96-27120. Pipeline Safety User Fee Assessment Methodology

[Federal Register Volume 61, Number 206 (Wednesday, October 23, 1996)]
[Notices]
[Page 55069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27120]


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DEPARTMENT OF TRANSPORTATION
Research and Special Programs Administration


Pipeline Safety User Fee Assessment Methodology

AGENCY: Research and Special Programs Administration, DOT.

ACTION: Notice of public meeting.

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SUMMARY: The Research and Special Programs Administration (RSPA) 
invites representatives of industry, state and local government, and 
the public to an open meeting on pipeline safety user fee assessments. 
The purpose of this meeting is to gather information on the present 
assessment methods used by RSPA in determining pipeline safety user 
fees and to explore a broad range of other approaches for assessing 
user fees.

DATES: The meeting will be held on November 22, 1996, 9:00 a.m.-4:00 
p.m.

ADDRESSES: The meeting will be held at the U.S. Department of 
Transportation 400 Seventh Street, S.W., Washington, D.C. Room 6200-04.

FOR FURTHER INFORMATION CONTACT: Marvin Fell, [phone], U.S. 
Department of Transportation, RSPA 400 Seventh St., S.W., Washington, 
D.C. 20590 regarding the subject matter of this notice, or the Dockets 
Unit [phone], regarding copies of this notice or other material 
referenced in this notice.

SUPPLEMENTARY INFORMATION: The Accountable Pipeline Safety and 
Partnership Act of 1996 Section 60127 requires that, ``[t]he Secretary 
of Transportation shall transmit to the Congress a report analyzing the 
present assessment of pipeline safety user fees solely on the basis of 
mileage to determine whether--
    (1) That measure of the resources of the Department of 
Transportation is the most appropriate measure of the resources used by 
the Department of Transportation in the regulation of pipeline 
transportation; or
    (2) Another basis of assessment would be a more appropriate measure 
of those resources:
    (b) Considerations--In making the report, the Secretary shall 
consider a wide range of assessment factors and suggestions and 
comments from the public.''

Background

    Under 49 U.S.C. 60103, gas and hazardous liquid pipeline operators 
pay annual user fees to fund the U.S. Department of Transportation's 
Pipeline Safety program. The Act provides that a fee shall be imposed 
on each person operating a pipeline transmission facility, a liquefied 
natural gas facility, or a hazardous liquid pipeline facility to which 
chapter 601 of 49 U.S.C. applies. The Act requires the Secretary of 
Transportation to establish a schedule of fees for pipeline usage that 
bear a reasonable relationship to the miles of pipeline, volume-miles, 
revenues or an appropriate combination thereof. In establishing the 
schedule, the Secretary must take into account the allocation of 
Departmental resources.
    After discussions with the major trade associations representing 
these industries a consensus was reached that pipeline mileage provides 
the most reasonable basis for determining fees to be paid by operators 
of gas transmission lines and hazardous liquid pipeline facilities. For 
LNG facilities it was determined that storage capacity was the 
appropriate basis for a fee.
    In order to reduce its administrative burden, RSPA decided to 
exempt small operators from the payment of user fees so that those 
operators would not be unduly burdened. Operators with less than 10 
miles of gas transmission lines and 30 miles of hazardous liquid 
pipelines would therefore be exempt. Further, it was concluded that 
charging fees to local distribution companies (LDCs) would be 
administratively burdensome because many LDCs are small operators. The 
imposition of such fees could result in a double counting against LDCs 
because transmission operators would likely pass along the costs of 
these fees to LDCs as a cost of doing business.
    In choosing to use pipeline mileage (and facility capacity in the 
case of LNG) RSPA chose an assessment method that minimizes the 
administrative expenses of collection. However, this method of 
assessment may not reflect how RSPA allocates its resources in 
regulating pipelines. For example, new construction inspections are not 
factored into mileage-based user fees. Presently, companies are charged 
the same fee regardless of accident history, although RSPA resources 
may be expended disproportionately on companies with poor safety 
records. The questions below address some of the issues concerning the 
present assessment methodology:
    (1) Should RSPA charge a fee for new construction?
    (2) Should RSPA charge a fee on LDCs to recognize that some of 
RSPA's resources are devoted to regulating these operators?
    (3) Should RSPA consider accident history when computing fees?
    (4) Should other risk based measures be considered?
    (5) Should volume be considered in the fee calculation?
    (6) Should throughput, i.e., volume-mileage, be considered?
    (7) Should diameter of the pipeline be considered a cost factor?
    (8) Should location be a factor in determining the user fee? Does a 
pipeline in a densely populated area or an environmentally sensitive 
area require greater oversight than a pipeline in a remote area that is 
not environmentally sensitive?
    (9) Will RSPA need to require an annual report from liquid 
operators, which currently do not provide such reports, to collect 
information necessary for an alternative to the present assessment 
method? What could this mean to the administrative costs and paperwork 
burden of these operators?
    RSPA seeks comments on these issues and any other concerns the 
public has on the assessment of user fees, including any ideas to 
improve the efficiency and cost effectiveness of collection.
    Interested persons are invited to attend the meeting and present 
oral or written statements on the matters set for the meeting. Any 
person who wishes to speak should notify Marvin Fell at the above 
address. Please estimate the time that will be required for your 
presentation. RSPA reserves the right to limit the time of each 
speaker, if necessary, to ensure that everyone who requests an 
opportunity to speak is allocated sufficient time. Interested parties 
that are not scheduled to comment will have an opportunity to comment 
after all presentations are completed with the approval of the meeting 
officer.

    Issued in Washington, D.C., on October 17, 1996.
Richard B. Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 96-27120 Filed 10-22-96; 8:45 am]
BILLING CODE 4910-60-P