RSPA nest egg built on backs of hazmat fleets

July 1, 2002
BY THE end of fiscal year 2002, the Department of Transportation will have amassed a nest egg of approximately $26 million in surplus revenue generated

BY THE end of fiscal year 2002, the Department of Transportation will have amassed a nest egg of approximately $26 million in surplus revenue generated by the annual registration program covering the transportation of hazardous materials. That nest egg is growing by about $8 million a year.

DOT would like nothing better than to divert the money from its intended purpose, which is to fund hazardous materials emergency response planning and training activities by the states, local governments, and Indian tribes. Three times already, DOT petitioned Congress to allow diversion of the funds. Each time the request was rejected.

The next phase in this expanding drama started July 1 when 15 trade associations filed suit in federal court to force DOT to reduce hazmat registration fees to a more reasonable level and to use the surplus for its intended purpose. The lawsuit contends that DOT is required by law to adjust the amount of the hazmat registration fee to reflect any unexpended balance in the Hazardous Materials Emergency Preparedness Grants (HMEPG) fund.

The associations filing the lawsuit are among the Who's Who of the hazmat transport sector. Included are the Dangerous Goods Advisory Council, American Chemistry Council, American Trucking Associations, The Chlorine Institute, Compressed Gas Association, The Conference on Safe Transportation of Hazardous Articles, The Fertilizer Institute, Institute of Makers of Explosives, International Warehouse Logistics Association, National Paint and Coatings Association, National Propane Gas Association, National Tank Truck Carriers, Petroleum Marketers Association of America, Radiopharmaceutical Shippers and Carriers Conference, and Reusable Industrial Packaging Association.

Funding surpluses weren't much of a concern when the hazardous materials registration program was included in the Hazardous Materials Transportation Uniform Safety Act. The initial program, which remained in place from 1992 through 2000, called for an annual registration fee of $250, plus a processing fee of $50. Unfortunately, this didn't generate enough revenue to fully fund the HMEPG.

To make up for the shortfall, DOT's Research and Special Programs Administration used its discretionary authority to expand the categories of persons required to register and adopted a two-tiered ($300 and $2,000) fee schedule keyed to the Small Business Administration's “small business” criteria. The changes took effect in registration year 2000-2001, and the money came rolling in.

This was the real beginning of the DOT nest egg. The program generated $21 million in registration fees in 2000-2001. However, DOT and RSPA were only authorized by Congress to pay out $14.3 million in grants. The surplus had grown to $18.2 million by the end of fiscal year 2001.

RSPA's initial response was a proposed rule (HM-208D) that would have lowered the fee for all registrants for six registration years (2001-2002 through 2006-2007) to eliminate the surplus. The proposed rule was set aside in May 2001, and DOT began lobbying to maintain the current fee schedule and transfer the excess funds into RSPA's hazardous materials operating fund.

This is a bad idea. DOT would have little or no accountability for those funds, and it would be very tempting for bureaucrats to divert money into pet projects that had been denied funding from Congress. Essentially, we would end up with taxation without representation. Our founding fathers had a problem with that.

There is no reason that this lawsuit should go to trial. DOT and its greed-driven bureaucrats need to live within their mandate and budget. The companies that pay the hazmat registration fee deserve a one-to-two-year holiday, during which time the surplus funds would be fully spent or significantly reduced. Lastly, the registration fee should be lowered to prevent future surpluses.

About the Author

Charles Wilson

Charles E. Wilson has spent 20 years covering the tank truck, tank container, and storage terminal industries throughout North, South, and Central America. He has been editor of Bulk Transporter since 1989. Prior to that, Wilson was managing editor of Bulk Transporter and Refrigerated Transporter and associate editor of Trailer/Body Builders. Before joining the three publications in Houston TX, he wrote for various food industry trade publications in other parts of the country. Wilson has a bachelor's degree in journalism from the University of Kansas and served three years in the U.S. Army.