Vol. 76 Wednesday, No. 149 August 3, 2011

Part II

Department of Homeland Security

6 CFR Part 31 Security Program; Proposed Rule

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DEPARTMENT OF HOMELAND may also send comments to the Office 3. Registering AN Sellers SECURITY of Information and Regulatory Affairs 4. Registering AN Facility Representatives (OIRA), OMB. Comments on the 5. Registering a Designated AN Facility Office of the Secretary collection of information must reach POC 6. Summary of AN Facility Personnel DHS or OIRA on or before October 3, Registration Proposals 6 CFR Part 31 2011. To ensure that your comments to 7. Registering AN Purchasers [Docket ID 2008–0076] OIRA are received on time, the preferred 8. Federal/State/Tribal/Local Government- methods are by e-mail to Owned Entities That Are AN Facilities or RIN 1601–AA52 [email protected] (include AN Purchasers the docket number and ‘‘Attention: Desk 9. Registration Process Ammonium Nitrate Security Program Officer for Department of Homeland 10. Initial Applications Security/NPPD’’ in the subject line of 11. Applicant Vetting Process AGENCY: National Protection and 12. Notification of Approval or Denial Programs Directorate, DHS the e-mail) or fax at 202–395–6566. An 13. Revocation of Registration Numbers ACTION: Proposed rule; request for alternate, though slower, method is by 14. Appealing Registration Denials and comments. U.S. mail to the Office of Information Registration Revocations and Regulatory Affairs, Office of 15. Registration Updates and Expiration SUMMARY: This proposed rule would Management and Budget, 725 17th 16. Initial Six-Month Registration Period implement anti-terrorism measures to Street NW., Washington, DC 20503, C. Purchaser Verification Activities better secure the homeland. The Attention: Desk Officer for Department 1. Overview Department of Homeland Security of Homeland Security/NPPD. 2. Manner of Sale or Transfer of would regulate the sale and transfer of Ammonium Nitrate FOR FURTHER INFORMATION CONTACT: 3. Required Verification Activities ammonium nitrate pursuant to section Ammonium Nitrate Security Program 4. Verification of the Currency and 563 of the Fiscal Year 2008 Department Manager, U.S. Department of Homeland Authenticity of a Prospective AN of Homeland Security Appropriations Security, National Protection and Purchaser’s AN Registered User Number Act with the purpose of preventing the Programs Directorate, Infrastructure 5. Verification of a Prospective AN use of ammonium nitrate in an act of Security Compliance Division (NPPD/ Purchaser’s Identity When the AN terrorism. This proposed rule seeks ISCD), 245 Murray Lane, SW., Mail Stop Purchaser Opts Not To Use An Agent comment on both proposed text for such 0610, Arlington, VA 20598–0610, 6. Verification of a Prospective AN Purchaser’s Identity When the AN a regulation and on several practical and telephone number (703) 235–5263. legal issues integral to the development Purchaser Opts To Use An Agent SUPPLEMENTARY INFORMATION: 7. For Sales Involving Agents, Verification of an Ammonium Nitrate Security Table of Contents That the Agent Is Acting on Behalf of the Program. AN Purchaser DATES: Comments and related material I. Public Participation 8. Verification of the Agent’s Identity must either be submitted to our online II. Background: Overview of Subtitle J and Based on the Visual Check of the Agent’s docket via http://www.regulations.gov Associated Regulatory Development Photo Identification 9. Timing of Verification Activities on or before December 1, 2011 or reach Activities A. Subtitle J 10. Departmental Role in Verification the Docket Management Facility by that B. October 2008 Report to Congress Process date. Comments sent to DHS or the C. Advance Notice of Proposed 11. Purchaser Verification Portal Office of Management and Budget Rulemaking 12. Purchaser Verification Call Center (OMB) on collection of information D. Research Efforts and Findings 13. Purchaser Verification Portal and Call must reach DHS or OMB on or before 1. Security Hazards Presented by Use of Center October 3, 2011. Ammonium Nitrate 14. Suspicious Purchases and Attempted 2. Detonability of Ammonium Nitrate Purchases of Ammonium Nitrate ADDRESSES: You may submit comments, 3. Federal Regulations Addressing D. Recordkeeping identified by docket number 2008–0076, Ammonium Nitrate 1. Overview by one of the following methods: • a. Chemical Facility Anti-Terrorism 2. Entities Responsible for Keeping Records Federal eRulemaking Portal: Follow Standards 3. Records To Be Kept the instructions at http:// b. U.S. Coast Guard Maritime Security 4. Length of Retention of Records www.regulations.gov for submitting Regulations 5. Format and Storage of Records comments. c. Transportation Security Administration E. Reporting of Theft or Loss of • Mail: U.S. Department of Homeland d. Bureau of Alcohol, Tobacco, Firearms Ammonium Nitrate Security, National Protection and and 1. Overview Programs Directorate, Infrastructure e. Department of Transportation Hazardous 2. Who Must Report Theft or Loss Security Compliance Division (NPPD/ Materials Regulations 3. Level of Theft or Loss Warranting f. Department of Commerce Reporting ISCD), 245 Murray Lane, SW., Mail Stop 4. State Regulations Addressing 4. Process for Reporting Theft or Loss 0610, Arlington, VA 20598–0610. Ammonium Nitrate F. Inspections and Audits To avoid duplication, please use only 5. Voluntary Programs Addressing G. Guidance Materials and Posters one of these methods. For instructions Ammonium Nitrate H. Civil Penalties, Civil Penalty on submitting comments, see the III. Discussion of Proposed Rule: Adjudications, and Civil Penalty ‘‘Public Participation’’ portion of the Implementing Subtitle J Appeals SUPPLEMENTARY INFORMATION section A. Ammonium Nitrate Subject to Subtitle I. Consultation Requirements below. J Requirements J. Delegation of Authority Collection of Information Comments: 1. Mixture Requirement IV. Regulatory Analyses If you have comments on the collection 2. Threshold Weight and Individual A. Executive Order 12866 and Executive Products Exemptions Order 13563: Regulatory Planning and of information discussed in section IV.F 3. Explosives Exemption Review (‘‘Paperwork Reduction Act’’) of this B. Requirements for the Registration of AN 1. Cost Impacts Notice of Proposed Rulemaking Sellers and AN Purchasers 2. Benefits of the Ammonium Nitrate (NPRM), you may submit comments to 1. Overview Security Program the DHS as indicated above, and you 2. Who Must Register B. Regulatory Flexibility Act

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1. Reasons for and Objectives of the submitting written data, views, or II. Background: Overview of Subtitle J Proposed Rule arguments on all aspects of this NPRM. and Associated Regulatory 2. Affected Small Business Population and The Department of Homeland Security Development Activities Estimated Impact of Compliance 3. Number of Small Entities That Purchase (DHS or the Department) also invites A. Subtitle J Ammonium Nitrate comments that relate to the economic, 4. Number of Small Entities That Sell environmental, or federalism effects that Section 563 of the Fiscal Year 2008 Ammonium Nitrate may result from this NPRM. Comments Department of Homeland Security 5. Alternatives Considered that will provide the most assistance to Appropriations Act amends the 6. Average Costs per AN Facility the Department in developing this Homeland Security Act of 2002 and 7. Identification of Duplication, Overlap proposed rule will refer to a specific directs DHS to ‘‘regulate the sale and and Conflict With Other Federal Rules provision of the NPRM or the Secure transfer of ammonium nitrate by an C. Executive Order 13132: Federalism ammonium nitrate facility * * * to D. Unfunded Mandates Reform Act Handling of Ammonium Nitrate E. National Environmental Policy Act provisions in the Homeland Security prevent the misappropriation or use of F. Paperwork Reduction Act Act, as amended, explain the reason for ammonium nitrate in an act of G. International Trade Impact Assessment any comments, and include other terrorism.’’ See Public Law 110–161, Division E (2007). Section 563 amends Abbreviations and Terms Used in This information or authority that supports such comments. the Homeland Security Act of 2002 (6 Document U.S.C. 361 et seq.) by adding in a new AN Ammonium Nitrate Submission of Sensitive Information: Subtitle J—Secure Handling of ANFO Ammonium Nitrate/Fuel Oil Do not submit comments that include Ammonium Nitrate, sections 899A–899J ANPRM Advance Notice of Proposed trade secrets, confidential commercial (to be codified from 6 U.S.C. 488 to 6 Rulemaking or financial information, Chemical- U.S.C. 488i). All references to 6 U.S.C. ATF Bureau of Alcohol, Tobacco, Firearms, terrorism Vulnerability Information 488–488i throughout this document and Explosives (CVI), Protected Critical Infrastructure refer to the corresponding sections in ATSA Aviation and Transportation Information (PCII), or Sensitive Security Security Act the Homeland Security Act of 2002, as CFATS Chemical Facility Anti-Terrorism Information (SSI) to the public amended by section 563 of the Fiscal Standards regulatory docket. Please submit such Year 2008 Department of Homeland CFR Code of Federal Regulations comments separately from other Security Appropriations Act. All COI Chemical of Interest comments on the proposed rule. references to ‘‘Subtitle J’’ throughout CVI Chemical-terrorism Vulnerability Comments containing this type of this document refer to Subtitle J of the Information information should be appropriately Homeland Security Act of 2002, as DHS Department of Homeland Security marked as containing such information DOT Department of Transportation created by the Fiscal Year 2008 EAR Export Administration Regulations and submitted by mail to the following Department of Homeland Security FBI Federal Bureau of Investigation address: U.S. Department of Homeland Appropriations Act. FR Federal Register Security, National Protection and Pursuant to Subtitle J, the Department HMR Hazardous Materials Regulations Programs Directorate, Infrastructure must develop regulations that require, at HMT Hazardous Materials Table Security Compliance Division (NPPD/ a minimum, the following activities: IED Improvised Device ISCD), 245 Murray Lane, SW., Mail Stop • Registration Applications: Certain IRFA Initial Regulatory Flexibility Analysis 0610, Arlington, VA 20598–0610. ammonium nitrate sellers and MTSA Maritime Transportation Security Act Upon receipt of such comments, DHS prospective ammonium nitrate NAICS North American Industrial will not place the comments in the purchasers must apply for ammonium Classification System public docket and will handle them in nitrate (AN) registration numbers from NPRM Notice of Proposed Rulemaking accordance with applicable safeguards DHS in order to sell, transfer, and/or PCII Protected Critical Infrastructure and restrictions on access. DHS will purchase ammonium nitrate. See 6 Information hold them in a separate file to which the U.S.C. 488a(c) and 6 U.S.C. 488a(d). PHMSA Pipeline and Hazardous Materials • Terrorist Screening Database Safety Administration public does not have access, and place POC Point of Contact a note in the public docket that DHS has Checks: The Department must use QATT Qualified Anti-Terrorism received such materials from the identifying information of each Technology commenter. If DHS receives a request to prospective applicant to conduct a RFA Regulatory Flexibility Act examine or copy this information, DHS check against identifying information SAFETY Support Anti-Terrorism By will treat it as any other request under that appears in the Terrorist Screening Fostering Effective Technologies Database (TSDB). See 6 U.S.C. SBA Small Business Administration the Freedom of Information Act (FOIA), 5 U.S.C. 552, and the Department’s 488a(i)(2)(A). SORN System of Records Notice • Registration Numbers: The SSI Sensitive Security Information FOIA regulation found in Part 5 of Title TSA Transportation Security 6 of the Code of Federal Regulations Department generally must issue an Administration (CFR). ammonium nitrate registration number TSDB Terrorist Screening Database or deny the registration of an applicant TWIC Transportation Worker Identification Instructions: All submissions must within 72 hours of receipt of each Credential include the agency name and docket ammonium nitrate seller’s or UMRA Unfunded Mandates Reform Act number for this rulemaking. All ammonium nitrate purchaser’s complete USC United States Code comments received will be posted registration application. See 6 U.S.C. USCG United States Coast Guard without change to http:// 488a(i)(3)(A). USDA United States Department of www.regulations.gov, including any • Purchaser Verification Activities: At personal information provided. VSL Value per Statistical Life the point of sale, ammonium nitrate Docket: For access to the docket to sellers must verify each potential I. Public Participation read background documents or ammonium nitrate purchaser’s identity Interested persons are invited to comments received, go to http:// and registration to purchase ammonium participate in this rulemaking by www.regulations.gov. nitrate pursuant to procedures

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established by the Department. See 6 and Programs Directorate for doing so.’’ • Comments on how likely U.S.C. 488a(e)(2)(D). See Explanatory Statement Submitted ammonium nitrate users would • Recordkeeping: All ammonium by Mr. Obey, Chairman of the House be to use an alternative fertilizer that is nitrate facilities must keep records of Committee on Appropriations, potentially less detonable, such as Sulf- sales or transfers of ammonium nitrate Regarding the Consolidated N® 26 Fertilizer Process and Product for at least two years after each Appropriations Amendment of the ( nitrate fertilizer) transaction. See 6 U.S.C. 488a(e)(1) and House of Representatives to the Senate which DHS recently Designated as a 6 U.S.C. 488a(e)(2). Amendment to H.R. 2764, 153 Cong. Qualified Anti-Terrorism Technology • Reporting Theft or Loss of Rec. H15741, H16092 (2007), available (QATT) pursuant to 6 U.S.C. 441–444 Ammonium Nitrate: Certain ammonium at http://www.gpo.gov/fdsys/pkg/CREC- (the Support Anti-terrorism by Fostering nitrate sellers must report the theft or 2007-12-17/pdf/CREC-2007-12-17- Effective Technologies Act of 2002, or loss of ammonium nitrate to Federal bk2.pdf. In October 2008, the SAFETY Act). See http:// authorities within one calendar day of Department submitted to Congress a www.safetyact.gov; discovery of theft or loss. See 6 U.S.C. report in response to this Explanatory • Comments on how best to conduct 488d. Statement, outlining possible or oversee regulatory compliance • Inspections and Audits: The approaches to implementing Subtitle J inspections and audits of ammonium Department must conduct or oversee and the potential costs associated with nitrate facilities’ records to ensure that regulatory compliance inspections and each approach. The Department’s report regulated ammonium nitrate facilities audits of ammonium nitrate facilities’ to Congress has aided in evaluating are properly maintaining records, to records, monitor compliance with the many of the approaches contained in monitor compliance with the requirements of Subtitle J, and deter or this NPRM. The Department’s report can requirements of Subtitle J, and to deter prevent misappropriation of ammonium be found in the docket for this NPRM, or prevent misappropriation of nitrate for use in terrorist acts. See 6 which is available at http:// ammonium nitrate for use in terrorist U.S.C. 488b. www.regulations.gov. acts; • Guidance Materials and Posters: • Comments on the economic impacts The Department must develop guidance C. Advance Notice of Proposed (both long-term and short-term, materials that set forth procedures for Rulemaking quantifiable and qualitative) of the appealing denial of an application for an DHS published an Advance Notice of implementation of Subtitle J, including ammonium nitrate registration number, Proposed Rulemaking (ANPRM) titled potential impacts on State, local, and guidance materials that help ammonium ‘‘Secure Handling of Ammonium Nitrate tribal governments of the United States; nitrate facilities identify suspicious Program’’ on October 29, 2008. See 73 potential impacts on agri-business, ammonium nitrate purchases or FR 64280. The ANPRM solicited public including ammonium nitrate attempted purchases or transfers, and comment on the following specific manufacturers, importers, packagers, posters providing information on issues: distributors, retailers, and end-users sellers’ record-keeping responsibilities • Comments regarding submission of including farmers (e.g., whether current and on the penalties for violating registration applications (e.g., whether ammonium nitrate purchasers would requirements under the Department’s applications should be submitted likely reduce their ammonium nitrate ammonium nitrate program. See 6 electronically or in paper form; whether purchases as a result of a new regulatory U.S.C. 488a(i)(4)(c) and 6 U.S.C. 488c(c). applications should be available only regime); and potential impacts on small • Establishing Threshold Percentage through DHS or through Local businesses; of Ammonium Nitrate in a Mixture: The Cooperative Extension offices or at • Comments on the monetary and Department must establish a threshold United States Post Offices); other costs anticipated to be incurred by percentage of ammonium nitrate in a • Comments regarding the technical U.S. citizens and others as a result of the mixture for that mixture to be regulated capabilities (e.g., access to computers; new compliance requirements, such as under the Department’s ammonium access to the Internet; average level of the costs in time and money that an nitrate program. See 6 U.S.C. 488a(b). computing skills; frequency of use of individual may incur to obtain an • Appeals and Penalties: The integrated Information Technology ammonium nitrate registration number. Department must establish an expedited systems) of ammonium nitrate These costs may or may not be appeals process for applicants denied manufacturers, distributors, sellers, and quantifiable and may include actual ammonium nitrate registration numbers, end-users; monetary outlays, transitional costs as well as an appeals process for • Comments regarding DHS incurred to obtain alternative individuals assessed civil penalties for distribution of ammonium nitrate documents, and the costs that will be violating the rules promulgated under registration letters or certificates (e.g., incurred in connection with potential Subtitle J. See 6 U.S.C. 488a(i)(4) and 6 whether DHS should use e-mail or delays at the point of sale; U.S.C. 488e(d). regular mail); • Comments on a possible fee • Comments regarding a verification B. October 2008 Report to Congress structure to address some or all of the process for registrations and ammonium costs of this new program, such as In an Explanatory Statement nitrate purchases, including methods for registration, TSDB checks, and issuance accompanying section 563 of the Fiscal verifying the identity of any ammonium of ammonium nitrate registration Year 2008 Department of Homeland nitrate purchaser, as well as the identity numbers; Security Appropriations Act the of designated agents purchasing • Comments on the benefits of this Chairman of the House Committee on ammonium nitrate on behalf of rulemaking; Appropriations indicated a desire for registered ammonium nitrate • Comments on any alternative the Department’s National Protection purchasers; methods of complying with Subtitle J; and Programs Directorate to ‘‘provide a • Comments on the detonability of and plan to implement [Subtitle J], including ammonium nitrate at certain • Comments on the best methods or analysis of the resources required to do concentrations, including research being processes for interacting with state and so, and a proposal for reallocating conducted concerning the detonability local governments regarding ammonium funding within the National Protection of ammonium nitrate; nitrate security.

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See 73 FR 64280, 64281, section IV— opposite, stating that alternative nitrate on a fine scale. Consequently, Questions for Commenters. would not serve the needs of these commenters stated that DHS DHS received comments from 33 certain crops equally well. Commenters should not require ammonium nitrate organizations and individuals. The from certain States where ammonium users to report losses of magnitudes majority of the submissions, 20, were nitrate is regularly used in agricultural normally encountered during from private companies and trade operations indicated that ammonium ammonium nitrate use and transport. associations, including associations nitrate is the best choice for Several commenters addressed the affiliated with the farming, explosives, application for certain crops. Other threshold quantity or percentage and industries. Three commenters, however, asserted that composition of ammonium nitrate universities provided comments, as did viable alternatives exist with respect to triggering regulation under this three government agencies. Six the majority of crops for which program. The universities that individuals, including one farmer, also ammonium nitrate currently is used as commented on the ANPRM addressed submitted comments. a fertilizer. the use of ammonium nitrate in The topics addressed by the There was a general consensus among scientific research, while other commenters covered a wide range of commenters regarding the need to avoid commenters addressed the use of issues. The two issues that received the duplication of other Federal licensing, ammonium nitrate as a component of most attention were the registration regulatory, and inspection programs. cold packs. These commenters stated process and the feasibility of using Commenters stated that to be registered that the quantities of ammonium nitrate under the ammonium nitrate program substances other than ammonium used in scientific research and in cold could be unnecessary for individuals nitrate in agricultural operations. DHS pack manufacturing are so small that already registered under related received 15 comments concerning the persons conducting scientific research regulatory programs covering registration process; all 15 commenters or purchasing and selling cold packs ammonium nitrate use, such as DHS’s wanted the registration process to be as should not be subjected to a rigorous Chemical Facility Anti-Terrorism simple and straightforward as possible. regulatory scheme. Several commenters Standards (CFATS), Department of Some commenters stated that if a also recommended that DHS should Transportation (DOT) hazardous registration process were to be exempt mixtures containing ammonium materials regulations, and Bureau of implemented, then a registrant should nitrate that ATF classified ‘‘explosives.’’ Alcohol, Tobacco, Firearms, and receive his/her approval from DHS In developing this NPRM, DHS Explosives (ATF) regulations. These carefully considered all public within 72 hours. The commenters commenters noted that ATF’s comments submitted in response to the expressed differing views on the inspection process also could be used ANPRM. DHS will respond to the issues technological capabilities of the for ammonium nitrate inspections under raised therein when responding to the regulated community. Some argued that this program to minimize inconvenience comments received on this NPRM. computer use was sufficiently common to ammonium nitrate users. for the entire process to be automated A number of commenters indicated D. Research Efforts and Findings through an Internet-based portal. As that some ammonium nitrate is In support of the effort to develop articulated by these comments, an normally lost as bulk ammonium nitrate regulations to implement Subtitle J, the online process would be fast, moves through the supply chain. inexpensive, and could be structured to Commenters noted, for example, that Department has examined and allow individuals to apply from their equipment used for transporting bulk considered research into a variety of homes or places of business. Others ammonium nitrate, such as hoppers, topics including the security hazards argued that computers are not common bins, and railcars are not shift-proof, presented by the use of ammonium enough among ammonium nitrate users, resulting in incidental spillage of nitrate; its detonability; existing Federal who would either be forced to travel to ammonium nitrate prills, which are the and State ammonium nitrate programs; different locations to register or to invest small, bead-like pellets of ammonium and voluntary security programs. In the in computers. This second group of nitrate typically used in the course of conducting this research, the commenters believed that registration manufacturing, transportation, and bulk Department reviewed numerous through an Internet-based portal would use of ammonium nitrate. Additionally, materials, including, but not limited to, constitute an unjustified burden. commenters noted that there is normally the following: • Many commenters believed that loss during movement throughout the A. Bauer, R.D. Heater & J.H. regulating ammonium nitrate and not supply chain due to melting or Paterson, Queen’s Univ. Mining Eng’g other types of fertilizer will cause a solidification of ammonium nitrate Dep’t, The Sensitivity of Ammonium decrease in ammonium nitrate usage prills based on nothing more than Nitrate Melts and Solutions to Projectile because of an expected rise in its cost. ambient temperature and humidity. For Impact (1981). There was no agreement on the degree instance, commenters noted that in a 90- • A. King & A. Bauer, Queen’s Univ. to which the cost of ammonium nitrate ton railcar shipment, it is not unusual Mining Eng’g Dep’t, Shock Initiation use would change, but multiple for these phenomena to result in loss of Characteristics of Ammonium Nitrate commenters indicated that cost would 200–500 pounds of ammonium nitrate. (1980). be passed along the supply chain until This may result because ammonium • R.W. Van Dolah, F.C. Gibson & J.N. it ultimately reaches end-users. If the nitrate is hygroscopic in nature (i.e., it Murphy, U.S. Dep’t of Interior, Bureau cost of ammonium nitrate were to go up, readily absorbs moisture). When of Mines, Further Studies on commenters hypothesized that ammonium nitrate prills come into Sympathetic , Report of ammonium nitrate alternatives may contact with ambient moisture in the Investigations 6903 (1966). become preferable. Some comments air, the prills may cake or meld together, • R.W. Van Dolah, F.C. Gibson & J.N. suggested that continued ammonium which can simultaneously increase the Murphy, U.S. Dep’t of Interior, Bureau nitrate use is based on historical overall mass of bulk ammonium nitrate of Mines, Sympathetic Detonation of ammonium nitrate use and that using an while reducing its overall volume. Ammonium Nitrate and Ammonium alternative would have no noticeable These properties cause significant Nitrate-Fuel Oil, Report of effect on operations. Others argued the difficulty in accounting for ammonium Investigations 6746 (1966).

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• J.J. Burns, G.S. Scott, G.W. Jones & Post, Apr. 21, 1995, at A28. More See A. Bauer, R.D. Heater & J.H. Bernard Lewis, U.S. Dep’t of Interior, recently, ammonium nitrate was used in Paterson, 1, 5 (1981). Preliminary results Bureau of Mines, Investigations on the the 1998 East African embassy truck of ongoing research suggest that Explosibility of Ammonium Nitrate, bombings, killing hundreds and injuring unblended ammonium nitrate can be Report of Investigations 4994 (1953). thousands at the U.S. embassies in Dar difficult to detonate with any reliability. Information about these materials can es Salaam, Tanzania, and Nairobi, To date, terrorists typically have be found in the docket for this NPRM. Kenya. See Corky Siemaszko, Wtc employed combinations of ammonium The Department seeks public comment Chemicals In Kenya Blast (Aug. 14, nitrate and fuel oil when utilizing on whether or not there are additional 1998), http://www.nydailynews.com/ ammonium nitrate in terrorist attacks. studies or other research materials the archives/news/1998/08/14/1998–08–14_ To better understand the detonability Department should consider in support wtc_chemicals_in_kenya_blast.html of ammonium nitrate and its use in of the development of the final (last visited May 11, 2011). Ammonium explosives, the Department reviewed, regulations as well as any copies of such nitrate was also used in a November and considered the results of, a study studies or research materials. 2003 series of truck bombings in conducted by Sandia National Laboratory. Due to the detailed nature of 1. Security Hazards Presented by Use of Turkey, killing over 50 individuals and its content and findings, however, this Ammonium Nitrate injuring an additional 700 individuals at multiple locations across Istanbul. See study, which is ‘‘For Official Use Only,’’ Ammonium nitrate is a chemical that Lauren Johnston, CBSNews.com, is not available to the public. The exists in multiple concentrations and Fertilizer Used in Terror (Apr. Department has also consulted with the physical forms, and different 14, 2004), http://www.cbsnews.com/ Federal Bureau of Investigation’s (FBI) concentrations and forms have different stories/2004/04/14/world/main611898. Explosives Unit. This consultation security implications. In the United shtml (last visited Aug. 11, 2010). helped the Department to understand States, the principal uses for ammonium Additionally, since the events of 9/11, the detonability of unblended nitrate are as a fertilizer or as part of an stores of ammonium nitrate have been ammonium nitrate, the detonability of explosive mixture. Ammonium nitrate confiscated during raids on terrorist ammonium nitrate mixtures, and the can be sensitized (made more sensitive sites around the world, including raids role ammonium nitrate plays in IED to shocks, and thus easier to detonate) on sites in Canada (see Steve Schippert, construction and terror-related with the addition of organic material. Threats Watch, Canada Raid Breaks activities. One common example is when Cell: 3 Tons of Explosives Found (June The Department seeks public fertilizer-grade ammonium nitrate is 3, 2006), http://threatswatch.org/inbrief/ comment on the detonability of mixed with fuel oil and creates an 2006/06/canada-raid-breaks-cell-3-tons/ ammonium nitrate. explosive mixture known as (last visited Aug. 11, 2010)), England 3. Federal Regulations Addressing Ammonium Nitrate/Fuel Oil (ANFO). (see BBC News, Ammonium Nitrate Ammonium Nitrate The fuel oil acts as an energy source. ‘Easy to Find’ (Mar. 30, 2004), http:// Both ammonium nitrate fertilizers and news.bbc.co.uk/2/hi/uk_news/3582921. In developing this proposed rule, DHS ANFO have been misused in acts of stm (last visited Aug. 11, 2010)), and the reviewed other Federal regulations that terrorism to cause catastrophic damage Philippines (see U.S. Dep’t of State, cover portions of the ammonium nitrate to human health, safety, national Office of the Coordinator for supply chain or deal with identity security, the economy, and critical Counterterrorism, Country Reports on verification; a number of these other infrastructure. Terrorism 2005, p. 78). regulations are discussed below. DHS Nationwide, fertilizer-grade examined these regulations for potential ammonium nitrate is commonly used in 2. Detonability of Ammonium Nitrate overlap with the proposed Ammonium agricultural operations and the chemical It is understood that under proper Nitrate Security Program. In developing and explosives industries. See A. King conditions pure (unblended) this NPRM, the Department collaborated & A. Bauer, 4. Due to its availability in ammonium nitrate is detonable. Making with many of its Federal security small-scale packaging (e.g., 50-pound reliable explosives from ammonium partners in an attempt to harmonize this bags), ammonium nitrate is susceptible nitrate is simplified through the proposed rule with other regulatory to theft and misuse in making addition of a fuel component with regimes. improvised explosive devices (IEDs). which it can react. In addition, though Over the years, ammonium nitrate has rare, accidental explosions have a. Chemical Facility Anti-Terrorism been used as an explosives component occurred during the manufacture, Standards in terrorist attacks, both domestically storage, and transport of ammonium In addition to the authority granted to and internationally. The 1995 Murrah nitrate. See J.J. Burns, G.S. Scott, G.W. DHS by Subtitle J, the Department had Federal Building attack in Oklahoma Jones & Bernard Lewis, 1. Despite the authority under section 550 of the City claimed the lives of 168 individuals explosive hazard presented by Homeland Security Appropriations Act and demonstrated how ammonium ammonium nitrate, however, it has been of 2007, Pub. L. 109–295, to issue nitrate could be misused to perpetrate successfully and safely used for decades regulations governing the security of deadly terrorist attacks. See Oklahoma as a fertilizer. See R.W. Van Dolah, F.C. high-risk chemical facilities. Under that City National Memorial, A Look at the Gibson & J.N. Murphy; Report of authority, the Department promulgated Numbers, http://www.oklahomacity Investigations 6746, 2. There is little an interim final rule titled the Chemical nationalmemorial.org/secondary.php? scientific consensus about the critical Facility Anti-Terrorism Standards section=5&catid=145&id=83 (last diameter of an explosive required for (CFATS), 6 CFR part 27. See 72 FR visited Aug. 11, 2010). The Provisional detonation and the size of the 17688 (April 9, 2007). Under CFATS, Irish Republican Army also used conventional explosive charge (i.e., the Department regulates the security of ammonium nitrate as part of its London booster) necessary to detonate high-risk chemical facilities, including bombing campaign in the early 1980s. unblended ammonium nitrate. These high-risk chemical facilities that possess See Boyce Rensberger, Ammonium questions about detonability all receive ammonium nitrate. Nitrate Explosives Are Simple, Easily research attention today, and have also To help the Department identify high- Made, Widely Used in Industry, Wash. received research attention in the past. risk chemical facilities under CFATS,

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the Department adopted a list of United States. Through its MTSA d. Bureau of Alcohol, Tobacco, chemicals of interest (COI) as Appendix regulations, USCG regulates the security Firearms, and Explosives A to CFATS. See 72 FR 65396 of vessels transporting ammonium ATF, a principal law enforcement (November 20, 2007). Any chemical nitrate, as well as the security of certain agency within the U.S. Department of facility that possesses any COI at or facilities that store, manufacture, use, or Justice, is dedicated to preventing above the applicable screening distribute ammonium nitrate. In terrorism, reducing violent crime, and threshold quantity specified in addition, USCG regulates the protecting our nation. Among its Appendix A for that COI must complete transportation of ammonium nitrate, authorities, under 27 CFR part 555, ATF and submit to DHS certain consequence- and the loading or unloading of is responsible for regulating the use of based information via an online tool ammonium nitrate from vessels at any explosives, which are defined by called the Chemical Security waterfront facility. See 33 CFR part 126 inclusion in ATF’s annual List of Assessment Tool Top-Screen. Any (regulating the handling of ammonium Explosive Materials, ATF Publication chemical facility preliminarily nitrate at waterfront facilities, and 5400.8. See 75 FR 1085 (Jan. 8, 2010) determined to be high-risk after DHS establishing penalties for handling (notice of annual list). While ATF does review of the chemical facility’s Top- ammonium nitrate without a permit); 46 not consider ammonium nitrate an Screen must then meet additional CFR 148.01–7 (regulating the bulk explosive, ammonium nitrate explosive security-related requirements under shipment of ammonium nitrate). CFATS. Due to the risks ammonium mixtures and ANFO are included in USCG has also designated as a ATF’s list of explosive materials. ATF nitrate may pose if either (1) exploded ‘‘Certain Dangerous Cargo’’ any on-site, or (2) stolen or diverted to regulations require that no person, other ammonium nitrate that is not certain than a licensee or permittee, knowingly produce IEDs, ammonium nitrate (in dangerous cargo residue. See 33 CFR both explosive and specified fertilizer transport or receive any explosive 160.204. Based on this designation, each material (including ANFO). See 27 CFR forms) is one of over 300 COI that DHS vessel carrying ammonium nitrate on listed in Appendix A to CFATS. See 72 555.26(a). Section III.A.3 of this NPRM bodies of other than certain discusses the interaction of ATF FR 65407–65408, 65410. portions of inland rivers must submit a Although Subtitle J and CFATS share regulations with the proposed Notice of Arrival prior to arrival in port. a goal of preventing terrorism risks ammonium nitrate rule. See 33 CFR part 160, subpart C. The associated with ammonium nitrate, the Notice of Arrival must contain certain e. Department of Transportation scopes and methods of regulation under information, including the name of the Hazardous Materials Regulations Subtitle J and CFATS are very different. vessel’s owner and operator, the names The CFATS rule—which addresses The Federal Hazardous Materials of the last five ports or places visited, hundreds of chemicals in addition to Transportation Law (Federal Hazmat the amount of ammonium nitrate on ammonium nitrate—is directed at the Law, 49 U.S.C. 5101 et seq.) authorizes board, and information pertaining to security of high-risk chemical facilities. the Secretary of Transportation to The CFATS rule does not, however, each crewmember aboard. See 33 CFR ‘‘prescribe regulations for the safe impose any limitations on the sale or 160.206. Owners and operators of U.S.- transportation, including security, of transfer of ammonium nitrate. By flagged vessels carrying ammonium hazardous material in intrastate, contrast, Subtitle J does not address the nitrate in bulk must have, and must interstate, and foreign commerce.’’ The physical security of ammonium nitrate operate in compliance with, USCG- Secretary of Transportation has facilities but does impose certain approved vessel security plans. See 33 delegated this authority to Pipeline and conditions on the sale or transfer of CFR 104.410. Likewise, owners and Hazardous Materials Safety ammonium nitrate (e.g., requiring that operators of facilities that receive Administration (PHMSA). PHMSA, ammonium nitrate may only be vessels carrying ammonium nitrate in through its Hazardous Materials transferred between registered bulk must have and operate in Regulations (HMR; 49 CFR Parts 171– ammonium nitrate sellers and registered compliance with USCG-approved 180), prescribes transportation ammonium nitrate purchasers (or facility security plans. See 33 CFR requirements for hazardous materials, purchasers’ agents)). 105.410. including ammonium nitrate. In developing the rule required by c. Transportation Security The Hazardous Materials Table (HMT; Subtitle J, DHS intends to draw on Administration 49 CFR 172.101) lists several shipping information gained under the CFATS descriptions for ammonium nitrate and program about ammonium nitrate, and The Transportation Security ammonium nitrate mixtures or will work to ensure that CFATS and the Administration (TSA) has broad solutions. These descriptions vary based new Subtitle J program complement authority over security of all modes of on the properties of the particular each other. For additional discussion of transportation. These authorities are ammonium nitrate at issue. As such, a the CFATS program’s interaction with found primarily in the Aviation and shipment of ammonium nitrate may be the proposed ammonium nitrate rule, Transportation Security Act of 2001 classed and regulated as a Division 1.1D see section III.A.1 of this NPRM. (ATSA), Public Law 107–71, which explosive, Division 5.1 oxidizer, or regulates the transportation of cargo, Class 9 miscellaneous hazardous b. U.S. Coast Guard Maritime Security including ammonium nitrate. ATSA material. For transport in commerce Regulations broadly allows TSA to ‘‘exercise * * * these materials must comply with all The U.S. Coast Guard (USCG) powers, relating to transportation applicable HMR requirements (e.g., regulates ammonium nitrate under security as [TSA] considers packaging, shipping papers, marking, multiple programs. Under the Maritime appropriate.’’ See 49 U.S.C. 114. TSA labeling, placarding, security plans, Transportation Security Act (MTSA), 46 exercises its authority under ATSA in emergency response information, U.S.C. 70101 et seq., USCG has part by performing threat assessments training, etc.). authority to regulate security both on truck drivers who must receive aboard maritime vessels and at facilities Hazardous Materials Endorsements in f. Department of Commerce located in, under, or adjacent to any order to be authorized to transport Under the Export Administration subject to the jurisdiction of the ammonium nitrate. Regulations (EAR), the U.S. Department

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of Commerce’s Bureau of Industry and 4. State Regulations Addressing P. Murrah Federal Building in Security regulates the export and re- Ammonium Nitrate Oklahoma City. The Department export of ammonium nitrate. A ‘‘re- Virtually all 50 States regulate believes that, in many instances, export’’ is the shipment or transmission ammonium nitrate in some manner, voluntary programs already in place can of an item subject to the EAR from one based on its use either as a fertilizer, an serve as good building blocks for foreign country (i.e., a country other explosive, or both. Although not in meeting regulatory requirements. The than the United States) to another universal agreement, relevant State Department seeks comments providing foreign country. A re-export also occurs regulations typically define ammonium details on voluntary programs related to when there is release of technology or nitrate as an ammonium and nitrate ammonium nitrate security and how software subject to the EAR to a foreign mixture containing not less than 33 they could potentially be leveraged by national outside the United States. See percent nitrate; require purchasers and ammonium nitrate users to meet the 15 CFR 734.2, and 15 CFR part 772 sellers of ammonium nitrate to register requirements of the proposed rule. (definition of ‘‘re-export’’). with a governing State body; and require III. Discussion of Proposed Rule: sellers of ammonium nitrate to maintain Implementing Subtitle J Specifically, under the EAR, licensees records of sales of ammonium nitrate for are authorized to export or re-export at least two years. Many State What follows is a discussion of the ammonium nitrate only to certain regulations grant State officials both the approach DHS is proposing to take in countries listed in the EAR, and authority to inspect facilities possessing implementing Subtitle J. Where consistent with the terms of the issued or distributing ammonium nitrate and appropriate, potential alternative export license. See 15 CFR 742.6 and 15 the authority to fine or otherwise approaches are also discussed. DHS CFR 747.3. Under the EAR, ammonium penalize facilities or individuals who welcomes public comment on the nitrate is defined to include fertilizers fail to comply with regulations proposed rule, and also on potential and fertilizer blends containing more concerning ammonium nitrate. alternative approaches. than 15% by weight ammonium nitrate, The cost to the public of this 5. Voluntary Programs Addressing proposed rule ranges from $300 million except liquid fertilizers (containing any Ammonium Nitrate amount of ammonium nitrate) or dry to $1.041 billion over 10 years at a 7% fertilizers which contain less than 15% In addition to efforts required by discount rate. The primary estimate is by weight ammonium nitrate. See 15 existing Federal and State regulations, the mean which is $671 million. For CFR part 774, Supplement 1 for item- many producers, distributors, and users comparison, at a 3% discount rate, the of ammonium nitrate have undertaken cost of the proposed rule ranges from specific export licensing information. voluntary efforts to secure the $364 million to $1.3 billion with a Individuals involved in the domestic ammonium nitrate supply chain. Chief primary (mean) estimate of $814 sale or transfer of ammonium nitrate, as among these voluntary efforts is the million. The average annualized cost for defined by DHS, at U.S.-based exporters ‘‘America’s Security Begins With You’’ the program ranges from $43 million to of ammonium nitrate would be required program. This program is a voluntary $148 million (with a mean of $85 to register with the Department under ‘‘know-your-customer’’ program million), also employing a 7% discount the proposed Ammonium Nitrate developed jointly by the ATF and rate. The following two tables present Security Program. members of the fertilizer industry the summary discounted total and following the 1995 attack on the Alfred annualized costs for the rule.

OMB ACCOUNTING STATEMENT OF ANNUALIZED COSTS AND BENEFITS PROGRAM YEARS 1–10)

3 Percent discount rate 7 Percent discount rate Primary Minimum Maximum Primary Minimum Maximum estimate estimate estimate estimate estimate estimate (millions) (millions) (millions) (millions) (millions) (millions)

Costs Annualized Monetized Costs ...... $95.4 $42.7 $148.1 $95.5 $42.7 $148.2 Benefits

Qualitative (un-quantified) Benefits ...... Reduced vulnerability to terrorist attack using ammonium nitrate.

SUMMARY OF COSTS ($ MILLIONS, 7 PERCENT DISCOUNT RATE)—BY PROGRAM YEAR

Audits/ Registration Appeals Point of sale Recordkeeping inspections Federal costs * Total cost

PY1 ...... 18.9 0.1 67.5 6.2 0.4 9.8 102.7 PY2 ...... 4.4 0.0 62.6 4.4 0.4 6.5 78.2 PY3 ...... 4.3 0.0 58.4 4.1 0.4 6.0 73.2 PY4 ...... 4.2 0.0 54.7 3.8 0.4 5.7 68.7 PY5 ...... 4.2 0.0 51.1 3.6 0.3 5.3 64.4 PY6 ...... 8.9 0.0 48.1 3.4 0.3 5.1 65.8 PY7 ...... 6.8 0.0 44.6 3.1 0.3 4.7 59.5 PY8 ...... 6.7 0.0 41.7 3.0 0.3 4.4 56.0 PY9 ...... 6.6 0.0 39.0 2.8 0.2 4.2 52.6 PY10 ...... 6.5 0.0 36.4 2.6 0.2 3.9 49.5

Total ...... 71.3 0.1 503.8 36.8 3.0 55.3 670.6 * Reporting of Thefts rounds to zero in individual years and are omitted from this table but included in the total and regulatory analysis.

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DHS also conducted a break-even under this rule mixtures that terrorist inclusive mixture requirement is analysis that examines the required -makers would be most interested appropriate for Subtitle J. reduction in the potential frequency of in acquiring. To assist in determining an Second, during the development of terrorist attacks involving ammonium appropriate threshold percentage of this proposed rule, the Department nitrate. The proposed rule would be cost ammonium nitrate in a mixture for obtained information from the effective if it resulted in a reduction in purposes of Subtitle J, the Department Department of Justice, indicating that attack frequency by at least one attack reviewed multiple detonability studies, under certain circumstances, the size of the examined mixture requirements (which occurred 16 years ago) per 14 employed by other Federal and State experiments that have shown that years. For discussion of this analysis, regulatory programs, and consulted with mixtures containing as low as 30 and for explanation of other cost a variety of Federal, State, and private percent ammonium nitrate by weight calculations, please see section IV of sector entities. Based on this research can be used as components of viable this NPRM, which discusses various and after consultation with the FBI’s explosives. This information was regulatory analyses conducted by DHS. Explosives Unit, the Department unavailable to DHS when it wrote and published the CFATS mixture A. Ammonium Nitrate Subject to proposes to define ammonium nitrate in requirements. In light of this evidence Subtitle J Requirements (See Section section 31.105 to include any mixture and the purpose for which the Subtitle 31.105 of the Proposed Rule) that is 30 percent or more ammonium nitrate by weight. By setting the mixture J mixture requirement is being This section will address the requirement at 30 percent, the established, the Department believes definition of ammonium nitrate. Department believes the proposed rule that setting the proposed mixture Congress has defined ammonium nitrate will capture those ammonium nitrate requirement at 30 percent ammonium for purposes of Subtitle J to include mixtures that could be most effectively nitrate is the correct course of action. ‘‘solid ammonium nitrate that is chiefly used in bomb-making, or that could be the ammonium salt of nitric acid and The Department’s proposed mixture most effectively retooled or reconfigured requirement would exempt persons and contains not less than 33 percent for use in bomb-making. nitrogen by weight.’’ See 6 U.S.C. entities from coverage under the The Department is aware that this 488(1)(A). DHS proposes to use this proposed rule only to the extent that proposed mixture requirement differs definition of solid ammonium nitrate in they possess or obtain mixtures from the mixture requirements used for section 31.105 of the proposed rule. containing less than 30 percent ammonium nitrate under CFATS. Under Also included in the definition of ammonium nitrate by weight. The CFATS, a mixture containing ammonium nitrate for purposes of proposed requirement would not Subtitle J is ‘‘any mixture containing a ammonium nitrate is counted towards the screening threshold quantity for exempt persons and entities from percentage of ammonium nitrate that is coverage to the extent that they possess equal to or greater than the percentage ammonium nitrate if ammonium nitrate makes up 33 percent or more of the or obtain solid ammonium nitrate which determined by [DHS].’’ See 6 U.S.C. they intend to incorporate into 488(1)(B). In establishing this mixture mixture. Therefore, this proposed mixture requirement for this rule would ammonium nitrate mixtures. The percentage for purposes of Subtitle J, the Department thus proposes that the Department was required to consult apply more broadly than the mixture purchase, sale, transfer, or acquisition of with the heads of appropriate Federal requirement in CFATS; the ammonium solid ammonium nitrate to be departments and agencies, including the nitrate mixtures covered under this incorporated into mixtures will be Secretary of Agriculture, and to provide proposed requirement would include notice and an opportunity for comment. ammonium nitrate mixtures containing treated the same as the purchase, sale, See 6 U.S.C. 488a(b). That consultation between 30 and 33 percent ammonium transfer, or acquisition of ammonium is discussed below. nitrate by weight, while CFATS’ nitrate not to be incorporated into This section will also discuss the mixture requirements do not cover mixtures. Department’s consideration of a mixtures containing between 30 and 33 The Department is interested in percent ammonium nitrate by weight. minimum threshold amount of receiving comments on this proposed ammonium nitrate that would have to There are two main reasons for the approach, including comments on the change hands as part of a sale or transfer difference between the CFATS approach Department’s proposal to define to ammonium nitrate mixtures and the before that sale or transfer (including ammonium nitrate to include any proposed Ammonium Nitrate Security the individuals participating in the mixture that is 30 percent or more Program approach to mixtures. First, the transaction) would be subject to Subtitle ammonium nitrate by weight. DHS two mixture requirements exist to J’s requirements. This section will also requests comments addressing the accomplish different goals. The CFATS discuss the Department’s discretionary appropriateness of this percentage, ability to exempt from regulation ‘‘a mixture requirements exist to help the Department identify potentially high- comments addressing whether it would person producing, selling, or purchasing be more appropriate to express this ammonium nitrate exclusively for use in risk chemical facilities subject to percentage as a percentage of mixture the production of an explosive under a CFATS. The CFATS mixture weight or as a percentage of mixture license or permit issued under chapter requirements are not an assertion by the volume, and comments discussing 40 of title 18, United States Code.’’ See Department that only ammonium nitrate whether a higher or lower mixture 6 U.S.C. 488a(f). mixtures containing 33 percent or more ammonium nitrate are vulnerable to percentage would be more appropriate. 1. Mixture Requirement misuse in acts of terrorism. The The Department is also interested in Mixtures containing high percentages proposed Ammonium Nitrate Security comments addressing possible of ammonium nitrate can be effectively Program mixture requirement, however, consumer and retail impacts of the used in bomb-making. By proposing to is solely meant to identify ammonium proposed mixture requirement, and on include a mixture requirement in the nitrate mixtures that have the potential the detonability of ammonium nitrate Ammonium Nitrate Security Program, to be misused in acts of terrorism. and ammonium nitrate mixtures of the Department is seeking to capture Accordingly, a more conservative and varying percentages.

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2. Threshold Weight and Individual required to accumulate sufficient from regulation. In section 31.105 of the Products Exemptions ammonium nitrate to construct an proposed rule the Department proposes The Department’s understanding is explosive that poses a significant to define a ‘‘cold pack’’ as a small, that, outside of small sample or research terrorist threat. This threshold should commercially-available package quantities, ammonium nitrate is also reduce the economic impact of the commonly used as a replacement for ice primarily sold either in bulk or in pre- Ammonium Nitrate Security Program by in the application of first aid, containing packaged bags containing no less than avoiding regulation of those transactions unmixed water and ammonium nitrate 50 pounds of ammonium nitrate. that present de minimis security risk. that, immediately prior to use, can be In order to determine the utility of Mixtures that contain small percentages manipulated to cause the comingling of this approach, the Department solicits or amounts of ammonium nitrate are the water and the ammonium nitrate comments on the manners in which also found in various retail products, resulting in an endothermic reaction ammonium nitrate is sold and packaged, including home and garden products that significantly lowers the temperature the manners and frequencies of use of of the package. For the following (e.g., fertilizer mixtures) and cold packs. ammonium nitrate in small quantities, Under Subtitle J, the Department has reasons, DHS does not believe that and the utility of setting a threshold authority to regulate transactions (and Congress intended the people and weight. The Department additionally the individuals conducting them) facilities buying and selling cold packs requests comments addressing the involving any amount of ammonium to be regulated by Subtitle J. appropriateness of the proposed 25 The Department believes that the nitrate. The Department is proposing to pound threshold weight. Specifically, security benefits obtained from establish a threshold weight to which the Department asks whether another regulating sales and transfers of cold the regulation would apply, and is threshold weight, such as 5 pounds, 10 packs would be minimal and considering whether the marginal pounds, 50 pounds, or another quantity, outweighed by significant impact on the security benefits gained from regulating would better achieve the desired results general public. Cold packs individually transactions involving de minimis of the proposed rule. contain extremely small amounts of quantities of ammonium nitrate are If the Ammonium Nitrate Security ammonium nitrate such that collecting outweighed by the costs of regulating Program does include a threshold very large numbers of them would be those transactions. Similarly, the weight, DHS proposes that the threshold necessary in order to obtain enough Department is considering whether the weight would apply to mixtures as well ammonium nitrate to produce a security benefits gained from regulating as to unblended ammonium nitrate. As dangerous explosive device. transactions involving products such, the proposed rule would apply to The Department also believes that packaged such that they are unlikely to an ammonium nitrate mixture only if regulating sales and transfers of cold be used to make an explosive are (1) the mixture weighs at least the packs would impose substantial outweighed by the costs of regulating threshold weight, and (2) the mixture economic impacts on the public, which those transactions. To avoid capturing contains at least 30 percent ammonium would not be justified by the minimal these transactions under its regulatory nitrate by weight. Both conditions security benefit gained by cold packs regime, and to avoid complicating would need to be satisfied in order for regulation. Specifically, DHS is ammonium nitrate transactions that may the proposed rule to apply to a given concerned that regulation of cold packs only pose a de minimis security risk, the mixture. would have serious and negative Department is considering applying The Department proposes that when impacts on the provision of first aid, both a minimum threshold weight and applying the threshold weight to an first responders, and the medical sector an individual products exemption for ammonium nitrate mixture, the total generally. These substantial impacts cold packs to this rulemaking. weight of the mixture should be would be spread over a large variety of The Department is considering counted, as opposed to just the weight retail stores, medical facilities, health establishing a threshold weight whereby of the ammonium nitrate in the mixture. care providers, athletic teams, regulated each transaction would be subject to In other words, all ten pounds of a industries that require first aid kits Subtitle J’s regulatory requirements only single ten-pound bag (or all ten pounds containing cold packs, and individuals if the transaction involves the sale, of ten one-pound bags) of fertilizer using cold packs for personal first aid transfer, or purchase of ammonium mixture containing 30 percent purposes. A preliminary examination nitrate that, in the aggregate, is equal to ammonium nitrate by weight would indicates that the potential affected or greater than the threshold weight. count towards the threshold weight, and populations could easily exceed six Specifically, section 31.105 of the not just the three pounds which is the million individuals, businesses, and proposed rule contains a 25 pound weight of the ammonium nitrate portion organizations or public entities. threshold weight. The Department of that mixture. The Department Complicating the issue is the fact that believes that this weight is low enough believes this approach would be more many cold pack manufacturers do not to prevent a bad actor from easily effective at preventing a bad actor from use ammonium nitrate in their acquiring a sufficient quantity of acquiring sufficient quantities of products—many manufactures assemble ammonium nitrate to pose a terrorist ammonium nitrate than would an cold packs that contain other chemicals threat. The Department also believes alternative approach under which only instead of ammonium nitrate. Cold pack that this weight is high enough to avoid the ammonium nitrate content of a purchasers or sellers might not know capturing small laboratory quantities of mixture is counted towards threshold which chemicals are present in the cold ammonium nitrate or transactions weight. The Department solicits packs they obtain, prior to obtaining involving other de minimis quantities of comments on the utility and manner of them, which could complicate their ammonium nitrate that are unlikely to application of the proposed threshold abilities to comply with any regulatory be misappropriated for use in a terrorist weight to mixtures containing requirements. act. The Department believes that such ammonium nitrate. For these reasons, the Department de minimis quantities are unlikely to be In addition to including a threshold does not believe that Congress intended misappropriated for use in a terrorist act weight in the proposed rule, the cold packs—or the sporting goods due to the large number of transactions Department is proposing to exempt cold stores, recreational centers, schools, and in de minimis quantities that would be packs containing ammonium nitrate other entities that purchase or sell

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them—to be covered under Subtitle J. describing uses for ammonium nitrate explosive under 27 CFR part 555, and DHS requests comments describing the other than as a fertilizer, a cold packs thus ATF does not regulate ammonium populations that could be impacted by component, or an explosives ingredient. nitrate that has not been mixed with a cold packs regulation, including DHS solicits comments on whether any fuel oil, outside of the limited comments discussing those populations’ other uses of ammonium nitrate warrant separation distance requirements abilities to comply with the proposed exemptions. governing the storage of ammonium regulatory requirements. 3. Explosives Exemption nitrate when stored in the vicinity of The Department’s proposed cold other high explosives and blasting The Department has the discretion to packs exemption would exempt persons agents, as set forth in 27 CFR 555.220. exempt from regulation persons and and entities from coverage under the This is the case even where unblended facilities producing, selling, ammonium nitrate is being produced, rule only to the extent that they transferring, or purchasing ammonium purchase, sell, or transfer cold packs purchased, or stored by a facility nitrate exclusively for use in the regulated by ATF as a manufacturer of containing ammonium nitrate. The production of explosives under a license proposed rule would not exempt ANFO. It is also the Department’s or permit issued under the Federal understanding that facilities producing persons and entities (such as explosives laws, 18 U.S.C. Chapter 40, ANFO typically have inventories of manufacturers of cold packs) from and associated regulations. See 6 U.S.C. ammonium nitrate on hand for use in coverage to the extent that they 488a(f). purchase or transfer ammonium nitrate ATF is responsible for enforcing manufacturing ANFO, while entities which they intend to incorporate into federal explosives laws and has engaged solely in the re-sale or purchase cold packs. The Department thus established regulations for doing so. See of ANFO are unlikely to possess any proposes that the purchase, sale, 27 CFR Part 555. ATF’s regulatory ammonium nitrate other than that transfer, or acquisition of ammonium authority over a facility or individual which is contained within ANFO nitrate to be incorporated into cold licensed to use an ammonium nitrate- mixtures. packs will be treated the same as the based explosive is limited to ammonium The Department is considering three purchase, sale, transfer, or acquisition of nitrate that (1) has been mixed with a possible approaches for regulating ammonium nitrate not to be fuel (i.e., ANFO) which is defined in 27 individuals and facilities involved in incorporated into cold packs. CFR 555.11 as an ‘‘explosive’’ and (2) is the production of ANFO. These The Department solicits comments on contained on ATF’s List of Explosive approaches are summarized in the these proposed exemptions. The Materials. Unblended ammonium following table, and discussed Department also solicits comments nitrate, however, is not defined as an thereafter.

Option 1 Option 2 Option 3

Would DHS opt to exempt individ- No ...... Yes ...... Partial Exemption. uals and facilities that purchase, sell, or transfer ammonium ni- trate solely for use in the pro- duction of explosives? Brief description of option ...... Ammonium nitrate transactions Ammonium nitrate purchases, Ammonium nitrate combined with would be regulated by DHS sales, or transfers by individ- fuel oil (ANFO) would not be whether or not the ammonium uals and facilities solely to en- regulated by DHS. nitrate purchased, sold, or able use of ammonium nitrate transferred has been combined in the production of explosives with fuel oil to create ANFO. would not be regulated by DHS. Would DHS regulate ammonium Yes ...... No ...... No. nitrate mixtures that are ‘‘explo- sives’’ subject to ATF regulation (i.e., ANFO)? What duplication would result from Individuals and facilities would be Individuals and facilities regulated Certain facilities (e.g., those that this option? subject to regulation by both by ATF under the Federal ex- produce ANFO) would be sub- DHS under Subtitle J and ATF plosives laws would not be reg- ject to both DHS and ATF regu- under the Federal explosives ulated by DHS. No duplication lations. laws. would result. What gaps would result from this No gaps in coverage of ammo- Could create a considerable gap Compromise approach closes option? nium nitrate as it moves in regulatory coverage through- gaps in security of the ammo- through the supply chain. out the ammonium nitrate sup- nium nitrate supply chain. ply chain, as ATF regulations apply solely to ANFO and not the ammonium nitrate used to create it.

The first option is to apply the final J and ATF under the Federal explosives ensure that there are no gaps in coverage rule implementing Subtitle J to laws. By not exempting ammonium of ammonium nitrate as it moves individuals and facilities that purchase, nitrate used in explosives from through the supply chain—ammonium sell, or transfer ammonium nitrate for coverage, DHS would be treating all nitrate would be captured under DHS’s use in the production of explosives. individuals and facilities who purchase, ammonium nitrate program both before Under this approach, such individuals sell, or transfer ammonium nitrate— and after being combined with fuel oil and facilities would be subject to whether as part of ANFO mixtures or to create ANFO, and would be captured regulation by both DHS under Subtitle not—the same. This approach would under ATF’s regulations after being

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combined with fuel oil to create ANFO. requirements and would be subject agricultural property, where these The major disadvantage of not solely to ATF regulation. Individuals services are provided by an individual exempting ammonium nitrate used in producing ANFO, however, would be or entity other than the person or entity explosives is that individuals and subject to the Subtitle J requirements, as owning or operating the property upon facilities who purchase, sell, or transfer they, by necessity, possess ammonium which the fertilizer is deposited. The ammonium nitrate for the purpose of nitrate (which they possess as Department is interested in receiving manufacturing explosives would be unblended ammonium nitrate before comments on these definitions, as well subject to potentially duplicative combining it with fuel oil to make as all other definitions included in the regulatory requirements, including two ANFO). This approach recognizes both proposed rule. sets of licensing requirements, two sets the fact that ATF already regulates The proposed registration process of recordkeeping requirements, two sets ANFO, as well as the fact that ATF’s would include conducting a check of of point of sale requirements, and jurisdiction is limited such that ATF appropriate identifying information of inspections by both ATF and DHS. In does not regulate the ammonium nitrate any person seeking to register against response to the October 29, 2008 used by facilities to make ANFO. identifying information that appears in ANPRM, some commenters expressed Through this compromise approach, the Terrorist Screening Database. concern over these potentially repetitive individuals and entities whose Accordingly, prospective applicants regulatory requirements. ammonium nitrate-related operations would be required to provide specific The second option is to entirely are already regulated by ATF are spared identifying information to the exempt from Subtitle J requirements the duplicative DHS oversight that Department. Appearance in the TSDB is facilities and persons that purchase, would result from the first option grounds for denial of a registration sell, or transfer ammonium nitrate (discussed above), while gaps in number (an ‘‘AN Registered User solely for use in the production of security of the ammonium nitrate Number’’). In section 31.220(a)(1) of the explosives, as they are already regulated supply chain that would be created by proposed rule, the Department proposes by ATF. In this model, facilities and the second option (discussed above) are to develop an online web portal through persons that are licensed by ATF to mix avoided. The primary drawback of this which individuals will apply for AN ammonium nitrate with fuel to create approach is that it would make certain Registered User Numbers. The ANFO, but that do not purchase, sell, or facilities (e.g., those that produce Department proposes that AN transfer ammonium nitrate for other ANFO) subject to both DHS and ATF Registered User Numbers will be purposes and do not perform regulations. To minimize this impact, disseminated to successful applicants ammonium nitrate application services, the Department and ATF currently are via e-mail or through the DHS web would not be subject to the rule discussing ways to coordinate portal. The Department also proposes in implementing Subtitle J. The primary inspections and other compliance section 31.235 to make AN Registered advantage of this approach is that it activities for these ammonium nitrate User Numbers valid for a period of five would prevent potentially duplicative facilities, and will work together to years. Additional proposals on who regulatory requirements from applying ensure that there is minimal duplication would be required to register and on to ammonium nitrate facilities and of effort or burden caused by this various aspects of the registration individuals that are already subject to approach, if adopted. process are discussed in the following ATF regulations. This approach, The Department welcomes comments paragraphs. The Department seeks however, could create a considerable on this proposed approach to public comment on its proposed gap in regulatory coverage throughout ammonium nitrate produced, bought, registration methodology, on other the ammonium nitrate supply chain, as sold, or transferred exclusively for the methods the Department may consider ATF regulations apply solely to ANFO purpose of producing explosives. The for registration, and on the length of and not the ammonium nitrate used to Department also welcomes comments time registration numbers should create it. For example, facilities that on any other exemptions that it should remain valid. produce ammonium nitrate to sell to consider. 2. Who Must Register manufacturers of ANFO but who themselves do not produce ANFO B. Requirements for the Registration of 6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. would be subject to neither ATF nor AN Sellers and AN Purchasers (See 488e(a)(3)(B) require owners and DHS regulation under this approach. Sections 31.200–31.250 of the Proposed operators of AN Facilities (including Similarly, stores of ammonium nitrate at Rule) facilities that provide ammonium nitrate application services) to register with the facilities producing ANFO would not be 1. Overview subject to any regulatory requirements Department. For the reasons provided (e.g., recordkeeping requirements, Pursuant to 6 U.S.C. 488a(c), 6 U.S.C. below, the Department proposes in reporting of theft or loss requirements) 488a(d), 6 U.S.C. 488e(a)(3)(A), and 6 section 31.200 that any person who may by DHS or ATF under this approach. U.S.C. 488e(a)(3)(B), the Department individually perform a sale or transfer of This would create regulatory gaps in the must establish a process by which ammonium nitrate on behalf of an AN ammonium nitrate supply chain which persons owning or operating ‘‘AN Facility would be required to register as could be exploited by terrorists. Facilities’’ and persons intending to an owner or operator. Registered AN The third option would exempt from purchase ammonium nitrate must Facility personnel (whether owners or regulation ammonium nitrate mixtures register with the Department. Section operators) involved with sales, transfers, that are ‘‘explosives’’ subject to ATF 31.105 of the proposed rule defines an or provision of application services are regulation (i.e., ANFO). DHS is ‘‘AN Facility’’ as any person or entity collectively referred to in the proposed proposing this option in section 31.305 that produces, sells, or otherwise rule as ‘‘AN Sellers,’’ of which ‘‘AN of the proposed rule. Under this transfers ownership of, or provides Facility Representatives’’ and approach, entities and individuals that application services for, ammonium ‘‘Designated AN Facility Points of purchase, sell, or transfer ANFO, but nitrate. The Department proposes to Contact (POCs)’’ are subsets that have who do not produce ANFO or possess define ‘‘application services’’ in section special responsibilities under the ammonium nitrate for other reasons, 31.105 as the physical deposit of proposed rule. ‘‘AN Facility would be exempt from all Subtitle J fertilizer onto turf, fields, crops, or other Representatives’’ are any AN Facility

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personnel, be they owners or operators, Department proposes to require only proposing that several categories of designated to act on behalf of an AN those owners and operators actually individuals register as ‘‘AN Sellers’’: Facility for purposes of compliance with involved in sales, transfers, or (1) Any individual who has an this rule. A ‘‘Designated AN Facility application services to register. DHS is ownership interest in an AN Facility POC’’ is the AN Facility Representative also considering, however, whether may register as an AN Seller. designated by an AN Facility to act as Subtitle J requires all owners to register. (2) Any individual designated to act the primary point of contact with the DHS welcomes comments on this issue on behalf of an AN Facility for purposes Department on behalf of the AN Facility and the benefits and costs imposed by of compliance with this regulation for purposes of compliance with this a registration requirement for various would be required to register as an AN rule. types of owners. We understand that Seller, such as, possibly, a site manager, 6 U.S.C. 488a(d) and 6 U.S.C. some would consider it overly sales manager, or corporate officer. 488e(a)(3)(A) also require anyone who burdensome to require all owners or (3) Any individual involved in the intends to purchase ammonium nitrate operators of AN Facilities to register, sale or transfer of ammonium nitrate on to register with the Department. The because not all owners or operators are behalf of an AN Facility would be proposed rule refers to these individuals involved in or have influence over their required to register as an AN Seller, as ‘‘AN Purchasers.’’ organizations’ ammonium nitrate such as a sales clerk or cashier. Additional details on the registration operations, and because not all owners (4) Any individual performing of AN Sellers, AN Facility or operators have the capability to cause ammonium nitrate application services Representatives, Designated AN Facility ammonium nitrate misappropriation. on behalf of an AN Facility would be POCs, and AN Purchasers follow. The Some AN Facilities, such as those required to register as an AN Seller. Department welcomes public comment owned by large companies, may have DHS proposes that every sale, transfer, on the usefulness of these registration many persons who could be considered or provision of ammonium nitrate categories. owners under 6 U.S.C. 488a(c)(1)(A) and application services would have to be DHS also welcomes public comment 6 U.S.C. 488e(a)(3)(B). The Department conducted by a registered individual (or discussing other potential registration requests comment on who should be by multiple registered individuals). categories. DHS is interested in required to register to fulfill Subtitle J’s Accordingly, while every AN Facility comments addressing the benefits and owner registration requirements for will be required to have at least one AN costs of potentially registering these types of facilities. DHS also Seller registered with the Department, organizations in addition to the requests comment describing how not every individual with job at an AN registration of individual persons. The registration of various owners would or Facility would have to register to be an Department’s proposed rule would would not fulfill the objective of AN Seller. These proposals would require only the registration of Subtitle J—‘‘to prevent the largely give AN Facilities the flexibility individual persons, although DHS is misappropriation or use of ammonium to seek registration of and to conduct interested in receiving comments nitrate in an act of terrorism.’’ See 6 business with the personnel of their addressing what benefits and costs, if U.S.C. 488a(a). choosing, while also ensuring that all any, there would be in requiring The Department is also interested in sales, transfers, and application services registration of organizations involved in obtaining more information about are conducted by individuals who have ammonium nitrate sales, transfers, or individuals who operate (but do not been vetted by and registered with the application services. DHS is interested own) AN Facilities, particularly at AN Department. in receiving comments addressing Facilities where owners themselves are DHS is proposing that within the which types of organizations (if any) not involved in day-to-day operations category of AN Sellers there be a should register—organizations affiliated and do not personally sell, transfer, or subcategory of individuals called ‘‘AN with AN Facilities, organizations perform application services for Facility Representatives.’’ The affiliated with AN Purchasers, both, or ammonium nitrate. Operators include qualifications and responsibilities of AN neither. The Department also invites employees or other persons who could Facility Representatives will be comments addressing organizational act on behalf of a facility in conducting discussed in the following section. AN structures, and whether different sales and transfers, such as sales clerks, Sellers who are not AN Facility registration requirements should apply cashiers, sales managers, and persons Representatives would have authority to to organizations with different who provide ammonium nitrate perform all of the regulatory activities ownership, governance, or operational transportation services (e.g., delivery that owners or operators must perform structures. The Department also seeks truck drivers) or application services. pursuant to Subtitle J (e.g., verifying the comments discussing potential ways in Enabling operator registration is identities of prospective AN Purchasers, which organizational registration could consistent with the Department’s recording the details of completed sales, take place. authority under 6 U.S.C. 488a(a) and 6 and handing over possession of U.S.C. 488e(a)(3)(B), and is necessary in ammonium nitrate to approved AN 3. Registering AN Sellers order to ensure that persons with the Purchasers), but would not be 6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. ability to sell, transfer, or provide responsible for ensuring that other AN 488e(a)(3)(B) require persons who own application services for ammonium Facility personnel are following the and persons who operate AN Facilities nitrate are not terrorists. DHS welcomes Department’s regulations. For a to register with the Department. DHS comments on which operators involved description of permissible believes that Subtitle J’s registration in the sale and transfer of ammonium responsibilities of AN Sellers, refer to requirements for AN Facility personnel nitrate, or involved in ammonium section 31.210 of the proposed rule. will be satisfied if AN Facilities nitrate application services, should be The Department proposes that every designate AN Sellers, AN Facility required and why they should be AN Facility would have to have at least Representatives, and/or Designated AN required to register with the one registered AN Seller (i.e., the Facility POCs to register and perform Department. Designated AN Facility POC), but may the sale, transfer, and application In light of the Department’s seek the registration of as many other service responsibilities discussed understanding of the roles of AN AN Facility Representatives and AN elsewhere in this NPRM. The Facility owners and operators, DHS is Sellers as it deems appropriate. The

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Department proposes that whether or additional AN Facility Representatives 6. Summary of AN Facility Personnel not an AN Facility seeks registration of is entirely discretionary. The Registration Proposals more than a single person will be Department also proposes that while an In summary, the Department is discretionary. AN Facility would have to have at least proposing that any individual working In section 31.220(c)(3), the one registered AN Facility at or for an AN Facility that performs Department proposes that each person Representative, whether or not an AN sales or transfers of ammonium nitrate, registering as an AN Seller, AN Facility Facility seeks registration of any or that performs ammonium nitrate Representative, or Designated AN additional AN Sellers who are not AN application services, would have to Facility POC will be expected to provide Facility Representatives is entirely register with the Department. Sales, information identifying all AN Facilities discretionary. Under the Department’s transfers, or application services may at which he/she will perform sales or only be performed by an individual who transfers of ammonium nitrate, or on proposed approach, an AN Facility may behalf of which he/she will perform decide that it is most cost-effective to successfully registers with the application services. In section register only AN Facility Department and is granted an AN 31.220(b), the Department proposes that Representatives; however, in that case, Registered User Number as an AN Seller a single individual may serve as an AN AN Facility Representatives would have (or AN Facility Representative or Seller for multiple AN Facilities. to be able to perform all applicable Designated AN Facility POC, as both AN regulatory compliance activities in this Facility Representatives and Designated 4. Registering AN Facility rule. AN Facility POCs are subsets of AN Representatives Sellers). An AN Facility may have as While the Department’s proposal does The Department recognizes that not many or as few registered AN Sellers as not preclude the registration of multiple all AN Sellers will have the same level it deems fit, and would be required to AN Facility Representatives for a single of non-regulatory responsibility and have at least one registered AN Facility authority within an AN Facility, and AN Facility, each AN Facility will be Representative. that some AN Sellers may not be in a required to designate a single AN AN Facility Representatives have position to monitor or control overall Facility Representative to act as the several responsibilities that AN Sellers AN Facility compliance or the primary point of contact with the who are not AN Facility Representatives compliance of other AN Facility Department on behalf of the AN do not have (i.e., responsibilities for employees with the final regulations. In Facility. This individual will be referred ensuring an AN Facility’s holistic light of this, in section 31.215(b), the to as the ‘‘Designated AN Facility POC.’’ compliance with Subtitle J Department is proposing the creation of The qualifications and responsibilities requirements). Each AN Facility would a subcategory of individuals called ‘‘AN of Designated AN Facility POCs will be be required to designate a single AN Facility Representatives’’ within the discussed in the following section. Facility Representative to be that broader class of AN Sellers. The An individual registering as an AN facility’s Designated AN Facility POC, Department proposes that AN Facility Facility Representative will be expected who will serve as the facility’s primary Representatives would be AN Sellers to provide the name of and contact point of contact with the Department. The Department welcomes comments who are not only responsible for their information for the Designated AN on the propriety and effectiveness of own compliance with the regulations, Facility POC for each AN Facility on but also would be responsible for the this proposed approach, including behalf of which he/she is registering. AN Facility’s overall compliance with comments that address the following Please note that a single individual may the regulations and the compliance of issues: all other AN Facility employees. serve as an AN Facility Representative • The ownership and management The Department also proposes that, for multiple AN Facilities. structures of AN Facilities; • for purposes of these regulations, the 5. Registering a Designated AN Facility The proposed qualifications for definition of ‘‘AN Facility POC being an AN Facility Representative, Representative’’ be broad enough to including whether individuals who do include not only individuals who own In section 31.215(a) of the proposed not own all or part of an AN Facility all or part of AN Facilities, but also any rule, the Department proposes requiring should be able to register as AN Facility non-owner AN Facility operators, each AN Facility to designate a single Representatives; employees, or contractors designated to AN Facility Representative to act as the • The proposed regulatory act on behalf of an AN Facility for primary point of contact with the compliance responsibilities of AN purposes of compliance with this Department on behalf of the AN Sellers and AN Facility Representatives, proposed rule. Thus, for purposes of the Facility. The Department proposes that which will be described in further detail proposed rule, an AN Facility would be the Designated AN Facility POC will be throughout the remainder of this NPRM; • allowed to designate as an AN Facility the individual who is responsible for Whether or not proof of ownership Representative an individual without contacts with the Department regarding (for owners) or proof of delegation of any ownership in the AN Facility, such regulatory activities, such as the authority from company ownership or as, possibly, a site manager, sales scheduling of inspections under management (for non-owners) should be manager, or corporate officer, to meet sections 31.500 and 31.505 of the required for individuals registering as the ‘‘owner’’ and ‘‘operator’’ registration proposed rule. The Department AN Facility Representatives; and • The proposal that not all AN requirements of Subtitle J. proposes that the Designated AN In section 31.215(b), the Department Facility owners or operators should be Facility POC will have this point-of- proposes that every AN Facility would required to register. contact responsibility in addition to all have to have at least one AN Facility The Department also welcomes Representative registered on its behalf, other AN Facility Representative comments on potential alternative but may have as many AN Facility responsibilities. approaches. Several such alternative Representatives registered on its behalf Please note that a single individual approaches follow: as it deems appropriate. Whether or not may serve as a Designated AN Facility • Permitting only individuals who an AN Facility seeks registration of any POC for multiple AN Facilities. own all or part of an AN Facility to

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register, and requiring those individuals DHS does not believe that ammonium provide both an online Web portal and to perform all applicable regulatory nitrate fertilizer is likely to be phone-based registration system. compliance activities, such as verifying misappropriated for use in acts of Applicants could choose between Web AN Purchasers’ AN Registered User terrorism after it has been applied to portal registration and phone Numbers and identities (as described in agricultural property. The Department registration—DHS would accept either if sections 31.300 and 31.305 of the welcomes public comment on this it implemented this alternative. Under proposed rule); or conclusion. this alternative, DHS could accept • Permitting only AN Facility 8. Federal/State/Tribal/Local registration applications over the phone, Representatives to register, but allowing Government-Owned Entities That Are vet applicants against the TSDB (as any facility personnel to conduct AN Facilities or AN Purchasers described in section III.B.11 of this ammonium nitrate sales, transactions, NPRM), and subsequently mail and application services; or While the Department does not applicants paper letters containing • Permitting only AN Facility believe that many Federal, State, tribal, registration numbers or registration Representatives to register, but allowing or local governmentally-owned entities denials. DHS could also potentially non-registered facility personnel whose engage in the sale, transfer, or purchase provide each applicant with the option names have been provided to the of ammonium nitrate, the Department of receiving a call, conveying Department to be involved in believes that some such entities do. In registration results or registration status, ammonium nitrate sales, transactions, Subtitle J, Congress did not exempt from prior to receipt of a paper letter in the and application services. regulation AN Facilities that are owned mail. Calls could be provided to enable by, or AN Purchasers who work for, applicants to learn their statuses prior to 7. Registering AN Purchasers Federal, State, tribal, or local receiving letters in the mail. 6 U.S.C. 488a(d) and 6 U.S.C. governments. Accordingly, the Department is proposing to treat such Although DHS is proposing Internet- 488e(a)(3)(A) require any individual only registration at this time, the who intends to purchase or acquire entities like any other AN Facilities or AN Purchasers, and is proposing to Department invites public comments ammonium nitrate to register with the addressing the above alternative Department. Specifically, the require them to comply with all applicable regulatory requirements. The registration approach, and any other Department proposes in section 31.205 alternative registration approaches that to require that each individual person Department solicits comments on the existence of governmentally-owned commenters believe would enable attempting to purchase or acquire applicants and DHS to efficiently carry ammonium nitrate from an AN Facility entities engaged in the sale, transfer, or purchase of ammonium nitrate; on the out their respective registration would be required to register with the obligations. Specifically, DHS is Department. Whether that person is the existence of government-owned entities that provide application services; interested in identifying alternative owner of the purchasing entity or approaches to the Internet that would simply an employee thereof, the examples of such entities; and whether or not such entities should receive allow DHS to meet its statutory Department proposes to require that requirements to, ‘‘to the extent person to have a valid AN Registered special treatment under the Ammonium Nitrate Security Program. practicable, issue or deny registration User Number. Moreover, whether a numbers under [Subtitle J] not later than purchasing entity would want to have a 9. Registration Process 72 hours after the time [DHS] receives single individual complete all purchases The Department is proposing that a complete registration application, or have multiple individuals with each applicant for an AN Registered unless [DHS] determines, in the interest purchasing authority would be within User Number would be required to of national security, that additional time that entity’s discretion, but the register as a Designated AN Facility is necessary to review an application[,]’’ Department would require any POC, AN Facility Representative, AN and to ‘‘notify a person seeking to individual attempting to purchase Seller, and/or AN Purchaser through an register with the Department [* * *] of ammonium nitrate to be registered online Web portal (the ‘‘AN User the status of the application of that before an AN Facility would be Registration Portal’’) developed by the person not later than 72 hours after the authorized to sell ammonium nitrate to Department and made available via the time [DHS] receives a complete him/her. This is necessary to ensure that Internet. Proposed procedures for registration application.’’ See 6 U.S.C. each individual taking ownership of applying for an AN Registered User 488a(i)(3). The Department will ammonium nitrate has been vetted Number and registering as a Designated consider and examine alternatives before obtaining ammonium nitrate. The AN Facility POC, AN Facility suggested in public comments in Department welcomes public comment Representative, AN Seller, and/or AN assessing whether to require online on this proposed approach. Purchaser can be found in section registration in the final rule. DHS is The Department also proposes that it 31.220 of the proposed rule. (This particularly interested in receiving will not require persons receiving NPRM refers to applicants who have public comments addressing the ammonium nitrate application services successfully registered under these business and economic impacts that to register as AN Purchasers. The proposed procedures as ‘‘registered various registration alternatives would Department does not believe that users.’’) have on the regulated community, Subtitle J requires registration and TSDB One alternative to Internet-only including the costs and benefits of the vetting of owners/operators of registration is to add a phone various alternatives on individual agricultural property who receive registration option to the current registration applicants. Because it is application services, as long as those Internet option. This alternative would proposing to implement an online individuals do not otherwise qualify for registration system, DHS requests 1 registration under this proposed rule. under the Department’s proposed rule. Such an comments addressing the level of access owner or operator would have to register with DHS to the Internet that registration 1 If an owner or operator receives and possesses as an AN Purchaser, would have to be screened applicants currently have, comments ammonium nitrate for any length of time before it against the TSDB, and would have to fulfill the is applied as fertilizer to his/her agricultural other proposed obligations of AN Purchasers as addressing the level of access applicants property, he/she would qualify as an AN Purchaser described elsewhere in this NPRM. anticipate having in the future, and

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comments addressing how registration that implementing an online registration Internet-only approach because mail applicants who do not have readily- system would reduce the risks of lost processing times, delays associated with accessible Internet access could obtain paperwork or misdirected mail, both by transcribing phoned-in registrations, the access necessary to register online. registration applicants and by DHS, and delays associated with generating DHS specifically requests information, which would be inherent in any and processing paper forms mailed to or data, and/or studies pertaining to the alternative registration systems relying from DHS would slow DHS’s responses regulated community’s access to the on mailed correspondence or paper to registration applications. For these Internet. The Department will consider forms. While allowing registration over reasons, a phone-in or mail-in any data or studies received on any the phone would eliminate the potential registration alternative would not aspects of registration or on any loss of mailed paper forms by expedite registration in comparison to alternatives, as well as other comments, registration applicants, it would not online registration. However, DHS seeks and if appropriate, modify the entirely eliminate the potential for some comment on whether or not possible registration system proposed in this paper letters from DHS containing registration delays would be preferable NPRM. registration numbers or registration to the burdens of having to access While not every potential applicant denials to be lost. DHS thus believes public computers that would be may have personal access to the that an online registration system is imposed by an Internet-only registration Internet, the Internet is widely available, likely to be the most accurate approach on individuals without such as at public libraries or in other registration system possible; it would be readily-accessible Internet access. DHS public buildings. AN Facilities are also less prone to the types of errors is also seeking comments on other ways welcome, but not required, to provide identified above than alternative in which these burdens might be Internet access to potential applicants. registration systems. DHS seeks mitigated for those without readily- The Department believes that there are comments on how errors could be accessible Internet access. significant benefits to an online reduced through alternative registration DHS acknowledges that the proposed approach. The benefits to applicants, systems. Internet-only registration procedures, if registered users, and the Department of finalized, would impose costs and DHS proposes Internet-only an online approach include: (1) Quicker burden on regulated members of the registration because Subtitle J directs response from the Department, thereby public. Online registration would likely the Department to ‘‘establish procedures minimizing the time during which an be more burdensome for individuals to efficiently receive applications for applicant or registered user would not without readily-accessible access to the be able to purchase, sell, or transfer registration numbers.’’ See 6 U.S.C. Internet than for others. Subtitle J, ammonium nitrate, or perform 488a(i)(1)(A). A major goal of Subtitle J however, specifies that persons do not ammonium nitrate application services; is to expedite and streamline the need to be registered to purchase, sell, (2) ability for an applicant or registered registration and regulatory compliance transfer, or receive ammonium nitrate user to access, view, update, and processes that are part of the until six months after the issuance of manage his/her personally identifiable Ammonium Nitrate Security Program. the final rule implementing the information; and (3) ability for a See, e.g., 6 U.S.C. 488a(i)(3)(A) Ammonium Nitrate Security Program. registered user to easily renew his/her (directing DHS to, ‘‘to the extent See 6 U.S.C. 488e(e). DHS believes that AN Registered User Number once it has practicable, issue or deny registration this six-month period will provide a expired. Additional benefits of online numbers under [Subtitle J] not later than sufficient opportunity for those without registration, and description of 72 hours after the time [DHS] receives readily-accessible Internet access to rationales for online registration, follow. a complete registration application obtain the brief Internet access As described in section III.B.11 of this [* * *]’’); 6 U.S.C. 488a(i)(1)(A) necessary to register with the NPRM, DHS proposes to vet registration (directing DHS to ‘‘promptly issue or Department. The period of time between applicants against the TSDB as part of deny’’ registration numbers (emphasis issuance of a final rule and the Ammonium Nitrate Security added)); 6 U.S.C. 488a(i)(1)(B) (directing implementation of the registration Program. Accurate TSDB vetting DHS to structure the program to requirement (i.e., that individuals depends upon DHS obtaining accurate maximize the number of registration possess AN Registered User Numbers) information from registration applicants that apply for registration should minimize burden or business applicants. Because TSDB vetting soon after implementation of the disruption felt by registration results or submissions of inaccurate or program); 6 U.S.C. 488a(i)(3)(B) applicants. Nevertheless, the improper registration information to (directing DHS to notify registration Department seeks comments on the DHS could lead to registration denials applicants whenever there are delays in likely burdens (in terms of time and or revocations (as described in sections processing registration applications); expense) on those who would need to III.B.12 and 13 of this NPRM), and 6 U.S.C. 488a(i)(4)(A) (directing access public computers in order to preventing individuals from being able DHS to create an expedited appeals register online. DHS also seeks to access ammonium nitrate and thus process for individuals whose comments on any additional costs impacting their livelihoods, DHS registration applications are denied). incurred besides those associated with believes that it should implement the Implementing an online registration registration. most accurate registration system system would not only enable DHS to In Subtitle J, 6 U.S.C. 488a(i)(1)(B) possible. DHS believes that return registration results to applicants additionally directs the Department to implementing an online registration over the Internet within the 72-hour take steps to maximize the number of system would reduce the risk of human timeframe set forth in 6 U.S.C. registration applications that are error in submission and transcription of 488a(i)(3)(A), it would also enable DHS submitted and processed during the six registration information, as compared to to return registration results to months following the issuance of the the phone-in registration alternative applicants faster than under any of the final rule. In order to accomplish this, mentioned above or as compared to other possible registration alternatives, the Department intends to engage in a mail-in or other possible registration thereby best achieving the goal of concerted outreach effort both alternatives. DHS is seeking comment expediting registration that underlies immediately before and immediately on this assumption. DHS also believes Subtitle J. The Department proposes the after the release of the final rule in an

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effort to raise awareness of Subtitle J’s designed to allow the Department to vet application information, the purposes registration requirements and the the individual against the TSDB, and to for collecting application information, process for completing them. The subsequently enable point of sale the uses of application information, and Department welcomes public comments verifications. The Department is the impacts on individuals by providing on both potential outreach targets and proposing in section 31.220(c)(1) that or failing to provide application other steps the Department can take to each applicant provide his/her name, information. DHS expects to provide maximize the number of registration address, telephone number, photo this notice electronically, within the AN applications that are submitted and identification document type, photo User Registration Portal. processed during the initial six-month identification document issuing entity, 11. Applicant Vetting Process registration period. photo identification document number, The Department’s proposal would place of birth, date of birth, citizenship, In section 31.225, the Department require online registration, but would and gender, along with any other proposes to vet applicants against the not mandate what sort of Internet access information deemed necessary by the TSDB and/or verify each applicant’s registration applicants must obtain in Department to carry out TSDB vetting. enrollment in a Department program order to complete the registration To ensure that appropriate user roles that conducts equivalent TSDB vetting process. As mentioned previously, are assigned to each AN Registered User prior to issuing him/her an AN registration applicants could use public Number, DHS proposes in section Registered User Number. See 6 U.S.C. computers and internet connections, or 31.220(b) that each applicant would also 488a(i)(2)(A) (requiring TSDB vetting). computers and Internet connections be asked to declare his/her ammonium Under section 31.230(b)(1) of the provided by AN Facilities, in order to nitrate user status in general terms (i.e., proposed rule, applicants whose register if they do not have access to AN Seller; AN Facility Representative; identifying information appears in the personal computers and the internet. Designated AN Facility POC; AN TSDB may be denied AN Registered DHS recognizes that use of public Purchaser). In section 31.220(b), the User Numbers. See 6 U.S.C. computers or unsecured Internet Department proposes to allow an 488a(i)(2)(B). Each applicant who connections can increase privacy risks applicant the ability to register as both applies for an AN Registered User and risks of loss of sensitive personal an AN Seller and an AN Purchaser. The Number will be vetted against the TSDB data. The Department has published a Department is interested in receiving before being approved to purchase, sell, Privacy Impact Assessment comments on the utility of this transfer, or provide application services concurrently with publication of this proposal. for ammonium nitrate. NPRM addressing these risks, and also The Department is also proposing in The Department is aware that some addressing other privacy risks and section 31.220(c)(3) that each AN Seller, applicants may have already been vetted safeguards relevant to the Ammonium AN Facility Representative, and against the TSDB as part of other DHS Nitrate Security Program. The Designated AN Facility POC would be programs prior to submission of their Department’s Ammonium Nitrate required to submit information AN Registered User Number Security Program Privacy Impact identifying all AN Facilities at or for applications. Sections 31.220 and Assessment can be found online, at which he/she serves as an AN Seller, 31.230 of the proposed rule would http://www.dhs.gov/privacy. DHS AN Facility Representative, or enable, but would not require, DHS to encourages members of the public to Designated AN Facility POC. recognize the results of TSDB vetting read the Privacy Impact Assessment, Under section 31.220(c)(1) of the completed by other DHS programs as and submit comments on this NPRM proposed rule the Department may also part of AN Registered User Number regarding the risks and safeguards that collect information necessary to enable application reviews. The Department is is addresses. The Department is it to verify applicants’ enrollments in interested in receiving comments on the particularly interested in receiving other TSDB vetting programs. The utility of this proposal. comments addressing privacy risks Department is considering exercising its The Department welcomes public associated with use of public computers authority under 6 U.S.C. 488a(i)(6)(A) to comment on the means by which it or unsecured internet connections as recognize the results of equivalent TSDB proposes to accomplish vetting, and on part of the proposed registration vetting conducted on applicants any other aspects of the proposed process, and comments addressing how enrolled in other appropriate DHS approach to vetting applicants for AN DHS and registration applicants can programs where possible. This approach Registered User Numbers. At a date after protect personal information and would limit the number of instances in publication of the Ammonium Nitrate sensitive information transmitted which different DHS programs may vet Security Program NPRM in the Federal online. the same applicant against the TSDB. Register, but prior to final rule In summary, the Department proposes The Department would appreciate implementation, the Department will that registration applications be comments regarding whether or not this publish in the Federal Register both a collected only though an online web or other information would be System of Records Notice (SORN) for portal. The Department seeks public worthwhile to collect, and regarding the the Ammonium Nitrate Security comments on this proposed Internet- burden on the regulated community of Program and a separate Notice of only approach, and on potential such collection. The Department also Proposed Rulemaking proposing to alternative approaches. DHS will welcomes public comment on the exempt the Ammonium Nitrate Security consider alternatives submitted in totality of this proposed registration Program from certain Privacy Act selecting which type of registration application process, including public requirements. The Department will also system to implement as part of the final comment discussing potential publish, on the Department’s Web site, rule. alternative processes. a Privacy Impact Assessment. In these Pursuant to the Privacy Act, 5 U.S.C. documents the Department will outline 10. Initial Applications 552a(e)(3), DHS intends to provide the potential privacy impacts of the Upon accessing the AN User notice to individuals submitting proposed rule, including the privacy Registration Portal, DHS proposes in information to DHS through the AN impacts of the vetting process and the section 31.220(c)(1) that each applicant User Registration Portal about the circumstances under which DHS will be asked a series of questions authority for DHS’s collection of intends to share information collected

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under the Ammonium Nitrate Security public comment addressing potential mechanisms described in this section of Program with Federal law enforcement alternative means of providing such this NPRM, while civil penalty agencies as a part of law enforcement notice. adjudications and appeals will be investigations into terrorist ties of governed only by the mechanisms 13. Revocation of Registration Numbers applicants for AN Registered User described in section III.H of this NPRM. Numbers. Under section 31.245 of the proposed The reason for this mutual exclusivity rule, the Department proposes to revoke is because registration denials and 12. Notification of Approval or Denial an individual’s AN Registered User revocations are fundamentally different Consistent with 6 U.S.C. 488a(i)(3)(A) Number upon determining that it is in from imposition of civil penalties under and 6 U.S.C. 488a(i)(3)(B), to the extent the interest of national security to the Department’s proposed rule. Under practicable, the Department intends to revoke that AN Registered User Number the Department’s proposal, individuals approve or deny each application for an based on the results of the activities or other entities will only be issued civil AN Registered User Number, and to described in section 31.225 of the penalties for violating the rules of the issue each AN Registered User Number, proposed rule, or that the AN Registered Ammonium Nitrate Security Program. not later than 72 hours after the time the User holding that AN Registered User Individuals or other entities will not be Department receives a complete Number obtained it by submitting issued civil penalties for having their application. The Department may deny fraudulent or false information. See 6 registrations denied or revoked. an applicant an AN Registered User U.S.C. 488a(i)(7)(A). To support these Adjudication or appeal of civil penalties Number if that applicant’s name or determinations, in section 31.225(b) the will thus involve assessment of whether identifying information appears in the Department proposes to recurrently vet or not individuals or other entities have TSDB. See 6 U.S.C. 488a(i)(2)(B). The individuals who have previously been violated the final Ammonium Nitrate Department proposes in section issued AN Registered User Numbers. Security Program rules. On the other 31.230(c) to provide notification of See 6 U.S.C. 488a(i)(7)(A). As hand, appeal of denial or revocation of registration application approval or appropriate, before revoking an registration numbers will involve denial to each applicant electronically. individual’s AN Registered User review of the completeness and If a registration application is Number, the Department must provide accuracy of registration applications, approved, the notification of such notice to the individual, and after the and review of TSDB vetting results and approval will contain a unique AN revocation of the AN Registered User national security interests if applicable. Registered User Number assigned to the Number, the Department must provide The appeal procedures listed in this applicant. The Department is the affected individual an opportunity section of the NPRM are intended to considering including in the notification to appeal. See 6 U.S.C. 488a(i)(7)(B). In enable reviews of registration issued to each successful applicant a sections 31.245(b) and (c), DHS application denials and revocations of certificate including the AN Registered proposes that notification of revocation registration numbers, while the User Number that he/she can print and will be provided to each affected adjudication and appeal procedures keep as part of his/her records and use individual in writing, along with listed in section III.H are intended to to facilitate the AN Purchaser instructions on the process for enable reviews of civil penalties and of verification process. appealing the Department’s revocation alleged regulatory violations. The Department welcomes public decision. The appellate process will Subtitle J requires the Department to comment on the efficiency and mirror that provided to individuals afford persons denied AN Registered sufficiency of notifying applicants of whose initial applications for AN User Numbers, and persons whose AN AN Registered User Number approvals Registered User Numbers are denied, as Registered User Numbers are revoked, and denials via e-mail or other described below in the following section the opportunity to appeal such denials electronic means, and also welcomes and in section 31.250 of the proposed and revocations in an expedited public comment addressing potential rule. The Department welcomes public manner. See 6 U.S.C. 488a(i)(4). The alternative means for providing such comment on the efficiency and Department proposes to fulfill this notice, such as notification via sufficiency of this method of providing requirement by permitting each person telephone or letter. The Department also notice of revocation and on the to request copies of the materials on welcomes public comment addressing proposed appeals process, and also which denial or revocation was based, the appropriate contents of registration welcomes public comment on potential and to file statements explaining why approvals and denials. alternative means for either. he/she believes that he/she has been The Department intends to issue or inappropriately denied registration and 14. Appealing Registration Denials and deny AN Registered User Numbers containing any applicable supporting Registration Revocations within 72 hours of application, as evidence, to be reviewed by the required by Subtitle J. See 6 U.S.C. This section discusses proposed Department. These proposed appeals 488a(i)(3). When this is not practicable, appeal procedures for persons denied procedures are based, in part, on or when the Department determines in AN Registered User Numbers and for appeals procedures the Department the interest of national security that persons whose AN Registered User offers as part of the Transportation additional time is needed to review an Numbers are revoked under Subtitle J. Worker Identification Credential (TWIC) application, the Department proposes to These procedures can be found in and Hazardous Materials Endorsement provide notice of delay to applicants section 31.250 of the proposed rule. A (HME) programs. See 49 CFR 1515.9(a)– whose registration determinations are later section of this NPRM, section III.H, (b); 49 CFR 1515.5. delayed in the same manner as discusses proposed adjudication and Specifically, the Department proposes approvals or denials will be issued, as appeal procedures for persons and that, after having received an stated in section 31.230(e) of the entities issued civil penalties by the ammonium nitrate registration denial or proposed rule. The Department Department under Subtitle J. These two revocation, a person may initiate an welcomes public comment on the sets of procedures are mutually appeal by filing a written Request for efficiency, sufficiency, costs and exclusive; the Department proposes that Materials requesting copies of the benefits of this manner of providing registration and revocation appeals will materials on which denial or revocation notice of delay, and also welcomes be governed only by the appeals was based. The Department proposes to

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require that each Request for Materials 31.220(a)(2) proposes to require via the proposed AN User Registration be submitted to the Department within registration applicants and AN Portal anytime beginning 60 days prior 60 days of the date of denial or Registered Users to update submitted to the expiration of his/her AN revocation. information within 30 days of a change Registered User Number through one The Department proposes that after to any of the information submitted as year after the expiration of his/her AN the receipt of a Request for Materials, it part of the application (e.g., name, Registered User Number. After will send the appellant a DHS Response address). An applicant or AN Registered completion of the renewal process, each containing copies of the releasable User would be able to update his/her renewed AN Registered User Number materials upon which denial or information through the proposed AN will be valid for an additional five years. revocation was based. DHS will not User Registration Portal. DHS seeks To facilitate this, the Department include any classified information in public comment on its proposed intends to maintain an AN Registered this DHS Response nor will it include approach to updating registration User’s registration application any other information or material information, including how often and information for a period of one year protected from disclosure under law, under what circumstances to require following the expiration of his/her AN although as appropriate it will include registrants to update the information Registered User Number. If an unclassified summaries of classified submitted to DHS as part of registration. individual fails to renew his/her AN evidence supporting denial or DHS also requests public comments on Registered User Number within one year revocation. The Department proposes potential alternative approaches to of its expiration, the AN Registered User that it will serve its DHS Response on requiring registration information to be Number will be permanently retired. the appellant within 60 days of Request updated through the proposed AN User Such an individual will need to apply for Materials receipt, unless additional Registration Portal, including comments for a new AN Registered User Number time is required in the interest of on the feasibility and practicality of to purchase, sell, transfer, or provide national security. allowing updates to be accomplished application services for ammonium Upon review of those releasable over the telephone or through the mail. nitrate after his/her initial AN Register materials, the Department proposes that The Department proposes in section User Number has been permanently an appellant may reply to the 31.235 of the proposed rule to make retired. Department with a Request for Appeal each AN Registered User Number issued The Department seeks public containing the rationale or information under Subtitle J valid for five years after comment on this proposed approach, upon which he/she disputes the the date of issuance (unless revoked including the utility, benefits, and costs Department’s denial or revocation before expiration pursuant to 6 U.S.C. of requiring re-registration of determination. The Department 488a(i)(7)). Under this proposal, the ammonium nitrate users in general, and proposes that an appellant will have 60 Department expects many applicants to on the proposed five-year time period in days from the date of the Department’s apply to renew their AN Registered User particular. Response in which to file such rationale Numbers every five years. or information. The Department In proposing five years as the duration 16. Initial Six-Month Registration Period proposes that after reviewing this of each AN Registered User Number, the 6 U.S.C. 488e(e) specifies that persons rationale or information, it will serve Department is seeking to balance the do not need to be registered to purchase, the appellant with a Final benefits of requiring renewals against sell, transfer, or receive ammonium Determination of the Department’s the burdens to both the regulated nitrate until six months after the resolution of his/her appeal. The community and the Department of the issuance of the final rule implementing Department proposes that it will renewal process. As part of its Subtitle J. 6 U.S.C. 488a(i)(1)(B) directs perform this service within 72 hours of evaluation of potential expiration and the Department to take steps to Request for Appeal receipt, to the extent renewal processes, the Department has maximize the number of registration practicable, as required by 6 U.S.C. considered the expiration/renewal applications that are submitted and 488a(i)(4)(A)(ii). schedules for ATF’s Federal Explosives processed during the six months For good cause shown, the Regulations (three years), for DHS following the issuance of the final rule. Department additionally proposes to programs that conduct TSDB vetting In order to accomplish this, the grant appellants extensions of the 60- (e.g., five years for TSA’s TWIC program Department intends to engage in a day appeals submission periods and five years for U.S. Customs and concerted outreach effort both Border Protection’s Trusted Traveler mentioned above. This will afford immediately prior to and immediately programs), and for various State appellants the necessary time in which following the release of the final rule in ammonium nitrate licensing regulations to work with other government agencies an effort to raise awareness of Subtitle (generally one year). The Department to correct records and materials J’s registration requirements and the believes that the five-year renewal cycle contributing to the Department’s denial/ process for completing them. The for AN Registered User Numbers is revocation determinations when those Department welcomes suggestions on appropriate because it will minimize the records and materials contain incorrect both potential outreach targets and other burden on the regulated community, in or outdated information. steps the Department can take to comparison to screening programs with The Department welcomes public maximize the number of registration shorter renewal cycles. Additionally, a comment on this appeals mechanism, applications that are submitted and five-year validity period aligns with and also welcomes public comment on processed during the initial six-month DHS’s practice of recurrently vetting potential alternative appeals registration period. mechanisms. information against the TSDB for five years as part of certain transportation C. Purchaser Verification Activities (See 15. Registration Updates and Expiration and critical infrastructure security Sections 31.300–31.310 of the Proposed Under Subtitle J, DHS may require programs. Rule) registrants to update registration The Department proposes in section information submitted to DHS ‘‘as 31.240 to allow each AN Registered 1. Overview appropriate.’’ See 6 U.S.C. 488a(6)(b). User to apply for a five-year extension Subtitle J specifies that only Pursuant to this authority, section of his/her AN Registered User Number individuals with valid AN Registered

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User Numbers may purchase online), and the AN Seller delivers individual brings ammonium nitrate ammonium nitrate, and that AN Sellers ammonium nitrate to the AN Purchaser; into the country and transfers would be required to refuse to sell or (3) the AN Purchaser places an possession of it to another person ammonium nitrate to prospective AN advanced order either in person or within the United States, the Purchasers who do not possess valid AN through other means (e.g., telephone, verification and recordkeeping activities Registered User Numbers. See 6 U.S.C. online), and an agent acting on behalf of described below would be required. 488e(a)(2) and 6 U.S.C. 488e(a)(3). To the AN Purchaser takes possession of Similarly, if an individual in the United this end, AN Sellers would be required the ammonium nitrate from the AN States transfers possession of to verify that each prospective AN Seller. Other transaction formats are ammonium nitrate to another person Purchaser has a valid (i.e., current and also possible. who intends to export that ammonium In addition to the aforementioned authentic) AN Registered User Number nitrate, the verification and approaches to transferring possession of prior to transfer of ammonium nitrate. recordkeeping activities described Subtitle J also requires AN Sellers to ammonium nitrate as part of a sale or below would be required. Verification verify each prospective AN Purchaser’s transfer, depending on the financial and recordkeeping would not be identity prior to transfer of ammonium arrangements entered into between an required, however, if an individual nitrate to that prospective AN AN Facility and an AN Purchaser, the transports ammonium nitrate out of the Purchaser. See 6 U.S.C. 488a(e)(2)(D). payment of funds or other services in DHS therefore proposes to require that exchange for ammonium nitrate may country as long as there is no transfer of an AN Facility refuse to sell or transfer occur prior to, concurrent with, or after possession of the ammonium nitrate ammonium nitrate to a prospective AN the actual transfer of possession of when it is inside the United States. Purchaser whose identity or AN ammonium nitrate. Likewise, verification and Registered User Number the AN Seller The Department is interested in recordkeeping would not be required if is unable to verify. These proposed comments regarding the frequency of an individual brings ammonium nitrate requirements can be found in section these various modes of delivery and into the country as long as there was no 31.300 of the proposed rule, and are payment, as well as any other transfer of possession of that ammonium further discussed throughout the transactional formats that are used to nitrate when it is inside the United remainder of section III.C of this NPRM. sell or transfer ammonium nitrate. States. DHS seeks comments on this In addition to verifying the identity The verification activities described proposal, on the methods of conducting and AN Registered User Number of a in section III.C of this NPRM are ammonium nitrate imports and exports, prospective AN Purchaser, if an AN required for each sale or transfer of and on any potential alternative Purchaser whose identity and AN ammonium nitrate. The Department treatments of imported or exported Registered User Number has been seeks comments on its proposed ammonium nitrate. definition of ‘‘transfer,’’ including what verified uses an agent on his or her When ammonium nitrate is used or should be considered a transfer subject behalf at the point of sale, the AN Seller moved within a single AN Facility, or must also verify the identity of the to Subtitle J. For purposes of this rule, when possession of ammonium nitrate agent. See 6 U.S.C. 488a(e)(2)(D). the Department is proposing that changes within a single AN Facility but Identity verification of AN Purchasers ‘‘transfer’’ of ammonium nitrate be that ammonium nitrate does not leave (and, where applicable, their agents) by defined generally as ‘‘[t]he transfer of AN Sellers is to occur in accordance possession or ownership of ammonium the AN Facility, the verification with procedures proposed in section nitrate from one person or entity to activities described below are not 31.300. another person or entity for use outside required. The reason for this is that, AN Facilities would also be required of the AN Facility from which the under Subtitle J, DHS is authorized only to record certain information regarding ammonium nitrate is being transferred. to regulate sales, transfers, and prospective AN Purchasers (and, if Transfers of ammonium nitrate include application services; how ammonium applicable, the agents acting on their transfers of possession or ownership nitrate is stored, used, or processed behalves) for each sale or transfer as part that occur as part of sales and other within the confines of individual AN of Subtitle J’s recordkeeping business or commercial transactions, Facilities is not the subject of Subtitle J. requirements. See 6 U.S.C. 488a(e)(2). and also include transfers of possession As such, persons using or moving or ownership that are not part of sales ammonium nitrate within an AN 2. Manner of Sale or Transfer of or other business or commercial Facility, or obtaining possession of Ammonium Nitrate transactions. The physical deposit of ammonium nitrate for use within the The Department is aware that the fertilizer onto turf, fields, crops, or other same AN Facility, would not need to be ways in which sales and transfers of agricultural property is not a transfer of registered with DHS. ammonium nitrate are conducted can ammonium nitrate.’’ Elaboration on this The application of ammonium nitrate vary by AN Facility, and that differences definition follows. fertilizer to property by an application in ammonium nitrate transaction The Department is aware that service would not be regulated as a protocols could impact the timing and transaction protocols may be different performance of identity verification and for sales or transfers that occur as part transfer under the Department’s other required point of sale activities. of imports or exports of ammonium proposal. The Department does not Through conversations with industry, nitrate than for purely domestic sales or believe that ammonium nitrate fertilizer the Department has identified three transfers. As part of this proposed rule, is likely to be misused in acts of principal transaction formats commonly DHS proposes to regulate all ammonium terrorism after it has been applied to used to sell or transfer ammonium nitrate transfers that occur within the agricultural property. Accordingly, nitrate: (1) The AN Purchaser appears at United States. As such, DHS would farmers and other persons who have an AN Facility and takes possession of require the verification and ammonium nitrate fertilizer spread on ammonium nitrate from the AN Seller recordkeeping activities described their agricultural property do not need directly; (2) the AN Purchaser places an below whenever possession of to register with the Department, nor do advanced order either in person or ammonium nitrate changes hands inside their identities need to be verified by through other means (e.g., telephone, the United States. For example, if an AN Sellers prior to their receipt of

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application services.2 Pursuant to the (i.e., any AN Seller who provides identification verification on the AN Department’s proposal, however, ammonium nitrate to be loaded into an Purchaser receiving the ammonium transfer of ammonium nitrate from an ‘‘AN Agent’’ transporter’s truck or other nitrate. See sections III.C.3 through AN Facility to a separate application vehicle) would need to be registered III.C.9 of this NPRM. The AN Facility service would be regulated. Regulation with and vetted by the Department. with which the transporter is associated of application services is required under Before an ‘‘AN Agent’’ transporter can would also have to maintain records of Subtitle J. See 6 U.S.C. 488(2). pick up or obtain possession of the transporter’s delivery. See section Specifically, the Department believes ammonium nitrate (i.e., before it can be III.D of this NPRM. that regulation of transfers to loaded into his/her truck or other (3) Independent transporters. application services is necessary in vehicle), his/her identity would need to Transporters who fit into neither of the order to ensure that terrorists cannot be verified by the AN Facility from previous two categories would be easily obtain ammonium nitrate by which he/she seeks to pick up regulated as both AN Purchasers and infiltrating, posing as, or working for ammonium nitrate, as described in AN Sellers under the Department’s application services. The Department sections III.C.8 and III.C.9 of this NPRM. proposed rule. As such, they would seeks comments on these proposals, and Before an ‘‘AN Agent’’ transporter can have to register with the Department is particularly interested in comments pick up ammonium nitrate, the AN and be vetted against the TSDB. See discussing interactions between AN Facility from which he/she seeks to pick sections III.B.10 and III.B.11 of this Facilities, application services, and it up would also need to verify that he/ NPRM. Any AN Seller from whom an ammonium nitrate end users. she has legitimately been asked to serve independent transporter picks up or Persons who transport ammonium as an ‘‘AN Agent’’ by a registered AN obtains ammonium nitrate (i.e., any AN nitrate from one AN Facility to a Purchaser. See sections III.C.7 and Seller who provides ammonium nitrate delivery location outside that AN III.C.9 of this NPRM. Before an ‘‘AN to be loaded into the independent Facility (e.g., truck drivers) conduct Agent’’ transporter can pick up transporter’s truck or other vehicle) regulated transfers under this proposed ammonium nitrate, the AN Facility from would also need to be registered with rule, regardless of whether the AN which he/she seeks to pick it up would and vetted by the Department. Facility and delivery location are owned also need to verify that the AN Similarly, any AN Purchaser to whom or operated by the same business or Purchaser to whom the ‘‘AN Agent’’ an independent transporter delivers organization, and are therefore subject transporter plans to deliver the ammonium nitrate would also need to to this regulation. Ammonium nitrate ammonium nitrate is properly registered be registered with and vetted by the transportation would be regulated in with DHS. See sections III.C.4, 6, and 9 Department. three ways under the proposed rule, of this NPRM. Independent transporters would need to be registered as AN Purchasers in depending upon particular transporters’ Under this proposed rule, an ‘‘AN Agent’’ transporter would not need to order to pick up or obtain ammonium relationships with AN Facilities or AN perform any identity verification or nitrate (i.e., in order to have it loaded Purchasers. Any particular registration verification on the AN into their trucks or other vehicles). transportation would have to be Purchaser to whom he/she delivers Before an independent transporter can regulated pursuant to one (and only ammonium nitrate. Similarly, ‘‘AN pick up or obtain possession of one) of the three options listed Agent’’ transporters would not need to ammonium nitrate (i.e., before it can be immediately below.3 maintain any records or paperwork loaded into his/her truck or other (1) Transporters who are the agents of under this proposed rule. vehicle), his/her identity would need to AN Purchasers. Any person possessing (2) Transporters who work for AN be verified and his/her AN Registered valid photo identification could Facilities. Transporters could work for User Number would need to be verified transport ammonium nitrate from an AN or deliver ammonium nitrate on behalf by the AN Facility from which he/she Facility to an AN Purchaser, pursuant to of AN Facilities, and could register seeks to pick up or obtain ammonium the Department’s proposed rules for under the Department’s proposed rules nitrate. See sections III.C.4, III.C.5, and ‘‘AN Agents’’ as described in sections as AN Sellers for those facilities. See III.C.9 of this NPRM. III.C.4 through III.C.9 of this NPRM. section III.B.3 of this NPRM. Independent transporters would also ‘‘AN Agent’’ transporters would not Transporters who register as AN Sellers need to be registered as AN Sellers in need to be registered with or vetted by would be vetted against the TSDB. See order to deliver ammonium nitrate to DHS. Any AN Purchaser to which an sections III.B.10 and III.B.11 of this other AN Purchasers. Before an ‘‘AN Agent’’ transporter delivers NPRM. independent transporter delivers or ammonium nitrate, however, would Once registered as an AN Seller on drops off ammonium nitrate to an AN need to be registered with and vetted by behalf of a particular AN Facility, a Purchaser, he/she (or other employees the Department. Similarly, any AN transporter could pick up or obtain registered on behalf of his/her Seller from whom an ‘‘AN Agent’’ possession of ammonium nitrate from organization) would have to conduct a transporter obtains ammonium nitrate that AN Facility (i.e., it could be loaded registration verification and identity into his/her truck or other vehicle at verification on the AN Purchaser 2 Persons who perform application services, that AN Facility) without having to receiving the ammonium nitrate. See however, must be registered with DHS under the proposed rule. For elaboration on this registration undergo the identity verification or AN sections III.C.3 through III.C.9 of this requirement, see section 31.210(c) of the proposed Registered User Number verification NPRM. The AN Facility with which the rule and see sections III.B.2 and 3 of this NPRM. activities described in sections III.C.3 independent transporter is associated 3 Transporters of ammonium nitrate can also be through III.C.9 of this NPRM. Before a would also have to maintain records of subject to other Federal and State regulations regarding the transportation of hazardous materials. transporter who is registered as an AN the transporter’s delivery. See section Registration and compliance with DHS’s proposed Seller delivers or drops off ammonium III.D of this NPRM. Ammonium Nitrate Security Program would not nitrate to an AN Purchaser, however, The Department is interested in relieve transporters of duties or registration he/she (or other registered employees of comments addressing coverage of truck requirements under USCG, TSA, or DOT rules, or under other Federal or State programs. See sections the AN Facility with which he/she is drivers and other transporters of II.D.3 and II.D.4 of this document for descriptions associated) would have to conduct ammonium nitrate. The Department is of other select rules and programs. registration verification and particularly interested in comments

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addressing transporters’ relationships to The Department seeks comments on transaction, the AN Seller would also be AN Facilities and AN Purchasers, and the proposal that transportation of required to verify both (1) the agent’s addressing transporters’ abilities to ammonium nitrate would be regulated identity based upon a visual check of perform the activities required of where possession moves between the agent’s photo identification, and (2) regulated persons. The Department different locations but where ownership that the agent is acting on the approved specifically requests comments is not transferred (i.e., where transfer AN Purchaser’s behalf. addressing the three types of takes place within a single corporate Each of these required verification transportation arrangements described entity). DHS realizes, however, that this activities is described in greater detail in above, including comments discussing proposal could have a significant impact the following sections of the NPRM. whether any particular types of on businesses with multiple locations, Although the Department proposes to transportation arrangements should be and that it might not increase require these verification activities for exempt from proposed regulatory ammonium nitrate security for every AN sales and transfers of ammonium requirements, and if so, discussing why Facility or entity to which it would nitrate, DHS proposes not to require particular transportation arrangements apply. Accordingly, the Department these verification activities prior to should be exempt. seeks comments on this proposal. DHS provision of ammonium nitrate DHS proposes that transportation of also seeks comments suggesting application services. The Department ammonium nitrate where possession alternative ways in which Subtitle J’s seeks comments on its proposal not to moves between different AN Facilities requirements regarding the regulation of require verification activities prior to or other locations would be regulated as ammonium nitrate transfers could be provision of ammonium nitrate a transfer. Both of these types of achieved. The Department is interested application services. transfers would require all the in comments generally describing the registration, verification, and organizational structures and 4. Verification of the Currency and recordkeeping activities required of transportation needs of the companies Authenticity of a Prospective AN transfers elsewhere in this NPRM. A or other entities owning or operating AN Purchaser’s AN Registered User Number person delivering ammonium nitrate Facilities, and in comments addressing In order to bolster the effectiveness of from one AN Facility to another location whether transportation between AN Registered User Numbers in would be regulated as part of one of the locations owned or operated under the preventing the misappropriation of three transporter categories listed above, same corporate structure should be ammonium nitrate, DHS proposes that regardless of whether that person’s exempt from coverage under the the AN Seller will be required to verify delivery location is part of the same Ammonium Nitrate Security Program. company or business as the AN Facility the currency and authenticity of a from which he/she obtains the 3. Required Verification Activities prospective AN Purchaser’s AN ammonium nitrate transported. Based on statutory requirements and Registered User Number prior to By proposing to require that the Department’s understanding of the completing a sale or transfer of transportation between related business ways in which sales and transfers of ammonium nitrate. DHS proposes in entities qualifies as a regulated transfer ammonium nitrate typically occur, the section 31.305(a) to provide each AN of ammonium nitrate, DHS would Department is proposing to require that Seller the capability to verify the ensure that all entities from which an AN Seller perform the specific currency and authenticity of a transportation of ammonium nitrate verification activities discussed below prospective AN Purchaser’s AN originates have AN Registered Users on for each sale or transfer of ammonium Registered User Number either staff who are screened for terrorist ties nitrate. electronically through a web portal who can be responsible for carrying out The AN Seller would always be designed by the Department (the the security requirements of Subtitle J. required to verify the currency and ‘‘Purchaser Verification Portal’’) or Likewise, by proposing to require that authenticity of the prospective AN telephonically through a call center transportation between related business Purchaser’s AN Registered User maintained by the Department (the entities qualifies as a regulated transfer Number. ‘‘Purchaser Verification Call Center’’). of ammonium nitrate, DHS would also The AN Seller would be required to The Department proposes in section ensure that all entities receiving verify the prospective AN Purchaser’s 31.305(a)(3) to compare the prospective shipments of ammonium nitrate have identity as specified by DHS. The AN Purchaser’s name and AN AN Registered Users on staff who are manner of verification of a prospective Registered User Number, which a screened for terrorist ties and who can AN Purchaser’s identity would vary prospective AN Purchaser would be be responsible for carrying out the depending on whether or not the AN required to provide an AN Seller for security requirements of Subtitle J. Purchaser has opted to use an agent (an submission to DHS, to information Similarly, by proposing to require that ‘‘AN Agent’’) to procure ammonium contained in the Department’s AN transportation between related business nitrate for him/her. If the AN Purchaser Registered User database, and to provide entities qualifies as a regulated transfer opted not to use an agent, then the AN rapid confirmation or rejection of the of ammonium nitrate, DHS would also Seller verifies the AN Purchaser’s prospective AN Purchaser’s information ensure that intra-company identity based upon the visual check of to the AN Seller via the same transportation of ammonium nitrate is the AN Purchaser’s photo identification. mechanism (i.e., the Purchaser conducted by AN Registered Users or If the AN Purchaser opted to use an Verification Portal or the Purchaser ‘‘AN Agents.’’ These features of the agent, then the AN Seller verifies the Verification Call Center). This approach Department’s proposed rule would help AN Purchaser’s identity by submitting provides a reasonable degree of to ensure that persons screened for certain information provided by the AN confidence as to the currency and terrorist ties (or their agents) would be Purchaser to the Department for authenticity of the AN Purchaser’s AN responsible for a given company’s or comparison against information Registered User Number. Both the business’s ammonium nitrate during contained in the AN Purchaser’s AN proposed Purchaser Verification Portal times when that ammonium nitrate Registered User Number application. and the proposed Purchaser Verification might be most vulnerable to In the event that a prospective AN Call Center are described in greater misappropriation. Purchaser uses an agent to complete the detail below.

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Verification of a prospective AN transfer of ammonium nitrate the AN would be used to circumvent the Purchaser’s AN Registered User Number Seller would have to provide certain intentions of Subtitle J, the Department would be required regardless of whether prospective AN Purchaser information believes it is imperative for AN Sellers or not the AN Purchaser opts to use an (e.g., name; photo identification to ensure that an agent is acting at the agent on his or her behalf to take document number; AN Registered User direction of a registered AN Purchaser possession of ammonium nitrate. Number) to DHS either electronically before the AN Seller transfers through the Purchaser Verification 5. Verification of a Prospective AN possession of ammonium nitrate to that Portal or telephonically through the Purchaser’s Identity When the AN agent. To accomplish this, the Purchaser Verification Call Center. The Purchaser Opts Not To Use an Agent Department is considering various Department proposes to compare this approaches: Consistent with 6 U.S.C. information, which a prospective AN (1) Requiring AN Purchasers to 488a(e)(2)(D), the Department proposes Purchaser would be required to provide submit the names of their agents to DHS that the AN Seller will be required to to an AN Seller for submission to the via the AN User Registration Portal, and verify the prospective AN Purchaser’s Department, to information contained in requiring the AN Seller to confirm with identity. If the AN Purchaser opts not to the Department’s AN Registered User DHS, prior to transferring possession of use an agent, DHS proposes in section Database. The Department would ammonium nitrate to an agent, that the 31.305(b) that the AN Seller would be provide rapid confirmation or rejection name of that agent has been previously required to verify, by performing a of the prospective AN Purchaser’s submitted to DHS by the relevant AN visual check of a photo identification information to the AN Seller via the Purchaser. document such as a driver’s license or same mechanism (i.e., the Purchaser (2) Requiring the AN Seller to orally passport, the identity of the AN Verification Portal or the Purchaser confirm with the prospective AN Purchaser no later than when the AN Verification Call Center). The Purchaser prior to each transfer of Purchaser directly takes possession of Department believes that this ammonium nitrate that the agent is ammonium nitrate from the AN Seller at confirmation or rejection would take acting on behalf of the AN Purchaser. the completion of the sale or transfer. about the same amount of time as it (3) Allowing both options, whereby The Department proposes using a takes merchants to receive credit card definition of ‘‘photo identification an AN Seller first should check with authorizations at retail stores. DHS to see if the prospective AN document’’ similar to the definition This approach would enable use of an Purchaser has submitted the name of the used by the Department’s Secure Flight agent when it is not possible to verify agent to DHS. If not, then the AN Seller Program, to establish what qualifies as the identity of the AN Purchaser in would be required to orally confirm an acceptable form of identification for person (i.e., by conducting a visual with the prospective AN Purchaser that this verification process. Specifically, in inspection of the photo identification of the agent is acting on his/her behalf. section 31.105, the Department proposes the AN Purchaser and comparing the DHS proposes this third approach in defining ‘‘photo identification photo identification with the AN document’’ as ‘‘[a]ny of the following Purchaser physically present). The section 31.310(b) of the proposed rule. documents containing a unique Department seeks comments on this Under the first approach, each AN document number: (1) An unexpired approach, including comments Purchaser would be required to provide passport issued by a foreign government addressing whether AN Purchasers to DHS the names of any agents that which contains a photograph; or (2) An would be likely to provide identity might act on his/her behalf at the point unexpired document issued by a U.S. verification information to AN Sellers of sale. AN Purchasers would submit Federal, State, or tribal government that themselves (e.g., by providing this names of agents to DHS via the AN User includes the following information for information to AN Sellers over the Registration Portal. An AN Purchaser the person: (i) Full name; (ii) date of telephone), or whether AN Purchasers could submit an agent’s name when he/ birth; and (iii) photograph; or (3) Such would be likely to ask their agents to she applies for an AN Registered User other documents that the Department provide this information to AN Sellers Number or at any other time prior to may designate as valid identification in person. DHS also seeks comments on conducting a purchase involving that documents.’’ Cf. 49 CFR 1560.3. The the advisability, costs, and benefits of agent. Then, prior to transferring Department also assumes that each AN enabling agents to provide AN possession of ammonium nitrate to an Purchaser and each AN Agent will Purchasers’ identity verification agent, an AN Seller would need to possess a photo identification information directly to AN Sellers, and verify with the Department that the document. The Department seeks seeks comments on possible alternative prospective AN Purchaser has comments on this proposed requirement methods that could be employed to designated the agent as an approved and assumption, including comment on verify AN Purchasers’ identities in sales agent to represent the AN Purchaser at the forms of identification that should or transfers involving AN Agents. the point of sale. This verification be acceptable for purposes of the visual Both the proposed Purchaser would occur through the same identification verification check. Verification Portal and the proposed mechanism that is used for the other Purchaser Verification Call Center are prospective AN Purchaser identity 6. Verification of a Prospective AN described in greater detail below. verification activities (i.e., the Purchaser Purchaser’s Identity When the AN Verification Portal or the Purchaser Purchaser Opts to Use an Agent 7. For Sales Involving Agents, Verification Call Center). Note, however, Consistent with 6 U.S.C. Verification That the Agent Is Acting on that agent information that the AN 488a(e)(2)(D), the Department proposes Behalf of the AN Purchaser Purchases and AN Sellers provided to in section 31.310(a) that the AN Seller Subtitle J limits registration and the Department would not be vetted will be required to verify the vetting requirements to AN Purchasers, against the TSDB or otherwise checked prospective AN Purchaser’s identity and does not extend registration and by the Department; rather, it would with DHS when the prospective AN vetting requirements to the agents of AN simply be maintained in the AN Purchaser chooses to use an agent to Purchasers. See 6 U.S.C. 488a(d) and 6 Registered User Database as a data field take possession of ammonium nitrate. U.S.C. 488a(e). In order to help linked to the AN Purchaser for use in Specifically, before completing a sale or minimize the likelihood that agents the agent verification process.

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Under the second approach, the For these reasons, the Department their agents only after the verification Department would require an AN Seller proposes this third approach. activities discussed above have been to verify with the prospective AN If DHS implements either the first completed. Payment for transfer of Purchaser that the agent is actually approach or the third approach in an possession may happen at any time, acting on behalf of the prospective AN Ammonium Nitrate Security Program either before or after verification Purchaser for each specific transaction. final rule, the Department will construct activities have been completed. Much like the other verification the AN User Registration Portal such that AN Purchasers could submit the 10. Departmental Role in Verification activities contained in the proposed Process rule, this could occur at the time the names of their agents to DHS through prospective AN Purchaser places the that portal. If so, DHS would require AN As part of the verification process, the order, when the agent arrives to take Purchasers to notify agents that their Department proposes to require AN possession of ammonium nitrate, or any names could be submitted to DHS in Sellers to provide the Department with other time, so long as it occurs prior to this manner. DHS seeks public comment sufficient information to verify (1) the the AN Seller transferring possession of on how such notification should be currency and authenticity of prospective ammonium nitrate to the prospective carried out, if the Department AN Purchasers’ AN Registered User AN Purchaser’s agent. Note, if this implements either the first approach or Numbers, and (2) prospective AN approach were adopted, the Department the third approach. Purchasers’ identities when AN would propose requiring this The Department seeks comment on Purchasers use agents. The Department confirmation to occur for each the benefits, costs, economic impacts, also proposes to enable AN Sellers to transaction/occurrence in which an and practicality of all these approaches, verify through DHS, where applicable, agent is taking possession of ammonium as well as any potential alternate that prospective AN Purchasers have nitrate; a blanket verification of an agent approaches for verifying that an AN submitted the names of the agents acting by an AN Purchaser would not be Agent is acting on behalf of a on their behalves to the Department. To acceptable. Additionally, as an e-mail or prospective AN Purchaser. help AN Sellers accomplish this, the letter can be easily forged, under this Department is considering developing a 8. Verification of the Agent’s Identity secure AN Purchaser verification web approach the Department would require Based on the Visual Check of the that the AN Seller receive this portal (‘‘Purchaser Verification Portal’’) Agent’s Photo Identification and a call center (‘‘Purchaser verification orally (e.g., in person, Consistent with 6 U.S.C. Verification Call Center’’) through telephonically) from the prospective AN 488a(e)(2)(D), DHS proposes in section which AN Sellers can submit Purchaser. 31.310(c)(1) that the AN Seller would be information to the Department that will The third approach—the option the required to verify, by performing a allow the Department to nearly Department proposes to use in this visual check of a photo identification immediately (1) Verify or disaffirm NPRM—is a combination of the first two document such as a driver’s license or prospective AN Purchasers’ AN approaches. Specifically, AN Purchasers passport, the identity of the agent taking Registered User Numbers, (2) verify or would be expected to provide the possession of ammonium nitrate from disaffirm prospective AN Purchasers’ Department with the names of their the AN Seller at the completion of a sale identities, and, where applicable, (3) agent(s), and an AN Seller would be or transfer. This visual check would verify or disaffirm the preapproval of expected to verify either through the mirror the process and requirements agents. Purchaser Verification Portal or used by the AN Seller when performing 11. Purchaser Verification Portal Purchaser Verification Call Center that a visual check on an AN Purchaser, the agent information has been provided when an AN Purchaser takes possession The first option the Department is by the AN Purchaser to the Department. of ammonium nitrate. considering is to develop a Purchaser As opposed to the first approach under Verification Portal that would be which a sale cannot occur unless the 9. Timing of Verification Activities available via the Internet to registered agent’s name has been provided to the All of the aforementioned verification AN Sellers only. To gain access to the Department by the prospective AN activities would be required to occur portal, AN sellers would be asked to Purchaser, this third option would before the AN Seller transfers provide their AN Registered User allow the AN Seller to complete a sale possession of ammonium nitrate to the Number, a password, and potentially or transfer after either (1) verifying that prospective AN Purchaser or the agent other identifying information. The the agent has been designated by the acting on the prospective AN Department proposes in sections 31.305 prospective AN Purchaser through the Purchaser’s behalf. Outside of that and 31.310 that, upon accessing the Purchaser Verification Portal or requirement, the time at which the AN portal, an AN Seller would enter into Purchaser Verification Call Center, or (2) Seller performs the verification the system, at a minimum, the orally confirming with the prospective activities would be entirely within the prospective AN Purchaser’s name and AN Purchaser that the agent is acting on discretion of the AN Seller. For AN Registered User Number to verify the prospective AN Purchaser’s behalf instance, in a situation where the AN the prospective AN Purchaser’s AN for the sale or transfer at issue. The Purchaser places an advance order for Registered User Number. If the Department expects that in the majority ammonium nitrate to be picked up at a prospective AN Purchaser uses an agent, of cases, this oral confirmation would later date, the AN Seller may perform then the AN Seller would enter into the occur telephonically. This third option these activities at the time of sale or at system the prospective AN Purchaser’s has the benefit of minimizing the point the time of transfer of possession. photo identification document number of sale impact of the agent verification The proposed rule would regulate all (along with additional photo process while allowing a means for a transfers of ammonium nitrate, identification document information, sale or transfer to be completed even if including both transfers that involve such as type of photo identification a prospective AN Purchaser forgets or is payments or sales, and transfers that do document, and photo identification otherwise unable to provide the not involve payments or sales. Note that document issuing entity), to aid in Department with the agent’s name prior AN Sellers may transfer possession of verifying the prospective AN to using the agent at the point of sale. ammonium nitrate to AN Purchasers or Purchaser’s identity. This information

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should allow the Department to verify that the prospective AN Purchaser’s AN transferring possession of ammonium for the AN Seller that the prospective Registered User Number is current and nitrate. AN Purchaser is who he/she claims to authentic (i.e., matches the AN The Department welcomes public be and that he/she possesses a valid AN Registered User Number assigned to the comment on the overall effectiveness, Registered User Number. The prospective AN Purchaser), and (3) propriety, benefits, and costs of these Department is interested in receiving verifies that the prospective AN Purchaser Verification Portal identity comments on the information it Purchaser has listed his/her agent with and registration verification proposes to collect for AN Purchaser the Department as authorized to act on verification purposes, including specific his/her behalf, if appropriate. mechanisms, and also welcomes public comments on potential photo To support recordkeeping comment on or suggestion of potential identification document numbers that requirements, the Department is alternative methods for identity and the Department may collect, such as considering providing to the AN Seller, registration verification. driver’s license or passport numbers. along with its web verification notice, a 12. Purchaser Verification Call Center The Department considered requiring confirmation number and/or printable individuals’ Social Security Numbers in web verification notice record receipt. The second option the Department is lieu of photo identification document For recordkeeping requirements, see considering is to develop a Purchaser numbers. The Department believes, sections III.C.4–8. Comments on the Verification Call Center. The overall however, that photo identification utility, benefits, and costs of providing principle behind a call center document numbers are preferable to either a confirmation number or verification system is similar to the Social Security Numbers for two printable record receipt via the principle behind the Purchaser significant reasons. First, photo Purchaser Verification Portal are Verification Portal—that is, a identification document numbers are welcome. prospective AN Purchaser’s identity (for typically contained on physical The Department proposes that if the sales involving an agent) and possession identification cards that include Department notified an AN Seller that of a current and authentic AN photographs that could be visually the identity and AN Registered User Registered User Number could be Number of a prospective AN Purchaser checked by AN Sellers. Second, use of verified quickly prior to the transfer of were verified, then the AN Seller would photo identification document numbers possession of ammonium nitrate proceed with the second portion of the would minimize the potential privacy through use of a call center verification impact on AN Purchasers of having to identity verification—a visual check of system. Under this approach, AN Sellers share their Social Security Numbers. the identification document of the would call a toll-free phone number The Department seeks comments on the individual taking possession of the established by the Department where costs and benefits of Social Security ammonium nitrate (i.e., the AN Number use. Purchaser or, where applicable, his or they would either talk to a person or be The Department is also considering her agent). led through a series of telephone tree requiring AN Sellers to enter additional If the Department were to discover menus. During the phone call, each AN information into the Purchaser that either (1) the prospective AN Seller would be expected to provide, at Verification Portal, such as each Purchaser’s identity does not match the a minimum, his/her name, his/her AN quantity of ammonium nitrate sold or information of record for the given AN Registered User Number, and the transferred and each prospective AN Registered User Number, or (2) the AN prospective AN Purchaser’s name, AN Purchaser’s proposed use of the Registered User Number provided by Registered User Number, and, for sales ammonium nitrate to be procured. Such the prospective AN Purchaser is not involving an agent, the AN Purchaser’s additional information could help current and authentic, then the photo identification document number. strengthen the AN Purchaser Department would issue a notice to the The Department is also considering identification process and facilitate the AN Seller indicating that the sale or requiring or enabling AN Sellers to performance of compliance audits and transfer of ammonium nitrate to the provide additional information, such as inspections, and would generally help prospective AN Purchaser is not the quantity and intended use of the to prevent the misappropriation or use authorized. The Department anticipates ammonium nitrate being sold or of ammonium nitrate in acts of that the confirmation or denial notice transferred. The operator or automated terrorism. Comments on the utility of resulting from the web verification telephone system would enter the collecting additional information, as process will typically be sent to and information provided into the well as the types of information that it received by the AN Seller quickly, much Department’s Registered User database may be worthwhile for the Department like how merchants receive approval or system, wait for electronic confirmation, to collect, are welcome. denial notices prior to authorizing and then provide verbal confirmation to The Department proposes that purchases via credit card. the caller along with a confirmation information entered into the Purchaser As mentioned earlier, the Department number for that specific transaction. Verification Portal will be transmitted to is aware that sales and transfers of the Department which, upon receipt, ammonium nitrate occur in many A call center may be preferable to a will check the information against the different ways, and that AN Facilities’ web portal, as presumably all AN AN Registered User records maintained varying ammonium nitrate sales Facilities have telephones while not all by the Department. The Department procedures can impact the timing and AN Facilities have computers with would electronically notify the AN performance of verification activities. Internet access, particularly at the point Seller of the result once the Department Depending on the structure of the of sale. There are some potential (1) verifies or disaffirms the prospective transaction, the manner in which the disadvantages, though, including the AN Purchaser’s identity (i.e., determines AN Seller goes about verifying the likelihood that the call center approach whether the identifying information prospective AN Purchaser’s identity, would take more time per transaction provided matches the information AN Registered User Number, and use of than the web portal approach, and that submitted in the prospective AN an agent may vary. In all cases, DHS it would be significantly more costly for Purchaser’s AN Registered User Number proposes that the AN Seller will the Department to establish and operate application), if appropriate, (2) verifies complete these verifications prior to a call center.

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13. Purchaser Verification Portal and response to ‘‘suspicious’’ purchases or 6 U.S.C. 488a(e)(1). As discussed above, Call Center ‘‘suspicious’’ attempted purchases. See the Department is aware that there are A third option is for the Department 6 U.S.C. 488c(c)(1)(A). Moreover, many types of facilities selling or to establish both a Purchaser Subtitle J provides that if an AN Seller transferring ammonium nitrate, Verification Portal and a Purchaser refuses to sell or transfer ammonium including but not limited to Verification Call Center. This is the nitrate to any person, or in good faith corporations, partnerships, approach the Department is proposing discloses to the Department or cooperatives, and sole proprietorships. For many of these organizational forms, in sections 31.305 and 31.310. This appropriate law enforcement authorities it may not be reasonable to expect an approach is identical to the Purchaser the actual or attempted purchase or AN Facility Representative to be Verification Portal option described transfer of ammonium nitrate, based on engaged in or have direct oversight over above, integrated with the Purchaser a reasonable belief that the person recordkeeping at the AN Facility. In Verification Call Center option. The seeking to purchase or transfer recognition of this, the Department is advantage of this alternative is that all ammonium nitrate may use the proposing that while a facility’s AN AN Facilities would be ammonium nitrate to create an Facility Representative or accommodated—those with telephone explosive device to be employed in an Representatives would be responsible access only and those with both act of terrorism or for another unlawful for their AN Facility’s compliance with telephone and Internet access who find purpose, the AN Seller shall not be liable in any civil action relating to that the proposed rule’s recordkeeping the verification web portal option more requirements, any facility employee, efficient. This approach, however, refusal to sell or that disclosure. See 6 U.S.C. 488f(a). regardless of whether or not he/she is a would be the most costly of the registered AN Seller, could perform alternatives for the Department to To assist AN Sellers in determining what a ‘‘suspicious’’ circumstance is recordkeeping activities on behalf of the establish and operate. facility. The Department, however, is As indicated in sections 31.305 and and what appropriate responsive actions are, Subtitle J requires the Department proposing in sections 31.315(d) and (e) 31.310 of the proposed rule, DHS to require each AN Facility proposes that as part of the verification to issue guidance addressing ‘‘suspicious’’ circumstances. See 6 Representative to ensure that his/her processes described in section III.C of facility maintains records in compliance this NPRM, AN Purchasers and/or AN U.S.C. 488c(c)(1). The Department will issue such guidance, along with other with the rule. DHS welcomes public Agents will be required to provide comment on the propriety and effect of information to AN Facilities in order to statutorily required guidance, along with the final rule implementing the this proposal. enable use of the Purchaser Verification AN Purchasers are under no Portal or the Purchaser Verification Call Ammonium Nitrate Security Program. The Department welcomes public obligation to maintain records pursuant Center. DHS will require AN Facilities to Subtitle J. to notify the AN Purchasers and AN comment on topics to be addressed in Agents providing this information about this guidance, including comment on 3. Records To Be Kept why it is collected. DHS will also ‘‘suspicious’’ purchases and attempted For each sale or transfer of require AN Facilities to notify AN purchases. The Department also ammonium nitrate, the Department is Purchasers and AN Agents that the welcomes public comment on the proposing in section 31.315(a) of the information they provide may be shared formats in which its guidance materials proposed rule to require that the records with DHS. DHS seeks public comment should be published and the means of kept by the AN Facility include the date on how such notifications should be dissemination of guidance materials. of sale/transfer; form and amount of carried out. D. Recordkeeping (See Sections 31.315 payment; quantity of ammonium nitrate The Department welcomes public and 31.515 of the Proposed Rule) sold/transferred; type of packaging; comment on the overall effectiveness delivery location; the name, address, and propriety of these alternative 1. Overview telephone number, AN Registered User identity and registration verification Pursuant to Subtitle J, AN Facilities Number, and photo identification mechanisms, and also welcomes public must maintain records of each sale or document information of the AN comment on or suggestion of potential transfer of ammonium nitrate for a two- Purchaser to whom it was sold/ alternative methods for identity and year period beginning on the date of that transferred; and, if the AN Purchaser registration verification. sale or transfer. See 6 U.S.C. 488a(e)(1). uses an agent at the point of sale, the AN Facilities must take reasonable name, address, telephone number, and 14. Suspicious Purchases and actions to ensure the protection of the photo identification document Attempted Purchases of Ammonium information included in such records. information of the agent acting on behalf Nitrate See 6 U.S.C. 488a(e)(3). 6 U.S.C. 488b of the AN Purchaser. Subtitle J encourages AN Sellers to be authorizes DHS to inspect and audit AN In addition to keeping records wary of suspicious purchases and Facility records for the purpose of containing the information listed above, attempted purchases of ammonium monitoring compliance with Subtitle J DHS proposes to require AN Facilities nitrate. See 6 U.S.C. 488c(c)(1) and 6 or for the purpose of deterring or to maintain records related to the U.S.C. 488f. To this end, Subtitle J preventing the misappropriation or use verification of a prospective AN encourages AN Sellers to exercise their of ammonium nitrate in acts of Purchaser AN Registered User Number’s commercial rights to deny the sale or terrorism. currency and authenticity, and transfer of ammonium nitrate to verification of a prospective AN prospective AN Purchasers when 2. Entities Responsible for Keeping Purchaser’s and (where applicable) prospective AN Purchasers attempt to Records agent’s identity. These requirements are purchase ammonium nitrate under Pursuant to Subtitle J and section discussed in sections 31.315(a)(8) and ‘‘suspicious’’ circumstances. See 6 31.315(a) of the proposed rule, AN (9) of the proposed rule. Such U.S.C. 488f. Furthermore, Subtitle J Facility Representatives must ensure requirements are important to allow the encourages AN Sellers to contact law that records of each sale or transfer of Department to monitor compliance enforcement entities, as appropriate, in ammonium nitrate are maintained. See under the regulations, to deter or

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prevent the misappropriation or use of of the information listed in this section records available within the specified ammonium nitrate in acts of terrorism, of the NPRM to AN Facilities in order timeframes, and to take reasonable and to support the investigation of to enable facility recordkeeping. DHS actions to protect the records. The reported theft or loss of ammonium will require AN Facility personnel to Department proposes allowing an AN nitrate. The Department welcomes notify the AN Purchasers and AN Facility to maintain records onsite or comment on the benefits and costs of Agents providing this information about offsite, so long as the records are made maintaining records regarding the AN why it is collected. DHS will also available for inspection when DHS Purchaser (and, where applicable, agent) require AN Facility personnel to notify inspectors arrive for inspections where verification process. AN Purchasers and AN Agents that the the AN Facility has received prior In addition to the proposed records information they provide may be shared notice of the inspection or within four requirements discussed above, the with DHS. DHS seeks public comment hours of inspectors’ arrivals for Department also is considering on how such notifications should be unannounced inspections. requiring AN Facilities to keep carried out. The Department also proposes giving photocopies of each individual AN 4. Length of Retention of Records AN Facilities flexibility to determine Purchaser’s or agent’s photo what constitutes ‘‘reasonable actions’’ identification document and/or Subtitle J provides that each record of for ensuring the protection of records, printouts of the Department’s electronic sale or transfer of ammonium nitrate and is considering defining ‘‘reasonable verification of the authenticity and must be maintained by the relevant AN actions’’ as actions commensurate with currency of each individual’s AN Facility for at least two years from the the actions that an AN Facility would Registered User Number (if the date of the transaction that generates take to secure sensitive or confidential Department decides to use the that record. See 6 U.S.C. 488a(e)(1)(A). business records. Typical actions could Purchaser Verification Portal). The For consistency purposes, in section include storage in locked file cabinets Department is interested in receiving 31.315(d) of the proposed rule the for paper recordkeeping or password- public comment regarding what types of Department proposes that an AN protecting files for electronic records should be considered adequate Facility would be required to maintain recordkeeping. records for the purpose of showing for two years all records required under The Department welcomes public completed verification activities, as well this rule. The Department seeks comment on the proposed record as what the costs and benefits of comments on this proposal. formatting options, security standards, generating and maintaining these 5. Format and Storage of Records and production timeframes, as well as records would be. any potential alternative approaches or In addition to transaction records and Pursuant to 6 U.S.C. 488a(e)(3), and as proposed in section 31.315(e), an AN additional requirements the Department verification records, there are a variety should consider. of other records that may be necessary Facility must take ‘‘reasonable actions’’ for AN Facilities to maintain in order to to ensure protection of the information E. Reporting of Theft or Loss of support compliance monitoring by the included in records maintained Ammonium Nitrate (See Sections Department. These include: (1) pursuant to Subtitle J. Subtitle J, 31.400–31.405 of the Proposed Rule) however, does not explicitly prescribe Maintenance by each AN Facility of 1. Overview copies of the AN Registered User any format or storage requirements. In Number certificates of the AN Facility an effort to minimize the burden on Pursuant to Subtitle J, any AN Facility Representatives, Designated AN Facility regulated AN Facilities and to provide Representative who has knowledge of POC, and/or all other AN Sellers flexibility to allow AN Facilities to theft or unexplained loss of ammonium employed by the facility (note, this leverage existing recordkeeping efforts nitrate is required to report such theft or presumes that the Department does in to meet this regulatory requirement, the loss to Federal law enforcement fact decide to issue approved applicants Department proposes allowing AN authorities within 24 hours of the time certificates along with their AN Facilities to choose methods of records at which knowledge of theft or loss is Registered User Numbers); (2) copies of storage for themselves. The Department acquired. See 6 U.S.C. 488d. The reports of theft or loss made to the is considering, however, providing AN Department additionally encourages all Federal Government pursuant to Facilities the capability to create and other individuals who have possession Subtitle J; (3) any reports showing the maintain appropriate records in the of or control over ammonium nitrate to reconciliation of sales/transfers and web-based Purchaser Verification Portal. report any thefts or unexplained losses inventory; and (4) any orders or other This would give AN Facilities the of ammonium nitrate of which they correspondence issued by the opportunity to use the portal to store become aware. Voluntary reporting is Department to an AN Facility regarding their records, but would not require provided for in section 31.405(b) of the activities regulated by Subtitle J. These them to do so. The Department proposed rule. records all may have value in welcomes comments on this proposal. 2. Who Must Report Theft or Loss monitoring compliance with the DHS proposes that AN Facilities be regulations or in deterring or preventing allowed to maintain records in paper or Although any employee at an AN the misappropriation or use of electronic format, and that AN Facilities Facility may report a theft or loss of ammonium nitrate in acts of terrorism. may use whatever template or form they ammonium nitrate, DHS proposes in The Department is considering requiring choose for individual records. An AN section 31.400 that it will be the AN Facilities to maintain these records, Facility simply would be required to responsibility of each facility’s AN and welcomes public comment on the ensure that its records contain all of the Facility Representatives to ensure that value of each and the costs associated data required by the final rule theft or loss from the facility is reported with each. implementing the Ammonium Nitrate in a timely fashion. Additionally, while As indicated in sections 31.315(b) and Security Program, and to make the there is no legal requirement for AN (c) of the proposed rule, DHS proposes records available for inspection by DHS Purchasers or agents acting on their that as part of ammonium nitrate sales officials as described in section 31.515 behalf to report thefts or unexplained or transfers AN Purchasers and/or AN of the proposed rule. DHS proposes that losses of ammonium nitrate, the Agents will be required to provide some each AN Facility be required to make Department encourages them to do so

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using the same procedures that AN conduct appropriate law enforcement to be maintained under the Facility personnel would use. actions in response to theft/loss ‘‘recordkeeping’’ requirements of the reporting, due to ATF’s unique final rule implementing the Ammonium 3. Level of Theft or Loss Warranting explosives-related law enforcement Nitrate Security Program. (See section Reporting mission. III.D of this NPRM for discussion of Any time an AN Facility The Department welcomes public proposed recordkeeping requirements.) Representative or any other individual comment on this proposal to leverage The Department welcomes public employed by an AN Facility comes to ATF’s theft/loss reporting and response comment on the types of records and believe that a theft of ammonium nitrate capabilities, and welcomes public other items or activities it should review has occurred, AN Facility comment on potential alternative during inspections or audits. Representatives would be responsible reporting mechanisms. The Department The Department proposes to conduct for ensuring that that theft is reported also welcomes public comment on the inspections at AN Facilities and/or any using the procedures set forth in section information to be required as part of other locations where records subject to 31.400. Determining when to report a each theft/loss report. The Department the inspection/audit requirements are loss, however, is not as straightforward proposes to require that each theft/loss located. The Department also proposes a proposition, because it is typical for report be made to ATF in a manner that it conduct inspections during AN small percentages of bulk ammonium prescribed by DHS after consultation Facilities’ regular business hours except nitrate to be ‘‘lost’’ as part of normal with ATF, and contain information when warranted by exigent bulk ammonium nitrate industrial and similar to that currently required by circumstances. The Department shipping business practices. While ATF for reports of theft or loss of welcomes public comment on individually such losses may tend to be explosives. This likely would involve inspections, including comments de minimis, in the aggregate they may modified versions of the process and addressing how often inspections amount to large amounts of lost tools established by ATF in support of should be undertaken. ammonium nitrate. The Department the ATF regulations regarding the Generally speaking, the Department seeks not to unduly burden individuals reporting of theft or loss of explosive will provide an AN Facility, via its involved in the manufacturing, storage, materials. See generally 27 CFR 555.30. Designated AN Facility POC, with a transportation, or use of bulk ATF requires reporting of the theft or minimum of 24 hours notice prior to ammonium nitrate, but on the other loss of explosives by telephoning a conducting an inspection or audit, as hand does seek to impose loss reporting nationwide toll free number, followed proposed in section 31.505(a). The requirements which will aid in up with submission to ATF of a Department, however, proposes to preventing misappropriation of completed form detailing the incident. reserve the right to conduct audits or ammonium nitrate. Accordingly, the The Department would work with ATF inspections without prior notice when Department proposes to require that AN to determine the appropriate warranted by exigent circumstances or Facility Representatives ensure that information to be reported and the when delay in conducting an inspection losses of ammonium nitrate from their proper template for a form specific to might be seriously detrimental to facilities be reported using the reporting the theft or loss of ammonium security, as described in sections procedures described below when those nitrate. The Department welcomes 31.505(a)(1) and (2). Such inspections, losses deviate from the amount of loss public comment on this proposed conducted without prior notice, will that typically occurs during routine approach for reporting theft and loss of require approval by a supervisory production, storage, transportation, or ammonium nitrate, and also welcomes manager at DHS. use of ammonium nitrate. public comment addressing any The Department has also considered The Department seeks public potential alternative approaches or not providing notice prior to conducting comment on its proposed approach to additional requirements the Department inspections or audits in order to align defining the circumstances under which should consider. with inspections processes carried out a theft or loss would be required to be Although there is no statutory by other agencies, such as ATF. The reported and whether the theft/loss requirement for AN Facility Department welcomes comments reporting requirements should apply Representatives or other registered addressing how much notice, if any, only to theft or loss of ammonium individuals who have knowledge of should be provided to AN Facilities nitrate above a minimum threshold thefts or unexplained losses to report prior to inspections or audits, including amount. If a minimum threshold such incidents to local law enforcement, comments addressing whether the amount should apply, the Department is the Department encourages AN Department should align its notice also interested in receiving comments Facilities and individuals to do so in procedures with ATF’s (or with any addressing the level at which this addition to reporting the theft or loss to other entity’s) notice procedures. amount should be set. The Department ATF. When prior notice of an inspection is particularly interested in public has been provided to an AN Facility, F. Inspections and Audits (See Sections comments addressing how theft/loss DHS expects that the facility will have 31.500–31.515 of the Proposed Rule) reporting requirements should vary, if at all records required to be maintained by all, based on AN Facility business size Subtitle J states that DHS ‘‘shall this rule available for review/ or other AN Facility business establish a process for the periodic inspection/audit at the time of arrival of characteristics. inspection and auditing of the records inspectors, as proposed in section maintained by owners of ammonium 31.515(a). In cases where the 4. Process for Reporting Theft or Loss nitrate facilities for the purpose of Department has initiated an inspection The Department proposes in section monitoring compliance * * * or for the or audit without giving an AN Facility 31.405(a) to require reporting of theft/ purpose of deterring or preventing the prior notice, the facility will be loss to ATF. The Department will misappropriation or use of ammonium expected to make all records required to coordinate with ATF to ensure proper nitrate in an act of terrorism.’’ See 6 be maintained by the final ammonium tracking and coordination of reported U.S.C. 488b. As part of these inspections nitrate rule available to inspectors ammonium nitrate thefts and losses; and audits, the Department proposes to within four hours of receipt of an however, ATF, not the Department, will inspect and audit the records required inspector request to review/inspect/

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audit such records, as proposed in Department under Subtitle J. An earlier subject persons/entities shall have the section 31.515(b). section of this NPRM, section III.B.14, option of initiating adjudicatory Inspections and audits would be discusses proposed appeal rights and proceedings to challenge the propriety conducted by DHS personnel or by procedures for persons denied AN of the Department’s determinations. The other Federal, State, local, or tribal Registered User Numbers and for Department also proposes in section government personnel authorized to persons whose AN Registered User 31.735(a) that subject persons/entities perform AN Facility inspections Numbers are revoked under Subtitle J. may appeal adverse adjudication pursuant to this rule. The Department These two sets of procedures are decisions. The Department welcomes may conduct remote inspections and mutually exclusive; the Department public comment on these mechanisms, audits in addition to in-person proposes that civil penalty and welcomes suggestions of possible inspections and audits, as proposed in adjudications and appeals would be alternatives or modifications to them. sections 31.500(b), 31.505(b), and governed only by the mechanisms Subtitle J requires the Department to 31.515(c)–(d). The Department described in this section, while consider a number of factors in issuing welcomes comments and suggestions as registration and revocation appeals and setting the amounts of civil to when a remote inspection would be would be governed only by the appeals penalties against persons violating reasonable, cost effective, and of benefit mechanisms described in section III.B of Subtitle J and its implementing to AN Facilities or the Department. this NPRM. regulations. See 6 U.S.C. 488e(c). The The reason for this mutual exclusivity Department proposes to consider the G. Guidance Materials and Posters is because registration denials and factors listed in section 31.605, among Under Subtitle J, the Department is revocations are fundamentally different other factors as justice requires, in required to develop and provide to from imposition of civil penalties under issuing and setting the amounts of civil members of the regulated community the Department’s proposed rule. Under penalties. The Department welcomes several types of guidance documents the Department’s proposal, individuals public comment on additional factors and materials. First, 6 U.S.C. or other entities will only be issued civil that it should consider in issuing and 488a(i)(4)(C) requires the Department to penalties for violating the rules of the setting civil penalties, and also issue to any individual who is denied Ammonium Nitrate Security Program. welcomes public comment on the size an AN Registered User Number Individuals or other entities will not be of the civil penalties it should issue for guidance on the procedures for issued civil penalties for having their different types of regulatory violations. appealing that denial. Second, 6 U.S.C. registrations denied or revoked. Subtitle J also requires the 488c(c)(1) requires the Department to Adjudication or appeal of civil penalties Department to afford each person make available to owners of AN will thus involve assessment of whether potentially subject to civil penalties the Facilities guidance on the identification or not individuals or other entities have opportunity to defend himself in an of suspicious ammonium nitrate violated the final Ammonium Nitrate administrative hearing to be held ‘‘in purchases, transfers, attempted Security Program rules. On the other the county, parish, or incorporated city purchases, and attempted transfers, as hand, appeal of denial or revocation of of residence of that person.’’ See 6 well as guidance on appropriate actions registration numbers will involve U.S.C. 488e(d). As such, the Department to be taken by AN Facilities with respect review of the completeness and proposes in section 31.725(b) to conduct to such suspicious activities. accuracy of registration applications, all hearings and adjudications in the Additionally, 6 U.S.C. 488c(c)(3) and review of TSDB vetting results and counties, parishes, or incorporated cities requires the Department to make national security interests if applicable. of residence of the persons or entities available materials suitable for posting The adjudication and appeal procedures seeking those hearings and at locations where ammonium nitrate is listed in this section of the NPRM are adjudications, unless those persons or sold that notify prospective AN intended to enable reviews of civil entities waive this right. The Purchasers of Subtitle J’s recordkeeping penalties and of alleged regulatory Department believes that it may be more requirements and the penalties for violations, while the appeal procedures expeditious, from time to time, for the violating those requirements. listed in section III.B are intended to Department and for subject persons to As the procedures and requirements enable reviews of registration conduct hearings and adjudications that will be detailed in these materials application denials and revocations of elsewhere, or to conduct them via are to a large degree dependent on the registration numbers. teleconferencing or videoconferencing, final rule for Subtitle J, the Department The Department is authorized to and accordingly thinks it economical to is still gathering information, input, and assess civil penalties against persons all to offer subject persons this option. data, which it will use to assist in violating the rules promulgated under The Department welcomes public developing these guidance materials Subtitle J. See 6 U.S.C. 488e(b). In comment on the efficiency of allowing and posters. It is the Department’s intent section 31.600, the Department proposes subject persons to waive the statutory to work with the regulated community that, upon becoming aware of regulatory right to local hearing and adjudication. to determine appropriate content and violations, the Department would I. Consultation Requirements means of dissemination for these authorize and order civil penalties of up guidance materials and posters. The to $50,000 per regulatory violation 6 U.S.C. 488a(g) requires the Department welcomes comments from against violating persons and entities Department to ‘‘consult with the the public on these matters. much in the same way as the CFATS Secretary of Agriculture, States, and rules enable it to authorize and order appropriate private sector entities, to H. Civil Penalties, Civil Penalty civil penalties against chemical facilities ensure that the access of agricultural Adjudications, and Civil Penalty violating CFATS. Specifically, the producers to ammonium nitrate is not Appeals (See Sections 31.600–31.735 of Department proposes to issue Orders unduly burdened.’’ Similarly, 6 U.S.C. the Proposed Rule) Assessing Civil Penalty against persons 488a(b) requires the Department to This section discusses proposed (and, as appropriate, against entities consult ‘‘with the heads of appropriate requirements for adjudication and owning or operating AN Facilities) for Federal departments and agencies appeal procedures for the issuance and violating these rules. The Department (including the Secretary of Agriculture)’’ assessment of civil penalties by the proposes in section 31.700(a) that when establishing a threshold

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percentage for ammonium nitrate in a determines that the State is capable of mandate likely to result in the substance. Finally, in 6 U.S.C. satisfactorily carrying out such expenditure by State, local, or tribal 488a(i)(4)(B), Congress directed the functions.’’ See 6 U.S.C. 488c(b)(2). If governments, in the aggregate, or by the Department to consult with appropriate the Department delegates any functions private sector, of $100 million or more stakeholders when developing the to a State, ‘‘subject to the availability of annually (adjusted for inflation). process for appealing the denial of an appropriations * * * the Secretary shall A. Executive Order 12866 and Executive application for an AN Registered User provide to that State sufficient funds to Order 13563: Regulatory Planning and Number. carry out the delegated functions.’’ See Review During the development of this 6 U.S.C. 488c(b)(3). NPRM, the Department has identified In regards to delegation of its This proposed rule is an economically relevant points of contact for authority to individual States, the significant regulatory action under consultation purposes within numerous Department proposes the following Executive Order 12866 as supplemented Federal, State, and private sector process: If a State is interested in by Executive Order 13563, because it entities. For example, the U.S. performing the administration and could result in the expenditure of over Department of Agriculture (USDA) enforcement activities required by $100 million in any one year. assisted the Department with gaining a Subtitle J, the governor of the State Accordingly, this proposed rule has better understanding of the potentially would submit a written request to the been reviewed by the Office of affected population, and with Department asking for delegation of Management and Budget (OMB). The understanding how agricultural users those authorities and articulating the OMB Circular A–4 Accounting acquire and use ammonium nitrate. The State’s ability to ‘‘satisfactorily carry out statement is included in the separate Explosives Unit at the FBI provided such functions.’’ See 6 U.S.C. 488c(b)(2). Regulatory Assessment. substantial insight into the detonability Upon receipt of the request, the A Regulatory Assessment, which of ammonium nitrate and mixtures Department would evaluate whether the more thoroughly explains the containing ammonium nitrate. The State is ‘‘capable of satisfactorily assumptions used to generate the Office of Enforcement Programs and carrying out such functions’’ and, upon estimated costs and benefits of this Services at ATF outlined how ATF completion of the evaluation, would proposed rule, is available in the docket regulates ammonium nitrate and provide the State with a written as indicated under the ADDRESSES ammonium nitrate explosive mixtures response informing it of the section. Interested persons are invited to as well as how ATF manages the Department’s determination. In order to provide comment on all aspects of the reporting of theft or loss of explosives. make a fair evaluation, the Department Regulatory Assessment. Comments that The Department also met with State is likely to request information from the will provide the most assistance to the fertilizer control officials from over a State and consult with the State before Department with the rulemaking dozen States who provided significant a final determination is made. include the economic impact (both long- insight into how ammonium nitrate is term and short-term, quantifiable and IV. Regulatory Analyses used within their States and how they qualitative) of the implementation of currently regulate ammonium nitrate. Changes to Federal regulations must Subtitle J; the monetary and other costs The Department also held listening undergo several economic analyses. anticipated to be incurred by AN sessions with numerous industry First, Executive Order 12866, as Facility Representatives, AN Sellers, AN associations representing members of supplemented by Executive Order Purchasers, and anyone else potentially the likely regulated community, as well 13563, Regulatory Planning and Review impacted by Subtitle J, any as with individual producers, (58 FR 51735, October 4, 1993; 76 FR distributional effects on U.S. citizens; distributors, and users of ammonium 18134, January 18, 2011), directs each and the security benefits of the nitrate. Federal agency to propose or adopt a rulemaking. Subsequent to the release of this regulation only upon a reasoned Comments containing trade secrets, NPRM, the Department will continue to determination that the benefits of the confidential commercial or financial consult with Federal, State, and private intended regulation justify its costs. information, CVI, or SSI should be sector entities as it develops the final Second, the Regulatory Flexibility Act appropriately marked and submitted per rule. The Department intends to hold of 1980 (5 U.S.C. 601 et seq., as the directions in section I of this NPRM meetings, open to the public and to amended by the Small Business (Public Participation) above. Federal and State government entities, Regulatory Enforcement Fairness Act of 1. Cost Impacts at various locations across the country 1996) requires agencies to consider the in order to further consult with economic impact of regulatory changes DHS estimates the number of entities ammonium nitrate stakeholders. The on small entities. Third, the Trade that purchase ammonium nitrate to Department intends to publish the Agreements Act (19 U.S.C. 2531–2533) range from 64,950 to 106,200. These dates, times, and locations of these prohibits agencies from setting entities include farms, fertilizer mixers, public meetings in the Federal Register. standards that create unnecessary farm supply wholesalers and co-ops, obstacles to assess the effect of golf courses, landscaping services, J. Delegation of Authority regulatory changes on foreign commerce explosives distributors, mines, retail The Department may enter into of the United States. In developing U.S. garden centers, and lab supply cooperative agreements with USDA or standards, the Trade Agreements Act wholesalers. The Department estimates any State department of agriculture to requires agencies to consider between 2,486 and 6,236 entities sell carry out certain provisions of Subtitle international trade standards where ammonium nitrate, many of which also J. See 6 U.S.C. 488c(a)(1). Subtitle J appropriate, as the basis of U.S. purchase ammonium nitrate as well. further requires the Department, at the standards. Fourth, the Unfunded Entities that sell ammonium nitrate request of a governor of a State, to Mandates Reform Act of 1995 (2 U.S.C. include ammonium nitrate fertilizer and delegate to that State authority to carry 1531–1538) requires agencies to prepare explosive manufacturers, fertilizer out the administration and enforcement a written assessment of the costs, mixers, farm supply wholesalers and co- of select portions of Subtitle J, ‘‘if the benefits, and other effects of proposed ops, retail garden centers, explosives Secretary [of Homeland Security] or final rules that include a Federal distributors, fertilizer applicator

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services, and lab supply wholesalers. publications/infores/respterrorism/ building. In order to estimate the impact Individuals or firms that provide chap1.html. The attack, which occurred of this attack in dollar terms, DHS must transportation services within the 16 years ago, killed 168 people (167 assume a value per statistical life (VSL). distribution chain may be categorized as individuals were killed by the explosion The Department emphasizes this VSL is sellers, agents, or facilities depending and 1 additional death of an emergency not an estimate of what a particular life upon their business relationship with worker occurred during the rescue and may be worth, but is only an estimate the other parties to the transaction. The recovery operation) and an additional what one would be willing to pay to total number of potentially regulated 592 people suffered non-fatal injuries. receive a reduction in mortality risk. farms and other businesses ranges from See ‘‘Physical Injuries and Fatalities The Department is assuming a VSL of $6 64,986 to 106,236 (including overlap Resulting From the Oklahoma City million, which is equivalent to saying between the categories). Bombing.’’ JAMA, August 7, 1996 Sue someone is willing to pay $6 to receive The cost of the Ammonium Nitrate Mallonee, RN, MPH; Sheryll Shariat, a one-in-a-million reduction in the risk Security Program ranges from $300 MPH; Gail Stennies, MD, MPH; Rick of death or $60 to receive a one-in-a- million to $1.041 billion over 10 years Waxweiler, PhD; David Hogan, DO; Fred one-hundred-thousand reduction in the at a 7% discount rate. The primary Jordan, MD, pp 382–387available at: risk of death. estimate is the mean, which is $670.6 http://jama.ama-assn.org/cgi/reprint/ Applying the $6 million VSL to the million. For comparison, at a 3% 276/5/382; http://jama.ama-assn.org/ 168 deaths from the Murrah attack plus discount rate, the cost of the program cgi/content/abstract/276/5/382 the cost of other expenditures that are ranges from $364.2 million to $1.3 (estimates of injuries differ by source; directly related to the attack (such as the billion with a primary (mean) estimate DHS used the detailed JAMA article as cost of replacing the Murrah Building), of $814 million. The average annualized it was based on survey and interview DHS estimates the cost to society of the cost for the program ranges from $43 data and has thorough documentation). Murrah attack to be approximately of million to $148 million (with a mean of There are several key benefits of the $1.35 billion (2010 dollars). As this $96 million), also employing a 7% Ammonium Nitrate Security Program proposed rule is expected to cost society discount rate. The largest cost proposed rule: approximately $95.5 million annually, component of the proposed rule is • The Ammonium Nitrate Security this proposed rule would be cost related to the point of sale. The point of Program will standardize and build effective if it prevented one terrorist sale activities account for approximately upon successful industry ‘‘know your attack similar to the Murrah building 55% to 80% of the total program cost. customer’’ initiatives and state attack every 14.1 years ($1.35 billion This is followed by registration regulations to prevent the attack cost/$95.5 million annual activities, recordkeeping, inspections/ misappropriation of ammonium nitrate. rulemaking cost). See the Regulatory audits, and reporting theft/loss. • The Ammonium Nitrate Security Assessment in the public docket for Program will provide timely, accurate more information on this break-even 2. Benefits of the Ammonium Nitrate vetting of persons wishing to possess analysis. Security Program and transfer ammonium nitrate. By In addition to reducing the possibility This rule will help secure the nation’s requiring individuals to be vetted of an ammonium nitrate-based terrorist supply of ammonium nitrate. According against the TSDB, known bad actors attack, promulgating this rulemaking to a U.S. Department of Justice report, may be stopped from legally purchasing provides the benefit of allowing DHS to ‘‘[t]he April 19, 1995, bombing of the ammonium nitrate. comply with the law. Subtitle J states Alfred P. Murrah Federal Building • The Ammonium Nitrate Security the ‘‘Secretary shall regulate the sale (Murrah Building) in Oklahoma City Program will allow AN Sellers to and transfer of ammonium nitrate by an sent shock waves throughout America. identify non-authorized persons and ammonium nitrate facility …to prevent The bombing took its toll in human life requires them to deny sale of the misappropriation or use of and property damage and changed the ammonium nitrate to these persons. By ammonium nitrate in an act of community’s and the Nation’s general complying with the point of sale terrorism.’’ Section II.A of this preamble sense of safety and security. The requirements to verify the accuracy and provides a more detailed background explosion rocked downtown Oklahoma currency of a potential AN Purchaser’s discussion of the regulatory City, reduced the north face of the AN Registered User Number and an requirements expressly contained in Murrah Building to rubble, and dealt inspection of his/her photo Subtitle J, such as the registration extensive damage to each of the nine identification document, AN Sellers requirement for certain ammonium floors as they collapsed into the center, will have the knowledge to allow or nitrate sellers and purchasers. DHS pancaking one on top of the other. deny sale of ammonium nitrate. believes this rulemaking allows the When the dust cleared, one-third of the • The Ammonium Nitrate Security Department to comply with the building lay in ruins. The force of the Program will eliminate gaps in Federal regulatory requirements of Subtitle J. blast damaged 324 surrounding oversight of ammonium nitrate supplies buildings, overturned automobiles, used in explosives manufacturing. B. Regulatory Flexibility Act touched off car fires, and blew out To better inform the comparison of The Regulatory Flexibility Act of 1980 windows and doors in a 50-block area. the costs of implementing the (RFA) establishes ‘‘as a principle of News reports indicated the explosion ammonium nitrate program in the regulatory issuance that agencies shall was felt 55 miles from the site and proposed rule with the benefits to endeavor, consistent with the objective registered 6.0 on the Richter scale.’’ See homeland security it will afford due to of the rule and of applicable statutes, to ‘‘Responding to Terrorism Victims: reduced risk of successful terror attack fit regulatory and informational Oklahoma City and Beyond,’’ U.S. involving ammonium nitrate, DHS requirements to the scale of the Department of Justice, Office of Justice performed a break-even analysis. In this business, organizations, and Programs, Office for Victims of Crime, break-even analysis, DHS compared the governmental jurisdictions subject to October 2000, available at http:// annualized costs of the proposed rule to regulation.’’ To achieve that principle, www.ojp.usdoj.gov/ovc/publications/ the expected benefits of preventing an the RFA requires agencies to consider infores/respterrorism/executive.html ammonium nitrate based terrorist attack, the potential impacts of their rules on and http://www.ojp.usdoj.gov/ovc/ such as the attack on the Murrah federal small entities. The RFA covers a wide

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range of small entities, including small acquire ammonium nitrate above the understanding of how many and which businesses, not-for-profit organizations, threshold level proposed by this rule. specific AN Facilities will be subject to and small governmental jurisdictions. the requirements under the Ammonium 2. Affected Small Business Population Although DHS does not believe the Nitrate Security Program. Consequently, and Estimated Impact of Compliance proposed rule will have a significant without the benefit of having the AN economic impact on a substantial At this time, DHS’s preliminary Registered User Number results, it is number of small entities, the agency has estimate of the number of very difficult to know which AN prepared an Initial Regulatory establishments that either sell, Facilities will have to undergo the Flexibility Analysis (IRFA) for public purchase, or sell and purchase burden of verifying AN Registered User review and comment. DHS requests ammonium nitrate that will be covered Numbers, and maintaining records of comments on this IRFA and the by the Ammonium Nitrate Security transactions involving ammonium potential impacts of the proposed rule Program rules range from 64,986 to nitrate. In addition, the Department has on small entities. Below is a summary 106,236 facilities. This estimate is offered some degree of flexibility when of the IRFA. DHS’s best estimate based on listening choosing the method of verifying AN sessions with industry representatives Registered User Numbers and 1. Reasons for and Objectives of the and plant food control officials, maintaining records. DHS expects that Proposed Rule consultation with other Federal agencies AN Facilities will take full advantage of and departments (e.g., USDA), and Reason for the Proposed Rule. Section this flexibility in order to minimize the research across available information cost of this proposed rule to their 563 of the Fiscal Year 2008 Department provided by industry and governmental operations. of Homeland Security Appropriations sources. During the ANPRM, DHS did Act amends the Homeland Security Act not receive any information on small 3. Number of Small Entities That of 2002 and provides DHS with the nonprofits or small governmental Purchase Ammonium Nitrate authority to ‘‘regulate the sale and jurisdictions that might be directly The Small Business Administration transfer of ammonium nitrate by an regulated by this rule. However, some of (SBA) classifies farms as a small ammonium nitrate facility * * * to the entity types identified in the business if it has receipts less than prevent the misappropriation or use of analysis of purchasers are similar to $750,000. The USDA Census of ammonium nitrate in an act of activities that could be conducted by Agriculture provides data on the terrorism.’’ For additional information small nonprofits or small governmental number of farms by economic class on the security hazards presented by the jurisdictions. DHS believes impacts on based on the market value of use of ammonium nitrate, see sections small nonprofits or small governmental agricultural products sold (excluding II.D.1 and 2 of this preamble. jurisdictions would be similar as any government payments). The next table Objective of the Proposed Rule. This other purchaser in this analysis. DHS shows that 94.5% of farms had receipts proposed rule aims to prohibit a known invites comments from any small of $0.5 million or less; 97.4% of farms or suspected terrorist from purchasing nonprofit or small governmental had receipts less than $1.0 million. or legally acquiring ammonium nitrate jurisdiction that believes it is being Thus, it is clear that the majority of from an AN Facility. Additionally, only directly regulated by this rule. After AN farms are small entities. Comments are individuals favorably vetted by the Sellers and AN Purchasers register with requested concerning the provided Department will be able to legally DHS there will be a better information.

NUMBER OF U.S. FARMS BY THE MARKET VALUE OF AGRICULTURAL PRODUCTS SOLD [2007]

Market value of agricultural products sold ($) Number of farms Percent of total

Less than $1000 ...... 499,880 22.7 $1000–$2,499 ...... 270,712 12.3 $2500–$5,000 ...... 246,309 11.2 $5,000–$9,999 ...... 254,834 11.6 $10,000–$24,999 ...... 274,274 12.4 $25,000–49,999 ...... 163,500 7.4 $50,000–$99,999 ...... 129,124 5.9 $100,000–$249,000 ...... 149,049 6.8 $250,000–$499,999 ...... 96,251 4.4 $500,000–$999,999 ...... 63,567 2.9 More than $1,000,000 ...... 57,292 2.6

Total Farms ...... 2,204,792 100.0 Source: 2007 Census of Agriculture, USDA (Table 3—page 10).

The next two tables show the primary descriptions and SBA definitions for majority of businesses likely to purchase North American Industrial small entities that purchase ammonium ammonium nitrate are small entities. Classification System (NAICS) codes, nitrate. This comparison shows that the

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PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY PURCHASE AMMONIUM NITRATE [Employee size] *

Establishments by employee size NAICS Description (Subtotal) 0–4 5–9 10–19 20–99 100–499 < 499 500+

2121 ...... ...... 194 96 100 233 149 772 375 % of total ...... 17% 8% 9% 20% 13% 67% 33% 2122 ...... Metal Mining...... 131 39 18 26 21 235 72 % of total ...... 43% 13% 6% 8% 7% 77% 23% 2123 ...... Nonmetallic Mineral Mining and Quar- 1,434 666 603 877 501 4,081 1,743 rying. % of total ...... 25% 11% 10% 15% 9% 70% 30% 325314 ... Fertilizer (Mixing Only) Manufacturing .... 111 64 56 89 62 382 94 % of total...... 23% 13% 12% 19% 13% 80% 20% 42491 ..... Farm Supplies Merchant Wholesalers .... 2,473 983 673 948 765 5,842 1,901 % of total ...... 32% 13% 9% 12% 10% 76% 25% 42469 ..... Other Chemical & Allied Products Mer- 3,352 1,155 846 1,082 648 7,083 2,405 chant Wholesalers...... % of total ...... 35% 12% 9% 11% 7% 74% 25% * Totals may be affected by rounding.

PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY PURCHASE AMMONIUM NITRATE [Sales size] *

Establishments by sales size NAICS Description $.1–0.5 $0.5–1 $5–10 (Subtotal) <$0.1 mill mill mill $1–5 mill mill < $10 mill > $10 mill

213113 ... Support services for Coal Mining ...... 47 98 38 101 16 300 46 % of total ...... 14% 28% 11% 29% 5% 87% 13% 213114 ... Support services for Metal Mining ...... 19 26 14 20 ...... 79 104 % of total ...... 10% 14% 8% 11% 0% 43% 57% 213115 ... Support services for Nonmetallic Mining 24 47 17 40 8 136 15 % of total ...... 16% 31% 11% 26% 5% 89% 10% 44422 ..... Nursery, Garden Center, and Farm Sup- 1,872 5,004 2,675 3,941 830 14,322 3,461 ply Stores. % of total ...... 11% 28% 15% 22% 5% 81% 20% 56173 ..... Landscaping Services...... 23,993 36,446 6,935 5,095 490 72,959 1,249 % of total ...... 32% 49% 9% 7% 1% 98% 1% 71391 ..... Golf Courses & Country Clubs ...... 1,172 3,802 2,041 3,333 588 10,936 906 % of total ...... 10% 32% 17% 28% 5% 92% 7% * Totals may be affected by rounding.

4. Number of Small Entities That Sell Registered User Number, verifying AN both sell and purchase ammonium Ammonium Nitrate Purchasers’ AN Registered User Number nitrate. The primary NAICS codes, and photo ID at the point of sale, descriptions, and definitions (both In addition to regulating AN maintaining records of point of sale employee size and revenues) for small Purchasers, the proposed rule places transactions for two years and reporting entities that sell ammonium nitrate are additional burdens on entities that sell theft and loss of AN. AN Facilities that shown in the next two tables. The SBA ammonium nitrate. These additional are in the middle of the supply chain classifies the majority of these AN burdens include registration for AN from manufacturer to end-use consumer Facilities as small entities.

PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE [Employee size] *

Establishments by employee size NAICS Description (Subtotal) 0–4 5–9 10–19 20–99 100–499 < 499 500+

325311 ... Nitrogenous Fertilizer Manufacturing...... 46 19 23 15 11 114 31 % of total ...... 32% 13% 16% 10% 8% 79% 21% 325314 ... Fertilizer (Mixing Only) Manufacturing .... 111 64 56 89 62 382 94 % of total...... 23% 13% 12% 19% 13% 80% 20% 32592 ..... Explosives Manufacturing...... 8 4 10 16 13 51 31

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PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE— Continued [Employee size] *

Establishments by employee size NAICS Description (Subtotal) 0–4 5–9 10–19 20–99 100–499 < 499 500+

% of total ...... 10% 5% 12% 20% 16% 63% 38% 42291 ..... Farm Supplies Merchant Wholesalers .... 2,473 983 673 948 765 5,842 1,901 % of total ...... 32% 13% 9% 12% 10% 76% 25% 42269 ..... Other Chemical and Allied Products Mer- 3,352 1,155 846 1,082 648 7,083 2,405 chant Wholesalers. % of total ...... 35% 12% 9% 11% 7% 74% 25% * Totals may be affected by rounding.

PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE [Sales size] *

Establishments by sales size NAICS Description < $0.1 $.1–0.5 $0.5–1 $5–10 (subtotal) < > $10 mill mill mill mill $1.5 mill mill $10 mill

115112 ... Soil Preparation, Planting, and Culti- 509 992 413 395 30 2,339 86 vating. 21% 41% 18% 16% 1% 96% 4% % of total ...... 44422 ..... Nursery, Garden Center, and Farm Sup- 1,872 5,004 2,675 3,941 830 14,322 3,461 ply Stores. % of total ...... 11% 28% 15% 22% 5% 81% 20% * Totals may be affected by rounding.

5. Alternatives Considered oral confirmation of the agent with the industry, each prospective AN Seller or AN Purchaser on whose behalf the agent AN Purchaser applying for an AN The Department considered several is working; and (g) exempt explosives Registered User Number would have to alternatives when developing the from this regulation rather than not spend approximately 45 minutes Ammonium Nitrate Security Program exempting them. Each of these reading about the rule and procedures proposed rule. The alternatives alternatives is discussed below. for registration before completing the considered were: (a) Register a. Registration registration application. If the individuals applying for an AN application is paper-based, DHS Registered User Number using a paper The Department considered using one assumes it will take each applicant application (via facsimile or the U.S. or more of three potential approaches about 15 minutes to complete a paper mail) rather than through in person for AN Seller and AN Purchaser application, fax or mail it to the application at a local Cooperative registration: paper applications Department, and file it for his or her Extension office or only through a web- submitted via facsimile or U.S. Mail; records. For the Department, supporting based portal; (b) verify AN Purchasers electronic applications via a web-based paper submission of application through both an Internet based portal; or telephone application for a materials via facsimile or U.S. Mail verification portal and call center rather limited number of applicants. The would require the hiring of staff to than only a verification portal or call Department is proposing the use of a manually extract information from the center; (c) communicate with applicants web-based portal—the ‘‘AN User submitted application form for for an AN Registered User Number Registration Portal’’—as the sole means performance of the TSDB check and through U.S. Mail rather than only for registering to be an AN Purchaser or submission into a registered user through e-mail or a secure web-based AN Seller. portal; (d) establish a specific capability database maintained by the Department. within the Department to receive, 1. Registration through Facsimile or U.S. The paper application process was not process, and respond to reports of theft Mail pursued or developed, as the or loss rather than leverage a similar Paper registration via facsimile or U.S. Department believes that it would result capability which already exists with the Mail would require potential applicants in unacceptably lengthy application ATF; (e) require AN Facilities to to obtain and fill out an application processing times, and unacceptable maintain records electronically in a form and fax it or mail it to the delays between submission of central database provided by the Department. The Department would applications and receipt of AN Department rather than providing then process the application and Registered User Numbers. flexibility to the AN Facility to maintain communicate the results back to the 2. Registration Through Local their own records either in paper or potential applicant via facsimile or U.S. Cooperative Extension Office electronically; (f) require agents to Mail. register with the Department prior to the Registration through facsimile or U.S. During the ANPRM DHS received the sale or transfer of ammonium nitrate Mail would have costs to both the suggestion to consider the USDA involving an agent rather than allow industry and the Department. For the extension offices as an application

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method. The USDA provided applicant approximately 15 minutes to neither paper registration applications explanations why this was not feasible. find the website, enter information, nor in person applications at local submit the information to the Cooperative Extension offices be 3. Registration Through the AN User Department, and print and file a copy offered. Registration Portal for his or her records. Both the Registration Via a Telephone Through a Department developed individual applicant and government Application Process website, potential applicants could costs are developed in the relevant apply for an AN Registered User sections of the evaluation The The applicant would contact the AN Number online. With the widespread Department intends to leverage the Helpdesk and ask to register over the availability of the Internet, applicants Chemical Security Assessment Tool phone. The Helpdesk operator would could apply from home, a public library, developed and deployed in support of collect all the information necessary to or place or employment, for instance. CFATS, thus significantly lowering both complete an application for an AN Further, nothing in the proposed rule the initial development costs and the Registered User Number. The IT system would prohibit an AN Facility from annual operating and maintenance would then route the application as if it providing an Internet access point to costs. were an application through the web potential applicants for use when The Department is proposing that portal. The evaluation of the vetting applying for AN Registered User registration be done through an online against the TSDB would be the same. Numbers. Potential applicants would go web portal. See section III.B.1 of this Once a decision had been made as to to the Department’s website and access preamble. While not every potential whether or not to approve or deny an the AN User Registration Portal. There, applicant may have personal access to application, the system would identify potential applicants would apply online the Internet, the Internet is widely the response to be mailed to the for an AN Registered User Number and available, and the Department believes applicant. The system would route the submit their application directly to the that there are significant benefits to information to a vendor to process the Department. The Department would using an online approach. The benefits letter. The vendor would print and mail receive the information, process it, and to both the applicant and the the letter. The letter would require communicate back to the applicant via Department of an online approach tracking, signature, certification (i.e., e-mail. include: (1) Substantially quicker verification of identify), and next day Online registration through a response from the Department, thereby delivery. DHS would also require Department developed, operated, and minimizing the time during which the evidence of delivery from the vendor. maintained website would have costs to applicant would not be able to purchase These are required to ensure delivery both the industry and the Department. or sell ammonium nitrate; (2) the ability and receipt of the AN Registered User Each prospective AN Seller or AN for an applicant or registered user to Number to the correct individual. Purchaser applying for an AN access, view, update, and manage their DHS is not recommending the Registration User Number will spend personally identifiable information; (3) telephone option but invites public approximately 45 minutes reading about and greater control over managing their comment on the concept. The following the rule and procedures for registration participation in the Ammonium Nitrate tables provide information on the costs before completing the registration Security Program, such as ease in that vary between the recommended application. If the application is online, renewing their AN Registered User web-portal approach and the phone the Department assumes it will take the Number. The Department proposes that approach.

DIFFERENCES BETWEEN ALTERNATIVES COSTS [$ millions, 10-year total costs, 7 percent discount]

Web-portal Phone option Difference

Registration Costs ...... 71.3 20.3 51.0 Federal Costs ...... 55.3 81.5 ¥26.2 All Other Costs ...... 544.0 540.7 3.3

Total Costs ...... 670.6 642.5 28.1

b. Verification 1. Purchaser Verification Portal ammonium nitrate transaction to verify Verifying AN Purchaser status the identity and AN Registered User The Department considered three Number of the prospective AN potential approaches to verify a through a web-based portal will have costs to both industry and the Purchaser. Accordingly, the overall cost prospective AN Purchaser; establishing Department. The Department will bear would depend on the number of a web-based portal (i.e., Purchaser the cost of developing and maintaining ammonium nitrate transactions that Verification Portal), establishing a call the verification portal and related occur and the time it takes to perform center, and establishing both guidance on its use and proper a simple identity check and enter basic capabilities. The Department is verification processes. The cost to AN Purchaser information into the web- proposing to establish both a web-based industry of this activity is having a portal. Based upon the detailed data in portal and call center. computer and access to the Internet. the evaluation, the following table Beyond that, cost to the industry is the summarizes the average costs per incremental time spent during an transaction.

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POINT OF SALE AVERAGE COST SUMMARY*

Low total High total estimate estimate Mean

Total POS Annual Costs ($) ...... 23,886,565 120,516,567 72,201,566 Purchaser POS Costs ($) ...... 3,488,523 18,112,934 10,800,728 Seller POS Costs ($) ...... 20,398,042 102,403,633 61,400,837 Transactions ...... 5,486,000 29,340,000 17,413,000 Sellers ...... 2,486 6,236 4,361 Purchasers ...... 64,950 106,200 85,575 Transactions/Seller/Week ...... 42.4 90.5 66.5 Transactions/Purchaser/Week ...... 1.6 5.3 3.5 Seller Cost/Transaction ($) ...... 3.7 3.5 3.5 Purchaser Cost/Transaction ($) ...... 0.64 0.62 0.62 * Data is for all entities and comes from the detailed evaluation, particularly Tables 9, 10, 26–29, 35–36.

2. Purchaser Verification Call Center When creating a manner in which AN time to complete paperwork would be The Department also considered a Sellers can verify the required equivalent to the submission of Purchaser Verification Call Center. information on a potential ammonium information electronically. The costs to nitrate purchase by an AN Purchaser, the Department, however, would be Under this approach, AN Sellers would the Department found both advantages more substantial. The Department use a telephone to call a toll-free phone and disadvantages to each option would have to hire or devote staff to number established by the Department considered. A call center may be process incoming correspondence. where they would either talk to a person preferable to a web portal, as or be led through a series of telephone 2. Electronic Means presumably all AN Facilities have tree menus. During the phone call, the telephones while not all AN Facilities The other option for communication AN Seller would be expected to provide have computers with Internet access, could be by electronic means. Program information about the AN Purchaser. particularly at the point of sale. communication would occur through e- The operator or automated telephone However, there are some potential mail and secure web portals. The cost to system would enter the information disadvantages. For instance, the call the industry can be broken down to provided into the Department’s center approach would take more time computer and Internet access. The cost Registered User database system, wait per transaction than the web portal to the Department hinges on developing for electronic confirmation, and then approach, and it would be significantly web portals and databases to securely provide verbal confirmation to the caller more costly for the Department to store information. along with a confirmation number for establish and operate a call center. The The Department assumes that most that specific transaction. advantage of this alternative is that all applicants have Internet access with one Verifying AN Purchaser status AN Facilities would be exception. Based upon information from through a call center will have costs to accommodated—those with telephone the USDA, approximately 60% of farms both industry and the Department. The access only and those with both have Internet access. Thus, DHS burden to the industry for the call center telephone and Internet access who find assumes that in the agricultural sector, option rests upon having a telephone the verification web portal option more approximately 60% of farms have and the time spent relaying the relevant efficient. As a result, the Department computers with Internet access. The AN Purchaser information to the call proposes to offer both online and call Department therefore estimated that center. The cost to the Department is the center options despite the higher costs 40% of these individuals will have to establishment of the call center and to the Department. travel a short distance to public library, potentially employing staff to standby or other location where access to the and field calls regarding AN purchases. c. Communication With Applicants Internet is available to apply for an AN Registered User Number. Further, DHS 3. Purchaser Verification Portal and Call The Department must communicate assumes that for applicants without Center with applicants throughout the registration process. The Department Internet access, two trips will be The Department proposes to establish considered two alternatives to required; one to complete the AN both a Purchaser Verification Portal and communicating with applicants: (1) Registered User Number application, a Purchaser Verification Call Center. See communication by U.S. Mail, and (2) and a second trip after 72 hours to section III.C.13. This approach is communication by electronic means. retrieve the e-mail containing the AN identical to the Purchaser Verification The Department proposes to User Registration Number. The Portal described above, integrated with communicate with applicants by Department has assumed farmers the Purchaser Verification Call Center electronic means. without Internet access will make two capability. This approach presumably trips. The Department assumes that the would be the cheapest for the regulated 1. U.S. Mail round trip distance is 50 miles per trip community as each AN Facility likely The U.S. Mail could act as the and has used the IRS mileage rate of would choose to employ the most cost- communication medium between the $0.55 per mile. DHS assumes the total effective means of verification; however, Department and the regulated extra time for each trip will average it would be the most costly of the community. If the U.S. Mail were approximately one hour each way. Each alternatives for the Department to chosen as the communication trip will include an additional hour for establish and operate as it would bear mechanism, the Ammonium Nitrate the Internet access and registration. the costs associated with the Security Program would be paper-based. Multiplying 50 miles times two trips development and maintenance of both a While there would be some minimal times $0.55 per mile totals $55 per web verification portal and call center. cost to the industry (e.g., postage), the individual for the two trips associated

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with applying for and receiving an AN 1. ATF Reporting central database, it would meet Registered User Number. Additionally, One of the many responsibilities of Department recordkeeping DHS included approximately $1.9 ATF is regulating the use of explosives. requirements. The costs to industry associated with million for farmers who attempt to make Because pure ammonium nitrate does this alternative are the costs of the time a purchase without knowing about the not fall within the scope of the statutory spent during each transaction collecting regulation and must then make one definition of ‘‘explosives’’ set forth at 18 and recording the information required extra trip. These calculations are U.S.C. 841(d), it is not subject to ATF’s under the regulations, the costs of the detailed in Tables 11 and 12 in Section controls on importation, manufacture, 7 of the full evaluation. Because of the time spent on ongoing recordkeeping distribution or storage; however, activities throughout the year, and any minimal time and effort it takes to apply ammonium nitrate explosive mixtures for and receive an AN Registered User capital investment costs an AN Facility and ANFO are included in ATF’s List of incurs in acquiring equipment to Number, the Department believes this Explosive Materials. ATF has an approach to be a cost-effective way to facilitate the safe storage of the AN existing program for reporting the theft transaction records. prevent misappropriation of ammonium or loss of explosives. Individuals that nitrate. discover the theft or unexplained loss of f. Agents The Department considered using the ammonium nitrate would contact ATF The Department considered three U.S. Mail as the primary medium for by phone and facsimile and provide the options to minimize the likelihood that communication; however, the pertinent information. The costs to the agents are used to circumvent the Department ultimately rejected this industry for reporting to ATF the theft intentions of Subtitle J. Specifically, the approach due to the additional time it or unexplained loss of ammonium Department believes it is imperative for would take to notify applicants of their nitrate would be minimal. The costs to AN Sellers to ensure that an agent is AN Registered User Number. The the Department would be minimal as acting at the direction of a registered AN Department also cited the significant well, unless DHS funded ATF efforts. Purchaser before the AN Seller transfers availability of the Internet. Therefore, 2. DHS Reporting possession of ammonium nitrate to that the Department is proposing to use agent. To accomplish this, the electronic means as the primary Similar to ATF’s method for reporting Department is considering the following medium for communication. theft or loss of explosives, individuals alternatives: Additionally, the Department believes upon discovering the theft or 1. Requiring AN Purchasers to submit that electronic communication is more unexplained loss of ammonium nitrate the names of their agents to DHS via the secure and faster than U.S. Mail. would contact DHS. The costs to the AN User Registration Portal, and d. Reporting Theft or Loss industry for reporting the theft or requiring the AN Seller to confirm with unexplained loss of ammonium nitrate DHS, prior to transferring possession of The Department considered two to DHS would be minimal. The costs to the ammonium nitrate, that the alternatives pursuant to Subtitle J, the Department would be greater than prospective AN Purchaser has which requires an AN Facility when compared to the ATF reporting submitted the name of the agent to DHS; Representative who has knowledge of requirement. DHS would be required to 2. Requiring the AN Seller to orally theft or unexplained loss of ammonium create and establish the theft/loss confirm with the prospective AN nitrate to report such theft or loss to reporting policies, procedures, and Purchaser prior to each sale that the Federal law enforcement authorities infrastructure. agent is acting on behalf of the AN within 24 hours of the time at which The Department is proposing to Purchaser; knowledge of theft or loss is acquired. require reporting of theft/loss to ATF. 3. A combination of the first two The Department considered requiring an See section III.E of this preamble. ATF options, whereby an AN Seller first AN Facility Representative to report to already possesses the unique experience should check with DHS to see if the either the Department or ATF. The in collecting and responding to the prospective AN Purchaser has Department proposes to require theft/loss of explosive related materials. submitted the name of the agent to DHS reporting of theft/loss to ATF. Additionally, DHS wishes to avoid and, if not, then the AN Seller must Under either option, there is a burden duplicative efforts at the Federal level. orally confirm with the prospective AN to the industry. The cost to industry of Purchaser that the agent is acting on his/ e. Recordkeeping this activity will be the time to gather her behalf. DHS is proposing this third details and report the theft or loss of The Department considered two approach. AN. Because of the seriousness of theft options to maintain records: (1) Under the first approach, each AN or loss of AN, the total time to report a Mandatory use of a central electronic Purchaser would be required to provide theft or loss is assumed to include two database, and (2) the flexibility to to DHS the names of any agents that hours each for an inventory manager maintain records in paper format or in might act on his/her behalf at the point and sales person, plus one hour for the electronic format. The Department of sale. The AN purchaser would submit general manager. This includes the time proposes allowing AN Facilities to names of agents to DHS via the AN User for the reporter to organize useful select the method of records storage for Registration Portal. An AN Purchaser details for law enforcement and conduct themselves. See section III.F of this could submit an agent’s name when he/ a brief investigation. There will likely be preamble. she applies for an AN Registered User additional time for a necessary follow- The Department selected this Number or at any other time prior to up investigation. Strictly for purposes of alternative because the burden to submit conducting a purchase involving that this analysis, the Department assumes and maintain electronic records in a agent. Then, prior to transferring that two percent of AN Facilities and central database would increase the possession of ammonium nitrate to an AN Purchasers will report loss or theft burden on the industry without agent, an AN Seller would need to once per year. Based on these measurable benefit to the industry. The verify with the Department that the assumptions, there will be 88 reports of benefit would be limited to the prospective AN Purchaser has theft or loss annually, at a total annual confidence an AN Facility would have, designated the agent as an approved cost to industry of $13,350. that if it maintained its records in a agent to represent the AN Purchaser at

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the point of sale. This verification for this individual sale. The Department mixtures or not—the same. This would occur through the same expects that in the majority of cases this approach would ensure that there are no mechanism that is used for the other oral confirmation would occur gaps in coverage of ammonium nitrate prospective AN Purchaser verification telephonically. This third option has the as it moves through the supply chain— activities (i.e., the Purchaser benefit of minimizing the point of sale ammonium nitrate would be captured Verification Portal or the Purchaser impact of the agent verification process, under DHS’s ammonium nitrate Verification Call Center). The agent’s while allowing a means for a sale or program both before and after being information provided to the Department transfer to be completed even if a combined with fuel oil to create ANFO, by AN Purchasers and AN Sellers would prospective AN Purchaser forgets or is and would be captured under ATF’s not be vetted against the TSDB nor otherwise unable to provide the regulations after being combined with otherwise checked by the Department; Department with the agent’s name prior fuel oil to create ANFO. There could rather, it would simply be maintained in to using the agent at the point of sale. potentially be heightened costs to the the AN Registered User Database as a For these reasons, this third approach is industry due to potentially duplicative data field linked to the AN Purchaser for the option proposed by the Department. regulation. The costs to the Department use in the agent verification process. would hinge upon a greater number of g. Exemption of Explosives Regulated by Under the second approach, the AN Facilities to regulate. Department would require the AN Seller ATF to verify with the prospective AN Pursuant to Subtitle J, the Department 3. Entirely exempt from Subtitle J Purchaser that the agent is actually has the discretion to exempt from requirements facilities and persons that acting on behalf of the prospective AN regulation persons producing, selling, or purchase, sell, or transfer ammonium Purchaser for each specific transaction. purchasing ammonium nitrate nitrate solely for use in the production Much like the other verification exclusively for use in the production of of explosives activities, this could occur at the time explosives under a license or permit Under this approach, facilities and the prospective AN Purchaser places the issued under the Federal explosives persons that purchase, sell, or transfer order, when the agent arrives to take laws, 18 U.S.C. Chapter 40, and ammonium nitrate solely for use in the possession of ammonium nitrate, or any associated regulations. ATF is production of explosives would be other time, so long as it occurs prior to responsible for enforcing Federal entirely exempt from Subtitle J the AN Seller transferring possession of explosives laws, and has established requirements, as they are already ammonium nitrate to the prospective regulations for doing so. The regulated by ATF. In this model, AN Purchaser’s agent. If this approach Department is proposing to exempt from facilities and persons that are licensed were adopted, the Department would regulation ammonium nitrate mixtures by ATF to mix ammonium nitrate with propose requiring this confirmation to that are ‘‘explosives’’ subject to ATF fuel to create ANFO which do not occur for each transaction/occurrence in regulation (i.e., ANFO). The Department purchase, sell, or transfer ammonium which an agent is taking possession of also considered two other approaches. nitrate for other purposes would not be ammonium nitrate; a blanket The first option is to apply these rules subject to these regulations. This verification of an agent by an AN to individuals who purchase, sell, or approach, however, could create a Purchaser would not be acceptable. transfer ammonium nitrate for use in the considerable gap in regulatory coverage Additionally, as an e-mail or letter can production of explosives. The other throughout the ammonium nitrate be easily forged, under this approach option considered is to entirely exempt supply chain, as ATF regulations apply the Department would require that the from Subtitle J requirements facilities solely to ANFO and not the ammonium AN Seller must receive this verification and persons that purchase, sell, or nitrate used to create it. The costs to the orally (e.g., in person; telephonically) transfer ammonium nitrate solely for industry, as well as the Department, from the prospective AN Purchaser. use in the production of explosives, as would be low because certain The third approach—the option the they are already regulated by ATF. individuals and facilities would not fall Department is proposing in this under the regulation. NPRM—is a combination of the first two 1. Exempt AN Mixtures That Are The Department proposes to exempt approaches. Specifically, AN Purchasers ‘‘Explosives’’ Subject to ATF Regulation from all Subtitle J requirements entities would be expected to provide the Under this approach, entities and and individuals that purchase, sell, or Department with the names of their individuals that purchase, sell, or transfer ANFO, but who do not produce agent(s), and an AN Seller would be transfer ANFO, but who do not produce ANFO or possess ammonium nitrate for expected to verify either through the ANFO or possess ammonium nitrate for other reasons. These entities and Purchaser Verification Portal or other reasons, would be exempt from all individuals are regulated by ATF. This Purchaser Verification Call Center that Subtitle J requirements and would be approach avoids duplicative regulation the agent information has been provided subject solely to ATF regulation. This yet it does not create a potential by the AN Purchaser to the Department. approach minimizes cost to the industry regulatory gap in the ammonium nitrate As opposed to the first approach, under as well as the Department. supply chain. which a sale cannot occur unless the agent’s name has been provided to the 2. Regulate Individuals Who Purchase, 6. Average Costs per AN Facility Department by the prospective AN Sell, or Transfer AN for the Production The largest cost driver is activities Purchaser, under this third option the of Explosives related to the point of sale. While AN Seller would be allowed to complete Under this approach, such variation in cost by facility is largely the sale or transfer after either (1) individuals would be subject to driven by the number of point of sale verifying the agent has been designated regulation by both DHS under Subtitle transactions that each AN Facility by the prospective AN Purchaser in the J and ATF under the Federal explosives conducts, it is helpful to examine the Purchaser Verification Portal or laws. By not exempting ammonium average cost per AN Purchaser and AN Purchaser Verification Call Center, or (2) nitrate used in explosives, DHS would Facility. orally confirming with the prospective be treating all individuals who The average costs per entity that AN Purchaser that the agent is acting on purchase, sell, or transfer ammonium purchases ammonium nitrate are the prospective AN Purchaser’s behalf nitrate—whether as part of ANFO presented in the following tables. Both

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the lower and upper bounds of the and additional time during the does not represent a significant estimate are provided. In either case, the purchase. This registration cost averages economic impact. DHS invites highest cost will be for farms without $57 to $700 once every five years. DHS comments on this impact, particularly Internet access. The cost of compliance believes for even the smallest farms, impacts related to the point of sale to AN Purchasers is the time to apply other businesses, nonprofits, and small costs. for an AN Registered User Number with jurisdictions that only purchase the Department of Homeland Security ammonium nitrate, this registration cost

AVERAGE COST PER ENTITY THAT PURCHASES AMMONIUM NITRATE—LOW POPULATION/LOW TRANSACTIONS ESTIMATE *

Total Purchaser Appeals Purchase op- purchaser Number of Average cost registration ($) portunity cost cost entities per entity ($) ($) ($) ($)

Farms with internet access ...... 2,079,500 28,100 1,674,500 3,782,100 30,000 126 Farms w/o internet access ...... 12,998,000 18,700 1,116,300 14,133,000 20,000 707 Golf courses...... 169,000 3,500 334,900 507,400 6,000 85 Landscaping services...... 144,000 2,900 251,200 398,100 4,500 88 Blasting services ...... 16,000 200 14000 30,200 300 121 Mines ...... 71,000 1,500 97,700 170,200 1,800 97

Total ...... 15,477,500 54,900 3,488,500 19,020,900 62,500 304 * Totals may not add due to rounding.

AVERAGE COST PER ENTITY THAT PURCHASES AMMONIUM NITRATE—HIGH POPULATION/HIGH TRANSACTIONS ESTIMATE *

Purchase Total Purchaser Appeals opportunity purchaser Number of Average cost registration ($) cost cost entities per entity ($) ($) ($) ($)

Farms with internet access ...... 3,119,300 42,100 8,150,800 11,312,200 45,000 251 Farms w/o internet access ...... 19,497,500 28,100 5,433,900 24,959,500 30,000 832 Golf courses ...... 339,000 6,900 2,173,600 2,519,500 12,000 210 Landscaping services ...... 287,000 5,800 1,630,200 1,923,000 9,000 214 Blasting services ...... 33,000 700 90600 124,300 500 249 Mines ...... 142,000 2,800 634,000 778,800 3,500 223

Total ...... 23,417,800 86,400 18,112,900 41,617,100 100,000 416 * Totals may not add due to rounding.

The average per AN Facility cost to (low population/low transactions distributor (high population/high comply with the proposed rule ranges scenario) to $23,800 for an explosives transactions scenario). from $6,400 for laboratory suppliers AVERAGE COST PER AN FACILITY—LOW POPULATION/LOW TRANSACTIONS ESTIMATE *

Point of sale Reg. Appeals (Web Record- Reporting Audits/ Total seller Number of Average activities ($) portal) keeping theft/loss inspections cost AN facilities cost ($) ($) ($) ($) ($) ($) ($)

AN fert. manuf...... 8,000 0 125,800 43,100 100 2,700 179,700 0 6,900 AN expl. manuf...... 3,000 0 50,800 17,400 0 1,100 72,400 0 7,200 Fertilizer mixers ...... 83,000 1,700 1,935,500 663,200 1,100 41,500 2,726,000 400 6,800 Explosives dist...... 102,000 2,100 5,494,500 834,200 1,500 51,600 6,486,000 500 13,000 Farm whol./co-ops ...... 92,000 1,800 4,524,100 742,100 1,600 52,600 5,414,100 500 10,800 Retail garden ctrs...... 72,000 1,300 3,791,900 703,400 1,600 49,200 4,619,400 500 9,200 Fertilizer app...... 73,000 1,300 4,254,800 717,100 1,400 50,100 5,097,700 500 10,200 Lab. supply ...... 9,000 0 220,700 83,400 100 5,600 318,800 100 6,400

Total ...... 442,000 8,200 20,398,100 3,803,900 7,400 254,400 24,914,100 2,500 10,000 * Totals may not add due to rounding.

AVERAGE COST PER AN FACILITY—HIGH POPULATION/HIGH TRANSACTIONS ESTIMATE *

Point of sale Reg. Appeals (Web Record- Reporting Audits/ Total seller Number of Average activities ($) portal) keeping theft/loss inspections cost AN facilities cost ($) ($) ($) ($) ($) ($) ($)

AN fert. manuf...... 8,000 0 311,200 43,100 100 2,700 365,100 0 14,000 AN expl. manuf...... 3,000 0 125,700 17,400 0 1,100 147,300 0 14,700 Fertilizer mixers ...... 123,000 2,600 7,181,800 994,800 1,700 62,200 8,366,000 600 13,900 Explosives dist...... 202,000 4,200 21,807,900 1,668,500 3,100 103,200 23,788,900 1,000 23,800

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AVERAGE COST PER AN FACILITY—HIGH POPULATION/HIGH TRANSACTIONS ESTIMATE *—Continued

Point of sale Reg. Appeals (Web Record- Reporting Audits/ Total seller Number of Average activities ($) portal) keeping theft/loss inspections cost AN facilities cost ($) ($) ($) ($) ($) ($) ($)

Farm whol./co-ops ...... 184,000 3,400 17,841,300 1,484,200 3,200 105,100 19,621,100 1,000 19,600 Retail garden ctrs...... 357,000 6,000 37,281,300 3,517,200 7,900 246,100 41,415,400 2,500 16,600 Fertilizer app...... 146,000 2,800 16,764,200 1,434,200 2,900 100,100 18,450,200 1,000 18,500 Lab. supply...... 19,000 500 1,090,400 166,800 300 11,100 1,288,200 100 12,900

Total ...... 1,042,000 19,500 102,403,800 9,326,200 19,200 631,600 113,442,200 6,200 18,200 * Totals may not add due to rounding.

7. Identification of Duplication, Overlap that provide additional protections sufficient funds to carry out those and Conflict With Other Federal Rules against the acquisition of ammonium functions. See 6 U.S.C. 488c(b)(3). A thorough discussion of the nitrate or its use in terrorist attacks. The Department proposes the relationship to other rules is provided D. Unfunded Mandates Reform Act following process for evaluating earlier in section II.D of this preamble. requests from governors: If a State is The Unfunded Mandates Reform Act interested in performing the C. Executive Order 13132: Federalism of 1995 (UMRA), enacted as Public Law administration and enforcement Executive Order 13132 requires DHS 104–4 on March 22, 1995, is intended, activities required by Subtitle J, the to develop a process to ensure among other things, to curb the practice governor of the State must submit a ‘‘meaningful and timely input by State of imposing unfunded Federal mandates written request to the Department and local officials in the development of on State, local, and tribal governments. asking for delegation of those regulatory policies that have federalism Title II of UMRA requires each Federal authorities. Upon receipt of the request, implications.’’ To meet this agency to prepare a written statement the Department will initiate an requirement, the Department has, and assessing the effects of any Federal evaluation to determine if the State is will continue to, consult with State mandate in a proposed or final agency capable of satisfactorily performing fertilizer control officials, members of rule that may result in a $100 million or those functions and, upon completion of the American Association of Plant Food more expenditure (adjusted annually for the evaluation, will provide the State Control Officials, and others throughout inflation) in any one year by State, local, with a written response informing it of the development of these regulations. and tribal governments, in the aggregate, the Department’s determination. In Such consultation is expressly required or by the private sector. The primary order to make a fair evaluation, the by 6 U.S.C. 488a(g). Consultation with cost estimate for this proposed Department is likely to request the aforementioned groups has informed rulemaking would not impose such an information from the State and consult the Department on potential regulatory unfunded mandate on State, local, or with the State before a final avenues, and on the use and movement tribal governments, but the upper end of determination is made. Because the of ammonium nitrate through its life the estimate would show an unfunded responsibility would be transferred only cycle within the potentially regulated mandate in excess of $100 million at the request of the state, and only community. Additionally, the (adjusted for inflation) on the private when funding is available, no unfunded Department is hereby specifically sector. The analysis required under Title mandate would be created. requesting comments from State and II of UMRA is satisfied by the regulatory local officials on regulatory policies that impact assessment prepared in E. National Environmental Policy Act have federalism implications. conjunction with this NPRM. Chief among potential federalism The Department recognizes that some The Department has analyzed this implications is preemption of State AN Facilities of entities that purchase proposed rule for purposes of the ammonium nitrate regulations. As ammonium nitrate may be owned by National Environmental Policy Act of discussed in Part II.D of this preamble, state or local government entities. These 1969 (42 U.S.C. 4321–4347) under a number of States currently regulate the entities would be required to comply Department of Homeland Security security of ammonium nitrate. Subtitle with the provisions of this proposed Directive 023–01—Environmental J explicitly addresses preemption of rule. Planning Program, and has concluded such regulations, and ‘‘preempts the Further, under Subtitle J, the that this proposed rule comes within laws of any State, to the extent that such Department may enter into cooperative Categorical Exclusion A3 ‘‘promulgation laws are inconsistent with [Subtitle J], agreements with the USDA or any State of rules * * * (a) of a strictly except that [Subtitle J] shall not preempt department of agriculture to carry out administrative or procedural nature.’’ any State law that provides additional the provisions of Subtitle J. See 6 U.S.C. We find no basis for believing that there protection against the acquisition of 488c(a)(1). Subtitle J further requires the are extraordinary circumstances which ammonium nitrate by terrorists or the Department, at the request of a governor would require further analysis; use of ammonium nitrate in explosives of a State, to delegate to that State the however, we invite comment on this in acts of terrorism or for other illicit authority to carry out the administration conclusion. purposes, as determined by the and enforcement of Subtitle J, if the F. Paperwork Reduction Act [Department].’’ See 6 U.S.C. 488g(b). Department determines that the State is The Department specifically seeks capable of satisfactorily carrying out This NPRM contains collection of comment on the interaction of the such functions. See 6 U.S.C. 488c(b)(2). information requirements under the proposed rule with existing State and If the Department delegates any Paperwork Reduction Act of 1995 (44 local laws and regulations, including functions to a State, subject to the U.S.C. 3501–3520). ‘‘Collection of comment on any laws that may be availability of appropriations, the information,’’ as defined in 5 CFR inconsistent with Subtitle J and laws Department must provide to the state 1320.3(c), includes reporting, record

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keeping, monitoring, posting, labeling, Nitrate Registration; Appeals for Denial respondents, and estimated burdens and and other similar actions. or Revocation of AN Registered User costs. Subtitle J provides DHS with Numbers; Purchaser Verification; Under the protections provided by the authority to regulate the sale and Ammonium Nitrate Helpdesk; Paperwork Reduction Act, as amended, transfer of ammonium nitrate. This Electronic Recordkeeping Database; an agency may not conduct or sponsor, collection will enable the Department to Reporting Theft and Loss; Adjudication and a person is not required to respond ‘‘regulate the sale and transfer of or Appeal of an Order Assessing Civil ammonium nitrate by an ammonium Penalty; and Inspections and Audits. to, a collection of information unless it nitrate facility * * * to prevent the This NPRM includes a solicitation for displays a valid OMB control number. misappropriation or use of ammonium comments for a new information The Department will begin collecting nitrate in an act of terrorism.’’ See 6 collection, 1670–NEW. Any comments information as soon as an OMB control U.S.C. 488a(a). submitted will be reviewed by DHS and number is issued, or as soon as the This NPRM introduces a new OMB prior to publication of a final rule, mechanism for collecting information is collection with OMB Control Number and prior to OMB approval of this new publicly available, or when the rule 1670–NEW. The Ammonium Nitrate information collection. This NPRM implementing the Ammonium Nitrate Security Program information collection describes the nature of the information Security Program becomes effective, has eight new instruments: Ammonium collection, the categories of whichever is latest.

TABLE 1—ESTIMATES OF ANNUALIZED BURDEN HOURS AND COSTS

Total annual Number of Responses Avg. burden Total annual respondent Instrument respondents per per response burden cost respondent (in hours) (in hours) (in dollars)

Ammonium Nitrate Registration ...... 116,800 1 2.02 235,912 11,114,000 Appeals for Denial or Revocation of AN Registered User Numbers ...... 223 1 6.00 1,336 49,500 Purchaser Verification ...... 6,236 4,705 0.08 2,445,001 93,262,600 Ammonium Nitrate Helpdesk ...... 248,460 119 0.02 551,114 20,680,100 Electronic Recordkeeping Database ...... 6,236 4,705 0.02 448,992 8,591,600 Reporting of Theft & Loss ...... 125 1 2.80 349 18,300 Adjudication or Appeal of an Order Assessing Civil Pen- alty ...... Less Than 10 N/A N/A N/A N/A Inspections and Audits ...... 1,559 1 12.00 18,708 621,100

Title: Ammonium Nitrate Registration Number, and (2) register as a Designated comply with section 563 of the Fiscal Summary of Collection of AN Facility POC for the AN Facility. In Year 2008 Department of Homeland Information: Information is collected addition, sections 31.210 and 31.215 Security Appropriations Act, which through a web-based portal directly would allow any individual who has an requires the Department to issue AN from each applicant who wishes to ownership interest in an AN Facility; is Registered User Numbers. apply for an AN Registered User designated to act on behalf of a facility Description of the Respondents: DHS Number. The information collected will for purposes of compliance with this anticipates that there will be an average be used to determine if the applicant is regulation, such as, possibly, a site of 116,800 respondents annually. eligible for an AN Registered User manager, sales manager, or corporate Frequency of Response: On occasion. Number. Specifically, 6 U.S.C. officer; is involved in the sale or transfer Annual Burden Estimate: Each 488a(i)(2)(A) requires the Department to of ammonium nitrate at an AN Facility, respondent is estimated to have a conduct a check of identifying such as a sales clerk or cashier; or burden of 2.02 hours to register, update, information of all applicants against performs ammonium nitrate application and subsequently renew his/her AN identifying information that appears in services to register as an AN Seller. Registered User Number. The annual the TSDB. Sections 31.210 and 31.215 would hour burden is estimated to be 235,912 Consistent with 6 U.S.C. 488a(i)(3)(A) require that any person who hours. and 6 U.S.C. 488a(i)(3)(B), to the extent individually performs a sale or transfer Title: Appeals for Denial or practicable, the Department intends to of ammonium nitrate on behalf of an AN Revocation of AN Registered User approve or deny each registration Facility, or who performs ammonium Numbers. application, and to issue each AN nitrate application services, must be Summary of Collection of Registered User Number, not later than registered. Pursuant to section 31.205 of Information: Individuals who have had 72 hours after the time DHS receives a the proposed rule, any person who their AN Registered User Numbers complete registration application. DHS intends to purchase ammonium nitrate denied or revoked may appeal the may deny an applicant an AN must also be registered. Department’s denials or revocations, Registered User Number if the TSDB Use of: The information collected will pursuant to section 31.250 of the indicates that the applicant may pose a be used to (1) conduct a check of proposed rule. Each individual threat to national security. See 6 U.S.C. identifying information of applicants requesting an appeal is required to file 488a(i)(2)(B). against identifying information that a Request for Materials, a Request for As proposed in section 31.215(a), at appears in the TSDB, and (2) issue the Appeal, and other filings as necessary. least one individual who is designated Department’s approval or denial of each Use of: The information collected will to act on behalf of a facility for purposes registration application. be used to process appeals. of compliance with this regulation must Need for Information: The Need for Information: The (1) apply for an AN Registered User information collected is needed to Department needs the collected

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information to ensure that all necessary Title: Ammonium Nitrate Helpdesk. burden of 2.8 hours to complete a theft information is collected in order to Summary of Collection of or loss of ammonium nitrate report. The process appeals and records correction Information: The Ammonium Nitrate annual hour burden is estimated to be requests. Helpdesk will respond to questions 349 hours. Description of the Respondents: DHS from industry and the public. Title: Adjudication or Appeal of an anticipates that there will be an average Use of: The information collected will Order Assessing Civil Penalty. of 223 respondents annually. be used to respond to questions from Summary of Collection of Frequency of Response: On occasion. industry and the public. Information: Pursuant to section 31.700 Annual Burden Estimate: Each Need for Information: The of the proposed rule, any person or respondent is estimated to have a Department needs to collect the entity against whom an Order Assessing burden of 6 hours to complete the information from the individuals Civil Penalty has been issued is entitled necessary filings. The annual hour contacting the Ammonium Nitrate to a hearing and adjudication, by a burden is estimated to be 1,336 hours. Helpdesk to respond to their questions. Presiding Officer, on any issue of Title: Purchaser Verification. Description of the Respondents: DHS material fact relevant to any civil Summary of Collection of anticipates that there will be an average penalty issued against such person or Information: AN Sellers will be required of 248,460 respondents annually. entity. Pursuant to section 31.735 of the to conduct verification of AN Frequency of Response: On occasion. proposed rule any person or entity Purchaser’s identities and AN Annual Burden Estimate: Each having received an Initial Decision has respondent is estimated to have a Registered User Numbers prior to sales the right to appeal. and transfers of ammonium nitrate, as burden of 0.02 hours per AN Helpdesk Use of: The information collected will required by sections 31.305, 31.310, and contact. The annual hour burden is be used to conduct hearings, 31.315 of the proposed rule. Verification estimated to be 551,114 hours. adjudications, and appeals. will involve the submission to DHS by Title: Electronic Recordkeeping Need for Information: The Database. AN Sellers of prospective purchasers’ information collected is needed to Summary of Collection of AN Registered User Numbers, of conduct hearings, adjudications, and matching information (e.g., names and Information: To collect information to support AN Facilities with the appeals. drivers’ license numbers) from AN Description of the Respondents: DHS recordkeeping requirements proposed in Purchasers’ photo identification anticipates that there will be fewer than documents, and of the names of AN section 31.315 of the proposed rule. Use of: The information collected will 10 respondents annually. Agents taking possession of ammonium Frequency of Response: On occasion. be used to support AN Facilities with nitrate on behalf of prospective Annual Burden Estimate: The the recordkeeping requirements purchasers. As part of this information Department did not estimate the annual proposed in section 31.315 of the collection AN Sellers will also submit burden. proposed rule. information identifying themselves, Title: Inspections and Audits Need for Information: Under section Summary of Collection of including their own AN Registered User 31.315, AN Facilities would be required Numbers, to DHS. AN Sellers will Information: Pursuant to section 31.500 to keep various records. The use of this of the proposed rule, the Department is submit this information to DHS through recordkeeping instrument, however, is the Purchaser Verification Portal or the authorized to enter AN Facilities, or voluntary. other locations where records are stored, Purchaser Verification Call Center. The Description of the Respondents: DHS to inspect and audit the records Purchaser Verification Portal or anticipates that there will be an average proposed in section 31.315. DHS may Purchaser Verification Call Center will of 6,236 respondents annually. compare information submitted as to Frequency of Response: On occasion. also inspect and audit any other records each AN Purchaser or AN Seller against Annual Burden Estimate: Each that pertain to misappropriation or the information on record for that AN respondent is estimated to have a preventing misappropriation of Purchaser or AN Seller. burden of 0.02 hours. The annual hour ammonium nitrate, and to inspect and Use of: The information collected will burden is estimated to be 448,992 hours. audit any other records required by the be used to conduct verification of AN Title: Reporting Theft and Loss. Assistant Secretary to be maintained Registered User Numbers and of AN Summary of Collection of pursuant to Subtitle J. During an Purchasers’ and AN Agents’ identities, Information: To report a theft or loss of inspection or audit the Department may prior to transfer of ammonium nitrate, ammonium nitrate, an individual would copy such records. DHS may also take as required by sections 31.305, 31.310, contact ATF. ATF will collect original copies of pertinent records out and 31.315 of the proposed rule. information and other details for a of the subject AN Facilities for Need for Information: The report of a theft or loss of ammonium duplication. DHS may also perform Department needs the information to nitrate, pursuant to sections 31.400 and remote inspections or audits, and verify that ammonium nitrate is only 31.405 of the proposed rule. require AN Facilities, AN Facility sold or transferred by individuals Use of: The information collected Representatives, and Designated AN authorized by the Department to would be used to track and potentially Facility POCs to make the records individuals authorized by the respond appropriately to the theft or available to the Department by Department. loss of ammonium nitrate. facsimile, mail, or e-mail. Description of the Respondents: DHS Need for Information: The Use of: The information collected will anticipates that there will be an average information collected is needed to track be used to perform inspections or of 6,236 respondents annually. and potentially respond appropriately to audits. Frequency of Response: On occasion. the theft or loss of ammonium nitrate. Need for Information: The Annual Burden Estimate: Each Description of the Respondents: DHS information collected is needed to respondent is estimated to have a anticipates that there will be an average perform inspections or audits. burden of 0.08 hours to complete AN of 125 respondents annually. Description of the Respondents: DHS Registered User Number verification. Frequency of Response: On occasion. anticipates that there will be an average The annual hour burden is estimated to Annual Burden Estimate: Each of 1,559 respondents annually. be 2,445,001 hours. respondent is estimated to have a Frequency of Response: On occasion.

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Annual Burden Estimate: Each and exporters would be required to Subpart F—Civil Penalties respondent is estimated to have a register with the Department and 31.600 Orders Assessing Civil Penalty, burden of 12 hours to prepare for and comply with the requirements of the generally. comply with an inspection or audit. The NPRM in the same manner as their 31.605 Setting Civil Penalty amounts. annual hour burden is estimated to be domestic counterparts when ammonium 31.610 Procedures for issuing Orders 18,708 hours. nitrate physically changes possession, Assessing Civil Penalty. as a part of sales or transfers by Solicitation of Comments Subpart G—Adjudications and Appeals ammonium nitrate facilities, within the 31.700 Neutral adjudications, generally. As required by the Paperwork jurisdiction of the United States. Thus, 31.705 Appointment of presiding officers. Reduction Act of 1995 (44 U.S.C. DHS has assessed the potential effect of 31.710 Commencement of adjudication 3507(d)), the Department has submitted this NPRM and has determined that it proceedings. a copy of the proposed rule to OMB for would not create unnecessary barriers to 31.715 Prohibition on ex parte its review of the collections of international trade. communications during adjudication. information. DHS is soliciting For the reasons set forth in the 31.720 Burden of proof. comments to: preamble, the Department of Homeland 31.725 Hearing and adjudication (1) Evaluate whether the proposed Security proposes to add Part 31 to Title procedures. 31.730 Completion of adjudication information requirement is necessary for 6, Code of Federal Regulations, to read the proper performance of the functions procedures. as follows: 31.735 Appeals. of the agency, including whether the information will have practical utility; Title 6—Domestic Security Subpart H—Other (2) Evaluate the accuracy of the Chapter 1—Department of Homeland 31.800 State law preemption. agency’s estimate of the burden; Security, Office of the Secretary Authority: Pub. L. 110–161, sec. 563. (3) Enhance the quality, utility, and PART 31—AMMONIUM NITRATE clarity of the information to be Subpart A—General collected; and SECURITY PROGRAM (4) Minimize the burden of the § 31.100 Purpose. Subpart A—General collection of information on those who The purpose of this part is to enhance are to respond, including using Sec. the security of the Nation by regulating appropriate automated, electronic, 31.100 Purpose. 31.105 Definitions. the sale and transfer of ammonium mechanical, or other technological 31.110 Applicability. nitrate, and to implement Section 563 of collection techniques or other forms of 31.115 Severability. the Fiscal Year 2008 Consolidated information technology. Appropriations Act, Public Law 110– Subpart B—Registration of AN Purchasers, Individuals and organizations may 161 (December 26, 2007). submit comments to DHS or OMB on AN Sellers, AN Facility Representatives, the information collection requirements and Designated AN Facility POCs § 31.105 Definitions. by October 3, 2011. Direct information 31.200 Permitted Applicants, Generally. Ammonium nitrate (AN). (1) collection comments to the DHS or 31.205 Permitted AN Purchasers. Notwithstanding paragraph (2) of this 31.210 Permitted AN Sellers. OMB addresses listed in the ADDRESSES definition, ammonium nitrate is— 31.215 AN Facility personnel registration section of this NPRM. A comment is requirements. (i) Solid ammonium nitrate that is most effective if DHS or OMB receives 31.220 Registration procedures and chiefly the ammonium salt of nitric it within 30 days of the publication of registration updates. acid, that contains not less than 33 this NPRM. 31.225 AN Registered User number percent nitrogen by weight, or applicant vetting. (ii) Any mixture containing 30 G. International Trade Impact 31.230 Registration approval and denial. percent or more solid ammonium Assessment 31.235 Registration expiration. nitrate, by weight, that is chiefly the The Trade Agreement Act of 1979 31.240 Registration extension. ammonium salt of nitric acid. The solid prohibits Federal agencies from 31.245 Registration revocation. ammonium nitrate in the mixture must activities that create unnecessary 31.250 Appealing registration denial or revocation determination. contain not less than 33 percent obstacles to the foreign commerce of the nitrogen by weight. United States. Legitimate domestic Subpart C—Point of Sale Requirements (2) The following are not ammonium objectives, such as security, are not 31.300 General transfer and sale nitrate: considered unnecessary obstacles. The restrictions. (i) Mixtures containing less than 30 statute also requires consideration of 31.305 Verification of AN Purchaser AN percent ammonium nitrate; or international standards and, where Registered User numbers and (ii) Mixtures classified as appropriate, that they be the basis for identities—purchases not involving AN ‘‘explosives’’ under 27 CFR 555.11; or U.S. standards. In addition, the general Agents. (iii) Ammonium nitrate or mixtures benefits and desirability of free trade 31.310 Verification of AN Purchaser AN Registered User numbers and containing ammonium nitrate weighing influenced the development of this identities—purchases involving AN less than 25 pounds; or notice of proposed rulemaking to Agents. (iv) Cold packs. remove or diminish, to the extent 31.315 Recordkeeping requirements. AN Agent. Any person who obtains feasible, barriers to international trade, possession of ammonium nitrate on Subpart D—Reporting Theft and Loss including both barriers affecting the behalf of an AN Purchaser. export of American goods and services 31.400 Reporting obligations. AN Facility. Any person or entity that to foreign countries and barriers 31.405 Reporting. produces, sells or otherwise transfers affecting the import of foreign goods and Subpart E—Inspections and Audits ownership of, or provides application services into the United States. 31.500 Authority. services for, ammonium nitrate. As entities that purchase or sell 31.505 Manner of inspections and audits. AN Facility Representative. Any AN ammonium nitrate, or as individual AN 31.510 Inspectors. Facility operator, owner, or employee Purchasers and AN Sellers, importers 31.515 Records availability requirements. who is designated as an AN Facility

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Representative by the subject AN Designated AN Facility POC. An AN § 31.115 Severability. Facility. Facility Representative who is If a court finds any portion of this Part AN Purchaser. Any person, other than designated by an AN Facility as that AN to have been promulgated without an AN Agent, who purchases or obtains Facility’s chief point of contact (POC) proper authority, the remainder of this ammonium nitrate from an AN Facility. for communications with the Part will remain in full effect. AN Registered User. A person who Department for purposes of compliance possesses a valid AN Registered User with this Part. Subpart B—Registration of AN Number for the purpose(s) of acquiring, Office of the General Counsel. The Purchasers, AN Sellers, AN Facility possessing, producing, purchasing, Office of the General Counsel of the Representatives, and Designated AN selling, transferring ownership or United States Department of Homeland Facility POCs possession of, and/or providing Security. application services for ammonium Photo identification document. Any § 31.200 Permitted applicants, generally. nitrate. of the following documents containing a Only persons who intend to acquire, AN Registered User Number. A unique document number: possess, produce, purchase, sell, registered user number issued by the (1) An unexpired passport issued by transfer ownership or possession of, Department of Homeland Security a foreign government which contains a and/or provide application services for photograph; or under subpart B of this part to a person ammonium nitrate may register or (2) An unexpired document issued by intending to acquire, possess, produce, attempt to register under this Subpart. a U.S. Federal, State, or tribal purchase, sell, transfer ownership or government that includes the following § 31.205 Permitted AN Purchasers. possession of, and/or provide information for the person: application services for ammonium No person may purchase or take (i) Full name; ownership of ammonium nitrate, or nitrate. (ii) Date of birth; and AN Seller. Any person designated as (iii) Photograph; or request that an AN Agent take an AN Seller by the AN Facility at (3) Such other documents that the possession of ammonium nitrate on his/ which he/she works or with which he/ Department may designate as valid her behalf, without a valid AN she is associated, for the purpose(s) of identification documents. Purchaser AN Registered User Number performing sales or transfers of Secretary. The Secretary of Homeland issued under this Subpart. ammonium nitrate or for performing Security or such other Department § 31.210 Permitted AN Sellers. certain other regulatory compliance officials as may be designated by the activities under this Part. Secretary of Homeland Security to act (a) Only persons registered under this Applicant. Any person who has on his/her behalf. Subpart as AN Sellers, AN Facility submitted an application for an AN Subtitle J. Subtitle J of the Homeland Representatives, or Designated AN Registered User Number for the Security Act of 2002, as created by Facility POCs may sell or transfer purpose(s) of acquiring, possessing, Section 563 of the Fiscal Year 2008 possession of ammonium nitrate to any producing, purchasing, selling, Consolidated Appropriations Act, person or entity. transferring ownership or possession of, Public Law 110–161 (December 26, (b) Only persons registered under this and/or providing application services 2007). Subpart as AN Sellers, AN Facility for ammonium nitrate. Transfer. The transfer of possession or Representatives, or Designated AN Application services. The provision of ownership of ammonium nitrate from Facility POCs may, as required by this services related to the physical deposit one person or entity to another person Part, verify AN Registered User of fertilizer onto turf, fields, crops, or or entity for use outside of the AN Numbers of AN Purchasers, the other agricultural property, where these Facility from which the ammonium identities of AN Purchasers, and the services are provided by a person or nitrate is being transferred. Transfers of identities of AN Agents. entity other than the person or entity ammonium nitrate include transfers of (c) Only persons registered under this owning or operating the property upon possession or ownership that occur as Subpart as AN Sellers, AN Facility which the fertilizer is deposited. The part of sales and other business or Representatives, or Designated AN provision of application services is not commercial transactions, and also Facility POCs may perform ammonium a sale or transfer of ammonium nitrate. include transfers of possession or nitrate application services. Assistant Secretary. The Assistant ownership that are not part of sales or other business or commercial § 31.215 AN Facility personnel registration Secretary for Infrastructure Protection of requirements. the United States Department of transactions. The physical deposit of fertilizer onto turf, fields, crops, or other Homeland Security, or any successors to (a) Designated AN Facility POC. (1) agricultural property is not a transfer of that position within the Department, or Each AN Facility must have one ammonium nitrate. such other Department officials as may Designated AN Facility POC registered Under Secretary. The Under Secretary on its behalf. be designated by the Assistant Secretary for National Protection and Programs of to act on his/her behalf. (2) Only one Designated Facility POC the United States Department of can be registered for each AN Facility. Cold pack. A small, commercially- Homeland Security, or any successors to (b) AN Facility Representatives. Each available package commonly used as a that position within the Department, or AN Facility must have at least one AN replacement for ice in the application of such other Department officials as may Facility Representative registered on its first aid, containing unmixed water and be designated by the Under Secretary to behalf. ammonium nitrate that, immediately act on his/her behalf. prior to use, can be manipulated to (c) AN Sellers. Any person affiliated cause the comingling of the water and § 31.110 Applicability. with an AN Facility, who is neither a the ammonium nitrate resulting in an This Part applies to any person or Designated AN Facility POC nor an AN endothermic reaction that significantly entity that possesses, acquires, Facility Representative, must register lowers the temperature of the package. purchases, sells, transfers, or provides under this Subpart as an AN Seller in Department. The United States application services for ammonium order to perform the activities described Department of Homeland Security. nitrate. in 6 CFR 31.210.

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§ 31.220 Registration procedures and the Department through the online web Notice of Delay to the applicant by e- registration updates. portal within 30 days of the date on mail or by an online web portal to be (a) Submission of Application which the AN Agent becomes developed by the Department. Information. (1) Applications for unauthorized to obtain ammonium registration under this Subpart must be nitrate. § 31.235 Registration expiration. submitted to the Department through an An AN Registered User Number online web portal to be developed by § 31.225 AN Registered User number issued under this subpart expires five the Department. The web address of this applicant vetting. years after the date it is issued. online web portal will be announced by (a) The Department will vet § 31.240 Registration extension. the Department in a future notice applicants’ identifying information published in the Federal Register. against the Terrorist Screening Database (a) Extension prior to registration (2) Each applicant and AN Registered (TSDB) and/or verify each applicant’s expiration. An AN Registered User can User must notify the Department of any enrollment in a Department program apply for an extension of his/her AN changes to his/her submitted that conducts equivalent TSDB vetting. Registered User Number not more than application information, within 30 days (b) The Department will compare each 60 days before its scheduled expiration. of any such changes, through the online AN Registered User’s identifying (b) Extension after registration web portal used for registration information against new and/or updated expiration. An AN Registered User can application. TSDB records as those new and/or apply for an extension of his/her AN (b) Application Information updated records become available. Registered User Number after the Identifying Type of Applicant. In order expiration date of that AN Registered for an applicant to be considered for § 31.230 Registration approval and denial. User Number for up to one year from the registration, he/she must identify (a) Registration approval. The date of expiration. whether he/she is applying as an AN Department will issue AN Registered (c) Application for new number after Seller, AN Facility Representative, User Numbers based on the results of registration expiration of more than one Designated AN Facility POC, and/or AN TSDB vetting and the submission of year. An AN Registered User with an Purchaser. An applicant may apply for complete registration applications by AN Registered User Number that has more than one role. applicants. been expired for more than one year (c) Application Information—General. (b) Registration denial. A registration must apply for, and obtain, a new AN (1) In order for an applicant to be applicant may be denied an AN Registered User Number before engaging considered for registration, his/her Registered User Number if: in the acquisition, purchase, sale, or registration application must include (1) Based on TSDB vetting and/or transfer of ammonium nitrate, or before his/her name, address, telephone verification of previous TSDB vetting providing ammonium nitrate number, photo identification document results under 6 CFR 31.225, the application services. type, photo identification document Assistant Secretary determines that it is (d) Extension procedures. An AN issuing entity, photo identification in the interest of national security to Registered User can apply for an document number, place of birth, date deny the registration application; or extension of his/her AN Registered User of birth, citizenship, gender, any other (2) The applicant submits an Number by following the registration information deemed necessary by the incomplete registration application; or procedures set forth in 6 CFR 31.220. Department to carry out vetting under 6 (3) Information contained in the Extensions will be issued or denied CFR 31.225, and, as appropriate, any registration application is fraudulent or using the registration issuance and other information deemed necessary by false. denial procedures and criteria set forth the Department to verify the applicant’s (c) AN Registered User number in 6 CFR 31.230. enrollment in a Department program issuance. The Department will provide that conducts equivalent TSDB vetting. AN Registered User Numbers to § 31.245 Registration revocation. (2) Each AN Purchaser applicant’s approved applicants by e-mail or by an (a) The Assistant Secretary may registration application must also online web portal to be developed by revoke an AN Registered User Number include a description of the intended the Department. if he/she determines that: use of the ammonium nitrate planned to (d) Notice of registration denial. The (1) It is in the interest of national be purchased or acquired by the Assistant Secretary will provide Notice security to revoke that AN Registered applicant. of Registration Denial to denied User Number based on the results of the (3) Each AN Seller, AN Facility applicants by e-mail or by an online activities described in 6 CFR 31.225; or Representative, and Designated AN web portal to be developed by the (2) The AN Registered User holding Facility POC must also submit Department. This Notice will include that AN Registered User Number information identifying all AN Facilities the date of denial, and will also include obtained it by submitting fraudulent or at or for which he/she will serve as an instructions about how to appeal such a false information. AN Seller, AN Facility Representative, denial pursuant to 6 CFR 31.250. (b) The Assistant Secretary will or Designated AN Facility POC. (e) Notice of delay. (1) When the provide Notice of Revocation to each (d) Identifying AN Agents. (1) AN Department is unable to approve or AN Registered User whose AN Purchasers and AN Purchaser deny a registration application within Registered User Number is revoked. applicants may, through the online web 72 hours of receipt, the Department will Notice of Revocation will be provided portal mentioned in 6 CFR 31.220(a), provide Notice of Delay to the applicant prior to the effective date of revocation, identify any AN Agents whom they by e-mail or by an online web portal to unless the Assistant Secretary authorize to obtain ammonium nitrate be developed by the Department. determines that it is in the interest of on their behalves. (2) When the Department determines national security to revoke an AN (2) When a person named as an AN that, in the interest of national security, Registered User Number prior to or at Agent is no longer authorized to obtain longer than 72 hours is required to the same time as provision of Notice of ammonium nitrate on behalf of an review a registration application or to Revocation. Notice of Revocation will applicant or AN Purchaser, the issue or deny an AN Registered User include both the date on which the applicant or AN Purchaser must notify Number, the Department will provide subject AN Registered User Number is

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to be revoked and the means by which (g) Final determination. (1) After (c) An AN Facility, AN Seller, AN revocation can be appealed. reviewing an appellant’s Request for Facility Representative, or Designated (c) Notices of Revocation will be Appeal, the Department will serve the AN Facility POC may not transfer disseminated to subject AN Registered appellant with a Final Determination. possession of ammonium nitrate to an Users by e-mail, by an online web portal (2) A Final Determination will be AN Agent when such AN Agent is to be developed by the Department, or signed by the Under Secretary, and will: attempting to obtain ammonium nitrate by other written communication. (i) Uphold the denial or revocation; or on behalf of an AN Purchaser whose (ii) Reverse the denial or revocation. registration is deficient under this Part. § 31.250 Appealing registration denial or (3) To the extent practicable, the (d) An AN Facility, AN Seller, AN revocation determination. Department will issue a Final Facility Representative, or Designated (a) Appealing registration denial. A Determination within 72 hours of AN Facility POC may only transfer person whose application for receipt of the appellant’s Request for possession of ammonium nitrate to an registration has been denied may appeal Appeal, unless the Department AN Agent after confirming with either the Assistant Secretary’s denial of his/ determines that additional time is the Department or the AN Purchaser her application under this subsection. required in the interest of national that the AN Agent is authorized to act (b) Appealing revocation. A person security. The Department will not on the AN Purchaser’s behalf. who has received a Notice of Revocation include any classified information in may appeal the Assistant Secretary’s this service, nor will it include any § 31.305 Verification of AN Registered revocation determination under this other information or material protected User Numbers and Identities—purchases or subsection. from disclosure under law. transfers not involving AN Agents. (c) Appellant’s request for materials. (4) Following a Final Determination (a) AN Purchaser electronic or To appeal a denial or revocation reversing a registration denial, the telephonic verification. Prior to determination, a person whose Department will issue to the appellant transferring possession of ammonium registration application is denied, or an AN Registered User Number as nitrate, the AN Seller, AN Facility whose AN Registered User Number is described in 6 CFR 31.230(c). Representative, or Designated AN revoked, must initiate an appeal by (h) Extension of time. For good cause Facility POC conducting the sale or filing a Request for Materials with the shown, the Department may grant an transfer must obtain the unexpired AN Office of the General Counsel. This appellant an extension of time to file a Registered User Number and the name Request for Materials must be submitted Request for Materials or Request for of the AN Purchaser seeking to take to the Office of the General Counsel Appeal. An appellant’s request for an possession of ammonium nitrate. within 60 days of the date of denial or extension of time must be in writing and (1) Prior to transfer, the AN Seller, AN revocation. must be received by the Office of the Facility Representative, or Designated (d) The department’s response. The General Counsel within a reasonable AN Facility POC conducting the sale or Department will serve the appellant time before the due date to be extended; transfer must submit this collected with copies of the releasable materials or an appellant may request an information to the Department by upon which denial or revocation was extension after the passing of a due date telephone or through an online web based within 60 days of receipt of a by sending a written request describing portal to be developed by the Request for Materials, unless the why the failure to file within the Department. Department determines that additional prescribed time limits should be (2) Prior to transfer, the AN Seller, AN time is required in the interest of excusable. Facility Representative, or Designated national security. The Department will (i) Final agency action. For purposes AN Facility POC conducting the sale or not include any classified information of judicial review, a Final Determination transfer must also submit information in this Response, nor will it include any constitutes final agency action by the identifying the AN Facility from which other information or material protected Department. A Notice of Registration ammonium nitrate is being transferred, from disclosure under law. As Application Denial or a Notice of as well as his/her own name and his/her appropriate, the Department will Registration Revocation constitutes final own AN Registered User Number, to the include in this Response unclassified agency action if not timely appealed Department by telephone or through the summaries of classified evidence pursuant to this section. online web portal mentioned in 6 CFR 31.305(a)(1). supporting denial or revocation. Subpart C—Point of Sale (e) Appellant’s request for appeal. To (3) Upon receipt of this information, Requirements appeal the denial or revocation, the the Department will determine whether appellant must serve upon the Office of § 31.300 General transfer and sale the information provided indicates that the General Counsel a Request for restrictions. the AN Seller, AN Facility Appeal within 60 days of service of the (a) An AN Facility, AN Seller, AN Representative, or Designated AN Department’s Response under paragraph Facility Representative, or Designated Facility POC submitting this (d) of this section. The appellant’s AN Facility POC may only transfer information is authorized to sell or Request for Appeal must be written and possession of ammonium nitrate to an transfer ammonium nitrate. The include the rationale and information AN Purchaser in possession of a valid Department will also determine whether upon which the appellant disputes the AN Registered User Number issued the information provided indicates that basis of denial or revocation. under subpart B of this part, or to a the person attempting to purchase or (f) Correcting materials. The Request person acting as an authorized AN obtain ammonium nitrate is authorized for Appeal must include any Agent under this Part. under Subpart B of this Part to do so. corrections, additions, or clarifications (b) An AN Facility, AN Seller, AN (4) The Department will then notify to the materials provided by the Facility Representative, or Designated the AN Seller, AN Facility Department under paragraph (d) of this AN Facility POC may only transfer Representative, or Designated AN section if the appellant believes that his/ possession of ammonium nitrate to an Facility POC, by telephone or through her denial or revocation was based on AN Purchaser or AN Agent after the online web portal mentioned in 6 materials or information that he/she verification of his/her identity as CFR 31.305(a)(1), of the determinations believes to be erroneous or incomplete. required by this subpart. made pursuant to 6 CFR 31.305(a)(3).

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The AN Seller, AN Facility ammonium nitrate is being transferred, Representative, or Designated AN Representative, or Designated AN as well as his/her own name and his/her Facility POC representing the AN Facility POC may not transfer own AN Registered User Number, to the Facility conducting the transfer. Such ammonium nitrate unless and until each Department by telephone or through the oral confirmation must be obtained in of these determinations indicates that online web portal discussed in 6 CFR person or by telephone, prior to transfer the Department has authorized the sale 31.310(a)(1). of possession to the AN Agent. or transfer. (3) Upon receipt of this information, (c) AN Agent visual verification. Prior (b) AN Purchaser visual verification. the Department will determine whether to transferring possession of ammonium Prior to transferring possession of the information provided indicates that nitrate to an AN Agent, an AN Seller, ammonium nitrate, the AN Seller, AN the AN Seller, AN Facility AN Facility Representative, or Facility Representative, or Designated Representative, or Designated AN Designated AN Facility POC must AN Facility POC conducting the sale or Facility POC submitting this examine the photo identification transfer must examine the photo information is authorized to sell or document of the AN Agent seeking to identification document of the AN transfer ammonium nitrate. The take possession of ammonium nitrate. Purchaser seeking to take possession of Department will also determine whether (1) The photo identification document ammonium nitrate. the information provided indicates that must contain a photograph of the person (1) The photo identification document the AN Purchaser is authorized under attempting to take possession of the must contain a photograph of the person Subpart B of this Part to purchase or ammonium nitrate. AN Sellers, AN attempting to take possession of the obtain ammonium nitrate. The Facility Representatives, or Designated ammonium nitrate. AN Sellers, AN Department will not determine that the AN Facility POCs may not transfer Facility Representatives, or Designated AN Purchaser is authorized to purchase possession of ammonium nitrate to AN Facility POCs must not transfer or obtain ammonium nitrate unless the persons unable to provide photo possession of ammonium nitrate to any photo identification document identification documents. An AN Agent person unable to provide a photo information provided matches the photo must not take possession of, or attempt identification document. No AN identification document information to take possession of, ammonium nitrate Purchaser may take possession of, or previously provided by that person to without presenting a photo attempt to take possession of, the Department under 6 CFR identification document. 31.220(a)(2) or (c)(1). ammonium nitrate without presenting a (2) The AN Seller, AN Facility (4) The Department will then notify photo identification document. Representative, or Designated AN (2) The AN Seller, AN Facility the AN Seller, AN Facility Representative, or Designated AN Facility POC must not transfer Representative, or Designated AN possession of ammonium nitrate unless Facility POC conducting the sale or Facility POC, by telephone or through the online web portal mentioned in 6 he/she determines, to the best of his/her transfer must not transfer possession of ability, that the person attempting to ammonium nitrate unless he/she CFR 31.310(a)(1), of the determinations made pursuant to 6 CFR 31.310(a)(3). take possession of the ammonium determines, to the best of his/her ability, nitrate is the same person as the person that the person attempting to take The AN Seller, AN Facility Representative, or Designated AN who is depicted on the examined photo possession of ammonium nitrate is the identification document, and is the same person as the person who is Facility POC may not transfer ammonium nitrate unless and until each same person as confirmed to be an depicted on the examined photo authorized AN Agent under 6 CFR identification document. of these determinations indicates that the Department has authorized the 31.310(b). § 31.310 Verification of AN Registered transfer. § 31.315 Recordkeeping requirements. User Numbers and Identities—purchases or (b) Confirmation of agency. An AN transfers involving AN Agents. Seller, AN Facility Representative, or (a) An AN Facility and its AN Facility (a) AN Purchaser electronic or Designated AN Facility POC, prior to Representative(s) and Designated AN telephonic verification. An AN Seller, transferring possession of ammonium Facility POC must each ensure that the AN Facility Representative, or nitrate to an AN Agent, must obtain AN Facility maintains records Designated AN Facility POC, prior to confirmation from the Department or pertaining to each sale or transfer of transferring possession of ammonium from the AN Purchaser that the AN ammonium nitrate consisting, at a nitrate to an AN Agent, must obtain the Agent is authorized to act on the AN minimum, of the following: name, the unexpired AN Registered Purchaser’s behalf. This confirmation (1) Date of sale or transfer; User Number, the photo identification must be obtained in either of two ways: (2) Form and amount of payment, if document type, the photo identification (1) By submitting the name of the AN any; document issuing entity, and the photo Agent to the Department by telephone (3) Quantity of ammonium nitrate identification document number of the or through the online web portal sold or transferred; AN Purchaser. mentioned in 6 CFR 31.310(a)(1). If the (4) Type of packaging of the (1) Prior to transfer, the AN Seller, AN named AN Agent has been previously ammonium nitrate sold or transferred; Facility Representative, or Designated authorized by the AN Purchaser to take (5) Location where the AN Purchaser, AN Facility POC conducting the sale or possession of ammonium nitrate on his/ or if applicable AN Agent, will take transfer must submit this collected her behalf, pursuant to 6 CFR 31.220(d), possession of the ammonium nitrate information to the Department by then the Department will provide a sold or transferred; telephone or through an online web notice of confirmation, by telephone or (6) Name, address, telephone number, portal to be developed by the through online web portal, to the AN AN Registered User Number, photo Department. Seller, AN Facility Representative, or identification document type, photo (2) Prior to transfer, the AN Seller, AN Designated AN Facility POC making this identification document issuing entity, Facility Representative, or Designated submission. and photo identification document AN Facility POC conducting the sale or (2) Orally from the AN Purchaser. number of the AN Purchaser purchasing transfer must also submit information Oral confirmation may be obtained by or taking possession of the ammonium identifying the AN Facility from which an AN Seller, AN Facility nitrate sold or transferred;

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(7) If an AN Agent takes possession of Justice (ATF), or direct other AN Facility POCs to make the records ammonium nitrate, name, address, Facility personnel to report such theft or mentioned in 6 CFR 31.500(a) available telephone number, photo identification loss to ATF, as provided in 6 CFR to the Department by facsimile, mail, or document type, photo identification 31.405. e-mail. document issuing entity, and photo (b) Each AN Facility and its AN identification document number of the Facility Representative(s) and § 31.505 Manner of inspections and audits. AN Agent taking possession of the Designated AN Facility POC must (a) On-Site inspections and audits. ammonium nitrate sold or transferred; ensure that the AN Facility implements Authorized Department officials will (8) If an AN Agent takes possession of internal reporting procedures which conduct on-site inspections and audits ammonium nitrate, a record of the date require all AN Facility Representatives, at reasonable times and in reasonable and means by which confirmation of AN Sellers, and other AN Facility manners. The Department will provide agency was received pursuant to 6 CFR personnel (as appropriate) to notify the a minimum of 24 hours notice to an AN 31.310(b); and appropriate AN Facility Representative Facility, if possible through its (9) Confirmation numbers or or Designated AN Facility POC of any Designated AN Facility POC, before any confirmation records, if any, received theft or unexplained loss of ammonium on-site inspection and audit, except from the Department as part of the nitrate, to report such theft or loss when: notification processes described in 6 directly to ATF, or both. (1) The Assistant Secretary CFR 31.305(a)(4) and 6 CFR determines that an on-site inspection 31.310(a)(4). § 31.405 Reporting. and audit without such notice is (b) In sales or transfers not involving (a) General reporting requirements. warranted by exigent circumstances and AN Agents, AN Purchasers must Persons required to report theft or loss approves such on-site inspection and provide the information required by 6 under this Subpart must report each audit; or CFR 31.315(a)(6) to AN Facility theft or loss to ATF by telephone and by (2) Any delay in conducting an on-site personnel prior to transfer of facsimile, not later than 24 hours after inspection and audit might be seriously ammonium nitrate. AN Facilities, AN becoming aware of such theft or loss. If detrimental to security, and the Sellers, AN Facility Representatives, facsimile is not available, persons Assistant Secretary determines that an and Designated AN Facility POCs must required to report theft or loss under on-site inspection and audit without not transfer possession of ammonium this Subpart must report each theft or notice is warranted, and approves an nitrate to any persons failing to provide loss to ATF by telephone and U.S. mail, Inspector to conduct such on-site this information prior to transfer. not later than 24 hours after becoming inspection and audit. (c) In sales or transfers involving AN aware of such theft or loss. (b) Remote inspections and audits. (b) Voluntary reporting. Persons not Agents, AN Purchasers and/or the AN Authorized Department officials will required to report theft or loss under Agents obtaining ammonium nitrate on conduct remote inspections and audits this Subpart may report theft or loss of their behalves must provide the at reasonable times and in reasonable ammonium nitrate by contacting ATF information required by 6 CFR manners. The Department will provide by the same means described in 31.315(a)(6) and (7) to AN Facility a minimum of 24 hours notice to an AN paragraph (a) of this section. personnel prior to transfer of Facility, if possible through its ammonium nitrate. AN Facilities, AN Subpart E—Inspections and Audits Designated AN Facility POC, before that Sellers, AN Facility Representatives, AN Facility is required to remotely and Designated AN Facility POCs must § 31.500 Authority. submit records to the Department. The not transfer possession of ammonium (a) On-site inspections and audits. In Department may provide less than 24 nitrate to any AN Agent if this order to assess compliance with the hours notice before an AN Facility is information has not been provided prior requirements of this part and with the required to remotely submit records to to transfer. requirements of subtitle J, and in order the Department only when: (d) An AN Facility and its AN Facility to prevent the misappropriation or use (1) The Assistant Secretary Representative(s) and Designated AN of ammonium nitrate in acts of determines that a remote inspection and Facility POC must each ensure that the terrorism, authorized Department audit without such notice is warranted AN Facility maintains the records officials may enter AN Facilities, or by exigent circumstances and approves required by 6 CFR 31.315(a), as to each other locations where records are stored, such remote inspection and audit; or sale or transfer of ammonium nitrate, for to inspect and audit the records a minimum of two years from the date (2) Any delay in conducting a remote required to be maintained pursuant to 6 of sale or transfer. inspection and audit might be seriously (e) An AN Facility and its AN Facility CFR 31.315, to inspect and audit any detrimental to security, and the Representative(s) and Designated AN other records that pertain to Assistant Secretary determines that a Facility POC must each take reasonable misappropriation or preventing remote inspection and audit without actions to ensure that the AN Facility misappropriation of ammonium nitrate, notice is warranted, and approves an secures the records required by 6 CFR and to inspect and audit any other Inspector to conduct such remote 31.315(a) from damage, theft, and loss. records required by the Assistant inspection and audit. Secretary to be maintained pursuant to § 31.510 Inspectors. Subpart D—Reporting Theft and Loss Subtitle J. (b) Remote inspections and audits. In (a) Inspections and audits will be § 31.400 Reporting obligations. order to assess compliance with the conducted by personnel duly authorized (a) Any AN Facility Representative or requirements of this part and with the and designated for that purpose as Designated AN Facility POC who has requirements of subtitle J, and in order ‘‘Inspectors’’ by the Assistant Secretary, knowledge of the theft or unexplained to prevent the misappropriation or use or any person who is authorized by the loss of ammonium nitrate must report of ammonium nitrate in acts of Department to perform inspections such theft or loss to the Bureau of terrorism, the Department may require pursuant to a cooperative agreement or Alcohol, Tobacco, Firearms and AN Facilities, AN Facility a delegation of authority established Explosives of the U.S. Department of Representatives, and Designated AN under subtitle J.

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(b) An Inspector will, on request, Facilities for duplication and prompt (2) A listing of the provision(s) of this present his or her credentials for return. Part alleged to have been violated; examination by AN Facility personnel (c) Records availability for remote (3) A statement of facts upon which during an on-site inspection and audit, inspections and audits for which the the alleged instances of violation are but these credentials may not be department has provided at least 24 based; reproduced or retained by any AN hours notice. Each AN Facility and its (4) A statement of the amount of the Facility, by any AN Facility personnel, AN Facility Representative(s) and civil penalty assessed; by any AN Seller, by any AN Facility Designated AN Facility POC must (5) A statement of the date by which Representative, or by any Designated remotely submit any and all records such person or entity must pay the civil AN Facility POC. requested by the Department under this penalty assessed, and a statement of the Part to the Department by the time date by which such person or entity § 31.515 Records availability prescribed in the Department’s notice. may file a Notice for Application for requirements. (d) Records availability for remote Review pursuant to Subpart G of this (a) Records availability during on-site inspections and audits for which the Part, as an alternative to civil penalty inspections and audits for which the department has provided less than 24 payment; department has provided at least 24 hours notice. Each AN Facility and its (6) A statement of the means by which hours notice. Each AN Facility and its AN Facility Representative(s) and such person or entity may file a Notice AN Facility Representative(s) and Designated AN Facility POC must for Application for Review pursuant to Designated AN Facility POC must make remotely submit all records requested Subpart G of this Part; and all records required to be maintained by by the Department under this Part to the (7) A statement of the means by which this Part available to Inspectors Department as quickly as possible after, payment may be made. immediately upon the commencement and in no case more than four hours (b) The Assistant Secretary may of an on-site inspection and audit. Each later than, receipt of the Department’s establish procedures for issuance of AN Facility and its AN Facility notice. Orders Assessing Civil Penalty. Representative(s) and Designated AN Subpart F—Civil Penalties (c) Each person or entity subject to an Facility POC must provide Inspectors Order Assessing Civil Penalty must with the use of photocopiers, § 31.600 Orders Assessing Civil Penalty, comply with the terms of such Order computers, and other equipment generally. Assessing Civil Penalty by the date necessary to copy such records, if When the Assistant Secretary specified in such Order Assessing Civil subject AN Facilities have access to determines that any person or entity has Penalty unless such person or entity has such equipment. If Inspectors deem that violated any provision or provisions of filed a timely Notice for Application for photocopying or other reproduction of this Part, the Assistant Secretary may Review under Subpart G of this Part. records is necessary, but subject AN issue an Order Assessing Civil Penalty (d) An Order Assessing Civil Penalty Facilities do not have access to against such person or entity making issued under this section becomes a necessary photocopying/reproduction such person or entity liable to the final agency action when the time equipment, Inspectors must be United States for a civil penalty of not specified in such Order Assessing Civil permitted to take original copies of more than $50,000 per violation of this Penalty to file a Notice for Application pertinent records out of the subject AN part. for Review has passed without such Facilities for duplication and prompt filing. return. § 31.605 Setting civil penalty amounts. In determining the amount of a civil Subpart G—Adjudications and Appeals (b) Records availability during on-site penalty, the Assistant Secretary will inspections and audits for which the consider: The nature and circumstances § 31.700 Neutral adjudications, generally. department has provided less than 24 of the violation(s) underlying the civil (a) Any person or entity against whom hours notice. Each AN Facility and its penalty; the history of prior violations an Order Assessing Civil Penalty has AN Facility Representative(s) and by the person or entity determined to been issued is entitled to a hearing and Designated AN Facility POC must make have committed the violation adjudication, by a Presiding Officer, on all records required to be maintained by underlying the civil penalty; the ability any issue of material fact relevant to any this Part available to Inspectors as to pay of the person or entity civil penalty issued against such person quickly as possible upon the determined to have committed the or entity under this Part. commencement of an on-site inspection violation underlying the civil penalty; (b) A Presiding Officer will issue an and audit. Each AN Facility and its AN the ability to continue to do business of Initial Decision on any material issue Facility Representative(s) and the person or entity determined to have related to an Order Assessing Civil Designated AN Facility POC must make committed the violation underlying the Penalty before any such issue is such records available, at a maximum, civil penalty; and any other matters that reviewed on appeal pursuant to 6 CFR within four hours of the commencement the Assistant Secretary determines that 31.735. of an on-site inspection and audit. justice requires. Inspectors must be provided with the § 31.705 Appointment of Presiding use of photocopiers, computers, and § 31.610 Procedures for issuing Orders Officers. other equipment necessary to copy such Assessing Civil Penalty. (a) Immediately upon the filing of any records, if subject AN Facilities have (a) At a minimum, each Order Notice for Application for Review under access to such equipment. If Inspectors Assessing Civil Penalty will be signed 6 CFR 31.710, the Secretary shall deem that photocopying or other by the Assistant Secretary, dated, and appoint an attorney, who is employed reproduction of records is necessary, but include as to each person or entity by the Department and who has not subject AN Facilities do not have access subject to such Order Assessing Civil performed any investigative or to necessary photocopying/reproduction Penalty: prosecutorial function with respect to equipment, Inspectors must be (1) The name, address, and (where the matter, to act as a neutral permitted to take original copies of applicable) AN Registered User Number adjudications officer or Presiding pertinent records out of the subject AN of such person or entity; Officer for the compilation of a factual

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record and the recommendation of an person who will advise that official in (h) A person or entity, individually or Initial Decision for each Proceeding. the decision on the matter, receives through counsel, may offer relevant and (b) Notwithstanding paragraph (a) of from or on behalf of any party, by means material information including written this section, the Secretary may appoint of an ex parte communication, direct testimony which that person or one or more attorneys who are information which is relevant to the entity believes should be considered in employed by the Department and who decision of the matter and to which opposition to the Order Assessing Civil do not perform any investigative or other parties have not had an Penalty at issue. prosecutorial function with respect to opportunity to respond, a summary of (i) A person or entity, individually or this subpart, to serve generally in the such information will be served on all through counsel, may conduct cross- capacity as Presiding Officer(s) for such other parties, who will have an examination as may be specifically matters pursuant to such procedures as opportunity to reply to the ex parte allowed by the assigned Presiding the Secretary may hereafter establish. communication within a time set by the Officer for a full determination of designated Presiding Officer. relevant facts. § 31.710 Commencement of Adjudication (c) The consideration of classified or Proceedings. Sensitive But Unclassified information § 31.730 Completion of adjudication procedures. (a) Any person or entity against whom or materials pursuant to an in camera an Order Assessing Civil Penalty has procedure does not constitute a (a) The assigned Presiding Officer will been issued may institute proceedings prohibited ex parte communication for close and certify the record of the to review the propriety of such civil purposes of this subpart. adjudication promptly upon the penalty by filing a Notice for completion of the hearing and upon the Application for Review specifying that § 31.720 Burden of proof. submission of post-hearing briefs, if any such person or entity requests a hearing The Assistant Secretary bears the are ordered by the assigned Presiding and adjudication. initial burden of proving the facts Officer. (b) Each person or entity requesting a necessary to support the challenged (b) The assigned Presiding Officer will hearing and adjudication must serve Order Assessing Civil Penalty at every issue an Initial Decision based on the each Notice for Application for Review proceeding instituted under this certified record, and the decision will be and all subsequent filings on the Office subpart. subject to appeal pursuant to 6 CFR of the General Counsel. 31.735. (c) Each Notice for Application for § 31.725 Hearing and adjudication (c) An Initial Decision will become a Review must be accompanied by all procedures. final agency action on the expiration of appropriate legal memoranda, (a) Following filing and receipt of the time for an appeal pursuant to 6 CFR declarations, affidavits, other Notice for Application for Review and 31.735. documents and other evidence Response, the assigned Presiding Officer (d) An Initial Decision will specify the supporting the position asserted by the will conduct scheduling conferences or time by which the subject person or person or entity requesting a hearing issue scheduling orders as appropriate; entity must pay the ordered civil and adjudication. accept or order pre-hearing memoranda, penalty, or the Presiding Officer’s (d) The Assistant Secretary will file motions, and briefings as appropriate; modification of such penalty, if any. and serve a Response, accompanied by and order discovery as appropriate. Such deadline will be stayed, however, all appropriate legal memoranda, (b) Any hearing and adjudication will during the pendency of any appeal declarations, affidavits, other be held as expeditiously as possible in pursuant to 6 CFR 31.735. documents and other evidence the county, parish, or incorporated city supporting the position asserted by the of residence of the person or entity § 31.735 Appeals. Assistant Secretary, within 14 calendar filing the Notice for Application for (a) Right to appeal. The Assistant days of the filing and service of the Review instituting the hearing and Secretary, or any person or entity having Notice for Application for Review and adjudication, at a precise location to be received an Initial Decision under this all supporting papers. determined by the assigned Presiding Subpart, has the right to appeal to the Officer, or, with the consent of such Under Secretary acting as a neutral § 31.715 Prohibition on ex parte person or entity, at any other location appeals officer. communications during adjudication. conducive to a prompt presentation of (b) Procedure for appeals. (1) The (a) At no time after the designation of any necessary testimony or other Assistant Secretary, or any person or a Presiding Officer for a proceeding and proceedings. entity who has received an Initial prior to the issuance of a Final Decision (c) Videoconferencing and Decision under this Subpart, may on an appeal pursuant to 6 CFR teleconferencing may be used where institute an appeal by filing a Notice of 31.735(e) will the designated Presiding appropriate at the discretion of the Appeal with the Office of the General Officer, or any person who will advise assigned Presiding Officer. Counsel. that official in the decision on the (d) Each party offering the affirmative (2) A Notice of Appeal must be filed matter, discuss ex parte the merits of the testimony of a witness must present that within seven calendar days of the proceeding with any interested person testimony by declaration, affidavit, or service of the Presiding Officer’s Initial outside the Department, with any other sworn statement submitted in Decision. Where the Assistant Secretary Department official who performs a advance as ordered by the assigned initiates an appeal, the Assistant prosecutorial or investigative function Presiding Officer. Secretary will serve a copy of this in such proceeding or a factually related (e) Any witness presented for Notice of Appeal on the appellee. proceeding, or with any representative examination will be asked to testify (3) An Initial Decision is stayed from of such person. under oath or affirmation. the timely filing of a Notice of Appeal (b) If, after the designation of a (f) The hearing and adjudication will until the Under Secretary issues a Final Presiding Officer and prior to the be recorded verbatim. Decision. issuance of a Final Decision on an (g) A person or entity may appear to (4) The appellant must file a Brief appeal pursuant to 6 CFR 31.375(e), the be heard on his own behalf or through with the Office of the General Counsel designated Presiding Officer, or any any counsel of his choice. within 28 calendar days of the filing of

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the Presiding Officer’s Initial Decision. investigative function in such (e) Final decisions. The Under Where the Assistant Secretary initiates proceeding or a factually related Secretary will issue a Final Decision an appeal, the Assistant Secretary will proceeding, or with any representative and serve it upon the parties. A Final serve a copy of this Brief on the of such person. Decision made by the Under Secretary appellee. (2) If, after the filing of a Notice of constitutes final agency action. (f) Conduct of appeals. The Secretary (5) The appellee must file its/his/her Appeal and prior to the issuance of a may establish procedures for the Opposition Brief with the Office of the Final Decision on an appeal pursuant to conduct of appeals pursuant to this General Counsel within 28 calendar 6 CFR 31.375(e), the Under Secretary, subpart. days of the filing of the appellant’s his designee, or any person who will Brief. Where the Assistant Secretary is advise that official in the decision on an appellee, the Assistant Secretary will Subpart H—Other the matter receives from or on behalf of serve a copy of this Opposition Brief on any party, by means of an ex parte § 31.800 State law preemption. the appellant. communication, information which is Subject to subtitle J, the laws of any (c) Expedited appeals. The Under relevant to the decision of the matter State are preempted to the extent that Secretary may provide for expedited and to which other parties have not had such laws are inconsistent with this part appeals for appropriate matters. an opportunity to respond, a summary or with subtitle J, except that this (d) Ex parte communications. (1) At of such information will be served on all section shall not preempt any State law no time after the filing of a Notice of other parties, who will have an that provides additional protection Appeal and prior to the issuance of a opportunity to reply to the ex parte against the acquisition of ammonium Final Decision on an appeal pursuant to communication within a time set by the nitrate by terrorists or the use of 6 CFR 31.735(e) will the Under Under Secretary or his/her designee. ammonium nitrate in explosives in acts Secretary, his designee, or any person of terrorism or for other illicit purposes, who will advise that official in the (3) The consideration of classified or as determined by the Secretary. decision on the matter discuss ex parte Sensitive But Unclassified information the merits of the proceeding with any or materials pursuant to an in camera Janet Napolitano, interested person outside the procedure does not constitute a Secretary. Department, with any Department prohibited ex parte communication for [FR Doc. 2011–19313 Filed 8–2–11; 8:45 am] official who performs a prosecutorial or purposes of this subpart. BILLING CODE 9119–9P–P

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