Clarification of the Fireworks Approvals Policy, 38053-38058 [2011-15969]
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Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations
harmonizing rules, and of promoting
flexibility. This is not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
DEPARTMENT OF DEFENSE
Defense Acquisition Regulations
System
48 CFR Part 252
RIN 0750–AH32
Defense Federal Acquisition
Regulation Supplement; Successor
Entities to the Netherlands Antilles
(DFARS Case 2011–D029)
III. Regulatory Flexibility Act
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Final rule.
AGENCY:
DoD is issuing a final rule to
revise the definitions of ‘‘Caribbean
Basin country’’ and ‘‘designated
country’’ due to the change in the
political status of the islands that
comprised the Netherlands Antilles.
DATES: Effective date: June 29, 2011.
FOR FURTHER INFORMATION CONTACT: Ms.
Amy Williams, Telephone 703–602–
0328.
SUMMARY:
SUPPLEMENTARY INFORMATION:
I. Background
This final rule amends definitions of
‘‘Caribbean Basin country’’ and
‘‘designated country’’ at the clauses
252.225–7021, Trade Agreements, and
252.225–45, Balance of Payments
Program—Construction Materials Under
Trade Agreements.
On October 10, 2010, Curacao and
Sint Maarten became autonomous
territories of the Kingdom of the
Netherlands. Bonaire, Saba, and Sint
Eustatius now fall under the direct
administration of the Netherlands.
The Netherlands Antilles was
designated as a beneficiary country
under the Caribbean Basin Initiative (see
19 U.S.C. 2702). According to the
initiative, successor political entities
remain eligible as beneficiary countries.
Therefore, the definitions have been
revised to replace ‘‘Netherlands
Antilles’’ with the five separate
successor entities.
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II. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
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The Regulatory Flexibility Act does
not apply to this rule.
Therefore, an initial regulatory
flexibility analysis has not been
performed because an initial regulatory
flexibility analysis is only required for
proposed or interim rules that require
publication for public comment (5
U.S.C. 603) and a final regulatory
flexibility analysis is only required for
final rules that were previously
published for public comment, and for
which an initial regulatory flexibility
analysis was prepared (5 U.S.C. 604).
This final rule does not constitute a
significant FAR (or DFARS) revision as
defined at FAR 1.501–1 because this
rule will not have a significant cost or
administrative impact on contractors or
offerors, or a significant effect beyond
the internal operating procedures of the
Government. The rule only reflects the
political status of the islands that
comprised the Netherlands Antilles.
This will have no impact on any entities
in the United States. Therefore,
publication for public comment under
41 U.S.C. 1707 is not required.
IV. Paperwork Reduction Act
This rule will not change the burden
of any of the approved information
collection requirements for part 225
currently approved by the Office of
Management and Budget under OMB
Clearance 0704–0229, Defense Federal
Acquisition Regulation Supplement Part
225, Foreign Acquisition, and related
clauses.
252.212–7001
38053
[Amended]
2. In section 252.212–7001, amend
paragraph (b)(12)(i) by removing the
clause date ‘‘(NOV 2009)’’ and adding in
its place ‘‘(JUN 2011)’’.
■
3. In section 252.225–7021, remove
the clause date ‘‘(NOV 2009)’’ and add
in its place ‘‘(JUN 2011)’’ and revise
paragraph (a)(3)(iv) to read as follows:
■
252.225–7021
Trade agreements.
*
*
*
*
*
(a) * * *
(3) * * *
(iv) A Caribbean Basin country
(Antigua and Barbuda, Aruba, Bahamas,
Barbados, Belize, Bonaire, British Virgin
Islands, Curacao, Dominica, Grenada,
Guyana, Haiti, Jamaica, Montserrat,
Saba, St. Kitts and Nevis, St. Lucia, St.
Vincent and the Grenadines, Sint
Eustatius, Sint Maarten, or Trinidad and
Tobago).
*
*
*
*
*
■ 4. In section 252.225–7045, remove
the clause date ‘‘(JAN 2009)’’ and add in
its place ‘‘(JUN 2011)’’ and in paragraph
(a), revise paragraph (4) of the definition
of ‘‘designated country’’ to read as
follows:
252.225–7045 Balance of Payments
Program—Construction Material Under
Trade Agreements.
*
*
*
*
*
(a) * * *
Designated country * * *
(4) A Caribbean Basin country
(Antigua and Barbuda, Aruba, Bahamas,
Barbados, Belize, Bonaire, British Virgin
Islands, Curacao, Dominica, Grenada,
Guyana, Haiti, Jamaica, Montserrat,
Saba, St. Kitts and Nevis, St. Lucia, St.
Vincent and the Grenadines, Sint
Eustatius, Sint Maarten, or Trinidad and
Tobago).
*
*
*
*
*
[FR Doc. 2011–16373 Filed 6–28–11; 8:45 am]
BILLING CODE 5001–08–P
List of Subjects in 48 CFR Part 252
DEPARTMENT OF TRANSPORTATION
Government procurement.
Ynette R. Shelkin,
Editor, Defense Acquisition Regulations
System.
Pipeline and Hazardous Materials
Safety Administration
Therefore, 48 CFR part 252 is
amended as follows:
49 CFR Part 173
PART 252—SOLICITATION
PROVISIONS AND CONTRACT
CLAUSES
1. The authority citation for 48 CFR
part 252 continues to read as follows:
■
Authority: 41 U.S.C. 1303 and 48 CFR
chapter 1.
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[Docket No. PHMSA–2010–0353; Notice No.
10–9]
Clarification of the Fireworks
Approvals Policy
Pipeline and Hazardous
Materials Safety Administration
(PHMSA), DOT.
ACTION: Clarification.
AGENCY:
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Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations
In this document, PHMSA is
responding to comments received from
its initial Notice No. 10–9 clarifying
PHMSA’s policy regarding the fireworks
approvals program. Furthermore, in this
document PHMSA is restating our
policy clarification in that we will issue
firework classification approvals only to
fireworks manufacturers, and accept
firework classification applications only
from fireworks manufacturers or their
designated agents. This policy
clarification is intended to enhance
safety by ensuring accountability of the
manufacture of the device, and reducing
the number of duplicate applications
and approvals being issued for identical
fireworks devices.
DATES: The policy clarification
discussed in this document is effective
June 29, 2011.
FOR FURTHER INFORMATION CONTACT: Mr.
Ryan Paquet, Director, Approvals and
Permits Division, Office of Hazardous
Materials Safety, (202) 366–4512,
PHMSA, 1200 New Jersey Avenue, SE.,
Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
SUMMARY:
Table of Contents
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I. Introduction
II. Background
III. List of Commenters, Beyond-the-Scope
Comments, and General Comments
IV. Summary of Policy Clarification
I. Introduction
With regard to fireworks approvals,
the Hazardous Materials Regulations
(HMR; 49 CFR parts 171–180), Section
173.56(j)(3) states that ‘‘[t]he
manufacturer applies in writing to the
Associate Administrator following the
applicable requirements in APA
Standard 87–1, and is notified in
writing by the Associate Administrator
that the fireworks have been classed,
approved, and assigned an EX number.’’
On December 17, 2010, PHMSA
published the initial Notice No. 10–9
(75 FR 79085) clarifying its policy,
consistent with the HMR, to issue
firework classification approvals only to
fireworks manufacturers, and accept
firework classification applications only
from fireworks manufacturers or their
designated agents. The Notice also
sought comment on that clarification. In
today’s document, PHMSA is
responding to those comments and
restating its policy clarification on the
fireworks approval program.
The comments received covered
various topics, including the economic
impact, language barrier issues,
jurisdictional issues, implementation
time, and the legal issues associated
with the Notice itself. Furthermore,
commenters also expressed concern on
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how the policy would affect the EX
application volume, the control and
distribution of fireworks designs,
PHMSA’s ability to ensure compliance
with and to enforce the clarification,
and the relationship with other Federal
regulations.
II. Background
The pyrotechnic industry is a global
logistics supply chain comprised of
mostly foreign fireworks manufacturers
and domestic importers, retailers,
distributors, and consumers. The
transportation of an explosive (fireworks
device) requires an EX classification
approval issued by PHMSA, commonly
referred to as an EX number. The EX
number is a unique identifier that
indicates the device has been classed
and approved for transportation in the
U.S., and is specific to a particular
device as specified in 49 CFR 173.56(j)
and the APA Standard 87–1.
PHMSA understands that it is a
common industry practice for fireworks
devices produced by one manufacturer
to be marketed and sold under different
trade names. Further, each retailer,
importer or distributor, in addition to
the manufacturer, applies for and
receives an EX classification approval
for the identical firework device. This
practice has resulted in PHMSA
processing multiple applications and
issuing multiple approvals for the same
firework device.
For some time, PHMSA has accepted
fireworks applications from
manufacturers, importers, retailers and
distributors, and has issued the
classification approvals to those
stakeholders in the pyrotechnic
industry. This redundant and
burdensome process does not promote
the safe transportation of explosives
(fireworks devices); instead, it impedes
the conduct of business for both the
fireworks industry and PHMSA.
In this document, PHMSA is
responding to comments on its policy
clarification to issue fireworks
classification approvals only to
fireworks manufacturers. PHMSA
believes that this policy will enhance
safety by ensuring accountability of the
manufacture of the device and reducing
the number of duplicate applications
and approvals being issued for identical
fireworks devices. The manufacturer of
the device is the only entity that can
ensure the approved formulation is the
actual formulation used to create the
device.
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III. List of Commenters, Beyond-theScope Comments, and General
Comments
PHMSA received 18 comments in
response to the initial Notice No. 10–9.
Some of the commenters requested that
we expedite the issuance of this
document to finalize the clarification of
the policy. We recognize their concerns
and have made every effort to publish
this document in an expeditious
manner. While a minority of the
commenters supported the clarification
to the fireworks policy in initial Notice
10–9, a majority of the commenters had
reservations about it. The comments, as
submitted to the docket for the initial
Notice No. 10–9 (Docket No. PHMSA–
2010–0353), may be accessed via
https://www.regulations.gov and were
submitted by the following individuals,
companies and associations:
(1) Ms. Elizabeth Knauss; PHMSA–
2010–0353–0002
(2) Huisky Trading Co., Ltd.; PHMSA–
2010–0353–0003
(3) Extreme Pyrotechnics LLC; PHMSA–
2010–0353–0004
(4) Rozzi’s Famous Fireworks; PHMSA–
2010–0353–0005
(5) Dangerous Goods Advisory Council
(DGAC); PHMSA–2010–0353–0006
(6) Kellner’s Fireworks Inc.; PHMSA–
2010–0353–0007
(7) B.J. Alan Company; PHMSA–2010–
0353–0008
(8) DG Advisor, LLC; PHMSA–2010–
0353–0009
(9) International Fireworks Shippers
Alliance (IFSA); PHMSA–2010–
0353–0010
(10) Law Office of Douglas Mawhorr;
PHMSA–2010–0353–0011
(11) Pyrotechnics Guild International;
PHMSA–2010–0353–0012
(12) Institute of Makers of Explosives
(IME); PHMSA–2010–0353–0013
(13) National Fireworks Association;
PHMSA–2010–0353–0014
(14) Galaxy Fireworks, Inc.; PHMSA–
2010–0353–0017
(15) American Pyrotechnics Association
(APA); PHMSA–2010–0353–0018
(16) Alliance of Special Effects &
Pyrotechnic Operators, Inc.
(ASEPO); PHMSA–2010–0353–0019
(17) Fireworks Over America; PHMSA–
2010–0353–0021
(18) American Promotional Events Inc.;
PHMSA–2010–0353–0023
Beyond-the-Scope Comments
PHMSA received ten comments
beyond the scope of this document. One
commenter requests PHMSA consider
waste management of used or defective
fireworks when proposing any
amendments to regulations related to
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the transport of fireworks. This
document does not propose any
regulatory amendments; rather, we are
clarifying existing policy. While
PHMSA agrees environmental impacts
should be considered when proposing
amendments to regulations, no
regulatory changes were proposed in the
Notice, and therefore, waste
management of fireworks is beyond the
scope of this document.
PHMSA received nine comments
suggesting alternative approaches aimed
at improving the current fireworks
approvals process. These alternative
approaches ranged from small
modifications and improvements to the
current system, to the complete
elimination of the requirement for EX
numbers for consumer fireworks.
PHMSA values input from the
stakeholders involved in the fireworks
approval process; however, the
alternative approaches suggested are
beyond the scope of this document and
will not be addressed here. The scope of
this document is limited to PHMSA’s
issuance of fireworks approvals only to
fireworks manufacturers. While we
agree that certain alternative approaches
to fireworks approvals merit PHMSA’s
consideration, we urge those
commenters who submitted these
beyond-the-scope approaches to request
a change in the regulations by filing the
recommendations as petitions for
rulemakings in accordance with 49 CFR
106.95 and 106.100.
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General Comments
Implementation Concerns
PHMSA received comments both in
support of and in opposition to the
policy clarification in the initial Notice
No. 10–9. A number of these concerns
dealt specifically with how PHMSA’s
implementation of the clarification
would affect the pyrotechnics industry.
These comments are discussed in detail
below.
Implementation. Commenters
suggested that if the clarification
presented in the initial Notice No. 10–
9 were adopted, there would need to be
a substantial implementation time.
PHMSA received two comments
concerned with the amount of time for
implementing the clarification and the
effect on industry.
PHMSA understands the concerns the
fireworks industry has expressed about
the ramifications of implementing this
action. In response to these concerns
PHMSA has devised an implementation
plan that addresses these concerns (see
section: IV. Summary of Policy
Clarification). As of the date of the
publication of this document in the
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Federal Register, classification approval
applications will be issued only to the
manufacturer. Fireworks approvals
applications submitted on behalf of
entities other than the manufacturer to
PHMSA prior to the publication date of
this document in the Federal Register
(i.e. already accepted by PHMSA) will
continue to be reviewed, processed, and
if approved, issued to the applicant.
Impact on Fireworks EX Application
Volume. Specifically, PHMSA received
comments regarding what impact the
clarification would have on the actual
volume of fireworks EX applications
received. PHMSA received comments
from seven companies opposing the
policy clarification asserting that there
will be an increase in the volume of
applications that PHMSA will have to
process. However, one company
supported the policy clarification
indicating that it is an ‘‘effort to reduce
redundancy and increase process
efficiency.’’
PHMSA does not agree with the
commenters’ concerns pertaining to
application volume. We believe that this
is a safety and data management issue.
Furthermore, we do not make policy
decisions of this type based on the
potential volume of applications.
Nonetheless, PHMSA believes that there
would not be an appreciable increase to
the number of firework applications
received. However, if such an increase
occurs, it will be temporary and over
time application volume will decrease.
One commenter asserted that an EX
approval allows multiple manufacturers
to use the same EX number. This is
incorrect. The use of the same EX
number by multiple manufacturers
constitutes a violation of the HMR. Only
the manufacturer identified in the
approval application is authorized to
use the assigned EX number. PHMSA
does not issue the same EX approval
number to more than one holder/
manufacturer.
Language Barriers. A majority of
fireworks manufacturers are located
outside the U.S. where English is not a
first language. Several commenters
expressed concern that implementing
the policy clarification could be
complicated by language barriers
present between PHMSA officials and
foreign fireworks manufacturers.
Commenters cited examples of Chinese
companies not understanding why an
application is rejected and not being
able to correct errors when re-applying.
PHMSA does not agree with the
commenters’ concerns pertaining to a
language barrier. All companies based
outside of the U.S. are required to have
a U.S. designated agent (see § 105.40) to
support the company in various issues,
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38055
including language translation. PHMSA
has issued many approvals to foreign
companies without any confusion or
misunderstanding as a result of
language barriers. When language
barriers arise, it is the U.S. designated
agent’s responsibility to resolve any
communication problems and technical
issues.
Control and Distribution of Fireworks
Designs. Three commenters addressed
the effect of initial Notice No. 10–9 on
the control and distribution of fireworks
design types. U.S. fireworks distributors
expressed their concern that they will
no longer have exclusive control over
their firework products if the
clarification presented in the initial
Notice No. 10–9 were implemented.
These commenters oppose the policy
clarification based on possible
trademark infringement. The
commenters who addressed this issue
indicated that, if adopted, the policy
clarification would deprive them of
their ability ‘‘to trademark private label
products that are proprietary to U.S.
companies.’’
PHMSA does not agree with the
commenters that the policy clarification
would result in trademark infringement.
The holder of the EX approval for a
firework device bears no relevance to a
company’s protected trademark. The
U.S. Patent and Trademark Office
defines a trademark as ‘‘a word, phrase,
symbol or design, or a combination
thereof, that identifies and distinguishes
the source of the goods of one party
from those of others.’’ Trademark
infringement occurs when a competitor
uses a mark that is identical or
confusingly similar to the protected
trademark. An EX approval number is
assigned by the Associate Administrator
to an explosive device that has been
evaluated under 49 CFR 173.56.
Fireworks EX approval applications are
reviewed by transportation specialists
who evaluate the composition and
safety of the firework device. Thus, a
protected trademark and an EX approval
number are issued separately by
different U.S. agencies for distinctly
separate purposes, which are mutually
exclusive.
Ability to Ensure Compliance/
Enforce. Various commenters suggested
that the policy clarification in the initial
Notice No. 10–9 could prove difficult
for PHMSA to enforce. In addition,
commenters suggested that the policy
clarification could decrease regulatory
clarity and make it more difficult for the
regulated entities to comply with the
HMR.
One commenter opposed the policy
clarification expressing concern that by
placing the maintenance of the EX
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Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations
number wholly in the hands of the
manufacturer, the U.S. user or seller has
no capacity to assure that the numbers
are being administered and applied
correctly. They state: ‘‘it is the importers
and end users who are transporting the
products in the U.S., not the
manufacturers. The importers and end
users are the ones who must
demonstrate compliance.’’
While firework classification
approvals will only be issued to
fireworks manufacturers, PHMSA will
accept fireworks approval applications
from the manufacturer’s U.S. designated
agent on behalf of the manufacturer, as
well as the manufacturer itself. PHMSA
disagrees that the burden to follow the
requirements of the approval falls solely
on the importer or end user once it
becomes part of the U.S. transportation
system. In fact, at that point it is too late
to correct a defect with the firework
device or any improper use of an EX
number. While it is incumbent upon the
manufacturer and the importer to ensure
the fireworks device meets the EX
approval requirements, it is not
PHMSA’s intent to regulate the
relationship between these two entities.
All participants throughout the supply
chain will be held accountable for their
regulatory responsibility. Furthermore,
§ 171.2(b) provides that ‘‘each offeror is
responsible only for the specific pretransportation functions that it performs
or is required to perform, and each
offeror may rely on information
provided by another offeror, unless that
offeror knows or, a reasonable person,
acting in the circumstances and
exercising reasonable care, would have
knowledge that the information
provided by the other offeror is
incorrect.’’
One commenter opposed the policy
clarification because it is unclear how
PHMSA will obtain new resources to be
able to conduct a ‘‘fitness review’’ on
each factory in China.
PHMSA currently conducts fitness
reviews on foreign entities for many
types of approval applications. Our
standard procedure, after we determine
that an application is complete, is to
evaluate the application to determine
whether the Applicant is qualified to
hold the type of approval for which it
has applied, in this case, a fireworks
approval. During the review, PHMSA
checks the application to determine
whether the Applicant followed the
requirements of the HMR. While we do
not typically conduct an onsite
inspection of the Applicant’s facilities
prior to granting or denying an approval
application for fireworks, we may
conduct an inspection if necessary to
determine the Applicant’s fitness.
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Furthermore, the Associate
Administrator may modify, suspend, or
terminate an approval in accordance
with 49 CFR 107.121 if necessary to
avoid a risk of significant harm to
persons or property.
One commenter opposed the policy
clarification because it is likely to divert
PHMSA’s scarce resources and PHMSA
does not have the means to develop a
global investigative capability. The
commenter claimed this would allow
for ‘‘front’’ or ‘‘shell’’ companies to
exploit the policy clarification.
PHMSA does not agree with the
commenter about its global investigative
capability. Part of PHMSA’s mission is
to implement the best course of action
to support the safety of the products
produced through shared responsibility
and focused accountability. PHMSA
currently conducts international as well
as domestic inspections. If a company is
found to be noncompliant with the
HMR, PHMSA may impose civil
penalties or seek criminal prosecution
for knowing, willful, or reckless
violations of the HMR.
One commenter opposed the policy
clarification because it would
potentially complicate the approvals
process.
PHMSA does not agree that the policy
clarification would complicate the
approvals process. Rather, we believe
that the policy clarification simplifies
the process. By issuing one EX number
for each type of firework device, as
opposed to issuing multiple EX
numbers for the same fireworks device,
we will reduce redundancy of approvals
for the same device and increase the
overall efficiency of the approvals
process. Additionally, by ensuring
uniform classification of fireworks
devices and eliminating application
duplicity, we will reduce the potential
risks of the shipment of unapproved
fireworks, thereby enhancing the safe
transport of fireworks devices.
Regulatory Clarity. PHMSA received
several comments concerning regulatory
clarity. Commenters are concerned
about the definition of manufacturer
being different between regulatory areas.
One commenter suggested that PHMSA
would have a different definition of
‘‘manufacturer’’ for entities who
construct packages than that used to
define a fireworks device maker. One
commenter states ‘‘PHMSA would be
creating inconsistencies where a
firework approval obtained through
§ 173.56(f) could only be held by the
person who formulates or produces the
firework while no such limit would
apply for fireworks approved through
the process used for other explosives.’’
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PHMSA disagrees with the
commenters because it is within the
agency’s discretion to interpret its own
regulations and clarify our policies.
However, we may in the future consider
adding a definition for manufacturer
through notice and comment
rulemaking.
Economic and Transportation Effects
Several commenters expressed
concern about the possible economic
ramifications caused by the
implementation of the fireworks
approval policy clarification. Although
most of the comments received
addressed economic impacts indirectly,
five commenters explicitly addressed
the economic impact of the policy
clarification.
Economic Impact. PHMSA received
several comments claiming that if
PHMSA issues approvals only to
manufacturers, it will increase costs,
discourage competition, and interfere
with trade and commerce. Commenters
expressed specific concerns that
companies could go out of business and
proprietary information could be
revealed.
PHMSA does not believe the policy
clarification pertaining to the fireworks
approvals process will affect costs,
competition, or interfere with trade and
commerce because we are not changing
the regulations pertaining to fireworks
approvals. Rather, we are clarifying the
existing regulations by advising the
public that a manufacturer, or its
designated U.S. agent, may submit an
approvals application. After review and
approval, PHMSA will issue an EX
number to the manufacturer specified in
the approval application. Despite not
being the approval holder, importers
and end users may still offer and
transport fireworks devices under the
EX approval issued to the manufacturer.
Commenters also expressed concern
that proprietary information may be
released to the public. To determine
whether records are releasable, PHMSA
complies with the Freedom of
Information Act (FOIA), 5 U.S.C. section
552, and any other applicable laws.
Should PHMSA receive a FOIA request
for information marked ‘‘confidential
commercial’’ or where PHMSA has
some other reason to believe that
confidential commercial information
may be contained in the record,
Departmental regulations in 49 CFR
§ 7.17 require that PHMSA consults
with the submitter of the information to
provide an opportunity to submit any
written objections and specific grounds
for non-disclosure before PHMSA
determines whether to release the
information.
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Transportation Safety. Four
commenters objected to the initial
Notice No. 10–9 on the grounds that no
safety benefit would be realized from
the policy clarification in the
application process. One commenter
stated ‘‘because it is required to identify
the product manufacturer on all
applications, the Agency has access to
manufacturer information regardless of
whether the approval is issued to an
importer, exporter and/or distributor.’’
PHMSA disagrees with the commenter’s
assertion. Issuing EX numbers
exclusively to manufacturers will
provide greater accountability on the
part of the manufacturer.
One commenter stated ‘‘we are not
aware of any situations where there was
a safety or transportation problem
attributable to the fact that the EX
approval was obtained by the entity that
worked with the factory and was
responsible for the fireworks once they
arrived in the United States.’’ While
PHMSA agrees with the commenter
about the safety record of fireworks in
transportation, we believe that this
policy clarification will nonetheless
make fireworks device transportation
safer. The manufacturer of the device is
the only entity that can ensure the
formulation that is approved is the
actual formulation used to create the
device. Furthermore, eliminating
redundant applications for the same
fireworks device will reduce the
potential risk of unapproved fireworks
being transported, thereby enhancing
the overall safety of the fireworks
devices in transport.
Administrative Issues
Several commenters expressed
concern over the manner in which
PHMSA is clarifying its fireworks
approvals policy. Other commenters
raised concerns regarding the effect the
policy clarification would have on other
sections of the HMR. A couple of
commenters expressed legal concerns
regarding the policy clarification. These
comments are discussed in detail below.
Manner in which the Clarification was
Presented. Three commenters expressed
concern with how we presented our
policy clarification. Specifically, these
commenters suggested that the policy
clarification presented in that Notice
may be better addressed in a rulemaking
action where comments can be
addressed in a more substantive
manner. Commenters claimed that
PHMSA is indicating a regulatory
change through that Notice, and thus,
should conduct notice and comment
rulemaking.
PHMSA is not required under the
Administrative Procedure Act to initiate
VerDate Mar<15>2010
16:04 Jun 28, 2011
Jkt 223001
informal rulemaking to clarify a policy.
Section 173.56(j) specifically states that
the manufacturer applies in writing and
is notified by the Associate
Administrator that the fireworks have
been classed, approved, and assigned an
EX-number. It is the responsibility of
the manufacturer to sign the application
and certify that the device conforms to
the APA Standard 87–1, which PHMSA
has incorporated by reference in the
HMR. In this document, we are
clarifying our policy to issue EX
approvals to manufacturers only to
coincide with the plain language of
§ 173.56(j).
Effects on the HMR. While, as cited
above, some commenters were
concerned that the clarification would
result in ambiguity in the regulations
pertaining to the definition of different
types of manufacturers, (e.g., fiberboard
box manufacturers and fireworks
manufacturers), commenters also raised
concern regarding the potential
precedent set by the policy clarification
in the initial Notice No. 10–9.
Specifically, commenters maintained
that the clarification presented in the
initial Notice No. 10–9 could affect the
definition of ‘‘manufacturer’’ in other
parts of the HMR. In addition, concern
was raised that this could set a
precedent for how explosives, other
than fireworks, are treated. One
commenter, for example, is concerned
that this policy may affect requirements
for package manufacturers.
PHMSA does not agree with the
commenters that this document would
affect other provisions of the HMR. In
this document we are clarifying our
policy with respect to fireworks
approvals only.
Legal Issues. PHMSA received a
comment opposing the policy
clarification based on the doctrine of
laches. The commenter indicated that
PHMSA’s ‘‘neglect to assert a right, the
lapse of time associated therewith and
resultant disadvantage to another bars
the neglecting party from asserting the
right.’’
PHMSA does not agree with the
commenter’s application of the doctrine
of laches. Laches is the equitable
counterpart to the statute of limitations
that bars a claim when a delay in
bringing the claim is unreasonable and
results in prejudice to the opposing
party. In general, laches cannot be
imputed to the Federal government and
is not applicable to an agency’s
determination to clarify policy.
Another commenter opposed the
policy clarification asserting because
PHMSA has not thoroughly explained
its reasons for changing the policy.
PO 00000
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Fmt 4700
Sfmt 4700
38057
PHMSA agrees that we should
provide a reasoned basis for the policy
clarification, but disagrees that we have
failed to do so. As stated in the initial
Notice No. 10–9, we believe issuing
fireworks approvals only to
manufacturers will enhance safety by
ensuring uniform classification of
fireworks devices, eliminating
application duplicity, and minimizing
the potential risks of the shipment of
unapproved fireworks.
PHMSA received multiple comments
opposing the policy clarification based
on our lack of jurisdiction over foreign
manufacturers.
PHMSA agrees that we lack
jurisdiction over foreign manufacturers
who manufacture fireworks, but do not
offer them for transportation in
commerce. However, the Federal
Hazardous Materials Transportation
Law (49 U.S.C. 5101, et. seq.) provides
the authority to regulate the safe
transportation of hazardous materials in
interstate, intrastate, and foreign
commerce. If a foreign manufacturer
does not merely manufacture the
fireworks, but is also an offeror and
offers fireworks for transportation in
commerce within the U.S., then our
regulations would apply and the foreign
manufacturer may be held accountable
for violations of the HMR. Furthermore,
foreign manufacturers may have an
economic incentive to obtain EX
approvals given the market in the U.S.
for foreign fireworks.
One commenter opposed the policy
clarification based on Executive Order
No. 13563, Improving Regulation and
Regulatory Review, dated January 18,
2011. The commenter indicated that, if
adopted the policy clarification would
not support the spirit of the Executive
Order and would create more burdens
on both the regulated industry and
government.
PHMSA does not agree that the policy
clarification would contradict the spirit
of the Executive Order, which addresses
an agency’s adoption of new regulations
and does not restrict the agency’s ability
to interpret its existing regulations or to
make policy clarifications.
IV. Summary of Policy Clarification
Based on the comments received and
our responses to those comments,
PHMSA will proceed to implement the
policy clarification discussed in this
document. The implementation strategy
is detailed below:
1. All EX numbers issued prior to
June 29, 2011 will continue to remain in
effect.
2. All pending fireworks approval
applications submitted to PHMSA prior
to June 29, 2011 will continue to be
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Federal Register / Vol. 76, No. 125 / Wednesday, June 29, 2011 / Rules and Regulations
mstockstill on DSK4VPTVN1PROD with RULES
reviewed, processed, and if approved,
issued to the applicant.
3. All fireworks approval applications
submitted to PHMSA after June 29, 2011
will only be accepted from
manufacturers or their designated
agents. Designated agents, as specified
in § 105.40, may submit applications on
behalf of the manufacturer as long as the
agent or the manufacturer signs the
application and certifies that the device
VerDate Mar<15>2010
16:04 Jun 28, 2011
Jkt 223001
for which approval is requested
conforms to APA Standard 87–1, and
that the descriptions and technical
information contained in the
application are complete and accurate,
in accordance with § 173.56(j)(3).
PHMSA will review and process each
application, and if approved, will issue
an EX approval number only to the
manufacturer specified in the
application.
PO 00000
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Issued in Washington, DC, on June 21,
2011 under authority delegated in 49 CFR
part 1.
Magdy El-Sibaie,
Associate Administrator for Hazardous
Materials Safety, Pipeline and Hazardous
Materials Safety Administration.
[FR Doc. 2011–15969 Filed 6–28–11; 8:45 am]
BILLING CODE 4910–60–P
E:\FR\FM\29JNR1.SGM
29JNR1
]]>Agencies
[Federal Register Volume 76, Number 125 (Wednesday, June 29, 2011)]
[Rules and Regulations]
[Pages 38053-38058]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15969]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
49 CFR Part 173
[Docket No. PHMSA-2010-0353; Notice No. 10-9]
Clarification of the Fireworks Approvals Policy
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.
ACTION: Clarification.
-----------------------------------------------------------------------
[[Page 38054]]
SUMMARY: In this document, PHMSA is responding to comments received
from its initial Notice No. 10-9 clarifying PHMSA's policy regarding
the fireworks approvals program. Furthermore, in this document PHMSA is
restating our policy clarification in that we will issue firework
classification approvals only to fireworks manufacturers, and accept
firework classification applications only from fireworks manufacturers
or their designated agents. This policy clarification is intended to
enhance safety by ensuring accountability of the manufacture of the
device, and reducing the number of duplicate applications and approvals
being issued for identical fireworks devices.
DATES: The policy clarification discussed in this document is effective
June 29, 2011.
FOR FURTHER INFORMATION CONTACT: Mr. Ryan Paquet, Director, Approvals
and Permits Division, Office of Hazardous Materials Safety, (202) 366-
4512, PHMSA, 1200 New Jersey Avenue, SE., Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Background
III. List of Commenters, Beyond-the-Scope Comments, and General
Comments
IV. Summary of Policy Clarification
I. Introduction
With regard to fireworks approvals, the Hazardous Materials
Regulations (HMR; 49 CFR parts 171-180), Section 173.56(j)(3) states
that ``[t]he manufacturer applies in writing to the Associate
Administrator following the applicable requirements in APA Standard 87-
1, and is notified in writing by the Associate Administrator that the
fireworks have been classed, approved, and assigned an EX number.''
On December 17, 2010, PHMSA published the initial Notice No. 10-9
(75 FR 79085) clarifying its policy, consistent with the HMR, to issue
firework classification approvals only to fireworks manufacturers, and
accept firework classification applications only from fireworks
manufacturers or their designated agents. The Notice also sought
comment on that clarification. In today's document, PHMSA is responding
to those comments and restating its policy clarification on the
fireworks approval program.
The comments received covered various topics, including the
economic impact, language barrier issues, jurisdictional issues,
implementation time, and the legal issues associated with the Notice
itself. Furthermore, commenters also expressed concern on how the
policy would affect the EX application volume, the control and
distribution of fireworks designs, PHMSA's ability to ensure compliance
with and to enforce the clarification, and the relationship with other
Federal regulations.
II. Background
The pyrotechnic industry is a global logistics supply chain
comprised of mostly foreign fireworks manufacturers and domestic
importers, retailers, distributors, and consumers. The transportation
of an explosive (fireworks device) requires an EX classification
approval issued by PHMSA, commonly referred to as an EX number. The EX
number is a unique identifier that indicates the device has been
classed and approved for transportation in the U.S., and is specific to
a particular device as specified in 49 CFR 173.56(j) and the APA
Standard 87-1.
PHMSA understands that it is a common industry practice for
fireworks devices produced by one manufacturer to be marketed and sold
under different trade names. Further, each retailer, importer or
distributor, in addition to the manufacturer, applies for and receives
an EX classification approval for the identical firework device. This
practice has resulted in PHMSA processing multiple applications and
issuing multiple approvals for the same firework device.
For some time, PHMSA has accepted fireworks applications from
manufacturers, importers, retailers and distributors, and has issued
the classification approvals to those stakeholders in the pyrotechnic
industry. This redundant and burdensome process does not promote the
safe transportation of explosives (fireworks devices); instead, it
impedes the conduct of business for both the fireworks industry and
PHMSA.
In this document, PHMSA is responding to comments on its policy
clarification to issue fireworks classification approvals only to
fireworks manufacturers. PHMSA believes that this policy will enhance
safety by ensuring accountability of the manufacture of the device and
reducing the number of duplicate applications and approvals being
issued for identical fireworks devices. The manufacturer of the device
is the only entity that can ensure the approved formulation is the
actual formulation used to create the device.
III. List of Commenters, Beyond-the-Scope Comments, and General
Comments
PHMSA received 18 comments in response to the initial Notice No.
10-9. Some of the commenters requested that we expedite the issuance of
this document to finalize the clarification of the policy. We recognize
their concerns and have made every effort to publish this document in
an expeditious manner. While a minority of the commenters supported the
clarification to the fireworks policy in initial Notice 10-9, a
majority of the commenters had reservations about it. The comments, as
submitted to the docket for the initial Notice No. 10-9 (Docket No.
PHMSA-2010-0353), may be accessed via https://www.regulations.gov and
were submitted by the following individuals, companies and
associations:
(1) Ms. Elizabeth Knauss; PHMSA-2010-0353-0002
(2) Huisky Trading Co., Ltd.; PHMSA-2010-0353-0003
(3) Extreme Pyrotechnics LLC; PHMSA-2010-0353-0004
(4) Rozzi's Famous Fireworks; PHMSA-2010-0353-0005
(5) Dangerous Goods Advisory Council (DGAC); PHMSA-2010-0353-0006
(6) Kellner's Fireworks Inc.; PHMSA-2010-0353-0007
(7) B.J. Alan Company; PHMSA-2010-0353-0008
(8) DG Advisor, LLC; PHMSA-2010-0353-0009
(9) International Fireworks Shippers Alliance (IFSA); PHMSA-2010-0353-
0010
(10) Law Office of Douglas Mawhorr; PHMSA-2010-0353-0011
(11) Pyrotechnics Guild International; PHMSA-2010-0353-0012
(12) Institute of Makers of Explosives (IME); PHMSA-2010-0353-0013
(13) National Fireworks Association; PHMSA-2010-0353-0014
(14) Galaxy Fireworks, Inc.; PHMSA-2010-0353-0017
(15) American Pyrotechnics Association (APA); PHMSA-2010-0353-0018
(16) Alliance of Special Effects & Pyrotechnic Operators, Inc. (ASEPO);
PHMSA-2010-0353-0019
(17) Fireworks Over America; PHMSA-2010-0353-0021
(18) American Promotional Events Inc.; PHMSA-2010-0353-0023
Beyond-the-Scope Comments
PHMSA received ten comments beyond the scope of this document. One
commenter requests PHMSA consider waste management of used or defective
fireworks when proposing any amendments to regulations related to
[[Page 38055]]
the transport of fireworks. This document does not propose any
regulatory amendments; rather, we are clarifying existing policy. While
PHMSA agrees environmental impacts should be considered when proposing
amendments to regulations, no regulatory changes were proposed in the
Notice, and therefore, waste management of fireworks is beyond the
scope of this document.
PHMSA received nine comments suggesting alternative approaches
aimed at improving the current fireworks approvals process. These
alternative approaches ranged from small modifications and improvements
to the current system, to the complete elimination of the requirement
for EX numbers for consumer fireworks. PHMSA values input from the
stakeholders involved in the fireworks approval process; however, the
alternative approaches suggested are beyond the scope of this document
and will not be addressed here. The scope of this document is limited
to PHMSA's issuance of fireworks approvals only to fireworks
manufacturers. While we agree that certain alternative approaches to
fireworks approvals merit PHMSA's consideration, we urge those
commenters who submitted these beyond-the-scope approaches to request a
change in the regulations by filing the recommendations as petitions
for rulemakings in accordance with 49 CFR 106.95 and 106.100.
General Comments
Implementation Concerns
PHMSA received comments both in support of and in opposition to the
policy clarification in the initial Notice No. 10-9. A number of these
concerns dealt specifically with how PHMSA's implementation of the
clarification would affect the pyrotechnics industry. These comments
are discussed in detail below.
Implementation. Commenters suggested that if the clarification
presented in the initial Notice No. 10-9 were adopted, there would need
to be a substantial implementation time. PHMSA received two comments
concerned with the amount of time for implementing the clarification
and the effect on industry.
PHMSA understands the concerns the fireworks industry has expressed
about the ramifications of implementing this action. In response to
these concerns PHMSA has devised an implementation plan that addresses
these concerns (see section: IV. Summary of Policy Clarification). As
of the date of the publication of this document in the Federal
Register, classification approval applications will be issued only to
the manufacturer. Fireworks approvals applications submitted on behalf
of entities other than the manufacturer to PHMSA prior to the
publication date of this document in the Federal Register (i.e. already
accepted by PHMSA) will continue to be reviewed, processed, and if
approved, issued to the applicant.
Impact on Fireworks EX Application Volume. Specifically, PHMSA
received comments regarding what impact the clarification would have on
the actual volume of fireworks EX applications received. PHMSA received
comments from seven companies opposing the policy clarification
asserting that there will be an increase in the volume of applications
that PHMSA will have to process. However, one company supported the
policy clarification indicating that it is an ``effort to reduce
redundancy and increase process efficiency.''
PHMSA does not agree with the commenters' concerns pertaining to
application volume. We believe that this is a safety and data
management issue. Furthermore, we do not make policy decisions of this
type based on the potential volume of applications. Nonetheless, PHMSA
believes that there would not be an appreciable increase to the number
of firework applications received. However, if such an increase occurs,
it will be temporary and over time application volume will decrease.
One commenter asserted that an EX approval allows multiple
manufacturers to use the same EX number. This is incorrect. The use of
the same EX number by multiple manufacturers constitutes a violation of
the HMR. Only the manufacturer identified in the approval application
is authorized to use the assigned EX number. PHMSA does not issue the
same EX approval number to more than one holder/manufacturer.
Language Barriers. A majority of fireworks manufacturers are
located outside the U.S. where English is not a first language. Several
commenters expressed concern that implementing the policy clarification
could be complicated by language barriers present between PHMSA
officials and foreign fireworks manufacturers. Commenters cited
examples of Chinese companies not understanding why an application is
rejected and not being able to correct errors when re-applying.
PHMSA does not agree with the commenters' concerns pertaining to a
language barrier. All companies based outside of the U.S. are required
to have a U.S. designated agent (see Sec. 105.40) to support the
company in various issues, including language translation. PHMSA has
issued many approvals to foreign companies without any confusion or
misunderstanding as a result of language barriers. When language
barriers arise, it is the U.S. designated agent's responsibility to
resolve any communication problems and technical issues.
Control and Distribution of Fireworks Designs. Three commenters
addressed the effect of initial Notice No. 10-9 on the control and
distribution of fireworks design types. U.S. fireworks distributors
expressed their concern that they will no longer have exclusive control
over their firework products if the clarification presented in the
initial Notice No. 10-9 were implemented. These commenters oppose the
policy clarification based on possible trademark infringement. The
commenters who addressed this issue indicated that, if adopted, the
policy clarification would deprive them of their ability ``to trademark
private label products that are proprietary to U.S. companies.''
PHMSA does not agree with the commenters that the policy
clarification would result in trademark infringement. The holder of the
EX approval for a firework device bears no relevance to a company's
protected trademark. The U.S. Patent and Trademark Office defines a
trademark as ``a word, phrase, symbol or design, or a combination
thereof, that identifies and distinguishes the source of the goods of
one party from those of others.'' Trademark infringement occurs when a
competitor uses a mark that is identical or confusingly similar to the
protected trademark. An EX approval number is assigned by the Associate
Administrator to an explosive device that has been evaluated under 49
CFR 173.56. Fireworks EX approval applications are reviewed by
transportation specialists who evaluate the composition and safety of
the firework device. Thus, a protected trademark and an EX approval
number are issued separately by different U.S. agencies for distinctly
separate purposes, which are mutually exclusive.
Ability to Ensure Compliance/Enforce. Various commenters suggested
that the policy clarification in the initial Notice No. 10-9 could
prove difficult for PHMSA to enforce. In addition, commenters suggested
that the policy clarification could decrease regulatory clarity and
make it more difficult for the regulated entities to comply with the
HMR.
One commenter opposed the policy clarification expressing concern
that by placing the maintenance of the EX
[[Page 38056]]
number wholly in the hands of the manufacturer, the U.S. user or seller
has no capacity to assure that the numbers are being administered and
applied correctly. They state: ``it is the importers and end users who
are transporting the products in the U.S., not the manufacturers. The
importers and end users are the ones who must demonstrate compliance.''
While firework classification approvals will only be issued to
fireworks manufacturers, PHMSA will accept fireworks approval
applications from the manufacturer's U.S. designated agent on behalf of
the manufacturer, as well as the manufacturer itself. PHMSA disagrees
that the burden to follow the requirements of the approval falls solely
on the importer or end user once it becomes part of the U.S.
transportation system. In fact, at that point it is too late to correct
a defect with the firework device or any improper use of an EX number.
While it is incumbent upon the manufacturer and the importer to ensure
the fireworks device meets the EX approval requirements, it is not
PHMSA's intent to regulate the relationship between these two entities.
All participants throughout the supply chain will be held accountable
for their regulatory responsibility. Furthermore, Sec. 171.2(b)
provides that ``each offeror is responsible only for the specific pre-
transportation functions that it performs or is required to perform,
and each offeror may rely on information provided by another offeror,
unless that offeror knows or, a reasonable person, acting in the
circumstances and exercising reasonable care, would have knowledge that
the information provided by the other offeror is incorrect.''
One commenter opposed the policy clarification because it is
unclear how PHMSA will obtain new resources to be able to conduct a
``fitness review'' on each factory in China.
PHMSA currently conducts fitness reviews on foreign entities for
many types of approval applications. Our standard procedure, after we
determine that an application is complete, is to evaluate the
application to determine whether the Applicant is qualified to hold the
type of approval for which it has applied, in this case, a fireworks
approval. During the review, PHMSA checks the application to determine
whether the Applicant followed the requirements of the HMR. While we do
not typically conduct an onsite inspection of the Applicant's
facilities prior to granting or denying an approval application for
fireworks, we may conduct an inspection if necessary to determine the
Applicant's fitness. Furthermore, the Associate Administrator may
modify, suspend, or terminate an approval in accordance with 49 CFR
107.121 if necessary to avoid a risk of significant harm to persons or
property.
One commenter opposed the policy clarification because it is likely
to divert PHMSA's scarce resources and PHMSA does not have the means to
develop a global investigative capability. The commenter claimed this
would allow for ``front'' or ``shell'' companies to exploit the policy
clarification.
PHMSA does not agree with the commenter about its global
investigative capability. Part of PHMSA's mission is to implement the
best course of action to support the safety of the products produced
through shared responsibility and focused accountability. PHMSA
currently conducts international as well as domestic inspections. If a
company is found to be noncompliant with the HMR, PHMSA may impose
civil penalties or seek criminal prosecution for knowing, willful, or
reckless violations of the HMR.
One commenter opposed the policy clarification because it would
potentially complicate the approvals process.
PHMSA does not agree that the policy clarification would complicate
the approvals process. Rather, we believe that the policy clarification
simplifies the process. By issuing one EX number for each type of
firework device, as opposed to issuing multiple EX numbers for the same
fireworks device, we will reduce redundancy of approvals for the same
device and increase the overall efficiency of the approvals process.
Additionally, by ensuring uniform classification of fireworks devices
and eliminating application duplicity, we will reduce the potential
risks of the shipment of unapproved fireworks, thereby enhancing the
safe transport of fireworks devices.
Regulatory Clarity. PHMSA received several comments concerning
regulatory clarity. Commenters are concerned about the definition of
manufacturer being different between regulatory areas. One commenter
suggested that PHMSA would have a different definition of
``manufacturer'' for entities who construct packages than that used to
define a fireworks device maker. One commenter states ``PHMSA would be
creating inconsistencies where a firework approval obtained through
Sec. 173.56(f) could only be held by the person who formulates or
produces the firework while no such limit would apply for fireworks
approved through the process used for other explosives.''
PHMSA disagrees with the commenters because it is within the
agency's discretion to interpret its own regulations and clarify our
policies. However, we may in the future consider adding a definition
for manufacturer through notice and comment rulemaking.
Economic and Transportation Effects
Several commenters expressed concern about the possible economic
ramifications caused by the implementation of the fireworks approval
policy clarification. Although most of the comments received addressed
economic impacts indirectly, five commenters explicitly addressed the
economic impact of the policy clarification.
Economic Impact. PHMSA received several comments claiming that if
PHMSA issues approvals only to manufacturers, it will increase costs,
discourage competition, and interfere with trade and commerce.
Commenters expressed specific concerns that companies could go out of
business and proprietary information could be revealed.
PHMSA does not believe the policy clarification pertaining to the
fireworks approvals process will affect costs, competition, or
interfere with trade and commerce because we are not changing the
regulations pertaining to fireworks approvals. Rather, we are
clarifying the existing regulations by advising the public that a
manufacturer, or its designated U.S. agent, may submit an approvals
application. After review and approval, PHMSA will issue an EX number
to the manufacturer specified in the approval application. Despite not
being the approval holder, importers and end users may still offer and
transport fireworks devices under the EX approval issued to the
manufacturer.
Commenters also expressed concern that proprietary information may
be released to the public. To determine whether records are releasable,
PHMSA complies with the Freedom of Information Act (FOIA), 5 U.S.C.
section 552, and any other applicable laws. Should PHMSA receive a FOIA
request for information marked ``confidential commercial'' or where
PHMSA has some other reason to believe that confidential commercial
information may be contained in the record, Departmental regulations in
49 CFR Sec. 7.17 require that PHMSA consults with the submitter of the
information to provide an opportunity to submit any written objections
and specific grounds for non-disclosure before PHMSA determines whether
to release the information.
[[Page 38057]]
Transportation Safety. Four commenters objected to the initial
Notice No. 10-9 on the grounds that no safety benefit would be realized
from the policy clarification in the application process. One commenter
stated ``because it is required to identify the product manufacturer on
all applications, the Agency has access to manufacturer information
regardless of whether the approval is issued to an importer, exporter
and/or distributor.'' PHMSA disagrees with the commenter's assertion.
Issuing EX numbers exclusively to manufacturers will provide greater
accountability on the part of the manufacturer.
One commenter stated ``we are not aware of any situations where
there was a safety or transportation problem attributable to the fact
that the EX approval was obtained by the entity that worked with the
factory and was responsible for the fireworks once they arrived in the
United States.'' While PHMSA agrees with the commenter about the safety
record of fireworks in transportation, we believe that this policy
clarification will nonetheless make fireworks device transportation
safer. The manufacturer of the device is the only entity that can
ensure the formulation that is approved is the actual formulation used
to create the device. Furthermore, eliminating redundant applications
for the same fireworks device will reduce the potential risk of
unapproved fireworks being transported, thereby enhancing the overall
safety of the fireworks devices in transport.
Administrative Issues
Several commenters expressed concern over the manner in which PHMSA
is clarifying its fireworks approvals policy. Other commenters raised
concerns regarding the effect the policy clarification would have on
other sections of the HMR. A couple of commenters expressed legal
concerns regarding the policy clarification. These comments are
discussed in detail below.
Manner in which the Clarification was Presented. Three commenters
expressed concern with how we presented our policy clarification.
Specifically, these commenters suggested that the policy clarification
presented in that Notice may be better addressed in a rulemaking action
where comments can be addressed in a more substantive manner.
Commenters claimed that PHMSA is indicating a regulatory change through
that Notice, and thus, should conduct notice and comment rulemaking.
PHMSA is not required under the Administrative Procedure Act to
initiate informal rulemaking to clarify a policy. Section 173.56(j)
specifically states that the manufacturer applies in writing and is
notified by the Associate Administrator that the fireworks have been
classed, approved, and assigned an EX-number. It is the responsibility
of the manufacturer to sign the application and certify that the device
conforms to the APA Standard 87-1, which PHMSA has incorporated by
reference in the HMR. In this document, we are clarifying our policy to
issue EX approvals to manufacturers only to coincide with the plain
language of Sec. 173.56(j).
Effects on the HMR. While, as cited above, some commenters were
concerned that the clarification would result in ambiguity in the
regulations pertaining to the definition of different types of
manufacturers, (e.g., fiberboard box manufacturers and fireworks
manufacturers), commenters also raised concern regarding the potential
precedent set by the policy clarification in the initial Notice No. 10-
9. Specifically, commenters maintained that the clarification presented
in the initial Notice No. 10-9 could affect the definition of
``manufacturer'' in other parts of the HMR. In addition, concern was
raised that this could set a precedent for how explosives, other than
fireworks, are treated. One commenter, for example, is concerned that
this policy may affect requirements for package manufacturers.
PHMSA does not agree with the commenters that this document would
affect other provisions of the HMR. In this document we are clarifying
our policy with respect to fireworks approvals only.
Legal Issues. PHMSA received a comment opposing the policy
clarification based on the doctrine of laches. The commenter indicated
that PHMSA's ``neglect to assert a right, the lapse of time associated
therewith and resultant disadvantage to another bars the neglecting
party from asserting the right.''
PHMSA does not agree with the commenter's application of the
doctrine of laches. Laches is the equitable counterpart to the statute
of limitations that bars a claim when a delay in bringing the claim is
unreasonable and results in prejudice to the opposing party. In
general, laches cannot be imputed to the Federal government and is not
applicable to an agency's determination to clarify policy.
Another commenter opposed the policy clarification asserting
because PHMSA has not thoroughly explained its reasons for changing the
policy.
PHMSA agrees that we should provide a reasoned basis for the policy
clarification, but disagrees that we have failed to do so. As stated in
the initial Notice No. 10-9, we believe issuing fireworks approvals
only to manufacturers will enhance safety by ensuring uniform
classification of fireworks devices, eliminating application duplicity,
and minimizing the potential risks of the shipment of unapproved
fireworks.
PHMSA received multiple comments opposing the policy clarification
based on our lack of jurisdiction over foreign manufacturers.
PHMSA agrees that we lack jurisdiction over foreign manufacturers
who manufacture fireworks, but do not offer them for transportation in
commerce. However, the Federal Hazardous Materials Transportation Law
(49 U.S.C. 5101, et. seq.) provides the authority to regulate the safe
transportation of hazardous materials in interstate, intrastate, and
foreign commerce. If a foreign manufacturer does not merely manufacture
the fireworks, but is also an offeror and offers fireworks for
transportation in commerce within the U.S., then our regulations would
apply and the foreign manufacturer may be held accountable for
violations of the HMR. Furthermore, foreign manufacturers may have an
economic incentive to obtain EX approvals given the market in the U.S.
for foreign fireworks.
One commenter opposed the policy clarification based on Executive
Order No. 13563, Improving Regulation and Regulatory Review, dated
January 18, 2011. The commenter indicated that, if adopted the policy
clarification would not support the spirit of the Executive Order and
would create more burdens on both the regulated industry and
government.
PHMSA does not agree that the policy clarification would contradict
the spirit of the Executive Order, which addresses an agency's adoption
of new regulations and does not restrict the agency's ability to
interpret its existing regulations or to make policy clarifications.
IV. Summary of Policy Clarification
Based on the comments received and our responses to those comments,
PHMSA will proceed to implement the policy clarification discussed in
this document. The implementation strategy is detailed below:
1. All EX numbers issued prior to June 29, 2011 will continue to
remain in effect.
2. All pending fireworks approval applications submitted to PHMSA
prior to June 29, 2011 will continue to be
[[Page 38058]]
reviewed, processed, and if approved, issued to the applicant.
3. All fireworks approval applications submitted to PHMSA after
June 29, 2011 will only be accepted from manufacturers or their
designated agents. Designated agents, as specified in Sec. 105.40, may
submit applications on behalf of the manufacturer as long as the agent
or the manufacturer signs the application and certifies that the device
for which approval is requested conforms to APA Standard 87-1, and that
the descriptions and technical information contained in the application
are complete and accurate, in accordance with Sec. 173.56(j)(3). PHMSA
will review and process each application, and if approved, will issue
an EX approval number only to the manufacturer specified in the
application.
Issued in Washington, DC, on June 21, 2011 under authority
delegated in 49 CFR part 1.
Magdy El-Sibaie,
Associate Administrator for Hazardous Materials Safety, Pipeline and
Hazardous Materials Safety Administration.
[FR Doc. 2011-15969 Filed 6-28-11; 8:45 am]
BILLING CODE 4910-60-P
