For Clients and friends of Jackson Kelly PLLC
Volume 16, Number 2, Winter 2008 ©2008 Jackson Kelly PLLC
Pursuant to an Advance Notice of Proposed Rulemaking (“ANPRM”) released on October 29, 2008, the Department of Homeland Security (“DHS”) seeks comments on a recent amendment to the Homeland Security Act (“HSA”) entitled the Secure Handling of Ammonium Nitrate. 73 Fed. Reg. 64280 (Oct. 29, 2008). The amendment requires the DHS to regulate the sale and transfer of ammonium nitrate by an ammonium nitrate facility (“ANF”) in an effort to prevent the misappropriation or use of ammonium nitrate in an act of terrorism.
Section 563 of the 2008 Consolidated Appropriations Act, Subtitle J, Secure Handling of Ammonium Nitrate, Public Law 110-161 (“Section 563”), amends the HSA to require the DHS to regulate the sale and transfer of ammonium nitrate by an ANF to prevent the misappropriation or use of ammonium nitrate in an act of terrorism. DHS is primarily concerned with ammonium nitrate when used as an explosive or as a fertilizer mixed with fuel oil to create an explosive mixture. Ammonium nitrate is a fertilizer that is commonly found in agriculture-related operations and is also used commercially as an explosive in the mining industry. The availability of small-scale packaging in both industries contributes to ammonium nitrate’s susceptibility to theft and misuse in making an improvised explosive device.
In an effort to prevent the theft and misuse of ammonium nitrate, Section 563 imposes certain conditions on sales or other transfers of ammonium nitrate without regard to the quantities involved. At its most basic level, Section 563 only allows ammonium nitrate to be transferred between registered ammonium nitrate purchasers and ANFs. Under Section 563, an ANF is any entity that produces, sells, or otherwise transfers ownership of, or provides application services for ammonium nitrate. Also under Section 563, an ammonium nitrate purchaser means any person who purchases ammonium nitrate from an ANF.
Section 563 requires the DHS to develop and implement a regulatory program covering the sale or transfer of ammonium nitrate for the purpose of preventing the misuse of ammonium nitrate. In furtherance of this mandate, the DHS plans to include four categories of activities in the new rule. A summary of the four categories and the activities included in each category follows.
Registration Activities: DHS plans to require ANFs and prospective ammonium nitrate purchasers to apply for registration numbers from DHS in order to sell, transfer, and/or purchase ammonium nitrate. Prospective registrants would be required to provide specific identifying information to DHS, which would be used by DHS to conduct checks of identifying information of all prospective registrants against identifying information that appears in the Terrorist Screening Database. Under the program, DHS plans to issue or deny registration numbers within 72 hours of receiving of a complete registration application.
Point-of-Sale Activities: At points-of-sale, ANFs would be required to verify that potential ammonium nitrate purchasers are registered with DHS. This verification process would require confirming the ammonium nitrate purchaser’s identity and registration number. The program would also require ANFs to maintain records of sales or transfers of ammonium nitrate for at least two years after each transaction. If an ANF failed to maintain such records, the program would allow DHS to impose penalties upon the ANF.
Additional Regulatory Activities/Requirements: Under Section 563, ANFs and ammonium nitrate purchasers would have an obligation to report the theft or loss of ammonium nitrate to federal law enforcement authorities within one calendar day of discovery of the loss. DHS would also conduct or oversee regulatory compliance inspections and audits of ANF 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 ammonium nitrate for terrorist acts.
Administrative Activities: Under the proposed rule, DHS would establish an expedited appeals process for applicants denied a registration number. Specifically, Section 563 requires DHS to resolve any such appeal within 72 hours of receiving a denied individual’s request for appeal. Furthermore, DHS has authority to assess civil penalties up to $50,000.00 per violation of the regulations and will establish a process for managing both the assessment and potential appeal of any penalty assessed. Section 563 would also require DHS to establish a threshold percentage of ammonium nitrate in a substance as a prerequisite for that substance to be considered ammonium nitrate for purposes of complying with the statute.
In the ANPRM, DHS provided a list of comments that will provide the most assistance to DHS during the rulemaking process. A non-exhaustive list of the subject areas of potential comments that DHS seeks to receive include comments regarding: (i) a verification process for registrations and ammonium nitrate purchases, including methods for verifying the identity of any ammonium nitrate purchaser; (ii) the detonability of ammonium nitrate at certain concentrations, including research being conducted concerning the detonability of ammonium nitrate; (iii) how best to conduct or oversee regulatory compliance inspections and audits of ANF records; (iv) monetary and other costs anticipated to be incurred by U.S. citizens and others as a result of the new compliance requirements; and (v) the best methods or processes for interacting with state and local governments regarding ammonium nitrate security. Any person desiring to submit written comments on the proposed rulemaking must do so by December 29, 2008.
OCCUPATIONAL SAFETY AND HEALTH PRACTICE GROUP
Denver, Colorado
Responsible Attorney
Karen L. Johnston
(303) 390-0008
kjohnston@jacksonkelly.com
For more information, contact:
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Laura E. Beverage
Karen L. Johnston |
R. Henry Moore |
Julia K. Shreve
Michael T. Cimino |
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(303) 390-0003 |
(412) 434-8801 |
(304) 340-1000 |
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