    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

     H.R. 908, A BILL TO EXTEND THE AUTHORITY OF THE SECRETARY OF HOMELAND
      SECURITY TO MAINTAIN THE CHEMICAL FACILITY ANTI-TERRORISM STANDARDS
                                    PROGRAM

    =======================================================================

                                    HEARING

                                   BEFORE THE

                  SUBCOMMITTEE ON ENVIRONMENT AND THE ECONOMY

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 31, 2011

                                   __________

                               Serial No. 112-28

          Printed for the use of the Committee on Energy and Commerce

                            energycommerce.house.gov

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                        COMMITTEE ON ENERGY AND COMMERCE

                              FRED UPTON, Michigan
                                     Chairman

    JOE BARTON, Texas                    HENRY A. WAXMAN, California
      Chairman Emeritus                    Ranking Member
    CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
    ED WHITFIELD, Kentucky                 Chairman Emeritus
    JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
    JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
    MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
    GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
    LEE TERRY, Nebraska                  ANNA G. ESHOO, California
    MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
    SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
      Vice Chair                         DIANA DeGETTE, Colorado
    JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
    TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
    MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
    MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
    BRIAN P. BILBRAY, California         JAY INSLEE, Washington
    CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
    PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
    STEVE SCALISE, Louisiana             ANTHONY D. WEINER, New York
    ROBERT E. LATTA, Ohio                JIM MATHESON, Utah
    CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
    GREGG HARPER, Mississippi            JOHN BARROW, Georgia
    LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
    BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin
    BRETT GUTHRIE, Kentucky              Islands
    PETE OLSON, Texas
    DAVID B. McKINLEY, West Virginia
    CORY GARDNER, Colorado
    MIKE POMPEO, Kansas
    ADAM KINZINGER, Illinois
    H. MORGAN GRIFFITH, Virginia

                                     _____

                  Subcommittee on Environment and the Economy

                             JOHN SHIMKUS, Illinois
                                     Chairman
    TIM MURPHY, Pennsylvania             GENE GREEN, Texas
      Vice Chairman                        Ranking Member
    ED WHITFIELD, Kentucky               TOMMY BALDWIN, Wisconsin
    JOSEPH R. PITTS, Pennsylvania        G.K. BUTTERFIELD, North Carolina
    MARY BONO MACK, California           JOHN BARROW, Georgia
    JOHN SULLIVAN, Oklahoma              DORIS O. MATSUI, California
    CHARLES F. BASS, New Hampshire       FRANK PALLONE, Jr., New Jersey
    ROBERT E. LATTA, Ohio                DIANA DeGETTE, Colorado
    CATHY McMORRIS RODGERS, Washington   LOIS CAPPS, California
    GREGG HARPER, Mississippi            JOHN D. DINGELL, Michigan
    BILL CASSIDY, Louisiana              HENRY A. WAXMAN, California (ex
    CORY GARDNER, Colorado                   officio)
    JOE BARTON, Texas
    FRED UPTON, Michigan (ex officio)

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. John Shimkus, a Representative in Congress from the State of
      Illinois, opening statement....................................     1
        Prepared statement...........................................     2
    Hon. Gene Green, a Representative in Congress from the State of
      Texas, opening statement.......................................     6
    Hon. Tim Murphy, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     7
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................     8
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, prepared statement...................................   109
    Hon. Joe Barton, a Representative in Congress from the State of
      Texas, prepared statement......................................   111

                                   Witnesses

    Rand Beers, Under Secretary, National Protection and Programs
      Directorate, U.S. Department of Homeland Security..............     9
        Prepared statement...........................................    11
        Answers to submitted questions...............................   113
    Andrew K. Skipp, President and Chief Executive Officer, Hubbard-
      Hall, Inc., on behalf of the National Association of Chemical
      Distributors...................................................    54
        Prepared statement...........................................    56
        Answers to submitted questions...............................   121
    David C. Tabar, CSP, Global Director of Safety, Sherwin-Williams
      Company, on behalf of the American Coatings Association........    65
        Prepared statement...........................................    67
        Answers to submitted questions...............................   124
    William E. Allmond IV, Vice President, Government Relations,
      Society of Chemical Manufacturers and Affiliates...............    73
        Prepared statement...........................................    75
        Answers to submitted questions...............................   125
    James S. Frederick, Assistant Director, Health, Safety, and
      Environment, United Steelworkers...............................    82
        Prepared statement...........................................    85

                               Submitted Material

    H.R. 908, A Bill to extend the authority of the Secretary of
      Homeland Security to maintain the Chemical Facility Anti-
      Terrorism Standards program....................................     4
    Letter of March 28, 2001, from Randall S. Dearth, President and
      CEO, LANXESS Corporation, to Mr. Murphy........................    38
    Letter of March 30, 2011, from Cal Dooley, President and CEO,
      American Chemistry Council, to Mr. Shimkus and Mr. Green,
      submitted by Mr. Murphy........................................    39
    Letter of March 29, 2011, from Charles T. Drevna, President,
      National Petrochemical & Refiners Association, to Members of
      Congress, by Mr. Green.........................................    45
    Written statement of March 31, 2011, from the National
      Petrochemical & Refiners Association...........................    47
    Written statement of March 31, 2011, from Hon. Charles W. Dent, a
      Representative in Congress from the Commonwealth of
      Pennsylvania...................................................   106

     H.R. 908, A BILL TO EXTEND THE AUTHORITY OF THE SECRETARY OF HOMELAND
      SECURITY TO MAINTAIN THE CHEMICAL FACILITY ANTI-TERRORISM STANDARDS
                                    PROGRAM

                                  ----------

                            THURSDAY, MARCH 31, 2011

                      House of Representatives,
           Subcommittee on Environment and the Economy,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 9:07 a.m., in
    room 2322 of the Rayburn House Office Building, Hon. John
    Shimkus (chairman of the subcommittee) presiding.
        Members present: Representatives Shimkus, Murphy,
    Whitfield, Bass, Latta, McMorris Rodgers, Harper, Cassidy,
    Gardner, Green, Butterfield, Barrow, and Waxman (ex officio).
        Staff present: David McCarthy, Chief Counsel, Environment
    and Economy; Tina Richards, Senior Policy Advisor, Chairman
    Emeritus; Gerald S. Couri, Senior Environment Policy Advisor;
    Chris Sarley, Policy Coordinator, Environment and Economy; Alex
    Yergin, Legislative Clerk; Jackie Cohen, Democratic Counsel;
    Greg Dotson, Democratic Energy and Environment Staff Director;
    Caitlin Haberman, Democratic Policy Analyst; and Karen
    Lightfoot, Democratic Communications Director and Senior Policy
    Advisor.
        Mr. Shimkus. I would like to call the hearing to order. And
    I will start by recognizing myself for 5 minutes.

      OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ILLINOIS

        Today we will hold our first legislative hearing on H.R.
    908, a bill that will give regulatory certainty, while
    providing the necessary security to keep chemical facilities,
    the employees who work there, and the American public safe.
        Under the leadership of Chairman Emeritus Barton, language
    authorizing the creation of the Chemicals Facility Anti-
    Terrorism Standards Act, which we know as CFATS, became law
    during the 109th Congress. CFATS takes a common-sense approach
    to chemical facility security by allowing the Department of
    Homeland Security to register facilities and determine where
    the biggest security threats exist. This is done through the
    development of risk-based standards that greatly reduce or
    eliminate vulnerabilities. To date, this framework has been
    used successfully, with thousands of facilities around the
    country identified, and industry working collaboratively with
    DHS to comply with regulations. It is important that these
    efforts move forward because the continuation of the CFATS
    program remains critical to our national security.
        Introduced by Vice-Chairman Tim Murphy and Ranking Member
    Gene Green, H.R. 908 will allow our antiterrorism security
    efforts at chemical facilities across the country to remain
    strong and the law underpinning them to remain in effect. At
    the same time it gives DHS time to fully implement this law,
    but most importantly, it provides a signal of clarity to
    business that they will not face uncertainty, fostering job
    creation and getting our economy back on track. I am encouraged
    by the bipartisan effort with introduction of this bill. It has
    played no small part in us holding this legislative hearing
    today and I look forward to continuing these efforts together.
        I appreciate Under Secretary Beers for working with us on
    his schedule to make sure he could testify today and that is
    why we are starting a little bit earlier than we normally do. I
    look forward to an update on the Department's progress as well
    as its thoughts on CFATS moving forward.
        Regarding our second panel, CFATS is a law that affects
    facilities with chemicals, not just chemical facilities. I
    believe it is important for this committee to hear from some of
    those interests. DHS's own information shows that some
    universities, hospitals, warehouses, distributors, and paint
    manufacturers are considered high-risk sites under CFATS. I
    welcome these interests and all our members on the second
    panel. I am equally interested in hearing how their sectors
    have managed implementation, whether they think major new
    additions to the law are warranted, and what type of affects an
    extension of CFATS could have moving forward.
        Finally, I want to raise one more matter in case there have
    been many questions. As everyone knows, our committee has sole
    jurisdiction over the Safe Drinking Water Act and existing
    drinking water security program at EPA. While I am not opposed
    to looking at this issue separately and at a later date, the
    fact of the matter is CFATS is set to expire very shortly and
    the drinking water provisions aren't. In a true risk-based
    spirit, we are going to attack the problem that is the most
    pressing first and then later look into seeing whether
    something more needs to be done in the other area.
        My time has expired. I will look for any one of my
    colleagues who may want a minute and 30, and if not, I will
    yield back my time and yield to the ranking member, Mr. Green
    from Texas, for 5 minutes.
        [The prepared statement of Mr. Shimkus follows:]

                    Prepared Statement of Hon. John Shimkus

        The Subcommittee will now come to order. Today we will hold
    our first legislative hearing on H.R. 908, a bill that will
    give regulatory certainty while providing the necessary
    security to keep chemical facilities, the employees who work
    there, and the American public safe.
        Under the leadership of Chairman Emeritus Barton, language
    authorizing the creation of the Chemical Facilities Anti-
    terrorism Standards Act (CFATS) became law during the 109th
    Congress. CFATS takes a common sense approach to chemical
    facility security by allowing the Department of Homeland
    Security (DHS) to register facilities and determine where the
    biggest security threats exist. This is done through the
    development of risk-based standards that greatly reduce or
    eliminate vulnerabilities. To date this framework has been used
    successfully, with thousands of facilities around the country
    identified, and industry working collaboratively with DHS to
    comply with regulations. It is important that these efforts
    move forward because the continuation of the CFATS program
    remains critical to our national security.
        Introduced by Vice-Chair Tim Murphy and Ranking Member Gene
    Green, H.R. 908 will allow our anti-terrorism security efforts
    at chemical facilities across the country to remain strong and
    the law underpinning them to remain in effect. At the same time
    it gives DHS time to fully implement this law, but most
    importantly, it provides a signal of clarity to businesses that
    they will not face uncertainty; fostering job creation and
    getting our economy back on track. I'm encouraged by the bi-
    partisan effort with introduction of this bill. It has played
    no small part in us holding this legislative hearing today and
    I look forward to continuing these efforts together.
        I appreciate Under Secretary Beers for working with us on
    his schedule to make sure he could testify today. I look
    forward to an update on the Department's progress as well as
    its thoughts on CFATS moving forward.
        Regarding our second panel, CFATS is a law that affects
    facilities with chemicals, not just chemical facilities. I
    believe it is important for this committee to hear from some of
    those other interests. DHS's own information shows that some
    universities, hospitals, warehouses, distributors, and paint
    manufacturers are considered high risk sites under CFATS. I
    welcome these interests and all our members on the second
    panel. I am equally interested in hearing how their sectors
    have managed implementation, whether they think major new
    additions to the law are warranted, and what type of affects an
    extension of CFATS could have moving forward.
        Finally, I want to raise one more matter in case there may
    be questions. As everyone knows, our committee has sole
    jurisdiction over the Safe Drinking Water Act and the existing
    drinking water security program at EPA. While I am not opposed
    to looking at that issue separately and at a later date, the
    fact of the matter is CFATS is set to expire very shortly and
    the drinking water provision aren't. In a true risk-based
    spirit, we are going to attack the problem that is the most
    pressing first and then later look into seeing whether
    something more needs to be done in that area.
        My time has expired, and I yield 5 minutes to the ranking
    member of the subcommittee, the gentleman from Texas and
    cosponsor of H.R. 908, Ranking Member Green.
        [H.R. 908 follows:]

        [GRAPHIC] [TIFF OMITTED] T7321.001

        [GRAPHIC] [TIFF OMITTED] T7321.002

       OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF TEXAS

        Mr. Green. Thank you, Mr. Chairman, for holding the
    legislative hearing today on H.R. 908, the full implementation
    of the Chemical Facility Anti-Terrorism Standards Act
    introduced by Representative Tim Murphy and myself.
        Chemical facility security is extremely important in the
    protection of public health and safety and particularly in our
    congressional district in Houston. The Houston Ship Channels
    are the heart of the petrochemical complex that stretches along
    the Texas Gulf Coast producing many products essential to
    modern life. It is also the largest petrochemical complex in
    the country. These chemical facilities contribute much in our
    economy and way of life in employing thousands of workers in
    high-paying quality jobs. These dedicated employees, as well as
    the communities that surround these facilities deserve the best
    security standards possible to prevent an act of terrorism on
    U.S. soil.
        Section 550 of the Department of Homeland Security
    Appropriations Act of 2007, Congress authorized the Department
    to regulate security at high-risk chemical facilities. Under
    Section 550, covered facilities must perform security
    vulnerability assessments and implement Site Security Plans
    containing security. According to DHS, since CFATS became
    effective in June of 2008, they have analyzed nearly 40,000
    facilities across the United States. Initially, DHS identified
    more than 7,000 facilities as potential high-risk. Then over
    2,000 facilities have been downgraded or are no longer
    regulated. Currently, CFATS covers 4,744 high-risk facilities
    nationwide across all 50 States, of which 4,126 facilities have
    received high-risk determinations.
        The program is funded through appropriation rider due to
    expire on March 18 with the CR. It is very important for the
    security of this country to revisit this statute to determine
    what is working in this program and what can be improved upon.
        Additionally, it is important we provide industry with some
    assurance that the program will continue to be funded. Since
    2001, chemical facilities have already invested billions in
    security improvements or fully complying with current
    regulations. Last year, H.R. 2868, the Chemical Facility
    Antiterrorism Act introduced by Representatives Thompson,
    Waxman, and Markey passed out of this committee and the full
    House. But unfortunately, like many good pieces of legislation,
    the House passes H.R. 2868 was never taken up by the Senate,
    and we are here today to begin discussions on how to proceed
    with chemical security.
        I worked hard with Ranking Member Waxman and Markey to
    improve H.R. 2868. One of these provisions was to avoid
    unnecessary duplication between CFATS and exempted MTSA
    facilities. I continue to support provisions to avoid overlap
    with existing security programs and I intend to ask our
    witnesses today about this issue as well.
        And again, I want to thank our witnesses for appearing and
    welcome Under Secretary Beers. And with that, thank you for
    taking the time to discuss this important program. And Mr.
    Chairman, if I have any time left, I would like to yield to our
    ranking member of the full committee.
        Mr. Shimkus. Do you want your full time?
        Mr. Green. You want your full time? OK. I will yield back.
        Mr. Shimkus. The gentleman yields back. The chair now
    recognizes the subcommittee vice-chairman, Mr. Murphy, for 5
    minutes.

       OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Murphy. Thank you, Mr. Chairman. I want to thank you
    and also my colleague, Gene Green of Texas, for working with me
    on this bill.
        The chemical industry, we know, touches every segment of
    our economy from agriculture to energy production to paint and
    plastics. Certainly, there is nothing we can go through for an
    hour in our lives without touching several layers of it, and
    its safety and security is of high importance to all of us and
    essential to our Nation's economic recovery in maintaining a
    strong domestic chemical industry. So any federal policy on
    plant security has to be mindful of that public health and
    safety but also has to make sure we have a regulatory certainty
    climate and stability so the chemical employers can continue to
    safely grow jobs and create a better economy.
        Under the Chemical Facility Anti-Terrorism Standards, our
    chemical plant and refineries have made significant
    improvements towards keeping our communities safe. In fact,
    since September of 2001, the domestic chemical industry has
    spent an estimated $8 billion on plant security and under the
    existing framework will spend another $8 billion. The law, we
    know, identifies four high-risk categories that require
    vulnerability assessments and Site Security Plans, but more
    importantly, the oversight and enforcement of the Department of
    Homeland Security.
        By the way, I am pleased that we will be hearing today from
    a Marine to talk about that because if anybody can tell us
    about security, call in the Marines, right? Important that we
    also have here today information on how this is working and
    present to us any information with regard to its effectiveness
    and implementation. Certainly, it does not deal with all
    aspects of chemical safety. That is for other issues on other
    legislation. This is specifically as it relates to some of
    these antiterrorism security measures. And we will look forward
    to hearing about this.
        So given that we have a successful program here, instead of
    changing it, the issue is let us provide domestic employers
    certainty on the regulatory front so they can continue to work
    towards the issue of security. Otherwise, we would be creating,
    I think, more barriers, more confusion with regard to security
    and jobs.
        So I look forward to working with Chairman Shimkus and
    Upton of the Energy and Commerce Committee, and of course with
    Ranking Member Gene Green to pass this bipartisan legislation
    and ensure that a key part of our Homeland Security policy is
    maintained. And with that, Mr. Chairman, I yield back.
        Mr. Shimkus. The gentleman yields back his time. The chair
    recognizes the ranking member of the full committee, Mr.
    Waxman, for 5 minutes.

    OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. Waxman. Thank you very much, Mr. Chairman.
        After the terrorist attack of 9/11/2001, federal officials
    and outside experts warned that the Nation's drinking water,
    utilities, and chemical facilities were vulnerable to terrorist
    attack. The risk that common, useful chemicals could be wielded
    as weapons by those who would seek to harm us became an
    alarming possibility and concern.
        In 2006 the Appropriations Committee established a program
    to protect the Nation's chemical facilities from terrorist
    attack and other intentional acts. The Chemical Facility Anti-
    Terrorism Standards Act was established by a provision tacked
    onto an appropriations bill. Today's hearing examines H.R. 908,
    legislation to extend the authorization for this 2006 program
    for another 7 years.
        The Department of Homeland Security has made tremendous
    progress in developing its chemical security program. They have
    done so without a great deal of congressional guidance.
    Although the provision establishing the program was within the
    jurisdiction of this committee, the committee didn't mark up a
    report the provision. The members of this committee didn't
    consider and revise it. Unfortunately, it was enacted without
    our input.
        The rationale was that this program was an emergency
    measure. It would be established quickly but would also end
    quickly, giving our committee the opportunity to develop a
    comprehensive policy. The Department of Homeland Security was
    directed to issue regulations in just 6 months and the program
    was slated to expire in 2009. But now we have seen that
    deadline extended with each appropriations bill.
        The Department has done well in getting the program off the
    ground, but it is unable to correct shortcomings in the
    underlying law authorizing its program. That task falls to us
    as the committee of jurisdiction.
        And there are serious shortcomings with the law that create
    dangerous security gaps. For instance, drinking water
    facilities are not covered at all. Unfortunately, H.R. 908
    simply extends the authorization of the existing program and
    would not address significant security gaps that put Americans
    at risk. It doesn't have to be this way. In the last Congress,
    Democratic and Republican staff spent hundreds of hours
    methodically working through the issues surrounding the CFATS
    program. We worked with the Majority and Minority of the
    Committee on Homeland Security. Industry, labor, and affected
    stakeholders were consulted throughout the process.
        The result was H.R. 2868, the Chemical and Water Security
    Act of 2009, which this committee reported and passed the House
    on a vote of 230 to 193. That legislation would have closed
    significant security gaps by establishing a security program
    for drinking water facilities and wastewater treatment works.
    The legislation would have harmonized the Chemical Facility
    Anti-Terrorism Standards Act with the Maritime Transportation
    Security Act. It also would have removed exemptions from
    Federal facilities.
        H.R. 2868 would have strengthened security at covered
    facilities by requiring assessment and in some cases adoption
    of safer chemicals, processes, or technologies to reduce the
    consequences of a terrorist attack. That common-sense policy
    would help facilities reduce the likelihood that they will
    become attractive terrorist targets.
        H.R. 2868 would also have strengthened security nationwide
    by creating an important mechanism for citizen enforcement.
    Companies, state attorneys general, and ordinary citizens could
    have used this provision to hold the Department to deadlines
    and ensure that the program was implemented.
        Unfortunately, in its current state, H.R. 908 would make
    none of these changes and would do nothing to close the
    significant security gaps we face as a Nation. I hope that we
    can have a robust committee process, find common ground to
    close those security gaps once and for all, and to make our
    country safer.
        Finally, I would like to note a number of issues with this
    legislation relating to the legislative protocols announced by
    the majority leader. For instance, legislation authorizing
    discretionary appropriations is required to specify the actual
    amount of funds being authorized. H.R. 908 does not do this.
    The Republican leadership has also said that they require a new
    or increased authorization to be offset by the termination of
    an existing authorization of equal or greater size. H.R. 908
    does not terminate any existing authorization. As we move
    forward in the legislative process, it is important that we
    understand how H.R. 908 comports with these protocols.
        Mr. Chairman, thank you for holding today's hearing. This
    is an important issue and one that I hope we can work on
    together. I yield back my time.
        Mr. Shimkus. Thank you, Mr. Waxman. Now, I would like to
    recognize the Honorable Rand Beers. I will just say before--we
    are honored to have you. I have gone through your bio and
    career: public servant, Marine rifle company commander in
    Vietnam and then all over the place working in service to this
    country. So we do appreciate you coming and thank you for your
    service. And you are recognized for 5 minutes for your opening
    statement.

     STATEMENT OF RAND BEERS, UNDER SECRETARY, NATIONAL PROTECTION
     AND PROGRAMS DIRECTORATE, U.S. DEPARTMENT OF HOMELAND SECURITY

        Mr. Beers. Thank you, Mr. Chairman, Ranking Member Green,
    distinguished----
        Mr. Shimkus. Sir, there is probably a button on the front
    there.
        Mr. Beers. Oh, there is. There we go. Thank you, sir. Thank
    you, Mr. Chairman, Ranking Member Green, and distinguished
    members of the committee. It is a pleasure to be here today and
    thank you for working to accommodate our schedules jointly.
        As you all are aware, Section 550 of the fiscal year 2007
    Department of Homeland Security Act, as amended, set up the
    expiration of this program in October of 2010, and it has been
    extended through the legislative process, including to this
    committee and is set to expire. So we are very eager to work
    with the committee and all levels of government and the private
    sector to achieve passage of the legislation and permanently
    authorize the Chemical Facilities Anti-Terrorism Standards
    program.
        While the inspection process is still ongoing, our analysis
    indicates that this program is delivering tangible results that
    make our Nation more secure. For example, since our inception,
    there have been 1,246 committees having completely removed
    their chemicals of interest and an additional 584 facilities
    that no longer possess the quantity of chemicals of interest
    that meet the threshold to be considered as high-risk
    facilities.
        Currently, as has been indicated, there are 4,744 high-risk
    facilities nationwide in all 50 States, of which 4,126
    facilities have received a final high-risk determination and
    due dates for the submission of their Site Security or
    Alternate Security Plans. This is a reflection of the
    significant work that has been done to date, beginning with the
    review, as indicated, of more than 39,000 facilities that
    submitted initial consequence screenings.
        More than 4,100 facilities have submitted their Site
    Security Plans, and in February of 2010, the Department began
    conducting inspections of the final-tiered facilities, starting
    with the highest risk, or Tier 1, facilities. The Department
    has completed approximately 175 preauthorization inspections to
    date.
        An important point that I hope does not get lost in these
    statistics is the open dialogue that DHS has established with
    industry through this program and the successful security gains
    that have already been implemented as a result.
        We enjoy a constructive dialogue with Congress, including
    members of this committee, as it contemplates new authorizing
    legislation for the CFATS program. The Department supports
    permanent authorization for the program, is committed to
    working with the Congress and other security partners to pass
    stand-alone chemical security legislation that includes the
    permanent authority beginning in fiscal year 2011.
        As you know, the administration believes that such an
    authorization should close security gaps in the current
    structure, such as eliminating the exemption for water and
    wastewater facilities and prudently approaching mandatory
    consideration of inherently safer technology.
        Again, thank you very much for holding this important
    hearing, and I would be happy to respond to any questions that
    you might have, Mr. Chairman, and other members of this
    distinguished committee.
        [The prepared statement of Mr. Beers follows:]

        [GRAPHIC] [TIFF OMITTED] T7321.003

        [GRAPHIC] [TIFF OMITTED] T7321.004

        [GRAPHIC] [TIFF OMITTED] T7321.005

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        Mr. Shimkus. Thank you, sir. I will recognize myself for
    the first 5 minutes of questioning.
        The last time you were before our committee, you testified
    that 6,156 facilities fell into one of the top four high-risk
    tiers. Today, on your testimony you are suggesting that there
    are 4,744 facilities or around 1,400 less than before now fall
    into one of the top four high-risk tiers. I think you mentioned
    some of that in your opening statement as far as the amount of
    chemicals being removed so they fell out of the criteria. The
    decline, is some of it due to plant closings themselves? Do you
    know?
        Mr. Beers. Sir, I can't give you an exact figure on plant
    closings, but almost all of them are a result of the movement
    of the chemicals of interest offsite or the reduction in the
    amount onsite that resulted in the removal of them from the
    list of the high-risk tier.
        Mr. Shimkus. Your staff could probably check these numbers
    and get us that information?
        Mr. Beers. We will, sir.
        Mr. Shimkus. And thank you. Also, Ranking Member Waxman
    talked about the budgetary aspects, but based upon the present
    submission of a budget, there is probably a line item for this
    program in that budget, is that not correct?
        Mr. Beers. That is correct, sir. It is approximately 100
    million a year. It was 105 in FY '10, it was 203 in the FY '11
    request, and it is 99 million in the FY '12 request, so roughly
    100 million, sir.
        Mr. Shimkus. Great, thank you. Great. That is helpful.
    Thank you. Also the last time you testified you stated that you
    did not have any idea of how much industry was spending to
    comply with CFATS, but you did note that based on the number of
    top-screened DHS was receiving that many material modifications
    were being made by covered facilities. You didn't have last
    time--do you know of how much industry has had to spend to
    upgrade to meet CFATS compliance?
        Mr. Beers. Sir, I don't have that number at the tip of my
    fingertips. Let me have staff----
        Mr. Shimkus. Is that something that in your negotiations
    they talk to you about at all or----
        Mr. Beers. One of the considerations that we bring to bear
    is we develop Site Security Plans is yes, sir, the cost of
    those security plans. Security is not a free good, as you well
    know, and we are very mindful of that. That doesn't mean that--
    everyone has to recognize that some costs may be required to
    implement a good security plan. But a good security plan is
    good neighborliness on the part of the chemical industries in
    the areas that their facilities exist.
        Mr. Shimkus. Are there still implementation issues that
    need clarifying, such as personnel surety or agricultural
    chemical issues?
        Mr. Beers. Yes, sir. Both of those are still works in
    progress. The personnel surety plan has been a subject of
    discussion between ourselves and the chemical industry. We are
    close to being in a position to come forward with that
    proposal. The indefinite extension of this regulation applying
    to some agricultural production facilities remains in effect.
    We have done several studies, but I can't give you an
    indication of when we are going to get to the end of that
    indefinite extension, sir.
        Mr. Shimkus. And in my opening statement I mentioned
    numerous programs from hospitals. This is a wide range, a
    portfolio, and I just wanted to put that out just for the
    public to understand that this does more than just chemical
    plants. It is a pretty wide range. And of course, from
    universities to hospitals are some that we would not normally
    think would be involved in this program. And in testimony in
    the last Congress sometimes that got confused. So I am just
    reiterating. You would agree with that, that there are
    hospitals and universities and it is a wide range of areas that
    are involved with the CFATS program?
        Mr. Beers. Yes, sir. I mean just beyond the chemical
    manufacturers themselves, this affects warehousing
    distributors, oil and gas operations, hospitals, semiconductor
    manufacturers, paint manufacturers, colleges and universities,
    some pharmaceuticals, and some parts of the agricultural
    industry. And I have not finished the list there but that is
    certainly enough for giving people an indication of how broadly
    this particular law affects companies and facilities around the
    country.
        Mr. Shimkus. Great, sir. Thank you very much. Now, I yield
    back my time and recognize Mr. Green for 5 minutes.
        Mr. Green. Thank you, Mr. Chairman. I have some questions
    on coordination, but let me follow up with that.
        In your testimony you talk about the exemption, for
    example, of water and wastewater facilities. Are there any
    other facilities that are not part of the law now that you
    think should be included in it other than wastewater and water
    facilities?
        Mr. Beers. Sir, we have talked before and you mentioned in
    your opening statement the MTSA exemption, which takes marine
    facilities or facilities that are located in areas defined as
    marine areas, which do in fact have chemical facilities that
    would fall under this regulation if they were not exempted from
    it. I can report to you that the Secretary has made it very
    clear both to me and the Commandant of the Coast Guard that she
    wants that harmonized with or without a law. We have engaged,
    over the course of the last year, in a working group study.
    There are 18 recommendations that are now moving up the chain
    as a result of that committee's study, and I am hopeful that we
    will have that to the Secretary for final approval in the not-
    too-distant future.
        Mr. Green. I appreciate that and that is one of my concerns
    is that MTSA, you know, is part of the Transport Worker
    Identification Card, and my concern was that we would have a
    separate card for employees who actually go between these
    facilities and is it hope that Homeland Security under current
    authority could require or give credit to the TWIC card for
    someone at a chemical security facility or vice versa?
        Mr. Beers. Yes, sir. That is exactly the point that the
    chairman was making when he asked about the Personnel Surety
    Program, and that is an effort that we are trying to merge
    between the two programs. It certainly defies logic, may I say,
    if we have one card for one kind of facility and one card for
    another. Having said that, and having spent some time around a
    table with a number of members of my staff and other staff, it
    is not a simple process, but it is a process which we are
    committed to and engaged in and I hope to have, as I said, an
    answer in the very near future.
        Mr. Green. OK. I have 260,000 TWIC cards issued in our
    district and so I would hope that we would have some
    coordination because we have plants that are not on the water
    side but they are owned by the same company and yet, you know,
    they would have the flexibility to transfer those staff between
    the two.
        I am glad in your testimony you also talked about prudent
    IST. Under current authorization, does the Department have the
    authority to look at inherently safer technology?
        Mr. Beers. It is not so much an authority question as it is
    that we have asked our Science and Technology Directorate
    within the Department to do a study of this issue. I don't want
    to indicate that it is exhaustive but we in the CFATS area have
    not at this point in time as part of the CFATS program made any
    investigatory effort. Should such a requirement be enacted, we
    are poised to begin that process but no, sir, we haven't
    actually begun it.
        Mr. Green. So is your testimony you don't think you have
    the authority right now or you just haven't begun to explore
    that?
        Mr. Beers. We just haven't begun to explore it. That is why
    I said we did have the Science and Technology Directorate
    explore information on that and that is available to us. At
    this particular point in time we didn't feel it was appropriate
    to move any further than that initial exploratory effort on
    their part.
        Mr. Green. OK. Well, it would seem that if there is an
    issue, hopefully the Department would come to Congress and say
    this is something we need and that way we could respond.
        The exemption of water and wastewater facilities, last
    Congress we had legislation that included that, included lots
    of, you know, multiple utility districts that were very small,
    of course, some of the largest cities in the country. Is there
    anything under current law in CFATS that would allow for
    Homeland Security to also coordinate with our local
    communities, again, from the smallest to the largest to deal
    with some of the chemicals that are stored that makes our
    drinking water safe.
        Mr. Beers. Sir, as part of our general outreach voluntary
    program under the National Infrastructure Protection Plan, we
    certainly can talk to those facilities in a best-practices
    sense. But in terms of any formal regulatory authority,
    obviously we have that exemption and no, we have not had that
    kind of a discussion in that sense. We have certainly worked
    with EPA to come to an understanding of the size of the
    population that we might be talking about. We have coordinated
    with them about the general notions that would come under a
    cooperative regime, which we have agreed to should that be
    enacted. But the actual communications of what a regulatory
    regime might look like, no, sir, it is a voluntary outreach
    program at this particular point.
        Mr. Green. Thank you.
        Mr. Shimkus. Thank you. And chair now recognizes Mr. Murphy
    for 5 minutes.
        Mr. Murphy. Thank you. And again, welcome here, Mr. Beers.
        For all practical purpose, CFATS, which took effect in June
    of 2007, and it has taken DHS 3 years and 10 months to work out
    the Tier 1 facilities and I think about 175 preliminary
    authorization inspections and four formal authorization
    inspections. How much longer do you think it will take to
    conclude the preliminary authorization inspections on the other
    41 Tier 1 facilities? Do you have any idea?
        Mr. Beers. Sir, I have told my staff that I expect those to
    be completed by the end of this calendar year. We have
    obviously taken more time than you or we would have liked in
    terms of moving this program forward, but part of the reason
    that that time has been taken is that one, we are absolutely
    committed to a dialogue with industry on this issue, and we are
    trying to and continuing to try to set up a program that is a
    cooperative program. I think that by and large if you talk to
    industry, they will give you a response not dissimilar to what
    I am telling you right now. That dialogue has taken time. We
    have learned a lot on the path from the law's enactment to
    today and I have no doubt that we will continue to learn that.
    But we are definitely committed to getting the Tier 1
    facilities done by the end of this year. And as you know, at
    the beginning of this calendar year, we began a major effort to
    move this forward.
        Mr. Murphy. Thank you. What about the other authorization
    inspections? Same thing? You feel that----
        Mr. Beers. The other categories?
        Mr. Murphy. Yes.
        Mr. Beers. We will move onto them as soon as we get through
    the preauthorization inspections of the Tier 1 facility. So as
    you note, we have done 175. There are 216 facilities that are
    in Tier 1 and 3 that are pending final tiering. So we should be
    able to move through those on the pre-inspection relatively
    quickly. It is getting the final version of the Site Security
    Plan and reviewing it and issuing letters that they should
    begin implementation that has taken up the time. They and we
    discovered that the original submissions didn't always have a
    sufficient amount of detail and that has required a dialogue.
    We have learned a lot from that dialogue and I think we can
    move this program more quickly now based on that information.
        Mr. Murphy. Thank you. And you feel industry has been
    cooperative with you in trying to implement these?
        Mr. Beers. Absolutely been cooperative, sir.
        Mr. Murphy. Thank you. When you testified for this
    committee before, DHS stated that it has not studied the
    inherently safer technologies' potential effects on employment.
    Has that taken place since this hearing?
        Mr. Beers. No, sir, not to my knowledge.
        Mr. Murphy. OK. All right. How about can you explain to me
    how inherently safer technology works to prevent theft and
    diversion of chemicals in any way? Is that part of the things
    that you would have jurisdiction or would be looking at
    yourselves?
        Mr. Beers. The simplest explanation of inherently safer
    technology actually deals with a water issue, as you are well
    aware. The use of chlorine in water creates a chemical that
    represents a risk depending upon the volume of the chemical
    stored at the particular site. There is an alternative which
    does not require a toxic chemical to be put there and use in
    that. And the question is whether or not we are going to have
    movement in that direction.
        But let me be clear. While there may be an estimated 6,000
    water and wastewater facilities that might fall under this were
    it included. We don't have enough firm data to tell you how
    those would stratify out and in fact whether they would all in
    fact be within the regime as you----
        Mr. Murphy. OK. Have you been communicating with EPA on
    these issues? Are you able to talk with them?
        Mr. Beers. We have been talking with EPA since the last
    Congress and the bill that this committee----
        Mr. Murphy. Is that a cooperative relationship as well?
        Mr. Beers. Yes, sir, I think it is.
        Mr. Murphy. Do we need a federal law to tell you to do
    that? Or it sounds like you are already doing that, which I
    appreciate.
        Mr. Beers. No, we don't need a federal law to tell us to do
    that.
        Mr. Murphy. Thank you. Because I know before we passed the
    Title IV, the Public Health Security and Bioterrorism
    Preparedness Response Act in 2002, which requires security for
    drinking water facilities and we are pleased that things are
    going over and that you are working cooperative on that. But I
    see I am out of time, so thank you so much, sir, and I yield
    back my time.
        Mr. Beers. Thank you, sir.
        Mr. Shimkus. Gentleman yields back his time. Chair
    recognizes ranking member of the full committee, Mr. Waxman,
    for 5 minutes.
        Mr. Waxman. Thank you, Mr. Chairman. I am concerned that
    this legislation would leave unanswered many questions about
    our Nation's vulnerability to attack on chemical facilities and
    I would like to explore some of these questions with you, Mr.
    Beers.
        Is it true that drinking water and wastewater facilities
    are statutorily exempt from the CFATS program?
        Mr. Beers. Yes, sir.
        Mr. Waxman. Are they exempt because there is no risk of a
    terrorist attack?
        Mr. Beers. Sir, I was not present when the law was
    originally put forward. I am not privy to the decision-making
    process that resulted in the exemption.
        Mr. Waxman. OK. Is it true that nuclear facilities are also
    statutorily exempt from the CFATS program?
        Mr. Beers. Yes, it is, sir.
        Mr. Waxman. Should I rest assured that terrorists will not
    target these facilities?
        Mr. Beers. No, sir, you should not rest assured that they
    will not, but we believe that the security regime that the
    regulatory agency has there is sufficient. Having said that, we
    have an outreach program between the Department of Homeland
    Security, the Nuclear Regulatory Commission, and the Department
    of Energy to talk in a voluntary mode about facilities that are
    also regulated by another department or agency.
        Mr. Waxman. What about the federal facilities that have
    large stores of chemicals that the Department is concerned
    about, the so-called Appendix A chemicals? Are they exempt?
        Mr. Beers. Yes, sir. That is my understanding.
        Mr. Waxman. Is there any reason to think that chemicals
    pose less of a risk when they are at federal facilities than
    when they are at private facilities?
        Mr. Beers. No, sir. But we have a lot more control over the
    security at federal facilities than we do without the CFATS
    program over private-sector facilities.
        Mr. Waxman. Are you concerned about these gaps created by
    these exemptions?
        Mr. Beers. Sir, the administration is taking the position,
    which I support, that water and wastewater ought to be included
    in this regime. We have also undertaken an effort within the
    Department of Homeland Security, as I indicated earlier, to
    ensure that there is a common regime between those facilities
    that are regulated under the MTSA and those facilities that are
    regulated under CFATS. That committee effort is completed. The
    recommendations are now moving up the chain to the Secretary to
    approve that, but she has made very clear to both me and the
    Commandant of the Coast Guard that she expects a harmonious
    regime across these two areas.
        Mr. Waxman. There are gaps and you expressed concern about
    them. You think they are otherwise being addressed but would
    H.R. 908 address those gaps?
        Mr. Beers. H.R. 908 focuses on the permanent authorization.
    Sir, we also need the permanent authorization. The fact that we
    are living from year to year or CR to CR is not a particularly
    good way for us to run a program and work with our partners in
    the industry if we are uncertain about the future of it. You--
    --
        Mr. Waxman. Uncertain about the future of CR?
        Mr. Beers. Excuse me?
        Mr. Waxman. Are you uncertain about the future of a CR?
        Mr. Beers. Sir, a CR has an end date. If the next act with
    respect to this year's appropriations doesn't address this
    issue, yes, sir. I am.
        Mr. Waxman. I can understand that. I was being a little
    facetious in my question to you.
        We have only touched upon some of the significant security
    gaps. As you know, port facilities are not held to the same
    security standards as chemical facilities even though they may
    pose the same risk, and I hope that this subcommittee is able
    to work together to address those security deficiencies and
    craft legislation to secure our Nation.
        It has been almost 10 years since the attacks of 9/11 but
    the job of securing our country's vulnerable assets is still
    unfinished, and I am concerned that DHS continues to miss
    milestones for implementation of this important program.
        Mr. Beers, how many facilities have completed the CFATS
    process?
        Mr. Beers. Sir, in terms of the final approval of a plan,
    no facilities have. We have 175 that have received
    authorization letters and we have inspected--that means that
    they go forward implementing their Site Security Plan so that
    we can then go out and look at the implementation of the Site
    Security Plan. We have four of those 175 who have had an
    inspection after they have begun to implement those plans and
    we expect that those four, which are currently under review,
    will be finally approved in the not-too-distant future.
        Mr. Waxman. Um-hum. Well, let me just say--and I only have
    a few seconds left--it has been almost 4 years since the
    Department's rules took effect and not one facility has
    completed the process. With that success rate I think we should
    all have concern about simply rubberstamping this program for
    another 7 years. And I just want to put that issue on the
    table. Thank you, Mr. Chairman.
        Mr. Shimkus. Thank you, sir. And before I recognize Mr.
    Latta, I want to recognize Mr. Murphy for unanimous consent
    request.
        Mr. Murphy. Thank you, Mr. Chairman, a request for two
    letters, with unanimous consent, to submit. One is a letter
    from the CEO Randy Dearth of LANXESS and the other one is from
    the American Chemistry Council.
        Mr. Shimkus. Without objection, so ordered.
        [The information follows:]

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        Mr. Shimkus. The chair now recognizes the gentleman from
    Ohio, Mr. Latta, for 5 minutes.
        Mr. Latta. Well, thank you very much, Mr. Chairman, and Mr.
    Under Secretary, thanks very much for being with us today.
        If I can just go back, on page 3 of your testimony on the
    very bottom of the paragraph there, talking about what is
    listed about 322 chemicals of interest. And I think that a
    question was asked mainly on agriculture, which I think the
    chairman had mentioned. The other thing you say there is an
    indefinite suspension on agriculture. What was that again,
    please?
        Mr. Beers. Sir, because of the use of fertilizer in the
    agricultural industry, quantities of that fertilizer that are
    stored on farms, as well as at the wholesale distributor, that
    represented a large problem that we recognize but were not
    prepared in the initial effort to try to get at the heart of
    the problem, which are these larger facilities. So we gave them
    an extension, we have conducted some studies, but we are not to
    the point where we are prepared to talk about rule-making with
    respect to those facilities.
        Mr. Latta. Thank you very much. Because the reason is I
    represent kind of an interesting district. I represent one of
    the largest manufacturing districts in Ohio and I represent the
    largest agricultural district because, of course, with
    anhydrous ammonia, that is one of the ones that our farmers are
    out there using all the time.
        And then another chemical listed is propane because in my
    area we have a lot of folks that live in the country that use
    propane for their main source of heat. Now, would propane be
    another one of those that down the road there might be
    something that--because, again, this is something that folks
    back home rely on all the time.
        Mr. Beers. Sir, with respect to that yes, it is, but we are
    talking about levels of propane, not the fact of propane. And
    sir, I am not a farmer and I don't know how much propane in a
    rural setting a farmer might have on his site, but I do have
    some rural property and I don't have that many propane tanks.
        Mr. Latta. You know, it is mainly for folks that live--and
    even in small villages. They don't have natural gas. They use
    propane tanks that are there to heat their homes. I just wanted
    to double-check that with you.
        And I guess there is also the other question that I have is
    when you are looking at the release and the theft and the
    diversion, the sabotage and contamination, so down the road
    would you be looking at that, then, or because, again, on
    release, again, of course, the farmer is out there when you are
    spraying with anhydrous. I guess that is my question is that
    would somebody in agricultural production fall under these
    regulations? It would be kind of an undue hardship on them.
        Mr. Beers. Sir, that is part of the issue that we are
    working our way through. I mean the point here is that those 4
    issues that you just read out are all considerations, but we
    have the authority to make judgments on how to or what to
    interpret on that. There is a level of storage that we look at,
    but it is also a question of where it is and what kind of
    potential threat it is.
        Mr. Latta. Thank you.
        Mr. Beers. So we take all those issues into consideration.
        Mr. Latta. Thank you very much.
        Mr. Beers. This is not a mechanistically implemented
    regulatory regime.
        Mr. Latta. Mr. Chairman, I yield back. Thank you very much.
        Mr. Shimkus. If the gentleman would yield just your last 50
    seconds for me. I represent parts of 30 counties in Southern
    Illinois so this propane debate is an interesting one. These
    residential tanks are about the size of a pickup truck, the bed
    of a pickup truck. If you were doing a development in a rural
    area where you had 10 or 15 homes with that, based upon the
    footprint of this development, could they fall into this
    process?
        Mr. Beers. No, I don't believe they could. I can give you--
    --
        Mr. Shimkus. I guess the issue is how much----
        Mr. Beers. But this is the issue of how much----
        Mr. Shimkus. How much over--right.
        Mr. Beers. And that particular----
        Mr. Shimkus. That might be a good thing because, look, I
    mean we will have an agricultural perspective always through
    this process.
        Mr. Beers. My staff is giving me a prompt.
        Mr. Shimkus. Good.
        Mr. Beers. Sixty thousand pounds----
        Mr. Shimkus. OK.
        Mr. Beers. --is the threshold screening quantity.
        Mr. Shimkus. All right. I will have to find out how many
    pounds are in one of those big tanks.
        Mr. Beers. So there is a propane tank out back of my rural
    property without a dolly of some sort.
        Mr. Shimkus. Right.
        Mr. Beers. Even the larger tanks that you are talking about
    are----
        Mr. Shimkus. And we will follow up. That is what we have
    hearings for. So thank you, sir. Now, the chair would like to
    recognize Mr. Barrow. No, he is not here. Ms. McMorris Rodgers
    for 5 minutes? No questions. Mr. Cassidy for 5 minutes. Would
    the gentleman yield for a second? And hit your button again and
    then pull the microphone up.
        Mr. Cassidy. Now, Mr. Waxman's question implied that the
    NRC is doing a poor job of regulating the security at nuclear
    power plants. When I visited the one in my district, oh, 6 or 8
    months ago, I was impressed with the perimeter fences, the .50
    caliber guns, the check-in process, et cetera. Have you had a
    chance to review the security requirements for such facilities
    and would you accept the implication of his questioning, that
    there is an inadequacy of those?
        Mr. Beers. Sir, as I said in answer to his question, we
    believe that the regulatory regime that those plants are
    currently under is adequate to ensure their protection.
        Mr. Cassidy. OK. I just wanted to make sure that was
    documented.
        Secondly, now, I don't have your expertise--I am totally up
    front about that--but it seems like if we have incompletely
    implemented the rules--doing a great job working at it, but it
    just takes time--of something passed in 2007, it seems almost
    counterproductive to implement a whole other regulator regime
    when people have to adjust midstream. That is just intuitive to
    me. Would you accept that or would you dispute that?
        Mr. Beers. Sir, you point out a challenge that would be
    true if that were the case, but the administration put forward
    its recommendation to add water and wastewater in the belief
    that we, in fact, have learned a great deal----
        Mr. Cassidy. Now, not to be rude but water and wastewater
    were not previously included, so that would not be a regulatory
    regime change if you will. That would be an addendum.
        Mr. Beers. Yes, sir.
        Mr. Cassidy. That is different from saying oh, listen,
    guys, you have been working on this, but by the way, we now
    have another set of rules before you completed the first set.
        Mr. Beers. I am sorry. Are you specifically referring to
    the Inherently Safer Technology part?
        Mr. Cassidy. Correct.
        Mr. Beers. Sir, that is why in the administration's
    presentation of this possible expansion that we want to be very
    clear that the deadlines, if any, take into account the need in
    moving in that direction that would be required by moving into
    an area that we would have to spend some time and effort.
        Mr. Cassidy. But again, just to drill down on my question,
    it seems like if someone has not completely incorporated the
    recommendations of rules issued and regulations issued dating
    back to 2007, to come up with another regulatory regime before
    you have finished the first is almost like a whipsaw and,
    frankly, somewhat wasteful of resources if it turns out IST
    takes you in another direction.
        Mr. Beers. Sir, we put forward the recommendation on this
    in the belief that we could, given sufficient time, be able to
    deal with an expansion of the regime. The challenge that you
    put forward is, I think, an accurately characterized challenge.
        Mr. Cassidy. OK.
        Mr. Beers. I am not disagreeing with you on that. And that
    is why we have been very clear that we would not want to be
    held to a heroic set of deadlines in that regard, because it
    will require an expanded effort; it will require some new
    information.
        Mr. Cassidy. Now, again, you have so much more expertise in
    this area than I that with trepidation that I go forward. But
    still, when I think of IST, I think that that is a fairly
    static concept. Now, it has to be one vetted, you have to have
    public comments, you have got to look at it when frankly there
    may be some innovation out there which doesn't have time to be
    processed. I think of the Maginot Line as being the IST of its
    day and yet clearly tank warfare, you know, ruined the concept.
    Now, do you accept that or is Maginot Line a poor example of
    where we are going with this?
        Mr. Beers. Sir, I am a military historian. I love your
    example. But as the process that we have undertaken with
    respect to the facilities under the current regime has gone
    from a large number of firms that submitted top-screen down to
    a much smaller number, which is approximately 10 percent, and
    we have had 1,200 firms that have fallen off of this because
    they have changed the holdings and we had another several
    hundred that are in lower screening, we recognize that this is
    a dynamic process. And the point that you make about changes in
    technology, we would of course incorporate changes in
    technology as they occurred.
        Mr. Cassidy. But is it fair to say the bureaucracies have a
    difficult time--I am a physician. Whenever they come up with a
    practice guideline, I am always struck that the practice
    guideline has to ignore that which is on the cusp. Because in
    order to get the consensus for the practice guideline, the cusp
    almost has to be marginalized because 90 of the cusp is
    marginalized. But there is 10 percent of that cusp that, wow,
    is the brave new future. Now, I have to think that in your area
    that that may also be true as kind of fertile as yours is for
    innovation.
        Mr. Beers. Sir, that is an excellent example and I think
    you are correct in saying that sometimes bureaucracy appears to
    be slower than reality, but I would also say that one of the
    things about this program that we have absolutely learned is
    that we have to be flexible and adaptable in terms of looking
    at new situations and new pieces of information.
        Mr. Cassidy. Thank you.
        Mr. Beers. So that is what we would do.
        Mr. Cassidy. He is gaveling us. I yield back.
        Mr. Shimkus. The gentleman's time has expired. The chair
    would like, with unanimous consent, recognize the ranking
    member for a UC request and then follow up with a statement.
        Mr. Green. Mr. Chairman, I would like to ask unanimous
    consent to place into the record both a letter and testimony
    from the National Petroleum Refiners Association.
        Mr. Shimkus. Without objection, so ordered.
        [The information follows:]

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        Mr. Green. And also one last question. Part of the
    testimony that is going to be submitted by the Petroleum
    Refiners--and let me read a little bit of it--``Under CFATS, it
    is required that personnel with access to sensitive information
    and relevant operations be vetted under the National Terrorism
    Screening Database, no matter if the person has been vetted by
    other government credentialing programs, such as the Transport
    Worker Identification Card or the Hazardous Materials
    Endorsement, or a host of other federal government
    credentialing programs. In the last 2 years, DHS has twice
    proposed in the Federal Registry that employees at CFATS sites
    would have to obtain multiple government credentials.''
        Obviously, there is some confusion out there concerning
    what DHS is doing, and that is our concern about this
    legislation. One of the things, we would like to give you the
    authority to make sure you streamline it instead of people
    having--it is bad enough--I work at the Port of Miami, and I
    have to have a Miami Port card along with a DHS card or a TWIC
    card. We surely don't need multiple federal cards. And so that
    is our concern.
        Mr. Beers. And that is our concern as well, sir, and that
    is what we are trying to work to resolve.
        Mr. Green. OK. Thank you.
        Mr. Shimkus. I want to thank you for coming and appreciate
    your response to the questions. And if you have got information
    on Mr. Green's issue and you want to be receptive to his
    concerns, so if there are ways in which you can provide us
    information as we move forward on this process, we would
    appreciate it. So sir, you are excused and we will sit the next
    panel.
        Mr. Beers. Sir, thank you very much for the opportunity and
    I look forward to continuing to work with you and the
    committee. I appreciate it.
        Mr. Shimkus. Thank you. We will give everyone a chance to
    get seated and then I will do an introduction of the entire
    panel and then we will recognize each member on the second
    panel for 5 minutes, your full statements are submitted for the
    record, and then we will follow up with questions.
        So first of all, we would like to thank the second panel
    for joining us. On the second panel, we have Mr. Andrew Skipp,
    President and CEO of Hubbard-Hall, Incorporated, from
    Waterbury, Connecticut. Also Mr. David Tabar, CSP--what is CSP?
        Mr. Tabar. Certified safety professional.
        Mr. Shimkus. Oh, I should know that. Global Director of
    Safety, Sherwin-Williams--I do know that--from Cleveland; Mr.
    Bill Allmond, Vice President, Government Relations, Society of
    Chemical Manufacturers and Affiliates; and then Mr. James
    Frederick, Assistant Director of Health, Safety, and the
    Environment, and the United Steelworkers.
        And we want to welcome you all here and we will start. Mr.
    Skipp, you are recognized for 5 minutes.

      STATEMENTS OF ANDREW K. SKIPP, PRESIDENT/CEO, HUBBARD-HALL,
        INC., ON BEHALF OF THE NATIONAL ASSOCIATION OF CHEMICAL
       DISTRIBUTORS; DAVID TABAR CSP, GLOBAL DIRECTOR OF SAFETY,
         SHERWIN-WILLIAMS, ON BEHALF OF THE AMERICAN COATINGS
    ASSOCIATION; WILLIAM E. ALLMOND IV, VICE PRESIDENT, GOVERNMENT
     RELATIONS, SOCIETY OF CHEMICAL MANUFACTURERS AND AFFILIATES;
    AND JAMES S. FREDERICK, ASSISTANT DIRECTOR, HEALTH, SAFETY, AND
                    ENVIRONMENT, UNITED STEELWORKERS

                      STATEMENT OF ANDREW K. SKIPP

        Mr. Skipp. Thank you, and good morning, Chairman Shimkus,
    Ranking Member Green, and subcommittee members. My name is
    Andrew Skipp and I am president of Hubbard-Hall, a chemical
    distributor based in Waterbury, Connecticut. I am also chairman
    of the National Association of Chemical Distributors (NACD),
    and I am pleased to provide testimony today in support of H.R.
    908 to extend DHS's authority to continue the CFATS program.
        NACD is an association of over 250 chemical distributors
    who purchase and take title to products and market them to a
    customer base of more than 750,000. Most NACD members are
    small, privately-owned businesses. The typical member has 26
    million in annual sales, three facilities, and 28 employees. We
    demonstrate our commitment to product stewardship through
    compliance with Responsible Distribution, our mandatory and
    third-party-verified environmental, health, safety, and
    security program.
        As owners and managers, our members have a personal stake
    in safety and security of our employees and companies. We
    demonstrate this through our commitment to Responsible
    Distribution, our relationships with our employees and our
    union members, and through our careful compliance with numerous
    environmental, transportation, safety, regulatory concerns,
    both on a federal, state, and local level.
        On behalf of Hubbard-Hall and NACD, I commend
    Representatives Murphy and Green for introducing the
    legislation to extend DHS's authority to continue CFATS for 7
    years. NACD was a strong supporter of the 2006 legislation that
    resulted in CFATS. H.R. 908 would allow time for the full
    implementation and evaluation of CFATS before changes to this
    important program are considered.
        Because CFATS is a major regulation based upon performance
    standards for each facility rather than on one-size-fits-all
    mandate, it is taking time for DHS to evaluate and inspect over
    4,100 Site Security Plans. However, this approach has the
    advantages of designing plans to address each facility's unique
    situation while avoiding the creation of a single road map for
    potential terrorists.
        The bottom line is the real security measures are being
    implemented at facilities around the Nation because of CFATS.
    For example, my company has three facilities that are covered
    by this program. We have worked hard and spent substantial
    resources to design our Site Security Plans and implement
    additional security measures.
        CFATS is a major regulatory commitment for Hubbard-Hall. We
    are willing to invest the time and the resources to comply with
    this important regulation, and I know that our company and all
    NACD members would welcome the certainty of a clean, long-term
    extension.
        Prior CFATS proposals included measures that would have
    been counterproductive to the good progress that has been made.
    The most disruptive of these have required all CFATS-covered
    facilities, including chemical distributors to conduct
    inherently safer technology, IST assessments, and for those in
    the highest-risk tiers to implement these measures. Such a
    mandate would shift the focus away from the real security
    issues and force companies to consider full-scale engineering
    and product changes.
        I want to emphasize that NACD opposes mandatory IST
    consideration. The fact of conducting IST assessments would be
    extremely costly for NACD members and would not reduce risk.
    For most NACD members, IST assessments would have to be
    outsourced at significant cost and produce limited options.
    Chemical distributors maintain specific inventories in order to
    respond to customer needs. If distributors are required to
    reduce inventories of certain products that would prevent us
    from meeting these needs. Particularly in these tough economic
    times, in addition to the myriad of regulations that already
    affect us, this could be the final straw to put some companies
    out of business, which would result in further job loss.
    Required inventory reductions would also assign additional risk
    to transportation and increase the likelihood of product
    handling incidents.
        Finally, CFATS currently provides incentives to companies
    to use the safest possible methods so they can assign to a
    lower-risk tier. In fact, over 1,200 facilities have reduced
    their security risk so much that they have tiered-out of the
    program. Many more facilities have been assigned to lower
    tiers.
        In conclusion, I repeat that NACD strongly supports the
    legislation to extend the current chemical security program
    with no changes. A clean extension will both provide regulatory
    certainty and allow for continued progress in implementing real
    security measures at our facilities.
        On behalf of Hubbard-Hall and NACD, I appreciate this
    opportunity to present our views on this critical issue and I
    look forward to your questions. Thank you.
        [The prepared statement of Mr. Skipp follows:]

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        Mr. Shimkus. Thank you very much, sir. And I would like to
    recognize--and I guess I mispronounced it--Mr. Tabar from
    Sherwin-Williams. You are recognized for 5 minutes.

                        STATEMENT OF DAVID TABAR

        Mr. Tabar. Thank you. Good morning, Chairman Shimkus and
    members of the subcommittee. My name is David Tabar and I am
    the global director of safety for the Sherwin-Williams Company
    in Cleveland, Ohio. I am also here representing the American
    Coatings Association. My purpose here today is to support H.R.
    908, and I thank you for this opportunity to present our views
    before the subcommittee today.
        The paint and coatings industry has been working to enhance
    the security of their manufacturing operations over the last
    decade. Specific steps the ACA has taken include the addition
    of a new security code to our Coatings Care Stewardship
    Program. ACA is a long-standing participant in the Chemicals
    Sector Coordinating Council and continues to work with the
    Department of Homeland Security on both voluntary and mandatory
    security measures under the Chemical Facility Anti-Terrorism
    Standards.
        Over the last several years, the coatings industry has
    worked hard to achieve CFATS compliance, including the
    submission and the conduct of Top-Screens, Security
    Vulnerability Assessments, and Site Security Plans, along with
    the development of proposed action plans requiring further
    review with the DHS. Facilities that were identified as ``high-
    risk'' were ultimately assigned one of four tiers by DHS. The
    process is ongoing, and while several coatings industry sites
    have completed this process, including related DHS inspections,
    other firms await DHS response to their Site Security Plans or
    Alternative Security Plans.
        ACA supported the original CFATS legislation and strongly
    supports the current program. This demanding program is now
    requiring thousands of chemical manufacturers and formulators
    nationwide to develop and deploy meaningful security
    enhancements. As a result, ACA supports permanent--or at least
    long-term--reauthorization of the existing CFATS statute in
    order to allow regulated facilities to continue their
    implementation of stringent DHS chemical facility security
    standards in an orderly manner. In our view, it is premature to
    seek to change the existing framework substantially until it
    has been fully implemented and we have gained a better
    understanding of what works and what does not.
        It is important that any uncertainty created by possible
    short-term reauthorizations is eliminated, so as to provide
    regulatory clarity, thus allowing affected industries to make
    prudent business decisions about how best to implement the
    current regulations. ACA, along with other groups, has opposed
    previous efforts to mandate product and process substitutions
    with technology established by regulation. Any move away from
    the current risk-based standards would lead to confusion, loss
    of viable security products, systems methodologies, and would
    create prohibitive legal liability and possible business
    failures. A move away from risk-based standards would most
    certainly put U.S. manufacturers at a competitive disadvantage
    with foreign manufacturers not facing such requirements. By
    making the existing chemical security framework permanent, a
    certainty will be provided that is necessary to enable
    companies to protect our citizens and to facilitate economic
    recovery.
        As a result, although ACA has consistently favored
    permanent CFATS reauthorization, we support the approach taken
    in H.R. 908, the full implementation of the Chemical Facility
    Anti-Terrorism Standards Act. The extension to 2017 provides
    industry with sufficient breathing room to implement CFATS on a
    permanent basis prior to a required revisiting of the law 7
    years from now.
        Many operations throughout the coatings industry are
    covered by CFATS, primary due to commercial grades of raw
    materials that are commonly used to formulate specialty roof,
    emissivity, infrastructure, or automotive coatings. As a
    responsible corporation, Sherwin-Williams has devoted
    considerable resources to CFATS compliance and works hard to
    meet our obligations to neighboring communities, customers,
    shareholders, and the public.
        Examples of CFATS-related actions include: new staff
    positions in chemical facility anti-terrorism; raw material
    elimination or substitution; control of purchasing, sales,
    inventories; development and enhancement of chemical tracking
    technologies; onsite and program-related consultative reviews;
    organization-wide safety and security support team development;
    Alternative Security Plans developed for small facilities;
    development of internal chemical security compliance standards;
    development of Facility Security Officer training; development
    of new risk- and regulatory-based management of change systems
    to improve risk identification, control, and action-closure;
    and the development of employee security awareness training
    programs.
        In light of our own experience, we agree with the position
    of ACA and our industry colleagues concerning a more permanent
    reauthorization of CFATS. Because of significant requirements
    placed on our company and other coatings manufacturers, we
    believe that Congress should continue to recognize this very
    stringent and well-constructed industrial antiterrorism
    program. Thank you.
        [The prepared statement of Mr. Tabar follows:]

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        Mr. Shimkus. Thank you, sir. Now the chair recognizes Mr.
    Allmond for 5 minutes, sir.

                   STATEMENT OF WILLIAM E. ALLMOND IV

        Mr. Allmond. Thank you. Good morning, Chairman Shimkus,
    Ranking Member Green, and Vice Chairman Murphy, and members of
    the subcommittee.
        My name is Bill Allmond and I am the vice president of
    government relations at the Society of Chemical Manufacturers
    and Affiliates. For 90 years, SOCMA has been and continues to
    be the leading trade association representing the batch,
    custom, and specialty chemical industry. SOCMA's 250-member
    companies employ more than 100,000 workers across the country
    and produce some 50,000 products--valued at $60 billion
    annually--that help make our standard of living possible. Over
    80% of our members are small businesses.
        I am pleased to provide this testimony regarding H.R. 908,
    the full implementation of the Chemical Facility Anti-Terrorism
    Standards Act. SOCMA strongly supports DHS's current Chemical
    Facility Anti-Terrorism Standards, or CFATS. This demanding
    regulation is now required in nearly 5,000 chemical facilities
    nationwide and facilities that use chemicals nationwide to
    develop and deploy meaningful security enhancements. This
    performance-based regulation protects facilities against attack
    without impairing the industry's ability to remain innovative
    and maintain some of the Nation's highest-paying manufacturing
    jobs. Furthermore, the standards have teeth. DHS has the
    authority to levy significant fines on a facility for
    noncompliance, can even shut a facility down.
        Congress can best assure CFATS's continued success and
    forward momentum by passing H.R. 908. This bill would
    reauthorize CFATS through 2017, thus allowing DHS and
    facilities to concentrate on successfully implementing that
    regulation through completion.
        SOCMA regards this regulation thus far as a success. Due to
    the outstanding cooperation of the chemical sector, there has
    been 100 percent compliance with the requirements to submit
    Top-Screens, Security Vulnerability Assessments, and Site
    Security Plans. DHS has not yet had to institute a single
    administrative penalty action to enforce compliance.
        Additionally, 2,000 facilities have changed processes or
    inventories in ways that have enabled them to screen out of the
    program. Thus, as predicted, CFATS is driving facilities to
    reduce inherent hazards, where in their expert judgment doing
    so is in fact safer, does not transfer risk to some other point
    in the supply chain, and makes economic sense.
        To fully gauge the effectiveness of the CFATS program,
    Congress should allow all tiered facilities to come into
    compliance. Completing the program's implementation from start
    to finish would provide DHS and chemical companies the ability
    to assess the overall efficacy of CFATS, identify its areas of
    strengths and weaknesses, and subsequently make or recommend to
    Congress any necessary improvements.
        Conversely, the need for annual reauthorization of CFATS
    has created uncertainty for regulated facilities. Without the
    assurance of a long-term authorization of these regulations,
    companies do run the risk of investing in costly activities
    today that might not satisfy regulatory standards tomorrow.
        Statutory authority for CFATS, which has been tied to a
    series of continuing resolutions passed by Congress since last
    year, is set to expire next week, as you know. Congress must
    act now to ensure continuation of the current standards and
    reauthorize the underlying statute for multiple years.
        As Congress considers chemical security legislation
    further, there is an issue of particular concern to us, which
    is interest among some to mandate Inherently Safer Technology
    within CFATS. One of our greatest concerns with mandatory IST
    is the real possibility that it will negatively restrict the
    production of active pharmaceutical ingredients, or APIs, many
    of the key raw materials of which are regulated under CFATS.
        APIs are used to fight many types of cancer, used in
    prescription and generic drugs and over-the-counter medicines.
    They are thoroughly regulated by the Food and Drug
    Administration and must meet demanding quality and purity
    requirements. Substituting chemicals or processes used for the
    production of APIs would create substantial unintended
    consequences. Substitution would likely violate the conditions
    of companies' FDA approvals. Requiring IST could also delay
    clinical trials while new replacement chemicals are identified,
    and meanwhile, to meet continuing consumer demand, API
    production would likely shift to foreign countries where FDA is
    less able to monitor conformance to quality standards.
        There is a legitimate federal role in IST at the moment,
    however, and DHS is actually serving that role well. A few
    years ago, DHS initiated an increasing safety of hazardous
    chemicals process to develop a consensus definition of IST, and
    from that, to begin crafting metrics that would allow people to
    begin to compare inherent safety of different processes. The
    definition process was open and engaging and concluded last
    year with a document that has been universally praised. This
    program has now begun work on its metrics project, although
    SOCMA understands that there is no funding for that effort in
    the President's fiscal year 2012 budget. That is unfortunate
    because this is an example of how the Federal Government can
    play a useful role in the field of inherent safety. Any attempt
    to mandate even consideration of IST is premature otherwise.
        We recommend the subcommittee move forward and place a
    higher priority on ensuring the current standards are extended.
    H.R. 908 does just that. I appreciate this opportunity to
    testify before you today and I look forward to your questions.
        [The prepared statement of Mr. Allmond follows:]

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        Mr. Shimkus. Thank you. And now I would like to turn to Mr.
    James Frederick, who is from the United Steelworkers. Before I
    give you your 5 minutes, during the district work period, I
    visited the U.S. steel plant in Granite City, Illinois. We
    still make steel in this country. It is difficult to do. It is
    the second time I have been there but it is phenomenal, a big
    operation, so thanks to you and the membership for the guide
    and the tour and I look forward to hearing your testimony.

                    STATEMENT OF JAMES S. FREDERICK

        Mr. Frederick. Thank you, Mr. Chairman and members of the
    subcommittee. Thank you for the opportunity to appear before
    you this morning to discuss the United Steelworkers' views on
    H.R. 908. The USW appreciates the opportunity to share our
    views with the Subcommittee on the important aspects of this
    issue and how H.R. 908, if passed, will extend the Department
    of Homeland Security Chemical Facility Anti-Terrorism
    Standards, CFATS.
        My name is Jim Frederick. I am a member of the United
    Steelworkers and the assistant director of the union's Health,
    Safety, and Environment Department in Pittsburgh, Pennsylvania.
    I have spent my 20-year career identifying and addressing
    workplace health and safety hazards; responding and
    investigating worker deaths, injuries, and illnesses; assisting
    local unions with health, safety, and environment improvements;
    and developing and delivering worker health, safety, and
    environment education and training programs.
        The full name of our union is the United Steel, Paper and
    Forestry, Rubber, Manufacturing, Energy, Allied-Industrial, and
    Service Workers International Union. As the largest industrial
    union in North America, we represent a total of 1.2 million
    active and retired members in the United States, Canada, and
    the Caribbean. More than 125,000 of these work in 800-plus
    chemical industry workplaces. Many of these are small
    workplaces and some are small businesses.
        The USW involvement in chemical plant security started long
    before the original promulgation of CFATS or the September 11,
    2001, terrorist attacks on the United States. Our union has
    always been actively engaged and involved with our members,
    communities, regulators, and legislators to improve workplace
    safety for our members, as well as their families and the
    community.
        The importance of this issue and these rules were well laid
    out in the Senate Committee on Homeland Security and
    Governmental Affairs hearing yesterday, titled ``10 Years After
    9/11.''
        As part of a broad coalition of more than 100
    organizations, the USW believes that legislation must be passed
    to improve chemical industry workplace safety and security, not
    just to extend the existing interim measures that generated
    CFATS rule. We believe that this is absolutely necessary to
    properly protect the communities that our members and their
    neighbors live and work. Recent examples from the Gulf oil
    spill to the earthquake and tsunami in Japan resonate of what
    can happen if catastrophic events take place in this country.
        And we believe the problems with CFATS include the
    following: (1), specific security measures. CFATS prohibits DHS
    from requiring any specific security measure. H.R. 908 would
    extend the prohibition from the DHS Secretary from denying
    approval for a Site Security Plan based on the presence or
    absence of a particular measure. The performance based
    standards will continue to allow employers to determine how
    they comply with the rules. Performance standards often result
    in cost and productivity taking precedence over safety.
    Performance standards also typically equate to less regulator
    oversight.
        An example of this is sometimes seen in chemical storage
    areas or tank farms at a chemical plant or oil refinery where
    retaining dikes are constructed to keep unexpected releases of
    chemicals from escaping to the environment beyond the tank
    farm. However, the retaining dikes are often in disrepair or
    are not engineered to retain the proper volume of chemicals in
    the tank farm.
        Next, smart security--CFATS fails to develop the use of
    smart security--safer and more secure chemical processes that
    can cost-effectively prevent terrorists from triggering
    chemical disasters. When we train workers and others to correct
    health and safety hazards in our workplaces we turn and follow
    the hierarchy of controls. The hierarchy of controls instructs
    us that the most effective way to control a hazard from causing
    an injury is to eliminate it or substitute it with something
    less hazardous. Legislation and standards addressing chemical
    plant security should utilize the same hierarchy principles to
    recognize and encourage the elimination or reduction of
    hazardous materials when possible and use substitution with
    less hazardous components.
        Safer processes may not be feasible in some circumstances,
    but they should at least be considered in a security plan. Many
    safety measures may be possible without expensive redesign and
    newer equipment. Since 1999, more than 500 facilities have used
    smart security to eliminate risks and create communities that
    are less vulnerable to harm. 500 is an impressive number but
    many, many more need specific guidance from legislation and
    regulation to implement such changes.
        Exemptions of too many workplaces at risk, as I already
    discussed this morning, CFATS explicitly exempts thousands of
    chemical and port facilities, including water treatment
    facilities and including at least half of the oil refineries in
    this country.
        Worker involvement: CFATS fails to involve knowledgeable
    workers in the development of vulnerability assessments and
    Site Security Plans or protect employees from its excessive
    background checks. Lesson after lesson can be taken from the
    input from workers in various workplace health and safety
    exercises of how that input has helped the employer to
    integrate and put in place effective security and safety
    measures.
        And one last point on risk shifting, CFATS fails to address
    the current problem of risk shifting, such as when companies
    shift chemical hazards to unguarded locations such as rail
    sidings. Risk shifting takes place continually in many
    workplaces. There are several reasons that this practice
    occurs, but the results are always the same. The community is
    at increased risk of exposure to a release of hazardous
    materials or to a terrorist obtaining these materials.
        In one recent example at a USW workplace, railcars of
    hydrofluoric acid are being stored off site property on rail
    sidings. The workplace stores approximately 2 million pounds of
    hydrofluoric acid, some offsite. The railcars are located near
    residential areas in the community. A release from 1 or more of
    these would be devastating to the residents close by and for a
    large area of the surrounding communities. Chemical plant
    security legislation can fully eliminate risk shifting by
    banning the practice legislatively and in subsequent
    regulation.
        The USW believes that legislation must be passed to improve
    chemical industry workplace safety and security that includes
    these items, not just to extend the existing interim measures
    that generated CFATS as a final rule. We believe that this is
    absolutely necessary to properly protect communities. However,
    if CFATS is going to be extended by this bill, please consider
    reduction of the time for the extension to 1 year and charge
    all stakeholders involved to convene as necessary to develop
    longer-term solutions to these problems.
        On behalf of the USW membership and their communities,
    thank you for the opportunity to testify this morning.
        [The prepared statement of Mr. Frederick follows:]

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        Mr. Shimkus. Thank you. Now, the chair recognizes himself
    for 5 minutes for questions.
        We have used the word ``permanent'' and I guess in this
    system of authorization that 7 years would seem like permanent,
    but Mr. Allmond, you mentioned it is really a long-term
    authorization, which would then give us a time to look at the
    bill through the next process. Would you all agree with that,
    that this is really not a permanent authorization or
    reauthorization? This is a 7-year authorization. Mr. Skipp?
        Mr. Skipp. Yes, I would say that that is true. I think that
    there is a very steep learning curve that is going on here.
    Certainly, the efforts of the Department of Homeland Security
    have been admirable about how they bring this thing up. And I
    think we are now finding that we are getting our hands around
    this thing but we need more time. And I think this does that.
    Recognize the fact that rules can change down the way, but this
    is a great first step.
        Mr. Shimkus. Mr. Taber?
        Mr. Taber. I would agree with that wholeheartedly. Seven
    years is going to go by rather quickly. We have got a lot that
    we have done in the last several years. We need the next few
    years to tighten that up, and we also need the direct
    involvement with DHS more specifically now that we have filed,
    all our plants are willing to move forward.
        Mr. Shimkus. Mr. Allmond?
        Mr. Allmond. Yes, sir, Mr. Chairman. Seven years would
    provide a lot more time. I mean, Congress, you know, has a very
    important oversight responsibility down the road, but it would
    give, certainly, industry a lot more certainty.
        Mr. Shimkus. Mr. Frederick, you said 1 year so I want you
    to weigh in also.
        Mr. Frederick. Certainly. I already stated that we would
    recommend a shorter extension. The program has been in place
    for several years already. Extension only adds to making
    essentially this into a permanent fix as what was started and
    agreed to at the time to be a temporary interim quick solution.
        Mr. Shimkus. But 7 years is not permanent. I mean 7 years
    will come and there will be another reauthorization period to
    look at. I guess because the next point following up on this is
    that the full implementation CFATS hasn't occurred to date, is
    that correct?
        Mr. Skipp. That is correct.
        Mr. Shimkus. And anyone disagree with that? So the point
    being I think we have to be very, very careful about changing
    the rules midstream before everyone has completed the process
    that was designed originally. And so that is part, you know, I
    like what Mr. Murphy has done with the 7 years. Maybe that will
    be discussed as we move the process through in the committee.
    Maybe that time frame may be adjusted. I am not sure how the
    committee would do in an open process that that may come up.
    But I think it is important that we give the existing
    authorization time to get through the whole process. We heard
    the deputy secretary talk about they are not even through the
    process of tiering folks out, moving people around, and so that
    is just kind of an editorial comment.
        Do you all believe that there are other existing
    requirements for health and safety such as OSHA's Process
    Safety Management Program, the Emergency Planning and Community
    Right-to-Know Act, the EPA's Risk Management Program, and are
    these appropriate for safety protections?
        Mr. Skipp. Well, they are part of that as far as I am
    concerned. And we implemented all of those things in our
    community. We are a company that goes back to 1849 in the city
    of Waterbury. I am the 6th generation to run the family
    business, and I can tell you that being thoughtful to our
    community and making sure we are communicating well with them
    is something that we do every day, and we integrate that with
    our police and fire as well. So this would just complement
    those efforts, I believe.
        Mr. Tabar. Now, I know both for the coatings industry and
    with Sherwin-Williams, global process safety is very critical
    to us. We have made efforts not only here in the U.S., but we
    are looking at exporting our programs internationally. We think
    that a lot is embodied in process safety that deals with IST
    already and it is very normal for us to deal with substitutions
    and changes, reformulations as part of our chemical process
    safety efforts.
        Mr. Allmond. Yes, that is correct, Mr. Chairman, and as the
    under secretary testified, DHS is nowhere near close to
    understanding how to regulate IST at the moment.
        Mr. Shimkus. Mr. Frederick?
        Mr. Frederick. And it is certainly correct that these are
    pieces of a very complex issue that do come into play of
    providing some semblance of safety in those workplaces.
        Mr. Shimkus. Great. Thank you. My time is about expired, so
    I will yield to the ranking member, Mr. Green, for 5 minutes.
        Mr. Green. Mr. Chairman, I am just glad to hear you say you
    all. I thought that was something that I said----
        Mr. Shimkus. I am from Southern Illinois.
        Mr. Green. I know, Southern Illinois. Well, you all heard
    my questions earlier about coordination between because I have
    a lot of plants. In fact, along the Houston Ship Channel, all
    of my refineries--I have five refineries. Four of them are, by
    the way, organized by steelworkers and thank you. I used to
    have real steelworkers but now they are all refinery and
    chemical plant workers. The coordination of that to where we
    only have 1 federal identification card and that is our goal.
    And I know for your facilities it is the same thing.
        Mr. Frederick, you represent many of the workers at the
    chemical facilities. In fact, I was last year at a Conoco/
    Chevron facility. It actually has 500 steelworkers, and it was
    after the economy cratered and some of my chemical plants are
    closing, but since they make these plastic bottles we all drink
    out of, they were running 3 shifts and 500 union members. Do
    you have concerns about the MTSA issues? Because I know that
    plant is on the channel, Ship Channel of Houston and Exxon/
    Mobil refinery and Shell, but they also have facilities that
    are not covered by MTSA.
        Mr. Frederick. Yes. And for a number of reasons bur a
    couple of very good examples. One is just inconsistencies from
    within employers from one facility that is covered by CFATS to
    a facility that is not and how they have addressed the facility
    safety and security as a result of that inconsistency. So
    certainly, yes, there is a number of examples that we could go
    into of why we think those should be included in the same set
    of rules as those off the waterways.
        Mr. Green. OK. Mr. Skipp, you testified about potential for
    duplicative regulations. Under 2868, we would have ensured that
    facilities under MTSA would see only one regulator, the U.S.
    Coast Guard. Do you think that is important?
        Mr. Skipp. I liked what I heard Under Secretary Beers say,
    which is the harmonizing between those two departments of CFATS
    and MTSA. And I think that would be great. It all depends on
    how you define harmonized. As long as there is not a redundancy
    or duplicative efforts, which I know is a concern of yours,
    then I think it would be fine.
        Mr. Green. I guess because when you rolled out the
    Transport Worker Card, believe me, I had a lot of constituent
    case work when constituents, because of whatever reason, we had
    to work case-by-case through Lockheed who had the contract. And
    like I said, we have 260,000 of those, more than that now
    probably, and we want to make sure that we don't have to go
    through that again, don't remake the wheel. Don't we already
    have some----
        Mr. Skipp. Agreed.
        Mr. Green. Mr. Frederick, I am interested in your testimony
    you gave about the concerns of workers and regarding personnel
    security requirements. Are changes in 908 needed to ensure that
    workers' rights are protected?
        Mr. Frederick. Yes. And in one of the examples that is in
    my written statement, the need for worker involvement in the
    process of the Site Security Plans is very important. And in
    order to have thorough and good worker participation, some
    safety net of protection for them, a whistleblower protection
    for them is necessary. You know, in almost any other instance
    we recognize the deficiencies of that and can see that at some
    workplaces it is very encouraged, workers are involved, and at
    others for many reasons it is not. So we are concerned that,
    yes, there should be some provisions to protect workers as they
    participate in this process.
        Mr. Green. And I know in your testimony I agree with you.
    And I guess because there are other agencies that also regulate
    these same plant sites like OSHA and every once in a while I
    still get to go speak at one of my what I call share committee
    that we have a group of industries that bring the community
    involved, the fence line and also the employees are there, both
    unionized and management, and sit down and talk with the
    constituents. CFATS doesn't exempt that from current law like,
    for example, OSHA requirements.
        Mr. Frederick. Correct, and then some of that it has been,
    you know, referred to in the past by DHS as the employers
    certainly have the ability to do that, so it becomes somewhat
    of the voluntary piece for employers to do so. The problem is
    that not all employers volunteer.
        Mr. Green. OK. And having been on both sides of the
    bargaining table, the best way you get there is you talk to the
    folks actually producing a product and you can get the best
    ideas from them because they are living it every day.
        One of your exceptions, too, in your testimony, and you use
    the example of a chemical storage and tank farms, particularly
    with berms, EPA regulates those now or the State Environmental
    Agencies with the deference of EPA, because we have had some
    problems with those berms that are not updated. We end up
    contacting EPA instead of using another law. So there is
    already some current law that we can deal with on enforcement
    of those. And again, I know your members are out there every
    day and we work with our locals every way we can.
        So Mr. Chairman, I appreciate it. I know I would like to
    talk a little bit more about IST because having managed a
    business, we didn't call it inherently safer technology, but
    believe me, if we could save money and save on potential worker
    injuries, we used that as a part of our business practice. But
    thank you for your patience.
        Mr. Shimkus. Thank you. The chair now recognizes Mr. Murphy
    for 5 minutes.
        Mr. Murphy. Thank you. And I appreciate all the panel's
    comments. It is very helpful.
        Mr. Taber, with regard to the American Chemistry Council,
    how much have members spent overall--do you have any idea--in
    terms of----
        Mr. Taber. I could answer that but I am not a member of the
    American Chemistry Council but the American Coatings
    Association.
        Mr. Murphy. Well, how about Sherwin-Williams? I am sorry.
        Mr. Taber. That is OK.
        Mr. Murphy. I thought you had some knowledge of that, too.
    Does anybody there know in terms of how much----
        Mr. Taber. As far as the ACA goes I would say that we have
    not yet collected that data, party because we are awaiting the
    direct involvement with DHS on the interpretation of the Site
    Security Plans and Alternate Security Plans at the moment.
        Mr. Murphy. I appreciate that.
        Mr. Skipp. And I would echo that also. That is something we
    were waiting to find out more information from our people and
    how DHS will implement that.
        Mr. Murphy. But are you able to share how much your own
    companies have invested in all of this in terms of compliance
    or in terms of working through the security issue?
        Mr. Skipp. We have three relatively small facilities. It is
    just around $200,000.
        Mr. Murphy. OK. Mr. Taber, do you have----
        Mr. Taber. I can state it this way. It will likely be in
    the huge numbers in terms of the true capital cost. Right now
    we aggregate safety, health, environmental security----
        Mr. Murphy. Put together.
        Mr. Taber [continuing]. Expenditures and we are projecting
    a very large possible impact on the corporation as a function
    of this regulation.
        Mr. Murphy. Mr. Allmond, do you have any comments in terms
    of money that is invested in some of these security measures?
        Mr. Allmond. Congressman Murphy, I have an approximate
    amount, you know, tens of millions of dollars, especially when
    you factor in the staff time, the employee time to actually go
    through the Site Security Plans. You know, there is a lot of
    staff time built into complying with this regulation,
    especially up front.
        Mr. Murphy. I see. Mr. Frederick, do you have any idea how
    much some of the companies you work with have invested in
    working on these issues of security?
        Mr. Frederick. We are not privy to that information.
        Mr. Murphy. Is it working? OK. Very good. Sorry.
        Mr. Frederick. We typically don't receive that information
    from----
        Mr. Murphy. But your workers are engaged in these
    processes? You talked about the importance of sharing----
        Mr. Frederick. Yes. Yes.
        Mr. Murphy. OK. And how about one of the other members
    here? Do you include workers in Site Security reviews and
    welcome their input? Can you give us an idea of how you use
    that?
        Mr. Skipp. Sure. They participate on our safety committee.
    All employees do that. It is on a right-to-know basis. It is
    where their expertise might be able to help in one specific
    area, but as far as knowing the overall plan per se, they
    aren't necessarily involved in every aspect of that.
        Mr. Murphy. Is that done for security purposes?
        Mr. Skipp. Yes.
        Mr. Murphy. Same with you, Mr. Taber?
        Mr. Taber. Well, certainly under the OSHA programs, we are
    one of the leaders, at least in our firm with voluntary
    protection programs and OSHA cooperation and so we take the
    same perspective with safety and health as we do with security.
    I think some of the developing areas are the Employees Security
    Awareness Training programs that we are just on the verge of
    implementing that will take our security awareness and
    involvement with all employees to another level.
        Mr. Murphy. Mr. Allmond, agree?
        Mr. Allmond. Well, our organization has a program called
    ChemStewards that encourages all of our members to include
    employees into the decision-making process. I think generally
    they would agree with Mr. Skipp and Mr. Taber as well.
        Mr. Murphy. The reason I am asking that is Mr. Frederick
    brings up a point here and all of you are saying the companies
    recognize that people who do this every day have an inherent
    value in being able to provide that information. And given
    that, my impression when I have toured chemical facilities,
    even ones that maybe have been written up in the newspaper
    where someone snuck onto the site as part of a reporter's
    story, they have invested a great deal in taking care and have
    asked employees for their ideas. Is this something we need to
    codify into law or is something that is being done?
        Mr. Allmond. It doesn't need to be codified from my
    perspective and I am sure from our association's perspective
    because it is part of good business practice and what we do
    every day.
        Mr. Skipp. I would concur. I mean, as Mr. Green said, it is
    very important to tap into the knowledge of our expertise of
    our people and we do that every day through LEAN and other
    initiatives that it is just good business sense.
        Mr. Murphy. OK. I appreciate that. We want to make this
    bill work and we want to have the flexibility for Homeland
    Security to enact it. We heard before that they are working
    carefully with EPA. And I personally recognize I like it, as
    when I owned a business, I would ask my employees as well for
    suggestions along the way. The whole is greater than some of
    the parts and getting information from workers and goodness
    knows I believe with regard to management and employees,
    everybody wants to have a safe and secure workplace, and I
    would certainly encourage the association's continuing to hold
    those high standards.
        I recognize I am out of time, Mr. Chairman.
        Mr. Skipp. Can I make 1 other comment just about that? And
    I think that you didn't get a lot of clear numbers as far as
    where things are. We are really looking for certainty, and I
    think that is what this CFATS bill will do in order for people
    to invest more. There is some holding back because people are
    not sure which way to go because they haven't gotten enough
    feedback yet from the Agency.
        Mr. Murphy. That is important. Thank you, Mr. Chairman.
        Mr. Shimkus. Thank you. The chair recognizes Mr.
    Butterfield for 5 minutes.
        Mr. Butterfield. Thank you very much, Mr. Chairman and
    Ranking Member. Ladies and gentleman, it is good to see all of
    the witnesses today and thank you very much for your
    willingness to come forward and to give us your testimonies.
        Mr. Frederick, let me start with you. In your testimony I
    am told that you said that ``performance standards often result
    in cost and productivity taking precedence over safety.'' Did I
    quote you correctly?
        Mr. Frederick. Yes.
        Mr. Butterfield. We have seen several examples in the past
    year alone of major industrial actors placing profits over the
    safety of their workers and the safety of the environment,
    notably, with the BP oil spill. It is a serious issue and CFATS
    should be structured to limit the ability of covered facilities
    to place too much emphasis on cost at the expense of worker
    safety or the safety of the surrounding area.
        Question: Can you give an example of these performance
    standards resulting in cost concerns outweighing the concerns
    of security?
        Mr. Frederick. Yes. Without the specific workplace but
    within the oil-refining industry, some of the performance-based
    standards--this is the day-to-day case of the performance is
    achieved on paper but on the shop floor where the folks are
    working around the hazardous materials, the shortcuts have been
    taken, the hole in the fence has been filled with a camera
    instead of a new fence, whatever the case may be. We could
    provide some specifics from specific facilities for the record
    after the hearing if you would like.
        Mr. Butterfield. Well, what about a specific requirement
    from DHS to address the problem?
        Mr. Frederick. And on that, in some of just the perimeter
    security issues, the issue has been around fencing and when a
    gap in the fence, a hole in the fence has been in place, other
    measures have been taken instead of putting the more secure
    fencing in place.
        The example from the testimony of the berms or dikes to
    keep the unexpected release of chemicals from a tank is for
    compliance with other reasons but also comes into play the
    security because if there is a terrorist attack on that
    facility and the materials are released from more than 1 tank,
    oftentimes those are not designed to hold back that amount of
    the quantity of the materials within the tanks.
        Mr. Butterfield. Well, one thing leads to another. Then we
    get into a question of whether it is preferable to have a DHS-
    sponsored security measure requirement that guarantees a level
    of safety but may not be flexible enough for the variety of
    facilities that are tiered from traditional chemical plants or
    refineries to labs that are at our universities. We understand
    that security isn't cheap and that one size does not fit all.
    It is a difficult job for DHS.
        I completely agree with you, with your assessment of the
    value of workers' input to the process. Workers must be
    involved and they must also to feel free to blow the whistle
    without fear of reprisal. This is something we have talked
    about extensively in previous legislation on this issue.
        My final question is do you feel that the current CFATS
    program adequately protects whistleblowers?
        Mr. Frederick. No. We would not believe it does. However,
    at this juncture we also have not had cases to cite, only in
    feedback from our members that work in those facilities that
    they have some concerns that they have reservations about
    raising because there is not an adequate safety net for them to
    speak out on those issues.
        Mr. Butterfield. All right. Thank you.
        Mr. Skipp. Congressman?
        Mr. Butterfield. Yes. I am going to yield. Yes, you may
    respond.
        Mr. Skipp. May I respond to that also?
        Mr. Butterfield. I have a minute left, yes. Sure.
        Mr. Skipp. I am Andrew Skipp and I run a chemical company
    in Connecticut and I can tell you that 90 percent of our
    members are owner/managers of their businesses. They live their
    business day in those facilities. There is nothing more
    important than the safety and security of those plants.
        And I can assure you that our members take that very
    seriously and that they don't compromise for the benefit of
    just expediency. It is critical. It is our lifeblood. It is our
    livelihood. And so we take that initiative very seriously.
        The matter about whistleblowers, I can't refer to that
    relative to CFATS, but certainly there are laws in place to
    protect them and it is something that we take very seriously in
    our business.
        Mr. Butterfield. Thank you. All right. Anyone else want to
    respond to that? I have a few seconds left.
        Mr. Frederick. Just I think the laws that are in place
    would not--for example, the protections within the OSHA Act
    would not protect a worker for calling into question something
    under the CFATS regulations.
        Mr. Butterfield. All right. Mr. Chairman, I will yield back
    my time.
        Mr. Shimkus. If the gentleman would yield me his last 4
    seconds.
        Mr. Butterfield. Sure.
        Mr. Shimkus. I just want to make sure, Mr. Frederick, that
    none of your comments are under CVI. In other words, the
    information that you were alluding to is under CVI?
        Mr. Frederick. In the example of the----
        Mr. Shimkus. Well, you were giving some anecdotal stories
    and we want to make sure that----
        Mr. Frederick. I don't believe so.
        Mr. Shimkus. OK.
        Mr. Frederick. To my knowledge, no.
        Mr. Shimkus. OK. That is what we need to know. Thank you.
    The chair now recognizes Mr. Cassidy for 5 minutes.
        Mr. Cassidy. I never knew steelworkers' name was so long. I
    once sat on a plane next to a guy who worked for you all and
    who was I think doing mining, which I thought--so anyway, now
    kind of the light bulb goes on.
        Mr. Frederick, there was one sentence in your testimony in
    which you suggested you would oppose more extensive background
    checks for workers. Did I hear that correctly?
        Mr. Frederick. Yes. And our concern around background
    checks is twofold. One is to make certain that there is a
    process in place that if an error results of the background
    check, that that individual has an opportunity to clarify that
    error and correct it prior to losing his or her employment.
        Mr. Cassidy. Now, I accept that, but inherent in having
    more involvement in a process is greater risk that a background
    check may show something which would eliminate somebody's job
    frankly. I mean if it turns out a kid smoked marijuana in
    college and got busted for it and now he is 45, well, then that
    may come back and reflect upon him in a negative way. Would you
    object to, you know, drug screens, et cetera, all this that
    takes place?
        Mr. Frederick. Well, there are drug testing programs in a
    variety of----
        Mr. Cassidy. And I just use that as an example, not as a
    concrete particular. So it is not background checks in
    particular you object to or more even exhaustive ones. Rather
    it is the lack of safeguards if someone loses employment
    because of that.
        Mr. Frederick. Yes. And recognizing that there are
    necessary pieces of information that are needed. Our experience
    thus far has been that this is and will be a very expensive
    process, expensive and extensive, for a very limited amount of
    return of finding things more than somebody who perhaps had a
    minor item such as you----
        Mr. Cassidy. So if you will, kind of the principle that for
    last marginal benefit, you got to pay a heck of a lot of money?
        Mr. Frederick. And in some of the other examples we are
    talking about yes, there are costs associated with doing
    dangerous work.
        Mr. Cassidy. And if you increase the cost, ultimately it is
    going to affect employment?
        Mr. Frederick. It may, yes.
        Mr. Cassidy. So my concern is, for example, that that same
    principle is involved here. I mentioned earlier to the earlier
    witness I went to visit the nuclear power plant and I was
    struck how much security they have, three different perimeter
    fences. Even if they cut a hole, there is a camera
    surveillance. And so they told me about how an armadillo
    wandered across and their motion detectors got it.
        Now, if we are going to have NRC do this level of
    requirement and overlay CFATS, do you see that as appropriate?
        Mr. Frederick. Well, specifically to the NRC provision, I
    don't have firsthand knowledge or experience. Our union does
    not represent workers at nuclear generators----
        Mr. Cassidy. But you mentioned that in your testimony as
    kind of a concern that they are excluded.
        Mr. Frederick. The NRC. And so what I want to explain is
    that within the NRC they also have regulatory authority over
    non-energy producing facilities beyond the nuclear plants. And
    in some of those facilities, one example being the NRC has
    oversight of a very narrow piece of the production process, so
    a very large facility, narrow piece is NRC, but because the NRC
    has authority over that narrow piece, CFATS does not apply. For
    example, that is the facility that has 2 million pounds of
    hydrofluoric acid onsite and some of it in railcars offsite.
    That is a real concern that the NRC, small piece of the
    operation that they have oversight for, a large facility
    excluded from CFATS.
        Mr. Cassidy. Now, my concern is that if we have overlay of
    federal agency over federal agency, that is not just a
    multiplier. That is an exponent in terms of the complexity and
    the expense of compliance.
        Now, it also seems this IST--I used the example of the
    Maginot Line where you have got this kind of, OK, this is the
    current technology but really there is something on the cusp
    but it has not been vetted, reviewed, public comments, so
    therefore it can't be because the de facto standard becomes the
    IST. That actually seems like a counterproductive mechanism. I
    don't see the problem--in fact, I see IST as almost the same
    problem you defined earlier going after marginal benefit with
    greater expense, ultimately costing jobs.
        Mr. Frederick. In some cases the using other technologies
    is certainly not costing jobs. There are many examples of
    better technologies being brought in place across worker health
    and safety, as well as site security. There are other examples
    that jobs have benefitted.
        Mr. Cassidy. If you have IST, that becomes a de facto
    standard, and if it becomes a de facto standard, even if there
    is a better technology, it most likely won't be implemented
    because there is a de facto standard issued by a reg 8 months
    ago even if 1 month ago there is a better technology that comes
    out.
        Mr. Frederick. However, if it is looked at and with a
    system in place as suggested in the testimony and in other
    folks that are looking at this issue currently in other bills,
    there are the ability to have a DHS appeals process that would
    ensure that the facility, the employer has the ability to refer
    this back with some questions and move on to----
        Mr. Cassidy. Now, I have been under this Federal Government
    now for 2 \1/2\ years but it is my impression that it dances
    like an elephant upon the head of a pin. It is very slow-
    moving. It is very awkward. It is very laborious and expensive
    to work through that process. So I kind of return to my point
    that the reg issued 9 months ago becomes a de facto standard
    and 2 years later you finally work through the appeals process
    and in the meantime you are 3 generations ahead what you
    originally offered on appeal is now outdated. Do you follow
    what I am saying?
        Mr. Frederick. Yes.
        Mr. Cassidy. And so do you really see the bureaucracy in
    the appeals process working so well that we will always have
    the most current technology being used to secure our plants?
        Mr. Frederick. I see that we certainly would have better
    technology than is in place at the start of the process and the
    ability for the employer, the manufacturer to continue to move
    forward as long as it is within the scope of their security----
        Mr. Cassidy. But if there is a new technology that comes
    out and it is not part of the IST, what is the likelihood that
    it will be immediately implemented?
        Mr. Frederick. Well, and so perhaps I guess we are a little
    bit off of what we perceive the prescriptive standard on IST to
    look like. We believe that in the instance in some of the other
    applications of this issue that are in place, there is the
    flexibility for----
        Mr. Cassidy. Well, the assistant secretary actually,
    though, conceded the possibility that there would be a standard
    which would leave out something that would be technologically
    more advanced because it had not had a chance to be reviewed.
    And he actually, you know, frankly said yes, that is going to
    happen. He accepted that as a probability. And frankly that
    concerns me because I think that there is so much explosion of
    technology, we would be remiss in terms of safety and all of
    the other things if we didn't have a standard which allowed its
    usage.
        I yield back. Thank you.
        Mr. Shimkus. The gentleman yields back his time. Unanimous
    consent for the ranking member for a minute.
        Mr. Green. Yes. I want to ask, your response, Mr.
    Frederick, to our colleague from Louisiana that because NRC has
    jurisdiction over, for example, nuclear facility but they don't
    have jurisdiction over something else on that plant site that
    that would exempt any other regulation because NRC has it?
        Mr. Frederick. Just in this instance that I was referring
    to, just the CFATS regulation.
        Mr. Green. We are going to explore that because I know we
    have OSHA requirements at nuclear facilities and we really
    don't want overlay and duplication but we do want somebody
    looking at it.
        Mr. Frederick. Correct.
        Mr. Green. And so that is the concern.
        Mr. Shimkus. And I thank my colleague. I have a couple of
    pieces of business to finish up. Unanimous consent request that
    a letter from Mr. Dent on this be submitted for the record.
    Without objection, so ordered.
        [The information follows:]

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        Mr. Shimkus. I also want to advise all members that we have
    10 legislative days to submit questions for the record and if
    you would be so good to return those questions to us to fulfill
    the hearing.
        With that, we do appreciate your time. Please feel free to
    visit with us on this issue as we move forward. We do want to
    bring some certainty to this. We do want to have a longer-term
    reauthorization of some size so that you all can move forward
    in helping in this process. So with that, the hearing is
    adjourned.
        [Whereupon, at 10:58 a.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

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