99-15988. Compliance Policy for Year 2000 (Y2K) Problems

[Federal Register Volume 64, Number 120 (Wednesday, June 23, 1999)]
[Notices]
[Pages 33541-33543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15988]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration


Compliance Policy for Year 2000 (Y2K) Problems

AGENCY: Research and Special Programs Administration (RSPA); U.S. 
Department of Transportation (DOT).

ACTION: Notice; compliance policy.

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SUMMARY: RSPA has developed safety standards, procedures and reporting 
requirements, found at 49 CFR Parts 190, 191, 192, 193, 194, 195 and 
199, for ensuring the safe operation of pipeline facilities. Civil 
enforcement action (civil penalty or compliance order) can be taken for 
violations of pipeline safety regulations. RSPA can also issue a 
corrective action order if it determines a pipeline facility poses a 
hazard to life, property, or the environment. RSPA can also seek 
injunctive relief.
    We do not intend to pursue applicable pipeline safety compliance 
actions for regulatory violations or for environmental or safety 
problems

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caused by tests that are specifically designed to identify and 
eliminate Year 2000-related malfunctions. For example, we would not 
pursue any compliance actions should an over-pressurization, hazardous 
liquid or natural gas release, fire, or explosion occur as a result of 
component failure during Year 2000 testing, as long as no substantial 
environmental damage or serious harm results and the failure is 
promptly corrected. The proposed stays of compliance actions are 
limited to testing-related problems disclosed to RSPA by February 1, 
2000, if certain criteria have been met, such as ensuring that the 
tests are designed to protect human health and the environment, 
ensuring that the tests are conducted well in advance of the Year 2000 
critical dates, and ensuring that all testing-related problems are 
immediately corrected. If a testing-related problem does occur, testing 
plans should be available to document that these criteria have been 
met.
    We will pursue enforcement action or other applicable compliance 
action against companies that do not prepare for potential Year 2000 
problems and thereby endanger the public and the environment. Such 
actions will include assessing maximum civil penalties for any pipeline 
safety regulatory violation. Failure to identify and correct Year 2000 
problems before 2000 could result in serious safety problems, such as 
unexpected shutdowns or other safety and operational malfunctions. The 
federal pipeline safety regulations require companies to prepare for 
and address any adverse or abnormal operations on its pipeline system, 
including those associated with Year 2000 issues. Every company must 
ensure Year 2000 readiness of its system through testing, repair, and 
contingency planning.
    The millennium date change is near and substantial progress in 
assessing and remediating Year 2000 non-compliant computer code and 
hardware should already have occurred. Therefore, we are encouraging 
companies to focus on preparing business continuity and contingency 
plans. These plans need to ensure that the impact of any Year 2000 
failure is minimized and that appropriate and adequate preparations are 
in place to ensure continuous, safe service to customers.

ADDRESSES: This document can be viewed on the Office of Pipeline Safety 
(OPS) home page at: http://ops.dot.gov.

FOR FURTHER INFORMATION CONTACT: Roger Little, [phone].

SUPPLEMENTARY INFORMATION:

Background

    The Year 2000 issue arises because a number of computerized 
functions require recognition of a specific year, day, and time, but 
many computers and computerized equipment recognize only the last two 
digits of a year's date (e.g., 1998 is 98; 2000 is 00). Therefore, when 
the calendar changes to the year 2000, computers and equipment with 
embedded computer chips may have difficulty interpreting the correct 
date. They may interpret the year to be 1900 or some other year. As a 
result, some computers and equipment containing embedded computer chips 
could become permanently unable to function properly. Others may 
continue to operate, but erroneously, while others simply may stop and 
need to be restarted. Some may create data that look correct, but in 
reality contain errors, and some may continue to operate correctly. In 
addition, some computer-related systems may have trouble functioning 
properly on other dates such as a leap year, and on September 9, 1999, 
where the date string 9-9-99 was commonly used as an end-of-operation 
command or for other purposes than for representing the date. Our 
policy to stay compliance actions encompasses any facility or computer-
related testing problems that may arise as a result of the generally 
recognized suspect dates associated with Year 2000 non-compliance. We 
are referring to all of these dates as Year 2000 problems for purposes 
of this compliance policy.

Emphasis on Testing

    The public expects compliance with the nation's environmental and 
safety laws. The regulated pipeline community must take all steps 
necessary to anticipate and resolve potential environmental and safety 
compliance problems that may result from Year 2000-related equipment 
problems. In an effort to ensure timely compliance, RSPA adopts this 
compliance policy to encourage any necessary testing of computer 
systems and their related pipeline facilities (e.g., Supervisory 
Control and Data Acquisition systems, overpressure protection devices, 
or other pipeline system components). We recognize that regulated 
companies need to understand how RSPA will react should such testing 
result in pipeline safety violations or other compliance problems.

Relationship to Year 2000 Dates

    Although the focus of this policy is on testing-related problems 
that occur prior to January 1, 2000, RSPA notes that with respect to 
problems occurring after January 1, 2000, we will continue to recognize 
good faith efforts and other potentially mitigating factors in 
determining an appropriate response. In that regard, companies that 
test and prepare necessary plans in accordance with the terms of this 
policy are likely to be in a more favorable position to avoid 
compliance action than companies that do not, should a company not be 
able to correct all Year 2000-related deficiencies in a timely manner.

Criteria Justifying Application of This Policy

    Companies must address potentially adverse conditions on their 
pipelines. The pipeline safety regulations require procedures to assure 
safety from adverse, abnormal and emergency operating conditions. RSPA 
will fully consider a company's preparations if a violation or incident 
results from a Year 2000 problem and will mitigate any subsequent 
compliance action if necessary preparations have been taken. However, 
RSPA will pursue strong enforcement action, including assessing maximum 
civil penalties, for regulatory violations or other safety problems 
resulting from a pipeline company not having prepared for potential 
Year 2000 problems.
    As noted above, RSPA will exercise its discretion to forego 
applicable compliance actions for problems resulting from specific 
tests, where the company can demonstrate to RSPA that it has satisfied 
all of the nine (9) applicable criteria below.
    (1) Systematic Design of Testing Protocols. Written testing 
protocols were (a) designed in advance of the testing period, (b) 
reflect a good faith effort to evaluate the company's Year 2000-related 
safety and environmental compliance status, (c) will not circumvent 
pipeline safety regulatory compliance, (d) were designed to prevent or 
limit violations or other compliance problems that may result from such 
testing (e.g., through adoption or revision of appropriate contingency 
plans) and (e) include provisions to protect the public, employees and 
the environment.
    (2) Problems Caused By Testing. The specific Year 2000-related 
testing was the direct cause of the potential compliance problems.
    (3) Testing Need, Timing and Length. The specific testing that 
caused the problem was:
    (a) Necessary to determine the effectiveness of specific Year 2000-
related modifications or existing operations in ensuring pipeline 
safety compliance;

[[Page 33543]]

    (b) Part of a comprehensive testing program designed to correct 
Year 2000 deficiencies at the facility;
    (c) Conducted well in advance of the Year 2000 dates in question 
(i.e., normally at least 30 days in advance of the dates in question);
    (4) Absence of Harm. Testing problems do not result in substantial 
environmental damage or serious actual harm to the public;
    (5) Immediate Correction. The company corrected all problems caused 
by the testing as soon as possible (i.e. normally within 24 hours).
    (6) Expeditious Remediation. The company expeditiously remediated 
any hazardous liquid release in accordance with the company response 
plan required by 49 CFR Part 194.
    (7) Reporting. The company has met all applicable reporting 
requirements including those for releases from a pipeline facility (49 
CFR Parts 191 and 195) and safety related condition reports (49 CFR 
Parts 191 and 195).
    (8) Retesting. Any retesting conducted prior to the Year 2000 dates 
in question met all the criteria outlined in this policy and included 
modifications to earlier testing and/or applicable operating conditions 
that are reasonably designed to achieve compliance.
    (9) Cooperation. The company provides any information RSPA requests 
as necessary to determine whether to forego compliance action.

Emphasis on Business Continuity and Contingency Planning

    Time is running out for solving Year 2000 problems. Some companies 
may not be able to fully test and remediate all of their mission-
critical systems and may face disruptions in their operations. Systems 
that have been tested and remediated may still encounter unanticipated 
Year 2000 problems. Despite best efforts of dedicated staff to assess, 
remediate, validate, and implement mission-critical systems, companies 
remain vulnerable to disrupted business processes. Because most 
companies are highly dependent on information technology to carry out 
their business, Year 2000-induced failures may have a severe impact on 
their ability to deliver critical services and assure safety. 
Additionally, the risk of failure is not limited to the company's 
internal information systems. Many companies depend on information and 
data provided by business partners such as other pipeline companies, 
state and local agencies, international suppliers, and private sector 
entities. Every company depends on key infrastructure services such as 
power, water, transportation, and telecommunications. Because of these 
risks, it is important that companies conduct business continuity and 
contingency planning to reduce the risk of Year 2000 business and 
facility failures.
    Each company should ensure the continuity of core business 
processes by identifying, assessing, managing, and mitigating its Year 
2000 risks. This effort should not be limited to the risks posed by the 
Year 2000-induced failures of internal information systems, but should 
include potential Year 2000 failures of others, including business 
partners and infrastructure service providers.
    The business continuity planning process focuses on reducing the 
risk of Year 2000-induced business and facility failures. It safeguards 
a company's ability to maintain safety functions and produce a minimum 
acceptable level of services in the event of failures of critical 
information systems and services. It also helps to identify alternate 
resources and processes needed to operate the core business processes. 
Although it does not offer a long-term solution to Year 2000-induced 
failures, it will help the company to prepare for a potential crisis, 
and may facilitate the restoration of normal service at the earliest 
possible time in the most cost-effective manner.

Cooperation With States

    RSPA is strongly encouraging States participating in the pipeline 
safety program to adopt this or a similar approach to address Year 2000 
compliance issues. RSPA is coordinating closely with State agencies 
concerning Year 2000-related testing issues.

Disclaimer

    This policy does not constitute a final Department action. It does 
not create any rights, duties, obligations, or defenses, implied or 
otherwise, in any persons or entities. It sets forth factors that RSPA 
intends to use in the exercise of its compliance discretion, and it is 
not intended for use in pleading, at hearing, at trial, or in any 
adjudicatory context.

Specific Compliance Concerns

    Individual facility-specific concerns may be directed to the RSPA 
Office of Pipeline Safety Regional offices listed below:

EASTERN REGION, 400 Seventh Street, SW, Room 7130, DPS-24, Washington, 
D.C. 20590, Telephone: [phone], Fax: [phone]
SOUTHERN REGION, 61 Forsyth Street, Suite 16T15, DPS-25, Atlanta, GA 
30303, Telephone: [phone], Fax: [phone]
CENTRAL REGION, 1100 Main Street, Suite 1120, DPS-26, Kansas City, MO 
64105, Telephone: [phone], Fax: [phone]
SOUTHWEST REGION, 2320 LaBranch Street, Room 2100, DPS-27, Houston, TX 
77004, Telephone: [phone], Fax: [phone]
WESTERN REGION, 12600 W. Colfax Avenue, Suite A-250, DPS-28, Lakewood, 
CO 80215-3736, Telephone: [phone], Fax: [phone]

    Issued in Washington, D.C., on June 16, 1999.
Stacey L. Gerard,
Director, Office of Policy, Regulations and Training.
[FR Doc. 99-15988 Filed 6-22-99; 8:45 am]
BILLING CODE 4910-06-P