[Federal Register Volume 73, Number 210 (Wednesday, October 29, 2008)]
[Proposed Rules]
[Pages 64280-64282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25821]

Proposed Rules
                                                Federal Register

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.


Federal Register / Vol. 73, No. 210 / Wednesday, October 29, 2008 / 
Proposed Rules

[[Page 64280]]


6 CFR Chapter I

[DHS 2008-0076]
RIN 1601-AA52

Secure Handling of Ammonium Nitrate Program

AGENCY: National Protection and Programs Directorate, Department of 
Homeland Security.

ACTION: Advance notice of proposed rulemaking.


SUMMARY: This Advance Notice of Proposed Rulemaking (ANPRM) seeks 
comment on a recent amendment to the Homeland Security Act entitled the 
Secure Handling of Ammonium Nitrate. The amendment requires the 
Department of Homeland Security (DHS or Department) to ``regulate the 
sale and transfer of ammonium nitrate by an ammonium nitrate facility * 
* * to prevent the misappropriation or use of ammonium nitrate in an 
act of terrorism.''

DATES: Written comments must be submitted on or before December 29, 

ADDRESSES: You may submit comments, identified by docket number 2008-
0076, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: U.S. Department of Homeland Security, National 
Protection and Programs Directorate, Office of Infrastructure 
Protection, Infrastructure Security Compliance Division, Mail Stop 
8100, Washington, DC 20528.

Infrastructure Protection, Infrastructure Security Compliance Division, 
Mail Stop 8100, Washington, DC 20528, telephone number (703) 235-5263.


Abbreviations and Terms Used in This Document

AN--Ammonium Nitrate
ANFO--Ammonium Nitrate/Fuel Oil
ANPRM--Advance Notice of Proposed Rulemaking
CFATS--Chemical Facility Anti-Terrorism Standards
COI--Chemicals of Interest
DHS or Department--Department of Homeland Security
DOT--Department of Transportation
IED--Improvised Explosive Device
IP--Office of Infrastructure Protection
ISCD--Infrastructure Security Compliance Division
NPPD--National Protection and Programs Directorate
POS--Point of Sale
STQ--Screening Threshold Quantity
TSDB--Terrorist Screening Database
USDA--United States Department of Agriculture

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on all aspects of the 
advance notice of proposed rulemaking (ANPRM). The Department also 
invites comments that relate to the economic, environmental, or 
federalism effects that might result from any final rule consequent 
from this ANPRM. Comments that will provide the most assistance to the 
Department in developing these procedures will refer to a specific 
provision of the ANPRM or the Secure Handling of Ammonium Nitrate 
provisions in the Homeland Security Act, explain the reason for any 
comments, and include other information or authority that supports such 
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov.

II. Background

    Section 563 of the 2008 Consolidated Appropriations Act, Subtitle 
J, Secure Handling of Ammonium Nitrate (``Section 563''), Public Law 
110-161, amends the Homeland Security Act of 2002. The amendment 
requires the Department to ``regulate the sale and transfer of ammonium 
nitrate by an ammonium nitrate facility * * * to prevent the 
misappropriation or use of ammonium nitrate in an act of terrorism.''

A. Ammonium Nitrate (AN)

    AN is a chemical that exists in multiple concentrations and 
physical forms, each of which may have different security implications. 
DHS is primarily concerned with AN when used as an explosive or as a 
fertilizer mixed with fuel oil to create an explosive mixture known as 
Ammonium Nitrate/Fuel Oil (ANFO). Both of these forms (i.e., explosive 
and fertilizer coupled with liquid fuel oil) in the hands of terrorists 
have the potential to be detonated and when there is sufficient 
exposure may create significant adverse consequences for human life or 
health. AN fertilizer is commonly found in agriculture-related 
operations nationwide and, given the availability of small-scale 
packaging (e.g., 50-pound bags), could be susceptible to theft and 
misuse in making an improvised explosive device (IED). AN is also used 
commercially as an explosive (in the mining industry, for example), and 
in that form, could be stolen and detonated by terrorists.
    Terrorist organizations have and will likely continue to use 
explosives, including AN-based explosives, in future terrorist attacks. 
While preventing the misappropriation and misuse of AN on American soil 
could mitigate national risk, AN is only one of many chemicals that are 
susceptible to misuse by terrorists.

B. AN and the Chemical Facility Anti-Terrorism Standards (CFATS) 

    In addition to the authority granted to DHS by section 563 of the 
2008 Consolidated Appropriations Act, the Department has authority 
under an earlier statute to regulate the security of certain facilities 
that possess AN. In October 2006, Congress enacted section 550 of the 
Homeland Security Appropriations Act of 2007 (Pub. L. 109-295), which 
required the Department to issue regulations for the security of high-
risk chemical facilities. Under that authority, the Department 
promulgated an interim final rule called the Chemical Facility Anti-

[[Page 64281]]

Standards (CFATS), 6 CFR Part 27. See 72 FR 17688 (April 9, 2007). To 
help the Department identify high-risk chemical facilities under the 
CFATS regulation, the Department adopted a final list of chemicals of 
interest (COI) as Appendix A to CFATS. See 72 FR 65396 (November 20, 
2007). Any chemical facility that possesses any COI at or above the 
applicable screening threshold quantity (STQ) specified in Appendix A 
for that COI must complete and submit to DHS certain consequence-based 
information (the ``Top-Screen''). Any facility preliminarily determined 
to be high-risk after DHS review of the facility's Top-Screen must then 
meet additional security-related requirements under CFATS. Due to the 
risks AN may pose if exploded on-site or if stolen or diverted to 
produce IEDs, AN (in both explosive and specified fertilizer form) was 
one of over 300 chemicals of interest that DHS listed in Appendix A to 
CFATS. See 72 FR 65407-65408, 65410.\1\

    \1\ The listing of AN in explosive form in Appendix A to CFATS 
covers any commercial grade of ammonium nitrate (with more than 0.2 
percent combustible substances, including any organic substance 
calculated as carbon, to the exclusion of any other added 
substance). The screening threshold quantities for this form of AN 
are 5,000 lbs (as a release-explosive) and 400 lbs when in 
transportation packaging (as a theft-explosive). Appendix A also 
lists AN in solid form (with a nitrogen concentration of 23% or 
greater) with an STQ of 2000 lbs. This form of AN is commonly used 
as a fertilizer in the agricultural community and, when used in a 
mixture, will count toward the STQ if the mixture contains a minimum 
concentration of 33% or more of solid AN.

    While both section 563 and the CFATS rule share a goal of reducing 
terrorist risks associated with AN, the scope and methods of regulation 
under section 563 and CFATS are expected to be very different. The 
CFATS rule--which addresses hundreds of chemicals in addition to AN--is 
directed at the security of high-risk facilities. The CFATS rule does 
not, however, impose any limitations on the sale or transfer of AN. By 
contrast, section 563 does not address the physical security of AN 
facilities. Instead, section 563 imposes certain conditions on sales or 
other transfers of AN--without regard to the quantities involved--e.g., 
by requiring that AN can only be transferred between registered AN 
purchasers (or their agents) and AN facilities. In developing the rules 
required by section 563, DHS intends to draw on information gained 
under the CFATS program about AN, especially its use by the 
agricultural community, so that CFATS and the new program under Section 
563 complement each other.

III. Section 563: Secure Handling of Ammonium Nitrate Act

    Pursuant to section 563, DHS will develop and implement a 
regulatory program covering the sale and transfer of AN for the purpose 
of preventing the misappropriation or use of AN in acts of terrorism. 
Consistent with section 563, DHS expects to include the following 
categories of activities and sub-activities in that program:

Category 1: Registration Activities

    A. Registration Applications. DHS would require AN facilities and 
prospective AN purchasers to apply for registration numbers from DHS in 
order to sell, transfer, and/or purchase AN. Prospective registrants 
would have to provide specific identifying information to DHS.
    B. Terrorist Screening Database (TSDB) Checks. DHS would conduct 
checks of identifying information of all prospective registrants 
against identifying information that appears in the TSDB.
    C. Registration Numbers. DHS generally would plan to issue or deny 
registration numbers within 72 hours of receipt of an AN facility or AN 
purchaser's complete registration application.

Category 2: Point-of-Sale (POS) Activities

    A. Seller Verification of Purchaser's Registration and Identity. At 
points-of-sale, AN facilities would have to verify that potential AN 
purchasers are registered with DHS (including verifying each AN 
purchaser's identity and registration number).
    B. Recordkeeping. DHS would require all AN facilities to keep 
records of sales or transfers of AN for at least two years after each 
transaction, with penalties for failing to maintain records 

Category 3: Additional Regulatory Activities/Requirements

    A. Reporting Theft or Loss of AN. DHS would require AN facilities 
and AN purchasers to report the theft or loss of AN to Federal law 
enforcement authorities within one calendar day of discovery of the 
theft or loss.
    B. Inspections and Audits. DHS would conduct or oversee regulatory 
compliance inspections and audits of AN facilities' records to ensure 
that regulated facilities are properly maintaining records, to monitor 
compliance with the requirements of section 563, and to deter or 
prevent misappropriation of AN for terrorist acts.
    C. Guidance Materials and Posters. DHS would develop guidance 
materials that 1) set forth procedures for appealing a denial of an 
application for a registration number, and 2) help AN facilities 
identify suspicious AN purchases, attempted purchases, and transfers 
and determine the appropriate course of action. DHS would also develop 
posters providing information on sellers' record-keeping requirements 
and penalties for violating those requirements.

Category 4: Administrative Activities

    Appeals and Penalties. The Department would establish an expedited 
appeals process for applicants denied a registration number. 
Specifically, section 563 requires the Department to resolve such an 
appeal within 72 hours of receiving a denied individual's request for 
appeal. Additionally, the Department has the authority to assess civil 
penalties of up to $50,000 per violation of the regulations and thus 
will establish a process for managing both the assessment and potential 
appeal of those penalties.
    Establishing Threshold Level of AN in a Substance. Under section 
563, DHS would establish a threshold percentage of AN in a substance as 
a prerequisite for that substance to be considered AN for purposes of 
complying with the statute. While pure, or ``straight,'' AN with a 
sufficient concentration of nitrates can be used as an explosives 
precursor, there is some scientific uncertainty regarding the specific 
detonability of pure AN. Experts in various governmental and non-
governmental organizations continue to research the minimum quantity 
(i.e., critical mass) of straight AN required for detonation, the size 
of conventional explosive charge (i.e., booster) necessary to detonate 
straight AN, and the actual yield (i.e., the explosive energy) from a 
straight AN detonation.

IV. Questions for Commenters

    Comments that will provide the most assistance to DHS in this 
rulemaking include, but are not limited to, the following:
    a. Comments regarding submission of registration applications 
(e.g., whether applications should be submitted electronically or in 
paper form; whether applications should be available only through DHS 
or through Local Cooperative Extension Service Offices or at United 
States Post Offices).
    b. Comments regarding the technical capabilities (e.g., access to 
computers; access to Internet; average level of computing skills; 
frequency of use of

[[Page 64282]]

integrated Information Technology systems) of AN manufacturers, 
distributors, sellers, and end-users.
    c. Comments regarding DHS distribution of AN registration letters 
or certificates (e.g., whether DHS should use email or regular mail).
    d. Comments regarding a verification process for registrations and 
AN purchases, including methods for verifying the identity of any AN 
purchaser, as well as the identity of designated agents purchasing AN 
on behalf of registered AN purchasers.
    e. Comments on the detonability of AN at certain concentrations, 
including research being conducted concerning the detonability of AN.
    f. Comments on how likely AN fertilizer users would be to use an 
alternative fertilizer that is potentially less detonable, such as, for 
example, Sulf-N[supreg] 26 Fertilizer Process and Product (ammonium 
sulfate nitrate fertilizer) which DHS recently ``designated'' as a 
Qualified Anti-Terrorism Technology (QATT) pursuant to 6 U.S.C. 441-444 
(the Support Anti-terrorism by Fostering Effective Technologies Act of 
2002, or SAFETY Act). See http://www.safetyact.gov.
    g. Comments on how best to conduct or oversee regulatory compliance 
inspections and audits of AN facilities' records to ensure that 
regulated facilities are properly maintaining records, to monitor 
compliance with the requirements of Section 563, and to deter or 
prevent misappropriation of AN for terrorist acts.
    h. Comments on the economic impacts (both long-term and short-term, 
quantifiable and qualitative) of the implementation of section 563, 
including potential impacts on State, local, and tribal governments of 
the United States; potential impacts on agri-business, including AN 
manufacturers, importers, packagers, distributors, retailers, and end-
users including farmers (e.g., whether current AN purchasers would 
likely reduce their AN purchases as a result of a new regulatory 
regime); and potential impacts on small businesses.
    i. Comments on the monetary and other costs anticipated to be 
incurred by U.S. citizens and others as a result of the new compliance 
requirements, such as the costs in time and money that an individual 
may incur to obtain an AN registration. These costs may or may not be 
quantifiable and may include actual monetary outlays, transitional 
costs incurred to obtain alternative documents, and the costs that will 
be incurred in connection with potential delays at the point of sale.
    j. Comments on a possible fee structure to address some or all of 
the costs of this new program, such as registration, TSDB checks, and 
issuance of registration numbers.
    k. Comments on the benefits of this rulemaking.
    l. Comments on any alternative methods of complying with the 
    m. Comments on the best methods or processes for interacting with 
state and local governments regarding AN security.

Michael Chertoff,
Secretary of Homeland Security, Department of Homeland Security.
[FR Doc. E8-25821 Filed 10-28-08; 8:45 am]