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PHMSA's Pipeline Safety Reauthorization:

Funding Issues



Updated August 10, 2020


Introduction

The federal pipeline safety program is administered by the Department of Transportation's (DOT's)
Pipeline and Hazardous Materials SafetyAdministration (PHMSA), working with state pipeline safety
regulators. Together, the federal and state agencies regulate the safety of the nation's hazardous liquid
(e.g., crude oil) and natural gas pipelines. Under the PIPES Act of 2016 (P.L. 114-183), funding
authorization for PHMSA's pipeline safety program expired on October 1, 2019. Although the Further
Consolidated Appropriations Act, 2020 (P.L. 116-94) includes pipeline safety appropriations for FY2020,
Congress is debating at what levels the program should next be authorized. The Trump Administration's
FY2019 and FY2020 budgets have proposed reducing PHMSA's pipeline safety funding whereas House
and Senate bills would authorize increased funding at different levels.

Past Budget Authority
PHMSA's pipeline safety program is funded primarily by user fees assessed on each regulated pipeline
operator. PHMSA collects additional fees from underground natural gas storage facility operators to fund
storage regulatory activities as part of its pipeline safety program. Much of PHISA's budget is used to
pay safety inspectors, either directly as federal employees or indirectly as state employees through state
grants. By statute, PHMSA may pay up to 80% of the cost of personnel, equipment, and activities of a
certified state pipeline safety agency. PHISA's total annual budget authority for pipeline safety has
grown since 2001 (Figure 1). For FY2019, PHMSA's enacted authority was $165 million-more than
double the agency's budget authority in FY2008 (not adjusted for inflation).








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