civil penalty authority to the 
enforcement agency and will evaluate past enforcement actions with the 
goal of determining if those actions have promoted compliance with 
State damage prevention laws. The policy in the preamble of this 
document further clarifies how the State program evaluation criteria 
will be applied.
    In response to the comments from AOPL and API, PHMSA believes that 
States can and do use alternative enforcement mechanisms (such as 
required training) to effectively encourage compliance with State 
damage prevention laws. However, PHMSA believes that civil penalties 
are the most effective deterrent to violation of the law.
    In response to IUB and NAPSR, PHMSA believes that civil penalty 
authority and publicizing enforcement actions are important components 
of adequate damage prevention law enforcement programs. However, a 
State having civil penalty authority is relatively more important to an 
adequate enforcement program than publicizing enforcement actions. 
PHMSA has developed a policy in the preamble to this final rule that 
describes how the evaluation criteria will be applied, including how 
the criteria will be weighted.
    In response to the KCC's comments about public records, PHMSA 
believes that transparency is an important component of an adequate 
enforcement program. PHMSA makes every effort to proactively make those 
records that are subject to Freedom of Information Act requirements 
public. PHMSA does this by posting records, to the extent practicable, 
to PHMSA's Web sites. PHMSA believes that State damage prevention law 
enforcement authorities should do the same in an effort to demonstrate 
the State's commitment to deterring excavation damage to pipelines 
through law enforcement. Additional clarification is made in the 
policies included in this preamble.
    In response to the comments from Pennsylvania One Call regarding 
Sec.  198.55(a)(3), PHMSA recognizes that States use alternatives to 
civil penalties, such as education requirements, for enforcement of 
State damage prevention laws. PHMSA believes that, under appropriate 
circumstances, using civil penalties is essential to adequate 
enforcement. PHMSA will be considerate of States' use of alternative 
enforcement actions when evaluating enforcement programs. In addition, 
PHMSA recognizes that transparency in enforcement actions may not 
always be possible under State law in every circumstance.
    PHMSA agrees with TRA's suggestion to replace the word ``ensure'' 
with the word ``promote'' in Sec.  198.55(a)(3). The regulatory 
language has been modified accordingly.
    PHMSA agrees with Southwest's comments regarding confidentiality 
concerns pertaining to enforcement records. PHMSA does not intend for 
States to violate the confidentiality of any party, and PHMSA only 
seeks for States to make publicly available records that demonstrate 
the effectiveness of the enforcement program as permitted by State law 
and as practicable with regard to the rights of all involved parties.

Comments on Sec.  198.55(a)(5)

    KCC stated that the phrase ``investigation practices that are 
adequate'' in this criterion is a vague phrase and one that requires 
additional guidance from PHMSA. KCC believes that this guidance, and an 
opportunity to comment on the guidance, should be part of the 
rulemaking process.
    Paiute and Southwest stated that investigation practices should be 
employed fairly and consistently to effectively determine the at-fault 
party. They suggested State investigators be trained in effective and 
consistent investigation practices.
    TRA stated that because excavation damage often is the result of 
partial failures of the excavator and the operator, it is difficult to 
always determine a single party who would qualify as the ``at-fault'' 
party in any specific situation. Therefore, TRA recommended that the 
language in Sec.  198.55(a)(5) be revised by replacing the phrase ``at-
fault party'' with the phrase ``responsible party or parties.''
Response
    PHMSA acknowledges KCC's request for clarification of how the State 
program evaluation criteria will be applied. This clarification is 
provided in the policy in the preamble to this final rule. PHMSA does 
not intend to subject this guidance to stakeholder comment as part of 
this rulemaking process. However, PHMSA did take into consideration 
comments from the NPRM in the development of this guidance.
    PHMSA agrees with Paiute and Southwest. State damage investigation 
practices should be fair and consistent to effectively determine the 
responsible party. PHMSA also agrees that State investigators should be 
trained in investigation practices. However, those issues are not 
within the scope of this final rule.
    PHMSA also agrees with TRA's suggestion to replace the phrase ``at-
fault party'' with the phrase, ``responsible party or parties'' in 
Sec.  198.55(a)(5). The regulatory language has been updated 
accordingly.

Comments on Sec.  198.55(a)(6) and (7)

    The IUB and NAPSR stated that Sec.  198.55(a)(6) and (7) would 
include in the evaluation of the effectiveness of a State damage 
prevention program whether the State's law contains provisions that 
have nothing to do with enforcement. They stated that 49 U.S.C. 
60114(f) does not authorize PHMSA to find State enforcement is 
inadequate due to unrelated deficiencies in the State law, and that 
only the adequacy of enforcement can be considered. Therefore, they 
recommended Sec.  198.55(a)(6) and (7) be deleted.
    The IUB stated that Congress directed PHMSA to conduct a study of 
the potential safety benefits and adverse consequences of other State 
exemptions; therefore, until that study is completed, the significance 
of State exemptions is undetermined. Attempting to link State 
exemptions to damage prevention enforcement, where it does not belong 
anyway, is contrary to the direction given by Congress regarding 
exemptions.
    AOPL and API suggested that a stop work requirement be added in 
Sec.  198.55(a)(6)(c). They suggested language that reads, ``An 
excavator who causes damage to a pipeline facility must immediately 
stop work at that location and report the damage to the owner or 
operator of the facility; and if the damage results in the escape of 
any material, gas or liquid, the excavator must immediately stop work 
at that location and promptly report to other appropriate authorities 
by calling the 911 emergency telephone number or another emergency 
telephone number.'' AOPL and API also suggested that the stop work 
requirement be added to Sec.  198.55(a)(6)(d) (new section). They 
suggested language that reads, ``Work stopped under subparagraph (c) 
may not resume until the pipeline operator determines it is safe to do 
so.'' Also, AOPL and API stated that they do not

[[Page 43861]]

oppose the AGA's recommendation that PHMSA adopt the full Common Ground 
Alliance best practices on actions an excavator must practice following 
a strike and release in this section. Kern River stated that the 
proposed criteria in Sec.  198.55(a)(6)(c)(i) and (ii) should first 
clarify that work must be stopped immediately when an excavator causes 
damage or suspected damage to a pipeline, whether there is a substance 
released or not.
    DCA and NUCA of Ohio stated that the criteria to determine the 
adequacy of the State law itself provided in Sec.  198.55(a)(6) are 
incomplete. They stated that PHMSA should restate the operator's 
responsibilities related to one-call participation and accurate 
locating and marking of their facilities in the criteria to determine 
the adequacy of a State damage prevention law described in the NPRM.
    NUCA of Ohio stated that while consideration of exemptions to 
damage prevention requirements is important, it is one-sided as 
currently written. Section 198.55(a)(7) asks: ``Does the state limit 
exemptions for excavators from its excavation damage prevention law?'' 
And answers: ``A state must provide to PHMSA a written justification 
for any exemptions for excavators from state damage prevention 
requirements.'' NUCA of Ohio stated the NPRM neglects to include 
consideration of exemptions to one-call membership requirements as well 
as from locating and marking responsibilities. As written, PHMSA would 
only consider enforcement of requirements subject to excavators in its 
criteria but not pipeline operator requirements.
    TPA stated that in Sec.  198.55(a)(6)(i), the words ``but no later 
than two hours following discovery of the damage'' should be added 
immediately following the word ``damage'' at the end of the subsection 
because of the need to provide clear guidance on the outer limit of 
time for a damage notification to occur. In this same subsection, TPA 
recommended that the phrase ``owner or'' be deleted because the 
pipeline safety regulations are directed towards operators of pipeline 
facilities, and the most effective communication to address damage is 
with the person who operates the pipeline. In Sec.  
198.55(a)(6)(c)(ii), TRA suggested that the language should be revised 
in the same manner as what TPA proposed for the language of Sec.  
196.109 to eliminate ambiguity in the provision and promote timely 
contact of the operator as well as 911.
    The Missouri PSC stated that the Missouri damage prevention statute 
requires that damages to underground facilities must be reported to 
MOCS by the excavator. MOCS then immediately notifies the facility 
owner or operator of the damage. This is a method that works well in 
Missouri. Further, the excavator may not have contact information for 
the underground facility owner/operator but can readily contact MOCS by 
dialing ``811.'' The Missouri PSC requested clarification from PHMSA 
that this notification process (the excavator reporting damage to MOCS) 
is acceptable (meets the criteria) and that damages do not have to be 
reported directly to the owner or operator of the pipeline facility.
Response
    In response to the comments from the IUB and NAPSR, PHMSA does have 
the authority to evaluate State damage prevention laws in order to 
determine the adequacy of enforcement of the laws. PHMSA believes that 
an adequate law enforcement program is dependent upon an adequate law 
that, at a minimum, contains the requirements of Sec.  195.55(a)(6) and 
does not excessively exempt parties from damage prevention 
responsibilities.
    In response to the IUB, Congress did direct PHMSA to conduct a 
study of State exemptions in the PHMSA reauthorization bill of 2011 
(Public Law 112-90). This final rule is an extension of the PIPES Act 
of 2006. PHMSA agrees that more information about the safety 
implications of exemptions is required, but, in general, PHMSA opposes 
exemptions in State damage prevention laws. However, some exemptions 
may be warranted, especially when justified by data, which is why PHMSA 
is requiring a written justification of exemptions in State damage 
prevention laws. In addition, as described in the policies included in 
this preamble, PHMSA does not intend to determine the adequacy of a 
State enforcement program based solely on the existence of exemptions.
    PHMSA acknowledges the recommendation from AOPL, API, and Kern 
River to include a ``stop work'' requirement to Sec.  198.55(a)(6)(c), 
which is now Sec.  198.55(a)(6)(iii), and Sec.  198.55(a)(6)(d), which 
is now Sec.  198.55(a)(6)(iv). However, PHMSA has not added this 
requirement to the final regulatory language. The requirement was not 
proposed in the NPRM and has therefore not been subject to public 
review and comment. In addition, PHMSA believes that communicating a 
Federal stop work requirement to excavators would be very difficult, 
thereby making the provision challenging to enforce. PHMSA has also not 
adopted the recommendation from AGA to require compliance with CGA best 
practices on actions an excavator must practice following a pipeline 
damage and product release. PHMSA strongly supports the CGA best 
practices but does not intend to implement the best practices through 
this regulation.
    PHMSA recognizes the concerns of DCA and NUCA of Ohio regarding the 
need to enforce operators' responsibilities in the damage prevention 
process. These responsibilities are codified at 49 CFR 192.614 and 
195.442 and 49 U.S.C. 60114. Therefore, using these requirements as a 
criterion for determining the adequacy of enforcement programs is 
redundant. However, PHMSA recognizes the need for States to more 
vigorously enforce these existing requirements on pipeline operators. 
PHMSA believes that to ensure fair and consistent enforcement of damage 
prevention requirements, States should consistently enforce 49 CFR 
192.614 and 195.442 and 49 U.S.C. 60114.
    In response to the comments from NUCA of Ohio regarding Sec.  
198.55(a)(7), PHMSA deliberately omitted exemptions for one-call 
membership. While exemptions regarding one-call membership may have the 
potential to impact pipeline safety, especially with regard to sewer 
cross-bores, PHMSA believes that notification exemptions likely have 
the greatest potential for negative impact on pipeline safety. Pipeline 
operators are required by existing regulations to be members of one-
calls in the States in which they operate, which is the fundamental 
membership requirement that has the greatest positive impact on 
excavation damage prevention for pipelines.
    PHMSA acknowledges TPA's and TRA's suggestion regarding the 2-hour 
time limit in Sec.  198.55(a)(6)(i), but PHMSA has opted not to set a 
specific time limit on notification to the operator. PHMSA believes 
that the regulatory language, as written, is enforceable. PHMSA agrees 
with TPA's recommendation to eliminate the phrase ``owner or'' from 
this same section; the regulatory language has been updated 
accordingly.
    PHMSA affirms that the notification process described by Missouri 
PSC is acceptable and meets the intent of this criterion, provided the 
notification from the excavator to the MOCS and from MOCS to the 
pipeline operator is prompt.

Comments on Sec.  198.55(a)(7)

    KCC stated that the Kansas damage prevention laws contain 
negotiated

[[Page 43862]]

exemptions for various categories of excavators, such as tillage for 
agricultural purposes. KCC stated that most tillage occurs during a 
very small time period over millions of acres in the State. Requiring 
all farmers to request locates, and for the operators to provide such 
locates each year during the very narrow planting season window, would 
be a logistical nightmare with little to no benefit if pipeline depth 
of cover is regularly monitored and maintained by the operator. KCC 
stated that Federal enforcement of a standard applied to pipeline 
rights[hyphen]of[hyphen]way, which differs from the statewide standard, 
would lead to confusion and possibly an increase in accidents. The KCC 
objected to the proposed requirement that States provide PHMSA a 
written justification for any exemptions for excavators from State 
damage prevention requirements. KCC believes that PHMSA has no 
authority to require States to provide such justifications.
    The Missouri PSC stated that some exemptions may be reasonable. The 
Missouri PSC requested clarification as to what exemptions, if any 
(beyond a homeowner hand-digging on their private property), may be 
acceptable. Also, the Missouri PSC stated that a written justification 
for any exemptions would lead to PHMSA approving or allowing that 
exemption to remain in the State damage prevention law.
    NYDPS commented that exemptions from State excavation damage 
prevention programs should be limited to ensure public safety, but 
States and PHMSA must appropriately balance the risks and costs of such 
exemptions. NYDPS stated that exempting excavators that are only using 
hand tools from providing notice of intent to excavate to the State 
one-call system may make sense in individual States, particularly in 
States with significant urban areas, since most excavation would 
require powered equipment to remove pavement in those States. NYDPS 
stated that requiring anyone (except a homeowner excavating on his or 
her own property) to provide notice of intent to excavate when only 
employing hand tools would impose significant costs on facility members 
to respond to requests for mark-outs, and these costs would, in the 
case of regulated utilities, be passed on to customers. Therefore, 
NYDPS stated that PHMSA should consider such exemptions on a case-by-
case basis in light of the particular attributes of the State and its 
excavation damage prevention program.
    GPA stated that to promote the message of pipeline damage 
prevention, it is necessary to include references to the nationwide 811 
one-call number in the final rule, and any exemptions to the 
requirements to use the one-call system should be severely limited.
    National Grid stated that PHMSA should consider where exemptions 
from membership in one-call centers and/or exemptions from compliance 
with one-call regulations exist--those exemptions may be a matter of 
law in some States, and they are likely beyond the influence of a 
regulatory commission. Also, National Grid stated that, as a penalty, 
the reduction in State damage prevention program funding will prove 
counterproductive in cases where the State commission has no authority 
to eliminate exemptions. Instead, National Grid suggested providing 
incentives to States to eliminate exemptions.
Response
    PHMSA has clarified the scope and applicability of the evaluation 
criteria, including criterion number 7, in the policy in the preamble 
of this final rule. PHMSA's purpose in requiring States to address 
exemptions is to raise awareness of the potential impact of exemptions 
on pipeline safety. In general, PHMSA believes that all excavators 
should be required to make notification to a one-call before engaging 
in excavation activity. However, PHMSA acknowledges that the subject of 
exemptions is complex. Some exemptions to State damage prevention laws 
are justifiable with data that demonstrates that the exemptions have no 
appreciable effect on pipeline safety. By focusing on exemptions in 
State laws, PHMSA intends to encourage States to investigate the impact 
of exemptions on pipeline safety and, whenever possible, justify the 
exemptions with data.

General Comments Regarding State Damage Prevention Enforcement Programs

    NUCA of Ohio stated that excavators are commonly determined to be 
at fault for failing to notify the one-call center prior to excavation, 
but what is significantly lacking is enforcement of requirements that 
pipeline operators accurately mark their facilities as prescribed by 
State law. The enforcement authorities could impose civil penalties or 
other appropriate measures regardless of the stakeholder involved.
    NYDPS agrees with PHMSA's proposed case-by-case determination of 
program adequacy. NYDPS stated that while the proposed penalties will 
likely have the effect of deterring willful violations, NYDPS believes 
that a State excavation damage prevention program with substantially 
less in civil penalties can also achieve the same result. NYDPS stated 
that this is especially true when one considers that most excavating 
companies are small, closely held corporations or proprietorships, and 
penalties in the range of five figures are generally enough to put 
these entities out of business or cause severe economic hardship.
    NYDPS said it is concerned with PHMSA's proposal to evaluate 
program adequacy with regard to penalty levels by determining whether 
they are sufficient to deter violations. It is unclear to NYDPS how 
PHMSA would make determinations of ``sufficient to deter violations.'' 
NYDPS stated that the standard is subjective and may imply some level 
of forecasting and/or assumptions. NYDPS suggested that with regard to 
penalty levels, PHMSA should review a State's excavation damage 
prevention program in terms of the annual decrease in underground 
facility damages and the magnitude of tickets processed by the State's 
damage prevention program. NYDPS stated that if a State can show a 
favorable rate over a period of years in underground facility damages 
per 1000 ``one-call tickets'' and a general downward trend, PHMSA 
should determine that the penalty levels under that particular State 
program are sufficient to deter noncompliance among the regulated 
community. NYDPS recommended that PHMSA take into account the level of 
compliance and maturity of the State's damage prevention program 
because these factors will have a significant impact on a State's 
annual data. NYDPS recommended, in addition, that the magnitude of 
excavation work within a State should be considered in PHMSA's review 
since the amount of excavation work varies depending on the particular 
characteristics of each State (e.g., population, the mix of urban and 
rural areas, the size of its urban centers). NYDPS recommended that 
when reviewing State programs, PHMSA should take into account other 
important aspects of damage prevention programs, including but not 
limited to outreach and education, damage prevention meetings among 
facility owners and excavators, and training programs.
    NYDPS stated that PHMSA should also take into account the deterrent 
effect of metrics in rate plans for regulated utilities that impose 
negative rate adjustments on a company for failure to meet certain 
metrics related to their performance of required duties and 
responsibilities under the State excavation damage prevention program 
law. NYDPS stated that these

[[Page 43863]]

performance metrics are generally part of most large gas utilities' 
rate plans in New York, with negative rate adjustments imposed for 
failure to meet applicable standards. NYDPS stated that PHMSA should 
take into account the effect of requiring training for those who 
violate the requirements of a State excavation damage prevention 
program. Such non-monetary sanctions have a positive effect on future 
compliance, particularly with regard to small excavating companies and 
their employees, and tend to prevent or deter future willful or 
unintentional noncompliance.
    Pennsylvania One Call suggests that where PHMSA determines that a 
State program's effectiveness is compromised by the lack of adequate 
resources, PHMSA should comment on the problem and consider 
establishing a mechanism to assist the State in making up such a 
revenue shortfall; fines should be earmarked for enforcement activities 
and educational efforts related to damage prevention.
    NYDPS supports PHMSA's evaluation of whether the State employs 
investigation practices that are adequate to determine the at-fault 
party when excavation damage occurs. NYDPS agrees with PHMSA that State 
programs must be capable of determining fault, since investigative 
practices are critical to the success and adequacy of State excavation 
damage prevention programs. However, NYDPS believes that the NPRM is 
too narrowly focused on determining the person or entity at fault for 
pipeline damages. Violations may occur without any damage to 
facilities; therefore, citations for violations of damage prevention 
program rules where no damage occurred should be important to correct 
behavior that could result in damages in future excavations.
Response
    PHMSA acknowledges the concerns of NUCA of Ohio regarding the need 
to emphasize the responsibilities of all stakeholders, including 
pipeline operators, in the damage prevention process. Federal 
regulations at 49 CFR 192.614 and 195.442 address the damage prevention 
responsibilities of pipeline operators. PHMSA will enforce these 
regulations in any Federal enforcement case related to this final rule; 
PHMSA will also work with relevant States to ensure these regulations 
are enforced with operators under State jurisdiction.
    PHMSA understands that many excavators are unable to pay excessive 
fines. PHMSA encourages States to enforce their own damage prevention 
regulations and assess fines and other penalties accordingly. PHMSA 
intends to enforce this final rule with civil penalties in accordance 
with 49 U.S.C. 190.225.
    PHMSA acknowledges the comments from NYDPS. PHMSA will use the 
criteria in Sec.  198.55 to assess the adequacy of State damage 
prevention law enforcement programs. The applicability of the criteria 
is clarified in the policy statement in the preamble to this final 
rule. PHMSA believes that the criteria and the accompanying policy take 
into account the concerns raised by NYDPS. PHMSA understands that State 
damage prevention programs are highly variable and PHMSA intends to 
give consideration to the unique aspects of State enforcement programs 
during annual evaluations.
    PHMSA acknowledges Pennsylvania One Call's recommendation to 
clearly explain the reasons for any findings of State enforcement 
program inadequacy. PHMSA intends to make these explanations public by 
making all of PHMSA's findings pertaining to State enforcement program 
evaluations available on PHMSA's Web sites. However, PHMSA is limited 
by law with regard to how civil penalties are collected. PHMSA may not 
use civil penalties to create funds for specific purposes. Civil 
penalties assessed by PHMSA are paid directly to the U.S. Treasury.
    PHMSA acknowledges the comments from NYDPS regarding the narrow 
focus of Sec.  198.55(a)(5). However, this final rule is intentionally 
constructed to be narrowly focused in this regard. PHMSA will likely 
only conduct enforcement proceedings in cases of actual excavation 
damage to pipelines and, most likely, only in cases of egregious 
violations of the Federal excavation standard set forth in this final 
rule. PHMSA encourages States to implement adequate enforcement 
programs that can address the variety of potential violations to State 
laws and regulations.

Comments on the Regulatory Analysis and Notices

    AAR stated that the Preliminary Regulatory Evaluation errs in 
stating that the NPRM would not impose any new costs on excavators. The 
AAR stated that railroads do not routinely contact one-call centers for 
the constant maintenance-of-way work undertaken along their 140,000 
miles of right-of-way; therefore, there would be a significant cost to 
the railroads, the call centers, and utilities if such calls were 
required. AAR stated that PHMSA has not shown a safety benefit from 
requiring railroads to participate in one-call systems for activities 
that pose no threat to underground pipelines. AAR stated that from a 
cost-benefit perspective, it makes no sense to require railroads to 
notify one-call centers for routine maintenance-of-way activities.
    CenterPoint stated that one cost that PHMSA has not adequately 
addressed is the cost to administer a damage prevention program. 
Whether the State incurs the expense to meet the proposed criteria, or 
PHMSA takes over the enforcement, these costs are significant and would 
vary depending on the reporting system adopted. Therefore, CenterPoint 
requested that PHMSA predict the number of States expected to be held 
inadequate to determine the cost of this rulemaking action.
    IUB stated that the evaluation for cost analysis states the 
proposed Federal excavation requirement mimics the excavation 
requirement in each State and does not impose any additional costs on 
regulators, but the proposed definitions of ``excavation'' and 
``excavator'' in the NPRM would not mimic State law and would set 
different standards for when a notice of excavation is required than a 
State may require. IUB stated that the costs to excavators of 
contending with two sets of notice requirements are not reflected in 
this evaluation. IUB stated that the cost evaluation states that PHMSA 
believes the NPRM does not mandate States to have adequate excavation 
damage prevention enforcement programs. IUB stated that perhaps it does 
not do so explicitly, but it certainly attempts to do so implicitly, as 
grant penalties are proposed for States without adequate enforcement in 
Sec.  198.53. In addition, IUB stated that PHMSA's data stated that an 
effective rate for Federal enforcement of even 50 percent of the State 
success rate is over-optimistic; that the 63 percent excavation damage 
incident reduction rate the evaluation attributes solely to state 
enforcement, with no consideration of other factors, is exaggerated; 
and that certain costs were omitted. IUB believes that whether proper 
consideration of these issues would cause the benefit/cost ratio to 
become unfavorable is unclear, but the 19-to-1 ratio stated in the 
rulemaking preamble is certainly highly inflated.
    The KCC questions the accuracy of PHMSA's cost estimates as 
unrealistic and that they are based upon flawed assumptions. KCC stated 
that the NPRM states, ``PHMSA believes that excavators will not incur 
any additional costs because the Federal excavation standard, which is 
also a self-executing standard, mirrors the excavation standard in each 
state and does not

[[Page 43864]]

impose any additional costs on excavators.'' KCC stated that this 
assumption is demonstrably not true and may even conceal the full scope 
of PHMSA's NPRM. KCC stated that the cost[hyphen]benefit analysis makes 
it sound like PHMSA is proposing only to enforce State standards when 
the state's enforcement efforts are deemed inadequate. KCC stated that 
if the rulemaking were confined in that manner, then the KCC's views 
might be different.
    NAPSR stated that PHMSA conducted a study that reviewed three 
States before and after they had enforcement programs and concluded 
that excavation enforcement programs might decrease pipeline excavation 
damages over time, and therefore, decrease fatalities, injuries, and 
property damage. NAPSR stated that for the States without enforcement 
programs, the NPRM does not indicate that PHMSA reviewed whether these 
States have experienced damage reduction on a year-to-year basis as the 
result of non-enforcement damage prevention initiatives--PHMSA only 
documents total damages and incidents over a 22-year period. In order 
to show the true advantages of a damage prevention enforcement program 
versus non-enforcement initiatives, NAPSR stated that it would be 
beneficial to show the damage trending rates of the States without 
enforcement programs. Also, NAPSR stated that PHMSA states that they 
intend to investigate all incidents in States without pipeline 
excavation damage enforcement programs. In the NPRM, PHMSA suggests 
that the 63 percent reduction is a helpful starting point on which to 
estimate the benefits of this final rule. NAPSR stated that PHMSA 
utilized three separate rates to conservatively evaluate the benefits 
of this final rule, but any significant reduction in pipeline damages 
would depend upon implementation of not just occasional incident 
enforcement, but all nine elements.
Response
    As stated in responses to other comments throughout this preamble, 
PHMSA will be considerate of existing exemptions in State damage 
prevention laws. This includes exemptions for railroads. PHMSA's 
position is further clarified in the policy in the preamble of this 
final rule.
    As of 2012, PHMSA already identified nine States without excavation 
damage prevention enforcement programs. Therefore, unless these States 
are able to begin enforcing their excavation damage prevention laws 
before the effective date of this final rule, PHMSA would likely deem 
those State programs inadequate. PHMSA's preliminary cost/benefit 
estimates were based on assumptions that PHMSA would be enforcing its 
rules in States without excavation enforcement programs. With regard to 
the States already enforcing their excavation damage enforcement 
programs, this rulemaking action has no effect.
    PHMSA is modifying some definitions to address the IUB's concerns. 
Also, as stated in the regulatory analysis document (same docket 
number), PHMSA agrees and has noted that all nine elements do 
contribute to the reduction of excavation incidents.
    It appears to PHMSA that KCC has misunderstood the NPRM because 
PHMSA has no intention of enforcing the Federal excavation standard in 
States where the States exercise their enforcement authorities and 
their excavation damage enforcement programs have not been determined 
to be inadequate.
    PHMSA agrees with NAPSR's assessment that all nine elements are 
very important in reducing pipeline excavation damage. However, this 
action is limited to enforcement. Therefore, available enforcement data 
was used to determine the effects of excavation damage enforcement 
prevention programs, and the results show that enforcement may be a 
major tool in decreasing underground pipeline excavation damages.

Existing Requirements Applicable to Owners and Operators of Pipeline 
Facilities

    Under existing pipeline safety regulations, 49 CFR 192.614 for gas 
pipelines and 49 CFR 195.442 for hazardous liquid pipelines, operators 
are required to have written excavation damage prevention programs that 
require, in part, that the operator provide for marking its pipelines 
in the area of an excavation for which the excavator has submitted a 
locate request.

Federal Pipeline Damage Prevention Regulations

    No commenters that addressed the existing pipeline safety damage 
prevention regulations, 49 CFR 192.614 and 195.442, considered these 
requirements to be inadequate, nor did they believe that PHMSA needed 
to make these requirements more detailed or specific. Several commented 
that to do otherwise would lead to confusion where the Federal 
requirements were different from State standards.

V. Regulatory Analysis and Notices

    This final rule amends the Federal Pipeline Safety Regulations (49 
CFR parts 190-199) to establish criteria and procedures PHMSA will use 
to determine the adequacy of State pipeline excavation damage 
prevention law enforcement programs.

Statutory/Legal Authority for This Rulemaking

    PHMSA's general authority to publish this final rule and prescribe 
pipeline safety regulations is codified at 49 U.S.C. 60101 et seq. 
Section 2(a) of the PIPES Act (Pub. L. 109-468) authorizes the 
Secretary of Transportation to enforce pipeline damage prevention 
requirements against persons who engage in excavation activity in 
violation of such requirements provided that, through a proceeding 
established by rulemaking, the Secretary has determined that the 
relevant State's enforcement is inadequate to protect safety.

Executive Order 12866, Executive Order 13563, and DOT Policies and 
Procedures

    This final rule is a non-significant regulatory action under 
section 3(f) of Executive Order 12866 (58 FR 51735) and 13563, and 
therefore was not reviewed by the Office of Management and Budget 
(OMB). This final rule is non-significant under the Regulatory Policies 
and Procedures of the Department of Transportation (44 FR 11034).
    Executive Orders 12866 and 13563 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 analyzed the costs and benefits of this final rule. PHMSA expects 
the total cost of this final rule to be $1.8 million, and the benefits 
to be $31 million.\9\
---------------------------------------------------------------------------

    \9\ These numbers are discounted over 10 years at 7%.
---------------------------------------------------------------------------

    PHMSA compared the overall costs of this final rule to the average 
costs associated with a single excavation damage incident. PHMSA found 
that this final rule has three separate potential cost impacts: (1) The 
costs to excavators to comply with the Federal excavation standard; (2) 
the cost to States to have their enforcement programs reviewed, to 
appeal a determination of ineffectiveness, and to ask for 
reconsideration; and (3) the cost impact on the Federal Government to 
enforce the Federal excavation standard.

[[Page 43865]]

With regard to the potential cost impacts on excavators, PHMSA believes 
that excavators will not incur any additional costs because the Federal 
excavation standard, which is also a self-executing standard, is a 
minimum standard. Since it is a minimum standard, all States already 
have excavation standards that are more stringent than the Federal 
standard. Therefore, this minimum standard imposes no additional costs 
on excavators. The cost impacts on States are those costs associated 
with having the State enforcement programs reviewed (estimated to be 
$20,000 per year), appealing a determination of ineffectiveness 
(estimated to be a one-time cost of $125,000), asking for 
reconsideration (estimated to be a one-time cost of $350,000 (14 x 
$25,000)). Therefore, assuming 14 States would be deemed to have 
inadequate enforcement programs, the total estimated first year cost 
impacts on States are (($20,000 (annually) + (14 x $25,000) + (5 x 
$25,000)) = $495,000. The annual cost impacts on States in subsequent 
years are estimated to be $20,000. The annual cost impacts on the 
Federal Government are estimated to be approximately $163,145. 
Therefore, the total first-year cost of this final rule is estimated to 
be $658,145 ($495,000 + $163,145). In the following years, the costs 
are estimated to be approximately $183,145 ($20,000 + $163,145) per 
year. The total cost over 10 years, with a 3 percent discount rate, is 
$2,084,132, and at a 7 percent discount rate is $1,720,214. PHMSA 
specifically asked for comments on whether it had adequately captured 
the scope and size of the costs of this final rule but, other than 
general comments, PHMSA did not receive any identified costs.
    To determine the benefits, PHMSA was able to obtain data for three 
States over the course of the establishment of their excavation damage 
prevention programs (additional information about these States can be 
found in the regulatory analysis that is in the public docket). Each of 
the three States had a decrease of at least 63 percent in the number of 
excavation damage incidents occurring after they initiated their 
enforcement programs. While many factors can contribute to the decrease 
in State excavation damage incidents, the data from these States was 
useful in helping to estimate the benefits of this final rule. PHMSA 
utilized three separate effectiveness rates to conservatively evaluate 
the benefits of this final rule. The rates are based on the reduction 
of incidents of the three States studied and more conservative 
effective rates because State pipeline programs vary widely, which may 
lead to a lower effective rate than that of the three States PHMSA 
analyzed. One expected unquantifiable benefit is that this rulemaking 
action will provide an increased deterrent to violate one-call 
requirements (although requirements vary by State, a one-call system 
allows excavators to call one number in a given State to ascertain the 
presence of underground utilities) and the attendant reduction in 
pipeline incidents and accidents caused by excavation damage. Based on 
incident reports submitted to PHMSA, failure to use an available one-
call system is a known cause of pipeline accidents.
    The average annual benefits range from $4,642,829 to $14,739,141. 
Evaluating just the lower range of benefits over 10 years results in a 
total benefit of over $40,790,000 with a 3 percent discount rate, and 
over $31,150,000 with a 7 percent discount rate. In addition, over the 
past 24 years, the average reportable incident caused $282,930 in 
property damage alone. Therefore, if this regulatory action prevents 
just one average reportable incident per year, this final rule would be 
cost beneficial.
    A regulatory evaluation containing a statement of the purpose and 
need for this rulemaking and an analysis of the costs and benefits is 
available in the docket.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), PHMSA 
must consider whether rulemaking actions would have a significant 
economic impact on a substantial number of small entities. Pursuant to 
5 U.S.C. 603, PHMSA has made a determination that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. This determination is based on the minimal cost to excavators 
to call the one-call center. In addition, this final rule is procedural 
in nature, and its purpose is to set forth an administrative 
enforcement process for actions that are already required. This final 
rule has no material effect on the costs or burdens of compliance for 
regulated entities, regardless of size. Thus, the marginal cost, if 
any, that is imposed by the final rule on regulated entities, including 
small entities, is not significant. Based on the facts available about 
the expected impact of this final rule, I certify that this final rule 
will not have a significant economic impact on a substantial number of 
small entities.
    Since the Regulatory Flexibility Act does not require a final 
regulatory flexibility analysis when a rule will not have a significant 
economic impact on a substantial number of small entities, such an 
analysis is not necessary for this final rule.

Executive Order 13175

    PHMSA has analyzed this final rule according to the principles and 
criteria in Executive Order 13175, ``Consultation and Coordination with 
Indian Tribal Governments.'' Because this final rule will not 
significantly or uniquely affect the communities of the Indian tribal 
governments or impose substantial direct compliance costs, the funding 
and consultation requirements of Executive Order 13175 do not apply.

Paperwork Reduction Act

    Pursuant to 5 CFR 1320.8(d), PHMSA is required to provide 
interested members of the public and affected agencies with an 
opportunity to comment on information collection and recordkeeping 
requests. PHMSA estimates that this final rule will cause an increase 
to the currently approved information collection titled ``Gas Pipeline 
Safety Program Certification and Hazardous Liquid Pipeline Safety 
Program Certification'' identified under OMB Control Number 2137-0584. 
Based on this final rule, PHMSA estimates a 20 percent reporting time 
increase to States with gas pipeline safety program certifications/
agreements. PHMSA estimates the increase at 12 hours per respondent for 
a total increase of 612 hours (12 hours * 51 respondents). As a result, 
PHMSA has submitted an information collection revision request to OMB 
for approval based on the requirements in this final rule. The 
information collection is contained in the pipeline safety regulations, 
49 CFR parts 190-199. The following information is provided for that 
information collection: (1) Title of the information collection; (2) 
OMB control number; (3) Current expiration date; (4) Type of request; 
(5) Abstract of the information collection activity; (6) Description of 
affected public; (7) Estimate of total annual reporting and 
recordkeeping burden; and (8) Frequency of collection. The information 
collection burden for the following information collection will be 
revised as follows:
    Title: Gas Pipeline Safety Program Certification and Hazardous 
Liquid Pipeline Safety Program Certification.
    OMB Control Number: 2137-0584.
    Current Expiration Date: October 31, 2017.
    Abstract: A State must submit an annual certification to assume 
responsibility for regulating intrastate

[[Page 43866]]

pipelines, and certain records must be maintained to demonstrate that 
the State is ensuring satisfactory compliance with the pipeline safety 
regulations. PHMSA uses that information to evaluate a State's 
eligibility for Federal grants.
    Affected Public: State and local governments.
    Annual Reporting and Recordkeeping Burden:
    Total Annual Responses: 67.
    Total Annual Burden Hours: 4,532 (this estimate includes an 
increase of 612 hours).
    Frequency of Collection: Annually and occasionally at State's 
discretion.

Requests for a copy of this information collection should be directed 
to Angela Dow, Office of Pipeline Safety (PHP-30), Pipeline and 
Hazardous Materials Safety Administration (PHMSA), 2nd Floor, 1200 New 
Jersey Avenue SE., Washington, DC 20590-0001, Telephone 202-366-4595.

Unfunded Mandates Reform Act of 1995

    This final rule will not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It will not result in costs of 
$153 million, adjusted for inflation, or more in any one year 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 this final rule.

National Environmental Policy Act

    PHMSA analyzed this final rule in accordance with section 102(2)(c) 
of the National Environmental Policy Act (42 U.S.C. 4332), the Council 
on Environmental Quality regulations (40 CFR parts 1500-1508), and DOT 
Order 5610.1C, and has determined that this action, which is designed 
to reduce pipeline accidents and spills, will not significantly affect 
the quality of the human environment. An environmental assessment of 
this final rule is available in the docket.

Executive Order 13132

    PHMSA has analyzed this final rule according to the principles and 
criteria of Executive Order 13132 (``Federalism''). A rule has 
implications for Federalism under Executive Order 13132 if it has a 
substantial direct effect on State or local governments, on the 
relationship between the national government and the States, or on the 
distribution of powers and responsibilities among the various levels of 
government.
    The Federal pipeline safety statutes in 49 U.S.C. 60101, et seq., 
create a strong Federal-State partnership for ensuring the safety of 
the Nation's interstate and intrastate pipelines. That partnership 
permits States to regulate intrastate pipelines after they certify to 
PHMSA, among other things, that they have and are enforcing standards 
at least as stringent as the Federal requirements and are promoting a 
damage prevention program. PHMSA provides Federal grants to States to 
cover a large portion of their pipeline safety program expenses, and 
PHMSA also makes grants available to assist in improving the overall 
quality and effectiveness of their damage prevention programs.
    In recognition of the value of this close partnership, PHMSA has 
made and continues to make every effort to ensure that our State 
partners have the opportunity to provide input on this final rule. For 
example, at the ANPRM stage, PHMSA sought advice from NAPSR and offered 
NAPSR officials the opportunity to meet with PHMSA and discuss issues 
of concern to the States. As a result of these consultation efforts 
with State officials and their comments on the ANPRM, PHMSA became 
aware of State concerns regarding the rigorousness of the criteria for 
program effectiveness. PHMSA had taken these concerns into account in 
developing the NPRM and asked for comments from State and local 
governments on any other Federalism issues. PHMSA received no 
additional comments on any impacts to the State and local governments.
    Under this final rule, Federal administrative enforcement action 
against an excavator that violates damage prevention requirements will 
be taken only in the demonstrable absence of enforcement by a State 
authority. Additionally, the final rule will establish a framework for 
evaluating State programs individually so that the exercise of Federal 
administrative enforcement in one State has no effect on the ability of 
all other States to continue to exercise State enforcement authority. 
This final rule will not preempt State law in the State where the 
violation occurred, or any other State, but will authorize Federal 
enforcement in the limited instance explained above. Finally, a State 
that establishes an effective damage prevention enforcement program has 
the ability to be recognized by PHMSA as having such a program.
    For the reasons discussed above, and based on the results of our 
consultations with the States, PHMSA has concluded this final rule will 
not have a substantial direct effect 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. In 
addition, this final rule does not impose substantial direct compliance 
costs on State and local governments. Accordingly, the consultation and 
funding requirements of Executive Order 13132 do not apply.

Executive Order 13211

    This final rule is not a ``significant energy action'' under 
Executive Order 13211 (Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use). It is not 
likely to have a significant adverse effect on supply, distribution, or 
energy use. Further, the Office of Information and Regulatory Affairs 
has not designated this final rule as a significant energy action.

Privacy Act Statement

    Anyone may search the electronic form of all comments received for 
any of our dockets. You may review DOT's complete Privacy Act Statement 
in the Federal Register published on April 11, 2000 (70 FR 19477), or 
visit http://www.regulations.gov.

List of Subjects

49 CFR Part 196

    Administrative practice and procedure, Pipeline safety, Reporting 
and recordkeeping requirements.

49 CFR Part 198

    Grant programs-transportation, Pipeline safety, Reporting and 
recordkeeping requirements.

    For the reasons discussed in the preamble, PHMSA amends 49 CFR 
subchapter D as follows:

0
1. Part 196 is added to read as follows:

PART 196--PROTECTION OF UNDERGROUND PIPELINES FROM EXCAVATION 
ACTIVITY

Subpart A--General
196.1 What is the purpose and scope of this part?
196.3 Definitions.
Subpart B--Damage Prevention Requirements
196.101 What is the purpose and scope of this subpart?
196.103 What must an excavator do to protect underground pipelines 
from excavation-related damage?
196.105 [Reserved]
196.107 What must an excavator do if a pipeline is damaged by 
excavation activity?
196.109 What must an excavator do if damage to a pipeline from 
excavation activity causes a leak where product is released from the 
pipeline?
196.111 What if a pipeline operator fails to respond to a locate 
request or fails to accurately locate and mark its pipeline?

[[Page 43867]]

Subpart C--Administrative Enforcement Process
196.201 What is the purpose and scope of this subpart?
196.203 What is the administrative process PHMSA will use to conduct 
enforcement proceedings for alleged violations of excavation damage 
prevention requirements?
196.205 Can PHMSA assess administrative civil penalties for 
violations?
196.207 What are the maximum administrative civil penalties for 
violations?
196.209 May other civil enforcement actions be taken?
196.211 May criminal penalties be imposed?

    Authority: 49 U.S.C. 60101 et seq.; and 49 CFR 1.97.

Subpart A--General


Sec.  196.1  What is the purpose and scope of this part?

    This part prescribes the minimum requirements that excavators must 
follow to protect underground pipelines from excavation-related damage. 
It also establishes an enforcement process for violations of these 
requirements.


Sec.  196.3  Definitions.

    Damage or excavation damage means any excavation activity that 
results in the need to repair or replace a pipeline due to a weakening, 
or the partial or complete destruction, of the pipeline, including, but 
not limited to, the pipe, appurtenances to the pipe, protective 
coatings, support, cathodic protection or the housing for the line 
device or facility.
    Excavation refers to excavation activities as defined in Sec.  
192.614, and covers all excavation activity involving both mechanized 
and non-mechanized equipment, including hand tools.
    Excavator means any person or legal entity, public or private, 
proposing to or engaging in excavation.
    One-call means a notification system through which a person can 
notify pipeline operators of planned excavation to facilitate the 
locating and marking of any pipelines in the excavation area.
    Pipeline means all parts of those physical facilities through which 
gas, carbon dioxide, or a hazardous liquid moves in transportation, 
including, but not limited to, pipe, valves, and other appurtenances 
attached or connected to pipe (including, but not limited to, tracer 
wire, radio frequency identification or other electronic marking system 
devices), pumping units, compressor units, metering stations, regulator 
stations, delivery stations, holders, fabricated assemblies, and 
breakout tanks.

Subpart B--Damage Prevention Requirements


Sec.  196.101  What is the purpose and scope of this subpart?

    This subpart prescribes the minimum requirements that excavators 
must follow to protect pipelines subject to PHMSA or State pipeline 
safety regulations from excavation-related damage.


Sec.  196.103  What must an excavator do to protect underground 
pipelines from excavation-related damage?

    Prior to and during excavation activity, the excavator must:
    (a) Use an available one-call system before excavating to notify 
operators of underground pipeline facilities of the timing and location 
of the intended excavation;
    (b) If underground pipelines exist in the area, wait for the 
pipeline operator to arrive at the excavation site and establish and 
mark the location of its underground pipeline facilities before 
excavating;
    (c) Excavate with proper regard for the marked location of 
pipelines an operator has established by taking all practicable steps 
to prevent excavation damage to the pipeline;
    (d) Make additional use of one-call as necessary to obtain locating 
and marking before excavating to ensure that underground pipelines are 
not damaged by excavation.


Sec.  196.105  [Reserved]


Sec.  196.107  What must an excavator do if a pipeline is damaged by 
excavation activity?

    If a pipeline is damaged in any way by excavation activity, the 
excavator must promptly report such damage to the pipeline operator, 
whether or not a leak occurs, at the earliest practicable moment 
following discovery of the damage.


Sec.  196.109  What must an excavator do if damage to a pipeline from 
excavation activity causes a leak where product is released from the 
pipeline?

    If damage to a pipeline from excavation activity causes the release 
of any PHMSA regulated natural and other gas or hazardous liquid as 
defined in part 192, 193, or 195 of this chapter from the pipeline, the 
excavator must promptly report the release to appropriate emergency 
response authorities by calling the 911 emergency telephone number.


Sec.  196.111  What if a pipeline operator fails to respond to a locate 
request or fails to accurately locate and mark its pipeline?

    PHMSA may enforce existing requirements applicable to pipeline 
operators, including those specified in 49 CFR 192.614 and 195.442 and 
49 U.S.C. 60114 if a pipeline operator fails to properly respond to a 
locate request or fails to accurately locate and mark its pipeline. The 
limitation in 49 U.S.C. 60114(f) does not apply to enforcement taken 
against pipeline operators and excavators working for pipeline 
operators.

Subpart C--Administrative Enforcement Process


Sec.  196.201  What is the purpose and scope of this subpart?

    This subpart describes the enforcement authority and sanctions 
exercised by the Associate Administrator for Pipeline Safety for 
achieving and maintaining pipeline safety under this part. It also 
prescribes the procedures governing the exercise of that authority and 
the imposition of those sanctions.


Sec.  196.203  What is the administrative process PHMSA will use to 
conduct enforcement proceedings for alleged violations of excavation 
damage prevention requirements?

    PHMSA will use the existing administrative adjudication process for 
alleged pipeline safety violations set forth in 49 CFR part 190, 
subpart B. This process provides for notification that a probable 
violation has been committed, a 30-day period to respond including the 
opportunity to request an administrative hearing, the issuance of a 
final order, and the opportunity to petition for reconsideration.


Sec.  196.205  Can PHMSA assess administrative civil penalties for 
violations?

    Yes. When the Associate Administrator for Pipeline Safety has 
reason to believe that a person has violated any provision of the 49 
U.S.C. 60101 et seq. or any regulation or order issued thereunder, 
including a violation of excavation damage prevention requirements 
under this part and 49 U.S.C. 60114(d) in a State with an excavation 
damage prevention law enforcement program PHMSA has deemed inadequate 
under 49 CFR part 198, subpart D, PHMSA may conduct a proceeding to 
determine the nature and extent of the violation and to assess a civil 
penalty.


Sec.  196.207  What are the maximum administrative civil penalties for 
violations?

    The maximum administrative civil penalties that may be imposed are 
specified in 49 U.S.C. 60122.

[[Page 43868]]

Sec.  196.209  May other civil enforcement actions be taken?

    Whenever the Associate Administrator has reason to believe that a 
person has engaged, is engaged, or is about to engage in any act or 
practice constituting a violation of any provision of 49 U.S.C. 60101 
et seq., or any regulations issued thereunder, PHMSA, or the person to 
whom the authority has been delegated, may request the Attorney General 
to bring an action in the appropriate U.S. District Court for such 
relief as is necessary or appropriate, including mandatory or 
prohibitive injunctive relief, interim equitable relief, civil 
penalties, and punitive damages as provided under 49 U.S.C. 60120.


Sec.  196.211  May criminal penalties be imposed?

    Yes. Criminal penalties may be imposed as specified in 49 U.S.C. 
60123.

PART 198--REGULATIONS FOR GRANTS TO AID STATE PIPELINE SAFETY 
PROGRAMS

0
2. The authority citation for part 198 is revised to read as follows:

    Authority: 49 U.S.C. 60101 et seq.; 49 CFR 1.97.


0
3. Part 198 is amended by adding subpart D to read as follows:
Subpart D--State Damage Prevention Enforcement Programs
198.51 What is the purpose and scope of this subpart?
198.53 When and how will PHMSA evaluate State damage prevention 
enforcement programs?
198.55 What criteria will PHMSA use in evaluating the effectiveness 
of State damage prevention enforcement programs?
198.57 What is the process PHMSA will use to notify a State that its 
damage prevention enforcement program appears to be inadequate?
198.59 How may a State respond to a notice of inadequacy?
198.61 How is a State notified of PHMSA's final decision?
198.63 How may a State with an inadequate damage prevention 
enforcement program seek reconsideration by PHMSA?

Subpart D--State Damage Prevention Enforcement Programs


Sec.  198.51  What is the purpose and scope of this subpart?

    This subpart establishes standards for effective State damage 
prevention enforcement programs and prescribes the administrative 
procedures available to a State that elects to contest a notice of 
inadequacy.


Sec.  198.53  When and how will PHMSA evaluate State damage prevention 
enforcement programs?

    PHMSA conducts annual program evaluations and certification reviews 
of State pipeline safety programs. PHMSA will also conduct annual 
reviews of State excavation damage prevention law enforcement programs. 
PHMSA will use the criteria described in Sec.  198.55 as the basis for 
the enforcement program reviews, utilizing information obtained from 
any State agency or office with a role in the State's excavation damage 
prevention law enforcement program. If PHMSA finds a State's 
enforcement program inadequate, PHMSA may take immediate enforcement 
against excavators in that State. The State will have five years from 
the date of the finding to make program improvements that meet PHMSA's 
criteria for minimum adequacy. A State that fails to establish an 
adequate enforcement program in accordance with Sec.  198.55 within 
five years of the finding of inadequacy may be subject to reduced grant 
funding established under 49 U.S.C. 60107. PHMSA will determine the 
amount of the reduction using the same process it uses to distribute 
the grant funding; PHMSA will factor the findings from the annual 
review of the excavation damage prevention enforcement program into the 
49 U.S.C. 60107 grant funding distribution to State pipeline safety 
programs. The amount of the reduction in 49 U.S.C. 60107 grant funding 
will not exceed four percent (4%) of prior year funding (not 
cumulative). If a State fails to implement an adequate enforcement 
program within five years of a finding of inadequacy, the Governor of 
that State may petition the Administrator of PHMSA, in writing, for a 
temporary waiver of the penalty, provided the petition includes a clear 
plan of action and timeline for achieving program adequacy.


Sec.  198.55  What criteria will PHMSA use in evaluating the 
effectiveness of State damage prevention enforcement programs?

    (a) PHMSA will use the following criteria to evaluate the 
effectiveness of a State excavation damage prevention enforcement 
program:
    (1) Does the State have the authority to enforce its State 
excavation damage prevention law using civil penalties and other 
appropriate sanctions for violations?
    (2) Has the State designated a State agency or other body as the 
authority responsible for enforcement of the State excavation damage 
prevention law?
    (3) Is the State assessing civil penalties and other appropriate 
sanctions for violations at levels sufficient to deter noncompliance 
and is the State making publicly available information that 
demonstrates the effectiveness of the State's enforcement program?
    (4) Does the enforcement authority (if one exists) have a reliable 
mechanism (e.g., mandatory reporting, complaint-driven reporting) for 
learning about excavation damage to underground facilities?
    (5) Does the State employ excavation damage investigation practices 
that are adequate to determine the responsible party or parties when 
excavation damage to underground facilities occurs?
    (6) At a minimum, do the State's excavation damage prevention 
requirements include the following:
    (i) Excavators may not engage in excavation activity without first 
using an available one-call notification system to establish the 
location of underground facilities in the excavation area.
    (ii) Excavators may not engage in excavation activity in disregard 
of the marked location of a pipeline facility as established by a 
pipeline operator.
    (iii) An excavator who causes damage to a pipeline facility:
    (A) Must report the damage to the operator of the facility at the 
earliest practical moment following discovery of the damage; and
    (B) If the damage results in the escape of any PHMSA regulated 
natural and other gas or hazardous liquid, must promptly report to 
other appropriate authorities by calling the 911 emergency telephone 
number or another emergency telephone number.
    (7) Does the State limit exemptions for excavators from its 
excavation damage prevention law? A State must provide to PHMSA a 
written justification for any exemptions for excavators from State 
damage prevention requirements. PHMSA will make the written 
justifications available to the public.
    (b) PHMSA may consider individual enforcement actions taken by a 
State in evaluating the effectiveness of a State's damage prevention 
enforcement program.


Sec.  198.57  What is the process PHMSA will use to notify a State that 
its damage prevention enforcement program appears to be inadequate?

    PHMSA will issue a notice of inadequacy to the State in accordance 
with 49 CFR 190.5. The notice will state the basis for PHMSA's 
determination that the State's damage prevention enforcement program 
appears inadequate for purposes of this subpart and set forth the 
State's response options.

[[Page 43869]]

Sec.  198.59  How may a State respond to a notice of inadequacy?

    A State receiving a notice of inadequacy will have 30 days from 
receipt of the notice to submit a written response to the PHMSA 
official who issued the notice. In its response, the State may include 
information and explanations concerning the alleged inadequacy or 
contest the allegation of inadequacy and request the notice be 
withdrawn.


Sec.  198.61  How is a State notified of PHMSA's final decision?

    PHMSA will issue a final decision on whether the State's damage 
prevention enforcement program has been found inadequate in accordance 
with 49 CFR 190.5.


Sec.  198.63  How may a State with an inadequate damage prevention 
enforcement program seek reconsideration by PHMSA?

    At any time following a finding of inadequacy, the State may 
petition PHMSA to reconsider such finding based on changed 
circumstances including improvements in the State's enforcement 
program. Upon receiving a petition, PHMSA will reconsider its finding 
of inadequacy promptly and will notify the State of its decision on 
reconsideration promptly but no later than the time of the next annual 
certification review.

    Issued in Washington, DC, under authority delegated in 49 CFR 
part 1.97.
Stacy Cummings,
Interim Executive Director.
[FR Doc. 2015-17259 Filed 7-22-15; 8:45 am]
 BILLING CODE 4910-60-P


