1. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration State Program Action Plan Linda Daugherty – OPS July 12, 2012

2. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration State Programs All States except Alaska and Hawaii participate in the Pipeline Safety Program through Certifications and Agreements States are responsible for the inspection and enforcement of approximately 80 percent of the nation’s pipeline infrastructure Approximately 300 state inspectors - 2 -

3. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration State Programs PHMSA support for State Pipeline Safety Programs –Grants to States (~ 40 million) –Training –Technical support for inspections and investigations –Supports NAPSR initiatives, state legislative challenges, and task teams PHMSA State Program Division = 10 people - 3 -

4. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Lessons Learned – Self Learning –PHMSA Internal Program Reviews Grant Management General Program Review –NTSB and OIG –Public/Media - 4 -

5. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration State Programs PHMSA State Program Action Plan Highlights: –Program Oversight –Grant Management –Transparency and Data Sharing Performance - 5 -

6. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Program Oversight Encourage States to use all enforcement tools including civil penalties Conduct more in-depth review of state program activities Promote State increasing available civil penalty amounts for violations to $100,000/$1,000,000 by increasing scoring criteria. (Note: 17 states have never issued a civil penalty in the last 10 years.) - 6 -

7. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Program Oversight Increase focus on state enforcement actions and the state follow-up to resolution Annually update the minimum recommended number of state inspection days and communicate number to states Consider imposing an increased grant penalty for a trend of the state not accomplishing program goals - 7 -

8. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Program Oversight Encourage state formalization and acceleration of high risk pipe replacement programs Increase federal/state communication through quarterly conference call with State Program Managers Transition states to Inspection Assistant (IA) for documenting inspections or use other technology for obtaining the same level of inspection information for federal/state programs - 8 -

9. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Program Oversight Update Distribution Inspection Form Formalize Procedures for De-Certifying States from Pipeline Safety Program Develop Federal/State Mentoring Program Develop and post metrics for state pipeline safety performance - 9 -

10. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Program Oversight Explore realigning Interstate Agents resources toward Intrastate facilities Conduct analysis of states receiving essentially the same grant funding, but having different incident rates for causal factors - 10 -

11. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Grant Management Separate grant financial and administrative functions Update names of grant documents to be consistent with typical grant terms Obtain OMB approval for all information gathering from states in support of grant Develop electronic grant signature capability for state grants - 11 -

12. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Grant Management Incorporate 20 percent cap on indirect cost into Part 198 Incorporate additional language in payment agreement to allow reallocation of available funds at end of grant year Include Certification with Grant Application Package and create new Progress Report Review Part 198 for need updates - 12 -

13. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Transparency and Data Sharing Encourage states to post enforcement data at operator level as PHMSA does Post PHMSA State Scoring Document, Grant Payments, Evaluation forms, and State Letters on PHMSA Website Develop internal website for State/Federal sharing of inspection and enforcement documents and issues Encourage overall increased state transparency of information and data - 13 -

14. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration State Program Performance The number of distribution incidents under state safety authority have declined by half over last 25 years During this time period miles of main increased 60% and services increased 50% - 14 -

15. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration State Programs PHMSA recognizes State have a very full plate and would like to see the programs grow –Growth is often limited by state constraints PHMSA has requested additional resources for State Programs in FY2013 PHMSA and State Programs are partners working toward a common goal. - 15 -

16. U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration Questions? - 16 -