Ammonium Nitrate Security Program, 46908-46957 [2011-19313]
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Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules
DEPARTMENT OF HOMELAND
SECURITY
Office of the Secretary
6 CFR Part 31
[Docket ID 2008–0076]
RIN 1601–AA52
Ammonium Nitrate Security Program
National Protection and
Programs Directorate, DHS
ACTION: Proposed rule; request for
comments.
AGENCY:
This proposed rule would
implement anti-terrorism measures to
better secure the homeland. The
Department of Homeland Security
would regulate the sale and transfer of
ammonium nitrate pursuant to section
563 of the Fiscal Year 2008 Department
of Homeland Security Appropriations
Act with the purpose of preventing the
use of ammonium nitrate in an act of
terrorism. This proposed rule seeks
comment on both proposed text for such
a regulation and on several practical and
legal issues integral to the development
of an Ammonium Nitrate Security
Program.
DATES: Comments and related material
must either be submitted to our online
docket via https://www.regulations.gov
on or before December 1, 2011 or reach
the Docket Management Facility by that
date. Comments sent to DHS or the
Office of Management and Budget
(OMB) on collection of information
must reach DHS or OMB on or before
October 3, 2011.
ADDRESSES: You may submit comments,
identified by docket number 2008–0076,
by one of the following methods:
• Federal eRulemaking Portal: Follow
the instructions at https://
www.regulations.gov for submitting
comments.
• Mail: U.S. Department of Homeland
Security, National Protection and
Programs Directorate, Infrastructure
Security Compliance Division (NPPD/
ISCD), 245 Murray Lane, SW., Mail Stop
0610, Arlington, VA 20598–0610.
To avoid duplication, please use only
one of these methods. For instructions
on submitting comments, see the
‘‘Public Participation’’ portion of the
SUPPLEMENTARY INFORMATION section
below.
Collection of Information Comments:
If you have comments on the collection
of information discussed in section IV.F
(‘‘Paperwork Reduction Act’’) of this
Notice of Proposed Rulemaking
(NPRM), you may submit comments to
the DHS as indicated above, and you
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may also send comments to the Office
of Information and Regulatory Affairs
(OIRA), OMB. Comments on the
collection of information must reach
DHS or OIRA on or before October 3,
2011. To ensure that your comments to
OIRA are received on time, the preferred
methods are by e-mail to
oira_submission@omb.eop.gov (include
the docket number and ‘‘Attention: Desk
Officer for Department of Homeland
Security/NPPD’’ in the subject line of
the e-mail) or fax at 202–395–6566. An
alternate, though slower, method is by
U.S. mail to the Office of Information
and Regulatory Affairs, Office of
Management and Budget, 725 17th
Street NW., Washington, DC 20503,
Attention: Desk Officer for Department
of Homeland Security/NPPD.
FOR FURTHER INFORMATION CONTACT:
Ammonium Nitrate Security Program
Manager, U.S. Department of Homeland
Security, National Protection and
Programs Directorate, Infrastructure
Security Compliance Division (NPPD/
ISCD), 245 Murray Lane, SW., Mail Stop
0610, Arlington, VA 20598–0610,
telephone number (703) 235–5263.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Public Participation
II. Background: Overview of Subtitle J and
Associated Regulatory Development
Activities
A. Subtitle J
B. October 2008 Report to Congress
C. Advance Notice of Proposed
Rulemaking
D. Research Efforts and Findings
1. Security Hazards Presented by Use of
Ammonium Nitrate
2. Detonability of Ammonium Nitrate
3. Federal Regulations Addressing
Ammonium Nitrate
a. Chemical Facility Anti-Terrorism
Standards
b. U.S. Coast Guard Maritime Security
Regulations
c. Transportation Security Administration
d. Bureau of Alcohol, Tobacco, Firearms
and Explosives
e. Department of Transportation Hazardous
Materials Regulations
f. Department of Commerce
4. State Regulations Addressing
Ammonium Nitrate
5. Voluntary Programs Addressing
Ammonium Nitrate
III. Discussion of Proposed Rule:
Implementing Subtitle J
A. Ammonium Nitrate Subject to Subtitle
J Requirements
1. Mixture Requirement
2. Threshold Weight and Individual
Products Exemptions
3. Explosives Exemption
B. Requirements for the Registration of AN
Sellers and AN Purchasers
1. Overview
2. Who Must Register
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3. Registering AN Sellers
4. Registering AN Facility Representatives
5. Registering a Designated AN Facility
POC
6. Summary of AN Facility Personnel
Registration Proposals
7. Registering AN Purchasers
8. Federal/State/Tribal/Local GovernmentOwned Entities That Are AN Facilities or
AN Purchasers
9. Registration Process
10. Initial Applications
11. Applicant Vetting Process
12. Notification of Approval or Denial
13. Revocation of Registration Numbers
14. Appealing Registration Denials and
Registration Revocations
15. Registration Updates and Expiration
16. Initial Six-Month Registration Period
C. Purchaser Verification Activities
1. Overview
2. Manner of Sale or Transfer of
Ammonium Nitrate
3. Required Verification Activities
4. Verification of the Currency and
Authenticity of a Prospective AN
Purchaser’s AN Registered User Number
5. Verification of a Prospective AN
Purchaser’s Identity When the AN
Purchaser Opts Not To Use An Agent
6. Verification of a Prospective AN
Purchaser’s Identity When the AN
Purchaser Opts To Use An Agent
7. For Sales Involving Agents, Verification
That the Agent Is Acting on Behalf of the
AN Purchaser
8. Verification of the Agent’s Identity
Based on the Visual Check of the Agent’s
Photo Identification
9. Timing of Verification Activities
10. Departmental Role in Verification
Process
11. Purchaser Verification Portal
12. Purchaser Verification Call Center
13. Purchaser Verification Portal and Call
Center
14. Suspicious Purchases and Attempted
Purchases of Ammonium Nitrate
D. Recordkeeping
1. Overview
2. Entities Responsible for Keeping Records
3. Records To Be Kept
4. Length of Retention of Records
5. Format and Storage of Records
E. Reporting of Theft or Loss of
Ammonium Nitrate
1. Overview
2. Who Must Report Theft or Loss
3. Level of Theft or Loss Warranting
Reporting
4. Process for Reporting Theft or Loss
F. Inspections and Audits
G. Guidance Materials and Posters
H. Civil Penalties, Civil Penalty
Adjudications, and Civil Penalty
Appeals
I. Consultation Requirements
J. Delegation of Authority
IV. Regulatory Analyses
A. Executive Order 12866 and Executive
Order 13563: Regulatory Planning and
Review
1. Cost Impacts
2. Benefits of the Ammonium Nitrate
Security Program
B. Regulatory Flexibility Act
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1. Reasons for and Objectives of the
Proposed Rule
2. Affected Small Business Population and
Estimated Impact of Compliance
3. Number of Small Entities That Purchase
Ammonium Nitrate
4. Number of Small Entities That Sell
Ammonium Nitrate
5. Alternatives Considered
6. Average Costs per AN Facility
7. Identification of Duplication, Overlap
and Conflict With Other Federal Rules
C. Executive Order 13132: Federalism
D. Unfunded Mandates Reform Act
E. National Environmental Policy Act
F. Paperwork Reduction Act
G. International Trade Impact Assessment
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Abbreviations and Terms Used in This
Document
AN Ammonium Nitrate
ANFO Ammonium Nitrate/Fuel Oil
ANPRM Advance Notice of Proposed
Rulemaking
ATF Bureau of Alcohol, Tobacco, Firearms,
and Explosives
ATSA Aviation and Transportation
Security Act
CFATS Chemical Facility Anti-Terrorism
Standards
CFR Code of Federal Regulations
COI Chemical of Interest
CVI Chemical-terrorism Vulnerability
Information
DHS Department of Homeland Security
DOT Department of Transportation
EAR Export Administration Regulations
FBI Federal Bureau of Investigation
FR Federal Register
HMR Hazardous Materials Regulations
HMT Hazardous Materials Table
IED Improvised Explosive Device
IRFA Initial Regulatory Flexibility Analysis
MTSA Maritime Transportation Security
Act
NAICS North American Industrial
Classification System
NPRM Notice of Proposed Rulemaking
PCII Protected Critical Infrastructure
Information
PHMSA Pipeline and Hazardous Materials
Safety Administration
POC Point of Contact
QATT Qualified Anti-Terrorism
Technology
RFA Regulatory Flexibility Act
SAFETY Support Anti-Terrorism By
Fostering Effective Technologies
SBA Small Business Administration
SORN System of Records Notice
SSI Sensitive Security Information
TSA Transportation Security
Administration
TSDB Terrorist Screening Database
TWIC Transportation Worker Identification
Credential
UMRA Unfunded Mandates Reform Act
USC United States Code
USCG United States Coast Guard
USDA United States Department of
Agriculture
VSL Value per Statistical Life
I. Public Participation
Interested persons are invited to
participate in this rulemaking by
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submitting written data, views, or
arguments on all aspects of this NPRM.
The Department of Homeland Security
(DHS or the Department) also invites
comments that relate to the economic,
environmental, or federalism effects that
may result from this NPRM. Comments
that will provide the most assistance to
the Department in developing this
proposed rule will refer to a specific
provision of the NPRM or the Secure
Handling of Ammonium Nitrate
provisions in the Homeland Security
Act, as amended, explain the reason for
any comments, and include other
information or authority that supports
such comments.
Submission of Sensitive Information:
Do not submit comments that include
trade secrets, confidential commercial
or financial information, Chemicalterrorism Vulnerability Information
(CVI), Protected Critical Infrastructure
Information (PCII), or Sensitive Security
Information (SSI) to the public
regulatory docket. Please submit such
comments separately from other
comments on the proposed rule.
Comments containing this type of
information should be appropriately
marked as containing such information
and submitted by mail to the following
address: U.S. Department of Homeland
Security, National Protection and
Programs Directorate, Infrastructure
Security Compliance Division (NPPD/
ISCD), 245 Murray Lane, SW., Mail Stop
0610, Arlington, VA 20598–0610.
Upon receipt of such comments, DHS
will not place the comments in the
public docket and will handle them in
accordance with applicable safeguards
and restrictions on access. DHS will
hold them in a separate file to which the
public does not have access, and place
a note in the public docket that DHS has
received such materials from the
commenter. If DHS receives a request to
examine or copy this information, DHS
will treat it as any other request under
the Freedom of Information Act (FOIA),
5 U.S.C. 552, and the Department’s
FOIA regulation found in Part 5 of Title
6 of the Code of Federal Regulations
(CFR).
Instructions: All submissions must
include the agency name and docket
number for this rulemaking. All
comments received will be posted
without change to https://
www.regulations.gov, including any
personal information provided.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov.
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II. Background: Overview of Subtitle J
and Associated Regulatory
Development Activities
A. Subtitle J
Section 563 of the Fiscal Year 2008
Department of Homeland Security
Appropriations Act amends the
Homeland Security Act of 2002 and
directs DHS to ‘‘regulate the sale and
transfer of ammonium nitrate by an
ammonium nitrate facility * * * to
prevent the misappropriation or use of
ammonium nitrate in an act of
terrorism.’’ See Public Law 110–161,
Division E (2007). Section 563 amends
the Homeland Security Act of 2002 (6
U.S.C. 361 et seq.) by adding in a new
Subtitle J—Secure Handling of
Ammonium Nitrate, sections 899A–899J
(to be codified from 6 U.S.C. 488 to 6
U.S.C. 488i). All references to 6 U.S.C.
488–488i throughout this document
refer to the corresponding sections in
the Homeland Security Act of 2002, as
amended by section 563 of the Fiscal
Year 2008 Department of Homeland
Security Appropriations Act. All
references to ‘‘Subtitle J’’ throughout
this document refer to Subtitle J of the
Homeland Security Act of 2002, as
created by the Fiscal Year 2008
Department of Homeland Security
Appropriations Act.
Pursuant to Subtitle J, the Department
must develop regulations that require, at
a minimum, the following activities:
• Registration Applications: Certain
ammonium nitrate sellers and
prospective ammonium nitrate
purchasers must apply for ammonium
nitrate (AN) registration numbers from
DHS in order to sell, transfer, and/or
purchase ammonium nitrate. See 6
U.S.C. 488a(c) and 6 U.S.C. 488a(d).
• Terrorist Screening Database
Checks: The Department must use
identifying information of each
prospective applicant to conduct a
check against identifying information
that appears in the Terrorist Screening
Database (TSDB). See 6 U.S.C.
488a(i)(2)(A).
• Registration Numbers: The
Department generally must issue an
ammonium nitrate registration number
or deny the registration of an applicant
within 72 hours of receipt of each
ammonium nitrate seller’s or
ammonium nitrate purchaser’s complete
registration application. See 6 U.S.C.
488a(i)(3)(A).
• Purchaser Verification Activities: At
the point of sale, ammonium nitrate
sellers must verify each potential
ammonium nitrate purchaser’s identity
and registration to purchase ammonium
nitrate pursuant to procedures
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established by the Department. See 6
U.S.C. 488a(e)(2)(D).
• Recordkeeping: All ammonium
nitrate facilities must keep records of
sales or transfers of ammonium nitrate
for at least two years after each
transaction. See 6 U.S.C. 488a(e)(1) and
6 U.S.C. 488a(e)(2).
• Reporting Theft or Loss of
Ammonium Nitrate: Certain ammonium
nitrate sellers must report the theft or
loss of ammonium nitrate to Federal
authorities within one calendar day of
discovery of theft or loss. See 6 U.S.C.
488d.
• Inspections and Audits: The
Department must conduct or oversee
regulatory compliance inspections and
audits of ammonium nitrate facilities’
records, monitor compliance with the
requirements of Subtitle J, and deter or
prevent misappropriation of ammonium
nitrate for use in terrorist acts. See 6
U.S.C. 488b.
• Guidance Materials and Posters:
The Department must develop guidance
materials that set forth procedures for
appealing denial of an application for an
ammonium nitrate registration number,
guidance materials that help ammonium
nitrate facilities identify suspicious
ammonium nitrate purchases or
attempted purchases or transfers, and
posters providing information on
sellers’ record-keeping responsibilities
and on the penalties for violating
requirements under the Department’s
ammonium nitrate program. See 6
U.S.C. 488a(i)(4)(c) and 6 U.S.C. 488c(c).
• Establishing Threshold Percentage
of Ammonium Nitrate in a Mixture: The
Department must establish a threshold
percentage of ammonium nitrate in a
mixture for that mixture to be regulated
under the Department’s ammonium
nitrate program. See 6 U.S.C. 488a(b).
• Appeals and Penalties: The
Department must establish an expedited
appeals process for applicants denied
ammonium nitrate registration numbers,
as well as an appeals process for
individuals assessed civil penalties for
violating the rules promulgated under
Subtitle J. See 6 U.S.C. 488a(i)(4) and 6
U.S.C. 488e(d).
B. October 2008 Report to Congress
In an Explanatory Statement
accompanying section 563 of the Fiscal
Year 2008 Department of Homeland
Security Appropriations Act the
Chairman of the House Committee on
Appropriations indicated a desire for
the Department’s National Protection
and Programs Directorate to ‘‘provide a
plan to implement [Subtitle J], including
analysis of the resources required to do
so, and a proposal for reallocating
funding within the National Protection
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and Programs Directorate for doing so.’’
See Explanatory Statement Submitted
by Mr. Obey, Chairman of the House
Committee on Appropriations,
Regarding the Consolidated
Appropriations Amendment of the
House of Representatives to the Senate
Amendment to H.R. 2764, 153 Cong.
Rec. H15741, H16092 (2007), available
at https://www.gpo.gov/fdsys/pkg/CREC2007-12-17/pdf/CREC-2007-12-17bk2.pdf. In October 2008, the
Department submitted to Congress a
report in response to this Explanatory
Statement, outlining possible
approaches to implementing Subtitle J
and the potential costs associated with
each approach. The Department’s report
to Congress has aided in evaluating
many of the approaches contained in
this NPRM. The Department’s report can
be found in the docket for this NPRM,
which is available at https://
www.regulations.gov.
C. Advance Notice of Proposed
Rulemaking
DHS published an Advance Notice of
Proposed Rulemaking (ANPRM) titled
‘‘Secure Handling of Ammonium Nitrate
Program’’ on October 29, 2008. See 73
FR 64280. The ANPRM solicited public
comment on the following specific
issues:
• Comments regarding submission of
registration applications (e.g., whether
applications should be submitted
electronically or in paper form; whether
applications should be available only
through DHS or through Local
Cooperative Extension offices or at
United States Post Offices);
• Comments regarding the technical
capabilities (e.g., access to computers;
access to the Internet; average level of
computing skills; frequency of use of
integrated Information Technology
systems) of ammonium nitrate
manufacturers, distributors, sellers, and
end-users;
• Comments regarding DHS
distribution of ammonium nitrate
registration letters or certificates (e.g.,
whether DHS should use e-mail or
regular mail);
• Comments regarding a verification
process for registrations and ammonium
nitrate purchases, including methods for
verifying the identity of any ammonium
nitrate purchaser, as well as the identity
of designated agents purchasing
ammonium nitrate on behalf of
registered ammonium nitrate
purchasers;
• Comments on the detonability of
ammonium nitrate at certain
concentrations, including research being
conducted concerning the detonability
of ammonium nitrate;
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• Comments on how likely
ammonium nitrate fertilizer users would
be to use an alternative fertilizer that is
potentially less detonable, such as SulfN® 26 Fertilizer Process and Product
(ammonium sulfate nitrate fertilizer)
which DHS recently Designated as a
Qualified Anti-Terrorism Technology
(QATT) pursuant to 6 U.S.C. 441–444
(the Support Anti-terrorism by Fostering
Effective Technologies Act of 2002, or
SAFETY Act). See https://
www.safetyact.gov;
• Comments on how best to conduct
or oversee regulatory compliance
inspections and audits of ammonium
nitrate facilities’ records to ensure that
regulated ammonium nitrate facilities
are properly maintaining records, to
monitor compliance with the
requirements of Subtitle J, and to deter
or prevent misappropriation of
ammonium nitrate for use in terrorist
acts;
• Comments on the economic impacts
(both long-term and short-term,
quantifiable and qualitative) of the
implementation of Subtitle J, including
potential impacts on State, local, and
tribal governments of the United States;
potential impacts on agri-business,
including ammonium nitrate
manufacturers, importers, packagers,
distributors, retailers, and end-users
including farmers (e.g., whether current
ammonium nitrate purchasers would
likely reduce their ammonium nitrate
purchases as a result of a new regulatory
regime); and potential impacts on small
businesses;
• Comments on the monetary and
other costs anticipated to be incurred by
U.S. citizens and others as a result of the
new compliance requirements, such as
the costs in time and money that an
individual may incur to obtain an
ammonium nitrate registration number.
These costs may or may not be
quantifiable and may include actual
monetary outlays, transitional costs
incurred to obtain alternative
documents, and the costs that will be
incurred in connection with potential
delays at the point of sale;
• Comments on a possible fee
structure to address some or all of the
costs of this new program, such as
registration, TSDB checks, and issuance
of ammonium nitrate registration
numbers;
• Comments on the benefits of this
rulemaking;
• Comments on any alternative
methods of complying with Subtitle J;
and
• Comments on the best methods or
processes for interacting with state and
local governments regarding ammonium
nitrate security.
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See 73 FR 64280, 64281, section IV—
Questions for Commenters.
DHS received comments from 33
organizations and individuals. The
majority of the submissions, 20, were
from private companies and trade
associations, including associations
affiliated with the farming, explosives,
and mining industries. Three
universities provided comments, as did
three government agencies. Six
individuals, including one farmer, also
submitted comments.
The topics addressed by the
commenters covered a wide range of
issues. The two issues that received the
most attention were the registration
process and the feasibility of using
substances other than ammonium
nitrate in agricultural operations. DHS
received 15 comments concerning the
registration process; all 15 commenters
wanted the registration process to be as
simple and straightforward as possible.
Some commenters stated that if a
registration process were to be
implemented, then a registrant should
receive his/her approval from DHS
within 72 hours. The commenters
expressed differing views on the
technological capabilities of the
regulated community. Some argued that
computer use was sufficiently common
for the entire process to be automated
through an Internet-based portal. As
articulated by these comments, an
online process would be fast,
inexpensive, and could be structured to
allow individuals to apply from their
homes or places of business. Others
argued that computers are not common
enough among ammonium nitrate users,
who would either be forced to travel to
different locations to register or to invest
in computers. This second group of
commenters believed that registration
through an Internet-based portal would
constitute an unjustified burden.
Many commenters believed that
regulating ammonium nitrate and not
other types of fertilizer will cause a
decrease in ammonium nitrate usage
because of an expected rise in its cost.
There was no agreement on the degree
to which the cost of ammonium nitrate
use would change, but multiple
commenters indicated that cost would
be passed along the supply chain until
it ultimately reaches end-users. If the
cost of ammonium nitrate were to go up,
commenters hypothesized that
ammonium nitrate alternatives may
become preferable. Some comments
suggested that continued ammonium
nitrate use is based on historical
ammonium nitrate use and that using an
alternative would have no noticeable
effect on operations. Others argued the
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opposite, stating that alternative
fertilizers would not serve the needs of
certain crops equally well. Commenters
from certain States where ammonium
nitrate is regularly used in agricultural
operations indicated that ammonium
nitrate is the best choice for nitrogen
application for certain crops. Other
commenters, however, asserted that
viable alternatives exist with respect to
the majority of crops for which
ammonium nitrate currently is used as
a fertilizer.
There was a general consensus among
commenters regarding the need to avoid
duplication of other Federal licensing,
regulatory, and inspection programs.
Commenters stated that to be registered
under the ammonium nitrate program
could be unnecessary for individuals
already registered under related
regulatory programs covering
ammonium nitrate use, such as DHS’s
Chemical Facility Anti-Terrorism
Standards (CFATS), Department of
Transportation (DOT) hazardous
materials regulations, and Bureau of
Alcohol, Tobacco, Firearms, and
Explosives (ATF) regulations. These
commenters noted that ATF’s
inspection process also could be used
for ammonium nitrate inspections under
this program to minimize inconvenience
to ammonium nitrate users.
A number of commenters indicated
that some ammonium nitrate is
normally lost as bulk ammonium nitrate
moves through the supply chain.
Commenters noted, for example, that
equipment used for transporting bulk
ammonium nitrate, such as hoppers,
bins, and railcars are not shift-proof,
resulting in incidental spillage of
ammonium nitrate prills, which are the
small, bead-like pellets of ammonium
nitrate typically used in the
manufacturing, transportation, and bulk
use of ammonium nitrate. Additionally,
commenters noted that there is normally
loss during movement throughout the
supply chain due to melting or
solidification of ammonium nitrate
prills based on nothing more than
ambient temperature and humidity. For
instance, commenters noted that in a 90ton railcar shipment, it is not unusual
for these phenomena to result in loss of
200–500 pounds of ammonium nitrate.
This may result because ammonium
nitrate is hygroscopic in nature (i.e., it
readily absorbs moisture). When
ammonium nitrate prills come into
contact with ambient moisture in the
air, the prills may cake or meld together,
which can simultaneously increase the
overall mass of bulk ammonium nitrate
while reducing its overall volume.
These properties cause significant
difficulty in accounting for ammonium
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nitrate on a fine scale. Consequently,
these commenters stated that DHS
should not require ammonium nitrate
users to report losses of magnitudes
normally encountered during
ammonium nitrate use and transport.
Several commenters addressed the
threshold quantity or percentage
composition of ammonium nitrate
triggering regulation under this
program. The universities that
commented on the ANPRM addressed
the use of ammonium nitrate in
scientific research, while other
commenters addressed the use of
ammonium nitrate as a component of
cold packs. These commenters stated
that the quantities of ammonium nitrate
used in scientific research and in cold
pack manufacturing are so small that
persons conducting scientific research
or purchasing and selling cold packs
should not be subjected to a rigorous
regulatory scheme. Several commenters
also recommended that DHS should
exempt mixtures containing ammonium
nitrate that ATF classified ‘‘explosives.’’
In developing this NPRM, DHS
carefully considered all public
comments submitted in response to the
ANPRM. DHS will respond to the issues
raised therein when responding to the
comments received on this NPRM.
D. Research Efforts and Findings
In support of the effort to develop
regulations to implement Subtitle J, the
Department has examined and
considered research into a variety of
topics including the security hazards
presented by the use of ammonium
nitrate; its detonability; existing Federal
and State ammonium nitrate programs;
and voluntary security programs. In the
course of conducting this research, the
Department reviewed numerous
materials, including, but not limited to,
the following:
• A. Bauer, R.D. Heater & J.H.
Paterson, Queen’s Univ. Mining Eng’g
Dep’t, The Sensitivity of Ammonium
Nitrate Melts and Solutions to Projectile
Impact (1981).
• A. King & A. Bauer, Queen’s Univ.
Mining Eng’g Dep’t, Shock Initiation
Characteristics of Ammonium Nitrate
(1980).
• R.W. Van Dolah, F.C. Gibson & J.N.
Murphy, U.S. Dep’t of Interior, Bureau
of Mines, Further Studies on
Sympathetic Detonation, Report of
Investigations 6903 (1966).
• R.W. Van Dolah, F.C. Gibson & J.N.
Murphy, U.S. Dep’t of Interior, Bureau
of Mines, Sympathetic Detonation of
Ammonium Nitrate and Ammonium
Nitrate-Fuel Oil, Report of
Investigations 6746 (1966).
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• J.J. Burns, G.S. Scott, G.W. Jones &
Bernard Lewis, U.S. Dep’t of Interior,
Bureau of Mines, Investigations on the
Explosibility of Ammonium Nitrate,
Report of Investigations 4994 (1953).
Information about these materials can
be found in the docket for this NPRM.
The Department seeks public comment
on whether or not there are additional
studies or other research materials the
Department should consider in support
of the development of the final
regulations as well as any copies of such
studies or research materials.
1. Security Hazards Presented by Use of
Ammonium Nitrate
Ammonium nitrate is a chemical that
exists in multiple concentrations and
physical forms, and different
concentrations and forms have different
security implications. In the United
States, the principal uses for ammonium
nitrate are as a fertilizer or as part of an
explosive mixture. Ammonium nitrate
can be sensitized (made more sensitive
to shocks, and thus easier to detonate)
with the addition of organic material.
One common example is when
fertilizer-grade ammonium nitrate is
mixed with fuel oil and creates an
explosive mixture known as
Ammonium Nitrate/Fuel Oil (ANFO).
The fuel oil acts as an energy source.
Both ammonium nitrate fertilizers and
ANFO have been misused in acts of
terrorism to cause catastrophic damage
to human health, safety, national
security, the economy, and critical
infrastructure.
Nationwide, fertilizer-grade
ammonium nitrate is commonly used in
agricultural operations and the chemical
and explosives industries. See A. King
& A. Bauer, 4. Due to its availability in
small-scale packaging (e.g., 50-pound
bags), ammonium nitrate is susceptible
to theft and misuse in making
improvised explosive devices (IEDs).
Over the years, ammonium nitrate has
been used as an explosives component
in terrorist attacks, both domestically
and internationally. The 1995 Murrah
Federal Building attack in Oklahoma
City claimed the lives of 168 individuals
and demonstrated how ammonium
nitrate could be misused to perpetrate
deadly terrorist attacks. See Oklahoma
City National Memorial, A Look at the
Numbers, https://www.oklahomacity
nationalmemorial.org/secondary.php?
section=5&catid=145&id=83 (last
visited Aug. 11, 2010). The Provisional
Irish Republican Army also used
ammonium nitrate as part of its London
bombing campaign in the early 1980s.
See Boyce Rensberger, Ammonium
Nitrate Explosives Are Simple, Easily
Made, Widely Used in Industry, Wash.
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Post, Apr. 21, 1995, at A28. More
recently, ammonium nitrate was used in
the 1998 East African embassy truck
bombings, killing hundreds and injuring
thousands at the U.S. embassies in Dar
es Salaam, Tanzania, and Nairobi,
Kenya. See Corky Siemaszko, Wtc
Chemicals In Kenya Blast (Aug. 14,
1998), https://www.nydailynews.com/
archives/news/1998/08/14/1998–08–14_
wtc_chemicals_in_kenya_blast.html
(last visited May 11, 2011). Ammonium
nitrate was also used in a November
2003 series of truck bombings in
Turkey, killing over 50 individuals and
injuring an additional 700 individuals at
multiple locations across Istanbul. See
Lauren Johnston, CBSNews.com,
Fertilizer Used in Terror Bombs (Apr.
14, 2004), https://www.cbsnews.com/
stories/2004/04/14/world/main611898.
shtml (last visited Aug. 11, 2010).
Additionally, since the events of 9/11,
stores of ammonium nitrate have been
confiscated during raids on terrorist
sites around the world, including raids
on sites in Canada (see Steve Schippert,
Threats Watch, Canada Raid Breaks
Cell: 3 Tons of Explosives Found (June
3, 2006), https://threatswatch.org/inbrief/
2006/06/canada-raid-breaks-cell-3-tons/
(last visited Aug. 11, 2010)), England
(see BBC News, Ammonium Nitrate
‘Easy to Find’ (Mar. 30, 2004), https://
news.bbc.co.uk/2/hi/uk_news/3582921.
stm (last visited Aug. 11, 2010)), and the
Philippines (see U.S. Dep’t of State,
Office of the Coordinator for
Counterterrorism, Country Reports on
Terrorism 2005, p. 78).
2. Detonability of Ammonium Nitrate
It is understood that under proper
conditions pure (unblended)
ammonium nitrate is detonable. Making
reliable explosives from ammonium
nitrate is simplified through the
addition of a fuel component with
which it can react. In addition, though
rare, accidental explosions have
occurred during the manufacture,
storage, and transport of ammonium
nitrate. See J.J. Burns, G.S. Scott, G.W.
Jones & Bernard Lewis, 1. Despite the
explosive hazard presented by
ammonium nitrate, however, it has been
successfully and safely used for decades
as a fertilizer. See R.W. Van Dolah, F.C.
Gibson & J.N. Murphy; Report of
Investigations 6746, 2. There is little
scientific consensus about the critical
diameter of an explosive required for
detonation and the size of the
conventional explosive charge (i.e.,
booster) necessary to detonate
unblended ammonium nitrate. These
questions about detonability all receive
research attention today, and have also
received research attention in the past.
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See A. Bauer, R.D. Heater & J.H.
Paterson, 1, 5 (1981). Preliminary results
of ongoing research suggest that
unblended ammonium nitrate can be
difficult to detonate with any reliability.
To date, terrorists typically have
employed combinations of ammonium
nitrate and fuel oil when utilizing
ammonium nitrate in terrorist attacks.
To better understand the detonability
of ammonium nitrate and its use in
explosives, the Department reviewed,
and considered the results of, a study
conducted by Sandia National
Laboratory. Due to the detailed nature of
its content and findings, however, this
study, which is ‘‘For Official Use Only,’’
is not available to the public. The
Department has also consulted with the
Federal Bureau of Investigation’s (FBI)
Explosives Unit. This consultation
helped the Department to understand
the detonability of unblended
ammonium nitrate, the detonability of
ammonium nitrate mixtures, and the
role ammonium nitrate plays in IED
construction and terror-related
activities.
The Department seeks public
comment on the detonability of
ammonium nitrate.
3. Federal Regulations Addressing
Ammonium Nitrate
In developing this proposed rule, DHS
reviewed other Federal regulations that
cover portions of the ammonium nitrate
supply chain or deal with identity
verification; a number of these other
regulations are discussed below. DHS
examined these regulations for potential
overlap with the proposed Ammonium
Nitrate Security Program. In developing
this NPRM, the Department collaborated
with many of its Federal security
partners in an attempt to harmonize this
proposed rule with other regulatory
regimes.
a. Chemical Facility Anti-Terrorism
Standards
In addition to the authority granted to
DHS by Subtitle J, the Department had
authority under section 550 of the
Homeland Security Appropriations Act
of 2007, Pub. L. 109–295, to issue
regulations governing the security of
high-risk chemical facilities. Under that
authority, the Department promulgated
an interim final rule titled the Chemical
Facility Anti-Terrorism Standards
(CFATS), 6 CFR part 27. See 72 FR
17688 (April 9, 2007). Under CFATS,
the Department regulates the security of
high-risk chemical facilities, including
high-risk chemical facilities that possess
ammonium nitrate.
To help the Department identify highrisk chemical facilities under CFATS,
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the Department adopted a list of
chemicals of interest (COI) as Appendix
A to CFATS. See 72 FR 65396
(November 20, 2007). Any chemical
facility that possesses any COI at or
above the applicable screening
threshold quantity specified in
Appendix A for that COI must complete
and submit to DHS certain consequencebased information via an online tool
called the Chemical Security
Assessment Tool Top-Screen. Any
chemical facility preliminarily
determined to be high-risk after DHS
review of the chemical facility’s TopScreen must then meet additional
security-related requirements under
CFATS. Due to the risks ammonium
nitrate may pose if either (1) exploded
on-site, or (2) stolen or diverted to
produce IEDs, ammonium nitrate (in
both explosive and specified fertilizer
forms) is one of over 300 COI that DHS
listed in Appendix A to CFATS. See 72
FR 65407–65408, 65410.
Although Subtitle J and CFATS share
a goal of preventing terrorism risks
associated with ammonium nitrate, the
scopes and methods of regulation under
Subtitle J and CFATS are very different.
The CFATS rule—which addresses
hundreds of chemicals in addition to
ammonium nitrate—is directed at the
security of high-risk chemical facilities.
The CFATS rule does not, however,
impose any limitations on the sale or
transfer of ammonium nitrate. By
contrast, Subtitle J does not address the
physical security of ammonium nitrate
facilities but does impose certain
conditions on the sale or transfer of
ammonium nitrate (e.g., requiring that
ammonium nitrate may only be
transferred between registered
ammonium nitrate sellers and registered
ammonium nitrate purchasers (or
purchasers’ agents)).
In developing the rule required by
Subtitle J, DHS intends to draw on
information gained under the CFATS
program about ammonium nitrate, and
will work to ensure that CFATS and the
new Subtitle J program complement
each other. For additional discussion of
the CFATS program’s interaction with
the proposed ammonium nitrate rule,
see section III.A.1 of this NPRM.
b. U.S. Coast Guard Maritime Security
Regulations
The U.S. Coast Guard (USCG)
regulates ammonium nitrate under
multiple programs. Under the Maritime
Transportation Security Act (MTSA), 46
U.S.C. 70101 et seq., USCG has
authority to regulate security both
aboard maritime vessels and at facilities
located in, under, or adjacent to any
waters subject to the jurisdiction of the
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United States. Through its MTSA
regulations, USCG regulates the security
of vessels transporting ammonium
nitrate, as well as the security of certain
facilities that store, manufacture, use, or
distribute ammonium nitrate. In
addition, USCG regulates the
transportation of ammonium nitrate,
and the loading or unloading of
ammonium nitrate from vessels at any
waterfront facility. See 33 CFR part 126
(regulating the handling of ammonium
nitrate at waterfront facilities, and
establishing penalties for handling
ammonium nitrate without a permit); 46
CFR 148.01–7 (regulating the bulk
shipment of ammonium nitrate).
USCG has also designated as a
‘‘Certain Dangerous Cargo’’ any
ammonium nitrate that is not certain
dangerous cargo residue. See 33 CFR
160.204. Based on this designation, each
vessel carrying ammonium nitrate on
bodies of water other than certain
portions of inland rivers must submit a
Notice of Arrival prior to arrival in port.
See 33 CFR part 160, subpart C. The
Notice of Arrival must contain certain
information, including the name of the
vessel’s owner and operator, the names
of the last five ports or places visited,
the amount of ammonium nitrate on
board, and information pertaining to
each crewmember aboard. See 33 CFR
160.206. Owners and operators of U.S.flagged vessels carrying ammonium
nitrate in bulk must have, and must
operate in compliance with, USCGapproved vessel security plans. See 33
CFR 104.410. Likewise, owners and
operators of facilities that receive
vessels carrying ammonium nitrate in
bulk must have and operate in
compliance with USCG-approved
facility security plans. See 33 CFR
105.410.
c. Transportation Security
Administration
The Transportation Security
Administration (TSA) has broad
authority over security of all modes of
transportation. These authorities are
found primarily in the Aviation and
Transportation Security Act of 2001
(ATSA), Public Law 107–71, which
regulates the transportation of cargo,
including ammonium nitrate. ATSA
broadly allows TSA to ‘‘exercise * * *
powers, relating to transportation
security as [TSA] considers
appropriate.’’ See 49 U.S.C. 114. TSA
exercises its authority under ATSA in
part by performing threat assessments
on truck drivers who must receive
Hazardous Materials Endorsements in
order to be authorized to transport
ammonium nitrate.
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d. Bureau of Alcohol, Tobacco,
Firearms, and Explosives
ATF, a principal law enforcement
agency within the U.S. Department of
Justice, is dedicated to preventing
terrorism, reducing violent crime, and
protecting our nation. Among its
authorities, under 27 CFR part 555, ATF
is responsible for regulating the use of
explosives, which are defined by
inclusion in ATF’s annual List of
Explosive Materials, ATF Publication
5400.8. See 75 FR 1085 (Jan. 8, 2010)
(notice of annual list). While ATF does
not consider ammonium nitrate an
explosive, ammonium nitrate explosive
mixtures and ANFO are included in
ATF’s list of explosive materials. ATF
regulations require that no person, other
than a licensee or permittee, knowingly
transport or receive any explosive
material (including ANFO). See 27 CFR
555.26(a). Section III.A.3 of this NPRM
discusses the interaction of ATF
regulations with the proposed
ammonium nitrate rule.
e. Department of Transportation
Hazardous Materials Regulations
The Federal Hazardous Materials
Transportation Law (Federal Hazmat
Law, 49 U.S.C. 5101 et seq.) authorizes
the Secretary of Transportation to
‘‘prescribe regulations for the safe
transportation, including security, of
hazardous material in intrastate,
interstate, and foreign commerce.’’ The
Secretary of Transportation has
delegated this authority to Pipeline and
Hazardous Materials Safety
Administration (PHMSA). PHMSA,
through its Hazardous Materials
Regulations (HMR; 49 CFR Parts 171–
180), prescribes transportation
requirements for hazardous materials,
including ammonium nitrate.
The Hazardous Materials Table (HMT;
49 CFR 172.101) lists several shipping
descriptions for ammonium nitrate and
ammonium nitrate mixtures or
solutions. These descriptions vary based
on the properties of the particular
ammonium nitrate at issue. As such, a
shipment of ammonium nitrate may be
classed and regulated as a Division 1.1D
explosive, Division 5.1 oxidizer, or
Class 9 miscellaneous hazardous
material. For transport in commerce
these materials must comply with all
applicable HMR requirements (e.g.,
packaging, shipping papers, marking,
labeling, placarding, security plans,
emergency response information,
training, etc.).
f. Department of Commerce
Under the Export Administration
Regulations (EAR), the U.S. Department
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of Commerce’s Bureau of Industry and
Security regulates the export and reexport of ammonium nitrate. A ‘‘reexport’’ is the shipment or transmission
of an item subject to the EAR from one
foreign country (i.e., a country other
than the United States) to another
foreign country. A re-export also occurs
when there is release of technology or
software subject to the EAR to a foreign
national outside the United States. See
15 CFR 734.2, and 15 CFR part 772
(definition of ‘‘re-export’’).
Specifically, under the EAR, licensees
are authorized to export or re-export
ammonium nitrate only to certain
countries listed in the EAR, and
consistent with the terms of the issued
export license. See 15 CFR 742.6 and 15
CFR 747.3. Under the EAR, ammonium
nitrate is defined to include fertilizers
and fertilizer blends containing more
than 15% by weight ammonium nitrate,
except liquid fertilizers (containing any
amount of ammonium nitrate) or dry
fertilizers which contain less than 15%
by weight ammonium nitrate. See 15
CFR part 774, Supplement 1 for itemspecific export licensing information.
Individuals involved in the domestic
sale or transfer of ammonium nitrate, as
defined by DHS, at U.S.-based exporters
of ammonium nitrate would be required
to register with the Department under
the proposed Ammonium Nitrate
Security Program.
4. State Regulations Addressing
Ammonium Nitrate
Virtually all 50 States regulate
ammonium nitrate in some manner,
based on its use either as a fertilizer, an
explosive, or both. Although not in
universal agreement, relevant State
regulations typically define ammonium
nitrate as an ammonium and nitrate
mixture containing not less than 33
percent nitrate; require purchasers and
sellers of ammonium nitrate to register
with a governing State body; and require
sellers of ammonium nitrate to maintain
records of sales of ammonium nitrate for
at least two years. Many State
regulations grant State officials both the
authority to inspect facilities possessing
or distributing ammonium nitrate and
the authority to fine or otherwise
penalize facilities or individuals who
fail to comply with regulations
concerning ammonium nitrate.
5. Voluntary Programs Addressing
Ammonium Nitrate
In addition to efforts required by
existing Federal and State regulations,
many producers, distributors, and users
of ammonium nitrate have undertaken
voluntary efforts to secure the
ammonium nitrate supply chain. Chief
among these voluntary efforts is the
‘‘America’s Security Begins With You’’
program. This program is a voluntary
‘‘know-your-customer’’ program
developed jointly by the ATF and
members of the fertilizer industry
following the 1995 attack on the Alfred
P. Murrah Federal Building in
Oklahoma City. The Department
believes that, in many instances,
voluntary programs already in place can
serve as good building blocks for
meeting regulatory requirements. The
Department seeks comments providing
details on voluntary programs related to
ammonium nitrate security and how
they could potentially be leveraged by
ammonium nitrate users to meet the
requirements of the proposed rule.
III. Discussion of Proposed Rule:
Implementing Subtitle J
What follows is a discussion of the
approach DHS is proposing to take in
implementing Subtitle J. Where
appropriate, potential alternative
approaches are also discussed. DHS
welcomes public comment on the
proposed rule, and also on potential
alternative approaches.
The cost to the public of this
proposed rule ranges from $300 million
to $1.041 billion over 10 years at a 7%
discount rate. The primary estimate is
the mean which is $671 million. For
comparison, at a 3% discount rate, the
cost of the proposed rule ranges from
$364 million to $1.3 billion with a
primary (mean) estimate of $814
million. The average annualized cost for
the program ranges from $43 million to
$148 million (with a mean of $85
million), also employing a 7% discount
rate. The following two tables present
the summary discounted total and
annualized costs for the rule.
OMB ACCOUNTING STATEMENT OF ANNUALIZED COSTS AND BENEFITS PROGRAM YEARS 1–10)
3 Percent discount rate
Primary
estimate
(millions)
Costs
Annualized Monetized Costs ...................
Benefits
Minimum
estimate
(millions)
$95.4
Qualitative (un-quantified) Benefits ..........
7 Percent discount rate
Maximum
estimate
(millions)
$42.7
Primary
estimate
(millions)
$148.1
$95.5
Minimum
estimate
(millions)
Maximum
estimate
(millions)
$42.7
$148.2
Reduced vulnerability to terrorist attack using ammonium nitrate.
SUMMARY OF COSTS ($ MILLIONS, 7 PERCENT DISCOUNT RATE)—BY PROGRAM YEAR
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Registration
Appeals
Point of sale
Recordkeeping
Audits/
inspections
Federal costs
* Total cost
PY1 ..............................
PY2 ..............................
PY3 ..............................
PY4 ..............................
PY5 ..............................
PY6 ..............................
PY7 ..............................
PY8 ..............................
PY9 ..............................
PY10 ............................
18.9
4.4
4.3
4.2
4.2
8.9
6.8
6.7
6.6
6.5
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
67.5
62.6
58.4
54.7
51.1
48.1
44.6
41.7
39.0
36.4
6.2
4.4
4.1
3.8
3.6
3.4
3.1
3.0
2.8
2.6
0.4
0.4
0.4
0.4
0.3
0.3
0.3
0.3
0.2
0.2
9.8
6.5
6.0
5.7
5.3
5.1
4.7
4.4
4.2
3.9
102.7
78.2
73.2
68.7
64.4
65.8
59.5
56.0
52.6
49.5
Total ......................
71.3
0.1
503.8
36.8
3.0
55.3
670.6
* Reporting of Thefts rounds to zero in individual years and are omitted from this table but included in the total and regulatory analysis.
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DHS also conducted a break-even
analysis that examines the required
reduction in the potential frequency of
terrorist attacks involving ammonium
nitrate. The proposed rule would be cost
effective if it resulted in a reduction in
attack frequency by at least one attack
the size of the Oklahoma City bombing
(which occurred 16 years ago) per 14
years. For discussion of this analysis,
and for explanation of other cost
calculations, please see section IV of
this NPRM, which discusses various
regulatory analyses conducted by DHS.
A. Ammonium Nitrate Subject to
Subtitle J Requirements (See Section
31.105 of the Proposed Rule)
This section will address the
definition of ammonium nitrate.
Congress has defined ammonium nitrate
for purposes of Subtitle J to include
‘‘solid ammonium nitrate that is chiefly
the ammonium salt of nitric acid and
contains not less than 33 percent
nitrogen by weight.’’ See 6 U.S.C.
488(1)(A). DHS proposes to use this
definition of solid ammonium nitrate in
section 31.105 of the proposed rule.
Also included in the definition of
ammonium nitrate for purposes of
Subtitle J is ‘‘any mixture containing a
percentage of ammonium nitrate that is
equal to or greater than the percentage
determined by [DHS].’’ See 6 U.S.C.
488(1)(B). In establishing this mixture
percentage for purposes of Subtitle J, the
Department was required to consult
with the heads of appropriate Federal
departments and agencies, including the
Secretary of Agriculture, and to provide
notice and an opportunity for comment.
See 6 U.S.C. 488a(b). That consultation
is discussed below.
This section will also discuss the
Department’s consideration of a
minimum threshold amount of
ammonium nitrate that would have to
change hands as part of a sale or transfer
before that sale or transfer (including
the individuals participating in the
transaction) would be subject to Subtitle
J’s requirements. This section will also
discuss the Department’s discretionary
ability to exempt from regulation ‘‘a
person producing, selling, or purchasing
ammonium nitrate exclusively for use in
the production of an explosive under a
license or permit issued under chapter
40 of title 18, United States Code.’’ See
6 U.S.C. 488a(f).
1. Mixture Requirement
Mixtures containing high percentages
of ammonium nitrate can be effectively
used in bomb-making. By proposing to
include a mixture requirement in the
Ammonium Nitrate Security Program,
the Department is seeking to capture
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under this rule mixtures that terrorist
bomb-makers would be most interested
in acquiring. To assist in determining an
appropriate threshold percentage of
ammonium nitrate in a mixture for
purposes of Subtitle J, the Department
reviewed multiple detonability studies,
examined mixture requirements
employed by other Federal and State
regulatory programs, and consulted with
a variety of Federal, State, and private
sector entities. Based on this research
and after consultation with the FBI’s
Explosives Unit, the Department
proposes to define ammonium nitrate in
section 31.105 to include any mixture
that is 30 percent or more ammonium
nitrate by weight. By setting the mixture
requirement at 30 percent, the
Department believes the proposed rule
will capture those ammonium nitrate
mixtures that could be most effectively
used in bomb-making, or that could be
most effectively retooled or reconfigured
for use in bomb-making.
The Department is aware that this
proposed mixture requirement differs
from the mixture requirements used for
ammonium nitrate under CFATS. Under
CFATS, a mixture containing
ammonium nitrate is counted towards
the screening threshold quantity for
ammonium nitrate if ammonium nitrate
makes up 33 percent or more of the
mixture. Therefore, this proposed
mixture requirement for this rule would
apply more broadly than the mixture
requirement in CFATS; the ammonium
nitrate mixtures covered under this
proposed requirement would include
ammonium nitrate mixtures containing
between 30 and 33 percent ammonium
nitrate by weight, while CFATS’
mixture requirements do not cover
mixtures containing between 30 and 33
percent ammonium nitrate by weight.
There are two main reasons for the
difference between the CFATS approach
to ammonium nitrate mixtures and the
proposed Ammonium Nitrate Security
Program approach to mixtures. First, the
two mixture requirements exist to
accomplish different goals. The CFATS
mixture requirements exist to help the
Department identify potentially highrisk chemical facilities subject to
CFATS. The CFATS mixture
requirements are not an assertion by the
Department that only ammonium nitrate
mixtures containing 33 percent or more
ammonium nitrate are vulnerable to
misuse in acts of terrorism. The
proposed Ammonium Nitrate Security
Program mixture requirement, however,
is solely meant to identify ammonium
nitrate mixtures that have the potential
to be misused in acts of terrorism.
Accordingly, a more conservative and
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46915
inclusive mixture requirement is
appropriate for Subtitle J.
Second, during the development of
this proposed rule, the Department
obtained information from the
Department of Justice, indicating that
under certain circumstances,
experiments that have shown that
mixtures containing as low as 30
percent ammonium nitrate by weight
can be used as components of viable
explosives. This information was
unavailable to DHS when it wrote and
published the CFATS mixture
requirements. In light of this evidence
and the purpose for which the Subtitle
J mixture requirement is being
established, the Department believes
that setting the proposed mixture
requirement at 30 percent ammonium
nitrate is the correct course of action.
The Department’s proposed mixture
requirement would exempt persons and
entities from coverage under the
proposed rule only to the extent that
they possess or obtain mixtures
containing less than 30 percent
ammonium nitrate by weight. The
proposed requirement would not
exempt persons and entities from
coverage to the extent that they possess
or obtain solid ammonium nitrate which
they intend to incorporate into
ammonium nitrate mixtures. The
Department thus proposes that the
purchase, sale, transfer, or acquisition of
solid ammonium nitrate to be
incorporated into mixtures will be
treated the same as the purchase, sale,
transfer, or acquisition of ammonium
nitrate not to be incorporated into
mixtures.
The Department is interested in
receiving comments on this proposed
approach, including comments on the
Department’s proposal to define
ammonium nitrate to include any
mixture that is 30 percent or more
ammonium nitrate by weight. DHS
requests comments addressing the
appropriateness of this percentage,
comments addressing whether it would
be more appropriate to express this
percentage as a percentage of mixture
weight or as a percentage of mixture
volume, and comments discussing
whether a higher or lower mixture
percentage would be more appropriate.
The Department is also interested in
comments addressing possible
consumer and retail impacts of the
proposed mixture requirement, and on
the detonability of ammonium nitrate
and ammonium nitrate mixtures of
varying percentages.
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2. Threshold Weight and Individual
Products Exemptions
The Department’s understanding is
that, outside of small sample or research
quantities, ammonium nitrate is
primarily sold either in bulk or in prepackaged bags containing no less than
50 pounds of ammonium nitrate.
Mixtures that contain small percentages
or amounts of ammonium nitrate are
also found in various retail products,
including home and garden products
(e.g., fertilizer mixtures) and cold packs.
Under Subtitle J, the Department has
authority to regulate transactions (and
the individuals conducting them)
involving any amount of ammonium
nitrate. The Department is proposing to
establish a threshold weight to which
the regulation would apply, and is
considering whether the marginal
security benefits gained from regulating
transactions involving de minimis
quantities of ammonium nitrate are
outweighed by the costs of regulating
those transactions. Similarly, the
Department is considering whether the
security benefits gained from regulating
transactions involving products
packaged such that they are unlikely to
be used to make an explosive are
outweighed by the costs of regulating
those transactions. To avoid capturing
these transactions under its regulatory
regime, and to avoid complicating
ammonium nitrate transactions that may
only pose a de minimis security risk, the
Department is considering applying
both a minimum threshold weight and
an individual products exemption for
cold packs to this rulemaking.
The Department is considering
establishing a threshold weight whereby
each transaction would be subject to
Subtitle J’s regulatory requirements only
if the transaction involves the sale,
transfer, or purchase of ammonium
nitrate that, in the aggregate, is equal to
or greater than the threshold weight.
Specifically, section 31.105 of the
proposed rule contains a 25 pound
threshold weight. The Department
believes that this weight is low enough
to prevent a bad actor from easily
acquiring a sufficient quantity of
ammonium nitrate to pose a terrorist
threat. The Department also believes
that this weight is high enough to avoid
capturing small laboratory quantities of
ammonium nitrate or transactions
involving other de minimis quantities of
ammonium nitrate that are unlikely to
be misappropriated for use in a terrorist
act. The Department believes that such
de minimis quantities are unlikely to be
misappropriated for use in a terrorist act
due to the large number of transactions
in de minimis quantities that would be
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required to accumulate sufficient
ammonium nitrate to construct an
explosive that poses a significant
terrorist threat. This threshold should
also reduce the economic impact of the
Ammonium Nitrate Security Program by
avoiding regulation of those transactions
that present de minimis security risk.
In order to determine the utility of
this approach, the Department solicits
comments on the manners in which
ammonium nitrate is sold and packaged,
the manners and frequencies of use of
ammonium nitrate in small quantities,
and the utility of setting a threshold
weight. The Department additionally
requests comments addressing the
appropriateness of the proposed 25
pound threshold weight. Specifically,
the Department asks whether another
threshold weight, such as 5 pounds, 10
pounds, 50 pounds, or another quantity,
would better achieve the desired results
of the proposed rule.
If the Ammonium Nitrate Security
Program does include a threshold
weight, DHS proposes that the threshold
weight would apply to mixtures as well
as to unblended ammonium nitrate. As
such, the proposed rule would apply to
an ammonium nitrate mixture only if
(1) the mixture weighs at least the
threshold weight, and (2) the mixture
contains at least 30 percent ammonium
nitrate by weight. Both conditions
would need to be satisfied in order for
the proposed rule to apply to a given
mixture.
The Department proposes that when
applying the threshold weight to an
ammonium nitrate mixture, the total
weight of the mixture should be
counted, as opposed to just the weight
of the ammonium nitrate in the mixture.
In other words, all ten pounds of a
single ten-pound bag (or all ten pounds
of ten one-pound bags) of fertilizer
mixture containing 30 percent
ammonium nitrate by weight would
count towards the threshold weight, and
not just the three pounds which is the
weight of the ammonium nitrate portion
of that mixture. The Department
believes this approach would be more
effective at preventing a bad actor from
acquiring sufficient quantities of
ammonium nitrate than would an
alternative approach under which only
the ammonium nitrate content of a
mixture is counted towards threshold
weight. The Department solicits
comments on the utility and manner of
application of the proposed threshold
weight to mixtures containing
ammonium nitrate.
In addition to including a threshold
weight in the proposed rule, the
Department is proposing to exempt cold
packs containing ammonium nitrate
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from regulation. In section 31.105 of the
proposed rule the Department proposes
to define a ‘‘cold pack’’ as a small,
commercially-available package
commonly used as a replacement for ice
in the application of first aid, containing
unmixed water and ammonium nitrate
that, immediately prior to use, can be
manipulated to cause the comingling of
the water and the ammonium nitrate
resulting in an endothermic reaction
that significantly lowers the temperature
of the package. For the following
reasons, DHS does not believe that
Congress intended the people and
facilities buying and selling cold packs
to be regulated by Subtitle J.
The Department believes that the
security benefits obtained from
regulating sales and transfers of cold
packs would be minimal and
outweighed by significant impact on the
general public. Cold packs individually
contain extremely small amounts of
ammonium nitrate such that collecting
very large numbers of them would be
necessary in order to obtain enough
ammonium nitrate to produce a
dangerous explosive device.
The Department also believes that
regulating sales and transfers of cold
packs would impose substantial
economic impacts on the public, which
would not be justified by the minimal
security benefit gained by cold packs
regulation. Specifically, DHS is
concerned that regulation of cold packs
would have serious and negative
impacts on the provision of first aid,
first responders, and the medical sector
generally. These substantial impacts
would be spread over a large variety of
retail stores, medical facilities, health
care providers, athletic teams, regulated
industries that require first aid kits
containing cold packs, and individuals
using cold packs for personal first aid
purposes. A preliminary examination
indicates that the potential affected
populations could easily exceed six
million individuals, businesses, and
organizations or public entities.
Complicating the issue is the fact that
many cold pack manufacturers do not
use ammonium nitrate in their
products—many manufactures assemble
cold packs that contain other chemicals
instead of ammonium nitrate. Cold pack
purchasers or sellers might not know
which chemicals are present in the cold
packs they obtain, prior to obtaining
them, which could complicate their
abilities to comply with any regulatory
requirements.
For these reasons, the Department
does not believe that Congress intended
cold packs—or the sporting goods
stores, recreational centers, schools, and
other entities that purchase or sell
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them—to be covered under Subtitle J.
DHS requests comments describing the
populations that could be impacted by
cold packs regulation, including
comments discussing those populations’
abilities to comply with the proposed
regulatory requirements.
The Department’s proposed cold
packs exemption would exempt persons
and entities from coverage under the
rule only to the extent that they
purchase, sell, or transfer cold packs
containing ammonium nitrate. The
proposed rule would not exempt
persons and entities (such as
manufacturers of cold packs) from
coverage to the extent that they
purchase or transfer ammonium nitrate
which they intend to incorporate into
cold packs. The Department thus
proposes that the purchase, sale,
transfer, or acquisition of ammonium
nitrate to be incorporated into cold
packs will be treated the same as the
purchase, sale, transfer, or acquisition of
ammonium nitrate not to be
incorporated into cold packs.
The Department solicits comments on
these proposed exemptions. The
Department also solicits comments
describing uses for ammonium nitrate
other than as a fertilizer, a cold packs
component, or an explosives ingredient.
DHS solicits comments on whether any
other uses of ammonium nitrate warrant
exemptions.
3. Explosives Exemption
The Department has the discretion to
exempt from regulation persons and
facilities producing, selling,
transferring, or purchasing ammonium
nitrate exclusively for use in the
production of explosives under a license
or permit issued under the Federal
explosives laws, 18 U.S.C. Chapter 40,
and associated regulations. See 6 U.S.C.
488a(f).
ATF is responsible for enforcing
federal explosives laws and has
established regulations for doing so. See
27 CFR Part 555. ATF’s regulatory
authority over a facility or individual
licensed to use an ammonium nitratebased explosive is limited to ammonium
nitrate that (1) has been mixed with a
fuel (i.e., ANFO) which is defined in 27
CFR 555.11 as an ‘‘explosive’’ and (2) is
contained on ATF’s List of Explosive
Materials. Unblended ammonium
nitrate, however, is not defined as an
46917
explosive under 27 CFR part 555, and
thus ATF does not regulate ammonium
nitrate that has not been mixed with a
fuel oil, outside of the limited
separation distance requirements
governing the storage of ammonium
nitrate when stored in the vicinity of
other high explosives and blasting
agents, as set forth in 27 CFR 555.220.
This is the case even where unblended
ammonium nitrate is being produced,
purchased, or stored by a facility
regulated by ATF as a manufacturer of
ANFO. It is also the Department’s
understanding that facilities producing
ANFO typically have inventories of
ammonium nitrate on hand for use in
manufacturing ANFO, while entities
engaged solely in the re-sale or purchase
of ANFO are unlikely to possess any
ammonium nitrate other than that
which is contained within ANFO
mixtures.
The Department is considering three
possible approaches for regulating
individuals and facilities involved in
the production of ANFO. These
approaches are summarized in the
following table, and discussed
thereafter.
Option 1
Would DHS opt to exempt individuals and facilities that purchase,
sell, or transfer ammonium nitrate solely for use in the production of explosives?
Brief description of option ..............
Would DHS regulate ammonium
nitrate mixtures that are ‘‘explosives’’ subject to ATF regulation
(i.e., ANFO)?
What duplication would result from
this option?
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What gaps would result from this
option?
Option 2
No .................................................
Yes ................................................
Partial Exemption.
Ammonium nitrate transactions
would be regulated by DHS
whether or not the ammonium
nitrate purchased, sold, or
transferred has been combined
with fuel oil to create ANFO.
Yes ................................................
Ammonium nitrate purchases,
sales, or transfers by individuals and facilities solely to enable use of ammonium nitrate
in the production of explosives
would not be regulated by DHS.
No .................................................
Ammonium nitrate combined with
fuel oil (ANFO) would not be
regulated by DHS.
Individuals and facilities would be
subject to regulation by both
DHS under Subtitle J and ATF
under the Federal explosives
laws.
No gaps in coverage of ammonium nitrate as it moves
through the supply chain.
Individuals and facilities regulated
by ATF under the Federal explosives laws would not be regulated by DHS. No duplication
would result.
Could create a considerable gap
in regulatory coverage throughout the ammonium nitrate supply chain, as ATF regulations
apply solely to ANFO and not
the ammonium nitrate used to
create it.
The first option is to apply the final
rule implementing Subtitle J to
individuals and facilities that purchase,
sell, or transfer ammonium nitrate for
use in the production of explosives.
Under this approach, such individuals
and facilities would be subject to
regulation by both DHS under Subtitle
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J and ATF under the Federal explosives
laws. By not exempting ammonium
nitrate used in explosives from
coverage, DHS would be treating all
individuals and facilities who purchase,
sell, or transfer ammonium nitrate—
whether as part of ANFO mixtures or
not—the same. This approach would
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Option 3
No.
Certain facilities (e.g., those that
produce ANFO) would be subject to both DHS and ATF regulations.
Compromise approach closes
gaps in security of the ammonium nitrate supply chain.
ensure that there are no gaps in coverage
of ammonium nitrate as it moves
through the supply chain—ammonium
nitrate would be captured under DHS’s
ammonium nitrate program both before
and after being combined with fuel oil
to create ANFO, and would be captured
under ATF’s regulations after being
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combined with fuel oil to create ANFO.
The major disadvantage of not
exempting ammonium nitrate used in
explosives is that individuals and
facilities who purchase, sell, or transfer
ammonium nitrate for the purpose of
manufacturing explosives would be
subject to potentially duplicative
regulatory requirements, including two
sets of licensing requirements, two sets
of recordkeeping requirements, two sets
of point of sale requirements, and
inspections by both ATF and DHS. In
response to the October 29, 2008
ANPRM, some commenters expressed
concern over these potentially repetitive
regulatory requirements.
The second option is to entirely
exempt from Subtitle J requirements
facilities and persons that purchase,
sell, or transfer ammonium nitrate
solely for use in the production of
explosives, as they are already regulated
by ATF. In this model, facilities and
persons that are licensed by ATF to mix
ammonium nitrate with fuel to create
ANFO, but that do not purchase, sell, or
transfer ammonium nitrate for other
purposes and do not perform
ammonium nitrate application services,
would not be subject to the rule
implementing Subtitle J. The primary
advantage of this approach is that it
would prevent potentially duplicative
regulatory requirements from applying
to ammonium nitrate facilities and
individuals that are already subject to
ATF regulations. This approach,
however, could create a considerable
gap in regulatory coverage throughout
the ammonium nitrate supply chain, as
ATF regulations apply solely to ANFO
and not the ammonium nitrate used to
create it. For example, facilities that
produce ammonium nitrate to sell to
manufacturers of ANFO but who
themselves do not produce ANFO
would be subject to neither ATF nor
DHS regulation under this approach.
Similarly, stores of ammonium nitrate at
facilities producing ANFO would not be
subject to any regulatory requirements
(e.g., recordkeeping requirements,
reporting of theft or loss requirements)
by DHS or ATF under this approach.
This would create regulatory gaps in the
ammonium nitrate supply chain which
could be exploited by terrorists.
The third option would exempt from
regulation ammonium nitrate mixtures
that are ‘‘explosives’’ subject to ATF
regulation (i.e., ANFO). DHS is
proposing this option in section 31.305
of the proposed rule. Under this
approach, entities and individuals that
purchase, sell, or transfer ANFO, but
who do not produce ANFO or possess
ammonium nitrate for other reasons,
would be exempt from all Subtitle J
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requirements and would be subject
solely to ATF regulation. Individuals
producing ANFO, however, would be
subject to the Subtitle J requirements, as
they, by necessity, possess ammonium
nitrate (which they possess as
unblended ammonium nitrate before
combining it with fuel oil to make
ANFO). This approach recognizes both
the fact that ATF already regulates
ANFO, as well as the fact that ATF’s
jurisdiction is limited such that ATF
does not regulate the ammonium nitrate
used by facilities to make ANFO.
Through this compromise approach,
individuals and entities whose
ammonium nitrate-related operations
are already regulated by ATF are spared
the duplicative DHS oversight that
would result from the first option
(discussed above), while gaps in
security of the ammonium nitrate
supply chain that would be created by
the second option (discussed above) are
avoided. The primary drawback of this
approach is that it would make certain
facilities (e.g., those that produce
ANFO) subject to both DHS and ATF
regulations. To minimize this impact,
the Department and ATF currently are
discussing ways to coordinate
inspections and other compliance
activities for these ammonium nitrate
facilities, and will work together to
ensure that there is minimal duplication
of effort or burden caused by this
approach, if adopted.
The Department welcomes comments
on this proposed approach to
ammonium nitrate produced, bought,
sold, or transferred exclusively for the
purpose of producing explosives. The
Department also welcomes comments
on any other exemptions that it should
consider.
B. Requirements for the Registration of
AN Sellers and AN Purchasers (See
Sections 31.200–31.250 of the Proposed
Rule)
1. Overview
Pursuant to 6 U.S.C. 488a(c), 6 U.S.C.
488a(d), 6 U.S.C. 488e(a)(3)(A), and 6
U.S.C. 488e(a)(3)(B), the Department
must establish a process by which
persons owning or operating ‘‘AN
Facilities’’ and persons intending to
purchase ammonium nitrate must
register with the Department. Section
31.105 of the proposed rule defines an
‘‘AN Facility’’ as any person or entity
that produces, sells, or otherwise
transfers ownership of, or provides
application services for, ammonium
nitrate. The Department proposes to
define ‘‘application services’’ in section
31.105 as the physical deposit of
fertilizer onto turf, fields, crops, or other
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agricultural property, where these
services are provided by an individual
or entity other than the person or entity
owning or operating the property upon
which the fertilizer is deposited. The
Department is interested in receiving
comments on these definitions, as well
as all other definitions included in the
proposed rule.
The proposed registration process
would include conducting a check of
appropriate identifying information of
any person seeking to register against
identifying information that appears in
the Terrorist Screening Database.
Accordingly, prospective applicants
would be required to provide specific
identifying information to the
Department. Appearance in the TSDB is
grounds for denial of a registration
number (an ‘‘AN Registered User
Number’’). In section 31.220(a)(1) of the
proposed rule, the Department proposes
to develop an online web portal through
which individuals will apply for AN
Registered User Numbers. The
Department proposes that AN
Registered User Numbers will be
disseminated to successful applicants
via e-mail or through the DHS web
portal. The Department also proposes in
section 31.235 to make AN Registered
User Numbers valid for a period of five
years. Additional proposals on who
would be required to register and on
various aspects of the registration
process are discussed in the following
paragraphs. The Department seeks
public comment on its proposed
registration methodology, on other
methods the Department may consider
for registration, and on the length of
time registration numbers should
remain valid.
2. Who Must Register
6 U.S.C. 488a(c)(1)(A) and 6 U.S.C.
488e(a)(3)(B) require owners and
operators of AN Facilities (including
facilities that provide ammonium nitrate
application services) to register with the
Department. For the reasons provided
below, the Department proposes in
section 31.200 that any person who may
individually perform a sale or transfer of
ammonium nitrate on behalf of an AN
Facility would be required to register as
an owner or operator. Registered AN
Facility personnel (whether owners or
operators) involved with sales, transfers,
or provision of application services are
collectively referred to in the proposed
rule as ‘‘AN Sellers,’’ of which ‘‘AN
Facility Representatives’’ and
‘‘Designated AN Facility Points of
Contact (POCs)’’ are subsets that have
special responsibilities under the
proposed rule. ‘‘AN Facility
Representatives’’ are any AN Facility
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personnel, be they owners or operators,
designated to act on behalf of an AN
Facility for purposes of compliance with
this rule. A ‘‘Designated AN Facility
POC’’ is the AN Facility Representative
designated by an AN Facility to act as
the primary point of contact with the
Department on behalf of the AN Facility
for purposes of compliance with this
rule.
6 U.S.C. 488a(d) and 6 U.S.C.
488e(a)(3)(A) also require anyone who
intends to purchase ammonium nitrate
to register with the Department. The
proposed rule refers to these individuals
as ‘‘AN Purchasers.’’
Additional details on the registration
of AN Sellers, AN Facility
Representatives, Designated AN Facility
POCs, and AN Purchasers follow. The
Department welcomes public comment
on the usefulness of these registration
categories.
DHS also welcomes public comment
discussing other potential registration
categories. DHS is interested in
comments addressing the benefits and
costs of potentially registering
organizations in addition to the
registration of individual persons. The
Department’s proposed rule would
require only the registration of
individual persons, although DHS is
interested in receiving comments
addressing what benefits and costs, if
any, there would be in requiring
registration of organizations involved in
ammonium nitrate sales, transfers, or
application services. DHS is interested
in receiving comments addressing
which types of organizations (if any)
should register—organizations affiliated
with AN Facilities, organizations
affiliated with AN Purchasers, both, or
neither. The Department also invites
comments addressing organizational
structures, and whether different
registration requirements should apply
to organizations with different
ownership, governance, or operational
structures. The Department also seeks
comments discussing potential ways in
which organizational registration could
take place.
3. Registering AN Sellers
6 U.S.C. 488a(c)(1)(A) and 6 U.S.C.
488e(a)(3)(B) require persons who own
and persons who operate AN Facilities
to register with the Department. DHS
believes that Subtitle J’s registration
requirements for AN Facility personnel
will be satisfied if AN Facilities
designate AN Sellers, AN Facility
Representatives, and/or Designated AN
Facility POCs to register and perform
the sale, transfer, and application
service responsibilities discussed
elsewhere in this NPRM. The
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Department proposes to require only
those owners and operators actually
involved in sales, transfers, or
application services to register. DHS is
also considering, however, whether
Subtitle J requires all owners to register.
DHS welcomes comments on this issue
and the benefits and costs imposed by
a registration requirement for various
types of owners. We understand that
some would consider it overly
burdensome to require all owners or
operators of AN Facilities to register,
because not all owners or operators are
involved in or have influence over their
organizations’ ammonium nitrate
operations, and because not all owners
or operators have the capability to cause
ammonium nitrate misappropriation.
Some AN Facilities, such as those
owned by large companies, may have
many persons who could be considered
owners under 6 U.S.C. 488a(c)(1)(A) and
6 U.S.C. 488e(a)(3)(B). The Department
requests comment on who should be
required to register to fulfill Subtitle J’s
owner registration requirements for
these types of facilities. DHS also
requests comment describing how
registration of various owners would or
would not fulfill the objective of
Subtitle J—‘‘to prevent the
misappropriation or use of ammonium
nitrate in an act of terrorism.’’ See 6
U.S.C. 488a(a).
The Department is also interested in
obtaining more information about
individuals who operate (but do not
own) AN Facilities, particularly at AN
Facilities where owners themselves are
not involved in day-to-day operations
and do not personally sell, transfer, or
perform application services for
ammonium nitrate. Operators include
employees or other persons who could
act on behalf of a facility in conducting
sales and transfers, such as sales clerks,
cashiers, sales managers, and persons
who provide ammonium nitrate
transportation services (e.g., delivery
truck drivers) or application services.
Enabling operator registration is
consistent with the Department’s
authority under 6 U.S.C. 488a(a) and 6
U.S.C. 488e(a)(3)(B), and is necessary in
order to ensure that persons with the
ability to sell, transfer, or provide
application services for ammonium
nitrate are not terrorists. DHS welcomes
comments on which operators involved
in the sale and transfer of ammonium
nitrate, or involved in ammonium
nitrate application services, should be
required and why they should be
required to register with the
Department.
In light of the Department’s
understanding of the roles of AN
Facility owners and operators, DHS is
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46919
proposing that several categories of
individuals register as ‘‘AN Sellers’’:
(1) Any individual who has an
ownership interest in an AN Facility
may register as an AN Seller.
(2) Any individual designated to act
on behalf of an AN Facility for purposes
of compliance with this regulation
would be required to register as an AN
Seller, such as, possibly, a site manager,
sales manager, or corporate officer.
(3) Any individual involved in the
sale or transfer of ammonium nitrate on
behalf of an AN Facility would be
required to register as an AN Seller,
such as a sales clerk or cashier.
(4) Any individual performing
ammonium nitrate application services
on behalf of an AN Facility would be
required to register as an AN Seller.
DHS proposes that every sale, transfer,
or provision of ammonium nitrate
application services would have to be
conducted by a registered individual (or
by multiple registered individuals).
Accordingly, while every AN Facility
will be required to have at least one AN
Seller registered with the Department,
not every individual with job at an AN
Facility would have to register to be an
AN Seller. These proposals would
largely give AN Facilities the flexibility
to seek registration of and to conduct
business with the personnel of their
choosing, while also ensuring that all
sales, transfers, and application services
are conducted by individuals who have
been vetted by and registered with the
Department.
DHS is proposing that within the
category of AN Sellers there be a
subcategory of individuals called ‘‘AN
Facility Representatives.’’ The
qualifications and responsibilities of AN
Facility Representatives will be
discussed in the following section. AN
Sellers who are not AN Facility
Representatives would have authority to
perform all of the regulatory activities
that owners or operators must perform
pursuant to Subtitle J (e.g., verifying the
identities of prospective AN Purchasers,
recording the details of completed sales,
and handing over possession of
ammonium nitrate to approved AN
Purchasers), but would not be
responsible for ensuring that other AN
Facility personnel are following the
Department’s regulations. For a
description of permissible
responsibilities of AN Sellers, refer to
section 31.210 of the proposed rule.
The Department proposes that every
AN Facility would have to have at least
one registered AN Seller (i.e., the
Designated AN Facility POC), but may
seek the registration of as many other
AN Facility Representatives and AN
Sellers as it deems appropriate. The
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Department proposes that whether or
not an AN Facility seeks registration of
more than a single person will be
discretionary.
In section 31.220(c)(3), the
Department proposes that each person
registering as an AN Seller, AN Facility
Representative, or Designated AN
Facility POC will be expected to provide
information identifying all AN Facilities
at which he/she will perform sales or
transfers of ammonium nitrate, or on
behalf of which he/she will perform
application services. In section
31.220(b), the Department proposes that
a single individual may serve as an AN
Seller for multiple AN Facilities.
4. Registering AN Facility
Representatives
The Department recognizes that not
all AN Sellers will have the same level
of non-regulatory responsibility and
authority within an AN Facility, and
that some AN Sellers may not be in a
position to monitor or control overall
AN Facility compliance or the
compliance of other AN Facility
employees with the final regulations. In
light of this, in section 31.215(b), the
Department is proposing the creation of
a subcategory of individuals called ‘‘AN
Facility Representatives’’ within the
broader class of AN Sellers. The
Department proposes that AN Facility
Representatives would be AN Sellers
who are not only responsible for their
own compliance with the regulations,
but also would be responsible for the
AN Facility’s overall compliance with
the regulations and the compliance of
all other AN Facility employees.
The Department also proposes that,
for purposes of these regulations, the
definition of ‘‘AN Facility
Representative’’ be broad enough to
include not only individuals who own
all or part of AN Facilities, but also any
non-owner AN Facility operators,
employees, or contractors designated to
act on behalf of an AN Facility for
purposes of compliance with this
proposed rule. Thus, for purposes of the
proposed rule, an AN Facility would be
allowed to designate as an AN Facility
Representative an individual without
any ownership in the AN Facility, such
as, possibly, a site manager, sales
manager, or corporate officer, to meet
the ‘‘owner’’ and ‘‘operator’’ registration
requirements of Subtitle J.
In section 31.215(b), the Department
proposes that every AN Facility would
have to have at least one AN Facility
Representative registered on its behalf,
but may have as many AN Facility
Representatives registered on its behalf
as it deems appropriate. Whether or not
an AN Facility seeks registration of any
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additional AN Facility Representatives
is entirely discretionary. The
Department also proposes that while an
AN Facility would have to have at least
one registered AN Facility
Representative, whether or not an AN
Facility seeks registration of any
additional AN Sellers who are not AN
Facility Representatives is entirely
discretionary. Under the Department’s
proposed approach, an AN Facility may
decide that it is most cost-effective to
register only AN Facility
Representatives; however, in that case,
AN Facility Representatives would have
to be able to perform all applicable
regulatory compliance activities in this
rule.
While the Department’s proposal does
not preclude the registration of multiple
AN Facility Representatives for a single
AN Facility, each AN Facility will be
required to designate a single AN
Facility Representative to act as the
primary point of contact with the
Department on behalf of the AN
Facility. This individual will be referred
to as the ‘‘Designated AN Facility POC.’’
The qualifications and responsibilities
of Designated AN Facility POCs will be
discussed in the following section.
An individual registering as an AN
Facility Representative will be expected
to provide the name of and contact
information for the Designated AN
Facility POC for each AN Facility on
behalf of which he/she is registering.
Please note that a single individual may
serve as an AN Facility Representative
for multiple AN Facilities.
5. Registering a Designated AN Facility
POC
In section 31.215(a) of the proposed
rule, the Department proposes requiring
each AN Facility to designate a single
AN Facility Representative to act as the
primary point of contact with the
Department on behalf of the AN
Facility. The Department proposes that
the Designated AN Facility POC will be
the individual who is responsible for
contacts with the Department regarding
regulatory activities, such as the
scheduling of inspections under
sections 31.500 and 31.505 of the
proposed rule. The Department
proposes that the Designated AN
Facility POC will have this point-ofcontact responsibility in addition to all
other AN Facility Representative
responsibilities.
Please note that a single individual
may serve as a Designated AN Facility
POC for multiple AN Facilities.
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6. Summary of AN Facility Personnel
Registration Proposals
In summary, the Department is
proposing that any individual working
at or for an AN Facility that performs
sales or transfers of ammonium nitrate,
or that performs ammonium nitrate
application services, would have to
register with the Department. Sales,
transfers, or application services may
only be performed by an individual who
successfully registers with the
Department and is granted an AN
Registered User Number as an AN Seller
(or AN Facility Representative or
Designated AN Facility POC, as both AN
Facility Representatives and Designated
AN Facility POCs are subsets of AN
Sellers). An AN Facility may have as
many or as few registered AN Sellers as
it deems fit, and would be required to
have at least one registered AN Facility
Representative.
AN Facility Representatives have
several responsibilities that AN Sellers
who are not AN Facility Representatives
do not have (i.e., responsibilities for
ensuring an AN Facility’s holistic
compliance with Subtitle J
requirements). Each AN Facility would
be required to designate a single AN
Facility Representative to be that
facility’s Designated AN Facility POC,
who will serve as the facility’s primary
point of contact with the Department.
The Department welcomes comments
on the propriety and effectiveness of
this proposed approach, including
comments that address the following
issues:
• The ownership and management
structures of AN Facilities;
• The proposed qualifications for
being an AN Facility Representative,
including whether individuals who do
not own all or part of an AN Facility
should be able to register as AN Facility
Representatives;
• The proposed regulatory
compliance responsibilities of AN
Sellers and AN Facility Representatives,
which will be described in further detail
throughout the remainder of this NPRM;
• Whether or not proof of ownership
(for owners) or proof of delegation of
authority from company ownership or
management (for non-owners) should be
required for individuals registering as
AN Facility Representatives; and
• The proposal that not all AN
Facility owners or operators should be
required to register.
The Department also welcomes
comments on potential alternative
approaches. Several such alternative
approaches follow:
• Permitting only individuals who
own all or part of an AN Facility to
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register, and requiring those individuals
to perform all applicable regulatory
compliance activities, such as verifying
AN Purchasers’ AN Registered User
Numbers and identities (as described in
sections 31.300 and 31.305 of the
proposed rule); or
• Permitting only AN Facility
Representatives to register, but allowing
any facility personnel to conduct
ammonium nitrate sales, transactions,
and application services; or
• Permitting only AN Facility
Representatives to register, but allowing
non-registered facility personnel whose
names have been provided to the
Department to be involved in
ammonium nitrate sales, transactions,
and application services.
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7. Registering AN Purchasers
6 U.S.C. 488a(d) and 6 U.S.C.
488e(a)(3)(A) require any individual
who intends to purchase or acquire
ammonium nitrate to register with the
Department. Specifically, the
Department proposes in section 31.205
to require that each individual person
attempting to purchase or acquire
ammonium nitrate from an AN Facility
would be required to register with the
Department. Whether that person is the
owner of the purchasing entity or
simply an employee thereof, the
Department proposes to require that
person to have a valid AN Registered
User Number. Moreover, whether a
purchasing entity would want to have a
single individual complete all purchases
or have multiple individuals with
purchasing authority would be within
that entity’s discretion, but the
Department would require any
individual attempting to purchase
ammonium nitrate to be registered
before an AN Facility would be
authorized to sell ammonium nitrate to
him/her. This is necessary to ensure that
each individual taking ownership of
ammonium nitrate has been vetted
before obtaining ammonium nitrate. The
Department welcomes public comment
on this proposed approach.
The Department also proposes that it
will not require persons receiving
ammonium nitrate application services
to register as AN Purchasers. The
Department does not believe that
Subtitle J requires registration and TSDB
vetting of owners/operators of
agricultural property who receive
application services, as long as those
individuals do not otherwise qualify for
registration under this proposed rule.1
1 If an owner or operator receives and possesses
ammonium nitrate for any length of time before it
is applied as fertilizer to his/her agricultural
property, he/she would qualify as an AN Purchaser
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DHS does not believe that ammonium
nitrate fertilizer is likely to be
misappropriated for use in acts of
terrorism after it has been applied to
agricultural property. The Department
welcomes public comment on this
conclusion.
8. Federal/State/Tribal/Local
Government-Owned Entities That Are
AN Facilities or AN Purchasers
While the Department does not
believe that many Federal, State, tribal,
or local governmentally-owned entities
engage in the sale, transfer, or purchase
of ammonium nitrate, the Department
believes that some such entities do. In
Subtitle J, Congress did not exempt from
regulation AN Facilities that are owned
by, or AN Purchasers who work for,
Federal, State, tribal, or local
governments. Accordingly, the
Department is proposing to treat such
entities like any other AN Facilities or
AN Purchasers, and is proposing to
require them to comply with all
applicable regulatory requirements. The
Department solicits comments on the
existence of governmentally-owned
entities engaged in the sale, transfer, or
purchase of ammonium nitrate; on the
existence of government-owned entities
that provide application services;
examples of such entities; and whether
or not such entities should receive
special treatment under the Ammonium
Nitrate Security Program.
9. Registration Process
The Department is proposing that
each applicant for an AN Registered
User Number would be required to
register as a Designated AN Facility
POC, AN Facility Representative, AN
Seller, and/or AN Purchaser through an
online Web portal (the ‘‘AN User
Registration Portal’’) developed by the
Department and made available via the
Internet. Proposed procedures for
applying for an AN Registered User
Number and registering as a Designated
AN Facility POC, AN Facility
Representative, AN Seller, and/or AN
Purchaser can be found in section
31.220 of the proposed rule. (This
NPRM refers to applicants who have
successfully registered under these
proposed procedures as ‘‘registered
users.’’)
One alternative to Internet-only
registration is to add a phone
registration option to the current
Internet option. This alternative would
under the Department’s proposed rule. Such an
owner or operator would have to register with DHS
as an AN Purchaser, would have to be screened
against the TSDB, and would have to fulfill the
other proposed obligations of AN Purchasers as
described elsewhere in this NPRM.
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provide both an online Web portal and
phone-based registration system.
Applicants could choose between Web
portal registration and phone
registration—DHS would accept either if
it implemented this alternative. Under
this alternative, DHS could accept
registration applications over the phone,
vet applicants against the TSDB (as
described in section III.B.11 of this
NPRM), and subsequently mail
applicants paper letters containing
registration numbers or registration
denials. DHS could also potentially
provide each applicant with the option
of receiving a call, conveying
registration results or registration status,
prior to receipt of a paper letter in the
mail. Calls could be provided to enable
applicants to learn their statuses prior to
receiving letters in the mail.
Although DHS is proposing Internetonly registration at this time, the
Department invites public comments
addressing the above alternative
registration approach, and any other
alternative registration approaches that
commenters believe would enable
applicants and DHS to efficiently carry
out their respective registration
obligations. Specifically, DHS is
interested in identifying alternative
approaches to the Internet that would
allow DHS to meet its statutory
requirements to, ‘‘to the extent
practicable, issue or deny registration
numbers under [Subtitle J] not later than
72 hours after the time [DHS] receives
a complete registration application,
unless [DHS] determines, in the interest
of national security, that additional time
is necessary to review an application[,]’’
and to ‘‘notify a person seeking to
register with the Department [* * *] of
the status of the application of that
person not later than 72 hours after the
time [DHS] receives a complete
registration application.’’ See 6 U.S.C.
488a(i)(3). The Department will
consider and examine alternatives
suggested in public comments in
assessing whether to require online
registration in the final rule. DHS is
particularly interested in receiving
public comments addressing the
business and economic impacts that
various registration alternatives would
have on the regulated community,
including the costs and benefits of the
various alternatives on individual
registration applicants. Because it is
proposing to implement an online
registration system, DHS requests
comments addressing the level of access
to the Internet that registration
applicants currently have, comments
addressing the level of access applicants
anticipate having in the future, and
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comments addressing how registration
applicants who do not have readilyaccessible Internet access could obtain
the access necessary to register online.
DHS specifically requests information,
data, and/or studies pertaining to the
regulated community’s access to the
Internet. The Department will consider
any data or studies received on any
aspects of registration or on any
alternatives, as well as other comments,
and if appropriate, modify the
registration system proposed in this
NPRM.
While not every potential applicant
may have personal access to the
Internet, the Internet is widely available,
such as at public libraries or in other
public buildings. AN Facilities are also
welcome, but not required, to provide
Internet access to potential applicants.
The Department believes that there are
significant benefits to an online
approach. The benefits to applicants,
registered users, and the Department of
an online approach include: (1) Quicker
response from the Department, thereby
minimizing the time during which an
applicant or registered user would not
be able to purchase, sell, or transfer
ammonium nitrate, or perform
ammonium nitrate application services;
(2) ability for an applicant or registered
user to access, view, update, and
manage his/her personally identifiable
information; and (3) ability for a
registered user to easily renew his/her
AN Registered User Number once it has
expired. Additional benefits of online
registration, and description of
rationales for online registration, follow.
As described in section III.B.11 of this
NPRM, DHS proposes to vet registration
applicants against the TSDB as part of
the Ammonium Nitrate Security
Program. Accurate TSDB vetting
depends upon DHS obtaining accurate
information from registration
applicants. Because TSDB vetting
results or submissions of inaccurate or
improper registration information to
DHS could lead to registration denials
or revocations (as described in sections
III.B.12 and 13 of this NPRM),
preventing individuals from being able
to access ammonium nitrate and thus
impacting their livelihoods, DHS
believes that it should implement the
most accurate registration system
possible. DHS believes that
implementing an online registration
system would reduce the risk of human
error in submission and transcription of
registration information, as compared to
the phone-in registration alternative
mentioned above or as compared to
mail-in or other possible registration
alternatives. DHS is seeking comment
on this assumption. DHS also believes
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that implementing an online registration
system would reduce the risks of lost
paperwork or misdirected mail, both by
registration applicants and by DHS,
which would be inherent in any
alternative registration systems relying
on mailed correspondence or paper
forms. While allowing registration over
the phone would eliminate the potential
loss of mailed paper forms by
registration applicants, it would not
entirely eliminate the potential for some
paper letters from DHS containing
registration numbers or registration
denials to be lost. DHS thus believes
that an online registration system is
likely to be the most accurate
registration system possible; it would be
less prone to the types of errors
identified above than alternative
registration systems. DHS seeks
comments on how errors could be
reduced through alternative registration
systems.
DHS proposes Internet-only
registration because Subtitle J directs
the Department to ‘‘establish procedures
to efficiently receive applications for
registration numbers.’’ See 6 U.S.C.
488a(i)(1)(A). A major goal of Subtitle J
is to expedite and streamline the
registration and regulatory compliance
processes that are part of the
Ammonium Nitrate Security Program.
See, e.g., 6 U.S.C. 488a(i)(3)(A)
(directing DHS to, ‘‘to the extent
practicable, issue or deny registration
numbers under [Subtitle J] not later than
72 hours after the time [DHS] receives
a complete registration application
[* * *]’’); 6 U.S.C. 488a(i)(1)(A)
(directing DHS to ‘‘promptly issue or
deny’’ registration numbers (emphasis
added)); 6 U.S.C. 488a(i)(1)(B) (directing
DHS to structure the program to
maximize the number of registration
applicants that apply for registration
soon after implementation of the
program); 6 U.S.C. 488a(i)(3)(B)
(directing DHS to notify registration
applicants whenever there are delays in
processing registration applications);
and 6 U.S.C. 488a(i)(4)(A) (directing
DHS to create an expedited appeals
process for individuals whose
registration applications are denied).
Implementing an online registration
system would not only enable DHS to
return registration results to applicants
over the Internet within the 72-hour
timeframe set forth in 6 U.S.C.
488a(i)(3)(A), it would also enable DHS
to return registration results to
applicants faster than under any of the
other possible registration alternatives,
thereby best achieving the goal of
expediting registration that underlies
Subtitle J. The Department proposes the
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Internet-only approach because mail
processing times, delays associated with
transcribing phoned-in registrations,
and delays associated with generating
and processing paper forms mailed to or
from DHS would slow DHS’s responses
to registration applications. For these
reasons, a phone-in or mail-in
registration alternative would not
expedite registration in comparison to
online registration. However, DHS seeks
comment on whether or not possible
registration delays would be preferable
to the burdens of having to access
public computers that would be
imposed by an Internet-only registration
approach on individuals without
readily-accessible Internet access. DHS
is also seeking comments on other ways
in which these burdens might be
mitigated for those without readilyaccessible Internet access.
DHS acknowledges that the proposed
Internet-only registration procedures, if
finalized, would impose costs and
burden on regulated members of the
public. Online registration would likely
be more burdensome for individuals
without readily-accessible access to the
Internet than for others. Subtitle J,
however, specifies that persons do not
need to be registered to purchase, sell,
transfer, or receive ammonium nitrate
until six months after the issuance of
the final rule implementing the
Ammonium Nitrate Security Program.
See 6 U.S.C. 488e(e). DHS believes that
this six-month period will provide a
sufficient opportunity for those without
readily-accessible Internet access to
obtain the brief Internet access
necessary to register with the
Department. The period of time between
issuance of a final rule and
implementation of the registration
requirement (i.e., that individuals
possess AN Registered User Numbers)
should minimize burden or business
disruption felt by registration
applicants. Nevertheless, the
Department seeks comments on the
likely burdens (in terms of time and
expense) on those who would need to
access public computers in order to
register online. DHS also seeks
comments on any additional costs
incurred besides those associated with
registration.
In Subtitle J, 6 U.S.C. 488a(i)(1)(B)
additionally directs the Department to
take steps to maximize the number of
registration applications that are
submitted and processed during the six
months following the issuance of the
final rule. In order to accomplish this,
the Department intends to engage in a
concerted outreach effort both
immediately before and immediately
after the release of the final rule in an
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effort to raise awareness of Subtitle J’s
registration requirements and the
process for completing them. The
Department welcomes public comments
on both potential outreach targets and
other steps the Department can take to
maximize the number of registration
applications that are submitted and
processed during the initial six-month
registration period.
The Department’s proposal would
require online registration, but would
not mandate what sort of Internet access
registration applicants must obtain in
order to complete the registration
process. As mentioned previously,
registration applicants could use public
computers and internet connections, or
computers and Internet connections
provided by AN Facilities, in order to
register if they do not have access to
personal computers and the internet.
DHS recognizes that use of public
computers or unsecured Internet
connections can increase privacy risks
and risks of loss of sensitive personal
data. The Department has published a
Privacy Impact Assessment
concurrently with publication of this
NPRM addressing these risks, and also
addressing other privacy risks and
safeguards relevant to the Ammonium
Nitrate Security Program. The
Department’s Ammonium Nitrate
Security Program Privacy Impact
Assessment can be found online, at
https://www.dhs.gov/privacy. DHS
encourages members of the public to
read the Privacy Impact Assessment,
and submit comments on this NPRM
regarding the risks and safeguards that
is addresses. The Department is
particularly interested in receiving
comments addressing privacy risks
associated with use of public computers
or unsecured internet connections as
part of the proposed registration
process, and comments addressing how
DHS and registration applicants can
protect personal information and
sensitive information transmitted
online.
In summary, the Department proposes
that registration applications be
collected only though an online web
portal. The Department seeks public
comments on this proposed Internetonly approach, and on potential
alternative approaches. DHS will
consider alternatives submitted in
selecting which type of registration
system to implement as part of the final
rule.
10. Initial Applications
Upon accessing the AN User
Registration Portal, DHS proposes in
section 31.220(c)(1) that each applicant
will be asked a series of questions
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designed to allow the Department to vet
the individual against the TSDB, and to
subsequently enable point of sale
verifications. The Department is
proposing in section 31.220(c)(1) that
each applicant provide his/her name,
address, telephone number, photo
identification document type, photo
identification document issuing entity,
photo identification document number,
place of birth, date of birth, citizenship,
and gender, along with any other
information deemed necessary by the
Department to carry out TSDB vetting.
To ensure that appropriate user roles
are assigned to each AN Registered User
Number, DHS proposes in section
31.220(b) that each applicant would also
be asked to declare his/her ammonium
nitrate user status in general terms (i.e.,
AN Seller; AN Facility Representative;
Designated AN Facility POC; AN
Purchaser). In section 31.220(b), the
Department proposes to allow an
applicant the ability to register as both
an AN Seller and an AN Purchaser. The
Department is interested in receiving
comments on the utility of this
proposal.
The Department is also proposing in
section 31.220(c)(3) that each AN Seller,
AN Facility Representative, and
Designated AN Facility POC would be
required to submit information
identifying all AN Facilities at or for
which he/she serves as an AN Seller,
AN Facility Representative, or
Designated AN Facility POC.
Under section 31.220(c)(1) of the
proposed rule the Department may also
collect information necessary to enable
it to verify applicants’ enrollments in
other TSDB vetting programs. The
Department is considering exercising its
authority under 6 U.S.C. 488a(i)(6)(A) to
recognize the results of equivalent TSDB
vetting conducted on applicants
enrolled in other appropriate DHS
programs where possible. This approach
would limit the number of instances in
which different DHS programs may vet
the same applicant against the TSDB.
The Department would appreciate
comments regarding whether or not this
or other information would be
worthwhile to collect, and regarding the
burden on the regulated community of
such collection. The Department also
welcomes public comment on the
totality of this proposed registration
application process, including public
comment discussing potential
alternative processes.
Pursuant to the Privacy Act, 5 U.S.C.
552a(e)(3), DHS intends to provide
notice to individuals submitting
information to DHS through the AN
User Registration Portal about the
authority for DHS’s collection of
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application information, the purposes
for collecting application information,
the uses of application information, and
the impacts on individuals by providing
or failing to provide application
information. DHS expects to provide
this notice electronically, within the AN
User Registration Portal.
11. Applicant Vetting Process
In section 31.225, the Department
proposes to vet applicants against the
TSDB and/or verify each applicant’s
enrollment in a Department program
that conducts equivalent TSDB vetting
prior to issuing him/her an AN
Registered User Number. See 6 U.S.C.
488a(i)(2)(A) (requiring TSDB vetting).
Under section 31.230(b)(1) of the
proposed rule, applicants whose
identifying information appears in the
TSDB may be denied AN Registered
User Numbers. See 6 U.S.C.
488a(i)(2)(B). Each applicant who
applies for an AN Registered User
Number will be vetted against the TSDB
before being approved to purchase, sell,
transfer, or provide application services
for ammonium nitrate.
The Department is aware that some
applicants may have already been vetted
against the TSDB as part of other DHS
programs prior to submission of their
AN Registered User Number
applications. Sections 31.220 and
31.230 of the proposed rule would
enable, but would not require, DHS to
recognize the results of TSDB vetting
completed by other DHS programs as
part of AN Registered User Number
application reviews. The Department is
interested in receiving comments on the
utility of this proposal.
The Department welcomes public
comment on the means by which it
proposes to accomplish vetting, and on
any other aspects of the proposed
approach to vetting applicants for AN
Registered User Numbers. At a date after
publication of the Ammonium Nitrate
Security Program NPRM in the Federal
Register, but prior to final rule
implementation, the Department will
publish in the Federal Register both a
System of Records Notice (SORN) for
the Ammonium Nitrate Security
Program and a separate Notice of
Proposed Rulemaking proposing to
exempt the Ammonium Nitrate Security
Program from certain Privacy Act
requirements. The Department will also
publish, on the Department’s Web site,
a Privacy Impact Assessment. In these
documents the Department will outline
the potential privacy impacts of the
proposed rule, including the privacy
impacts of the vetting process and the
circumstances under which DHS
intends to share information collected
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srobinson on DSK4SPTVN1PROD with PROPOSALS2
under the Ammonium Nitrate Security
Program with Federal law enforcement
agencies as a part of law enforcement
investigations into terrorist ties of
applicants for AN Registered User
Numbers.
12. Notification of Approval or Denial
Consistent with 6 U.S.C. 488a(i)(3)(A)
and 6 U.S.C. 488a(i)(3)(B), to the extent
practicable, the Department intends to
approve or deny each application for an
AN Registered User Number, and to
issue each AN Registered User Number,
not later than 72 hours after the time the
Department receives a complete
application. The Department may deny
an applicant an AN Registered User
Number if that applicant’s name or
identifying information appears in the
TSDB. See 6 U.S.C. 488a(i)(2)(B). The
Department proposes in section
31.230(c) to provide notification of
registration application approval or
denial to each applicant electronically.
If a registration application is
approved, the notification of such
approval will contain a unique AN
Registered User Number assigned to the
applicant. The Department is
considering including in the notification
issued to each successful applicant a
certificate including the AN Registered
User Number that he/she can print and
keep as part of his/her records and use
to facilitate the AN Purchaser
verification process.
The Department welcomes public
comment on the efficiency and
sufficiency of notifying applicants of
AN Registered User Number approvals
and denials via e-mail or other
electronic means, and also welcomes
public comment addressing potential
alternative means for providing such
notice, such as notification via
telephone or letter. The Department also
welcomes public comment addressing
the appropriate contents of registration
approvals and denials.
The Department intends to issue or
deny AN Registered User Numbers
within 72 hours of application, as
required by Subtitle J. See 6 U.S.C.
488a(i)(3). When this is not practicable,
or when the Department determines in
the interest of national security that
additional time is needed to review an
application, the Department proposes to
provide notice of delay to applicants
whose registration determinations are
delayed in the same manner as
approvals or denials will be issued, as
stated in section 31.230(e) of the
proposed rule. The Department
welcomes public comment on the
efficiency, sufficiency, costs and
benefits of this manner of providing
notice of delay, and also welcomes
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public comment addressing potential
alternative means of providing such
notice.
13. Revocation of Registration Numbers
Under section 31.245 of the proposed
rule, the Department proposes to revoke
an individual’s AN Registered User
Number upon determining that it is in
the interest of national security to
revoke that AN Registered User Number
based on the results of the activities
described in section 31.225 of the
proposed rule, or that the AN Registered
User holding that AN Registered User
Number obtained it by submitting
fraudulent or false information. See 6
U.S.C. 488a(i)(7)(A). To support these
determinations, in section 31.225(b) the
Department proposes to recurrently vet
individuals who have previously been
issued AN Registered User Numbers.
See 6 U.S.C. 488a(i)(7)(A). As
appropriate, before revoking an
individual’s AN Registered User
Number, the Department must provide
notice to the individual, and after the
revocation of the AN Registered User
Number, the Department must provide
the affected individual an opportunity
to appeal. See 6 U.S.C. 488a(i)(7)(B). In
sections 31.245(b) and (c), DHS
proposes that notification of revocation
will be provided to each affected
individual in writing, along with
instructions on the process for
appealing the Department’s revocation
decision. The appellate process will
mirror that provided to individuals
whose initial applications for AN
Registered User Numbers are denied, as
described below in the following section
and in section 31.250 of the proposed
rule. The Department welcomes public
comment on the efficiency and
sufficiency of this method of providing
notice of revocation and on the
proposed appeals process, and also
welcomes public comment on potential
alternative means for either.
14. Appealing Registration Denials and
Registration Revocations
This section discusses proposed
appeal procedures for persons denied
AN Registered User Numbers and for
persons whose AN Registered User
Numbers are revoked under Subtitle J.
These procedures can be found in
section 31.250 of the proposed rule. A
later section of this NPRM, section III.H,
discusses proposed adjudication and
appeal procedures for persons and
entities issued civil penalties by the
Department under Subtitle J. These two
sets of procedures are mutually
exclusive; the Department proposes that
registration and revocation appeals will
be governed only by the appeals
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mechanisms described in this section of
this NPRM, while civil penalty
adjudications and appeals will be
governed only by the mechanisms
described in section III.H of this NPRM.
The reason for this mutual exclusivity
is because registration denials and
revocations are fundamentally different
from imposition of civil penalties under
the Department’s proposed rule. Under
the Department’s proposal, individuals
or other entities will only be issued civil
penalties for violating the rules of the
Ammonium Nitrate Security Program.
Individuals or other entities will not be
issued civil penalties for having their
registrations denied or revoked.
Adjudication or appeal of civil penalties
will thus involve assessment of whether
or not individuals or other entities have
violated the final Ammonium Nitrate
Security Program rules. On the other
hand, appeal of denial or revocation of
registration numbers will involve
review of the completeness and
accuracy of registration applications,
and review of TSDB vetting results and
national security interests if applicable.
The appeal procedures listed in this
section of the NPRM are intended to
enable reviews of registration
application denials and revocations of
registration numbers, while the
adjudication and appeal procedures
listed in section III.H are intended to
enable reviews of civil penalties and of
alleged regulatory violations.
Subtitle J requires the Department to
afford persons denied AN Registered
User Numbers, and persons whose AN
Registered User Numbers are revoked,
the opportunity to appeal such denials
and revocations in an expedited
manner. See 6 U.S.C. 488a(i)(4). The
Department proposes to fulfill this
requirement by permitting each person
to request copies of the materials on
which denial or revocation was based,
and to file statements explaining why
he/she believes that he/she has been
inappropriately denied registration and
containing any applicable supporting
evidence, to be reviewed by the
Department. These proposed appeals
procedures are based, in part, on
appeals procedures the Department
offers as part of the Transportation
Worker Identification Credential (TWIC)
and Hazardous Materials Endorsement
(HME) programs. See 49 CFR 1515.9(a)–
(b); 49 CFR 1515.5.
Specifically, the Department proposes
that, after having received an
ammonium nitrate registration denial or
revocation, a person may initiate an
appeal by filing a written Request for
Materials requesting copies of the
materials on which denial or revocation
was based. The Department proposes to
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require that each Request for Materials
be submitted to the Department within
60 days of the date of denial or
revocation.
The Department proposes that after
the receipt of a Request for Materials, it
will send the appellant a DHS Response
containing copies of the releasable
materials upon which denial or
revocation was based. DHS will not
include any classified information in
this DHS Response nor will it include
any other information or material
protected from disclosure under law,
although as appropriate it will include
unclassified summaries of classified
evidence supporting denial or
revocation. The Department proposes
that it will serve its DHS Response on
the appellant within 60 days of Request
for Materials receipt, unless additional
time is required in the interest of
national security.
Upon review of those releasable
materials, the Department proposes that
an appellant may reply to the
Department with a Request for Appeal
containing the rationale or information
upon which he/she disputes the
Department’s denial or revocation
determination. The Department
proposes that an appellant will have 60
days from the date of the Department’s
Response in which to file such rationale
or information. The Department
proposes that after reviewing this
rationale or information, it will serve
the appellant with a Final
Determination of the Department’s
resolution of his/her appeal. The
Department proposes that it will
perform this service within 72 hours of
Request for Appeal receipt, to the extent
practicable, as required by 6 U.S.C.
488a(i)(4)(A)(ii).
For good cause shown, the
Department additionally proposes to
grant appellants extensions of the 60day appeals submission periods
mentioned above. This will afford
appellants the necessary time in which
to work with other government agencies
to correct records and materials
contributing to the Department’s denial/
revocation determinations when those
records and materials contain incorrect
or outdated information.
The Department welcomes public
comment on this appeals mechanism,
and also welcomes public comment on
potential alternative appeals
mechanisms.
15. Registration Updates and Expiration
Under Subtitle J, DHS may require
registrants to update registration
information submitted to DHS ‘‘as
appropriate.’’ See 6 U.S.C. 488a(6)(b).
Pursuant to this authority, section
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31.220(a)(2) proposes to require
registration applicants and AN
Registered Users to update submitted
information within 30 days of a change
to any of the information submitted as
part of the application (e.g., name,
address). An applicant or AN Registered
User would be able to update his/her
information through the proposed AN
User Registration Portal. DHS seeks
public comment on its proposed
approach to updating registration
information, including how often and
under what circumstances to require
registrants to update the information
submitted to DHS as part of registration.
DHS also requests public comments on
potential alternative approaches to
requiring registration information to be
updated through the proposed AN User
Registration Portal, including comments
on the feasibility and practicality of
allowing updates to be accomplished
over the telephone or through the mail.
The Department proposes in section
31.235 of the proposed rule to make
each AN Registered User Number issued
under Subtitle J valid for five years after
the date of issuance (unless revoked
before expiration pursuant to 6 U.S.C.
488a(i)(7)). Under this proposal, the
Department expects many applicants to
apply to renew their AN Registered User
Numbers every five years.
In proposing five years as the duration
of each AN Registered User Number, the
Department is seeking to balance the
benefits of requiring renewals against
the burdens to both the regulated
community and the Department of the
renewal process. As part of its
evaluation of potential expiration and
renewal processes, the Department has
considered the expiration/renewal
schedules for ATF’s Federal Explosives
Regulations (three years), for DHS
programs that conduct TSDB vetting
(e.g., five years for TSA’s TWIC program
and five years for U.S. Customs and
Border Protection’s Trusted Traveler
programs), and for various State
ammonium nitrate licensing regulations
(generally one year). The Department
believes that the five-year renewal cycle
for AN Registered User Numbers is
appropriate because it will minimize the
burden on the regulated community, in
comparison to screening programs with
shorter renewal cycles. Additionally, a
five-year validity period aligns with
DHS’s practice of recurrently vetting
information against the TSDB for five
years as part of certain transportation
and critical infrastructure security
programs.
The Department proposes in section
31.240 to allow each AN Registered
User to apply for a five-year extension
of his/her AN Registered User Number
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46925
via the proposed AN User Registration
Portal anytime beginning 60 days prior
to the expiration of his/her AN
Registered User Number through one
year after the expiration of his/her AN
Registered User Number. After
completion of the renewal process, each
renewed AN Registered User Number
will be valid for an additional five years.
To facilitate this, the Department
intends to maintain an AN Registered
User’s registration application
information for a period of one year
following the expiration of his/her AN
Registered User Number. If an
individual fails to renew his/her AN
Registered User Number within one year
of its expiration, the AN Registered User
Number will be permanently retired.
Such an individual will need to apply
for a new AN Registered User Number
to purchase, sell, transfer, or provide
application services for ammonium
nitrate after his/her initial AN Register
User Number has been permanently
retired.
The Department seeks public
comment on this proposed approach,
including the utility, benefits, and costs
of requiring re-registration of
ammonium nitrate users in general, and
on the proposed five-year time period in
particular.
16. Initial Six-Month Registration Period
6 U.S.C. 488e(e) specifies that persons
do not need to be registered to purchase,
sell, transfer, or receive ammonium
nitrate until six months after the
issuance of the final rule implementing
Subtitle J. 6 U.S.C. 488a(i)(1)(B) directs
the Department to take steps to
maximize the number of registration
applications that are submitted and
processed during the six months
following the issuance of the final rule.
In order to accomplish this, the
Department intends to engage in a
concerted outreach effort both
immediately prior to and immediately
following the release of the final rule in
an effort to raise awareness of Subtitle
J’s registration requirements and the
process for completing them. The
Department welcomes suggestions on
both potential outreach targets and other
steps the Department can take to
maximize the number of registration
applications that are submitted and
processed during the initial six-month
registration period.
C. Purchaser Verification Activities (See
Sections 31.300–31.310 of the Proposed
Rule)
1. Overview
Subtitle J specifies that only
individuals with valid AN Registered
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User Numbers may purchase
ammonium nitrate, and that AN Sellers
would be required to refuse to sell
ammonium nitrate to prospective AN
Purchasers who do not possess valid AN
Registered User Numbers. See 6 U.S.C.
488e(a)(2) and 6 U.S.C. 488e(a)(3). To
this end, AN Sellers would be required
to verify that each prospective AN
Purchaser has a valid (i.e., current and
authentic) AN Registered User Number
prior to transfer of ammonium nitrate.
Subtitle J also requires AN Sellers to
verify each prospective AN Purchaser’s
identity prior to transfer of ammonium
nitrate to that prospective AN
Purchaser. See 6 U.S.C. 488a(e)(2)(D).
DHS therefore proposes to require that
an AN Facility refuse to sell or transfer
ammonium nitrate to a prospective AN
Purchaser whose identity or AN
Registered User Number the AN Seller
is unable to verify. These proposed
requirements can be found in section
31.300 of the proposed rule, and are
further discussed throughout the
remainder of section III.C of this NPRM.
In addition to verifying the identity
and AN Registered User Number of a
prospective AN Purchaser, if an AN
Purchaser whose identity and AN
Registered User Number has been
verified uses an agent on his or her
behalf at the point of sale, the AN Seller
must also verify the identity of the
agent. See 6 U.S.C. 488a(e)(2)(D).
Identity verification of AN Purchasers
(and, where applicable, their agents) by
AN Sellers is to occur in accordance
with procedures proposed in section
31.300.
AN Facilities would also be required
to record certain information regarding
prospective AN Purchasers (and, if
applicable, the agents acting on their
behalves) for each sale or transfer as part
of Subtitle J’s recordkeeping
requirements. See 6 U.S.C. 488a(e)(2).
2. Manner of Sale or Transfer of
Ammonium Nitrate
The Department is aware that the
ways in which sales and transfers of
ammonium nitrate are conducted can
vary by AN Facility, and that differences
in ammonium nitrate transaction
protocols could impact the timing and
performance of identity verification and
other required point of sale activities.
Through conversations with industry,
the Department has identified three
principal transaction formats commonly
used to sell or transfer ammonium
nitrate: (1) The AN Purchaser appears at
an AN Facility and takes possession of
ammonium nitrate from the AN Seller
directly; (2) the AN Purchaser places an
advanced order either in person or
through other means (e.g., telephone,
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online), and the AN Seller delivers
ammonium nitrate to the AN Purchaser;
or (3) the AN Purchaser places an
advanced order either in person or
through other means (e.g., telephone,
online), and an agent acting on behalf of
the AN Purchaser takes possession of
the ammonium nitrate from the AN
Seller. Other transaction formats are
also possible.
In addition to the aforementioned
approaches to transferring possession of
ammonium nitrate as part of a sale or
transfer, depending on the financial
arrangements entered into between an
AN Facility and an AN Purchaser, the
payment of funds or other services in
exchange for ammonium nitrate may
occur prior to, concurrent with, or after
the actual transfer of possession of
ammonium nitrate.
The Department is interested in
comments regarding the frequency of
these various modes of delivery and
payment, as well as any other
transactional formats that are used to
sell or transfer ammonium nitrate.
The verification activities described
in section III.C of this NPRM are
required for each sale or transfer of
ammonium nitrate. The Department
seeks comments on its proposed
definition of ‘‘transfer,’’ including what
should be considered a transfer subject
to Subtitle J. For purposes of this rule,
the Department is proposing that
‘‘transfer’’ of ammonium nitrate be
defined generally as ‘‘[t]he transfer of
possession or ownership of ammonium
nitrate from one person or entity to
another person or entity for use outside
of the AN Facility from which the
ammonium nitrate is being transferred.
Transfers of ammonium nitrate include
transfers of possession or ownership
that occur as part of sales and other
business or commercial transactions,
and also include transfers of possession
or ownership that are not part of sales
or other business or commercial
transactions. The physical deposit of
fertilizer onto turf, fields, crops, or other
agricultural property is not a transfer of
ammonium nitrate.’’ Elaboration on this
definition follows.
The Department is aware that
transaction protocols may be different
for sales or transfers that occur as part
of imports or exports of ammonium
nitrate than for purely domestic sales or
transfers. As part of this proposed rule,
DHS proposes to regulate all ammonium
nitrate transfers that occur within the
United States. As such, DHS would
require the verification and
recordkeeping activities described
below whenever possession of
ammonium nitrate changes hands inside
the United States. For example, if an
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individual brings ammonium nitrate
into the country and transfers
possession of it to another person
within the United States, the
verification and recordkeeping activities
described below would be required.
Similarly, if an individual in the United
States transfers possession of
ammonium nitrate to another person
who intends to export that ammonium
nitrate, the verification and
recordkeeping activities described
below would be required. Verification
and recordkeeping would not be
required, however, if an individual
transports ammonium nitrate out of the
country as long as there is no transfer of
possession of the ammonium nitrate
when it is inside the United States.
Likewise, verification and
recordkeeping would not be required if
an individual brings ammonium nitrate
into the country as long as there was no
transfer of possession of that ammonium
nitrate when it is inside the United
States. DHS seeks comments on this
proposal, on the methods of conducting
ammonium nitrate imports and exports,
and on any potential alternative
treatments of imported or exported
ammonium nitrate.
When ammonium nitrate is used or
moved within a single AN Facility, or
when possession of ammonium nitrate
changes within a single AN Facility but
that ammonium nitrate does not leave
the AN Facility, the verification
activities described below are not
required. The reason for this is that,
under Subtitle J, DHS is authorized only
to regulate sales, transfers, and
application services; how ammonium
nitrate is stored, used, or processed
within the confines of individual AN
Facilities is not the subject of Subtitle J.
As such, persons using or moving
ammonium nitrate within an AN
Facility, or obtaining possession of
ammonium nitrate for use within the
same AN Facility, would not need to be
registered with DHS.
The application of ammonium nitrate
fertilizer to property by an application
service would not be regulated as a
transfer under the Department’s
proposal. The Department does not
believe that ammonium nitrate fertilizer
is likely to be misused in acts of
terrorism after it has been applied to
agricultural property. Accordingly,
farmers and other persons who have
ammonium nitrate fertilizer spread on
their agricultural property do not need
to register with the Department, nor do
their identities need to be verified by
AN Sellers prior to their receipt of
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application services.2 Pursuant to the
Department’s proposal, however,
transfer of ammonium nitrate from an
AN Facility to a separate application
service would be regulated. Regulation
of application services is required under
Subtitle J. See 6 U.S.C. 488(2).
Specifically, the Department believes
that regulation of transfers to
application services is necessary in
order to ensure that terrorists cannot
easily obtain ammonium nitrate by
infiltrating, posing as, or working for
application services. The Department
seeks comments on these proposals, and
is particularly interested in comments
discussing interactions between AN
Facilities, application services, and
ammonium nitrate end users.
Persons who transport ammonium
nitrate from one AN Facility to a
delivery location outside that AN
Facility (e.g., truck drivers) conduct
regulated transfers under this proposed
rule, regardless of whether the AN
Facility and delivery location are owned
or operated by the same business or
organization, and are therefore subject
to this regulation. Ammonium nitrate
transportation would be regulated in
three ways under the proposed rule,
depending upon particular transporters’
relationships with AN Facilities or AN
Purchasers. Any particular
transportation would have to be
regulated pursuant to one (and only
one) of the three options listed
immediately below.3
(1) Transporters who are the agents of
AN Purchasers. Any person possessing
valid photo identification could
transport ammonium nitrate from an AN
Facility to an AN Purchaser, pursuant to
the Department’s proposed rules for
‘‘AN Agents’’ as described in sections
III.C.4 through III.C.9 of this NPRM.
‘‘AN Agent’’ transporters would not
need to be registered with or vetted by
DHS. Any AN Purchaser to which an
‘‘AN Agent’’ transporter delivers
ammonium nitrate, however, would
need to be registered with and vetted by
the Department. Similarly, any AN
Seller from whom an ‘‘AN Agent’’
transporter obtains ammonium nitrate
2 Persons who perform application services,
however, must be registered with DHS under the
proposed rule. For elaboration on this registration
requirement, see section 31.210(c) of the proposed
rule and see sections III.B.2 and 3 of this NPRM.
3 Transporters of ammonium nitrate can also be
subject to other Federal and State regulations
regarding the transportation of hazardous materials.
Registration and compliance with DHS’s proposed
Ammonium Nitrate Security Program would not
relieve transporters of duties or registration
requirements under USCG, TSA, or DOT rules, or
under other Federal or State programs. See sections
II.D.3 and II.D.4 of this document for descriptions
of other select rules and programs.
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(i.e., any AN Seller who provides
ammonium nitrate to be loaded into an
‘‘AN Agent’’ transporter’s truck or other
vehicle) would need to be registered
with and vetted by the Department.
Before an ‘‘AN Agent’’ transporter can
pick up or obtain possession of
ammonium nitrate (i.e., before it can be
loaded into his/her truck or other
vehicle), his/her identity would need to
be verified by the AN Facility from
which he/she seeks to pick up
ammonium nitrate, as described in
sections III.C.8 and III.C.9 of this NPRM.
Before an ‘‘AN Agent’’ transporter can
pick up ammonium nitrate, the AN
Facility from which he/she seeks to pick
it up would also need to verify that he/
she has legitimately been asked to serve
as an ‘‘AN Agent’’ by a registered AN
Purchaser. See sections III.C.7 and
III.C.9 of this NPRM. Before an ‘‘AN
Agent’’ transporter can pick up
ammonium nitrate, the AN Facility from
which he/she seeks to pick it up would
also need to verify that the AN
Purchaser to whom the ‘‘AN Agent’’
transporter plans to deliver the
ammonium nitrate is properly registered
with DHS. See sections III.C.4, 6, and 9
of this NPRM.
Under this proposed rule, an ‘‘AN
Agent’’ transporter would not need to
perform any identity verification or
registration verification on the AN
Purchaser to whom he/she delivers
ammonium nitrate. Similarly, ‘‘AN
Agent’’ transporters would not need to
maintain any records or paperwork
under this proposed rule.
(2) Transporters who work for AN
Facilities. Transporters could work for
or deliver ammonium nitrate on behalf
of AN Facilities, and could register
under the Department’s proposed rules
as AN Sellers for those facilities. See
section III.B.3 of this NPRM.
Transporters who register as AN Sellers
would be vetted against the TSDB. See
sections III.B.10 and III.B.11 of this
NPRM.
Once registered as an AN Seller on
behalf of a particular AN Facility, a
transporter could pick up or obtain
possession of ammonium nitrate from
that AN Facility (i.e., it could be loaded
into his/her truck or other vehicle at
that AN Facility) without having to
undergo the identity verification or AN
Registered User Number verification
activities described in sections III.C.3
through III.C.9 of this NPRM. Before a
transporter who is registered as an AN
Seller delivers or drops off ammonium
nitrate to an AN Purchaser, however,
he/she (or other registered employees of
the AN Facility with which he/she is
associated) would have to conduct
registration verification and
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46927
identification verification on the AN
Purchaser receiving the ammonium
nitrate. See sections III.C.3 through
III.C.9 of this NPRM. The AN Facility
with which the transporter is associated
would also have to maintain records of
the transporter’s delivery. See section
III.D of this NPRM.
(3) Independent transporters.
Transporters who fit into neither of the
previous two categories would be
regulated as both AN Purchasers and
AN Sellers under the Department’s
proposed rule. As such, they would
have to register with the Department
and be vetted against the TSDB. See
sections III.B.10 and III.B.11 of this
NPRM. Any AN Seller from whom an
independent transporter picks up or
obtains ammonium nitrate (i.e., any AN
Seller who provides ammonium nitrate
to be loaded into the independent
transporter’s truck or other vehicle)
would also need to be registered with
and vetted by the Department.
Similarly, any AN Purchaser to whom
an independent transporter delivers
ammonium nitrate would also need to
be registered with and vetted by the
Department.
Independent transporters would need
to be registered as AN Purchasers in
order to pick up or obtain ammonium
nitrate (i.e., in order to have it loaded
into their trucks or other vehicles).
Before an independent transporter can
pick up or obtain possession of
ammonium nitrate (i.e., before it can be
loaded into his/her truck or other
vehicle), his/her identity would need to
be verified and his/her AN Registered
User Number would need to be verified
by the AN Facility from which he/she
seeks to pick up or obtain ammonium
nitrate. See sections III.C.4, III.C.5, and
III.C.9 of this NPRM.
Independent transporters would also
need to be registered as AN Sellers in
order to deliver ammonium nitrate to
other AN Purchasers. Before an
independent transporter delivers or
drops off ammonium nitrate to an AN
Purchaser, he/she (or other employees
registered on behalf of his/her
organization) would have to conduct a
registration verification and identity
verification on the AN Purchaser
receiving the ammonium nitrate. See
sections III.C.3 through III.C.9 of this
NPRM. The AN Facility with which the
independent transporter is associated
would also have to maintain records of
the transporter’s delivery. See section
III.D of this NPRM.
The Department is interested in
comments addressing coverage of truck
drivers and other transporters of
ammonium nitrate. The Department is
particularly interested in comments
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addressing transporters’ relationships to
AN Facilities and AN Purchasers, and
addressing transporters’ abilities to
perform the activities required of
regulated persons. The Department
specifically requests comments
addressing the three types of
transportation arrangements described
above, including comments discussing
whether any particular types of
transportation arrangements should be
exempt from proposed regulatory
requirements, and if so, discussing why
particular transportation arrangements
should be exempt.
DHS proposes that transportation of
ammonium nitrate where possession
moves between different AN Facilities
or other locations would be regulated as
a transfer. Both of these types of
transfers would require all the
registration, verification, and
recordkeeping activities required of
transfers elsewhere in this NPRM. A
person delivering ammonium nitrate
from one AN Facility to another location
would be regulated as part of one of the
three transporter categories listed above,
regardless of whether that person’s
delivery location is part of the same
company or business as the AN Facility
from which he/she obtains the
ammonium nitrate transported.
By proposing to require that
transportation between related business
entities qualifies as a regulated transfer
of ammonium nitrate, DHS would
ensure that all entities from which
transportation of ammonium nitrate
originates have AN Registered Users on
staff who are screened for terrorist ties
who can be responsible for carrying out
the security requirements of Subtitle J.
Likewise, by proposing to require that
transportation between related business
entities qualifies as a regulated transfer
of ammonium nitrate, DHS would also
ensure that all entities receiving
shipments of ammonium nitrate have
AN Registered Users on staff who are
screened for terrorist ties and who can
be responsible for carrying out the
security requirements of Subtitle J.
Similarly, by proposing to require that
transportation between related business
entities qualifies as a regulated transfer
of ammonium nitrate, DHS would also
ensure that intra-company
transportation of ammonium nitrate is
conducted by AN Registered Users or
‘‘AN Agents.’’ These features of the
Department’s proposed rule would help
to ensure that persons screened for
terrorist ties (or their agents) would be
responsible for a given company’s or
business’s ammonium nitrate during
times when that ammonium nitrate
might be most vulnerable to
misappropriation.
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The Department seeks comments on
the proposal that transportation of
ammonium nitrate would be regulated
where possession moves between
different locations but where ownership
is not transferred (i.e., where transfer
takes place within a single corporate
entity). DHS realizes, however, that this
proposal could have a significant impact
on businesses with multiple locations,
and that it might not increase
ammonium nitrate security for every AN
Facility or entity to which it would
apply. Accordingly, the Department
seeks comments on this proposal. DHS
also seeks comments suggesting
alternative ways in which Subtitle J’s
requirements regarding the regulation of
ammonium nitrate transfers could be
achieved. The Department is interested
in comments generally describing the
organizational structures and
transportation needs of the companies
or other entities owning or operating AN
Facilities, and in comments addressing
whether transportation between
locations owned or operated under the
same corporate structure should be
exempt from coverage under the
Ammonium Nitrate Security Program.
3. Required Verification Activities
Based on statutory requirements and
the Department’s understanding of the
ways in which sales and transfers of
ammonium nitrate typically occur, the
Department is proposing to require that
an AN Seller perform the specific
verification activities discussed below
for each sale or transfer of ammonium
nitrate.
The AN Seller would always be
required to verify the currency and
authenticity of the prospective AN
Purchaser’s AN Registered User
Number.
The AN Seller would be required to
verify the prospective AN Purchaser’s
identity as specified by DHS. The
manner of verification of a prospective
AN Purchaser’s identity would vary
depending on whether or not the AN
Purchaser has opted to use an agent (an
‘‘AN Agent’’) to procure ammonium
nitrate for him/her. If the AN Purchaser
opted not to use an agent, then the AN
Seller verifies the AN Purchaser’s
identity based upon the visual check of
the AN Purchaser’s photo identification.
If the AN Purchaser opted to use an
agent, then the AN Seller verifies the
AN Purchaser’s identity by submitting
certain information provided by the AN
Purchaser to the Department for
comparison against information
contained in the AN Purchaser’s AN
Registered User Number application.
In the event that a prospective AN
Purchaser uses an agent to complete the
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transaction, the AN Seller would also be
required to verify both (1) the agent’s
identity based upon a visual check of
the agent’s photo identification, and (2)
that the agent is acting on the approved
AN Purchaser’s behalf.
Each of these required verification
activities is described in greater detail in
the following sections of the NPRM.
Although the Department proposes to
require these verification activities for
sales and transfers of ammonium
nitrate, DHS proposes not to require
these verification activities prior to
provision of ammonium nitrate
application services. The Department
seeks comments on its proposal not to
require verification activities prior to
provision of ammonium nitrate
application services.
4. Verification of the Currency and
Authenticity of a Prospective AN
Purchaser’s AN Registered User Number
In order to bolster the effectiveness of
AN Registered User Numbers in
preventing the misappropriation of
ammonium nitrate, DHS proposes that
the AN Seller will be required to verify
the currency and authenticity of a
prospective AN Purchaser’s AN
Registered User Number prior to
completing a sale or transfer of
ammonium nitrate. DHS proposes in
section 31.305(a) to provide each AN
Seller the capability to verify the
currency and authenticity of a
prospective AN Purchaser’s AN
Registered User Number either
electronically through a web portal
designed by the Department (the
‘‘Purchaser Verification Portal’’) or
telephonically through a call center
maintained by the Department (the
‘‘Purchaser Verification Call Center’’).
The Department proposes in section
31.305(a)(3) to compare the prospective
AN Purchaser’s name and AN
Registered User Number, which a
prospective AN Purchaser would be
required to provide an AN Seller for
submission to DHS, to information
contained in the Department’s AN
Registered User database, and to provide
rapid confirmation or rejection of the
prospective AN Purchaser’s information
to the AN Seller via the same
mechanism (i.e., the Purchaser
Verification Portal or the Purchaser
Verification Call Center). This approach
provides a reasonable degree of
confidence as to the currency and
authenticity of the AN Purchaser’s AN
Registered User Number. Both the
proposed Purchaser Verification Portal
and the proposed Purchaser Verification
Call Center are described in greater
detail below.
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Verification of a prospective AN
Purchaser’s AN Registered User Number
would be required regardless of whether
or not the AN Purchaser opts to use an
agent on his or her behalf to take
possession of ammonium nitrate.
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5. Verification of a Prospective AN
Purchaser’s Identity When the AN
Purchaser Opts Not To Use an Agent
Consistent with 6 U.S.C.
488a(e)(2)(D), the Department proposes
that the AN Seller will be required to
verify the prospective AN Purchaser’s
identity. If the AN Purchaser opts not to
use an agent, DHS proposes in section
31.305(b) that the AN Seller would be
required to verify, by performing a
visual check of a photo identification
document such as a driver’s license or
passport, the identity of the AN
Purchaser no later than when the AN
Purchaser directly takes possession of
ammonium nitrate from the AN Seller at
the completion of the sale or transfer.
The Department proposes using a
definition of ‘‘photo identification
document’’ similar to the definition
used by the Department’s Secure Flight
Program, to establish what qualifies as
an acceptable form of identification for
this verification process. Specifically, in
section 31.105, the Department proposes
defining ‘‘photo identification
document’’ as ‘‘[a]ny of the following
documents containing a unique
document number: (1) An unexpired
passport issued by a foreign government
which contains a photograph; or (2) An
unexpired document issued by a U.S.
Federal, State, or tribal government that
includes the following information for
the person: (i) Full name; (ii) date of
birth; and (iii) photograph; or (3) Such
other documents that the Department
may designate as valid identification
documents.’’ Cf. 49 CFR 1560.3. The
Department also assumes that each AN
Purchaser and each AN Agent will
possess a photo identification
document. The Department seeks
comments on this proposed requirement
and assumption, including comment on
the forms of identification that should
be acceptable for purposes of the visual
identification verification check.
6. Verification of a Prospective AN
Purchaser’s Identity When the AN
Purchaser Opts to Use an Agent
Consistent with 6 U.S.C.
488a(e)(2)(D), the Department proposes
in section 31.310(a) that the AN Seller
will be required to verify the
prospective AN Purchaser’s identity
with DHS when the prospective AN
Purchaser chooses to use an agent to
take possession of ammonium nitrate.
Specifically, before completing a sale or
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transfer of ammonium nitrate the AN
Seller would have to provide certain
prospective AN Purchaser information
(e.g., name; photo identification
document number; AN Registered User
Number) to DHS either electronically
through the Purchaser Verification
Portal or telephonically through the
Purchaser Verification Call Center. The
Department proposes to compare this
information, which a prospective AN
Purchaser would be required to provide
to an AN Seller for submission to the
Department, to information contained in
the Department’s AN Registered User
Database. The Department would
provide rapid confirmation or rejection
of the prospective AN Purchaser’s
information to the AN Seller via the
same mechanism (i.e., the Purchaser
Verification Portal or the Purchaser
Verification Call Center). The
Department believes that this
confirmation or rejection would take
about the same amount of time as it
takes merchants to receive credit card
authorizations at retail stores.
This approach would enable use of an
agent when it is not possible to verify
the identity of the AN Purchaser in
person (i.e., by conducting a visual
inspection of the photo identification of
the AN Purchaser and comparing the
photo identification with the AN
Purchaser physically present). The
Department seeks comments on this
approach, including comments
addressing whether AN Purchasers
would be likely to provide identity
verification information to AN Sellers
themselves (e.g., by providing this
information to AN Sellers over the
telephone), or whether AN Purchasers
would be likely to ask their agents to
provide this information to AN Sellers
in person. DHS also seeks comments on
the advisability, costs, and benefits of
enabling agents to provide AN
Purchasers’ identity verification
information directly to AN Sellers, and
seeks comments on possible alternative
methods that could be employed to
verify AN Purchasers’ identities in sales
or transfers involving AN Agents.
Both the proposed Purchaser
Verification Portal and the proposed
Purchaser Verification Call Center are
described in greater detail below.
7. For Sales Involving Agents,
Verification That the Agent Is Acting on
Behalf of the AN Purchaser
Subtitle J limits registration and
vetting requirements to AN Purchasers,
and does not extend registration and
vetting requirements to the agents of AN
Purchasers. See 6 U.S.C. 488a(d) and 6
U.S.C. 488a(e). In order to help
minimize the likelihood that agents
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would be used to circumvent the
intentions of Subtitle J, the Department
believes it is imperative for AN Sellers
to ensure that an agent is acting at the
direction of a registered AN Purchaser
before the AN Seller transfers
possession of ammonium nitrate to that
agent. To accomplish this, the
Department is considering various
approaches:
(1) Requiring AN Purchasers to
submit the names of their agents to DHS
via the AN User Registration Portal, and
requiring the AN Seller to confirm with
DHS, prior to transferring possession of
ammonium nitrate to an agent, that the
name of that agent has been previously
submitted to DHS by the relevant AN
Purchaser.
(2) Requiring the AN Seller to orally
confirm with the prospective AN
Purchaser prior to each transfer of
ammonium nitrate that the agent is
acting on behalf of the AN Purchaser.
(3) Allowing both options, whereby
an AN Seller first should check with
DHS to see if the prospective AN
Purchaser has submitted the name of the
agent to DHS. If not, then the AN Seller
would be required to orally confirm
with the prospective AN Purchaser that
the agent is acting on his/her behalf.
DHS proposes this third approach in
section 31.310(b) of the proposed rule.
Under the first approach, each AN
Purchaser would be required to provide
to DHS the names of any agents that
might act on his/her behalf at the point
of sale. AN Purchasers would submit
names of agents to DHS via the AN User
Registration Portal. An AN Purchaser
could submit an agent’s name when he/
she applies for an AN Registered User
Number or at any other time prior to
conducting a purchase involving that
agent. Then, prior to transferring
possession of ammonium nitrate to an
agent, an AN Seller would need to
verify with the Department that the
prospective AN Purchaser has
designated the agent as an approved
agent to represent the AN Purchaser at
the point of sale. This verification
would occur through the same
mechanism that is used for the other
prospective AN Purchaser identity
verification activities (i.e., the Purchaser
Verification Portal or the Purchaser
Verification Call Center). Note, however,
that agent information that the AN
Purchases and AN Sellers provided to
the Department would not be vetted
against the TSDB or otherwise checked
by the Department; rather, it would
simply be maintained in the AN
Registered User Database as a data field
linked to the AN Purchaser for use in
the agent verification process.
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Under the second approach, the
Department would require an AN Seller
to verify with the prospective AN
Purchaser that the agent is actually
acting on behalf of the prospective AN
Purchaser for each specific transaction.
Much like the other verification
activities contained in the proposed
rule, this could occur at the time the
prospective AN Purchaser places the
order, when the agent arrives to take
possession of ammonium nitrate, or any
other time, so long as it occurs prior to
the AN Seller transferring possession of
ammonium nitrate to the prospective
AN Purchaser’s agent. Note, if this
approach were adopted, the Department
would propose requiring this
confirmation to occur for each
transaction/occurrence in which an
agent is taking possession of ammonium
nitrate; a blanket verification of an agent
by an AN Purchaser would not be
acceptable. Additionally, as an e-mail or
letter can be easily forged, under this
approach the Department would require
that the AN Seller receive this
verification orally (e.g., in person,
telephonically) from the prospective AN
Purchaser.
The third approach—the option the
Department proposes to use in this
NPRM—is a combination of the first two
approaches. Specifically, AN Purchasers
would be expected to provide the
Department with the names of their
agent(s), and an AN Seller would be
expected to verify either through the
Purchaser Verification Portal or
Purchaser Verification Call Center that
the agent information has been provided
by the AN Purchaser to the Department.
As opposed to the first approach under
which a sale cannot occur unless the
agent’s name has been provided to the
Department by the prospective AN
Purchaser, this third option would
allow the AN Seller to complete a sale
or transfer after either (1) verifying that
the agent has been designated by the
prospective AN Purchaser through the
Purchaser Verification Portal or
Purchaser Verification Call Center, or (2)
orally confirming with the prospective
AN Purchaser that the agent is acting on
the prospective AN Purchaser’s behalf
for the sale or transfer at issue. The
Department expects that in the majority
of cases, this oral confirmation would
occur telephonically. This third option
has the benefit of minimizing the point
of sale impact of the agent verification
process while allowing a means for a
sale or transfer to be completed even if
a prospective AN Purchaser forgets or is
otherwise unable to provide the
Department with the agent’s name prior
to using the agent at the point of sale.
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For these reasons, the Department
proposes this third approach.
If DHS implements either the first
approach or the third approach in an
Ammonium Nitrate Security Program
final rule, the Department will construct
the AN User Registration Portal such
that AN Purchasers could submit the
names of their agents to DHS through
that portal. If so, DHS would require AN
Purchasers to notify agents that their
names could be submitted to DHS in
this manner. DHS seeks public comment
on how such notification should be
carried out, if the Department
implements either the first approach or
the third approach.
The Department seeks comment on
the benefits, costs, economic impacts,
and practicality of all these approaches,
as well as any potential alternate
approaches for verifying that an AN
Agent is acting on behalf of a
prospective AN Purchaser.
8. Verification of the Agent’s Identity
Based on the Visual Check of the
Agent’s Photo Identification
Consistent with 6 U.S.C.
488a(e)(2)(D), DHS proposes in section
31.310(c)(1) that the AN Seller would be
required to verify, by performing a
visual check of a photo identification
document such as a driver’s license or
passport, the identity of the agent taking
possession of ammonium nitrate from
the AN Seller at the completion of a sale
or transfer. This visual check would
mirror the process and requirements
used by the AN Seller when performing
a visual check on an AN Purchaser,
when an AN Purchaser takes possession
of ammonium nitrate.
9. Timing of Verification Activities
All of the aforementioned verification
activities would be required to occur
before the AN Seller transfers
possession of ammonium nitrate to the
prospective AN Purchaser or the agent
acting on the prospective AN
Purchaser’s behalf. Outside of that
requirement, the time at which the AN
Seller performs the verification
activities would be entirely within the
discretion of the AN Seller. For
instance, in a situation where the AN
Purchaser places an advance order for
ammonium nitrate to be picked up at a
later date, the AN Seller may perform
these activities at the time of sale or at
the time of transfer of possession.
The proposed rule would regulate all
transfers of ammonium nitrate,
including both transfers that involve
payments or sales, and transfers that do
not involve payments or sales. Note that
AN Sellers may transfer possession of
ammonium nitrate to AN Purchasers or
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their agents only after the verification
activities discussed above have been
completed. Payment for transfer of
possession may happen at any time,
either before or after verification
activities have been completed.
10. Departmental Role in Verification
Process
As part of the verification process, the
Department proposes to require AN
Sellers to provide the Department with
sufficient information to verify (1) the
currency and authenticity of prospective
AN Purchasers’ AN Registered User
Numbers, and (2) prospective AN
Purchasers’ identities when AN
Purchasers use agents. The Department
also proposes to enable AN Sellers to
verify through DHS, where applicable,
that prospective AN Purchasers have
submitted the names of the agents acting
on their behalves to the Department. To
help AN Sellers accomplish this, the
Department is considering developing a
secure AN Purchaser verification web
portal (‘‘Purchaser Verification Portal’’)
and a call center (‘‘Purchaser
Verification Call Center’’) through
which AN Sellers can submit
information to the Department that will
allow the Department to nearly
immediately (1) Verify or disaffirm
prospective AN Purchasers’ AN
Registered User Numbers, (2) verify or
disaffirm prospective AN Purchasers’
identities, and, where applicable, (3)
verify or disaffirm the preapproval of
agents.
11. Purchaser Verification Portal
The first option the Department is
considering is to develop a Purchaser
Verification Portal that would be
available via the Internet to registered
AN Sellers only. To gain access to the
portal, AN sellers would be asked to
provide their AN Registered User
Number, a password, and potentially
other identifying information. The
Department proposes in sections 31.305
and 31.310 that, upon accessing the
portal, an AN Seller would enter into
the system, at a minimum, the
prospective AN Purchaser’s name and
AN Registered User Number to verify
the prospective AN Purchaser’s AN
Registered User Number. If the
prospective AN Purchaser uses an agent,
then the AN Seller would enter into the
system the prospective AN Purchaser’s
photo identification document number
(along with additional photo
identification document information,
such as type of photo identification
document, and photo identification
document issuing entity), to aid in
verifying the prospective AN
Purchaser’s identity. This information
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should allow the Department to verify
for the AN Seller that the prospective
AN Purchaser is who he/she claims to
be and that he/she possesses a valid AN
Registered User Number. The
Department is interested in receiving
comments on the information it
proposes to collect for AN Purchaser
verification purposes, including specific
comments on potential photo
identification document numbers that
the Department may collect, such as
driver’s license or passport numbers.
The Department considered requiring
individuals’ Social Security Numbers in
lieu of photo identification document
numbers. The Department believes,
however, that photo identification
document numbers are preferable to
Social Security Numbers for two
significant reasons. First, photo
identification document numbers are
typically contained on physical
identification cards that include
photographs that could be visually
checked by AN Sellers. Second, use of
photo identification document numbers
would minimize the potential privacy
impact on AN Purchasers of having to
share their Social Security Numbers.
The Department seeks comments on the
costs and benefits of Social Security
Number use.
The Department is also considering
requiring AN Sellers to enter additional
information into the Purchaser
Verification Portal, such as each
quantity of ammonium nitrate sold or
transferred and each prospective AN
Purchaser’s proposed use of the
ammonium nitrate to be procured. Such
additional information could help
strengthen the AN Purchaser
identification process and facilitate the
performance of compliance audits and
inspections, and would generally help
to prevent the misappropriation or use
of ammonium nitrate in acts of
terrorism. Comments on the utility of
collecting additional information, as
well as the types of information that it
may be worthwhile for the Department
to collect, are welcome.
The Department proposes that
information entered into the Purchaser
Verification Portal will be transmitted to
the Department which, upon receipt,
will check the information against the
AN Registered User records maintained
by the Department. The Department
would electronically notify the AN
Seller of the result once the Department
(1) verifies or disaffirms the prospective
AN Purchaser’s identity (i.e., determines
whether the identifying information
provided matches the information
submitted in the prospective AN
Purchaser’s AN Registered User Number
application), if appropriate, (2) verifies
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that the prospective AN Purchaser’s AN
Registered User Number is current and
authentic (i.e., matches the AN
Registered User Number assigned to the
prospective AN Purchaser), and (3)
verifies that the prospective AN
Purchaser has listed his/her agent with
the Department as authorized to act on
his/her behalf, if appropriate.
To support recordkeeping
requirements, the Department is
considering providing to the AN Seller,
along with its web verification notice, a
confirmation number and/or printable
web verification notice record receipt.
For recordkeeping requirements, see
sections III.C.4–8. Comments on the
utility, benefits, and costs of providing
either a confirmation number or
printable record receipt via the
Purchaser Verification Portal are
welcome.
The Department proposes that if the
Department notified an AN Seller that
the identity and AN Registered User
Number of a prospective AN Purchaser
were verified, then the AN Seller would
proceed with the second portion of the
identity verification—a visual check of
the identification document of the
individual taking possession of the
ammonium nitrate (i.e., the AN
Purchaser or, where applicable, his or
her agent).
If the Department were to discover
that either (1) the prospective AN
Purchaser’s identity does not match the
information of record for the given AN
Registered User Number, or (2) the AN
Registered User Number provided by
the prospective AN Purchaser is not
current and authentic, then the
Department would issue a notice to the
AN Seller indicating that the sale or
transfer of ammonium nitrate to the
prospective AN Purchaser is not
authorized. The Department anticipates
that the confirmation or denial notice
resulting from the web verification
process will typically be sent to and
received by the AN Seller quickly, much
like how merchants receive approval or
denial notices prior to authorizing
purchases via credit card.
As mentioned earlier, the Department
is aware that sales and transfers of
ammonium nitrate occur in many
different ways, and that AN Facilities’
varying ammonium nitrate sales
procedures can impact the timing and
performance of verification activities.
Depending on the structure of the
transaction, the manner in which the
AN Seller goes about verifying the
prospective AN Purchaser’s identity,
AN Registered User Number, and use of
an agent may vary. In all cases, DHS
proposes that the AN Seller will
complete these verifications prior to
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transferring possession of ammonium
nitrate.
The Department welcomes public
comment on the overall effectiveness,
propriety, benefits, and costs of these
Purchaser Verification Portal identity
and registration verification
mechanisms, and also welcomes public
comment on or suggestion of potential
alternative methods for identity and
registration verification.
12. Purchaser Verification Call Center
The second option the Department is
considering is to develop a Purchaser
Verification Call Center. The overall
principle behind a call center
verification system is similar to the
principle behind the Purchaser
Verification Portal—that is, a
prospective AN Purchaser’s identity (for
sales involving an agent) and possession
of a current and authentic AN
Registered User Number could be
verified quickly prior to the transfer of
possession of ammonium nitrate
through use of a call center verification
system. Under this approach, AN Sellers
would call a toll-free phone number
established by the Department where
they would either talk to a person or be
led through a series of telephone tree
menus. During the phone call, each AN
Seller would be expected to provide, at
a minimum, his/her name, his/her AN
Registered User Number, and the
prospective AN Purchaser’s name, AN
Registered User Number, and, for sales
involving an agent, the AN Purchaser’s
photo identification document number.
The Department is also considering
requiring or enabling AN Sellers to
provide additional information, such as
the quantity and intended use of the
ammonium nitrate being sold or
transferred. The operator or automated
telephone system would enter the
information provided into the
Department’s Registered User database
system, wait for electronic confirmation,
and then provide verbal confirmation to
the caller along with a confirmation
number for that specific transaction.
A call center may be preferable to a
web portal, as presumably all AN
Facilities have telephones while not all
AN Facilities have computers with
Internet access, particularly at the point
of sale. There are some potential
disadvantages, though, including the
likelihood that the call center approach
would take more time per transaction
than the web portal approach, and that
it would be significantly more costly for
the Department to establish and operate
a call center.
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13. Purchaser Verification Portal and
Call Center
A third option is for the Department
to establish both a Purchaser
Verification Portal and a Purchaser
Verification Call Center. This is the
approach the Department is proposing
in sections 31.305 and 31.310. This
approach is identical to the Purchaser
Verification Portal option described
above, integrated with the Purchaser
Verification Call Center option. The
advantage of this alternative is that all
AN Facilities would be
accommodated—those with telephone
access only and those with both
telephone and Internet access who find
the verification web portal option more
efficient. This approach, however,
would be the most costly of the
alternatives for the Department to
establish and operate.
As indicated in sections 31.305 and
31.310 of the proposed rule, DHS
proposes that as part of the verification
processes described in section III.C of
this NPRM, AN Purchasers and/or AN
Agents will be required to provide
information to AN Facilities in order to
enable use of the Purchaser Verification
Portal or the Purchaser Verification Call
Center. DHS will require AN Facilities
to notify the AN Purchasers and AN
Agents providing this information about
why it is collected. DHS will also
require AN Facilities to notify AN
Purchasers and AN Agents that the
information they provide may be shared
with DHS. DHS seeks public comment
on how such notifications should be
carried out.
The Department welcomes public
comment on the overall effectiveness
and propriety of these alternative
identity and registration verification
mechanisms, and also welcomes public
comment on or suggestion of potential
alternative methods for identity and
registration verification.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
14. Suspicious Purchases and
Attempted Purchases of Ammonium
Nitrate
Subtitle J encourages AN Sellers to be
wary of suspicious purchases and
attempted purchases of ammonium
nitrate. See 6 U.S.C. 488c(c)(1) and 6
U.S.C. 488f. To this end, Subtitle J
encourages AN Sellers to exercise their
commercial rights to deny the sale or
transfer of ammonium nitrate to
prospective AN Purchasers when
prospective AN Purchasers attempt to
purchase ammonium nitrate under
‘‘suspicious’’ circumstances. See 6
U.S.C. 488f. Furthermore, Subtitle J
encourages AN Sellers to contact law
enforcement entities, as appropriate, in
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response to ‘‘suspicious’’ purchases or
‘‘suspicious’’ attempted purchases. See
6 U.S.C. 488c(c)(1)(A). Moreover,
Subtitle J provides that if an AN Seller
refuses to sell or transfer ammonium
nitrate to any person, or in good faith
discloses to the Department or
appropriate law enforcement authorities
the actual or attempted purchase or
transfer of ammonium nitrate, based on
a reasonable belief that the person
seeking to purchase or transfer
ammonium nitrate may use the
ammonium nitrate to create an
explosive device to be employed in an
act of terrorism or for another unlawful
purpose, the AN Seller shall not be
liable in any civil action relating to that
refusal to sell or that disclosure. See 6
U.S.C. 488f(a).
To assist AN Sellers in determining
what a ‘‘suspicious’’ circumstance is
and what appropriate responsive actions
are, Subtitle J requires the Department
to issue guidance addressing
‘‘suspicious’’ circumstances. See 6
U.S.C. 488c(c)(1). The Department will
issue such guidance, along with other
statutorily required guidance, along
with the final rule implementing the
Ammonium Nitrate Security Program.
The Department welcomes public
comment on topics to be addressed in
this guidance, including comment on
‘‘suspicious’’ purchases and attempted
purchases. The Department also
welcomes public comment on the
formats in which its guidance materials
should be published and the means of
dissemination of guidance materials.
D. Recordkeeping (See Sections 31.315
and 31.515 of the Proposed Rule)
1. Overview
Pursuant to Subtitle J, AN Facilities
must maintain records of each sale or
transfer of ammonium nitrate for a twoyear period beginning on the date of that
sale or transfer. See 6 U.S.C. 488a(e)(1).
AN Facilities must take reasonable
actions to ensure the protection of the
information included in such records.
See 6 U.S.C. 488a(e)(3). 6 U.S.C. 488b
authorizes DHS to inspect and audit AN
Facility records for the purpose of
monitoring compliance with Subtitle J
or for the purpose of deterring or
preventing the misappropriation or use
of ammonium nitrate in acts of
terrorism.
2. Entities Responsible for Keeping
Records
Pursuant to Subtitle J and section
31.315(a) of the proposed rule, AN
Facility Representatives must ensure
that records of each sale or transfer of
ammonium nitrate are maintained. See
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6 U.S.C. 488a(e)(1). As discussed above,
the Department is aware that there are
many types of facilities selling or
transferring ammonium nitrate,
including but not limited to
corporations, partnerships,
cooperatives, and sole proprietorships.
For many of these organizational forms,
it may not be reasonable to expect an
AN Facility Representative to be
engaged in or have direct oversight over
recordkeeping at the AN Facility. In
recognition of this, the Department is
proposing that while a facility’s AN
Facility Representative or
Representatives would be responsible
for their AN Facility’s compliance with
the proposed rule’s recordkeeping
requirements, any facility employee,
regardless of whether or not he/she is a
registered AN Seller, could perform
recordkeeping activities on behalf of the
facility. The Department, however, is
proposing in sections 31.315(d) and (e)
to require each AN Facility
Representative to ensure that his/her
facility maintains records in compliance
with the rule. DHS welcomes public
comment on the propriety and effect of
this proposal.
AN Purchasers are under no
obligation to maintain records pursuant
to Subtitle J.
3. Records To Be Kept
For each sale or transfer of
ammonium nitrate, the Department is
proposing in section 31.315(a) of the
proposed rule to require that the records
kept by the AN Facility include the date
of sale/transfer; form and amount of
payment; quantity of ammonium nitrate
sold/transferred; type of packaging;
delivery location; the name, address,
telephone number, AN Registered User
Number, and photo identification
document information of the AN
Purchaser to whom it was sold/
transferred; and, if the AN Purchaser
uses an agent at the point of sale, the
name, address, telephone number, and
photo identification document
information of the agent acting on behalf
of the AN Purchaser.
In addition to keeping records
containing the information listed above,
DHS proposes to require AN Facilities
to maintain records related to the
verification of a prospective AN
Purchaser AN Registered User Number’s
currency and authenticity, and
verification of a prospective AN
Purchaser’s and (where applicable)
agent’s identity. These requirements are
discussed in sections 31.315(a)(8) and
(9) of the proposed rule. Such
requirements are important to allow the
Department to monitor compliance
under the regulations, to deter or
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prevent the misappropriation or use of
ammonium nitrate in acts of terrorism,
and to support the investigation of
reported theft or loss of ammonium
nitrate. The Department welcomes
comment on the benefits and costs of
maintaining records regarding the AN
Purchaser (and, where applicable, agent)
verification process.
In addition to the proposed records
requirements discussed above, the
Department also is considering
requiring AN Facilities to keep
photocopies of each individual AN
Purchaser’s or agent’s photo
identification document and/or
printouts of the Department’s electronic
verification of the authenticity and
currency of each individual’s AN
Registered User Number (if the
Department decides to use the
Purchaser Verification Portal). The
Department is interested in receiving
public comment regarding what types of
records should be considered adequate
records for the purpose of showing
completed verification activities, as well
as what the costs and benefits of
generating and maintaining these
records would be.
In addition to transaction records and
verification records, there are a variety
of other records that may be necessary
for AN Facilities to maintain in order to
support compliance monitoring by the
Department. These include: (1)
Maintenance by each AN Facility of
copies of the AN Registered User
Number certificates of the AN Facility
Representatives, Designated AN Facility
POC, and/or all other AN Sellers
employed by the facility (note, this
presumes that the Department does in
fact decide to issue approved applicants
certificates along with their AN
Registered User Numbers); (2) copies of
reports of theft or loss made to the
Federal Government pursuant to
Subtitle J; (3) any reports showing the
reconciliation of sales/transfers and
inventory; and (4) any orders or other
correspondence issued by the
Department to an AN Facility regarding
activities regulated by Subtitle J. These
records all may have value in
monitoring compliance with the
regulations or in deterring or preventing
the misappropriation or use of
ammonium nitrate in acts of terrorism.
The Department is considering requiring
AN Facilities to maintain these records,
and welcomes public comment on the
value of each and the costs associated
with each.
As indicated in sections 31.315(b) and
(c) of the proposed rule, DHS proposes
that as part of ammonium nitrate sales
or transfers AN Purchasers and/or AN
Agents will be required to provide some
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of the information listed in this section
of the NPRM to AN Facilities in order
to enable facility recordkeeping. DHS
will require AN Facility personnel to
notify the AN Purchasers and AN
Agents providing this information about
why it is collected. DHS will also
require AN Facility personnel to notify
AN Purchasers and AN Agents that the
information they provide may be shared
with DHS. DHS seeks public comment
on how such notifications should be
carried out.
4. Length of Retention of Records
Subtitle J provides that each record of
sale or transfer of ammonium nitrate
must be maintained by the relevant AN
Facility for at least two years from the
date of the transaction that generates
that record. See 6 U.S.C. 488a(e)(1)(A).
For consistency purposes, in section
31.315(d) of the proposed rule the
Department proposes that an AN
Facility would be required to maintain
for two years all records required under
this rule. The Department seeks
comments on this proposal.
5. Format and Storage of Records
Pursuant to 6 U.S.C. 488a(e)(3), and as
proposed in section 31.315(e), an AN
Facility must take ‘‘reasonable actions’’
to ensure protection of the information
included in records maintained
pursuant to Subtitle J. Subtitle J,
however, does not explicitly prescribe
any format or storage requirements. In
an effort to minimize the burden on
regulated AN Facilities and to provide
flexibility to allow AN Facilities to
leverage existing recordkeeping efforts
to meet this regulatory requirement, the
Department proposes allowing AN
Facilities to choose methods of records
storage for themselves. The Department
is considering, however, providing AN
Facilities the capability to create and
maintain appropriate records in the
web-based Purchaser Verification Portal.
This would give AN Facilities the
opportunity to use the portal to store
their records, but would not require
them to do so. The Department
welcomes comments on this proposal.
DHS proposes that AN Facilities be
allowed to maintain records in paper or
electronic format, and that AN Facilities
may use whatever template or form they
choose for individual records. An AN
Facility simply would be required to
ensure that its records contain all of the
data required by the final rule
implementing the Ammonium Nitrate
Security Program, and to make the
records available for inspection by DHS
officials as described in section 31.515
of the proposed rule. DHS proposes that
each AN Facility be required to make
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records available within the specified
timeframes, and to take reasonable
actions to protect the records. The
Department proposes allowing an AN
Facility to maintain records onsite or
offsite, so long as the records are made
available for inspection when DHS
inspectors arrive for inspections where
the AN Facility has received prior
notice of the inspection or within four
hours of inspectors’ arrivals for
unannounced inspections.
The Department also proposes giving
AN Facilities flexibility to determine
what constitutes ‘‘reasonable actions’’
for ensuring the protection of records,
and is considering defining ‘‘reasonable
actions’’ as actions commensurate with
the actions that an AN Facility would
take to secure sensitive or confidential
business records. Typical actions could
include storage in locked file cabinets
for paper recordkeeping or passwordprotecting files for electronic
recordkeeping.
The Department welcomes public
comment on the proposed record
formatting options, security standards,
and production timeframes, as well as
any potential alternative approaches or
additional requirements the Department
should consider.
E. Reporting of Theft or Loss of
Ammonium Nitrate (See Sections
31.400–31.405 of the Proposed Rule)
1. Overview
Pursuant to Subtitle J, any AN Facility
Representative who has knowledge of
theft or unexplained loss of ammonium
nitrate is required to report such theft or
loss to Federal law enforcement
authorities within 24 hours of the time
at which knowledge of theft or loss is
acquired. See 6 U.S.C. 488d. The
Department additionally encourages all
other individuals who have possession
of or control over ammonium nitrate to
report any thefts or unexplained losses
of ammonium nitrate of which they
become aware. Voluntary reporting is
provided for in section 31.405(b) of the
proposed rule.
2. Who Must Report Theft or Loss
Although any employee at an AN
Facility may report a theft or loss of
ammonium nitrate, DHS proposes in
section 31.400 that it will be the
responsibility of each facility’s AN
Facility Representatives to ensure that
theft or loss from the facility is reported
in a timely fashion. Additionally, while
there is no legal requirement for AN
Purchasers or agents acting on their
behalf to report thefts or unexplained
losses of ammonium nitrate, the
Department encourages them to do so
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using the same procedures that AN
Facility personnel would use.
3. Level of Theft or Loss Warranting
Reporting
Any time an AN Facility
Representative or any other individual
employed by an AN Facility comes to
believe that a theft of ammonium nitrate
has occurred, AN Facility
Representatives would be responsible
for ensuring that that theft is reported
using the procedures set forth in section
31.400. Determining when to report a
loss, however, is not as straightforward
a proposition, because it is typical for
small percentages of bulk ammonium
nitrate to be ‘‘lost’’ as part of normal
bulk ammonium nitrate industrial and
shipping business practices. While
individually such losses may tend to be
de minimis, in the aggregate they may
amount to large amounts of lost
ammonium nitrate. The Department
seeks not to unduly burden individuals
involved in the manufacturing, storage,
transportation, or use of bulk
ammonium nitrate, but on the other
hand does seek to impose loss reporting
requirements which will aid in
preventing misappropriation of
ammonium nitrate. Accordingly, the
Department proposes to require that AN
Facility Representatives ensure that
losses of ammonium nitrate from their
facilities be reported using the
procedures described below when those
losses deviate from the amount of loss
that typically occurs during routine
production, storage, transportation, or
use of ammonium nitrate.
The Department seeks public
comment on its proposed approach to
defining the circumstances under which
a theft or loss would be required to be
reported and whether the theft/loss
reporting requirements should apply
only to theft or loss of ammonium
nitrate above a minimum threshold
amount. If a minimum threshold
amount should apply, the Department is
also interested in receiving comments
addressing the level at which this
amount should be set. The Department
is particularly interested in public
comments addressing how theft/loss
reporting requirements should vary, if at
all, based on AN Facility business size
or other AN Facility business
characteristics.
4. Process for Reporting Theft or Loss
The Department proposes in section
31.405(a) to require reporting of theft/
loss to ATF. The Department will
coordinate with ATF to ensure proper
tracking and coordination of reported
ammonium nitrate thefts and losses;
however, ATF, not the Department, will
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conduct appropriate law enforcement
actions in response to theft/loss
reporting, due to ATF’s unique
explosives-related law enforcement
mission.
The Department welcomes public
comment on this proposal to leverage
ATF’s theft/loss reporting and response
capabilities, and welcomes public
comment on potential alternative
reporting mechanisms. The Department
also welcomes public comment on the
information to be required as part of
each theft/loss report. The Department
proposes to require that each theft/loss
report be made to ATF in a manner
prescribed by DHS after consultation
with ATF, and contain information
similar to that currently required by
ATF for reports of theft or loss of
explosives. This likely would involve
modified versions of the process and
tools established by ATF in support of
the ATF regulations regarding the
reporting of theft or loss of explosive
materials. See generally 27 CFR 555.30.
ATF requires reporting of the theft or
loss of explosives by telephoning a
nationwide toll free number, followed
up with submission to ATF of a
completed form detailing the incident.
The Department would work with ATF
to determine the appropriate
information to be reported and the
proper template for a form specific to
reporting the theft or loss of ammonium
nitrate. The Department welcomes
public comment on this proposed
approach for reporting theft and loss of
ammonium nitrate, and also welcomes
public comment addressing any
potential alternative approaches or
additional requirements the Department
should consider.
Although there is no statutory
requirement for AN Facility
Representatives or other registered
individuals who have knowledge of
thefts or unexplained losses to report
such incidents to local law enforcement,
the Department encourages AN
Facilities and individuals to do so in
addition to reporting the theft or loss to
ATF.
F. Inspections and Audits (See Sections
31.500–31.515 of the Proposed Rule)
Subtitle J states that DHS ‘‘shall
establish a process for the periodic
inspection and auditing of the records
maintained by owners of ammonium
nitrate facilities for the purpose of
monitoring compliance * * * or for the
purpose of deterring or preventing the
misappropriation or use of ammonium
nitrate in an act of terrorism.’’ See 6
U.S.C. 488b. As part of these inspections
and audits, the Department proposes to
inspect and audit the records required
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to be maintained under the
‘‘recordkeeping’’ requirements of the
final rule implementing the Ammonium
Nitrate Security Program. (See section
III.D of this NPRM for discussion of
proposed recordkeeping requirements.)
The Department welcomes public
comment on the types of records and
other items or activities it should review
during inspections or audits.
The Department proposes to conduct
inspections at AN Facilities and/or any
other locations where records subject to
the inspection/audit requirements are
located. The Department also proposes
that it conduct inspections during AN
Facilities’ regular business hours except
when warranted by exigent
circumstances. The Department
welcomes public comment on
inspections, including comments
addressing how often inspections
should be undertaken.
Generally speaking, the Department
will provide an AN Facility, via its
Designated AN Facility POC, with a
minimum of 24 hours notice prior to
conducting an inspection or audit, as
proposed in section 31.505(a). The
Department, however, proposes to
reserve the right to conduct audits or
inspections without prior notice when
warranted by exigent circumstances or
when delay in conducting an inspection
might be seriously detrimental to
security, as described in sections
31.505(a)(1) and (2). Such inspections,
conducted without prior notice, will
require approval by a supervisory
manager at DHS.
The Department has also considered
not providing notice prior to conducting
inspections or audits in order to align
with inspections processes carried out
by other agencies, such as ATF. The
Department welcomes comments
addressing how much notice, if any,
should be provided to AN Facilities
prior to inspections or audits, including
comments addressing whether the
Department should align its notice
procedures with ATF’s (or with any
other entity’s) notice procedures.
When prior notice of an inspection
has been provided to an AN Facility,
DHS expects that the facility will have
all records required to be maintained by
this rule available for review/
inspection/audit at the time of arrival of
inspectors, as proposed in section
31.515(a). In cases where the
Department has initiated an inspection
or audit without giving an AN Facility
prior notice, the facility will be
expected to make all records required to
be maintained by the final ammonium
nitrate rule available to inspectors
within four hours of receipt of an
inspector request to review/inspect/
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audit such records, as proposed in
section 31.515(b).
Inspections and audits would be
conducted by DHS personnel or by
other Federal, State, local, or tribal
government personnel authorized to
perform AN Facility inspections
pursuant to this rule. The Department
may conduct remote inspections and
audits in addition to in-person
inspections and audits, as proposed in
sections 31.500(b), 31.505(b), and
31.515(c)–(d). The Department
welcomes comments and suggestions as
to when a remote inspection would be
reasonable, cost effective, and of benefit
to AN Facilities or the Department.
G. Guidance Materials and Posters
Under Subtitle J, the Department is
required to develop and provide to
members of the regulated community
several types of guidance documents
and materials. First, 6 U.S.C.
488a(i)(4)(C) requires the Department to
issue to any individual who is denied
an AN Registered User Number
guidance on the procedures for
appealing that denial. Second, 6 U.S.C.
488c(c)(1) requires the Department to
make available to owners of AN
Facilities guidance on the identification
of suspicious ammonium nitrate
purchases, transfers, attempted
purchases, and attempted transfers, as
well as guidance on appropriate actions
to be taken by AN Facilities with respect
to such suspicious activities.
Additionally, 6 U.S.C. 488c(c)(3)
requires the Department to make
available materials suitable for posting
at locations where ammonium nitrate is
sold that notify prospective AN
Purchasers of Subtitle J’s recordkeeping
requirements and the penalties for
violating those requirements.
As the procedures and requirements
that will be detailed in these materials
are to a large degree dependent on the
final rule for Subtitle J, the Department
is still gathering information, input, and
data, which it will use to assist in
developing these guidance materials
and posters. It is the Department’s intent
to work with the regulated community
to determine appropriate content and
means of dissemination for these
guidance materials and posters. The
Department welcomes comments from
the public on these matters.
H. Civil Penalties, Civil Penalty
Adjudications, and Civil Penalty
Appeals (See Sections 31.600–31.735 of
the Proposed Rule)
This section discusses proposed
requirements for adjudication and
appeal procedures for the issuance and
assessment of civil penalties by the
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Department under Subtitle J. An earlier
section of this NPRM, section III.B.14,
discusses proposed appeal rights and
procedures for persons denied AN
Registered User Numbers and for
persons whose AN Registered User
Numbers are revoked under Subtitle J.
These two sets of procedures are
mutually exclusive; the Department
proposes that civil penalty
adjudications and appeals would be
governed only by the mechanisms
described in this section, while
registration and revocation appeals
would be governed only by the appeals
mechanisms described in section III.B of
this NPRM.
The reason for this mutual exclusivity
is because registration denials and
revocations are fundamentally different
from imposition of civil penalties under
the Department’s proposed rule. Under
the Department’s proposal, individuals
or other entities will only be issued civil
penalties for violating the rules of the
Ammonium Nitrate Security Program.
Individuals or other entities will not be
issued civil penalties for having their
registrations denied or revoked.
Adjudication or appeal of civil penalties
will thus involve assessment of whether
or not individuals or other entities have
violated the final Ammonium Nitrate
Security Program rules. On the other
hand, appeal of denial or revocation of
registration numbers will involve
review of the completeness and
accuracy of registration applications,
and review of TSDB vetting results and
national security interests if applicable.
The adjudication and appeal procedures
listed in this section of the NPRM are
intended to enable reviews of civil
penalties and of alleged regulatory
violations, while the appeal procedures
listed in section III.B are intended to
enable reviews of registration
application denials and revocations of
registration numbers.
The Department is authorized to
assess civil penalties against persons
violating the rules promulgated under
Subtitle J. See 6 U.S.C. 488e(b). In
section 31.600, the Department proposes
that, upon becoming aware of regulatory
violations, the Department would
authorize and order civil penalties of up
to $50,000 per regulatory violation
against violating persons and entities
much in the same way as the CFATS
rules enable it to authorize and order
civil penalties against chemical facilities
violating CFATS. Specifically, the
Department proposes to issue Orders
Assessing Civil Penalty against persons
(and, as appropriate, against entities
owning or operating AN Facilities) for
violating these rules. The Department
proposes in section 31.700(a) that
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46935
subject persons/entities shall have the
option of initiating adjudicatory
proceedings to challenge the propriety
of the Department’s determinations. The
Department also proposes in section
31.735(a) that subject persons/entities
may appeal adverse adjudication
decisions. The Department welcomes
public comment on these mechanisms,
and welcomes suggestions of possible
alternatives or modifications to them.
Subtitle J requires the Department to
consider a number of factors in issuing
and setting the amounts of civil
penalties against persons violating
Subtitle J and its implementing
regulations. See 6 U.S.C. 488e(c). The
Department proposes to consider the
factors listed in section 31.605, among
other factors as justice requires, in
issuing and setting the amounts of civil
penalties. The Department welcomes
public comment on additional factors
that it should consider in issuing and
setting civil penalties, and also
welcomes public comment on the size
of the civil penalties it should issue for
different types of regulatory violations.
Subtitle J also requires the
Department to afford each person
potentially subject to civil penalties the
opportunity to defend himself in an
administrative hearing to be held ‘‘in
the county, parish, or incorporated city
of residence of that person.’’ See 6
U.S.C. 488e(d). As such, the Department
proposes in section 31.725(b) to conduct
all hearings and adjudications in the
counties, parishes, or incorporated cities
of residence of the persons or entities
seeking those hearings and
adjudications, unless those persons or
entities waive this right. The
Department believes that it may be more
expeditious, from time to time, for the
Department and for subject persons to
conduct hearings and adjudications
elsewhere, or to conduct them via
teleconferencing or videoconferencing,
and accordingly thinks it economical to
all to offer subject persons this option.
The Department welcomes public
comment on the efficiency of allowing
subject persons to waive the statutory
right to local hearing and adjudication.
I. Consultation Requirements
6 U.S.C. 488a(g) requires the
Department to ‘‘consult with the
Secretary of Agriculture, States, and
appropriate private sector entities, to
ensure that the access of agricultural
producers to ammonium nitrate is not
unduly burdened.’’ Similarly, 6 U.S.C.
488a(b) requires the Department to
consult ‘‘with the heads of appropriate
Federal departments and agencies
(including the Secretary of Agriculture)’’
when establishing a threshold
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percentage for ammonium nitrate in a
substance. Finally, in 6 U.S.C.
488a(i)(4)(B), Congress directed the
Department to consult with appropriate
stakeholders when developing the
process for appealing the denial of an
application for an AN Registered User
Number.
During the development of this
NPRM, the Department has identified
relevant points of contact for
consultation purposes within numerous
Federal, State, and private sector
entities. For example, the U.S.
Department of Agriculture (USDA)
assisted the Department with gaining a
better understanding of the potentially
affected population, and with
understanding how agricultural users
acquire and use ammonium nitrate. The
Explosives Unit at the FBI provided
substantial insight into the detonability
of ammonium nitrate and mixtures
containing ammonium nitrate. The
Office of Enforcement Programs and
Services at ATF outlined how ATF
regulates ammonium nitrate and
ammonium nitrate explosive mixtures
as well as how ATF manages the
reporting of theft or loss of explosives.
The Department also met with State
fertilizer control officials from over a
dozen States who provided significant
insight into how ammonium nitrate is
used within their States and how they
currently regulate ammonium nitrate.
The Department also held listening
sessions with numerous industry
associations representing members of
the likely regulated community, as well
as with individual producers,
distributors, and users of ammonium
nitrate.
Subsequent to the release of this
NPRM, the Department will continue to
consult with Federal, State, and private
sector entities as it develops the final
rule. The Department intends to hold
meetings, open to the public and to
Federal and State government entities,
at various locations across the country
in order to further consult with
ammonium nitrate stakeholders. The
Department intends to publish the
dates, times, and locations of these
public meetings in the Federal Register.
J. Delegation of Authority
The Department may enter into
cooperative agreements with USDA or
any State department of agriculture to
carry out certain provisions of Subtitle
J. See 6 U.S.C. 488c(a)(1). Subtitle J
further requires the Department, at the
request of a governor of a State, to
delegate to that State authority to carry
out the administration and enforcement
of select portions of Subtitle J, ‘‘if the
Secretary [of Homeland Security]
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determines that the State is capable of
satisfactorily carrying out such
functions.’’ See 6 U.S.C. 488c(b)(2). If
the Department delegates any functions
to a State, ‘‘subject to the availability of
appropriations * * * the Secretary shall
provide to that State sufficient funds to
carry out the delegated functions.’’ See
6 U.S.C. 488c(b)(3).
In regards to delegation of its
authority to individual States, the
Department proposes the following
process: If a State is interested in
performing the administration and
enforcement activities required by
Subtitle J, the governor of the State
would submit a written request to the
Department asking for delegation of
those authorities and articulating the
State’s ability to ‘‘satisfactorily carry out
such functions.’’ See 6 U.S.C. 488c(b)(2).
Upon receipt of the request, the
Department would evaluate whether the
State is ‘‘capable of satisfactorily
carrying out such functions’’ and, upon
completion of the evaluation, would
provide the State with a written
response informing it of the
Department’s determination. In order to
make a fair evaluation, the Department
is likely to request information from the
State and consult with the State before
a final determination is made.
IV. Regulatory Analyses
Changes to Federal regulations must
undergo several economic analyses.
First, Executive Order 12866, as
supplemented by Executive Order
13563, Regulatory Planning and Review
(58 FR 51735, October 4, 1993; 76 FR
18134, January 18, 2011), directs each
Federal agency to propose or adopt a
regulation only upon a reasoned
determination that the benefits of the
intended regulation justify its costs.
Second, the Regulatory Flexibility Act
of 1980 (5 U.S.C. 601 et seq., as
amended by the Small Business
Regulatory Enforcement Fairness Act of
1996) requires agencies to consider the
economic impact of regulatory changes
on small entities. Third, the Trade
Agreements Act (19 U.S.C. 2531–2533)
prohibits agencies from setting
standards that create unnecessary
obstacles to assess the effect of
regulatory changes on foreign commerce
of the United States. In developing U.S.
standards, the Trade Agreements Act
requires agencies to consider
international trade standards where
appropriate, as the basis of U.S.
standards. Fourth, the Unfunded
Mandates Reform Act of 1995 (2 U.S.C.
1531–1538) requires agencies to prepare
a written assessment of the costs,
benefits, and other effects of proposed
or final rules that include a Federal
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mandate likely to result in the
expenditure by State, local, or tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
annually (adjusted for inflation).
A. Executive Order 12866 and Executive
Order 13563: Regulatory Planning and
Review
This proposed rule is an economically
significant regulatory action under
Executive Order 12866 as supplemented
by Executive Order 13563, because it
could result in the expenditure of over
$100 million in any one year.
Accordingly, this proposed rule has
been reviewed by the Office of
Management and Budget (OMB). The
OMB Circular A–4 Accounting
statement is included in the separate
Regulatory Assessment.
A Regulatory Assessment, which
more thoroughly explains the
assumptions used to generate the
estimated costs and benefits of this
proposed rule, is available in the docket
as indicated under the ADDRESSES
section. Interested persons are invited to
provide comment on all aspects of the
Regulatory Assessment. Comments that
will provide the most assistance to the
Department with the rulemaking
include the economic impact (both longterm and short-term, quantifiable and
qualitative) of the implementation of
Subtitle J; the monetary and other costs
anticipated to be incurred by AN
Facility Representatives, AN Sellers, AN
Purchasers, and anyone else potentially
impacted by Subtitle J, any
distributional effects on U.S. citizens;
and the security benefits of the
rulemaking.
Comments containing trade secrets,
confidential commercial or financial
information, CVI, or SSI should be
appropriately marked and submitted per
the directions in section I of this NPRM
(Public Participation) above.
1. Cost Impacts
DHS estimates the number of entities
that purchase ammonium nitrate to
range from 64,950 to 106,200. These
entities include farms, fertilizer mixers,
farm supply wholesalers and co-ops,
golf courses, landscaping services,
explosives distributors, mines, retail
garden centers, and lab supply
wholesalers. The Department estimates
between 2,486 and 6,236 entities sell
ammonium nitrate, many of which also
purchase ammonium nitrate as well.
Entities that sell ammonium nitrate
include ammonium nitrate fertilizer and
explosive manufacturers, fertilizer
mixers, farm supply wholesalers and coops, retail garden centers, explosives
distributors, fertilizer applicator
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srobinson on DSK4SPTVN1PROD with PROPOSALS2
services, and lab supply wholesalers.
Individuals or firms that provide
transportation services within the
distribution chain may be categorized as
sellers, agents, or facilities depending
upon their business relationship with
the other parties to the transaction. The
total number of potentially regulated
farms and other businesses ranges from
64,986 to 106,236 (including overlap
between the categories).
The cost of the Ammonium Nitrate
Security Program ranges from $300
million to $1.041 billion over 10 years
at a 7% discount rate. The primary
estimate is the mean, which is $670.6
million. For comparison, at a 3%
discount rate, the cost of the program
ranges from $364.2 million to $1.3
billion with a primary (mean) estimate
of $814 million. The average annualized
cost for the program ranges from $43
million to $148 million (with a mean of
$96 million), also employing a 7%
discount rate. The largest cost
component of the proposed rule is
related to the point of sale. The point of
sale activities account for approximately
55% to 80% of the total program cost.
This is followed by registration
activities, recordkeeping, inspections/
audits, and reporting theft/loss.
2. Benefits of the Ammonium Nitrate
Security Program
This rule will help secure the nation’s
supply of ammonium nitrate. According
to a U.S. Department of Justice report,
‘‘[t]he April 19, 1995, bombing of the
Alfred P. Murrah Federal Building
(Murrah Building) in Oklahoma City
sent shock waves throughout America.
The bombing took its toll in human life
and property damage and changed the
community’s and the Nation’s general
sense of safety and security. The
explosion rocked downtown Oklahoma
City, reduced the north face of the
Murrah Building to rubble, and dealt
extensive damage to each of the nine
floors as they collapsed into the center,
pancaking one on top of the other.
When the dust cleared, one-third of the
building lay in ruins. The force of the
blast damaged 324 surrounding
buildings, overturned automobiles,
touched off car fires, and blew out
windows and doors in a 50-block area.
News reports indicated the explosion
was felt 55 miles from the site and
registered 6.0 on the Richter scale.’’ See
‘‘Responding to Terrorism Victims:
Oklahoma City and Beyond,’’ U.S.
Department of Justice, Office of Justice
Programs, Office for Victims of Crime,
October 2000, available at https://
www.ojp.usdoj.gov/ovc/publications/
infores/respterrorism/executive.html
and https://www.ojp.usdoj.gov/ovc/
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publications/infores/respterrorism/
chap1.html. The attack, which occurred
16 years ago, killed 168 people (167
individuals were killed by the explosion
and 1 additional death of an emergency
worker occurred during the rescue and
recovery operation) and an additional
592 people suffered non-fatal injuries.
See ‘‘Physical Injuries and Fatalities
Resulting From the Oklahoma City
Bombing.’’ JAMA, August 7, 1996 Sue
Mallonee, RN, MPH; Sheryll Shariat,
MPH; Gail Stennies, MD, MPH; Rick
Waxweiler, PhD; David Hogan, DO; Fred
Jordan, MD, pp 382–387available at:
https://jama.ama-assn.org/cgi/reprint/
276/5/382; https://jama.ama-assn.org/
cgi/content/abstract/276/5/382
(estimates of injuries differ by source;
DHS used the detailed JAMA article as
it was based on survey and interview
data and has thorough documentation).
There are several key benefits of the
Ammonium Nitrate Security Program
proposed rule:
• The Ammonium Nitrate Security
Program will standardize and build
upon successful industry ‘‘know your
customer’’ initiatives and state
regulations to prevent the
misappropriation of ammonium nitrate.
• The Ammonium Nitrate Security
Program will provide timely, accurate
vetting of persons wishing to possess
and transfer ammonium nitrate. By
requiring individuals to be vetted
against the TSDB, known bad actors
may be stopped from legally purchasing
ammonium nitrate.
• The Ammonium Nitrate Security
Program will allow AN Sellers to
identify non-authorized persons and
requires them to deny sale of
ammonium nitrate to these persons. By
complying with the point of sale
requirements to verify the accuracy and
currency of a potential AN Purchaser’s
AN Registered User Number and an
inspection of his/her photo
identification document, AN Sellers
will have the knowledge to allow or
deny sale of ammonium nitrate.
• The Ammonium Nitrate Security
Program will eliminate gaps in Federal
oversight of ammonium nitrate supplies
used in explosives manufacturing.
To better inform the comparison of
the costs of implementing the
ammonium nitrate program in the
proposed rule with the benefits to
homeland security it will afford due to
reduced risk of successful terror attack
involving ammonium nitrate, DHS
performed a break-even analysis. In this
break-even analysis, DHS compared the
annualized costs of the proposed rule to
the expected benefits of preventing an
ammonium nitrate based terrorist attack,
such as the attack on the Murrah federal
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46937
building. In order to estimate the impact
of this attack in dollar terms, DHS must
assume a value per statistical life (VSL).
The Department emphasizes this VSL is
not an estimate of what a particular life
may be worth, but is only an estimate
what one would be willing to pay to
receive a reduction in mortality risk.
The Department is assuming a VSL of $6
million, which is equivalent to saying
someone is willing to pay $6 to receive
a one-in-a-million reduction in the risk
of death or $60 to receive a one-in-aone-hundred-thousand reduction in the
risk of death.
Applying the $6 million VSL to the
168 deaths from the Murrah attack plus
the cost of other expenditures that are
directly related to the attack (such as the
cost of replacing the Murrah Building),
DHS estimates the cost to society of the
Murrah attack to be approximately of
$1.35 billion (2010 dollars). As this
proposed rule is expected to cost society
approximately $95.5 million annually,
this proposed rule would be cost
effective if it prevented one terrorist
attack similar to the Murrah building
attack every 14.1 years ($1.35 billion
attack cost/$95.5 million annual
rulemaking cost). See the Regulatory
Assessment in the public docket for
more information on this break-even
analysis.
In addition to reducing the possibility
of an ammonium nitrate-based terrorist
attack, promulgating this rulemaking
provides the benefit of allowing DHS to
comply with the law. Subtitle J states
the ‘‘Secretary shall regulate the sale
and transfer of ammonium nitrate by an
ammonium nitrate facility …to prevent
the misappropriation or use of
ammonium nitrate in an act of
terrorism.’’ Section II.A of this preamble
provides a more detailed background
discussion of the regulatory
requirements expressly contained in
Subtitle J, such as the registration
requirement for certain ammonium
nitrate sellers and purchasers. DHS
believes this rulemaking allows the
Department to comply with the
regulatory requirements of Subtitle J.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980
(RFA) establishes ‘‘as a principle of
regulatory issuance that agencies shall
endeavor, consistent with the objective
of the rule and of applicable statutes, to
fit regulatory and informational
requirements to the scale of the
business, organizations, and
governmental jurisdictions subject to
regulation.’’ To achieve that principle,
the RFA requires agencies to consider
the potential impacts of their rules on
small entities. The RFA covers a wide
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range of small entities, including small
businesses, not-for-profit organizations,
and small governmental jurisdictions.
Although DHS does not believe the
proposed rule will have a significant
economic impact on a substantial
number of small entities, the agency has
prepared an Initial Regulatory
Flexibility Analysis (IRFA) for public
review and comment. DHS requests
comments on this IRFA and the
potential impacts of the proposed rule
on small entities. Below is a summary
of the IRFA.
1. Reasons for and Objectives of the
Proposed Rule
Reason for the Proposed Rule. Section
563 of the Fiscal Year 2008 Department
of Homeland Security Appropriations
Act amends the Homeland Security Act
of 2002 and provides DHS with the
authority to ‘‘regulate the sale and
transfer of ammonium nitrate by an
ammonium nitrate facility * * * to
prevent the misappropriation or use of
ammonium nitrate in an act of
terrorism.’’ For additional information
on the security hazards presented by the
use of ammonium nitrate, see sections
II.D.1 and 2 of this preamble.
Objective of the Proposed Rule. This
proposed rule aims to prohibit a known
or suspected terrorist from purchasing
or legally acquiring ammonium nitrate
from an AN Facility. Additionally, only
individuals favorably vetted by the
Department will be able to legally
acquire ammonium nitrate above the
threshold level proposed by this rule.
2. Affected Small Business Population
and Estimated Impact of Compliance
At this time, DHS’s preliminary
estimate of the number of
establishments that either sell,
purchase, or sell and purchase
ammonium nitrate that will be covered
by the Ammonium Nitrate Security
Program rules range from 64,986 to
106,236 facilities. This estimate is
DHS’s best estimate based on listening
sessions with industry representatives
and plant food control officials,
consultation with other Federal agencies
and departments (e.g., USDA), and
research across available information
provided by industry and governmental
sources. During the ANPRM, DHS did
not receive any information on small
nonprofits or small governmental
jurisdictions that might be directly
regulated by this rule. However, some of
the entity types identified in the
analysis of purchasers are similar to
activities that could be conducted by
small nonprofits or small governmental
jurisdictions. DHS believes impacts on
small nonprofits or small governmental
jurisdictions would be similar as any
other purchaser in this analysis. DHS
invites comments from any small
nonprofit or small governmental
jurisdiction that believes it is being
directly regulated by this rule. After AN
Sellers and AN Purchasers register with
DHS there will be a better
understanding of how many and which
specific AN Facilities will be subject to
the requirements under the Ammonium
Nitrate Security Program. Consequently,
without the benefit of having the AN
Registered User Number results, it is
very difficult to know which AN
Facilities will have to undergo the
burden of verifying AN Registered User
Numbers, and maintaining records of
transactions involving ammonium
nitrate. In addition, the Department has
offered some degree of flexibility when
choosing the method of verifying AN
Registered User Numbers and
maintaining records. DHS expects that
AN Facilities will take full advantage of
this flexibility in order to minimize the
cost of this proposed rule to their
operations.
3. Number of Small Entities That
Purchase Ammonium Nitrate
The Small Business Administration
(SBA) classifies farms as a small
business if it has receipts less than
$750,000. The USDA Census of
Agriculture provides data on the
number of farms by economic class
based on the market value of
agricultural products sold (excluding
government payments). The next table
shows that 94.5% of farms had receipts
of $0.5 million or less; 97.4% of farms
had receipts less than $1.0 million.
Thus, it is clear that the majority of
farms are small entities. Comments are
requested concerning the provided
information.
NUMBER OF U.S. FARMS BY THE MARKET VALUE OF AGRICULTURAL PRODUCTS SOLD
[2007]
Market value of agricultural products sold ($)
Number of farms
Percent of total
Less than $1000 ..........................................................................................................................................
$1000–$2,499 ..............................................................................................................................................
$2500–$5,000 ..............................................................................................................................................
$5,000–$9,999 .............................................................................................................................................
$10,000–$24,999 .........................................................................................................................................
$25,000–49,999 ...........................................................................................................................................
$50,000–$99,999 .........................................................................................................................................
$100,000–$249,000 .....................................................................................................................................
$250,000–$499,999 .....................................................................................................................................
$500,000–$999,999 .....................................................................................................................................
More than $1,000,000 .................................................................................................................................
499,880
270,712
246,309
254,834
274,274
163,500
129,124
149,049
96,251
63,567
57,292
22.7
12.3
11.2
11.6
12.4
7.4
5.9
6.8
4.4
2.9
2.6
Total Farms ..........................................................................................................................................
2,204,792
100.0
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Source: 2007 Census of Agriculture, USDA (Table 3—page 10).
The next two tables show the primary
North American Industrial
Classification System (NAICS) codes,
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descriptions and SBA definitions for
small entities that purchase ammonium
nitrate. This comparison shows that the
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majority of businesses likely to purchase
ammonium nitrate are small entities.
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03AUP2
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Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules
PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY PURCHASE AMMONIUM
NITRATE
[Employee size] *
Establishments by employee size
NAICS
Description
0–4
2121 .......
2122 .......
2123 .......
325314 ...
42491 .....
42469 .....
................
Coal Mining ..............................................
% of total .................................................
Metal Mining ............................................
% of total .................................................
Nonmetallic Mineral Mining and Quarrying.
% of total .................................................
Fertilizer (Mixing Only) Manufacturing ....
% of total .................................................
Farm Supplies Merchant Wholesalers ....
% of total .................................................
Other Chemical & Allied Products Merchant Wholesalers.
% of total .................................................
5–9
10–19
20–99
100–499
(Subtotal)
< 499
500+
194
17%
131
43%
1,434
96
8%
39
13%
666
100
9%
18
6%
603
233
20%
26
8%
877
149
13%
21
7%
501
772
67%
235
77%
4,081
375
33%
72
23%
1,743
25%
111
23%
2,473
32%
3,352
11%
64
13%
983
13%
1,155
10%
56
12%
673
9%
846
15%
89
19%
948
12%
1,082
9%
62
13%
765
10%
648
70%
382
80%
5,842
76%
7,083
30%
94
20%
1,901
25%
2,405
35%
12%
9%
11%
7%
74%
25%
* Totals may be affected by rounding.
PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY PURCHASE AMMONIUM
NITRATE
[Sales size] *
Establishments by sales size
NAICS
Description
<$0.1 mill
213113 ...
213114 ...
213115 ...
44422 .....
56173 .....
71391 .....
Support services for Coal Mining ............
% of total .................................................
Support services for Metal Mining ...........
% of total .................................................
Support services for Nonmetallic Mining
% of total .................................................
Nursery, Garden Center, and Farm Supply Stores.
% of total .................................................
Landscaping Services .............................
% of total .................................................
Golf Courses & Country Clubs ................
% of total .................................................
$.1–0.5
mill
$0.5–1
mill
$1–5 mill
$5–10
mill
(Subtotal)
< $10 mill
> $10 mill
47
14%
19
10%
24
16%
1,872
98
28%
26
14%
47
31%
5,004
38
11%
14
8%
17
11%
2,675
101
29%
20
11%
40
26%
3,941
16
5%
................
0%
8
5%
830
300
87%
79
43%
136
89%
14,322
46
13%
104
57%
15
10%
3,461
11%
23,993
32%
1,172
10%
28%
36,446
49%
3,802
32%
15%
6,935
9%
2,041
17%
22%
5,095
7%
3,333
28%
5%
490
1%
588
5%
81%
72,959
98%
10,936
92%
20%
1,249
1%
906
7%
* Totals may be affected by rounding.
4. Number of Small Entities That Sell
Ammonium Nitrate
In addition to regulating AN
Purchasers, the proposed rule places
additional burdens on entities that sell
ammonium nitrate. These additional
burdens include registration for AN
Registered User Number, verifying AN
Purchasers’ AN Registered User Number
and photo ID at the point of sale,
maintaining records of point of sale
transactions for two years and reporting
theft and loss of AN. AN Facilities that
are in the middle of the supply chain
from manufacturer to end-use consumer
both sell and purchase ammonium
nitrate. The primary NAICS codes,
descriptions, and definitions (both
employee size and revenues) for small
entities that sell ammonium nitrate are
shown in the next two tables. The SBA
classifies the majority of these AN
Facilities as small entities.
PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE
srobinson on DSK4SPTVN1PROD with PROPOSALS2
[Employee size] *
Establishments by employee size
NAICS
Description
0–4
325311 ...
325314 ...
32592 .....
Nitrogenous Fertilizer Manufacturing ......
% of total .................................................
Fertilizer (Mixing Only) Manufacturing ....
% of total .................................................
Explosives Manufacturing ........................
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5–9
46
32%
111
23%
8
Frm 00033
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19
13%
64
13%
4
Sfmt 4702
10–19
23
16%
56
12%
10
20–99
15
10%
89
19%
16
E:\FR\FM\03AUP2.SGM
100–499
11
8%
62
13%
13
03AUP2
(Subtotal)
< 499
114
79%
382
80%
51
500+
31
21%
94
20%
31
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PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE—
Continued
[Employee size] *
Establishments by employee size
NAICS
Description
0–4
42291 .....
42269 .....
% of total .................................................
Farm Supplies Merchant Wholesalers ....
% of total .................................................
Other Chemical and Allied Products Merchant Wholesalers.
% of total .................................................
5–9
10–19
20–99
100–499
(Subtotal)
< 499
500+
10%
2,473
32%
3,352
5%
983
13%
1,155
12%
673
9%
846
20%
948
12%
1,082
16%
765
10%
648
63%
5,842
76%
7,083
38%
1,901
25%
2,405
35%
12%
9%
11%
7%
74%
25%
* Totals may be affected by rounding.
PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE
[Sales size] *
Establishments by sales size
NAICS
115112 ...
44422 .....
Description
< $0.1
mill
Soil Preparation, Planting, and Cultivating.
% of total .................................................
Nursery, Garden Center, and Farm Supply Stores.
% of total .................................................
$.1–0.5
mill
$0.5–1
mill
$5–10
mill
(subtotal) <
$10 mill
> $10 mill
$1.5 mill
509
21%
................
1,872
992
41%
................
5,004
413
18%
................
2,675
395
16%
................
3,941
30
1%
................
830
2,339
96%
........................
14,322
86
4%
................
3,461
11%
28%
15%
22%
5%
81%
20%
* Totals may be affected by rounding.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
5. Alternatives Considered
The Department considered several
alternatives when developing the
Ammonium Nitrate Security Program
proposed rule. The alternatives
considered were: (a) Register
individuals applying for an AN
Registered User Number using a paper
application (via facsimile or the U.S.
mail) rather than through in person
application at a local Cooperative
Extension office or only through a webbased portal; (b) verify AN Purchasers
through both an Internet based
verification portal and call center rather
than only a verification portal or call
center; (c) communicate with applicants
for an AN Registered User Number
through U.S. Mail rather than only
through e-mail or a secure web-based
portal; (d) establish a specific capability
within the Department to receive,
process, and respond to reports of theft
or loss rather than leverage a similar
capability which already exists with the
ATF; (e) require AN Facilities to
maintain records electronically in a
central database provided by the
Department rather than providing
flexibility to the AN Facility to maintain
their own records either in paper or
electronically; (f) require agents to
register with the Department prior to the
sale or transfer of ammonium nitrate
involving an agent rather than allow
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oral confirmation of the agent with the
AN Purchaser on whose behalf the agent
is working; and (g) exempt explosives
from this regulation rather than not
exempting them. Each of these
alternatives is discussed below.
a. Registration
The Department considered using one
or more of three potential approaches
for AN Seller and AN Purchaser
registration: paper applications
submitted via facsimile or U.S. Mail;
electronic applications via a web-based
portal; or telephone application for a
limited number of applicants. The
Department is proposing the use of a
web-based portal—the ‘‘AN User
Registration Portal’’—as the sole means
for registering to be an AN Purchaser or
AN Seller.
1. Registration through Facsimile or U.S.
Mail
Paper registration via facsimile or U.S.
Mail would require potential applicants
to obtain and fill out an application
form and fax it or mail it to the
Department. The Department would
then process the application and
communicate the results back to the
potential applicant via facsimile or U.S.
Mail.
Registration through facsimile or U.S.
Mail would have costs to both the
industry and the Department. For the
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Sfmt 4702
industry, each prospective AN Seller or
AN Purchaser applying for an AN
Registered User Number would have to
spend approximately 45 minutes
reading about the rule and procedures
for registration before completing the
registration application. If the
application is paper-based, DHS
assumes it will take each applicant
about 15 minutes to complete a paper
application, fax or mail it to the
Department, and file it for his or her
records. For the Department, supporting
paper submission of application
materials via facsimile or U.S. Mail
would require the hiring of staff to
manually extract information from the
submitted application form for
performance of the TSDB check and
submission into a registered user
database maintained by the Department.
The paper application process was not
pursued or developed, as the
Department believes that it would result
in unacceptably lengthy application
processing times, and unacceptable
delays between submission of
applications and receipt of AN
Registered User Numbers.
2. Registration Through Local
Cooperative Extension Office
During the ANPRM DHS received the
suggestion to consider the USDA
extension offices as an application
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method. The USDA provided
explanations why this was not feasible.
3. Registration Through the AN User
Registration Portal
Through a Department developed
website, potential applicants could
apply for an AN Registered User
Number online. With the widespread
availability of the Internet, applicants
could apply from home, a public library,
or place or employment, for instance.
Further, nothing in the proposed rule
would prohibit an AN Facility from
providing an Internet access point to
potential applicants for use when
applying for AN Registered User
Numbers. Potential applicants would go
to the Department’s website and access
the AN User Registration Portal. There,
potential applicants would apply online
for an AN Registered User Number and
submit their application directly to the
Department. The Department would
receive the information, process it, and
communicate back to the applicant via
e-mail.
Online registration through a
Department developed, operated, and
maintained website would have costs to
both the industry and the Department.
Each prospective AN Seller or AN
Purchaser applying for an AN
Registration User Number will spend
approximately 45 minutes reading about
the rule and procedures for registration
before completing the registration
application. If the application is online,
the Department assumes it will take the
neither paper registration applications
nor in person applications at local
Cooperative Extension offices be
offered.
applicant approximately 15 minutes to
find the website, enter information,
submit the information to the
Department, and print and file a copy
for his or her records. Both the
individual applicant and government
costs are developed in the relevant
sections of the evaluation The
Department intends to leverage the
Chemical Security Assessment Tool
developed and deployed in support of
CFATS, thus significantly lowering both
the initial development costs and the
annual operating and maintenance
costs.
The Department is proposing that
registration be done through an online
web portal. See section III.B.1 of this
preamble. While not every potential
applicant may have personal access to
the Internet, the Internet is widely
available, and the Department believes
that there are significant benefits to
using an online approach. The benefits
to both the applicant and the
Department of an online approach
include: (1) Substantially quicker
response from the Department, thereby
minimizing the time during which the
applicant would not be able to purchase
or sell ammonium nitrate; (2) the ability
for an applicant or registered user to
access, view, update, and manage their
personally identifiable information; (3)
and greater control over managing their
participation in the Ammonium Nitrate
Security Program, such as ease in
renewing their AN Registered User
Number. The Department proposes that
Registration Via a Telephone
Application Process
The applicant would contact the AN
Helpdesk and ask to register over the
phone. The Helpdesk operator would
collect all the information necessary to
complete an application for an AN
Registered User Number. The IT system
would then route the application as if it
were an application through the web
portal. The evaluation of the vetting
against the TSDB would be the same.
Once a decision had been made as to
whether or not to approve or deny an
application, the system would identify
the response to be mailed to the
applicant. The system would route the
information to a vendor to process the
letter. The vendor would print and mail
the letter. The letter would require
tracking, signature, certification (i.e.,
verification of identify), and next day
delivery. DHS would also require
evidence of delivery from the vendor.
These are required to ensure delivery
and receipt of the AN Registered User
Number to the correct individual.
DHS is not recommending the
telephone option but invites public
comment on the concept. The following
tables provide information on the costs
that vary between the recommended
web-portal approach and the phone
approach.
DIFFERENCES BETWEEN ALTERNATIVES COSTS
[$ millions, 10-year total costs, 7 percent discount]
Web-portal
Phone option
Difference
Registration Costs .....................................................................................................
Federal Costs ............................................................................................................
All Other Costs ..........................................................................................................
71.3
55.3
544.0
20.3
81.5
540.7
51.0
¥26.2
3.3
Total Costs .........................................................................................................
670.6
642.5
28.1
srobinson on DSK4SPTVN1PROD with PROPOSALS2
b. Verification
The Department considered three
potential approaches to verify a
prospective AN Purchaser; establishing
a web-based portal (i.e., Purchaser
Verification Portal), establishing a call
center, and establishing both
capabilities. The Department is
proposing to establish both a web-based
portal and call center.
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1. Purchaser Verification Portal
Verifying AN Purchaser status
through a web-based portal will have
costs to both industry and the
Department. The Department will bear
the cost of developing and maintaining
the verification portal and related
guidance on its use and proper
verification processes. The cost to
industry of this activity is having a
computer and access to the Internet.
Beyond that, cost to the industry is the
incremental time spent during an
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ammonium nitrate transaction to verify
the identity and AN Registered User
Number of the prospective AN
Purchaser. Accordingly, the overall cost
would depend on the number of
ammonium nitrate transactions that
occur and the time it takes to perform
a simple identity check and enter basic
AN Purchaser information into the webportal. Based upon the detailed data in
the evaluation, the following table
summarizes the average costs per
transaction.
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POINT OF SALE AVERAGE COST SUMMARY*
Low total
estimate
Total POS Annual Costs ($) ......................................................................................
Purchaser POS Costs ($) ..........................................................................................
Seller POS Costs ($) .................................................................................................
Transactions ..............................................................................................................
Sellers ........................................................................................................................
Purchasers .................................................................................................................
Transactions/Seller/Week ..........................................................................................
Transactions/Purchaser/Week ...................................................................................
Seller Cost/Transaction ($) ........................................................................................
Purchaser Cost/Transaction ($) .................................................................................
High total
estimate
23,886,565
3,488,523
20,398,042
5,486,000
2,486
64,950
42.4
1.6
3.7
0.64
120,516,567
18,112,934
102,403,633
29,340,000
6,236
106,200
90.5
5.3
3.5
0.62
Mean
72,201,566
10,800,728
61,400,837
17,413,000
4,361
85,575
66.5
3.5
3.5
0.62
* Data is for all entities and comes from the detailed evaluation, particularly Tables 9, 10, 26–29, 35–36.
2. Purchaser Verification Call Center
The Department also considered a
Purchaser Verification Call Center.
Under this approach, AN Sellers would
use a telephone to call a toll-free phone
number established by the Department
where they would either talk to a person
or be led through a series of telephone
tree menus. During the phone call, the
AN Seller would be expected to provide
information about the AN Purchaser.
The operator or automated telephone
system would enter the information
provided into the Department’s
Registered User database system, wait
for electronic confirmation, and then
provide verbal confirmation to the caller
along with a confirmation number for
that specific transaction.
Verifying AN Purchaser status
through a call center will have costs to
both industry and the Department. The
burden to the industry for the call center
option rests upon having a telephone
and the time spent relaying the relevant
AN Purchaser information to the call
center. The cost to the Department is the
establishment of the call center and
potentially employing staff to standby
and field calls regarding AN purchases.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
3. Purchaser Verification Portal and Call
Center
The Department proposes to establish
both a Purchaser Verification Portal and
a Purchaser Verification Call Center. See
section III.C.13. This approach is
identical to the Purchaser Verification
Portal described above, integrated with
the Purchaser Verification Call Center
capability. This approach presumably
would be the cheapest for the regulated
community as each AN Facility likely
would choose to employ the most costeffective means of verification; however,
it would be the most costly of the
alternatives for the Department to
establish and operate as it would bear
the costs associated with the
development and maintenance of both a
web verification portal and call center.
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When creating a manner in which AN
Sellers can verify the required
information on a potential ammonium
nitrate purchase by an AN Purchaser,
the Department found both advantages
and disadvantages to each option
considered. A call center may be
preferable to a web portal, as
presumably all AN Facilities have
telephones while not all AN Facilities
have computers with Internet access,
particularly at the point of sale.
However, there are some potential
disadvantages. For instance, the call
center approach would take more time
per transaction than the web portal
approach, and it would be significantly
more costly for the Department to
establish and operate a call center. The
advantage of this alternative is that all
AN Facilities would be
accommodated—those with telephone
access only and those with both
telephone and Internet access who find
the verification web portal option more
efficient. As a result, the Department
proposes to offer both online and call
center options despite the higher costs
to the Department.
c. Communication With Applicants
The Department must communicate
with applicants throughout the
registration process. The Department
considered two alternatives to
communicating with applicants: (1)
communication by U.S. Mail, and (2)
communication by electronic means.
The Department proposes to
communicate with applicants by
electronic means.
1. U.S. Mail
The U.S. Mail could act as the
communication medium between the
Department and the regulated
community. If the U.S. Mail were
chosen as the communication
mechanism, the Ammonium Nitrate
Security Program would be paper-based.
While there would be some minimal
cost to the industry (e.g., postage), the
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time to complete paperwork would be
equivalent to the submission of
information electronically. The costs to
the Department, however, would be
more substantial. The Department
would have to hire or devote staff to
process incoming correspondence.
2. Electronic Means
The other option for communication
could be by electronic means. Program
communication would occur through email and secure web portals. The cost to
the industry can be broken down to
computer and Internet access. The cost
to the Department hinges on developing
web portals and databases to securely
store information.
The Department assumes that most
applicants have Internet access with one
exception. Based upon information from
the USDA, approximately 60% of farms
have Internet access. Thus, DHS
assumes that in the agricultural sector,
approximately 60% of farms have
computers with Internet access. The
Department therefore estimated that
40% of these individuals will have to
travel a short distance to public library,
or other location where access to the
Internet is available to apply for an AN
Registered User Number. Further, DHS
assumes that for applicants without
Internet access, two trips will be
required; one to complete the AN
Registered User Number application,
and a second trip after 72 hours to
retrieve the e-mail containing the AN
User Registration Number. The
Department has assumed farmers
without Internet access will make two
trips. The Department assumes that the
round trip distance is 50 miles per trip
and has used the IRS mileage rate of
$0.55 per mile. DHS assumes the total
extra time for each trip will average
approximately one hour each way. Each
trip will include an additional hour for
the Internet access and registration.
Multiplying 50 miles times two trips
times $0.55 per mile totals $55 per
individual for the two trips associated
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with applying for and receiving an AN
Registered User Number. Additionally,
DHS included approximately $1.9
million for farmers who attempt to make
a purchase without knowing about the
regulation and must then make one
extra trip. These calculations are
detailed in Tables 11 and 12 in Section
7 of the full evaluation. Because of the
minimal time and effort it takes to apply
for and receive an AN Registered User
Number, the Department believes this
approach to be a cost-effective way to
prevent misappropriation of ammonium
nitrate.
The Department considered using the
U.S. Mail as the primary medium for
communication; however, the
Department ultimately rejected this
approach due to the additional time it
would take to notify applicants of their
AN Registered User Number. The
Department also cited the significant
availability of the Internet. Therefore,
the Department is proposing to use
electronic means as the primary
medium for communication.
Additionally, the Department believes
that electronic communication is more
secure and faster than U.S. Mail.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
d. Reporting Theft or Loss
The Department considered two
alternatives pursuant to Subtitle J,
which requires an AN Facility
Representative who has knowledge of
theft or unexplained loss of ammonium
nitrate to report such theft or loss to
Federal law enforcement authorities
within 24 hours of the time at which
knowledge of theft or loss is acquired.
The Department considered requiring an
AN Facility Representative to report to
either the Department or ATF. The
Department proposes to require
reporting of theft/loss to ATF.
Under either option, there is a burden
to the industry. The cost to industry of
this activity will be the time to gather
details and report the theft or loss of
AN. Because of the seriousness of theft
or loss of AN, the total time to report a
theft or loss is assumed to include two
hours each for an inventory manager
and sales person, plus one hour for the
general manager. This includes the time
for the reporter to organize useful
details for law enforcement and conduct
a brief investigation. There will likely be
additional time for a necessary followup investigation. Strictly for purposes of
this analysis, the Department assumes
that two percent of AN Facilities and
AN Purchasers will report loss or theft
once per year. Based on these
assumptions, there will be 88 reports of
theft or loss annually, at a total annual
cost to industry of $13,350.
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1. ATF Reporting
One of the many responsibilities of
ATF is regulating the use of explosives.
Because pure ammonium nitrate does
not fall within the scope of the statutory
definition of ‘‘explosives’’ set forth at 18
U.S.C. 841(d), it is not subject to ATF’s
controls on importation, manufacture,
distribution or storage; however,
ammonium nitrate explosive mixtures
and ANFO are included in ATF’s List of
Explosive Materials. ATF has an
existing program for reporting the theft
or loss of explosives. Individuals that
discover the theft or unexplained loss of
ammonium nitrate would contact ATF
by phone and facsimile and provide the
pertinent information. The costs to the
industry for reporting to ATF the theft
or unexplained loss of ammonium
nitrate would be minimal. The costs to
the Department would be minimal as
well, unless DHS funded ATF efforts.
2. DHS Reporting
Similar to ATF’s method for reporting
theft or loss of explosives, individuals
upon discovering the theft or
unexplained loss of ammonium nitrate
would contact DHS. The costs to the
industry for reporting the theft or
unexplained loss of ammonium nitrate
to DHS would be minimal. The costs to
the Department would be greater than
when compared to the ATF reporting
requirement. DHS would be required to
create and establish the theft/loss
reporting policies, procedures, and
infrastructure.
The Department is proposing to
require reporting of theft/loss to ATF.
See section III.E of this preamble. ATF
already possesses the unique experience
in collecting and responding to the
theft/loss of explosive related materials.
Additionally, DHS wishes to avoid
duplicative efforts at the Federal level.
e. Recordkeeping
The Department considered two
options to maintain records: (1)
Mandatory use of a central electronic
database, and (2) the flexibility to
maintain records in paper format or in
electronic format. The Department
proposes allowing AN Facilities to
select the method of records storage for
themselves. See section III.F of this
preamble.
The Department selected this
alternative because the burden to submit
and maintain electronic records in a
central database would increase the
burden on the industry without
measurable benefit to the industry. The
benefit would be limited to the
confidence an AN Facility would have,
that if it maintained its records in a
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46943
central database, it would meet
Department recordkeeping
requirements.
The costs to industry associated with
this alternative are the costs of the time
spent during each transaction collecting
and recording the information required
under the regulations, the costs of the
time spent on ongoing recordkeeping
activities throughout the year, and any
capital investment costs an AN Facility
incurs in acquiring equipment to
facilitate the safe storage of the AN
transaction records.
f. Agents
The Department considered three
options to minimize the likelihood that
agents are used to circumvent the
intentions of Subtitle J. Specifically, the
Department believes it is imperative for
AN Sellers to ensure that an agent is
acting at the direction of a registered AN
Purchaser before the AN Seller transfers
possession of ammonium nitrate to that
agent. To accomplish this, the
Department is considering the following
alternatives:
1. Requiring AN Purchasers to submit
the names of their agents to DHS via the
AN User Registration Portal, and
requiring the AN Seller to confirm with
DHS, prior to transferring possession of
the ammonium nitrate, that the
prospective AN Purchaser has
submitted the name of the agent to DHS;
2. Requiring the AN Seller to orally
confirm with the prospective AN
Purchaser prior to each sale that the
agent is acting on behalf of the AN
Purchaser;
3. A combination of the first two
options, whereby an AN Seller first
should check with DHS to see if the
prospective AN Purchaser has
submitted the name of the agent to DHS
and, if not, then the AN Seller must
orally confirm with the prospective AN
Purchaser that the agent is acting on his/
her behalf. DHS is proposing this third
approach.
Under the first approach, each AN
Purchaser would be required to provide
to DHS the names of any agents that
might act on his/her behalf at the point
of sale. The AN purchaser would submit
names of agents to DHS via the AN User
Registration Portal. An AN Purchaser
could submit an agent’s name when he/
she applies for an AN Registered User
Number or at any other time prior to
conducting a purchase involving that
agent. Then, prior to transferring
possession of ammonium nitrate to an
agent, an AN Seller would need to
verify with the Department that the
prospective AN Purchaser has
designated the agent as an approved
agent to represent the AN Purchaser at
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the point of sale. This verification
would occur through the same
mechanism that is used for the other
prospective AN Purchaser verification
activities (i.e., the Purchaser
Verification Portal or the Purchaser
Verification Call Center). The agent’s
information provided to the Department
by AN Purchasers and AN Sellers would
not be vetted against the TSDB nor
otherwise checked by the Department;
rather, it would simply be maintained in
the AN Registered User Database as a
data field linked to the AN Purchaser for
use in the agent verification process.
Under the second approach, the
Department would require the AN Seller
to verify with the prospective AN
Purchaser that the agent is actually
acting on behalf of the prospective AN
Purchaser for each specific transaction.
Much like the other verification
activities, this could occur at the time
the prospective AN Purchaser places the
order, when the agent arrives to take
possession of ammonium nitrate, or any
other time, so long as it occurs prior to
the AN Seller transferring possession of
ammonium nitrate to the prospective
AN Purchaser’s agent. If this approach
were adopted, the Department would
propose requiring this confirmation to
occur for each transaction/occurrence in
which an agent is taking possession of
ammonium nitrate; a blanket
verification of an agent by an AN
Purchaser would not be acceptable.
Additionally, as an e-mail or letter can
be easily forged, under this approach
the Department would require that the
AN Seller must receive this verification
orally (e.g., in person; telephonically)
from the prospective AN Purchaser.
The third approach—the option the
Department is proposing in this
NPRM—is a combination of the first two
approaches. Specifically, AN Purchasers
would be expected to provide the
Department with the names of their
agent(s), and an AN Seller would be
expected to verify either through the
Purchaser Verification Portal or
Purchaser Verification Call Center that
the agent information has been provided
by the AN Purchaser to the Department.
As opposed to the first approach, under
which a sale cannot occur unless the
agent’s name has been provided to the
Department by the prospective AN
Purchaser, under this third option the
AN Seller would be allowed to complete
the sale or transfer after either (1)
verifying the agent has been designated
by the prospective AN Purchaser in the
Purchaser Verification Portal or
Purchaser Verification Call Center, or (2)
orally confirming with the prospective
AN Purchaser that the agent is acting on
the prospective AN Purchaser’s behalf
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for this individual sale. The Department
expects that in the majority of cases this
oral confirmation would occur
telephonically. This third option has the
benefit of minimizing the point of sale
impact of the agent verification process,
while allowing a means for a sale or
transfer to be completed even if a
prospective AN Purchaser forgets or is
otherwise unable to provide the
Department with the agent’s name prior
to using the agent at the point of sale.
For these reasons, this third approach is
the option proposed by the Department.
g. Exemption of Explosives Regulated by
ATF
Pursuant to Subtitle J, the Department
has the discretion to exempt from
regulation persons producing, selling, or
purchasing ammonium nitrate
exclusively for use in the production of
explosives under a license or permit
issued under the Federal explosives
laws, 18 U.S.C. Chapter 40, and
associated regulations. ATF is
responsible for enforcing Federal
explosives laws, and has established
regulations for doing so. The
Department is proposing to exempt from
regulation ammonium nitrate mixtures
that are ‘‘explosives’’ subject to ATF
regulation (i.e., ANFO). The Department
also considered two other approaches.
The first option is to apply these rules
to individuals who purchase, sell, or
transfer ammonium nitrate for use in the
production of explosives. The other
option considered is to entirely exempt
from Subtitle J requirements facilities
and persons that purchase, sell, or
transfer ammonium nitrate solely for
use in the production of explosives, as
they are already regulated by ATF.
mixtures or not—the same. This
approach would ensure that there are no
gaps in coverage of ammonium nitrate
as it moves through the supply chain—
ammonium nitrate would be captured
under DHS’s ammonium nitrate
program both before and after being
combined with fuel oil to create ANFO,
and would be captured under ATF’s
regulations after being combined with
fuel oil to create ANFO. There could
potentially be heightened costs to the
industry due to potentially duplicative
regulation. The costs to the Department
would hinge upon a greater number of
AN Facilities to regulate.
1. Exempt AN Mixtures That Are
‘‘Explosives’’ Subject to ATF Regulation
Under this approach, entities and
individuals that purchase, sell, or
transfer ANFO, but who do not produce
ANFO or possess ammonium nitrate for
other reasons, would be exempt from all
Subtitle J requirements and would be
subject solely to ATF regulation. This
approach minimizes cost to the industry
as well as the Department.
3. Entirely exempt from Subtitle J
requirements facilities and persons that
purchase, sell, or transfer ammonium
nitrate solely for use in the production
of explosives
Under this approach, facilities and
persons that purchase, sell, or transfer
ammonium nitrate solely for use in the
production of explosives would be
entirely exempt from Subtitle J
requirements, as they are already
regulated by ATF. In this model,
facilities and persons that are licensed
by ATF to mix ammonium nitrate with
fuel to create ANFO which do not
purchase, sell, or transfer ammonium
nitrate for other purposes would not be
subject to these regulations. This
approach, however, could create a
considerable gap in regulatory coverage
throughout the ammonium nitrate
supply chain, as ATF regulations apply
solely to ANFO and not the ammonium
nitrate used to create it. The costs to the
industry, as well as the Department,
would be low because certain
individuals and facilities would not fall
under the regulation.
The Department proposes to exempt
from all Subtitle J requirements entities
and individuals that purchase, sell, or
transfer ANFO, but who do not produce
ANFO or possess ammonium nitrate for
other reasons. These entities and
individuals are regulated by ATF. This
approach avoids duplicative regulation
yet it does not create a potential
regulatory gap in the ammonium nitrate
supply chain.
2. Regulate Individuals Who Purchase,
Sell, or Transfer AN for the Production
of Explosives
Under this approach, such
individuals would be subject to
regulation by both DHS under Subtitle
J and ATF under the Federal explosives
laws. By not exempting ammonium
nitrate used in explosives, DHS would
be treating all individuals who
purchase, sell, or transfer ammonium
nitrate—whether as part of ANFO
6. Average Costs per AN Facility
The largest cost driver is activities
related to the point of sale. While
variation in cost by facility is largely
driven by the number of point of sale
transactions that each AN Facility
conducts, it is helpful to examine the
average cost per AN Purchaser and AN
Facility.
The average costs per entity that
purchases ammonium nitrate are
presented in the following tables. Both
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the lower and upper bounds of the
estimate are provided. In either case, the
highest cost will be for farms without
Internet access. The cost of compliance
to AN Purchasers is the time to apply
for an AN Registered User Number with
the Department of Homeland Security
does not represent a significant
economic impact. DHS invites
comments on this impact, particularly
impacts related to the point of sale
costs.
and additional time during the
purchase. This registration cost averages
$57 to $700 once every five years. DHS
believes for even the smallest farms,
other businesses, nonprofits, and small
jurisdictions that only purchase
ammonium nitrate, this registration cost
AVERAGE COST PER ENTITY THAT PURCHASES AMMONIUM NITRATE—LOW POPULATION/LOW TRANSACTIONS ESTIMATE *
Purchaser
registration
($)
Appeals
($)
Purchase opportunity cost
($)
Total
purchaser
cost
($)
Average cost
per entity
($)
Number of
entities
Farms with internet access ..................................
Farms w/o internet access ...................................
Golf courses .........................................................
Landscaping services ..........................................
Blasting services ..................................................
Mines ....................................................................
2,079,500
12,998,000
169,000
144,000
16,000
71,000
28,100
18,700
3,500
2,900
200
1,500
1,674,500
1,116,300
334,900
251,200
14000
97,700
3,782,100
14,133,000
507,400
398,100
30,200
170,200
30,000
20,000
6,000
4,500
300
1,800
126
707
85
88
121
97
Total ..............................................................
15,477,500
54,900
3,488,500
19,020,900
62,500
304
* Totals may not add due to rounding.
AVERAGE COST PER ENTITY THAT PURCHASES AMMONIUM NITRATE—HIGH POPULATION/HIGH TRANSACTIONS ESTIMATE *
Purchaser
registration
($)
Appeals
($)
Purchase
opportunity
cost
($)
Total
purchaser
cost
($)
Average cost
per entity
($)
Number of
entities
Farms with internet access ..................................
Farms w/o internet access ...................................
Golf courses .........................................................
Landscaping services ..........................................
Blasting services ..................................................
Mines ....................................................................
3,119,300
19,497,500
339,000
287,000
33,000
142,000
42,100
28,100
6,900
5,800
700
2,800
8,150,800
5,433,900
2,173,600
1,630,200
90600
634,000
11,312,200
24,959,500
2,519,500
1,923,000
124,300
778,800
45,000
30,000
12,000
9,000
500
3,500
251
832
210
214
249
223
Total ..............................................................
23,417,800
86,400
18,112,900
41,617,100
100,000
416
* Totals may not add due to rounding.
The average per AN Facility cost to
comply with the proposed rule ranges
from $6,400 for laboratory suppliers
(low population/low transactions
scenario) to $23,800 for an explosives
distributor (high population/high
transactions scenario).
AVERAGE COST PER AN FACILITY—LOW POPULATION/LOW TRANSACTIONS ESTIMATE *
Reg.
activities
($)
Point of sale
(Web
portal)
($)
Appeals
($)
Recordkeeping
($)
Reporting
theft/loss
($)
Audits/
inspections
($)
Total seller
cost
($)
Number of
AN facilities
Average
cost
($)
AN fert. manuf. ..........................
AN expl. manuf. ........................
Fertilizer mixers .........................
Explosives dist. .........................
Farm whol./co-ops .....................
Retail garden ctrs. .....................
Fertilizer app. ............................
Lab. supply ................................
8,000
3,000
83,000
102,000
92,000
72,000
73,000
9,000
0
0
1,700
2,100
1,800
1,300
1,300
0
125,800
50,800
1,935,500
5,494,500
4,524,100
3,791,900
4,254,800
220,700
43,100
17,400
663,200
834,200
742,100
703,400
717,100
83,400
100
0
1,100
1,500
1,600
1,600
1,400
100
2,700
1,100
41,500
51,600
52,600
49,200
50,100
5,600
179,700
72,400
2,726,000
6,486,000
5,414,100
4,619,400
5,097,700
318,800
0
0
400
500
500
500
500
100
6,900
7,200
6,800
13,000
10,800
9,200
10,200
6,400
Total ...................................
442,000
8,200
20,398,100
3,803,900
7,400
254,400
24,914,100
2,500
10,000
srobinson on DSK4SPTVN1PROD with PROPOSALS2
* Totals may not add due to rounding.
AVERAGE COST PER AN FACILITY—HIGH POPULATION/HIGH TRANSACTIONS ESTIMATE *
Reg.
activities
($)
AN fert. manuf. ..........................
AN expl. manuf. ........................
Fertilizer mixers .........................
Explosives dist. .........................
VerDate Mar<15>2010
19:21 Aug 02, 2011
8,000
3,000
123,000
202,000
Jkt 223001
Point of sale
(Web
portal)
($)
Appeals
($)
0
0
2,600
4,200
PO 00000
311,200
125,700
7,181,800
21,807,900
Frm 00039
Recordkeeping
($)
43,100
17,400
994,800
1,668,500
Fmt 4701
Sfmt 4702
Reporting
theft/loss
($)
100
0
1,700
3,100
Audits/
inspections
($)
Total seller
cost
($)
Number of
AN facilities
2,700
1,100
62,200
103,200
365,100
147,300
8,366,000
23,788,900
0
0
600
1,000
E:\FR\FM\03AUP2.SGM
03AUP2
Average
cost
($)
14,000
14,700
13,900
23,800
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AVERAGE COST PER AN FACILITY—HIGH POPULATION/HIGH TRANSACTIONS ESTIMATE *—Continued
Reg.
activities
($)
Point of sale
(Web
portal)
($)
Appeals
($)
Recordkeeping
($)
Reporting
theft/loss
($)
Audits/
inspections
($)
Total seller
cost
($)
Number of
AN facilities
Average
cost
($)
Farm whol./co-ops .....................
Retail garden ctrs. .....................
Fertilizer app. ............................
Lab. supply ................................
184,000
357,000
146,000
19,000
3,400
6,000
2,800
500
17,841,300
37,281,300
16,764,200
1,090,400
1,484,200
3,517,200
1,434,200
166,800
3,200
7,900
2,900
300
105,100
246,100
100,100
11,100
19,621,100
41,415,400
18,450,200
1,288,200
1,000
2,500
1,000
100
19,600
16,600
18,500
12,900
Total ...................................
1,042,000
19,500
102,403,800
9,326,200
19,200
631,600
113,442,200
6,200
18,200
* Totals may not add due to rounding.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
7. Identification of Duplication, Overlap
and Conflict With Other Federal Rules
A thorough discussion of the
relationship to other rules is provided
earlier in section II.D of this preamble.
C. Executive Order 13132: Federalism
Executive Order 13132 requires DHS
to develop a process to ensure
‘‘meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
implications.’’ To meet this
requirement, the Department has, and
will continue to, consult with State
fertilizer control officials, members of
the American Association of Plant Food
Control Officials, and others throughout
the development of these regulations.
Such consultation is expressly required
by 6 U.S.C. 488a(g). Consultation with
the aforementioned groups has informed
the Department on potential regulatory
avenues, and on the use and movement
of ammonium nitrate through its life
cycle within the potentially regulated
community. Additionally, the
Department is hereby specifically
requesting comments from State and
local officials on regulatory policies that
have federalism implications.
Chief among potential federalism
implications is preemption of State
ammonium nitrate regulations. As
discussed in Part II.D of this preamble,
a number of States currently regulate the
security of ammonium nitrate. Subtitle
J explicitly addresses preemption of
such regulations, and ‘‘preempts the
laws of any State, to the extent that such
laws are inconsistent with [Subtitle J],
except that [Subtitle J] shall not preempt
any State law that provides additional
protection against the acquisition of
ammonium nitrate by terrorists or the
use of ammonium nitrate in explosives
in acts of terrorism or for other illicit
purposes, as determined by the
[Department].’’ See 6 U.S.C. 488g(b).
The Department specifically seeks
comment on the interaction of the
proposed rule with existing State and
local laws and regulations, including
comment on any laws that may be
inconsistent with Subtitle J and laws
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that provide additional protections
against the acquisition of ammonium
nitrate or its use in terrorist attacks.
D. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act
of 1995 (UMRA), enacted as Public Law
104–4 on March 22, 1995, is intended,
among other things, to curb the practice
of imposing unfunded Federal mandates
on State, local, and tribal governments.
Title II of UMRA requires each Federal
agency to prepare a written statement
assessing the effects of any Federal
mandate in a proposed or final agency
rule that may result in a $100 million or
more expenditure (adjusted annually for
inflation) in any one year by State, local,
and tribal governments, in the aggregate,
or by the private sector. The primary
cost estimate for this proposed
rulemaking would not impose such an
unfunded mandate on State, local, or
tribal governments, but the upper end of
the estimate would show an unfunded
mandate in excess of $100 million
(adjusted for inflation) on the private
sector. The analysis required under Title
II of UMRA is satisfied by the regulatory
impact assessment prepared in
conjunction with this NPRM.
The Department recognizes that some
AN Facilities of entities that purchase
ammonium nitrate may be owned by
state or local government entities. These
entities would be required to comply
with the provisions of this proposed
rule.
Further, under Subtitle J, the
Department may enter into cooperative
agreements with the USDA or any State
department of agriculture to carry out
the provisions of Subtitle J. See 6 U.S.C.
488c(a)(1). Subtitle J further requires the
Department, at the request of a governor
of a State, to delegate to that State the
authority to carry out the administration
and enforcement of Subtitle J, if the
Department determines that the State is
capable of satisfactorily carrying out
such functions. See 6 U.S.C. 488c(b)(2).
If the Department delegates any
functions to a State, subject to the
availability of appropriations, the
Department must provide to the state
PO 00000
Frm 00040
Fmt 4701
Sfmt 4702
sufficient funds to carry out those
functions. See 6 U.S.C. 488c(b)(3).
The Department proposes the
following process for evaluating
requests from governors: If a State is
interested in performing the
administration and enforcement
activities required by Subtitle J, the
governor of the State must submit a
written request to the Department
asking for delegation of those
authorities. Upon receipt of the request,
the Department will initiate an
evaluation to determine if the State is
capable of satisfactorily performing
those functions and, upon completion of
the evaluation, will provide the State
with a written response informing it of
the Department’s determination. In
order to make a fair evaluation, the
Department is likely to request
information from the State and consult
with the State before a final
determination is made. Because the
responsibility would be transferred only
at the request of the state, and only
when funding is available, no unfunded
mandate would be created.
E. National Environmental Policy Act
The Department has analyzed this
proposed rule for purposes of the
National Environmental Policy Act of
1969 (42 U.S.C. 4321–4347) under
Department of Homeland Security
Directive 023–01—Environmental
Planning Program, and has concluded
that this proposed rule comes within
Categorical Exclusion A3 ‘‘promulgation
of rules * * * (a) of a strictly
administrative or procedural nature.’’
We find no basis for believing that there
are extraordinary circumstances which
would require further analysis;
however, we invite comment on this
conclusion.
F. Paperwork Reduction Act
This NPRM contains collection of
information requirements under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520). ‘‘Collection of
information,’’ as defined in 5 CFR
1320.3(c), includes reporting, record
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keeping, monitoring, posting, labeling,
and other similar actions.
Subtitle J provides DHS with
authority to regulate the sale and
transfer of ammonium nitrate. This
collection will enable the Department to
‘‘regulate the sale and transfer of
ammonium nitrate by an ammonium
nitrate facility * * * to prevent the
misappropriation or use of ammonium
nitrate in an act of terrorism.’’ See 6
U.S.C. 488a(a).
This NPRM introduces a new
collection with OMB Control Number
1670–NEW. The Ammonium Nitrate
Security Program information collection
has eight new instruments: Ammonium
Nitrate Registration; Appeals for Denial
or Revocation of AN Registered User
Numbers; Purchaser Verification;
Ammonium Nitrate Helpdesk;
Electronic Recordkeeping Database;
Reporting Theft and Loss; Adjudication
or Appeal of an Order Assessing Civil
Penalty; and Inspections and Audits.
This NPRM includes a solicitation for
comments for a new information
collection, 1670–NEW. Any comments
submitted will be reviewed by DHS and
OMB prior to publication of a final rule,
and prior to OMB approval of this new
information collection. This NPRM
describes the nature of the information
collection, the categories of
46947
respondents, and estimated burdens and
costs.
Under the protections provided by the
Paperwork Reduction Act, as amended,
an agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a valid OMB control number.
The Department will begin collecting
information as soon as an OMB control
number is issued, or as soon as the
mechanism for collecting information is
publicly available, or when the rule
implementing the Ammonium Nitrate
Security Program becomes effective,
whichever is latest.
TABLE 1—ESTIMATES OF ANNUALIZED BURDEN HOURS AND COSTS
Number of
respondents
Instrument
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Ammonium Nitrate Registration ...........................................
Appeals for Denial or Revocation of AN Registered User
Numbers ...........................................................................
Purchaser Verification ..........................................................
Ammonium Nitrate Helpdesk ...............................................
Electronic Recordkeeping Database ...................................
Reporting of Theft & Loss ....................................................
Adjudication or Appeal of an Order Assessing Civil Penalty ....................................................................................
Inspections and Audits .........................................................
Title: Ammonium Nitrate Registration
Summary of Collection of
Information: Information is collected
through a web-based portal directly
from each applicant who wishes to
apply for an AN Registered User
Number. The information collected will
be used to determine if the applicant is
eligible for an AN Registered User
Number. Specifically, 6 U.S.C.
488a(i)(2)(A) requires the Department to
conduct a check of identifying
information of all applicants against
identifying information that appears in
the TSDB.
Consistent with 6 U.S.C. 488a(i)(3)(A)
and 6 U.S.C. 488a(i)(3)(B), to the extent
practicable, the Department intends to
approve or deny each registration
application, and to issue each AN
Registered User Number, not later than
72 hours after the time DHS receives a
complete registration application. DHS
may deny an applicant an AN
Registered User Number if the TSDB
indicates that the applicant may pose a
threat to national security. See 6 U.S.C.
488a(i)(2)(B).
As proposed in section 31.215(a), at
least one individual who is designated
to act on behalf of a facility for purposes
of compliance with this regulation must
(1) apply for an AN Registered User
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Jkt 223001
Responses
per
respondent
Avg. burden
per response
(in hours)
Total annual
respondent
cost
(in dollars)
116,800
1
2.02
235,912
11,114,000
223
6,236
248,460
6,236
125
1
4,705
119
4,705
1
6.00
0.08
0.02
0.02
2.80
1,336
2,445,001
551,114
448,992
349
49,500
93,262,600
20,680,100
8,591,600
18,300
Less Than 10
1,559
N/A
1
N/A
12.00
N/A
18,708
N/A
621,100
Number, and (2) register as a Designated
AN Facility POC for the AN Facility. In
addition, sections 31.210 and 31.215
would allow any individual who has an
ownership interest in an AN Facility; is
designated to act on behalf of a facility
for purposes of compliance with this
regulation, such as, possibly, a site
manager, sales manager, or corporate
officer; is involved in the sale or transfer
of ammonium nitrate at an AN Facility,
such as a sales clerk or cashier; or
performs ammonium nitrate application
services to register as an AN Seller.
Sections 31.210 and 31.215 would
require that any person who
individually performs a sale or transfer
of ammonium nitrate on behalf of an AN
Facility, or who performs ammonium
nitrate application services, must be
registered. Pursuant to section 31.205 of
the proposed rule, any person who
intends to purchase ammonium nitrate
must also be registered.
Use of: The information collected will
be used to (1) conduct a check of
identifying information of applicants
against identifying information that
appears in the TSDB, and (2) issue the
Department’s approval or denial of each
registration application.
Need for Information: The
information collected is needed to
PO 00000
Total annual
burden
(in hours)
Frm 00041
Fmt 4701
Sfmt 4702
comply with section 563 of the Fiscal
Year 2008 Department of Homeland
Security Appropriations Act, which
requires the Department to issue AN
Registered User Numbers.
Description of the Respondents: DHS
anticipates that there will be an average
of 116,800 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: Each
respondent is estimated to have a
burden of 2.02 hours to register, update,
and subsequently renew his/her AN
Registered User Number. The annual
hour burden is estimated to be 235,912
hours.
Title: Appeals for Denial or
Revocation of AN Registered User
Numbers.
Summary of Collection of
Information: Individuals who have had
their AN Registered User Numbers
denied or revoked may appeal the
Department’s denials or revocations,
pursuant to section 31.250 of the
proposed rule. Each individual
requesting an appeal is required to file
a Request for Materials, a Request for
Appeal, and other filings as necessary.
Use of: The information collected will
be used to process appeals.
Need for Information: The
Department needs the collected
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Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules
information to ensure that all necessary
information is collected in order to
process appeals and records correction
requests.
Description of the Respondents: DHS
anticipates that there will be an average
of 223 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: Each
respondent is estimated to have a
burden of 6 hours to complete the
necessary filings. The annual hour
burden is estimated to be 1,336 hours.
Title: Purchaser Verification.
Summary of Collection of
Information: AN Sellers will be required
to conduct verification of AN
Purchaser’s identities and AN
Registered User Numbers prior to sales
and transfers of ammonium nitrate, as
required by sections 31.305, 31.310, and
31.315 of the proposed rule. Verification
will involve the submission to DHS by
AN Sellers of prospective purchasers’
AN Registered User Numbers, of
matching information (e.g., names and
drivers’ license numbers) from AN
Purchasers’ photo identification
documents, and of the names of AN
Agents taking possession of ammonium
nitrate on behalf of prospective
purchasers. As part of this information
collection AN Sellers will also submit
information identifying themselves,
including their own AN Registered User
Numbers, to DHS. AN Sellers will
submit this information to DHS through
the Purchaser Verification Portal or the
Purchaser Verification Call Center. The
Purchaser Verification Portal or
Purchaser Verification Call Center will
compare information submitted as to
each AN Purchaser or AN Seller against
the information on record for that AN
Purchaser or AN Seller.
Use of: The information collected will
be used to conduct verification of AN
Registered User Numbers and of AN
Purchasers’ and AN Agents’ identities,
prior to transfer of ammonium nitrate,
as required by sections 31.305, 31.310,
and 31.315 of the proposed rule.
Need for Information: The
Department needs the information to
verify that ammonium nitrate is only
sold or transferred by individuals
authorized by the Department to
individuals authorized by the
Department.
Description of the Respondents: DHS
anticipates that there will be an average
of 6,236 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: Each
respondent is estimated to have a
burden of 0.08 hours to complete AN
Registered User Number verification.
The annual hour burden is estimated to
be 2,445,001 hours.
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Jkt 223001
Title: Ammonium Nitrate Helpdesk.
Summary of Collection of
Information: The Ammonium Nitrate
Helpdesk will respond to questions
from industry and the public.
Use of: The information collected will
be used to respond to questions from
industry and the public.
Need for Information: The
Department needs to collect the
information from the individuals
contacting the Ammonium Nitrate
Helpdesk to respond to their questions.
Description of the Respondents: DHS
anticipates that there will be an average
of 248,460 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: Each
respondent is estimated to have a
burden of 0.02 hours per AN Helpdesk
contact. The annual hour burden is
estimated to be 551,114 hours.
Title: Electronic Recordkeeping
Database.
Summary of Collection of
Information: To collect information to
support AN Facilities with the
recordkeeping requirements proposed in
section 31.315 of the proposed rule.
Use of: The information collected will
be used to support AN Facilities with
the recordkeeping requirements
proposed in section 31.315 of the
proposed rule.
Need for Information: Under section
31.315, AN Facilities would be required
to keep various records. The use of this
recordkeeping instrument, however, is
voluntary.
Description of the Respondents: DHS
anticipates that there will be an average
of 6,236 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: Each
respondent is estimated to have a
burden of 0.02 hours. The annual hour
burden is estimated to be 448,992 hours.
Title: Reporting Theft and Loss.
Summary of Collection of
Information: To report a theft or loss of
ammonium nitrate, an individual would
contact ATF. ATF will collect
information and other details for a
report of a theft or loss of ammonium
nitrate, pursuant to sections 31.400 and
31.405 of the proposed rule.
Use of: The information collected
would be used to track and potentially
respond appropriately to the theft or
loss of ammonium nitrate.
Need for Information: The
information collected is needed to track
and potentially respond appropriately to
the theft or loss of ammonium nitrate.
Description of the Respondents: DHS
anticipates that there will be an average
of 125 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: Each
respondent is estimated to have a
PO 00000
Frm 00042
Fmt 4701
Sfmt 4702
burden of 2.8 hours to complete a theft
or loss of ammonium nitrate report. The
annual hour burden is estimated to be
349 hours.
Title: Adjudication or Appeal of an
Order Assessing Civil Penalty.
Summary of Collection of
Information: Pursuant to section 31.700
of the proposed rule, any person or
entity against whom an Order Assessing
Civil Penalty has been issued is entitled
to a hearing and adjudication, by a
Presiding Officer, on any issue of
material fact relevant to any civil
penalty issued against such person or
entity. Pursuant to section 31.735 of the
proposed rule any person or entity
having received an Initial Decision has
the right to appeal.
Use of: The information collected will
be used to conduct hearings,
adjudications, and appeals.
Need for Information: The
information collected is needed to
conduct hearings, adjudications, and
appeals.
Description of the Respondents: DHS
anticipates that there will be fewer than
10 respondents annually.
Frequency of Response: On occasion.
Annual Burden Estimate: The
Department did not estimate the annual
burden.
Title: Inspections and Audits
Summary of Collection of
Information: Pursuant to section 31.500
of the proposed rule, the Department is
authorized to enter AN Facilities, or
other locations where records are stored,
to inspect and audit the records
proposed in section 31.315. DHS may
also inspect and audit any other records
that pertain to misappropriation or
preventing misappropriation of
ammonium nitrate, and to inspect and
audit any other records required by the
Assistant Secretary to be maintained
pursuant to Subtitle J. During an
inspection or audit the Department may
copy such records. DHS may also take
original copies of pertinent records out
of the subject AN Facilities for
duplication. DHS may also perform
remote inspections or audits, and
require AN Facilities, AN Facility
Representatives, and Designated AN
Facility POCs to make the records
available to the Department by
facsimile, mail, or e-mail.
Use of: The information collected will
be used to perform inspections or
audits.
Need for Information: The
information collected is needed to
perform inspections or audits.
Description of the Respondents: DHS
anticipates that there will be an average
of 1,559 respondents annually.
Frequency of Response: On occasion.
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Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules
Annual Burden Estimate: Each
respondent is estimated to have a
burden of 12 hours to prepare for and
comply with an inspection or audit. The
annual hour burden is estimated to be
18,708 hours.
srobinson on DSK4SPTVN1PROD with PROPOSALS2
Solicitation of Comments
As required by the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)), the Department has submitted
a copy of the proposed rule to OMB for
its review of the collections of
information. DHS is soliciting
comments to:
(1) Evaluate whether the proposed
information requirement is necessary for
the proper performance of the functions
of the agency, including whether the
information will have practical utility;
(2) Evaluate the accuracy of the
agency’s estimate of the burden;
(3) Enhance the quality, utility, and
clarity of the information to be
collected; and
(4) Minimize the burden of the
collection of information on those who
are to respond, including using
appropriate automated, electronic,
mechanical, or other technological
collection techniques or other forms of
information technology.
Individuals and organizations may
submit comments to DHS or OMB on
the information collection requirements
by October 3, 2011. Direct information
collection comments to the DHS or
OMB addresses listed in the ADDRESSES
section of this NPRM. A comment is
most effective if DHS or OMB receives
it within 30 days of the publication of
this NPRM.
G. International Trade Impact
Assessment
The Trade Agreement Act of 1979
prohibits Federal agencies from
activities that create unnecessary
obstacles to the foreign commerce of the
United States. Legitimate domestic
objectives, such as security, are not
considered unnecessary obstacles. The
statute also requires consideration of
international standards and, where
appropriate, that they be the basis for
U.S. standards. In addition, the general
benefits and desirability of free trade
influenced the development of this
notice of proposed rulemaking to
remove or diminish, to the extent
feasible, barriers to international trade,
including both barriers affecting the
export of American goods and services
to foreign countries and barriers
affecting the import of foreign goods and
services into the United States.
As entities that purchase or sell
ammonium nitrate, or as individual AN
Purchasers and AN Sellers, importers
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46949
and exporters would be required to
register with the Department and
comply with the requirements of the
NPRM in the same manner as their
domestic counterparts when ammonium
nitrate physically changes possession,
as a part of sales or transfers by
ammonium nitrate facilities, within the
jurisdiction of the United States. Thus,
DHS has assessed the potential effect of
this NPRM and has determined that it
would not create unnecessary barriers to
international trade.
For the reasons set forth in the
preamble, the Department of Homeland
Security proposes to add Part 31 to Title
6, Code of Federal Regulations, to read
as follows:
Subpart F—Civil Penalties
31.600 Orders Assessing Civil Penalty,
generally.
31.605 Setting Civil Penalty amounts.
31.610 Procedures for issuing Orders
Assessing Civil Penalty.
Title 6—Domestic Security
Subpart H—Other
31.800 State law preemption.
Chapter 1—Department of Homeland
Security, Office of the Secretary
PART 31—AMMONIUM NITRATE
SECURITY PROGRAM
Subpart B—Registration of AN Purchasers,
AN Sellers, AN Facility Representatives,
and Designated AN Facility POCs
31.200 Permitted Applicants, Generally.
31.205 Permitted AN Purchasers.
31.210 Permitted AN Sellers.
31.215 AN Facility personnel registration
requirements.
31.220 Registration procedures and
registration updates.
31.225 AN Registered User number
applicant vetting.
31.230 Registration approval and denial.
31.235 Registration expiration.
31.240 Registration extension.
31.245 Registration revocation.
31.250 Appealing registration denial or
revocation determination.
Subpart C—Point of Sale Requirements
31.300 General transfer and sale
restrictions.
31.305 Verification of AN Purchaser AN
Registered User numbers and
identities—purchases not involving AN
Agents.
31.310 Verification of AN Purchaser AN
Registered User numbers and
identities—purchases involving AN
Agents.
31.315 Recordkeeping requirements.
Subpart D—Reporting Theft and Loss
31.400 Reporting obligations.
31.405 Reporting.
Subpart E—Inspections and Audits
31.500 Authority.
31.505 Manner of inspections and audits.
31.510 Inspectors.
31.515 Records availability requirements.
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Authority: Pub. L. 110–161, sec. 563.
Subpart A—General
§ 31.100
Subpart A—General
Sec.
31.100 Purpose.
31.105 Definitions.
31.110 Applicability.
31.115 Severability.
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Subpart G—Adjudications and Appeals
31.700 Neutral adjudications, generally.
31.705 Appointment of presiding officers.
31.710 Commencement of adjudication
proceedings.
31.715 Prohibition on ex parte
communications during adjudication.
31.720 Burden of proof.
31.725 Hearing and adjudication
procedures.
31.730 Completion of adjudication
procedures.
31.735 Appeals.
Sfmt 4702
Purpose.
The purpose of this part is to enhance
the security of the Nation by regulating
the sale and transfer of ammonium
nitrate, and to implement Section 563 of
the Fiscal Year 2008 Consolidated
Appropriations Act, Public Law 110–
161 (December 26, 2007).
§ 31.105
Definitions.
Ammonium nitrate (AN). (1)
Notwithstanding paragraph (2) of this
definition, ammonium nitrate is—
(i) Solid ammonium nitrate that is
chiefly the ammonium salt of nitric
acid, that contains not less than 33
percent nitrogen by weight, or
(ii) Any mixture containing 30
percent or more solid ammonium
nitrate, by weight, that is chiefly the
ammonium salt of nitric acid. The solid
ammonium nitrate in the mixture must
contain not less than 33 percent
nitrogen by weight.
(2) The following are not ammonium
nitrate:
(i) Mixtures containing less than 30
percent ammonium nitrate; or
(ii) Mixtures classified as
‘‘explosives’’ under 27 CFR 555.11; or
(iii) Ammonium nitrate or mixtures
containing ammonium nitrate weighing
less than 25 pounds; or
(iv) Cold packs.
AN Agent. Any person who obtains
possession of ammonium nitrate on
behalf of an AN Purchaser.
AN Facility. Any person or entity that
produces, sells or otherwise transfers
ownership of, or provides application
services for, ammonium nitrate.
AN Facility Representative. Any AN
Facility operator, owner, or employee
who is designated as an AN Facility
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Representative by the subject AN
Facility.
AN Purchaser. Any person, other than
an AN Agent, who purchases or obtains
ammonium nitrate from an AN Facility.
AN Registered User. A person who
possesses a valid AN Registered User
Number for the purpose(s) of acquiring,
possessing, producing, purchasing,
selling, transferring ownership or
possession of, and/or providing
application services for ammonium
nitrate.
AN Registered User Number. A
registered user number issued by the
Department of Homeland Security
under subpart B of this part to a person
intending to acquire, possess, produce,
purchase, sell, transfer ownership or
possession of, and/or provide
application services for ammonium
nitrate.
AN Seller. Any person designated as
an AN Seller by the AN Facility at
which he/she works or with which he/
she is associated, for the purpose(s) of
performing sales or transfers of
ammonium nitrate or for performing
certain other regulatory compliance
activities under this Part.
Applicant. Any person who has
submitted an application for an AN
Registered User Number for the
purpose(s) of acquiring, possessing,
producing, purchasing, selling,
transferring ownership or possession of,
and/or providing application services
for ammonium nitrate.
Application services. The provision of
services related to the physical deposit
of fertilizer onto turf, fields, crops, or
other agricultural property, where these
services are provided by a person or
entity other than the person or entity
owning or operating the property upon
which the fertilizer is deposited. The
provision of application services is not
a sale or transfer of ammonium nitrate.
Assistant Secretary. The Assistant
Secretary for Infrastructure Protection of
the United States Department of
Homeland Security, or any successors to
that position within the Department, or
such other Department officials as may
be designated by the Assistant Secretary
to act on his/her behalf.
Cold pack. A small, commerciallyavailable package commonly used as a
replacement for ice in the application of
first aid, containing unmixed water and
ammonium nitrate that, immediately
prior to use, can be manipulated to
cause the comingling of the water and
the ammonium nitrate resulting in an
endothermic reaction that significantly
lowers the temperature of the package.
Department. The United States
Department of Homeland Security.
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Designated AN Facility POC. An AN
Facility Representative who is
designated by an AN Facility as that AN
Facility’s chief point of contact (POC)
for communications with the
Department for purposes of compliance
with this Part.
Office of the General Counsel. The
Office of the General Counsel of the
United States Department of Homeland
Security.
Photo identification document. Any
of the following documents containing a
unique document number:
(1) An unexpired passport issued by
a foreign government which contains a
photograph; or
(2) An unexpired document issued by
a U.S. Federal, State, or tribal
government that includes the following
information for the person:
(i) Full name;
(ii) Date of birth; and
(iii) Photograph; or
(3) Such other documents that the
Department may designate as valid
identification documents.
Secretary. The Secretary of Homeland
Security or such other Department
officials as may be designated by the
Secretary of Homeland Security to act
on his/her behalf.
Subtitle J. Subtitle J of the Homeland
Security Act of 2002, as created by
Section 563 of the Fiscal Year 2008
Consolidated Appropriations Act,
Public Law 110–161 (December 26,
2007).
Transfer. The transfer of possession or
ownership of ammonium nitrate from
one person or entity to another person
or entity for use outside of the AN
Facility from which the ammonium
nitrate is being transferred. Transfers of
ammonium nitrate include transfers of
possession or ownership that occur as
part of sales and other business or
commercial transactions, and also
include transfers of possession or
ownership that are not part of sales or
other business or commercial
transactions. The physical deposit of
fertilizer onto turf, fields, crops, or other
agricultural property is not a transfer of
ammonium nitrate.
Under Secretary. The Under Secretary
for National Protection and Programs of
the United States Department of
Homeland Security, or any successors to
that position within the Department, or
such other Department officials as may
be designated by the Under Secretary to
act on his/her behalf.
§ 31.110
Applicability.
This Part applies to any person or
entity that possesses, acquires,
purchases, sells, transfers, or provides
application services for ammonium
nitrate.
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§ 31.115
Severability.
If a court finds any portion of this Part
to have been promulgated without
proper authority, the remainder of this
Part will remain in full effect.
Subpart B—Registration of AN
Purchasers, AN Sellers, AN Facility
Representatives, and Designated AN
Facility POCs
§ 31.200
Permitted applicants, generally.
Only persons who intend to acquire,
possess, produce, purchase, sell,
transfer ownership or possession of,
and/or provide application services for
ammonium nitrate may register or
attempt to register under this Subpart.
§ 31.205
Permitted AN Purchasers.
No person may purchase or take
ownership of ammonium nitrate, or
request that an AN Agent take
possession of ammonium nitrate on his/
her behalf, without a valid AN
Purchaser AN Registered User Number
issued under this Subpart.
§ 31.210
Permitted AN Sellers.
(a) Only persons registered under this
Subpart as AN Sellers, AN Facility
Representatives, or Designated AN
Facility POCs may sell or transfer
possession of ammonium nitrate to any
person or entity.
(b) Only persons registered under this
Subpart as AN Sellers, AN Facility
Representatives, or Designated AN
Facility POCs may, as required by this
Part, verify AN Registered User
Numbers of AN Purchasers, the
identities of AN Purchasers, and the
identities of AN Agents.
(c) Only persons registered under this
Subpart as AN Sellers, AN Facility
Representatives, or Designated AN
Facility POCs may perform ammonium
nitrate application services.
§ 31.215 AN Facility personnel registration
requirements.
(a) Designated AN Facility POC. (1)
Each AN Facility must have one
Designated AN Facility POC registered
on its behalf.
(2) Only one Designated Facility POC
can be registered for each AN Facility.
(b) AN Facility Representatives. Each
AN Facility must have at least one AN
Facility Representative registered on its
behalf.
(c) AN Sellers. Any person affiliated
with an AN Facility, who is neither a
Designated AN Facility POC nor an AN
Facility Representative, must register
under this Subpart as an AN Seller in
order to perform the activities described
in 6 CFR 31.210.
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§ 31.220 Registration procedures and
registration updates.
(a) Submission of Application
Information. (1) Applications for
registration under this Subpart must be
submitted to the Department through an
online web portal to be developed by
the Department. The web address of this
online web portal will be announced by
the Department in a future notice
published in the Federal Register.
(2) Each applicant and AN Registered
User must notify the Department of any
changes to his/her submitted
application information, within 30 days
of any such changes, through the online
web portal used for registration
application.
(b) Application Information
Identifying Type of Applicant. In order
for an applicant to be considered for
registration, he/she must identify
whether he/she is applying as an AN
Seller, AN Facility Representative,
Designated AN Facility POC, and/or AN
Purchaser. An applicant may apply for
more than one role.
(c) Application Information—General.
(1) In order for an applicant to be
considered for registration, his/her
registration application must include
his/her name, address, telephone
number, photo identification document
type, photo identification document
issuing entity, photo identification
document number, place of birth, date
of birth, citizenship, gender, any other
information deemed necessary by the
Department to carry out vetting under 6
CFR 31.225, and, as appropriate, any
other information deemed necessary by
the Department to verify the applicant’s
enrollment in a Department program
that conducts equivalent TSDB vetting.
(2) Each AN Purchaser applicant’s
registration application must also
include a description of the intended
use of the ammonium nitrate planned to
be purchased or acquired by the
applicant.
(3) Each AN Seller, AN Facility
Representative, and Designated AN
Facility POC must also submit
information identifying all AN Facilities
at or for which he/she will serve as an
AN Seller, AN Facility Representative,
or Designated AN Facility POC.
(d) Identifying AN Agents. (1) AN
Purchasers and AN Purchaser
applicants may, through the online web
portal mentioned in 6 CFR 31.220(a),
identify any AN Agents whom they
authorize to obtain ammonium nitrate
on their behalves.
(2) When a person named as an AN
Agent is no longer authorized to obtain
ammonium nitrate on behalf of an
applicant or AN Purchaser, the
applicant or AN Purchaser must notify
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the Department through the online web
portal within 30 days of the date on
which the AN Agent becomes
unauthorized to obtain ammonium
nitrate.
§ 31.225 AN Registered User number
applicant vetting.
(a) The Department will vet
applicants’ identifying information
against the Terrorist Screening Database
(TSDB) and/or verify each applicant’s
enrollment in a Department program
that conducts equivalent TSDB vetting.
(b) The Department will compare each
AN Registered User’s identifying
information against new and/or updated
TSDB records as those new and/or
updated records become available.
§ 31.230
Registration approval and denial.
(a) Registration approval. The
Department will issue AN Registered
User Numbers based on the results of
TSDB vetting and the submission of
complete registration applications by
applicants.
(b) Registration denial. A registration
applicant may be denied an AN
Registered User Number if:
(1) Based on TSDB vetting and/or
verification of previous TSDB vetting
results under 6 CFR 31.225, the
Assistant Secretary determines that it is
in the interest of national security to
deny the registration application; or
(2) The applicant submits an
incomplete registration application; or
(3) Information contained in the
registration application is fraudulent or
false.
(c) AN Registered User number
issuance. The Department will provide
AN Registered User Numbers to
approved applicants by e-mail or by an
online web portal to be developed by
the Department.
(d) Notice of registration denial. The
Assistant Secretary will provide Notice
of Registration Denial to denied
applicants by e-mail or by an online
web portal to be developed by the
Department. This Notice will include
the date of denial, and will also include
instructions about how to appeal such a
denial pursuant to 6 CFR 31.250.
(e) Notice of delay. (1) When the
Department is unable to approve or
deny a registration application within
72 hours of receipt, the Department will
provide Notice of Delay to the applicant
by e-mail or by an online web portal to
be developed by the Department.
(2) When the Department determines
that, in the interest of national security,
longer than 72 hours is required to
review a registration application or to
issue or deny an AN Registered User
Number, the Department will provide
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46951
Notice of Delay to the applicant by email or by an online web portal to be
developed by the Department.
§ 31.235
Registration expiration.
An AN Registered User Number
issued under this subpart expires five
years after the date it is issued.
§ 31.240
Registration extension.
(a) Extension prior to registration
expiration. An AN Registered User can
apply for an extension of his/her AN
Registered User Number not more than
60 days before its scheduled expiration.
(b) Extension after registration
expiration. An AN Registered User can
apply for an extension of his/her AN
Registered User Number after the
expiration date of that AN Registered
User Number for up to one year from the
date of expiration.
(c) Application for new number after
registration expiration of more than one
year. An AN Registered User with an
AN Registered User Number that has
been expired for more than one year
must apply for, and obtain, a new AN
Registered User Number before engaging
in the acquisition, purchase, sale, or
transfer of ammonium nitrate, or before
providing ammonium nitrate
application services.
(d) Extension procedures. An AN
Registered User can apply for an
extension of his/her AN Registered User
Number by following the registration
procedures set forth in 6 CFR 31.220.
Extensions will be issued or denied
using the registration issuance and
denial procedures and criteria set forth
in 6 CFR 31.230.
§ 31.245
Registration revocation.
(a) The Assistant Secretary may
revoke an AN Registered User Number
if he/she determines that:
(1) It is in the interest of national
security to revoke that AN Registered
User Number based on the results of the
activities described in 6 CFR 31.225; or
(2) The AN Registered User holding
that AN Registered User Number
obtained it by submitting fraudulent or
false information.
(b) The Assistant Secretary will
provide Notice of Revocation to each
AN Registered User whose AN
Registered User Number is revoked.
Notice of Revocation will be provided
prior to the effective date of revocation,
unless the Assistant Secretary
determines that it is in the interest of
national security to revoke an AN
Registered User Number prior to or at
the same time as provision of Notice of
Revocation. Notice of Revocation will
include both the date on which the
subject AN Registered User Number is
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to be revoked and the means by which
revocation can be appealed.
(c) Notices of Revocation will be
disseminated to subject AN Registered
Users by e-mail, by an online web portal
to be developed by the Department, or
by other written communication.
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§ 31.250 Appealing registration denial or
revocation determination.
(a) Appealing registration denial. A
person whose application for
registration has been denied may appeal
the Assistant Secretary’s denial of his/
her application under this subsection.
(b) Appealing revocation. A person
who has received a Notice of Revocation
may appeal the Assistant Secretary’s
revocation determination under this
subsection.
(c) Appellant’s request for materials.
To appeal a denial or revocation
determination, a person whose
registration application is denied, or
whose AN Registered User Number is
revoked, must initiate an appeal by
filing a Request for Materials with the
Office of the General Counsel. This
Request for Materials must be submitted
to the Office of the General Counsel
within 60 days of the date of denial or
revocation.
(d) The department’s response. The
Department will serve the appellant
with copies of the releasable materials
upon which denial or revocation was
based within 60 days of receipt of a
Request for Materials, unless the
Department determines that additional
time is required in the interest of
national security. The Department will
not include any classified information
in this Response, nor will it include any
other information or material protected
from disclosure under law. As
appropriate, the Department will
include in this Response unclassified
summaries of classified evidence
supporting denial or revocation.
(e) Appellant’s request for appeal. To
appeal the denial or revocation, the
appellant must serve upon the Office of
the General Counsel a Request for
Appeal within 60 days of service of the
Department’s Response under paragraph
(d) of this section. The appellant’s
Request for Appeal must be written and
include the rationale and information
upon which the appellant disputes the
basis of denial or revocation.
(f) Correcting materials. The Request
for Appeal must include any
corrections, additions, or clarifications
to the materials provided by the
Department under paragraph (d) of this
section if the appellant believes that his/
her denial or revocation was based on
materials or information that he/she
believes to be erroneous or incomplete.
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(g) Final determination. (1) After
reviewing an appellant’s Request for
Appeal, the Department will serve the
appellant with a Final Determination.
(2) A Final Determination will be
signed by the Under Secretary, and will:
(i) Uphold the denial or revocation; or
(ii) Reverse the denial or revocation.
(3) To the extent practicable, the
Department will issue a Final
Determination within 72 hours of
receipt of the appellant’s Request for
Appeal, unless the Department
determines that additional time is
required in the interest of national
security. The Department will not
include any classified information in
this service, nor will it include any
other information or material protected
from disclosure under law.
(4) Following a Final Determination
reversing a registration denial, the
Department will issue to the appellant
an AN Registered User Number as
described in 6 CFR 31.230(c).
(h) Extension of time. For good cause
shown, the Department may grant an
appellant an extension of time to file a
Request for Materials or Request for
Appeal. An appellant’s request for an
extension of time must be in writing and
must be received by the Office of the
General Counsel within a reasonable
time before the due date to be extended;
or an appellant may request an
extension after the passing of a due date
by sending a written request describing
why the failure to file within the
prescribed time limits should be
excusable.
(i) Final agency action. For purposes
of judicial review, a Final Determination
constitutes final agency action by the
Department. A Notice of Registration
Application Denial or a Notice of
Registration Revocation constitutes final
agency action if not timely appealed
pursuant to this section.
Subpart C—Point of Sale
Requirements
§ 31.300 General transfer and sale
restrictions.
(a) An AN Facility, AN Seller, AN
Facility Representative, or Designated
AN Facility POC may only transfer
possession of ammonium nitrate to an
AN Purchaser in possession of a valid
AN Registered User Number issued
under subpart B of this part, or to a
person acting as an authorized AN
Agent under this Part.
(b) An AN Facility, AN Seller, AN
Facility Representative, or Designated
AN Facility POC may only transfer
possession of ammonium nitrate to an
AN Purchaser or AN Agent after
verification of his/her identity as
required by this subpart.
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(c) An AN Facility, AN Seller, AN
Facility Representative, or Designated
AN Facility POC may not transfer
possession of ammonium nitrate to an
AN Agent when such AN Agent is
attempting to obtain ammonium nitrate
on behalf of an AN Purchaser whose
registration is deficient under this Part.
(d) An AN Facility, AN Seller, AN
Facility Representative, or Designated
AN Facility POC may only transfer
possession of ammonium nitrate to an
AN Agent after confirming with either
the Department or the AN Purchaser
that the AN Agent is authorized to act
on the AN Purchaser’s behalf.
§ 31.305 Verification of AN Registered
User Numbers and Identities—purchases or
transfers not involving AN Agents.
(a) AN Purchaser electronic or
telephonic verification. Prior to
transferring possession of ammonium
nitrate, the AN Seller, AN Facility
Representative, or Designated AN
Facility POC conducting the sale or
transfer must obtain the unexpired AN
Registered User Number and the name
of the AN Purchaser seeking to take
possession of ammonium nitrate.
(1) Prior to transfer, the AN Seller, AN
Facility Representative, or Designated
AN Facility POC conducting the sale or
transfer must submit this collected
information to the Department by
telephone or through an online web
portal to be developed by the
Department.
(2) Prior to transfer, the AN Seller, AN
Facility Representative, or Designated
AN Facility POC conducting the sale or
transfer must also submit information
identifying the AN Facility from which
ammonium nitrate is being transferred,
as well as his/her own name and his/her
own AN Registered User Number, to the
Department by telephone or through the
online web portal mentioned in 6 CFR
31.305(a)(1).
(3) Upon receipt of this information,
the Department will determine whether
the information provided indicates that
the AN Seller, AN Facility
Representative, or Designated AN
Facility POC submitting this
information is authorized to sell or
transfer ammonium nitrate. The
Department will also determine whether
the information provided indicates that
the person attempting to purchase or
obtain ammonium nitrate is authorized
under Subpart B of this Part to do so.
(4) The Department will then notify
the AN Seller, AN Facility
Representative, or Designated AN
Facility POC, by telephone or through
the online web portal mentioned in 6
CFR 31.305(a)(1), of the determinations
made pursuant to 6 CFR 31.305(a)(3).
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The AN Seller, AN Facility
Representative, or Designated AN
Facility POC may not transfer
ammonium nitrate unless and until each
of these determinations indicates that
the Department has authorized the sale
or transfer.
(b) AN Purchaser visual verification.
Prior to transferring possession of
ammonium nitrate, the AN Seller, AN
Facility Representative, or Designated
AN Facility POC conducting the sale or
transfer must examine the photo
identification document of the AN
Purchaser seeking to take possession of
ammonium nitrate.
(1) The photo identification document
must contain a photograph of the person
attempting to take possession of the
ammonium nitrate. AN Sellers, AN
Facility Representatives, or Designated
AN Facility POCs must not transfer
possession of ammonium nitrate to any
person unable to provide a photo
identification document. No AN
Purchaser may take possession of, or
attempt to take possession of,
ammonium nitrate without presenting a
photo identification document.
(2) The AN Seller, AN Facility
Representative, or Designated AN
Facility POC conducting the sale or
transfer must not transfer possession of
ammonium nitrate unless he/she
determines, to the best of his/her ability,
that the person attempting to take
possession of ammonium nitrate is the
same person as the person who is
depicted on the examined photo
identification document.
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§ 31.310 Verification of AN Registered
User Numbers and Identities—purchases or
transfers involving AN Agents.
(a) AN Purchaser electronic or
telephonic verification. An AN Seller,
AN Facility Representative, or
Designated AN Facility POC, prior to
transferring possession of ammonium
nitrate to an AN Agent, must obtain the
name, the unexpired AN Registered
User Number, the photo identification
document type, the photo identification
document issuing entity, and the photo
identification document number of the
AN Purchaser.
(1) Prior to transfer, the AN Seller, AN
Facility Representative, or Designated
AN Facility POC conducting the sale or
transfer must submit this collected
information to the Department by
telephone or through an online web
portal to be developed by the
Department.
(2) Prior to transfer, the AN Seller, AN
Facility Representative, or Designated
AN Facility POC conducting the sale or
transfer must also submit information
identifying the AN Facility from which
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ammonium nitrate is being transferred,
as well as his/her own name and his/her
own AN Registered User Number, to the
Department by telephone or through the
online web portal discussed in 6 CFR
31.310(a)(1).
(3) Upon receipt of this information,
the Department will determine whether
the information provided indicates that
the AN Seller, AN Facility
Representative, or Designated AN
Facility POC submitting this
information is authorized to sell or
transfer ammonium nitrate. The
Department will also determine whether
the information provided indicates that
the AN Purchaser is authorized under
Subpart B of this Part to purchase or
obtain ammonium nitrate. The
Department will not determine that the
AN Purchaser is authorized to purchase
or obtain ammonium nitrate unless the
photo identification document
information provided matches the photo
identification document information
previously provided by that person to
the Department under 6 CFR
31.220(a)(2) or (c)(1).
(4) The Department will then notify
the AN Seller, AN Facility
Representative, or Designated AN
Facility POC, by telephone or through
the online web portal mentioned in 6
CFR 31.310(a)(1), of the determinations
made pursuant to 6 CFR 31.310(a)(3).
The AN Seller, AN Facility
Representative, or Designated AN
Facility POC may not transfer
ammonium nitrate unless and until each
of these determinations indicates that
the Department has authorized the
transfer.
(b) Confirmation of agency. An AN
Seller, AN Facility Representative, or
Designated AN Facility POC, prior to
transferring possession of ammonium
nitrate to an AN Agent, must obtain
confirmation from the Department or
from the AN Purchaser that the AN
Agent is authorized to act on the AN
Purchaser’s behalf. This confirmation
must be obtained in either of two ways:
(1) By submitting the name of the AN
Agent to the Department by telephone
or through the online web portal
mentioned in 6 CFR 31.310(a)(1). If the
named AN Agent has been previously
authorized by the AN Purchaser to take
possession of ammonium nitrate on his/
her behalf, pursuant to 6 CFR 31.220(d),
then the Department will provide a
notice of confirmation, by telephone or
through online web portal, to the AN
Seller, AN Facility Representative, or
Designated AN Facility POC making this
submission.
(2) Orally from the AN Purchaser.
Oral confirmation may be obtained by
an AN Seller, AN Facility
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Representative, or Designated AN
Facility POC representing the AN
Facility conducting the transfer. Such
oral confirmation must be obtained in
person or by telephone, prior to transfer
of possession to the AN Agent.
(c) AN Agent visual verification. Prior
to transferring possession of ammonium
nitrate to an AN Agent, an AN Seller,
AN Facility Representative, or
Designated AN Facility POC must
examine the photo identification
document of the AN Agent seeking to
take possession of ammonium nitrate.
(1) The photo identification document
must contain a photograph of the person
attempting to take possession of the
ammonium nitrate. AN Sellers, AN
Facility Representatives, or Designated
AN Facility POCs may not transfer
possession of ammonium nitrate to
persons unable to provide photo
identification documents. An AN Agent
must not take possession of, or attempt
to take possession of, ammonium nitrate
without presenting a photo
identification document.
(2) The AN Seller, AN Facility
Representative, or Designated AN
Facility POC must not transfer
possession of ammonium nitrate unless
he/she determines, to the best of his/her
ability, that the person attempting to
take possession of the ammonium
nitrate is the same person as the person
who is depicted on the examined photo
identification document, and is the
same person as confirmed to be an
authorized AN Agent under 6 CFR
31.310(b).
§ 31.315
Recordkeeping requirements.
(a) An AN Facility and its AN Facility
Representative(s) and Designated AN
Facility POC must each ensure that the
AN Facility maintains records
pertaining to each sale or transfer of
ammonium nitrate consisting, at a
minimum, of the following:
(1) Date of sale or transfer;
(2) Form and amount of payment, if
any;
(3) Quantity of ammonium nitrate
sold or transferred;
(4) Type of packaging of the
ammonium nitrate sold or transferred;
(5) Location where the AN Purchaser,
or if applicable AN Agent, will take
possession of the ammonium nitrate
sold or transferred;
(6) Name, address, telephone number,
AN Registered User Number, photo
identification document type, photo
identification document issuing entity,
and photo identification document
number of the AN Purchaser purchasing
or taking possession of the ammonium
nitrate sold or transferred;
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(7) If an AN Agent takes possession of
ammonium nitrate, name, address,
telephone number, photo identification
document type, photo identification
document issuing entity, and photo
identification document number of the
AN Agent taking possession of the
ammonium nitrate sold or transferred;
(8) If an AN Agent takes possession of
ammonium nitrate, a record of the date
and means by which confirmation of
agency was received pursuant to 6 CFR
31.310(b); and
(9) Confirmation numbers or
confirmation records, if any, received
from the Department as part of the
notification processes described in 6
CFR 31.305(a)(4) and 6 CFR
31.310(a)(4).
(b) In sales or transfers not involving
AN Agents, AN Purchasers must
provide the information required by 6
CFR 31.315(a)(6) to AN Facility
personnel prior to transfer of
ammonium nitrate. AN Facilities, AN
Sellers, AN Facility Representatives,
and Designated AN Facility POCs must
not transfer possession of ammonium
nitrate to any persons failing to provide
this information prior to transfer.
(c) In sales or transfers involving AN
Agents, AN Purchasers and/or the AN
Agents obtaining ammonium nitrate on
their behalves must provide the
information required by 6 CFR
31.315(a)(6) and (7) to AN Facility
personnel prior to transfer of
ammonium nitrate. AN Facilities, AN
Sellers, AN Facility Representatives,
and Designated AN Facility POCs must
not transfer possession of ammonium
nitrate to any AN Agent if this
information has not been provided prior
to transfer.
(d) An AN Facility and its AN Facility
Representative(s) and Designated AN
Facility POC must each ensure that the
AN Facility maintains the records
required by 6 CFR 31.315(a), as to each
sale or transfer of ammonium nitrate, for
a minimum of two years from the date
of sale or transfer.
(e) An AN Facility and its AN Facility
Representative(s) and Designated AN
Facility POC must each take reasonable
actions to ensure that the AN Facility
secures the records required by 6 CFR
31.315(a) from damage, theft, and loss.
Subpart D—Reporting Theft and Loss
§ 31.400
Reporting obligations.
(a) Any AN Facility Representative or
Designated AN Facility POC who has
knowledge of the theft or unexplained
loss of ammonium nitrate must report
such theft or loss to the Bureau of
Alcohol, Tobacco, Firearms and
Explosives of the U.S. Department of
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Justice (ATF), or direct other AN
Facility personnel to report such theft or
loss to ATF, as provided in 6 CFR
31.405.
(b) Each AN Facility and its AN
Facility Representative(s) and
Designated AN Facility POC must
ensure that the AN Facility implements
internal reporting procedures which
require all AN Facility Representatives,
AN Sellers, and other AN Facility
personnel (as appropriate) to notify the
appropriate AN Facility Representative
or Designated AN Facility POC of any
theft or unexplained loss of ammonium
nitrate, to report such theft or loss
directly to ATF, or both.
§ 31.405
Reporting.
(a) General reporting requirements.
Persons required to report theft or loss
under this Subpart must report each
theft or loss to ATF by telephone and by
facsimile, not later than 24 hours after
becoming aware of such theft or loss. If
facsimile is not available, persons
required to report theft or loss under
this Subpart must report each theft or
loss to ATF by telephone and U.S. mail,
not later than 24 hours after becoming
aware of such theft or loss.
(b) Voluntary reporting. Persons not
required to report theft or loss under
this Subpart may report theft or loss of
ammonium nitrate by contacting ATF
by the same means described in
paragraph (a) of this section.
Subpart E—Inspections and Audits
§ 31.500
Authority.
(a) On-site inspections and audits. In
order to assess compliance with the
requirements of this part and with the
requirements of subtitle J, and in order
to prevent the misappropriation or use
of ammonium nitrate in acts of
terrorism, authorized Department
officials may enter AN Facilities, or
other locations where records are stored,
to inspect and audit the records
required to be maintained pursuant to 6
CFR 31.315, to inspect and audit any
other records that pertain to
misappropriation or preventing
misappropriation of ammonium nitrate,
and to inspect and audit any other
records required by the Assistant
Secretary to be maintained pursuant to
Subtitle J.
(b) Remote inspections and audits. In
order to assess compliance with the
requirements of this part and with the
requirements of subtitle J, and in order
to prevent the misappropriation or use
of ammonium nitrate in acts of
terrorism, the Department may require
AN Facilities, AN Facility
Representatives, and Designated AN
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Facility POCs to make the records
mentioned in 6 CFR 31.500(a) available
to the Department by facsimile, mail, or
e-mail.
§ 31.505
Manner of inspections and audits.
(a) On-Site inspections and audits.
Authorized Department officials will
conduct on-site inspections and audits
at reasonable times and in reasonable
manners. The Department will provide
a minimum of 24 hours notice to an AN
Facility, if possible through its
Designated AN Facility POC, before any
on-site inspection and audit, except
when:
(1) The Assistant Secretary
determines that an on-site inspection
and audit without such notice is
warranted by exigent circumstances and
approves such on-site inspection and
audit; or
(2) Any delay in conducting an on-site
inspection and audit might be seriously
detrimental to security, and the
Assistant Secretary determines that an
on-site inspection and audit without
notice is warranted, and approves an
Inspector to conduct such on-site
inspection and audit.
(b) Remote inspections and audits.
Authorized Department officials will
conduct remote inspections and audits
at reasonable times and in reasonable
manners. The Department will provide
a minimum of 24 hours notice to an AN
Facility, if possible through its
Designated AN Facility POC, before that
AN Facility is required to remotely
submit records to the Department. The
Department may provide less than 24
hours notice before an AN Facility is
required to remotely submit records to
the Department only when:
(1) The Assistant Secretary
determines that a remote inspection and
audit without such notice is warranted
by exigent circumstances and approves
such remote inspection and audit; or
(2) Any delay in conducting a remote
inspection and audit might be seriously
detrimental to security, and the
Assistant Secretary determines that a
remote inspection and audit without
notice is warranted, and approves an
Inspector to conduct such remote
inspection and audit.
§ 31.510
Inspectors.
(a) Inspections and audits will be
conducted by personnel duly authorized
and designated for that purpose as
‘‘Inspectors’’ by the Assistant Secretary,
or any person who is authorized by the
Department to perform inspections
pursuant to a cooperative agreement or
a delegation of authority established
under subtitle J.
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(b) An Inspector will, on request,
present his or her credentials for
examination by AN Facility personnel
during an on-site inspection and audit,
but these credentials may not be
reproduced or retained by any AN
Facility, by any AN Facility personnel,
by any AN Seller, by any AN Facility
Representative, or by any Designated
AN Facility POC.
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§ 31.515 Records availability
requirements.
(a) Records availability during on-site
inspections and audits for which the
department has provided at least 24
hours notice. Each AN Facility and its
AN Facility Representative(s) and
Designated AN Facility POC must make
all records required to be maintained by
this Part available to Inspectors
immediately upon the commencement
of an on-site inspection and audit. Each
AN Facility and its AN Facility
Representative(s) and Designated AN
Facility POC must provide Inspectors
with the use of photocopiers,
computers, and other equipment
necessary to copy such records, if
subject AN Facilities have access to
such equipment. If Inspectors deem that
photocopying or other reproduction of
records is necessary, but subject AN
Facilities do not have access to
necessary photocopying/reproduction
equipment, Inspectors must be
permitted to take original copies of
pertinent records out of the subject AN
Facilities for duplication and prompt
return.
(b) Records availability during on-site
inspections and audits for which the
department has provided less than 24
hours notice. Each AN Facility and its
AN Facility Representative(s) and
Designated AN Facility POC must make
all records required to be maintained by
this Part available to Inspectors as
quickly as possible upon the
commencement of an on-site inspection
and audit. Each AN Facility and its AN
Facility Representative(s) and
Designated AN Facility POC must make
such records available, at a maximum,
within four hours of the commencement
of an on-site inspection and audit.
Inspectors must be provided with the
use of photocopiers, computers, and
other equipment necessary to copy such
records, if subject AN Facilities have
access to such equipment. If Inspectors
deem that photocopying or other
reproduction of records is necessary, but
subject AN Facilities do not have access
to necessary photocopying/reproduction
equipment, Inspectors must be
permitted to take original copies of
pertinent records out of the subject AN
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Facilities for duplication and prompt
return.
(c) Records availability for remote
inspections and audits for which the
department has provided at least 24
hours notice. Each AN Facility and its
AN Facility Representative(s) and
Designated AN Facility POC must
remotely submit any and all records
requested by the Department under this
Part to the Department by the time
prescribed in the Department’s notice.
(d) Records availability for remote
inspections and audits for which the
department has provided less than 24
hours notice. Each AN Facility and its
AN Facility Representative(s) and
Designated AN Facility POC must
remotely submit all records requested
by the Department under this Part to the
Department as quickly as possible after,
and in no case more than four hours
later than, receipt of the Department’s
notice.
Subpart F—Civil Penalties
§ 31.600 Orders Assessing Civil Penalty,
generally.
When the Assistant Secretary
determines that any person or entity has
violated any provision or provisions of
this Part, the Assistant Secretary may
issue an Order Assessing Civil Penalty
against such person or entity making
such person or entity liable to the
United States for a civil penalty of not
more than $50,000 per violation of this
part.
§ 31.605
Setting civil penalty amounts.
In determining the amount of a civil
penalty, the Assistant Secretary will
consider: The nature and circumstances
of the violation(s) underlying the civil
penalty; the history of prior violations
by the person or entity determined to
have committed the violation
underlying the civil penalty; the ability
to pay of the person or entity
determined to have committed the
violation underlying the civil penalty;
the ability to continue to do business of
the person or entity determined to have
committed the violation underlying the
civil penalty; and any other matters that
the Assistant Secretary determines that
justice requires.
§ 31.610 Procedures for issuing Orders
Assessing Civil Penalty.
(a) At a minimum, each Order
Assessing Civil Penalty will be signed
by the Assistant Secretary, dated, and
include as to each person or entity
subject to such Order Assessing Civil
Penalty:
(1) The name, address, and (where
applicable) AN Registered User Number
of such person or entity;
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46955
(2) A listing of the provision(s) of this
Part alleged to have been violated;
(3) A statement of facts upon which
the alleged instances of violation are
based;
(4) A statement of the amount of the
civil penalty assessed;
(5) A statement of the date by which
such person or entity must pay the civil
penalty assessed, and a statement of the
date by which such person or entity
may file a Notice for Application for
Review pursuant to Subpart G of this
Part, as an alternative to civil penalty
payment;
(6) A statement of the means by which
such person or entity may file a Notice
for Application for Review pursuant to
Subpart G of this Part; and
(7) A statement of the means by which
payment may be made.
(b) The Assistant Secretary may
establish procedures for issuance of
Orders Assessing Civil Penalty.
(c) Each person or entity subject to an
Order Assessing Civil Penalty must
comply with the terms of such Order
Assessing Civil Penalty by the date
specified in such Order Assessing Civil
Penalty unless such person or entity has
filed a timely Notice for Application for
Review under Subpart G of this Part.
(d) An Order Assessing Civil Penalty
issued under this section becomes a
final agency action when the time
specified in such Order Assessing Civil
Penalty to file a Notice for Application
for Review has passed without such
filing.
Subpart G—Adjudications and Appeals
§ 31.700
Neutral adjudications, generally.
(a) Any person or entity against whom
an Order Assessing Civil Penalty has
been issued is entitled to a hearing and
adjudication, by a Presiding Officer, on
any issue of material fact relevant to any
civil penalty issued against such person
or entity under this Part.
(b) A Presiding Officer will issue an
Initial Decision on any material issue
related to an Order Assessing Civil
Penalty before any such issue is
reviewed on appeal pursuant to 6 CFR
31.735.
§ 31.705 Appointment of Presiding
Officers.
(a) Immediately upon the filing of any
Notice for Application for Review under
6 CFR 31.710, the Secretary shall
appoint an attorney, who is employed
by the Department and who has not
performed any investigative or
prosecutorial function with respect to
the matter, to act as a neutral
adjudications officer or Presiding
Officer for the compilation of a factual
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record and the recommendation of an
Initial Decision for each Proceeding.
(b) Notwithstanding paragraph (a) of
this section, the Secretary may appoint
one or more attorneys who are
employed by the Department and who
do not perform any investigative or
prosecutorial function with respect to
this subpart, to serve generally in the
capacity as Presiding Officer(s) for such
matters pursuant to such procedures as
the Secretary may hereafter establish.
§ 31.710 Commencement of Adjudication
Proceedings.
(a) Any person or entity against whom
an Order Assessing Civil Penalty has
been issued may institute proceedings
to review the propriety of such civil
penalty by filing a Notice for
Application for Review specifying that
such person or entity requests a hearing
and adjudication.
(b) Each person or entity requesting a
hearing and adjudication must serve
each Notice for Application for Review
and all subsequent filings on the Office
of the General Counsel.
(c) Each Notice for Application for
Review must be accompanied by all
appropriate legal memoranda,
declarations, affidavits, other
documents and other evidence
supporting the position asserted by the
person or entity requesting a hearing
and adjudication.
(d) The Assistant Secretary will file
and serve a Response, accompanied by
all appropriate legal memoranda,
declarations, affidavits, other
documents and other evidence
supporting the position asserted by the
Assistant Secretary, within 14 calendar
days of the filing and service of the
Notice for Application for Review and
all supporting papers.
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§ 31.715 Prohibition on ex parte
communications during adjudication.
(a) At no time after the designation of
a Presiding Officer for a proceeding and
prior to the issuance of a Final Decision
on an appeal pursuant to 6 CFR
31.735(e) will the designated Presiding
Officer, or any person who will advise
that official in the decision on the
matter, discuss ex parte the merits of the
proceeding with any interested person
outside the Department, with any
Department official who performs a
prosecutorial or investigative function
in such proceeding or a factually related
proceeding, or with any representative
of such person.
(b) If, after the designation of a
Presiding Officer and prior to the
issuance of a Final Decision on an
appeal pursuant to 6 CFR 31.375(e), the
designated Presiding Officer, or any
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person who will advise that official in
the decision on the matter, receives
from or on behalf of any party, by means
of an ex parte communication,
information which is relevant to the
decision of the matter and to which
other parties have not had an
opportunity to respond, a summary of
such information will be served on all
other parties, who will have an
opportunity to reply to the ex parte
communication within a time set by the
designated Presiding Officer.
(c) The consideration of classified or
Sensitive But Unclassified information
or materials pursuant to an in camera
procedure does not constitute a
prohibited ex parte communication for
purposes of this subpart.
§ 31.720
Burden of proof.
The Assistant Secretary bears the
initial burden of proving the facts
necessary to support the challenged
Order Assessing Civil Penalty at every
proceeding instituted under this
subpart.
§ 31.725 Hearing and adjudication
procedures.
(a) Following filing and receipt of
Notice for Application for Review and
Response, the assigned Presiding Officer
will conduct scheduling conferences or
issue scheduling orders as appropriate;
accept or order pre-hearing memoranda,
motions, and briefings as appropriate;
and order discovery as appropriate.
(b) Any hearing and adjudication will
be held as expeditiously as possible in
the county, parish, or incorporated city
of residence of the person or entity
filing the Notice for Application for
Review instituting the hearing and
adjudication, at a precise location to be
determined by the assigned Presiding
Officer, or, with the consent of such
person or entity, at any other location
conducive to a prompt presentation of
any necessary testimony or other
proceedings.
(c) Videoconferencing and
teleconferencing may be used where
appropriate at the discretion of the
assigned Presiding Officer.
(d) Each party offering the affirmative
testimony of a witness must present that
testimony by declaration, affidavit, or
other sworn statement submitted in
advance as ordered by the assigned
Presiding Officer.
(e) Any witness presented for
examination will be asked to testify
under oath or affirmation.
(f) The hearing and adjudication will
be recorded verbatim.
(g) A person or entity may appear to
be heard on his own behalf or through
any counsel of his choice.
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(h) A person or entity, individually or
through counsel, may offer relevant and
material information including written
direct testimony which that person or
entity believes should be considered in
opposition to the Order Assessing Civil
Penalty at issue.
(i) A person or entity, individually or
through counsel, may conduct crossexamination as may be specifically
allowed by the assigned Presiding
Officer for a full determination of
relevant facts.
§ 31.730 Completion of adjudication
procedures.
(a) The assigned Presiding Officer will
close and certify the record of the
adjudication promptly upon the
completion of the hearing and upon the
submission of post-hearing briefs, if any
are ordered by the assigned Presiding
Officer.
(b) The assigned Presiding Officer will
issue an Initial Decision based on the
certified record, and the decision will be
subject to appeal pursuant to 6 CFR
31.735.
(c) An Initial Decision will become a
final agency action on the expiration of
the time for an appeal pursuant to 6 CFR
31.735.
(d) An Initial Decision will specify the
time by which the subject person or
entity must pay the ordered civil
penalty, or the Presiding Officer’s
modification of such penalty, if any.
Such deadline will be stayed, however,
during the pendency of any appeal
pursuant to 6 CFR 31.735.
§ 31.735
Appeals.
(a) Right to appeal. The Assistant
Secretary, or any person or entity having
received an Initial Decision under this
Subpart, has the right to appeal to the
Under Secretary acting as a neutral
appeals officer.
(b) Procedure for appeals. (1) The
Assistant Secretary, or any person or
entity who has received an Initial
Decision under this Subpart, may
institute an appeal by filing a Notice of
Appeal with the Office of the General
Counsel.
(2) A Notice of Appeal must be filed
within seven calendar days of the
service of the Presiding Officer’s Initial
Decision. Where the Assistant Secretary
initiates an appeal, the Assistant
Secretary will serve a copy of this
Notice of Appeal on the appellee.
(3) An Initial Decision is stayed from
the timely filing of a Notice of Appeal
until the Under Secretary issues a Final
Decision.
(4) The appellant must file a Brief
with the Office of the General Counsel
within 28 calendar days of the filing of
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the Presiding Officer’s Initial Decision.
Where the Assistant Secretary initiates
an appeal, the Assistant Secretary will
serve a copy of this Brief on the
appellee.
(5) The appellee must file its/his/her
Opposition Brief with the Office of the
General Counsel within 28 calendar
days of the filing of the appellant’s
Brief. Where the Assistant Secretary is
an appellee, the Assistant Secretary will
serve a copy of this Opposition Brief on
the appellant.
(c) Expedited appeals. The Under
Secretary may provide for expedited
appeals for appropriate matters.
(d) Ex parte communications. (1) At
no time after the filing of a Notice of
Appeal and prior to the issuance of a
Final Decision on an appeal pursuant to
6 CFR 31.735(e) will the Under
Secretary, his designee, or any person
who will advise that official in the
decision on the matter discuss ex parte
the merits of the proceeding with any
interested person outside the
Department, with any Department
official who performs a prosecutorial or
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investigative function in such
proceeding or a factually related
proceeding, or with any representative
of such person.
(2) If, after the filing of a Notice of
Appeal and prior to the issuance of a
Final Decision on an appeal pursuant to
6 CFR 31.375(e), the Under Secretary,
his designee, or any person who will
advise that official in the decision on
the matter receives from or on behalf of
any party, by means of an ex parte
communication, information which is
relevant to the decision of the matter
and to which other parties have not had
an opportunity to respond, a summary
of such information will be served on all
other parties, who will have an
opportunity to reply to the ex parte
communication within a time set by the
Under Secretary or his/her designee.
(3) The consideration of classified or
Sensitive But Unclassified information
or materials pursuant to an in camera
procedure does not constitute a
prohibited ex parte communication for
purposes of this subpart.
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46957
(e) Final decisions. The Under
Secretary will issue a Final Decision
and serve it upon the parties. A Final
Decision made by the Under Secretary
constitutes final agency action.
(f) Conduct of appeals. The Secretary
may establish procedures for the
conduct of appeals pursuant to this
subpart.
Subpart H—Other
§ 31.800
State law preemption.
Subject to subtitle J, the laws of any
State are preempted to the extent that
such laws are inconsistent with this part
or with subtitle J, except that this
section shall not preempt any State law
that provides additional protection
against the acquisition of ammonium
nitrate by terrorists or the use of
ammonium nitrate in explosives in acts
of terrorism or for other illicit purposes,
as determined by the Secretary.
Janet Napolitano,
Secretary.
[FR Doc. 2011–19313 Filed 8–2–11; 8:45 am]
BILLING CODE 9119–9P–P
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]]>Agencies
[Federal Register Volume 76, Number 149 (Wednesday, August 3, 2011)]
[Proposed Rules]
[Pages 46908-46957]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19313]
[[Page 46907]]
Vol. 76
Wednesday,
No. 149
August 3, 2011
Part II
Department of Homeland Security
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6 CFR Part 31
Ammonium Nitrate Security Program; Proposed Rule
Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 /
Proposed Rules
[[Page 46908]]
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DEPARTMENT OF HOMELAND SECURITY
Office of the Secretary
6 CFR Part 31
[Docket ID 2008-0076]
RIN 1601-AA52
Ammonium Nitrate Security Program
AGENCY: National Protection and Programs Directorate, DHS
ACTION: Proposed rule; request for comments.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would implement anti-terrorism measures to
better secure the homeland. The Department of Homeland Security would
regulate the sale and transfer of ammonium nitrate pursuant to section
563 of the Fiscal Year 2008 Department of Homeland Security
Appropriations Act with the purpose of preventing the use of ammonium
nitrate in an act of terrorism. This proposed rule seeks comment on
both proposed text for such a regulation and on several practical and
legal issues integral to the development of an Ammonium Nitrate
Security Program.
DATES: Comments and related material must either be submitted to our
online docket via https://www.regulations.gov on or before December 1,
2011 or reach the Docket Management Facility by that date. Comments
sent to DHS or the Office of Management and Budget (OMB) on collection
of information must reach DHS or OMB on or before October 3, 2011.
ADDRESSES: You may submit comments, identified by docket number 2008-
0076, by one of the following methods:
Federal eRulemaking Portal: Follow the instructions at
https://www.regulations.gov for submitting comments.
Mail: U.S. Department of Homeland Security, National
Protection and Programs Directorate, Infrastructure Security Compliance
Division (NPPD/ISCD), 245 Murray Lane, SW., Mail Stop 0610, Arlington,
VA 20598-0610.
To avoid duplication, please use only one of these methods. For
instructions on submitting comments, see the ``Public Participation''
portion of the SUPPLEMENTARY INFORMATION section below.
Collection of Information Comments: If you have comments on the
collection of information discussed in section IV.F (``Paperwork
Reduction Act'') of this Notice of Proposed Rulemaking (NPRM), you may
submit comments to the DHS as indicated above, and you may also send
comments to the Office of Information and Regulatory Affairs (OIRA),
OMB. Comments on the collection of information must reach DHS or OIRA
on or before October 3, 2011. To ensure that your comments to OIRA are
received on time, the preferred methods are by e-mail to oira_submission@omb.eop.gov (include the docket number and ``Attention: Desk
Officer for Department of Homeland Security/NPPD'' in the subject line
of the e-mail) or fax at 202-395-6566. An alternate, though slower,
method is by U.S. mail to the Office of Information and Regulatory
Affairs, Office of Management and Budget, 725 17th Street NW.,
Washington, DC 20503, Attention: Desk Officer for Department of
Homeland Security/NPPD.
FOR FURTHER INFORMATION CONTACT: Ammonium Nitrate Security Program
Manager, U.S. Department of Homeland Security, National Protection and
Programs Directorate, Infrastructure Security Compliance Division
(NPPD/ISCD), 245 Murray Lane, SW., Mail Stop 0610, Arlington, VA 20598-
0610, telephone number (703) 235-5263.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Public Participation
II. Background: Overview of Subtitle J and Associated Regulatory
Development Activities
A. Subtitle J
B. October 2008 Report to Congress
C. Advance Notice of Proposed Rulemaking
D. Research Efforts and Findings
1. Security Hazards Presented by Use of Ammonium Nitrate
2. Detonability of Ammonium Nitrate
3. Federal Regulations Addressing Ammonium Nitrate
a. Chemical Facility Anti-Terrorism Standards
b. U.S. Coast Guard Maritime Security Regulations
c. Transportation Security Administration
d. Bureau of Alcohol, Tobacco, Firearms and Explosives
e. Department of Transportation Hazardous Materials Regulations
f. Department of Commerce
4. State Regulations Addressing Ammonium Nitrate
5. Voluntary Programs Addressing Ammonium Nitrate
III. Discussion of Proposed Rule: Implementing Subtitle J
A. Ammonium Nitrate Subject to Subtitle J Requirements
1. Mixture Requirement
2. Threshold Weight and Individual Products Exemptions
3. Explosives Exemption
B. Requirements for the Registration of AN Sellers and AN
Purchasers
1. Overview
2. Who Must Register
3. Registering AN Sellers
4. Registering AN Facility Representatives
5. Registering a Designated AN Facility POC
6. Summary of AN Facility Personnel Registration Proposals
7. Registering AN Purchasers
8. Federal/State/Tribal/Local Government-Owned Entities That Are
AN Facilities or AN Purchasers
9. Registration Process
10. Initial Applications
11. Applicant Vetting Process
12. Notification of Approval or Denial
13. Revocation of Registration Numbers
14. Appealing Registration Denials and Registration Revocations
15. Registration Updates and Expiration
16. Initial Six-Month Registration Period
C. Purchaser Verification Activities
1. Overview
2. Manner of Sale or Transfer of Ammonium Nitrate
3. Required Verification Activities
4. Verification of the Currency and Authenticity of a
Prospective AN Purchaser's AN Registered User Number
5. Verification of a Prospective AN Purchaser's Identity When
the AN Purchaser Opts Not To Use An Agent
6. Verification of a Prospective AN Purchaser's Identity When
the AN Purchaser Opts To Use An Agent
7. For Sales Involving Agents, Verification That the Agent Is
Acting on Behalf of the AN Purchaser
8. Verification of the Agent's Identity Based on the Visual
Check of the Agent's Photo Identification
9. Timing of Verification Activities
10. Departmental Role in Verification Process
11. Purchaser Verification Portal
12. Purchaser Verification Call Center
13. Purchaser Verification Portal and Call Center
14. Suspicious Purchases and Attempted Purchases of Ammonium
Nitrate
D. Recordkeeping
1. Overview
2. Entities Responsible for Keeping Records
3. Records To Be Kept
4. Length of Retention of Records
5. Format and Storage of Records
E. Reporting of Theft or Loss of Ammonium Nitrate
1. Overview
2. Who Must Report Theft or Loss
3. Level of Theft or Loss Warranting Reporting
4. Process for Reporting Theft or Loss
F. Inspections and Audits
G. Guidance Materials and Posters
H. Civil Penalties, Civil Penalty Adjudications, and Civil
Penalty Appeals
I. Consultation Requirements
J. Delegation of Authority
IV. Regulatory Analyses
A. Executive Order 12866 and Executive Order 13563: Regulatory
Planning and Review
1. Cost Impacts
2. Benefits of the Ammonium Nitrate Security Program
B. Regulatory Flexibility Act
[[Page 46909]]
1. Reasons for and Objectives of the Proposed Rule
2. Affected Small Business Population and Estimated Impact of
Compliance
3. Number of Small Entities That Purchase Ammonium Nitrate
4. Number of Small Entities That Sell Ammonium Nitrate
5. Alternatives Considered
6. Average Costs per AN Facility
7. Identification of Duplication, Overlap and Conflict With
Other Federal Rules
C. Executive Order 13132: Federalism
D. Unfunded Mandates Reform Act
E. National Environmental Policy Act
F. Paperwork Reduction Act
G. International Trade Impact Assessment
Abbreviations and Terms Used in This Document
AN Ammonium Nitrate
ANFO Ammonium Nitrate/Fuel Oil
ANPRM Advance Notice of Proposed Rulemaking
ATF Bureau of Alcohol, Tobacco, Firearms, and Explosives
ATSA Aviation and Transportation Security Act
CFATS Chemical Facility Anti-Terrorism Standards
CFR Code of Federal Regulations
COI Chemical of Interest
CVI Chemical-terrorism Vulnerability Information
DHS Department of Homeland Security
DOT Department of Transportation
EAR Export Administration Regulations
FBI Federal Bureau of Investigation
FR Federal Register
HMR Hazardous Materials Regulations
HMT Hazardous Materials Table
IED Improvised Explosive Device
IRFA Initial Regulatory Flexibility Analysis
MTSA Maritime Transportation Security Act
NAICS North American Industrial Classification System
NPRM Notice of Proposed Rulemaking
PCII Protected Critical Infrastructure Information
PHMSA Pipeline and Hazardous Materials Safety Administration
POC Point of Contact
QATT Qualified Anti-Terrorism Technology
RFA Regulatory Flexibility Act
SAFETY Support Anti-Terrorism By Fostering Effective Technologies
SBA Small Business Administration
SORN System of Records Notice
SSI Sensitive Security Information
TSA Transportation Security Administration
TSDB Terrorist Screening Database
TWIC Transportation Worker Identification Credential
UMRA Unfunded Mandates Reform Act
USC United States Code
USCG United States Coast Guard
USDA United States Department of Agriculture
VSL Value per Statistical Life
I. Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views, or arguments on all aspects of this
NPRM. The Department of Homeland Security (DHS or the Department) also
invites comments that relate to the economic, environmental, or
federalism effects that may result from this NPRM. Comments that will
provide the most assistance to the Department in developing this
proposed rule will refer to a specific provision of the NPRM or the
Secure Handling of Ammonium Nitrate provisions in the Homeland Security
Act, as amended, explain the reason for any comments, and include other
information or authority that supports such comments.
Submission of Sensitive Information: Do not submit comments that
include trade secrets, confidential commercial or financial
information, Chemical-terrorism Vulnerability Information (CVI),
Protected Critical Infrastructure Information (PCII), or Sensitive
Security Information (SSI) to the public regulatory docket. Please
submit such comments separately from other comments on the proposed
rule. Comments containing this type of information should be
appropriately marked as containing such information and submitted by
mail to the following address: U.S. Department of Homeland Security,
National Protection and Programs Directorate, Infrastructure Security
Compliance Division (NPPD/ISCD), 245 Murray Lane, SW., Mail Stop 0610,
Arlington, VA 20598-0610.
Upon receipt of such comments, DHS will not place the comments in
the public docket and will handle them in accordance with applicable
safeguards and restrictions on access. DHS will hold them in a separate
file to which the public does not have access, and place a note in the
public docket that DHS has received such materials from the commenter.
If DHS receives a request to examine or copy this information, DHS will
treat it as any other request under the Freedom of Information Act
(FOIA), 5 U.S.C. 552, and the Department's FOIA regulation found in
Part 5 of Title 6 of the Code of Federal Regulations (CFR).
Instructions: All submissions must include the agency name and
docket number for this rulemaking. All comments received will be posted
without change to https://www.regulations.gov, including any personal
information provided.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov.
II. Background: Overview of Subtitle J and Associated Regulatory
Development Activities
A. Subtitle J
Section 563 of the Fiscal Year 2008 Department of Homeland Security
Appropriations Act amends the Homeland Security Act of 2002 and directs
DHS to ``regulate the sale and transfer of ammonium nitrate by an
ammonium nitrate facility * * * to prevent the misappropriation or use
of ammonium nitrate in an act of terrorism.'' See Public Law 110-161,
Division E (2007). Section 563 amends the Homeland Security Act of 2002
(6 U.S.C. 361 et seq.) by adding in a new Subtitle J--Secure Handling
of Ammonium Nitrate, sections 899A-899J (to be codified from 6 U.S.C.
488 to 6 U.S.C. 488i). All references to 6 U.S.C. 488-488i throughout
this document refer to the corresponding sections in the Homeland
Security Act of 2002, as amended by section 563 of the Fiscal Year 2008
Department of Homeland Security Appropriations Act. All references to
``Subtitle J'' throughout this document refer to Subtitle J of the
Homeland Security Act of 2002, as created by the Fiscal Year 2008
Department of Homeland Security Appropriations Act.
Pursuant to Subtitle J, the Department must develop regulations
that require, at a minimum, the following activities:
Registration Applications: Certain ammonium nitrate
sellers and prospective ammonium nitrate purchasers must apply for
ammonium nitrate (AN) registration numbers from DHS in order to sell,
transfer, and/or purchase ammonium nitrate. See 6 U.S.C. 488a(c) and 6
U.S.C. 488a(d).
Terrorist Screening Database Checks: The Department must
use identifying information of each prospective applicant to conduct a
check against identifying information that appears in the Terrorist
Screening Database (TSDB). See 6 U.S.C. 488a(i)(2)(A).
Registration Numbers: The Department generally must issue
an ammonium nitrate registration number or deny the registration of an
applicant within 72 hours of receipt of each ammonium nitrate seller's
or ammonium nitrate purchaser's complete registration application. See
6 U.S.C. 488a(i)(3)(A).
Purchaser Verification Activities: At the point of sale,
ammonium nitrate sellers must verify each potential ammonium nitrate
purchaser's identity and registration to purchase ammonium nitrate
pursuant to procedures
[[Page 46910]]
established by the Department. See 6 U.S.C. 488a(e)(2)(D).
Recordkeeping: All ammonium nitrate facilities must keep
records of sales or transfers of ammonium nitrate for at least two
years after each transaction. See 6 U.S.C. 488a(e)(1) and 6 U.S.C.
488a(e)(2).
Reporting Theft or Loss of Ammonium Nitrate: Certain
ammonium nitrate sellers must report the theft or loss of ammonium
nitrate to Federal authorities within one calendar day of discovery of
theft or loss. See 6 U.S.C. 488d.
Inspections and Audits: The Department must conduct or
oversee regulatory compliance inspections and audits of ammonium
nitrate facilities' records, monitor compliance with the requirements
of Subtitle J, and deter or prevent misappropriation of ammonium
nitrate for use in terrorist acts. See 6 U.S.C. 488b.
Guidance Materials and Posters: The Department must
develop guidance materials that set forth procedures for appealing
denial of an application for an ammonium nitrate registration number,
guidance materials that help ammonium nitrate facilities identify
suspicious ammonium nitrate purchases or attempted purchases or
transfers, and posters providing information on sellers' record-keeping
responsibilities and on the penalties for violating requirements under
the Department's ammonium nitrate program. See 6 U.S.C. 488a(i)(4)(c)
and 6 U.S.C. 488c(c).
Establishing Threshold Percentage of Ammonium Nitrate in a
Mixture: The Department must establish a threshold percentage of
ammonium nitrate in a mixture for that mixture to be regulated under
the Department's ammonium nitrate program. See 6 U.S.C. 488a(b).
Appeals and Penalties: The Department must establish an
expedited appeals process for applicants denied ammonium nitrate
registration numbers, as well as an appeals process for individuals
assessed civil penalties for violating the rules promulgated under
Subtitle J. See 6 U.S.C. 488a(i)(4) and 6 U.S.C. 488e(d).
B. October 2008 Report to Congress
In an Explanatory Statement accompanying section 563 of the Fiscal
Year 2008 Department of Homeland Security Appropriations Act the
Chairman of the House Committee on Appropriations indicated a desire
for the Department's National Protection and Programs Directorate to
``provide a plan to implement [Subtitle J], including analysis of the
resources required to do so, and a proposal for reallocating funding
within the National Protection and Programs Directorate for doing so.''
See Explanatory Statement Submitted by Mr. Obey, Chairman of the House
Committee on Appropriations, Regarding the Consolidated Appropriations
Amendment of the House of Representatives to the Senate Amendment to
H.R. 2764, 153 Cong. Rec. H15741, H16092 (2007), available at https://www.gpo.gov/fdsys/pkg/CREC-2007-12-17/pdf/CREC-2007-12-17-bk2.pdf. In
October 2008, the Department submitted to Congress a report in response
to this Explanatory Statement, outlining possible approaches to
implementing Subtitle J and the potential costs associated with each
approach. The Department's report to Congress has aided in evaluating
many of the approaches contained in this NPRM. The Department's report
can be found in the docket for this NPRM, which is available at https://www.regulations.gov.
C. Advance Notice of Proposed Rulemaking
DHS published an Advance Notice of Proposed Rulemaking (ANPRM)
titled ``Secure Handling of Ammonium Nitrate Program'' on October 29,
2008. See 73 FR 64280. The ANPRM solicited public comment on the
following specific issues:
Comments regarding submission of registration applications
(e.g., whether applications should be submitted electronically or in
paper form; whether applications should be available only through DHS
or through Local Cooperative Extension offices or at United States Post
Offices);
Comments regarding the technical capabilities (e.g.,
access to computers; access to the Internet; average level of computing
skills; frequency of use of integrated Information Technology systems)
of ammonium nitrate manufacturers, distributors, sellers, and end-
users;
Comments regarding DHS distribution of ammonium nitrate
registration letters or certificates (e.g., whether DHS should use e-
mail or regular mail);
Comments regarding a verification process for
registrations and ammonium nitrate purchases, including methods for
verifying the identity of any ammonium nitrate purchaser, as well as
the identity of designated agents purchasing ammonium nitrate on behalf
of registered ammonium nitrate purchasers;
Comments on the detonability of ammonium nitrate at
certain concentrations, including research being conducted concerning
the detonability of ammonium nitrate;
Comments on how likely ammonium nitrate fertilizer users
would be to use an alternative fertilizer that is potentially less
detonable, such as Sulf-N[supreg] 26 Fertilizer Process and Product
(ammonium sulfate nitrate fertilizer) which DHS recently Designated as
a Qualified Anti-Terrorism Technology (QATT) pursuant to 6 U.S.C. 441-
444 (the Support Anti-terrorism by Fostering Effective Technologies Act
of 2002, or SAFETY Act). See https://www.safetyact.gov;
Comments on how best to conduct or oversee regulatory
compliance inspections and audits of ammonium nitrate facilities'
records to ensure that regulated ammonium nitrate facilities are
properly maintaining records, to monitor compliance with the
requirements of Subtitle J, and to deter or prevent misappropriation of
ammonium nitrate for use in terrorist acts;
Comments on the economic impacts (both long-term and
short-term, quantifiable and qualitative) of the implementation of
Subtitle J, including potential impacts on State, local, and tribal
governments of the United States; potential impacts on agri-business,
including ammonium nitrate manufacturers, importers, packagers,
distributors, retailers, and end-users including farmers (e.g., whether
current ammonium nitrate purchasers would likely reduce their ammonium
nitrate purchases as a result of a new regulatory regime); and
potential impacts on small businesses;
Comments on the monetary and other costs anticipated to be
incurred by U.S. citizens and others as a result of the new compliance
requirements, such as the costs in time and money that an individual
may incur to obtain an ammonium nitrate registration number. These
costs may or may not be quantifiable and may include actual monetary
outlays, transitional costs incurred to obtain alternative documents,
and the costs that will be incurred in connection with potential delays
at the point of sale;
Comments on a possible fee structure to address some or
all of the costs of this new program, such as registration, TSDB
checks, and issuance of ammonium nitrate registration numbers;
Comments on the benefits of this rulemaking;
Comments on any alternative methods of complying with
Subtitle J; and
Comments on the best methods or processes for interacting
with state and local governments regarding ammonium nitrate security.
[[Page 46911]]
See 73 FR 64280, 64281, section IV--Questions for Commenters.
DHS received comments from 33 organizations and individuals. The
majority of the submissions, 20, were from private companies and trade
associations, including associations affiliated with the farming,
explosives, and mining industries. Three universities provided
comments, as did three government agencies. Six individuals, including
one farmer, also submitted comments.
The topics addressed by the commenters covered a wide range of
issues. The two issues that received the most attention were the
registration process and the feasibility of using substances other than
ammonium nitrate in agricultural operations. DHS received 15 comments
concerning the registration process; all 15 commenters wanted the
registration process to be as simple and straightforward as possible.
Some commenters stated that if a registration process were to be
implemented, then a registrant should receive his/her approval from DHS
within 72 hours. The commenters expressed differing views on the
technological capabilities of the regulated community. Some argued that
computer use was sufficiently common for the entire process to be
automated through an Internet-based portal. As articulated by these
comments, an online process would be fast, inexpensive, and could be
structured to allow individuals to apply from their homes or places of
business. Others argued that computers are not common enough among
ammonium nitrate users, who would either be forced to travel to
different locations to register or to invest in computers. This second
group of commenters believed that registration through an Internet-
based portal would constitute an unjustified burden.
Many commenters believed that regulating ammonium nitrate and not
other types of fertilizer will cause a decrease in ammonium nitrate
usage because of an expected rise in its cost. There was no agreement
on the degree to which the cost of ammonium nitrate use would change,
but multiple commenters indicated that cost would be passed along the
supply chain until it ultimately reaches end-users. If the cost of
ammonium nitrate were to go up, commenters hypothesized that ammonium
nitrate alternatives may become preferable. Some comments suggested
that continued ammonium nitrate use is based on historical ammonium
nitrate use and that using an alternative would have no noticeable
effect on operations. Others argued the opposite, stating that
alternative fertilizers would not serve the needs of certain crops
equally well. Commenters from certain States where ammonium nitrate is
regularly used in agricultural operations indicated that ammonium
nitrate is the best choice for nitrogen application for certain crops.
Other commenters, however, asserted that viable alternatives exist with
respect to the majority of crops for which ammonium nitrate currently
is used as a fertilizer.
There was a general consensus among commenters regarding the need
to avoid duplication of other Federal licensing, regulatory, and
inspection programs. Commenters stated that to be registered under the
ammonium nitrate program could be unnecessary for individuals already
registered under related regulatory programs covering ammonium nitrate
use, such as DHS's Chemical Facility Anti-Terrorism Standards (CFATS),
Department of Transportation (DOT) hazardous materials regulations, and
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regulations.
These commenters noted that ATF's inspection process also could be used
for ammonium nitrate inspections under this program to minimize
inconvenience to ammonium nitrate users.
A number of commenters indicated that some ammonium nitrate is
normally lost as bulk ammonium nitrate moves through the supply chain.
Commenters noted, for example, that equipment used for transporting
bulk ammonium nitrate, such as hoppers, bins, and railcars are not
shift-proof, resulting in incidental spillage of ammonium nitrate
prills, which are the small, bead-like pellets of ammonium nitrate
typically used in the manufacturing, transportation, and bulk use of
ammonium nitrate. Additionally, commenters noted that there is normally
loss during movement throughout the supply chain due to melting or
solidification of ammonium nitrate prills based on nothing more than
ambient temperature and humidity. For instance, commenters noted that
in a 90-ton railcar shipment, it is not unusual for these phenomena to
result in loss of 200-500 pounds of ammonium nitrate. This may result
because ammonium nitrate is hygroscopic in nature (i.e., it readily
absorbs moisture). When ammonium nitrate prills come into contact with
ambient moisture in the air, the prills may cake or meld together,
which can simultaneously increase the overall mass of bulk ammonium
nitrate while reducing its overall volume. These properties cause
significant difficulty in accounting for ammonium nitrate on a fine
scale. Consequently, these commenters stated that DHS should not
require ammonium nitrate users to report losses of magnitudes normally
encountered during ammonium nitrate use and transport.
Several commenters addressed the threshold quantity or percentage
composition of ammonium nitrate triggering regulation under this
program. The universities that commented on the ANPRM addressed the use
of ammonium nitrate in scientific research, while other commenters
addressed the use of ammonium nitrate as a component of cold packs.
These commenters stated that the quantities of ammonium nitrate used in
scientific research and in cold pack manufacturing are so small that
persons conducting scientific research or purchasing and selling cold
packs should not be subjected to a rigorous regulatory scheme. Several
commenters also recommended that DHS should exempt mixtures containing
ammonium nitrate that ATF classified ``explosives.''
In developing this NPRM, DHS carefully considered all public
comments submitted in response to the ANPRM. DHS will respond to the
issues raised therein when responding to the comments received on this
NPRM.
D. Research Efforts and Findings
In support of the effort to develop regulations to implement
Subtitle J, the Department has examined and considered research into a
variety of topics including the security hazards presented by the use
of ammonium nitrate; its detonability; existing Federal and State
ammonium nitrate programs; and voluntary security programs. In the
course of conducting this research, the Department reviewed numerous
materials, including, but not limited to, the following:
A. Bauer, R.D. Heater & J.H. Paterson, Queen's Univ.
Mining Eng'g Dep't, The Sensitivity of Ammonium Nitrate Melts and
Solutions to Projectile Impact (1981).
A. King & A. Bauer, Queen's Univ. Mining Eng'g Dep't,
Shock Initiation Characteristics of Ammonium Nitrate (1980).
R.W. Van Dolah, F.C. Gibson & J.N. Murphy, U.S. Dep't of
Interior, Bureau of Mines, Further Studies on Sympathetic Detonation,
Report of Investigations 6903 (1966).
R.W. Van Dolah, F.C. Gibson & J.N. Murphy, U.S. Dep't of
Interior, Bureau of Mines, Sympathetic Detonation of Ammonium Nitrate
and Ammonium Nitrate-Fuel Oil, Report of Investigations 6746 (1966).
[[Page 46912]]
J.J. Burns, G.S. Scott, G.W. Jones & Bernard Lewis, U.S.
Dep't of Interior, Bureau of Mines, Investigations on the Explosibility
of Ammonium Nitrate, Report of Investigations 4994 (1953).
Information about these materials can be found in the docket for
this NPRM. The Department seeks public comment on whether or not there
are additional studies or other research materials the Department
should consider in support of the development of the final regulations
as well as any copies of such studies or research materials.
1. Security Hazards Presented by Use of Ammonium Nitrate
Ammonium nitrate is a chemical that exists in multiple
concentrations and physical forms, and different concentrations and
forms have different security implications. In the United States, the
principal uses for ammonium nitrate are as a fertilizer or as part of
an explosive mixture. Ammonium nitrate can be sensitized (made more
sensitive to shocks, and thus easier to detonate) with the addition of
organic material. One common example is when fertilizer-grade ammonium
nitrate is mixed with fuel oil and creates an explosive mixture known
as Ammonium Nitrate/Fuel Oil (ANFO). The fuel oil acts as an energy
source. Both ammonium nitrate fertilizers and ANFO have been misused in
acts of terrorism to cause catastrophic damage to human health, safety,
national security, the economy, and critical infrastructure.
Nationwide, fertilizer-grade ammonium nitrate is commonly used in
agricultural operations and the chemical and explosives industries. See
A. King & A. Bauer, 4. Due to its availability in small-scale packaging
(e.g., 50-pound bags), ammonium nitrate is susceptible to theft and
misuse in making improvised explosive devices (IEDs).
Over the years, ammonium nitrate has been used as an explosives
component in terrorist attacks, both domestically and internationally.
The 1995 Murrah Federal Building attack in Oklahoma City claimed the
lives of 168 individuals and demonstrated how ammonium nitrate could be
misused to perpetrate deadly terrorist attacks. See Oklahoma City
National Memorial, A Look at the Numbers, https://www.oklahomacitynationalmemorial.org/secondary.php?section=5&catid=145&id=83 (last visited Aug. 11, 2010).
The Provisional Irish Republican Army also used ammonium nitrate as
part of its London bombing campaign in the early 1980s. See Boyce
Rensberger, Ammonium Nitrate Explosives Are Simple, Easily Made, Widely
Used in Industry, Wash. Post, Apr. 21, 1995, at A28. More recently,
ammonium nitrate was used in the 1998 East African embassy truck
bombings, killing hundreds and injuring thousands at the U.S. embassies
in Dar es Salaam, Tanzania, and Nairobi, Kenya. See Corky Siemaszko,
Wtc Chemicals In Kenya Blast (Aug. 14, 1998), https://www.nydailynews.com/archives/news/1998/08/14/1998-08-14_wtc_chemicals_in_kenya_blast.html (last visited May 11, 2011). Ammonium
nitrate was also used in a November 2003 series of truck bombings in
Turkey, killing over 50 individuals and injuring an additional 700
individuals at multiple locations across Istanbul. See Lauren Johnston,
CBSNews.com, Fertilizer Used in Terror Bombs (Apr. 14, 2004), https://www.cbsnews.com/stories/2004/04/14/world/main611898.shtml (last visited
Aug. 11, 2010). Additionally, since the events of 9/11, stores of
ammonium nitrate have been confiscated during raids on terrorist sites
around the world, including raids on sites in Canada (see Steve
Schippert, Threats Watch, Canada Raid Breaks Cell: 3 Tons of Explosives
Found (June 3, 2006), https://threatswatch.org/inbrief/2006/06/canada-raid-breaks-cell-3-tons/ (last visited Aug. 11, 2010)), England (see
BBC News, Ammonium Nitrate `Easy to Find' (Mar. 30, 2004), https://news.bbc.co.uk/2/hi/uk_news/3582921.stm (last visited Aug. 11, 2010)),
and the Philippines (see U.S. Dep't of State, Office of the Coordinator
for Counterterrorism, Country Reports on Terrorism 2005, p. 78).
2. Detonability of Ammonium Nitrate
It is understood that under proper conditions pure (unblended)
ammonium nitrate is detonable. Making reliable explosives from ammonium
nitrate is simplified through the addition of a fuel component with
which it can react. In addition, though rare, accidental explosions
have occurred during the manufacture, storage, and transport of
ammonium nitrate. See J.J. Burns, G.S. Scott, G.W. Jones & Bernard
Lewis, 1. Despite the explosive hazard presented by ammonium nitrate,
however, it has been successfully and safely used for decades as a
fertilizer. See R.W. Van Dolah, F.C. Gibson & J.N. Murphy; Report of
Investigations 6746, 2. There is little scientific consensus about the
critical diameter of an explosive required for detonation and the size
of the conventional explosive charge (i.e., booster) necessary to
detonate unblended ammonium nitrate. These questions about detonability
all receive research attention today, and have also received research
attention in the past. See A. Bauer, R.D. Heater & J.H. Paterson, 1, 5
(1981). Preliminary results of ongoing research suggest that unblended
ammonium nitrate can be difficult to detonate with any reliability. To
date, terrorists typically have employed combinations of ammonium
nitrate and fuel oil when utilizing ammonium nitrate in terrorist
attacks.
To better understand the detonability of ammonium nitrate and its
use in explosives, the Department reviewed, and considered the results
of, a study conducted by Sandia National Laboratory. Due to the
detailed nature of its content and findings, however, this study, which
is ``For Official Use Only,'' is not available to the public. The
Department has also consulted with the Federal Bureau of
Investigation's (FBI) Explosives Unit. This consultation helped the
Department to understand the detonability of unblended ammonium
nitrate, the detonability of ammonium nitrate mixtures, and the role
ammonium nitrate plays in IED construction and terror-related
activities.
The Department seeks public comment on the detonability of ammonium
nitrate.
3. Federal Regulations Addressing Ammonium Nitrate
In developing this proposed rule, DHS reviewed other Federal
regulations that cover portions of the ammonium nitrate supply chain or
deal with identity verification; a number of these other regulations
are discussed below. DHS examined these regulations for potential
overlap with the proposed Ammonium Nitrate Security Program. In
developing this NPRM, the Department collaborated with many of its
Federal security partners in an attempt to harmonize this proposed rule
with other regulatory regimes.
a. Chemical Facility Anti-Terrorism Standards
In addition to the authority granted to DHS by Subtitle J, the
Department had authority under section 550 of the Homeland Security
Appropriations Act of 2007, Pub. L. 109-295, to issue regulations
governing the security of high-risk chemical facilities. Under that
authority, the Department promulgated an interim final rule titled the
Chemical Facility Anti-Terrorism Standards (CFATS), 6 CFR part 27. See
72 FR 17688 (April 9, 2007). Under CFATS, the Department regulates the
security of high-risk chemical facilities, including high-risk chemical
facilities that possess ammonium nitrate.
To help the Department identify high-risk chemical facilities under
CFATS,
[[Page 46913]]
the Department adopted a list of chemicals of interest (COI) as
Appendix A to CFATS. See 72 FR 65396 (November 20, 2007). Any chemical
facility that possesses any COI at or above the applicable screening
threshold quantity specified in Appendix A for that COI must complete
and submit to DHS certain consequence-based information via an online
tool called the Chemical Security Assessment Tool Top-Screen. Any
chemical facility preliminarily determined to be high-risk after DHS
review of the chemical facility's Top-Screen must then meet additional
security-related requirements under CFATS. Due to the risks ammonium
nitrate may pose if either (1) exploded on-site, or (2) stolen or
diverted to produce IEDs, ammonium nitrate (in both explosive and
specified fertilizer forms) is one of over 300 COI that DHS listed in
Appendix A to CFATS. See 72 FR 65407-65408, 65410.
Although Subtitle J and CFATS share a goal of preventing terrorism
risks associated with ammonium nitrate, the scopes and methods of
regulation under Subtitle J and CFATS are very different. The CFATS
rule--which addresses hundreds of chemicals in addition to ammonium
nitrate--is directed at the security of high-risk chemical facilities.
The CFATS rule does not, however, impose any limitations on the sale or
transfer of ammonium nitrate. By contrast, Subtitle J does not address
the physical security of ammonium nitrate facilities but does impose
certain conditions on the sale or transfer of ammonium nitrate (e.g.,
requiring that ammonium nitrate may only be transferred between
registered ammonium nitrate sellers and registered ammonium nitrate
purchasers (or purchasers' agents)).
In developing the rule required by Subtitle J, DHS intends to draw
on information gained under the CFATS program about ammonium nitrate,
and will work to ensure that CFATS and the new Subtitle J program
complement each other. For additional discussion of the CFATS program's
interaction with the proposed ammonium nitrate rule, see section
III.A.1 of this NPRM.
b. U.S. Coast Guard Maritime Security Regulations
The U.S. Coast Guard (USCG) regulates ammonium nitrate under
multiple programs. Under the Maritime Transportation Security Act
(MTSA), 46 U.S.C. 70101 et seq., USCG has authority to regulate
security both aboard maritime vessels and at facilities located in,
under, or adjacent to any waters subject to the jurisdiction of the
United States. Through its MTSA regulations, USCG regulates the
security of vessels transporting ammonium nitrate, as well as the
security of certain facilities that store, manufacture, use, or
distribute ammonium nitrate. In addition, USCG regulates the
transportation of ammonium nitrate, and the loading or unloading of
ammonium nitrate from vessels at any waterfront facility. See 33 CFR
part 126 (regulating the handling of ammonium nitrate at waterfront
facilities, and establishing penalties for handling ammonium nitrate
without a permit); 46 CFR 148.01-7 (regulating the bulk shipment of
ammonium nitrate).
USCG has also designated as a ``Certain Dangerous Cargo'' any
ammonium nitrate that is not certain dangerous cargo residue. See 33
CFR 160.204. Based on this designation, each vessel carrying ammonium
nitrate on bodies of water other than certain portions of inland rivers
must submit a Notice of Arrival prior to arrival in port. See 33 CFR
part 160, subpart C. The Notice of Arrival must contain certain
information, including the name of the vessel's owner and operator, the
names of the last five ports or places visited, the amount of ammonium
nitrate on board, and information pertaining to each crewmember aboard.
See 33 CFR 160.206. Owners and operators of U.S.-flagged vessels
carrying ammonium nitrate in bulk must have, and must operate in
compliance with, USCG-approved vessel security plans. See 33 CFR
104.410. Likewise, owners and operators of facilities that receive
vessels carrying ammonium nitrate in bulk must have and operate in
compliance with USCG-approved facility security plans. See 33 CFR
105.410.
c. Transportation Security Administration
The Transportation Security Administration (TSA) has broad
authority over security of all modes of transportation. These
authorities are found primarily in the Aviation and Transportation
Security Act of 2001 (ATSA), Public Law 107-71, which regulates the
transportation of cargo, including ammonium nitrate. ATSA broadly
allows TSA to ``exercise * * * powers, relating to transportation
security as [TSA] considers appropriate.'' See 49 U.S.C. 114. TSA
exercises its authority under ATSA in part by performing threat
assessments on truck drivers who must receive Hazardous Materials
Endorsements in order to be authorized to transport ammonium nitrate.
d. Bureau of Alcohol, Tobacco, Firearms, and Explosives
ATF, a principal law enforcement agency within the U.S. Department
of Justice, is dedicated to preventing terrorism, reducing violent
crime, and protecting our nation. Among its authorities, under 27 CFR
part 555, ATF is responsible for regulating the use of explosives,
which are defined by inclusion in ATF's annual List of Explosive
Materials, ATF Publication 5400.8. See 75 FR 1085 (Jan. 8, 2010)
(notice of annual list). While ATF does not consider ammonium nitrate
an explosive, ammonium nitrate explosive mixtures and ANFO are included
in ATF's list of explosive materials. ATF regulations require that no
person, other than a licensee or permittee, knowingly transport or
receive any explosive material (including ANFO). See 27 CFR 555.26(a).
Section III.A.3 of this NPRM discusses the interaction of ATF
regulations with the proposed ammonium nitrate rule.
e. Department of Transportation Hazardous Materials Regulations
The Federal Hazardous Materials Transportation Law (Federal Hazmat
Law, 49 U.S.C. 5101 et seq.) authorizes the Secretary of Transportation
to ``prescribe regulations for the safe transportation, including
security, of hazardous material in intrastate, interstate, and foreign
commerce.'' The Secretary of Transportation has delegated this
authority to Pipeline and Hazardous Materials Safety Administration
(PHMSA). PHMSA, through its Hazardous Materials Regulations (HMR; 49
CFR Parts 171-180), prescribes transportation requirements for
hazardous materials, including ammonium nitrate.
The Hazardous Materials Table (HMT; 49 CFR 172.101) lists several
shipping descriptions for ammonium nitrate and ammonium nitrate
mixtures or solutions. These descriptions vary based on the properties
of the particular ammonium nitrate at issue. As such, a shipment of
ammonium nitrate may be classed and regulated as a Division 1.1D
explosive, Division 5.1 oxidizer, or Class 9 miscellaneous hazardous
material. For transport in commerce these materials must comply with
all applicable HMR requirements (e.g., packaging, shipping papers,
marking, labeling, placarding, security plans, emergency response
information, training, etc.).
f. Department of Commerce
Under the Export Administration Regulations (EAR), the U.S.
Department
[[Page 46914]]
of Commerce's Bureau of Industry and Security regulates the export and
re-export of ammonium nitrate. A ``re-export'' is the shipment or
transmission of an item subject to the EAR from one foreign country
(i.e., a country other than the United States) to another foreign
country. A re-export also occurs when there is release of technology or
software subject to the EAR to a foreign national outside the United
States. See 15 CFR 734.2, and 15 CFR part 772 (definition of ``re-
export'').
Specifically, under the EAR, licensees are authorized to export or
re-export ammonium nitrate only to certain countries listed in the EAR,
and consistent with the terms of the issued export license. See 15 CFR
742.6 and 15 CFR 747.3. Under the EAR, ammonium nitrate is defined to
include fertilizers and fertilizer blends containing more than 15% by
weight ammonium nitrate, except liquid fertilizers (containing any
amount of ammonium nitrate) or dry fertilizers which contain less than
15% by weight ammonium nitrate. See 15 CFR part 774, Supplement 1 for
item-specific export licensing information. Individuals involved in the
domestic sale or transfer of ammonium nitrate, as defined by DHS, at
U.S.-based exporters of ammonium nitrate would be required to register
with the Department under the proposed Ammonium Nitrate Security
Program.
4. State Regulations Addressing Ammonium Nitrate
Virtually all 50 States regulate ammonium nitrate in some manner,
based on its use either as a fertilizer, an explosive, or both.
Although not in universal agreement, relevant State regulations
typically define ammonium nitrate as an ammonium and nitrate mixture
containing not less than 33 percent nitrate; require purchasers and
sellers of ammonium nitrate to register with a governing State body;
and require sellers of ammonium nitrate to maintain records of sales of
ammonium nitrate for at least two years. Many State regulations grant
State officials both the authority to inspect facilities possessing or
distributing ammonium nitrate and the authority to fine or otherwise
penalize facilities or individuals who fail to comply with regulations
concerning ammonium nitrate.
5. Voluntary Programs Addressing Ammonium Nitrate
In addition to efforts required by existing Federal and State
regulations, many producers, distributors, and users of ammonium
nitrate have undertaken voluntary efforts to secure the ammonium
nitrate supply chain. Chief among these voluntary efforts is the
``America's Security Begins With You'' program. This program is a
voluntary ``know-your-customer'' program developed jointly by the ATF
and members of the fertilizer industry following the 1995 attack on the
Alfred P. Murrah Federal Building in Oklahoma City. The Department
believes that, in many instances, voluntary programs already in place
can serve as good building blocks for meeting regulatory requirements.
The Department seeks comments providing details on voluntary programs
related to ammonium nitrate security and how they could potentially be
leveraged by ammonium nitrate users to meet the requirements of the
proposed rule.
III. Discussion of Proposed Rule: Implementing Subtitle J
What follows is a discussion of the approach DHS is proposing to
take in implementing Subtitle J. Where appropriate, potential
alternative approaches are also discussed. DHS welcomes public comment
on the proposed rule, and also on potential alternative approaches.
The cost to the public of this proposed rule ranges from $300
million to $1.041 billion over 10 years at a 7% discount rate. The
primary estimate is the mean which is $671 million. For comparison, at
a 3% discount rate, the cost of the proposed rule ranges from $364
million to $1.3 billion with a primary (mean) estimate of $814 million.
The average annualized cost for the program ranges from $43 million to
$148 million (with a mean of $85 million), also employing a 7% discount
rate. The following two tables present the summary discounted total and
annualized costs for the rule.
OMB Accounting Statement of Annualized Costs and Benefits Program Years 1-10)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3 Percent discount rate 7 Percent discount rate
-----------------------------------------------------------------------------------------------
Primary Minimum Maximum Primary Minimum Maximum
estimate estimate estimate estimate estimate estimate
(millions) (millions) (millions) (millions) (millions) (millions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs
Annualized Monetized Costs.............................. $95.4 $42.7 $148.1 $95.5 $42.7 $148.2
Benefits
-----------------------------------------------------------------------------------------------
Qualitative (un-quantified) Benefits.................... Reduced vulnerability to terrorist attack using ammonium nitrate.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Summary of Costs ($ Millions, 7 Percent Discount Rate)--by Program Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
Audits/
Registration Appeals Point of sale Recordkeeping inspections Federal costs * Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
PY1..................................... 18.9 0.1 67.5 6.2 0.4 9.8 102.7
PY2..................................... 4.4 0.0 62.6 4.4 0.4 6.5 78.2
PY3..................................... 4.3 0.0 58.4 4.1 0.4 6.0 73.2
PY4..................................... 4.2 0.0 54.7 3.8 0.4 5.7 68.7
PY5..................................... 4.2 0.0 51.1 3.6 0.3 5.3 64.4
PY6..................................... 8.9 0.0 48.1 3.4 0.3 5.1 65.8
PY7..................................... 6.8 0.0 44.6 3.1 0.3 4.7 59.5
PY8..................................... 6.7 0.0 41.7 3.0 0.3 4.4 56.0
PY9..................................... 6.6 0.0 39.0 2.8 0.2 4.2 52.6
PY10.................................... 6.5 0.0 36.4 2.6 0.2 3.9 49.5
---------------------------------------------------------------------------------------------------------------
Total............................... 71.3 0.1 503.8 36.8 3.0 55.3 670.6
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Reporting of Thefts rounds to zero in individual years and are omitted from this table but included in the total and regulatory analysis.
[[Page 46915]]
DHS also conducted a break-even analysis that examines the required
reduction in the potential frequency of terrorist attacks involving
ammonium nitrate. The proposed rule would be cost effective if it
resulted in a reduction in attack frequency by at least one attack the
size of the Oklahoma City bombing (which occurred 16 years ago) per 14
years. For discussion of this analysis, and for explanation of other
cost calculations, please see section IV of this NPRM, which discusses
various regulatory analyses conducted by DHS.
A. Ammonium Nitrate Subject to Subtitle J Requirements (See Section
31.105 of the Proposed Rule)
This section will address the definition of ammonium nitrate.
Congress has defined ammonium nitrate for purposes of Subtitle J to
include ``solid ammonium nitrate that is chiefly the ammonium salt of
nitric acid and contains not less than 33 percent nitrogen by weight.''
See 6 U.S.C. 488(1)(A). DHS proposes to use this definition of solid
ammonium nitrate in section 31.105 of the proposed rule.
Also included in the definition of ammonium nitrate for purposes of
Subtitle J is ``any mixture containing a percentage of ammonium nitrate
that is equal to or greater than the percentage determined by [DHS].''
See 6 U.S.C. 488(1)(B). In establishing this mixture percentage for
purposes of Subtitle J, the Department was required to consult with the
heads of appropriate Federal departments and agencies, including the
Secretary of Agriculture, and to provide notice and an opportunity for
comment. See 6 U.S.C. 488a(b). That consultation is discussed below.
This section will also discuss the Department's consideration of a
minimum threshold amount of ammonium nitrate that would have to change
hands as part of a sale or transfer before that sale or transfer
(including the individuals participating in the transaction) would be
subject to Subtitle J's requirements. This section will also discuss
the Department's discretionary ability to exempt from regulation ``a
person producing, selling, or purchasing ammonium nitrate exclusively
for use in the production of an explosive under a license or permit
issued under chapter 40 of title 18, United States Code.'' See 6 U.S.C.
488a(f).
1. Mixture Requirement
Mixtures containing high percentages of ammonium nitrate can be
effectively used in bomb-making. By proposing to include a mixture
requirement in the Ammonium Nitrate Security Program, the Department is
seeking to capture under this rule mixtures that terrorist bomb-makers
would be most interested in acquiring. To assist in determining an
appropriate threshold percentage of ammonium nitrate in a mixture for
purposes of Subtitle J, the Department reviewed multiple detonability
studies, examined mixture requirements employed by other Federal and
State regulatory programs, and consulted with a variety of Federal,
State, and private sector entities. Based on this research and after
consultation with the FBI's Explosives Unit, the Department proposes to
define ammonium nitrate in section 31.105 to include any mixture that
is 30 percent or more ammonium nitrate by weight. By setting the
mixture requirement at 30 percent, the Department believes the proposed
rule will capture those ammonium nitrate mixtures that could be most
effectively used in bomb-making, or that could be most effectively
retooled or reconfigured for use in bomb-making.
The Department is aware that this proposed mixture requirement
differs from the mixture requirements used for ammonium nitrate under
CFATS. Under CFATS, a mixture containing ammonium nitrate is counted
towards the screening threshold quantity for ammonium nitrate if
ammonium nitrate makes up 33 percent or more of the mixture. Therefore,
this proposed mixture requirement for this rule would apply more
broadly than the mixture requirement in CFATS; the ammonium nitrate
mixtures covered under this proposed requirement would include ammonium
nitrate mixtures containing between 30 and 33 percent ammonium nitrate
by weight, while CFATS' mixture requirements do not cover mixtures
containing between 30 and 33 percent ammonium nitrate by weight.
There are two main reasons for the difference between the CFATS
approach to ammonium nitrate mixtures and the proposed Ammonium Nitrate
Security Program approach to mixtures. First, the two mixture
requirements exist to accomplish different goals. The CFATS mixture
requirements exist to help the Department identify potentially high-
risk chemical facilities subject to CFATS. The CFATS mixture
requirements are not an assertion by the Department that only ammonium
nitrate mixtures containing 33 percent or more ammonium nitrate are
vulnerable to misuse in acts of terrorism. The proposed Ammonium
Nitrate Security Program mixture requirement, however, is solely meant
to identify ammonium nitrate mixtures that have the potential to be
misused in acts of terrorism. Accordingly, a more conservative and
inclusive mixture requirement is appropriate for Subtitle J.
Second, during the development of this proposed rule, the
Department obtained information from the Department of Justice,
indicating that under certain circumstances, experiments that have
shown that mixtures containing as low as 30 percent ammonium nitrate by
weight can be used as components of viable explosives. This information
was unavailable to DHS when it wrote and published the CFATS mixture
requirements. In light of this evidence and the purpose for which the
Subtitle J mixture requirement is being established, the Department
believes that setting the proposed mixture requirement at 30 percent
ammonium nitrate is the correct course of action.
The Department's proposed mixture requirement would exempt persons
and entities from coverage under the proposed rule only to the extent
that they possess or obtain mixtures containing less than 30 percent
ammonium nitrate by weight. The proposed requirement would not exempt
persons and entities from coverage to the extent that they possess or
obtain solid ammonium nitrate which they intend to incorporate into
ammonium nitrate mixtures. The Department thus proposes that the
purchase, sale, transfer, or acquisition of solid ammonium nitrate to
be incorporated into mixtures will be treated the same as the purchase,
sale, transfer, or acquisition of ammonium nitrate not to be
incorporated into mixtures.
The Department is interested in receiving comments on this proposed
approach, including comments on the Department's proposal to define
ammonium nitrate to include any mixture that is 30 percent or more
ammonium nitrate by weight. DHS requests comments addressing the
appropriateness of this percentage, comments addressing whether it
would be more appropriate to express this percentage as a percentage of
mixture weight or as a percentage of mixture volume, and comments
discussing whether a higher or lower mixture percentage would be more
appropriate. The Department is also interested in comments addressing
possible consumer and retail impacts of the proposed mixture
requirement, and on the detonability of ammonium nitrate and ammonium
nitrate mixtures of varying percentages.
[[Page 46916]]
2. Threshold Weight and Individual Products Exemptions
The Department's understanding is that, outside of small sample or
research quantities, ammonium nitrate is primarily sold either in bulk
or in pre-packaged bags containing no less than 50 pounds of ammonium
nitrate. Mixtures that contain small percentages or amounts of ammonium
nitrate are also found in various retail products, including home and
garden products (e.g., fertilizer mixtures) and cold packs.
Under Subtitle J, the Department has authority to regulate
transactions (and the individuals conducting them) involving any amount
of ammonium nitrate. The Department is proposing to establish a
threshold weight to which the regulation would apply, and is
considering whether the marginal security benefits gained from
regulating transactions involving de minimis quantities of ammonium
nitrate are outweighed by the costs of regulating those transactions.
Similarly, the Department is considering whether the security benefits
gained from regulating transactions involving products packaged such
that they are unlikely to be used to make an explosive are outweighed
by the costs of regulating those transactions. To avoid capturing these
transactions under its regulatory regime, and to avoid complicating
ammonium nitrate transactions that may only pose a de minimis security
risk, the Department is considering applying both a minimum threshold
weight and an individual products exemption for cold packs to this
rulemaking.
The Department is considering establishing a threshold weight
whereby each transaction would be subject to Subtitle J's regulatory
requirements only if the transaction involves the sale, transfer, or
purchase of ammonium nitrate that, in the aggregate, is equal to or
greater than the threshold weight. Specifically, section 31.105 of the
proposed rule contains a 25 pound threshold weight. The Department
believes that this weight is low enough to prevent a bad actor from
easily acquiring a sufficient quantity of ammonium nitrate to pose a
terrorist threat. The Department also believes that this weight is high
enough to avoid capturing small laboratory quantities of ammonium
nitrate or transactions involving other de minimis quantities of
ammonium nitrate that are unlikely to be misappropriated for use in a
terrorist act. The Department believes that such de minimis quantities
are unlikely to be misappropriated for use in a terrorist act due to
the large number of transactions in de minimis quantities that would be
required to accumulate sufficient ammonium nitrate to construct an
explosive that poses a significant terrorist threat. This threshold
should also reduce the economic impact of the Ammonium Nitrate Security
Program by avoiding regulation of those transactions that present de
minimis security risk.
In order to determine the utility of this approach, the Department
solicits comments on the manners in which ammonium nitrate is sold and
packaged, the manners and frequencies of use of ammonium nitrate in
small quantities, and the utility of setting a threshold weight. The
Department additionally requests comments addressing the
appropriateness of the proposed 25 pound threshold weight.
Specifically, the Department asks whether another threshold weight,
such as 5 pounds, 10 pounds, 50 pounds, or another quantity, would
better achieve the desired results of the proposed rule.
If the Ammonium Nitrate Security Program does include a threshold
weight, DHS proposes that the threshold weight would apply to mixtures
as well as to unblended ammonium nitrate. As such, the proposed rule
would apply to an ammonium nitrate mixture only if (1) the mixture
weighs at least the threshold weight, and (2) the mixture contains at
least 30 percent ammonium nitrate by weight. Both conditions would need
to be satisfied in order for the proposed rule to apply to a given
mixture.
The Department proposes that when applying the threshold weight to
an ammonium nitrate mixture, the total weight of the mixture should be
counted, as opposed to just the weight of the ammonium nitrate in the
mixture. In other words, all ten pounds of a single ten-pound bag (or
all ten pounds of ten one-pound bags) of fertilizer mixture containing
30 percent ammonium nitrate by weight would count towards the threshold
weight, and not just the three pounds which is the weight of the
ammonium nitrate portion of that mixture. The Department believes this
approach would be more effective at preventing a bad actor from
acquiring sufficient qua
