### 1 

# Fi nal Report

of the

S mall Business Advocacy Review Panel on

E PA’s Planned Proposed Rule

Risk Management Modernization Rule

February 19, 2016SBAR Panel Report Risk Management Modernization Rule



### 2 

# Table of Contents

1 . IN TRODUCTION

................................ ......................................................................................................... 4

2 . B ACKGROUND AND DESCRIPTION OF RULEMAKING

................................................................................ 5

2 .1 Regulatory History

........................................................................................................................ 5

2.2 Description and Scope of Existing Rule

......................................................................................... 6

2.3 Overview of Revisions under Consideration

................................................................................. 7

Prevention Program Elements

.............................................................................................................. 8

Emergency Preparedness and Response Elements

.............................................................................. 9

2.4 Related Federal Rules

................................................................................................................. 10

OS HA’s PSM standard (29 CFR 1910.119)

........................................................................................... 11

Occupational Safety and Health Act General Duty Clause

................................................................ . 11

EPA’s Emergency Planning and Community Right

- to

- Know Act (EPCRA) regulations (40 CFR 350

- 372)

................................................................................................ ............................................................ 11

Standards for Owners and Operators of Hazardous Waste Treatment, Storage, and Disposal Facilities (40 CFR 264 and 265)

........................................................................................................... 12

CAA Section 112(r)(1) general duty clause

......................................................................................... 12

Department of Homeland Security (DHS) requirements

– Chemical Facility Anti

- Terrorism Standards (CFATS) (6 CFR 27)

............................................................................................................................... 12

Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) requirements for explosives.

............... 12

3 . A PPLICABLE SMALL ENTITY DEFINITIONS

............................................................................................... 13

4

. L IST OF SMALL ENTITY REPRESENTATIVES

.............................................................................................. 18

5

. S UMMARY OF SMALL ENTITY OUTREACH

.............................................................................................. 19

6. S UMMARY OF COMMENTS FROM SMALL ENTITY REPRESENTATIVES

................................................... 20

6. 1 Pre

- Panel Outreach

........................................................................................................................... 20

6.1.1 Summary of Verbal Comments

.................................................................................................. 20

6.1.2 Summary of Written Comments

................................................................................................ 28

6.1.3 Meeting Follow -Up

.................................................................................................................... 32

6.2 Panel Outreach

................................................................................................ ................................ . 32

6.2.1 Summary of Verbal Comments

.................................................................................................. 32

6.2.2 Summary of Written Comments

................................................................................................ 38

7

. P ANEL FINDINGS AND DISCUSSIONS

...................................................................................................... 46

7 .1 Number and Types of Entities Affected

...................................................................................... 46SBAR Panel Report Risk Management Modernization Rule



### 3 7.2 Potential Reporting, Recordkeeping, and Compliance Requirements

....................................... 46

7.3 Related Federal Rules

................................................................................................................. 46

7.4 Regulatory Flexibility Alternatives

.............................................................................................. 47

7.4.1 Third

- Party Compliance Audits

........................................................................................... 47

7.4.2 Incident Investigations & Root Cause Analysis

................................................................... 49

7.4. 4 Local Coordination

.............................................................................................................. 51

7.4.5 Emergency Response Exercises

........................................................................................... 53

7.4.6 Information Sharing

............................................................................................................ 54

APPENDIX A: List of Materials EPA shared with Small Entity Representatives

........................................... 57

APPENDIX B: Written Comments Submitted by Small Entity Representatives

.......................................... 58

### 4 

# 1. I NTRODUCTION

This report is presented by the Small Business Advocacy Review Panel (SBAR Panel or Panel) convene d to review the planned proposed rulemaking on Risk Management Modernization

. Under section 609(b) of the Regulatory Flexibility Act (RFA) as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), a Panel is required to be convened prior to publication of the initial regula tory flexibility analysis (IRFA) that an agency may be required to prepare under the RFA. In addition to EPA’s Small Business Advocacy Chairperson, the Panel will consist of the Director of the Office of Emergency Management’s Regulations Implementation Di vision in the EPA Office of Land and Emergency Management (OLEM) 1 , the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget, and the Chief Counsel for Advocacy of the Small Business
Administration.

Th is report includes the following:

• Background information on the proposed rule being developed;

• Information on the types of small entities that may be subject to the proposed rule;

• A description of efforts made to obtain the advice and recommendations of representatives of those small entities; and

• A summary of the comments that have been received to date from those representatives.

Section 609(b) of the RFA directs the Panel to consult with and report on the comments of small entity representatives (SERs) a nd make findings on issues related to elements of an IRFA under section 603 of
the RFA. Those elements of an IRFA are:

• A description of, and where feasible, an estimate of the number of small entities to which t he

pr oposed rule will apply;

• A description of projected reporting, record keeping, and other compliance requirements of t he

pr oposed rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record;

• An identification, to the extent practicable, of all relevant Federal rules which may duplicate, overlap, or conflict with the proposed rule

.

• A description of any significant alternatives to the proposed rule which accomplish the state d obj ectives of applicable statutes and which minimize any significant economic impact of the proposed rule on small entities. This analysis shall discuss any significant alternatives such as:

o the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities;

o the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities;

o the use of performance rather than design standards; and

o an exemption from coverage of the rule, or any part thereof, for such small entities.

Once completed, the Panel R eport is provided to the agency issuing the proposed rule and is incl uded in the rulemaking record. The agency is to consider the Panel’s findings when completing the draft of the proposed rule. In light of the Panel R eport, and where appropriate, the agency is also to consider whether changes are needed to the IRFA for the proposed rule or the decision on whether an IRFA is re quired.

1 The office previously known as the Office of Solid Waste and Emergency Response (OSWER) has been renamed to the Office of Land and Emergency Management (OLEM). The old office name “OSWER” may be retained on earlier materials prepared for the pre

- Panel and Panel process.SBAR Panel Report Risk Management Modernization Rule



### 5 The Panel’s findings and discussion will be based on the information available at the time the final Panel
R eport is drafted. EPA will continue to conduct analyses relevant to the proposed rule, and additional information may be developed or obtain ed during the remainder of the rule development process.

Any options identified by the Panel for reducing the rule’s regulatory impact on small entities may require further analysis and/or data collection to ensure that the options are practicable, enforce able, environmentally sound, and consistent with the Clean Air Act and its amendments.



# 2. BACKGROUND AND DESCRIPTION OF RULEMAKING

**2.1 Regulatory History** 

Both EPA’s 40 CFR part 68 Risk Management Program regulation 2 and the Occupational Safety and
Health Administration’s ( OSHA’s ) 29 CFR 1910.119 P rocess S afety M anagement (PSM) standard were authorized in the Clean Air Act (CAA) Amendments of 1990 (1990 CAAA), in response to a number of catastrophic chemical accidents occ urring worldwide that had resulted in public and worker fatalities and injuries, environmental damage, and other community impacts. OSHA published the PSM standard in 1992 (57 FR 6356, February 24, 1992), as required by section 304 of the 1990 CAAA, using its authority under 29 U.S.C. §653.

The 1990 CAAA required EPA to develop a list of at least 100 regulated substances for accident prevention and related threshold quantities (CAA section 112(r)(3)

- (5)), authorized accident prevention regulations (CAA sect ion 112(r)(7)(A)), and required EPA to develop “reasonable regulations” requiring facilities with over a threshold quantity (TQ) of a regulated substance to undertake accident prevention steps and submit a “risk management plan” to various local, state, an d Federal planning entities (CAA section 112(r)(7)(B))

. EPA published the RMP regulation in two stages. The Agency published the list of regulated substances and TQs in 1994 (59 FR 4478, January 31, 1994) (the “list rule”) and published the RMP final regul ation, containing risk management requirements for covered sources, in 1996 (61 FR 31668, June 20, 1996) (the “RMP rule”). 3

Both the OSHA PSM standard and the EPA RMP rule aim to prevent or minimize the consequences of accidental chemical releases through implementation of management program elements that integrate process safety technologies, procedures, and management practices. In addition to requiring implementation of management program elements, the RMP rule requires covered sources to submit a
docum ent (i.e., RMP) summarizing the source’s R isk M anagement P rogram to EPA. The RMP rule required covered sources to comply with its requirements and submit initial RMPs to EPA by June 21, 1999. Each RMP must be revised and updated at least once every five ye ars from the date the Plan was initially submitted.

EPA later revised the list rule and the RMP rule. EPA modified the regulated list of substances by exempting solutions with less than 37% concentrations of hydrochloric acid (62 FR 45130, August 25, 1997) , deleting the category of DOT Division 1.1 explosives, and exempting flammable substances in

2 40 CFR part 68 is titled, “Chemical Accident Prevention Provisions,” but is more commonly known as the “RMP regulation,” the “RMP rule” or the “Risk Management Program.” This document uses all three terms to refer to 40 CFR part 68. The term “RMP” refers to the document required to be submitted under subpart F of 40 CFR part 68, the Risk Management Plan. See http://www 2 .epa.gov/rmp for more infor mation on the Risk Management Program.

3 40 CFR Part 68 applies to owners and operators of stationary sources that have more than a TQ of a regulated substance within a process. The regulations do not apply to chemical hazards other than listed substances held above a TQ within a regulated process.SBAR Panel Report Risk Management Modernization Rule



### 6 gasoline used as fuel and in naturally occurring hydrocarbon mixtures prior to initial processing (63 FR 640, January 6, 1998).

EPA has modified the RMP rule five times . The f irst revision modified facility identification data and contact information reported in the RMP (64 FR 964, January 6, 1999). Next, EPA revised assumptions for the worst case scenario analysis for flammable substances and clarified what the agency means by chemical storage not incidental to transportation (64 FR 28696, May 26, 1999). After the Chemical Safety Information, Site Security and Fuels Regulatory Relief Act (CSISSFRRA) was enacted on August 5, 1999, EPA excluded regulated flammable substances when used as a fuel or held for sale as a fuel at a retail facility (65 FR 13243, March 13, 2000). Later, EPA restricted access to offsite consequence analysis (OCA) data for the public and government officials to minimize the security risks associated with posting
the information on the i nternet (65 FR 48108, August 4, 2000). Finally, EPA revised the RMP executive summary to remove a requirement to describe the OCA; revised reporting deadlines for RMP reportable
accidents 4 and emergency contact changes; and made other minor revisions to RMP contact information (69 FR 18819, April 8, 2004).

On August 1, 2013, President Obama signed Executive Order 13650, entitled Improving Chemical Facility Safety and Security (EO 13650 or the EO). The EO was prompted by major chemical accidents, including the explosion at the West Fertilizer facility in West, Texas on April 17, 2013. EO 13650 directs the federal government to carry out a number of tasks whose overall goal is to prevent chemical accidents. In addition to the tragedy at the West Fertilizer Company in West, Texas, a number of other incidents demonstrate a significant risk to the safety of American workers and communities. On March 23, 2005, explosions at the BP Refinery in Texas City, Texas killed 15 and injured more than 170. On April 2, 2010, an explosion and fire at the Tesoro Refinery in Anacortes, Washington killed seven. On August 6, 2012, the Chevron Refinery in Richmond, California, experienced a catastrophic pipe failure that released flammable process fluid, forming a large vapor cloud that engulfed 19 Chevron employees and ignited. All employees avoided serious injury, but the subsequent fire resulted in a large plume of hazardous chemicals that traveled across the Richmond, California area. Nearly 15,000 residents sought medical treatment due to the release. On June 6, 2013, a fire and explosion at Williams Olefins in Geismar, Louisiana killed two and injured many more. These incidents represent a small number of the significant incidents that have occurred in the U.S. and demonstrate a significant risk to the safety of American workers and communities. Among the tasks discussed, the EO directs agencies to consider possible changes to existing chemical safety regulations such as EPA’s RMP regulation. On July 31, 2014, EPA published a Request for Information (RFI) notice (79 FR 44604) to solicit comments and information from the public regarding potential changes to EPA’s RMP regulations.



## 2.2 **Description and Scope of Existing Rule** 

The owner or operator of a f acilit y holding more than a TQ of a regulated flammable or toxic substance in

a process is required to implement a risk management program and to submit an RMP to EPA.

Each facility's program should address three areas:

• Hazard assessment that details the potential effects of an accidental release, an accident history of the last five years, and an evaluation of worst

- case and alternative accidental releases;

• Prevention program that includes safety precautions and maintenance, hazard controls, a nd

em ployee training measures; and

4 A n RMP reportable accident is an accidental release meeting the criteria in §68.42 (i.e., those that that resulted in deaths, injuries, or significant property damage on

- site, or known offsite deaths, injuries, evacuations, sheltering in place, property damage, or environmental damage ).SBAR Panel Report Risk Management Modernization Rule



### 7 • Emergency response program that spells out emergency health care, employee training measures and procedures for informing the public and response agencies (e.g.

, the fire department) should an accident occur.

The RMP rule establishes three “program levels” for regulated processes:

Program 1 applies to processes that would not affect the public in the case of a worst

- case release and that have had no accidents with specific off

- site co nsequences within the past five years. Program 1 imposes limited hazard assessment requirements, requires coordination with local response agencies, and requires submission of an RMP.

Program 2 applies to processes not eligible for Program 1 or subject to Program 3, and imposes streamlined prevention program requirements, including safety information, hazard review, operating procedures, training, maintenance, compliance audits, and incident investigation elements. Program 2 also imposes additional hazard a ssessment, management, and emergency response requirements.

Program 3 applies to processes not eligible for Program 1 and either subject to OSHA’s PSM standard under Federal or State OSHA programs or classified in one of ten specified industry sectors iden tified by their 2002 North American Industrial Classification System (NAICS) codes listed at §68.10(d)(1). These industries were selected because they had a higher frequency of the most serious accidents as compared to other industry sectors. 5 The ten NAIC S codes and the industries they represent are 32211 (pulp mills), 32411(petroleum refineries), 32511 (petrochemical manufacturing), 325181 (alkalies and chlorine manufacturing), 325188 (all other basic inorganic chemical manufacturing), 325192 (cyclic crud e and intermediate manufacturing), 325199 (all other basic chemical manufacturing), 325211 (plastics material and resin manufacturing), 325311 (nitrogenous fertilizer manufacturing), or 32532 (pesticide and other agricultural chemicals manufacturing). 6 Program 3 imposes elements nearly identical to those in OSHA’s PSM standard as the accident prevention program. The Program 3 prevention program includes requirements relating to process safety information ; process hazard analysis (PHA) ; operating procedur es ; training ; mechanical integrity ; management of change ; pre

- startup review ; compliance audits ; incident investigations ; employee participation ; hot work permits ; and contractors. Program 3 also imposes the same hazard assessment, management, and emergenc y response requirements that are required for Program 2.



## 2.3 **Overview of Revisions under Consideration**

Through Agency review and stakeholder input, a broad range of program improvements have been suggested. From these EPA identified items which could only be addressed through a regulat ory change,
and further limited consideration to those which would provide the most protective impact. The following is a listing of regulatory revisions currently being considered and evaluated by EPA, and is not final at thi s time.

In this action, EPA will consider modifications to the current RMP regulations in order to reduce the likelihood and severity of accidental releases, and improve emergency response when those releases occur. EPA is considering modifications to the following prevention program elements of the RMP rule:

5 This analysis was done by EPA to support original RMP rulemaking in 1996 and used accident data filed by sources in response to EPA’s request for information in the A ccidental Release Information Program (ARIP). ARIP collects data from certain sources that report releases under CERCLA section 103. 61 FR 31668, June 20, 1996.

6 NAICS codes 325181 and 325188 are now combined and represented as 2012 revised NAICS code 3 25180 (other basic inorganic chemical manufacturing). NAICS code 325192 is now 2012 revised NAICS code 325194 (cyclic crude, intermediate, and gum and wood chemical manufacturing).SBAR Panel Report Risk Management Modernization Rule



### 8 • Strengthen compliance audit provisions by requiring the next compliance audit following an RMP reportable accident to be conducted by a third

- party ;

• Revise incident investigation provisions to require a root cause analysis following an RMP reportable accident or a “near miss incident; ” and

• Revise the Process Hazard Analysis (PHA) requirements to include a safer technol og y and alternatives analysis and a feasibility study.

EPA is also considering modifications to the rule to enhance state and local emergency preparedness and response in an effort to mitigate the effects of accidents. These include requirements to:

• Annually coordinate emergency response capabilities with loc al responders ;

• Conduct emergency response exercises to test the emergency response program or plan ; and

• Share information with local responders and the public. 

### Prevention Program Elements

Third

- Party Compliance Audits

The owner or operator of a facility with a Program 2 or Program 3 process must perform compliance audits every three years. However, s elf

- auditing may be insufficient to ensure compliance with RMP requirements and promote safe stationary source oper ation and accident prevention. Additionally , a l ack of auditor independence can result in more lenient or biased audit
results that are less accurate and reliable.

Therefore, EPA is considering a modification to the rule that would require the owner or operator of a facility with a Program 2 or Pro gram 3 process to conduct an independent audit by an auditor not associated with the regulated facility or parent company. An independent audit would only be required following an accident at the facility, or when ordered by an implementing agency based

on noncompliance with accident prevention requirements. The independent audit would be conducted at the time of the next scheduled compliance audit in lieu of the regularly scheduled compliance audit.

Incident Investigation/Root Cause Analysis

The owner or o perator of a facility with a Program 2 or Program 3 process must conduct an incident investigation following an incident that resulted in or could have resulted in a catastrophic release (includes a “near miss”). However, the incident investigation require ments of the RMP rule do not currently include a root cause analysis.

A root cause analysis could identify the underlying reasons for a chemical accident to prevent future accidents and ensure compliance with the RMP rule

. Therefore, EPA is considering a modification to the rule to require the owner or operator of a facility with a Program 2 or Program 3 process to complete a root cause investigation (i.e. identifying the fundamental reason why an
incident occurred and the correctable failures(s) in management systems) for all RMP reportable
accidents and near miss es within 12 months of the incident. A ny recognized methodolog y that
identifies the root causes can be used for the analysis

. EPA is also clarifying the definition of a catastrophic release and clarifying which near miss incidents must be investigated. EPA is proposing to modify the definition of catastrophic release to be identical to reportable accidents
under the five year accident history requirement. A catastroph ic release would mean a major uncontrolled emission, fire, or explosion, involving one or more regulated substances that result s in deaths, injuries, or significant property damage on

- site, or known offsite deaths, injuries, evacuations, shelteri ng in place, property damage, or environmental damage

.SBAR Panel Report Risk Management Modernization Rule



### 9 S afer Alternatives Analysis

The owner or operator of a facility with a Program 3 process must conduct a PHA to identify, evaluate, and control process hazards involving regulated substances. However, the PHA does not require the owner or operator to consider safer technologies and alternatives ( including inherently safer technologies (IST)) that could prevent or minimize the effects of chemical
accidents

. EPA is considering a modification to the rule to require the owners or operators of a subset of facilities with Program 3 processes to analyze potential safer technologies and alternatives and
evaluate the feasibility of implement ing any inherently safer technologies considered. However,
the o wner or operator would not be required to implement any prescribed technology. EPA would propose to define feasible to mean “capable of being successfully accomplished within a reasonable time, accounting for economic, environmental, legal, social, and technological
factors ”.

EPA is considering limiting this requirement to owners or operators of Program 3 facilities in
NAICS codes 322 (paper manufacturing), 324 (petroleum and coal products manufacturing), and 325 (chemical manufacturing) beca use these facilities operate complex processes and had high accident rates during the 10

- year period analyzed for this proposed rule (2004

- 2013)

. 7 These

sectors are m ostly owned by large businesses

. 

### Emergency Preparedness and Response Elements

Improved Local Coordination

The owner or operator of a facility with a Program 2 or Program 3 process must develop an emergency response program except when the community emergency response plan addresses toxic substances at the facility, or the owner/operator has coordinated response actions for flammable substances with local fire department. However, s tate and local emergency response official s have indicated that some RMP facility owners or operators have not adequately coordinated with Local Emergency Planning Committees ( LEPCs ) and local emergency responders.

EPA is considering a modification to the RMP rule that would require the owner or operator of a facility with a Program 2 or Program 3 process to c oordinate annually with the LEPC or local emergency responders to ensure response capabilities exist. The facility owner or operator would be required to d ocument these coordination activities. Additionally, EPA is considering an option to allow the LEPC or local emergency responders to request that the facility owner or operator

prepare an emergency response program in accordance with the RMP rule requirements.

Emergency Response Exercises

T here is no RMP requirement for a facility owner or operator to exercise the facility emergency response program or plan. However, lessons learned from incidents at RMP facilities often indicate poor emergency response planning and execution. Therefore, requiring exercises is likely to improve emergency response performance by facilit y personnel and community responders and reduce the consequences of an accident to the community.

7 EPA analyzed data from the EPA RMP database.SBAR Panel Report Risk Management Modernization Rule



### 10 EPA is considering a modification to the rule to require the owner or operator of a facility with a Program 2 or Program 3 process to test their emergency response program through notification,
table top, and/or field exercises as follows:

• Both “r esponding” and “non

- responding” facilities 8 would be required to conduct an
annual notification exercise ;

• Responding facilities would conduct a field exercise every 5 years and a tabletop
exercise annually in interim years and invite local responders to participate ; and

• The facility owner or operator would be required to d ocument all exercises

. Information Sharing

The f acility RMP must be made available to the public and LEPC/first responders ( with the exception of certain data that have restrict ed distribution to the public due to security concerns). This applies to all facilities subject to the RMP rule (including Program 1 facilities). However,

a ccessing and understanding the information in t he plans can be challenging.

EPA is considering modifications to the RMP rule that would make emergency response information easier to comprehend and ensure greater transparency without compromising security . EPA would require all RMP facility owners or o perators to provide chemical hazard information to LEPCs or local emergency response officials, including :

• Information on regulated substances;

• Incident investigation repo rt summarie s (with root cause findings);

• E xercise reports and schedules ;

• Compliance audit report summarie s;

• A ccident history; and

,

• Summary of i nherently safer technologies implemented or planned to be implemented.

EPA is also considering requirements that would make existing public information available in an easily accessible format including:

• Name of regulated substances held in a process;

• Safety data sheets (SDS);

• Accident history information;

• Summary of the emergency response program;

• E xercise reports and schedules; and

• LEPC contact information.

Finally, EPA is considering requiri ng public meetings to be held by facility owners or operators once every five years and within 30 days of a n RMP reportable accident.



## 2.4 **Related Federal Rules**

The RMP is one of several programs regarding chemical facility safety and security. EO 13650 dir ected the Environmental Protection Agency (EPA), the Department of Labor (DOL), the Department of Homeland Security (DHS), the Department of Justice, the Department of Agriculture, and the Department of Transportation to identify ways to modernize policies , regulations, and standards to enhance safety and security in chemical facilities. The EO established a Chemical Facility Safety and Security Working Group to oversee this effort, which is tri

- chaired by the EPA, DOL, and DHS and includes leadership and

8 “ Responding ” facilities are those facilities subject to the emergency response program requirements of §68.95

. “Non

- responding” facilities are those facilities not subject to §68.95.SBAR Panel Report Risk Management Modernization Rule



### 11 s ubject matter experts from each of the above listed Departments and agencies. Member s of the Working Group (at the management and staff level) regularly share information in order to coordinate activities on any work involving revisions in regulations, such as revisions to OSHA’s PSM standard and DHS’ CFATS regulations.



### OSHA’s PSM standard (29 CFR 1910.119)

M andated by the Clean Air Act Amendments of 1990 and issued in 1992, the PSM standard sets requirements for the management of highly hazardous substances to prevent and mitigate hazards associated with catastrophic releases of flammable, explosive, reactive, and toxic chemicals that may endanger workers. The PSM standard covers the manufacturing of explosives and processes involving threshold quantities of flammable liquids and flammable gasses, as well as 137 other highly hazardous chemi cals.


### Occupational Safety and Health Act General Duty Clause

Section 5(a)(1) of the Occupational Safety and Health ( OSH ) Act requires employers to provide its employees with a workplace free from recognized hazards that are causing, or are likely to,

cause death or serious physical harm.



### EPA’s Emergency Planning and Community Right

- to

- K now Act (EPCRA) regulations (40

CFR 350

- 372)

Following the 1984 release of approximately 40 tons of methyl isocyanate into the air in Bhopal, India, that killed over 3,700 people and the 1985 leak of 500 gallons of aldicarb oxime from a Union Carbide facility in Institute, West Virginia, Congress passed EPCRA in October 1986. The purpose of EPCRA is twofold: (1) t o encourage and support emergency planning efforts at the
Stat e and local levels, and (2) t o provide the public and local governments with information concerning potential chemical hazards present in their communities.

EPCRA created State and local infrastructure designed to (1) prepare for and mitigate the effects

o f a chemical incident and (2) ensure that information on chemical risks in the community is provided to the first responders and the public. These State and local entities are the State Emergency Response Commissions (SERCs), Tribal Emergency Response Comm issions (TERCs), LEPCs , and Tribal Emergency Planning Committees (TEPCs). Representatives on the LEPCs include local officials and planners, facility owners and operators, first responders, health and hospital personnel, environmental groups, and citizen/m embers of the public.

A central requirement of LEPCs and TEPCs is to develop a local emergency response plan. These plans are required to:

• I dentify facilities and transportation routes of extremely hazardous substances and
assess the risk based on chemic al information from facilities;

• D escribe on

- site and offsite emergency response procedures;

• D esignate a community coordinator and facility emergency coordinator(s) to implement the plan;

• D escribe emergency notification procedures ;

• D escribe how to deter mine the probable affected area and population by releases (including identification of critical community receptors and assets);

• D escribe local emergency equipment and facilities and the persons responsible for them;

• D escribe evacuation plans;

• I dentify the training program for emergency responders (including schedules); andSBAR Panel Report Risk Management Modernization Rule



### 12 • I dentify the methods and schedules for exercising emergency response plans.

Under the community right

- to

- know section of EPCRA, certain facilities that manufacture, process, or store any hazardous chemicals are required to submit a n SDS or list of hazardous chemicals, grouped into hazard categories, to SERCs, TERCs, LEPCs, TEPCs, and local fire departments. Under the Hazard Communication Standard, OSHA requires SDSs that describe
the properties, hazards, and health effects of these chemicals as well as emergency response procedures and appropriate personal protection equipment. Facilities must also annually report
their inventories of all onsite chemicals for which SDSs are required th at are stored above reporting threshold quantities to SERCs, LEPCs, and local fire departments. LEPCs must use
information about chemical inventories at facilities and SDSs in developing their local emergency plans; this information must also be available to the public.


### Standards for Owners and Operators of Hazardous Waste Treatment, Storage, and Disposal Facilities (40 CFR 264 and 265)

These regulations establish minimum national standards which define the acceptable management of hazardous waste including requirements for arrangements that owners and operators of hazardous waste facilities make with local authorities. In sections 264.37 and 265.37, hazardous waste generators are required to attempt to make arrangements for emergency response acti vities with local authorities, and document the refusal of local or State authorities to complete such arrangements in the operating record.


### CAA Section 112(r)(1) general duty clause

The statute requires facility owners and operators to identify hazards ; design, maintain and safely operate a facility; and prevent and minimize releases of any regulated substances under §112(r)(3) (40 CFR Part 130) and “any other extremely hazardous substance.” 9


### Department of Homeland Security (DHS) requirements

– Chemical Facility Anti

- T errorism Standards (CFATS) (6 CFR 27)

The CFATS program, established in 2007, regulates c hemical facilities that present a high level of security risk to ensure they have security measures in place to reduce the risks associated with
their possession of chemicals of interest (COI). There are 325 COI and 137 of the 140 RMP regulated substances are included on the list of COI.

The CFATS program requires the development, submission, and implementation of Site Security Plans (SSPs) (or Alternati ve Security Programs in lieu of SSPs), which document the security measures high

- risk chemical facilities use to satisfy the applicable risk

- based performance standards (RBPS) under CFATS. T hese plans are not “one

- size

- fits

- all,” but in

- depth, highly

custo mized, and dependent on each facility’s unique circumstances.


### Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF ) requirements for explosives.

ATF is responsible for enforcing Federal explosives laws that govern commerce in explosives in
the United States, including licensing, storage, recordkeeping, and conduct of business. ATF

9 Although the term “any other extremely hazardous substance" is not defined, the le gislative history of the 1990 CAA amendments indicates that the term would include any agent "which may or may not be listed or otherwise identified by any Government agency which may as the result of short

- term exposures associated with releases to the ai r cause death, injury or property damage due to its toxicity, reactivity, flammability, volatility, or corrosivity." See: http://www2.epa.gov/sites/produc tion/files/2013

- 10/documents/gdcregionalguidance.pdfSBAR Panel Report Risk Management Modernization Rule



### 13 conducts inspections of Federal explosives licensees who manufacture, import, sell, or store explosives in the United States to ensure that explosives are managed in accordan ce with
Federal law.

Additionally there are state and local chemical accident prevention requirements in California, Delaware, Louisiana, Nevada, N ew J ersey, and other states and localities.



# 3 . APPLICABLE SMALL ENTITY DEFINITIONS

The Regulatory Flexibility Act (RFA) defines small entities as including “small businesses,” “small governments,” and “small organizations” (5 USC 601). The regulatory revisions being considered by EPA for this rulemaking are expected to affect a variety of small businesses and sma ll governments but would not affect any small organizations. The RFA references the definition of “small business” found in the Small Business Act, which authorizes the Small Business Administration to further define “small business” by regulation. The SBA definitions of small business by size standards using the North American Industry Classification System (NAICS) can be found at 13 CFR 121.201.

The detailed listing of SBA definitions of small business for affected industries or sectors, and small governments, by NAICS code, is included in Table 1 , below. Table 2 presents the small/large breakdown
of facilities by sectors and by program level

.

### 14 Table 1: Industry Sector Small Entity Standards Potentially Affected by EPA’s Planned Action

NAICS Sector SBA Size Standard for Small Business NAICS Sector SBA Size Standard for Small Business
111 Crop Production $0.75m 3253 Pesticide, Fertilizer, and Other Agricultural Chemical Manufacturing 500 FTE

112 Animal Production and Aquaculture $0.75m

- $15m 3254 Pharmaceutical and Medicine Manufacturing 750 FTE

115 Support Activities for Agriculture and Forestry $7.5m 3255 Paint, Coating, and Adhesive Manufacturing 500 FTE

211111 Crude Petroleum and Natural Gas

Extraction 500 FTE 3256 Soap, Cleaning Compound, and Toilet Preparation Manufacturing 500

- 750 FTE

221112 Fossil Fuel Electric Power Generation 750 FTE 3259 Other Chemical Product and Preparation Manufacturing 500

- 750 FTE

22131 Water Supply and Irrigation Systems $27.5m 326 Plastics and Rubber Products Manufacturing 500

- 1000 FTE

22132 Sewage Treatment Facilities $20.5m 327 Nonmetallic Mineral Product Manufacturing 500

- 1000 FTE

3111 Animal Food Manufacturing 500 FTE 331 Primary Metal Manufacturing 500

- 1000 FTE
3112 Grain and Oilseed Milling 500

- 1000 FTE 332 Fabricated Metal Product Manufacturing 500

- 1000 FTE
3113 Sugar and Confectionery Product Manufacturing 500

- 750 FTE 333 Machinery Manufacturing 500

- 1000 FTE

3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 500

- 1000 FTE 334 Computer and Electronic Product

Manufacturing 500

- 1000 FTE

3115 Dairy Product Manufacturing 500 FTE 335 Electrical Equipment, Appliance, and

Component Manufacturing 500

- 1000 FTE

3116 Animal Slaughtering and Processing 500 FTE 336 Transportation Equipment Manufacturing 500

- 1000 FTE

3117 Seafood Product Preparation and Packaging 500 FTE 337 Furniture and Related Product Manufacturing 500 FTE

3118 Bakeries and Tortilla Manufacturing 500

- 750 FTE 339 Miscellaneous Manufacturing 500 FTE

3119 Other Food Manufacturing 500 FTE 42 Wholesale Trade 100 FTESBAR Panel Report Risk Management Modernization Rule



### 15 NAICS Sector SBA Size Standard for Small Business NAICS Sector SBA Size Standard for Small Business
3121 Beverage Manufacturing 500 FTE 44422 Nursery, Garden Center, and Farm

Supply Stores $11m

322 Paper Manufacturing 500

- 750 FTE 45431 Fuel Dealers 50 FTE

32411 Petroleum Refineries 1500 FTE 48691 Pipeline Transportation of Refined Product 1,500 FTE

32412 Asphalt Paving, Roofing, and Saturated Materials Manufacturing 500 FTE 48821 Support Activities for Rail Transportation $15m

32419 Other Petroleum and Coal Products Manufacturing 500

- 750 FTE 4931 General Warehousing and Storage $27.5m

3251 Basic Chemical Manufacturing 750

- 1000 FTE 56179 Other Services to Buildings and Dwellings $7.5m

3252 Resin and Synthetic Rubber Manufacturing 750

- 1000 FTE 5621 5622 Waste Management $38.5m

92 Public Administration <50,000 residents

served

### 16 Table 2: Program Level and Size by Sector

NAICS Description Program 1 Program 2 Program 3 Total Small Large Small Large Small Large

311 Food Mf g. 1 2 6 5 357 1014 1385

312 1 Beverage Mfg. 0 0 0 0 11 80 91

322 Paper Mfg. 0 1 0 1 5 63 70

324 Petroleum & Coal Products Mfg. 5 8 0 3 21 119 156

325 Chemical Mfg. 32 21 49 27 458 878 1465
313, 321, 326, 327, 33 Textile Mills; Wood Product Mfg; Plastic & Rubber Products

Mfg; Nonmetallic Mineral Product Mfg; and Other Manufacturing 10 33 29 34 39 113 136 384

4246 Chemical & Allied Products Merchant Wholesalers 2 4 0 0 91 236 333

4247 Petroleum & Petroleum Products Merchant Wholesalers 3 11 0 0 69 193 276

11, 12, 15,

42491 ( Ag Chemical Distributors) Crop Production; Animal Production and Aquaculture; Support Activities for Agriculture and Forestry; & Farm Supplies Merchant Wholesalers 9 1 0 0 1809 1848 3667

211 Oil and Gas Ex traction 88 222 13 28 104 286 741

2213 Water , Sewage & 0 1 6 4 12 79 102

10 For description of industry sectors classified under NAICS code 33, see table 1.SBAR Panel Report Risk Management Modernization Rule



### 17 NAICS Description Program 1 Program 2 Program 3 Total Small Large Small Large Small Large Other Systems

221 Utilities 22 16 35 37 80 153 343

493 Warehousing & Storage 11 59 0 0 267 719 1056

423, 424 Merchant Wholesale rs, Durable & Nondurable Goods 0 5 0 0 100 197 302

92 Public Administration 6 9 521 414 451 522 1923

Other 7 34 31 32 48 96 248

Total 219 423 695 590 3996 6619 12542

### 18 

# 4 . LIST OF SMALL ENTITY REPRESENTATIVES

EPA consulted with the Small Business Administration’s Office of Advocacy to develop the list of small entity representatives (SERs) in Table 3. EPA issued a press release inviting self

- nominations by affected small entities to serve as potential SERs. The press release directed interested small entities to a web page where they could indicate their interest in se rving as a SER. EPA launched the website June 19, 2015 and accepted self

- nominations until July 3, 2015

. In addition, EPA sent out an email notification requesting self

- nominations to key external stakeholders, including trade associations, and small entit y representatives in the regulated community that may be impacted by the proposed RMP rule changes. EPA sent the Office of Advocacy a Formal Notification with the suggested list of potential SERs on July 10, 2015 and the Office of Advocacy responded on Jul y 24, 2015.

Table 3: List of Small Entity Representatives

Name Affiliation

1 Lance Crimmins Safety and Risk Manager Glasgow Water Company

2 Kelly K. Willmott AMVAC Chemical Corporation

3 Robert Michaelson Water Systems Manager Manitowoc Public Utilities Water Department

4 Robin Bolte Regulatory Affairs Manager Allied Universal Corporation

5 Mike Woll n er Nebraska Fertilizer & Chemical Association

6 Bradley Ro d gers Industrial Hygienist FutureFuel Chemical Company

7 Mike Shorts Fluid Sealing Association

8 Lyndon Denton Business Development & Public Relations Manager Apache Nitrogen Products, Inc.

9 Thatcher Block
President Ag Cooperative Safety Directors of Iowa

10 Shawn Ward SHE Manager Cornerstone Chemical Company

11 Lowell Randel
Vice President, Government and Legal
Affairs International Association of Refrigerated Warehouses (IARW)

12 Tim Brown
Executive Vice President and Chief Strategy Officer American Refining Company

13 Kelly R. Kane Vice President of Operations Specialty Polymers, Inc.

14 Charles T. Newell
President Minnesota Freezer Warehouse Company

15 Rae C or nmiller Dorothy Kellogg National Rural Electric Cooperative Association

16 Jess McCluer National Grain and Feed Association (NGFA)

17 John Auger
Vice President Brook Warehousing Corporation

18 Mike Gapp Safety Director Kugler Oil CompanySBAR Panel Report Risk Management Modernization Rule



### 19 Name Affiliation

19 Michael Williams Safety and Risk Coordinator Agronomy Services, LLP

20 Matt Hite Gas Processor Association (GPA )

21 Tim Gominiak Maintenance Engineer Manager Perry’s Ice Cream Company

22 Brenda Seg g erman EHS Engineer Hydrite Chemicals Company

23 Emily Lyons International Dairy Foods Association

24 Jennifer Gibson National Association of Chemical Distributors

25 Javaneh Nekoomaram American Coatings Association

26 Mark D r e u x Arent Fox

27 Lara Swett American Fuel and Petrochemical Manufacturers (AFPM)

28 Dan Moss Director, Government Relations Society of Chemical Manufacturers & Affiliates (SOCMA)

29 Edward Flynn Louisiana Chemical Association

30 Karen Haase Senior Director, Safety, Regulatory &
Technical Affairs American Chemistry Council

31 Chris Wheland Assistant Operations Manager, Department of Public Utilities City of Troy

32 Kevin M. Morley Security & Preparedness Program Manager American Water Works Association



# 5 . SUMMARY OF SMALL ENTITY OUTREACH

In 2013 and 2014, as part of the EO 13650 activities, the federal government held a dozen listening sessions, supplemented by two online w ebinars. The locations for listening sessions were selected to reach as many and as diverse stakeholder groups as possible. Many listening sessions were held both during and outside of work hours to maxi mize stakeholder participation. 11

EPA also held several meetings with trade associations, include those r epresenting small businesses, to
discuss the actions the a gency is considering under the EO and how we can partner with industry to improve chemical safety.

EPA conducted a meeting/teleconference with potential SERs on September 22, 2015

. To help potential
SERs prepare for the meeting/teleconference, on September 10, 2015, EPA sent materials to each of the potential SERs via email. A list of the materials shared with the potential SERs during the pre

- P anel outreach meeting is contained in Appendix A. For th e September 22 nd pre

- Panel outreach meeting with the potential SERs, EPA also invited representatives from the Office of Advocacy of the Small Business Administration and the Office of Information and Regulatory Affairs within the Office of Management and Budget. A total of 29 potential SERs and SER helpers participated in the meeting. EPA presented an overview of the SBREFA process, an explanation of the planned rulemaking, and technical background

.

11 For a list of locations and notes for these sessions go to http://www.regulations.gov

, d ocket # DHS

- 2013

- 0075.SBAR Panel Report Risk Management Modernization Rule



### 20 This outreach meeting was held to solicit feedback from the potential SERs on their suggestions for the upcoming rulemaking. EPA asked the potential SERs to provide written comments by October 6, 2015

.
EPA conducted a meetin g/teleconference with SERs on N ovember 19, 2015 . To help SERs prepare for the meeting/teleconference, on November 4, 2015, EPA sent mat erials to each of the SERs via email. A
list of the mate rials shared with SERs during the P anel outreach meeting i s contained in Appendix A. A
total of 25 SERs and SER helpers participated in the meeting. EPA presented an explanation of the planned rulem aking, and technical background. This outreach meeting was held to solicit feedback from the SERs on their suggestions for the upcoming rulemaking. EPA as ked the SERs to provide written comments by December 9, 2015

.
Comments and discussion during the pre

- Panel and Panel outreach meeting s and written comments submitted by the SERs are summarized in section 6 , and included in their entirety as Appendix B

.



# 6

. SUM MARY OF COMMENTS FROM SMALL ENTITY

REPRESENTATIVES

**6.1 Pre**

**- Panel Outreach** 
6.1.1 Summary of Verbal Comments

Th e following is a summary of the discussion and comments by the potential SER s during the pre

- panel outreach meeting.

**General Comments**

One potential SER asked if SBAR panels should be initiated for all actions. EPA responded that SBAR panels are o nly required for rules where EPA cannot certify no S ignificant E conomic I mpact on a
S ubstantial N umber of S mall E ntities ( SISNOSE )

. Another potential SER asked if the written comments w ill be specifically addressed by the P anel . EPA responded that w ritten comments do not get individual formal responses. They are included in the overall package and considered when the P anel provides rec ommendations.

A few potential SERs asked about the process for submitting written comments and whether the comments would be made public. EPA responded that written comments should be e

- mailed to EPA by
October 6 th and that comments would be made public as part of the Panel convening document. However, EPA noted that if there are confidential business information (CBI) concerns, that the potential SER should contact EPA to discuss other methods for submission. EPA asked potential SERs to consider providing comments on what aspects of the proposed provisions work well as well as those they think do
not work well.

One potential SER asked whether a government shutdown would have an impact on the Panel schedule. EPA responded that it would not have an impact on the deadline for submitting written comments, but that it could potentially have an impact on the timeline for the overall panel process.

One potential SER asked for a draft copy of the rule preamble before the next meeting. EPA responded
that we are still drafting the preamble and will not have a copy available to share. 12

12 EPA has not historically shared draft rule preamble with potential SERs during the Panel process.SBAR Panel Report Risk Management Modernization Rule



### 21 **Background on Regulatory Actions**

One potential SER asked how EPA determined that regulatory improvements should be focused on the RMP rule rather than the EPCRA rule. EPA responded that the agency also looked at EPCRA as part of the response to EO 13650. EPA explained that based on information from listening sessions, EPA determined that its efforts should focus on how to assist LEPCs and SERCs to implement existing EPCRA requirements, r ather than pursue a rulemaking effort. EPA further explained that the EPCRA statutory requirements are comprehensive and address requirements for planning, gathering information, and training response personnel. There is no need for EPCRA regulatory change s and instead the focus is on assistance and implementation of the requirements.

Another potential SER commented that facility personnel have requested local fire departments to come to the facility, tour the operations, and determine how to address emerge ncies; however, it is almost impossible to get the locals to participate. The potential SER asked EPA to focus efforts more on communities and less on regulations for small businesses. EPA responded that, as part of the EO 13650 implementation, we looked a t a number of EPCRA and RMP implementation issues. We are not just focusing on the West, TX accident nor are we focused solely on regulations. For EPCRA, EPA realized the issue was not regulatory. The statute has strong provisions to get communities to wor k together to plan for risks. During the EO listening sessions, EPA heard the concern about local emergency planners and responders not coordinating with facility personnel. EPA stated that the agency has also heard the opposite from LEPCs (i.e., that faci lity personnel are not coordinating and working with local emergency planners and responders). EPA further explained that t he coordination activities vary nationwide and are dependent on the community personnel and whether leaders are focused on emergency planning. EPA is looking at finding ways to better facilitate the relationship between communities and facility representatives. EPA solicited feedback on how the potential SERs would recommend getting communities more involved. For RMP, EPA is focusing on priority issues where we believe we can improve chemical safety and those facilities that potentially pose a greater risk of a future accident.

Another potential SER asked EPA to identify which of the regulatory issues were selected as a result of
the Wes t, TX explosion. EPA agreed to address the question as the presenter addresses each issue in detail. Throughout the presentation, as each provision was described, EPA stated:

• The proposed third

- party compliance audit provisions were identified as a result of experience with implementation.

• The proposed incident investigations and root cause analysis provisions were not directly related to the West, TX explosion.

• The proposed local coordination provisions are addressing concerns that EPA was aware of
before the Executive Order.

• The proposed information sharing provisions are addressing concerns EPA heard about in the listening sessions and issues identified as a result of experience with implementation.

**Information on RMP Accidents**

One potential SER asked if EPA noted a decline in the number of accidents since the RMP rule was published. EPA responded that we have seen a slight decrease in the number of accidents over the ten

year period analyzed (2004

- 2013). However, EPA noted that there are many things to consider when assessing whether this decline was the result of the RMP rule. EPA do es not have data to compare to the number of accidents prior to the accident histories collected under the RMP rule.

Another potential SER was confu sed that the percentage of small businesses in each category on slide 18 equaled more than 100% when added together. EPA responded that the percentages are based onSBAR Panel Report Risk Management Modernization Rule



### 22 the number of small businesses in each category. EPA agreed to clarify this point i n the Pa nel outreach
materials.

One potential SER asked if the percentage is based on the number of facilities or the number of companies in each category. The potential SER noted that in the refrigerated warehousing sector, the percentages do not seem to accurate ly reflect the make up of the industry, concluding that the sector has a lot more small businesses than what is shown. The potential SER suggested that EPA revise the presentation to note that the percentage is of facilities in that sector that are part of a small business. Another potential SER echoed the comment and indicated that small businesses are the majority for warehouses in the sector he represents. EPA responded that when looking at the size of entities, it applies the SBA definition that defines small businesses by the size of the firm, not the facility. EPA agreed that additional language explaining the percentages would be helpful to make the table easier to
understand.

**Impact of More Stringent State Requirements**

Another potential SER asked whet her EPA considered the impacts that more stringent state requirements may have on small entities. The potential SER noted that NJ requires all facilities to meet Program 3 requirements (even if they would be eligible for Program 1 under the RMP rule). EPA responded that we looked at the NJ and CA regulations and how their rules impact RMP. For this rule, the options being considered would impact both Program 2 and Program 3 processes (with the exception of one issue that would apply to a subset of Program 3 processes based on NAICS codes). The potential SER later reemphasized his concern that state requirements that are more stringent may make it difficult for some small facilities to comply with the proposed rule.

**Impact of Other Federal Agency Requirements**

One potential SER asked if EPA considered the revised OSHA PSM retail exemption policy when developing the rule issues. 13 The potential SER noted that agricultural facilities would be pushed to Program 3 requirements as a result of the OSHA policy change a nd would be subject to the more stringent requirements. The potential SER also noted that the presentation shows that agricultural distributors currently in Program 2 have had no accidents. EPA responded that we did consider this policy change. EPA already accounted for the change on slides 17 and 18 for the agricultural sector by moving the Program 2 processes information to the Program 3 column.

Another potential SER asked if EPA considered the OSHA chemical concentration reinterpretation. 14 The potential SER further noted concern that this policy change may impact the number of their facilities that are subject to Program 3 requirements. EPA responded that we did not consider this policy because, with a couple of minor exceptions, we believe RMP already co vers most of those facilities that OSHA will
cover in the future. EPA further explained that w e believe that affected facilities are already Program 3 under the current RMP rule. The potential SER noted disagreement with this conclusion and would follow

up

.

**Third**

**- Party Compliance Audits** 

13 See OSHA Interpretation Letter on PSM Retail Exemption Interim Enforcement Policy (July 22, 2015) available at https://www.osha.gov/pls/oshaweb/owadis p.show_document?p_table=INTERPRETATIONS&p_id=29525

.

14 See OSHA Interpretation Letter on Process Safety Management of Highly Hazardous Chemicals and Covered Concentrations of Listed Appendix A Chemicals (June 5, 2015) available at https://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=29411

.SBAR Panel Report Risk Management Modernization Rule



### 23 One potential SER asked if the SER s will be provided the level of details that would be required for third

party audits and what kind of auditor qualifications will be required. EPA responded that we would provide more details and further indicated that the auditor would not be permitted to be associated with the facility. The potential SER further asked that i f he uses a third

- party for modeling of releases and consultation activities, will he be able to pick an auditor from that company. EPA responded that the current proposal would not allow an entity to use an auditor from a previous consulting relationship that extends beyond auditing.

Another potential SER expressed concern with his past experience with bad auditors. The potential SER requested that EPA consider doing the compliance audit instead. EPA responded that the government is not an auditor; however, we are planning to include strong competency requirements for auditors to avoid bad auditors. EPA solicited input on requirements for auditor competency.

Two potential SERs asked if EPA has any data showing that audits done by third

- party audit or s lead to
better results . EPA responded that it does have data showing that independent third

- party audits have better results and that the relevant references will be provided in the P anel outreach materials as well as
in the preamble of the proposed rule.

One potential SER encouraged EPA to be open

- minded when defining criteria for independent auditors. For example, on

- site personnel can get auditing competency qualifications from the American Petroleum Institute ( API ) . The potential SER further noted conc erns with how an independent auditor would gain the necessary knowledge to be able to evaluate the facility processes. The potential SER indicated that a lot of time and effort goes into training current auditors.

Another potential SER expressed concern ov er auditor availability and whether EPA has data on the pool of auditors that may be available. The potential SER further noted that it could be difficult to find an auditor, especially if the facility cannot hire an outside party that they have worked wit h in the past. EPA acknowledged this as an ongoing concern that the agency is considering. However, EPA noted that we do not expect a lot of facilities to need to hire an independent auditor since the requirement only applies
after a n RMP reportable accide nt occurs. EPA further indicated that we know that there are firms that do process safety auditing but we do not have a database or number of auditors available.

One potential SER asked for clarification that the requirement only applies to the first audi t after an accident. EPA confirmed that this is true. Another potential SER asked for clarification that this requirement only applies to the triennial compliance audit and not the PHA update that is required every five years. EPA confirmed that this is tr ue.
Another potential SER asked EPA to consider limiting the types of RMP reportable accidents to further reduce the number of audits that would be required. For example, require third

- party audits only after an accident with offsite impacts. EPA responded that it will consider this approach.

One potential SER asked for clarification as to whether a third

- party audit would be required after a near miss. EPA responded that a near miss would not trigger the requirement to have a third

- party audit.

One potent ial SER stated that EPA Region 7 staff already conduct audits after an accident occurs and asked why there is also a need for a third

- party audit. EPA responded that EPA staff do inspections, not
audits. EPA further noted that the Agency is able to inspect only a small number of facilities each year.

One potential SER suggested that EPA consider the overlap between incident investigation requirements
and third

- party audits, because both are triggered when a n accident occurs. The potential SER suggested that the incident investigation should be completed before a third

- party audit is conducted because the information from the investigation will be considered as part of the audit.SBAR Panel Report Risk Management Modernization Rule



### 24 One potential SER asked how t he new audit requirements would apply to the annual audits required by more stringent state requirements (e.g., New Jersey ). EPA responded that the new requirements would have no effect on NJ state requirements.

**Incident Investigation/Root Cause Analysis**

Many potential SERs expressed concerns over how EPA might define near misses. One potential SER asked if EPA will provide guidance. EPA responded that it does not intend to define near miss in the rule. However, EPA further explained that we will provide g uidance on near misses in the preamble. Another potential SER asked for clarification on whether facilities would be expected to try and differentiate between near misses that will require an incident investigation and those that do not. EPA confirmed that
this is true.

Another potential SER expressed concern that EPA will not define near miss. He stated that his concern is that EPA inspectors will identify what they interpret as near misses that occurred at the facility and cite the facility for failure to conduct an incident investigation. The potential SER explained that different people can look at a near miss in many different ways if it’s left open to interpretation. EPA responded that we recognize this is an issue of concern and have spent a lot of ti me considering how to provide guidance on near misses. EPA noted that it is difficult to develop a definition that can cover all possible near misses that may occur in the universe of RMP facilities.

After asserting that near misses are addressed in other regulatory programs, one potential SER recommended that EPA collaborate with OSHA, DHS, and other agencies so we have consistent guidance on near misses. EPA agreed.

One potential SER asked for clarification on what we mean by a “recognized root cause ana lysis.” The potential SER stated that there are many ways to do a root cause analysis and questioned whether any well accepted methodology that is used to identify the central problem causing an issue would be acceptable or whether EPA will specify a methodology. EPA responded that any established, recognized methodologies that identify the root cause can be used.

Another potential SER asked whether any actions would be required in response to the findings from the root cause analysis. EPA responded that a report would need to be created, which would include the findings and a description of the actions that the facility will need to take to prevent a similar accident in the future. The potential SER further asked if there is a timeframe in which responsive actions are required to be performed. EPA responded that a schedule should be included in the report. Another potential SER asked whether EPA would make a judgement on the acceptability of the timeline included
in the report. EPA respo nded that it would not make such a judgement.

One potential SER asked whether there was a requirement to submit the report, and, if so, how submission should occur. EPA responded that there would be no requirement to submit the report to EPA, but that a fa cility would be required to report the accident that occurred and that they have done the investigation.

One potential SER asked if EPA expects reporting of near misses. EPA responded that there is not a requirement to report near misses under the accident history section of the RMP, but that sources would have to report completion of root cause investigations for incidents, which include accidents and near
misses.

**Safer Alternatives Analysis**

One potential SER asked what the value is in evaluating safer al ternatives without also requiring implementation. EPA responded that, like other parts of the PHA, the purpose is to improve safety and prevent accidents. EPA stated that during the analysis there is the potential for a facility owner or operatorSBAR Panel Report Risk Management Modernization Rule



### 25 to see op portunities that he may choose to implement. The potential SER asked if the idea is to look at better controls, this is a subset of IST and the requirement is not clear. The potential SER indicated that

an IST review is best at the design stage; however th e team that does a PHA r eview are not design engineers; i nstead the facility needs someone knowledgeable on processes and underlying methodology. The potential SER expressed concerns that an IST review may not be a good fit. EPA responded by agreeing to pr ovide more clarity on this issue and that we could revise the presentation to include the range of safer technology and alternatives.

One potential SER indicated that her facility is a b atch toll manufacturer and expressed concern that they may lose business if they need to evaluate safer alternatives for custom formula blends

. The potential SER questioned whether EPA had considered the impacts of this requirement on batch toll
manufacturers. EPA responded that it had not specifically considered the impacts on batch toll manufacturers, but noted that if a safer technology would not apply, then there is no requirement to make changes.

One potential SER asked if EPA has data that shows examples w here IST were implemented and
resulted in safer facilities. EPA responded that w e are looking at such data and will discuss it in the rule preamble or in the RIA , as appropriate

. **Improved Local Coordination**

Many potential SERs expressed frustrations that in some cases, LEPC and local response officials are not active, are unwilling to coordinate with the facility personnel, or are volunteer personnel without the strong technical knowledge needed to understand the facility information. One potential SER not ed that it is difficult for a small business to do some of these things and expressed frustration that facilit ies would be required to do more to comply with the RMP rule because LEPCs do not do their job.

One potential SER asked for clarification on the d efinition of coordination. The potential SER noted past experience on coordination which involved sending a letter to the LEPC with no response. The potential SER expressed concern that a requirement to do anything more than that could be a problem. EPA

re sponded that it would consider this comment . EPA further responded that when the local community is

non

- responsive, the facility would be required to be a responding facility.

Another potential SER asked a follow

- up question expressing concern that a small dealership with only a few employees would have to buy a fire truck if the local responders and fire station didn’t respond to the facility’s attempt to coordinate. The potent ial SER also believed that sending in EPCRA Tier 2 reports serves as coordination because the local responders then know what hazardous materials the facilities have. EPA responded that the facility personnel would only be required to develop an emergency response program in accordance with §68.95. EPA further indicated that coordination with local responders is not a new requirement and should be done as part of the development of the local community emergency plan, which should be available to the public. The potential SER asked for
confirmation that if they made sure their facility was listed in local plan, then they would have no further requirement to go beyond that

. EPA responded that under the proposed rule, regulated facilities with Program 2 or 3 pr ocesses would be required to perform coordination activities annually and document
that coordination.

Many potential SERs asked for clarification on coordination and what would serve as appropriate
documentation.

Another potential SER asked if EPA has cons idered the impact o f these activities on the local responders
and that th e proposed revisions could lead to unfunded mandates. EPA acknowledged that funding is an
issue and that we are trying to address the gap that exists when a facility can't respond and is relying on local responders , but the local responders don’t have the capability to respond. EPA expects that someSBAR Panel Report Risk Management Modernization Rule



### 26 non

- responding facilities will have to develop a response capability. There are a number of ways to do that (establish an on

- site team and follow the requirements of HAZWOPER

, 15 enter into mutual aid agreements; or get a response contractor). EPA expects that this provision and the exercise requirements will be the most expensive provisions of the rule.

One potential SER asked if a facility with only 10 employees with anhydrous ammonia will have to respond to protect the community . EPA responded that this is not the expectation. Instead, the facility personnel will need to develop a plan in accordance wit h §68.95 to have procedures in place to respond at the facility. For example, this would include procedures to make appropriate notifications so that the local response officials can respond to protect the community. EPA further described the requirements of §68.95.

One potential SER asked EPA to provide a break down that shows how many responding facilities and

non

- responding facilities are small businesses. EPA agreed to provide this information in the P anel
outreach materials.

**Emergency Response Exercise s** 
One potential SER expressed confusion about the involvement of the community in the emergency response exercise s in light of statements that the potential SER asserted that EPA had made previously during the presentation that facilit y’s responsibility wo uld be limited to planning for an on

- site response, as opposed to a response throughout the community . EPA clarified that the role of the drills and exercises is to ensure that personnel understand the plan and to provide local response officia ls an opport unity to understand the facility emergency response plan so they know what to do to protect the community. EPA explained that the exercises could involve training with outside responders, but the local responders are not required to participate.

Another potential SER asked what requirement applies to local communities to conduct drills. EPA responded that EPCRA requires the development, review, and exercise of community response plans by
LEPCs.

**Information Sharing**

Many potential S ERs expressed con cern with providing information to LEPCs. They indicated that many
LEPCs are not active and will not utilize the information. One potential SER expressed concern that local responders do not participate in coordination activities or exercises and will not review information that EPA is proposing that facilities submit. Two potential SERs described this as a paper exercise with very little benefit. EPA responded that this provision is an attempt to address concerns from LEPCs that have
indicated that facilit y personnel are not coordinating and sharing information. EPA further responded that it is trying to balance the best way for communities to get the needed information, whil e not over

burdening industry. Another potential SER acknowledged that some LEPCs a re active but EPA should not overwhelm other smaller, volunteer groups with information.

Many potential SER s also expressed concern with the types of information that EPA identified for sharing. They indicated that they do not see t he value in sending inf ormation on compliance audits or inherently safer technologies. Another potential SER expressed concern over sharing IST and incident investigation
information and that this might reveal sensitive information that could be confidential business
information

. The potential SER suggested that the summary information should be kept brief to protect proprietary information. For example, they suggested the investigation report information should be

15 T raining requirements under the OSHA Hazardous Waste Operations and Emergency Resp onse (HAZWOPER) standard (29 CFR 1910.120),SBAR Panel Report Risk Management Modernization Rule



### 27 limited to final outcome of the investigation and provide only a brief summary of the incident, the findings and what is being done to address causes. Another potential SER requested confirmation that the IST information would only be required for a subset of industry codes and that it wouldn’t be a full report. EPA

con firmed this understanding. One potential SER asked if the proposed requirement for data on IST reporting applies only to technologies that were actually implemented . EPA responded that it would apply only to those technologies

.
Potential SERs a lso expressed concern over providing information to local responders or LEPCs who don’t have a strong technical background and that the information may not be well understood. One potential SER asked for clarification on what education level should be cons idered when developing the information. Potential SERs noted that many local officials do not have scientific backgrounds and do not understand the information presented. EPA responded by requesting information from the potential SERs on successful practic es to bridge the communication gap between facilities and responders.

One potential SER suggested, as an alternative, that EPA limit the requirement to a brief summary of the chemicals at the facility so responders understand how to respon d. The potential SER also cautioned that
EPA should consider what is provided to the public to avoid providing too much information that could be misunderstood. The potential SER noted that misunderstood information can bring a lot of unneeded
consternation in the event of an accident. EPA responded that there won’t be any new information provided to the public, highlighting that the requirement focuses instead on providing the same information in a more easily understood format. As to the information being provided to the LEPC, EPA responded that the proposed requirement involves a summary that does not need to be overly technical. A summary report on an accident should focus on what happened and what is being done to prevent re

occurrence.
One potential SER suggested that EPA write the information sharing provisions to allow LEPCs to request the information rather than require it be sent to every LEPC. EPA responded that it would consider this approach.

Another potential SER suggested that the information should only be sen t to LEPCs and not to other responders. The potential SER indicated that it is the LEPC’s obligation to review the information and educate the responders appropriately.

Another potential SER asked for clarification on what EPA means by an “easy format” for making information available to the public. EPA responded that one example may be providing information at a public meeting and that we are open to ideas from the potential SERs.

Another potential SER indicated that it can be difficult and expensive to ma ke technical process information easy to understand, depend ing on the audience. The potential SER further n oted his experience in the 1990s to discuss offsite consequence analysis information with the public resulted in many facilities engaging in an expen sive effort to host public meetings , but that few people attended the meetings.

Many potential SERs asked for clarification on public meetings . One potential SER asked if EPA will provide details on expectations for public meetings, such as the location of the meeting. EPA responded that it would include some guidance in the preamble. P otential SERs expressed concern over a requirement to hold a public meeting 30 days after a n RMP reportable accident, noting that the severity of the accident and size of the business could present a challenge for complying with that timeframe. Potential SERs asked for flexibility on the timing of a public meeting following a n RMP reportable
accident . EPA responded that these are helpful comments, which the agency will consider. One potential SER asked for guidance on the type of notice needed to make the public aware of an upcoming meeting, noting that it is challenging to obtain public participation . Another potential SER asked if the publicSBAR Panel Report Risk Management Modernization Rule



### 28 meeting can be combined with other topics, to which EPA responded yes , it could be combined

. EPA said it is looking for input from others on how their facilities reach out to the public and what successful practi ces could be shared with others.

**Estimated Costs**

One potential SER asked for more information on estimated costs and the data used to derive those

costs. The potential SER also requested clarification on the diversity of facilities considered when
estimati ng the cost of the rule. EPA responded that it is continuing to research the estimated costs, and
that as the estimates are refined, the agency will provide updates during the Panel process . EPA further responded that the current cost estimates are based o n general categories of facilities, such as simple v. complex facilities , and did not evaluate costs for every variety of regulated process. EPA also noted that for all provisions other than safer technologies, the cost analysis was done on a facility basi s, rather than a process basis. EPA seeks feedback on the cost estimates from potential SERs.

One potential SER ask ed EPA to consider costs to those small businesses that would be Program 1 in any other state, but are Program 3 in New Jersey. Another potential SER asked EPA to consider training costs for investigation personnel and costs for third

- party audits such as costs associated with the need to have auditors that are capable and qualified to review a particular process.


### 6.1.2 Summary of Written Comments Below are the potential SERs that submitted written comments following the pre

- panel outreach meeting on September 22, 2015 :

• Agronomy Services LLC

• American Refining Group, Inc.

• Brook Warehousing Systems

• Cornerstone Chemical Company

• FutureFuel Chemical Company

• International Association of Refrigerated Warehouses

• Perry’s Ice Cream Company, with assistance from International Dairy Foods Association

• Kugler Company

• Minnesota Freezer Warehouse Co.

• Allied Universal Corporation, with assistance from National Association of Chemical Distributors

• National Grain and Feed Association

• Nebraska Agri

- Business Association

• Hydrite , with assistance from SOCMA

A copy of these comments is included in Appendix B

. The following is a summary of the written

comments.

**General Comments**

One potential SER stated that the proposed RMP changes would not actually improve safety, reasoning that the rule as it currently stands has not been demonstrated to be deficient. Additionally, the commenter
stated that there is no evidence that the provisions contained in the proposed rule language will reduce the risk of facility accidents. Another potential SER stated that the current RMP rules were sufficient, but encouraged EPA to put more effort into addressing compliance gaps.

Another potential SER described the primary intent of this rulemaking to be the prevention of chemical explosions similar to that of West, TX. The commenter asserted that the proposed rule would not makeSBAR Panel Report Risk Management Modernization Rule



### 29 anyone safer, reasoning, in part, that the incident in West, TX was ammonium nitrate, not anhydrous
ammonia.

One potential SER commented that the proposed rule provisions would place an undue burden on agricultural retail operations, forcing them to either consolidate or close altogether.

One potential SER requested written confirmation that combustible dust will not be addressed by these revisions to the RMP program.

**Information on RMP Accidents**

One potential SER requested to see data that supported EPA’s claim that there has been a slight
increase in the number of accidents over time.

**Impact of More Stringent State Requirements**

One potential SER asserted that the additional emergency exercise requirements are largely irrelevant for facilities located in New Jersey, as the state’s Toxic Catastrophe Prevent ion Act already requires annual
field exercises.

**Impact of Other Federal Agency Requirements**

One potential SER stated that EPA needs to consider how U.S. Department of Homeland Security’s Chemical Facility Anti

- Terrorism Standards may impact the informatio n sharing requirements of the proposed rule. The commenter asserted that these standards state that the confidentiality of Chemical

terrorism Vulnerability Information must be maintained.

One potential SER urged EPA to consider how U.S Department of Transportation’s chemical security plan requirements for shipments that must include site

- specific and location

- specific components may impact the proposed rule. Specifically, the commenter stated that the rule may conflict with these requirements because the rule would require facility’s to release information that is not strictly need to
know.

One potential SER commented that for Food and Drug Administration ( FDA )

- regulated products, all manufacturing processes associated with that product involve FDA app rovals. A safer technologies
alternatives analysis would not be feasible without FDA approval.

**Third**

**- Party Compliance Audits** 

Several potential SER s questioned the impact that this req uirement would have on safety. Several potential SERs questioned the assertion that third

- party auditors are more qualified than owner/operators and their employees that are familiar with the nuances of their chemical processes. One potential SER expressed concern that an independent third

- party auditor would lack knowledge of the subtleties of the process and rely on checklists which would reduce the quality of the audit. In addition, commenters stated that having an audit conducted does not necessarily mean that any of the audit recommendations will be implemented. One pot ential SER asked what evidence EPA has demonstrating that an independent auditor will ensure a safer process and/or fewer accidents.

Several potential SERs asserted that the term “associated” is too expansive and vague for barring auditors from working wit h facilities for which they have another relationship. Commenters said that it is often the case that the best auditors are retired employees who already have detailed knowledge of a facility’s processes. Potential SERs requested additional information on the availability of competent third

party auditors , qualifications that may be required, and the benefits of this provision.SBAR Panel Report Risk Management Modernization Rule



### 30 Several potential SERs expressed concern about the availability of qualified third

- party auditors. One potential SER stated that it would likely be difficult to find a qualified auditor that did not have an association with their company. Another potential SER commented that small businesses would be less able to absorb the significant costs of third

- party audits.

One potential SER s ought clarification as to whether auditors would be prohibited from offering process safety consulting for firms they’ve audited. The commenter cautioned that if the prohibition did not exist then the requirement could create an incentive for third

- party a uditors to find shortcomings that they could
later offer to fix.

**Incident Investigation/Root Cause Analysis**

Several potential SERs commented that the rule language used to describe the root cause analysis implies a specific type of investigative methodolo gy that must be used. The commenters opposed this approach, reasoning that there are numerous types of methodologies that could be acceptable depending on the facility type and the type of incident. The commenters recommended including language that
would clarify that the investigation can be conducted with “an appropriate methodology,” which the commenters asserted is the approach in the PHA requirements.

One commenter also expressed concerns over the time and effort necessary to complete a root cause analysis, noting that most facilities in his industry only have 4

- 5 employees and this would be difficult to complete with so few employees and take away from operational responsibilities. Another potential SER expressed concern over the need to train exis ting employees or hire outside experts to conduct this analysis.

Several potential SERs also raised concerns over the ambiguity of the term “near miss.” The commenters stated that it is difficult to assess the full impact of the rule without understanding how broadly it would apply and that EPA should coordinate with other agencies such as OSHA to define this term

. **Safer Alternatives Analysis (SAA)** 

One potential SER stated that there are staffing issues related to the SAA requirements. They stated that

a S AA serves more of a process design function and must happen early in a facility’s development. The commenter asserted that available staff at a later stage in operations would include primarily engineering staff, not qualified to conduct an analysis of des ign. This potential SER raised a number of questions that they would like EPA to address:

• How do you measure whether one process is safer than another?

• Does EPA intend to limit the operating life of a product to onsite processing for a safer
alternatives r eview?

• Does EPA have any data to demonstrate that safer alternatives reviews make a facility safer?

• What is the value of requiring a safer alternatives review but not implementing it?

• What is a near miss?

• Have EPA and OSHA agreed upon a definition for near miss?

Other potential SERs also felt that a SAA is best utilized during the design phase and not during a PHA.

Another potential SER raised liability concerns regarding the SAA , stating that decisions not to implement due to feasibility could open a facil ity up to litigation.

One potential SER requested clarification on the scope of safer alternatives and indicated that if EPA means to require a shift to another product then that would be difficult because the demand by their customers is for anhydrous amm onia for growing crops.SBAR Panel Report Risk Management Modernization Rule



### 31 A potential SER pointed out that a mandatory IST analysis was considered as part of the 1996 RMP rulemaking. The commenter noted that, at that time, EPA concluded that an IST analysis would not produce additional benefits because a PHA already presents opportunities for continuous improvement.

**Improved Local Coordination**

Many potential SERs questioned what exactly was required by the term “coordination” and raised concerns about the staffing abilities of some LEPCs.

One potential SER questioned how coordination with the LEPC would affect a facility’s standing as responding or non

- responding.

One potential SER expressed concern that the requirement may result in additional small businesses having to become responders, which the comm enter described as an extremely costly and difficult process. The commenter requested that EPA provide cost estimate data for the costs associated with transitioning from a non

- responding facility to a responding facility.

Another potential SER described their coordination efforts and indicated that they do not expect any improvements as a result of this proposed change.

**Emergency Response Exercises**

Several potential SERs asserted that local emergency responders may not have the staff or time to participat e in exercises. They stated that industry would likely be found non

- compliant with the regulation because local emergency responders would be unable to participate. Furthermore, one SER questioned how many requests for local emergency responder participati on in exercises, even if routinely ignored, would equate to compliance under this provision.

Another potential SER described challenges with working with volunteer fire departments, indicating that there is high turnover and it is difficult to coordinate t raining with volunteer departments due to other family and full

- time work obligations.

One potential SER stated that this provision placed too much emphasis on what facilities should be doing and not enough emphasis on the additional assistance needed by t he local fire departments or other local responders.

**Information Sharing**

Several potential SERs asserted that there was little value in inundating LEPCs with information that is unlikely to improve their ability to be effective. Additionally, these comment ers stated that the scope of the information being released could be counterproductive to safety in that it may be useful to entities with an interest in criminal activity and raises security concerns.

Several potential SERs stated that the requirement of an “easy format” needed to be defined with sufficient guidance.

One potential SER raised concerns about the amount of time involved in providing the extent of information mandated and the value it would provide. They recommended narrowing the information t o a more usable set of information, possibly including one page summaries of each significant chemical hazard during a fire.

Several potential SERs commented that public meetings had already been required in 1999 as part of the Chemical Safety Information, Site Security and Fuels Regulatory Relief Act ( CSISSFRRA ) and were not
successful. The commenters stated that the public meetings were viewed as very expensive and had low
attendance.SBAR Panel Report Risk Management Modernization Rule



### 32 One potential SER questioned what specifically is involved in a public meeting and what had to be
communicated. The commenter stated that small businesses may require more than 30 days to conduct such a meeting depending on the severity of the incident and the complexity of the information that must
be communicated.

**Estimated Costs** 

One potential SER commented that EPA has significantly underestimated the cost of a third

- party audit. The commenter stated that a typical audit in which representative sampling is used costs between $125,000 and $150,000. The commenter asserted tha t, if EPA is considering mandating that all processes are audited, costs will run higher still.

One potential SER estimated that the cost of training a third

- party auditor on unique aspects of a facility would be approximately $25,000.

One potential SER estimated that the cost for developing a response team would be $12,000 annually in training for two facilities and equipment costs of $3,000/person.

One potential SER commented that EPA underestimated the costs associated wi th a root cause investigation. The commenter estimated that a comprehensive investigation into an RMP incident costs approximately $15,000 and could be much higher.

One potential SER expressed concern regarding the calculations of the cost estimates because some

states

– in this instanc e New Jersey

– require that any facility registered under th e RMP program be a P3 facility. The commenter requested to see a breakdown of costs by geographical region, industry type, and level categories.



### 6.1.3 Meeting Follow

- Up

After the pre

- panel outreach meeting, EPA updated panel outreach materials to satisfy several requests for clarification, additional information, and supporting data, pertaining to all provisions and the cost estimates for each provision.



## 6.2 Panel Outrea **ch**

6.2.1 Summary of Verbal Comments

The following is a summary of the discussion and comments by the SERs during the Panel outreach meeting.

**Third**

**- Party Compliance Audits** 

One SER asked how EPA came up with the “three years before and three years after ” limitations on an auditor participating in a third

- party compliance audit. EPA responded that the agency looked at a number
of Federal and State third

- party audit programs and found that most had a one to five year timeframe for
auditor involvement with t he facility. EPA then stated that we are proposing a three

- year period, but taking comment on whether another timeframe is better. The same SER asked whether EPA had a plan to
ensure that third

- party auditors do not pose a terrorism concern or raise busine ss confidentiality issues for the facilities that they audit. EPA responded that we have not fully considered these issues yet.

The SER also asked EPA to describe the value of excluding retired employees from performing audits.
EPA clarified that retired e mployees are only excluded if they are still participating in the facility in some way (e.g., a financial attachment through a corporate retirement plan) and explained that there is a concern if the employee would have a potential gain or loss associated w ith a good or bad audit. Finally, the SER concluded that it disagreed with EPA’s assumption that independent auditors may provide betterSBAR Panel Report Risk Management Modernization Rule



### 33 audits than auditors with experience with the facility. EPA expressed appreciat ion for these comments
and expressed a d esire to seek further comments, including from SERs and all stakeholders, on additional flexibility for independence and competency requirements and the timeframe related to auditor participation restrictions.

Another SER commented that retirees with finan cial connections to a facility would have an incentive to make sure that the facility is very safe because that would be in the interest in their long

- term benefit, concluding that EPA’s assumption should be reversed. EPA responded that it would make note of that

comment.

One SER requested clarification for the Professional Engineer ( PE ) requirement, stating that neither the existing RMP program nor other State programs require a PE on the auditing team. Another SER endorsed looking at other credentials ove r the PE. EPA responded that the agency was trying to find some independent accreditation that we could use for process safety inspections and that a PE has a professional ethics requirement

, however there is no existing accreditation for process safety. E PA stated
that we would appreciate further comment on this issue.

After echoing the comments related to the absence of a demonstrable benefit of having audits that are independent as compared to associated auditors, another SER raised concerns about the availability of independent auditors, especially in rural areas. A f ew SERs emphasized that in rural areas this will be a significant burden. Another commenter agreed with this concern and noted that the PE requirement will cause additional problems for availability. Another SER commented that this is going to be very

expe nsive and noted that the costs will be even higher where you have to bring to a remote area an independent auditor that satisfies the proposed criteria, including the PE requirement. EPA responded
that we are aware of these concerns and noted that there wi ll not be many of these audits required annually because they are tied to RMP reportable accidents , of which there are less than 150 annually

. One SER asked whether EPA would consider having a certified hazardous material manager in place of a
PE on a thir d

- party compliance audit. EPA responded that SERs should share options for EPA to
consider in the written comments.

One SER asked if EPA is planning on providing guidance on reasonable conflict of interest statements, explaining that he has seen very compl ex and very simple variations. EPA responded that guidance will be provided. EPA later indicated that we would propose compliance dates that would allow sufficient time the agency to produce guidance documents after publication of the rule

.
A few SERs sought clarification as to whether individuals are restricted by past relationships or whether entire companies are restricted. EPA clarified that we expect that entire companies would be restricted, but urged SERs to provide comments if they recommend an alternative. A SER stated that it seems like a significant burden for a small business to survey every employee at a large firm involved in auditing to determine that nobody at the firm is a retiree or otherwise associated with the facility. EPA responded that

we expect that an auditing company will know which of its employees had been previously associated with the facility.

A SER asked whether EPA intends on requiring third

- party audits for all compliance audits or only after RMP reportable incidents. EPA confirmed the intention to require third

- party audits only after RMP reportable incidents. The SER then asked whether EPA would be able to verify before the audit takes place whether the auditor meets the third

- party auditor requirements so that a facilit y does not get penalized after the audit is performed if they were unaware at that time that the auditor failed to meet all required criteria. EPA responded that there would potentially be an enforcement action if the agency
found out after the audit that the auditor did not meet the requirements. A few SERs followed

- up by noting that it is the facility’s burden to ensure that the auditor criteria are met. Finally, a SER asked whether EPASBAR Panel Report Risk Management Modernization Rule



### 34 was going to set industry specific criteria for third

- party auditors. EPA responded that there would not be industry specific criteria, but that there would be general criteria for independence and competency that would apply to all sectors

. **Incident Investigations & Root Cause Analysis**

A SER commented that people might thi nk that “catastrophic release” is more severe than “reportable,” and asked whether these terms actually have the same meaning in the rule. EPA responded that the meanings are the same. SBA expressed agreement with the SER and recommended that the terminolo gy be changed. EPA noted that one reason that “catastrophic release” is used is to link the requirement back to the language of the CAA. Panel members agreed to discuss this issue further outside of the meeting.

A SER stated that the inclusion of near misses in the requirement would dramatically increase the incident investigation reporting requirement. EPA responded that, despite the existing requirement to investigate near misses, most facilities are not performing these investigations and EPA wants t hem to be performed. The SER stated that EPA should consider working harder at enforcing existing requirements rather than creating new requirements.

Another SER asked if there was any additional liability imposed for over reporting of incidents in RMP

acc ident history now considered as near misses. EPA responded that this question demonstrates why the clarification is needed, that there are no threshold quantities for defining reportable releases and that some facilities are confusing EPCRA release reporti ng requirements with those under the RMP

. EPA clarified that if there is a release that meets an impact criterion, then an investigation is required.

A SER asked if the recommendations in an incident investigation report must be implemented. EPA responded that the criteria for recommendations must be resolved, but that implementation is not required. SBA asked for clarification on the meaning of the term “ resolve. ” EPA stated that it can include implementing the recommendation, implementing an alternative, or not implementing because it is not feasible to implement. The facility owner or operator would be required to document the resolution.

A SER asked how the facility can perform a root cause analysis if the subject machinery blew up. EPA stated that it would provide guidance on performing root cause analyses. In response, another SER asked when guidance would be provided. EPA noted that the agency would propose compliance dates to allow sufficient time for facility o wners and operators to comply and for the agency to produce guidance documents after publication of the rule

.
Another SER asked whether a shelter

- in

- place order would be consider ed a catastrophic release. EPA responded that the current proposal specifies that a shelter

- in

- place order would be considered a catastrophic release. The SER also asked why the existing rule language relating to the scope of the investigation is not adequ ate. EPA responded that root cause is an industry term that is more descriptive and better understood than the existing “contributing factors” language.

A SER sought clarification on the process upset examples for near misses, including leak ing valves and vapor release alarms. Specifically, the commenter questioned whether EPA had considered false alarms. Additionally, the SER asked whether a conservation vent would be considered activation of a release device. EPA responded that we would appreciate additio nal examples of what should be considered to be
a near miss.

Finally, a SER commented that these investigations seem to be duplicative of the purposes of third

- party
audits. The commenter asserted tha t the root cause analysis would be more effective than the third

- party
audit. EPA stated that third

- party audits are intended to cover a broader range of the RMP requirements, and incident investigations look at a specific accident and its cause.

**Safer Alte rnatives Analysis** SBAR Panel Report Risk Management Modernization Rule



### 35 SBA requested clarification as to whether this covers a narrower universe of fa cilities than all of Program
3. EPA clarified that this requirement is applicable to only three NAICS codes that have Program 3

processes

. A SER questioned why EPA had selected the PHA as the mec hanism for incorporating SAA

. The SER also questioned what materials, other than CCPS, EPA is using as t he basis for this requirement. EPA responded that the PHA seemed to be the best fit because it involves a fundamenta l analysis to ide ntify changes to your process. EPA further stated that the PHA already considers certain enhancements to process control (e.g., engineering controls) and this new requirement will now require that safer alternatives, including inherently s af er technologies

, be considered. EPA noted that we think CCPS has great guidance and that th eir guidance will be a centerpiece of EPA’s guidance. EPA also suggested that SERs provide information about other methodologies in their written comments.

A SER noted that many of its members engage heavily in toll or contract manufacturing and asked how the proposed requirement would apply t o a company in that situation. EPA stated that we expect the

propose d provision would apply to toll manufacturers and that t hey would need to understand the process that they are involved in enough to consider safer alternatives.

**Local Coordination**

A SER expressed concern about how companies in remote areas are supposed to comply if a well

functioning LEPC does not exist. EPA r esponded that companies should consider whether there are other response entities available (e.g., a local fire department) to coordi nate with other than the LEPC.

SBA noted that problems with compliance should not necessarily be dealt w ith by adding new r egulations.

A SER asked how a small business was su pposed to ensure coordination. EPA responded that the requirement would be that the facility owner or operator should reach out to the LEPC to coordinate response activities , but if the LEPC or other response entities do not exist or are not capable of responding to an incident , then the facility would have to become a responding facility.

A SER asked EPA to confirm that it is their opinion that this is not a new requirement. EPA responded
th at this is an existing requirement under the CAA. A SER asked why not enforce existing EPCRA requirements instead of creating additional requirements under RMP. EPA responded that the need for facility coordination with local response agencies is not just an EPCRA requirement, it is also a current RMP requirement. If a fire department will not respond, then the facility must ensure a response. EPA is clarifying the current obligation. EPA is also working on getting better participation from LEPCs for
EPCRA requirements. EPA notes that LEPCs have complained that some facilities are not coordinating with them and are only reporting such coordination on their RMP.

A SER asked if EPA had an idea of how many of the non

- responding facilities would have to become

r esponding facilit ies . EPA responded that the agency has an idea, but that it is complicated. For purposes of the economic analysis, we are looking at a range of costs for currently non

- responding facilities who do
not have an active public h az ardous mat eri als (hazmat) team within their county

. 16 EPA noted that there could be several thousand that would have to make some change to their capabilities in response to this requirement.

**Emergency Response Exercises**

16 EPA expects that hazmat teams will have the capability to respond to accidental releases at RMP

- regulated facilities.SBAR Panel Report Risk Management Modernization Rule



### 36 No comments were provided on this issue at the Panel outreach meeting

. Other comments on this issue are included in other sections of this panel report.

**Information Sharing**

A SER asked whether the agency has any information on the history of public meetings other than those following an incident, noti ng that their impression is that these meetings have not been terribly productive
without a specific reason for meeting. EPA responded that there was a one

- time public meeting requirement for RMP facilities after passage of CSISSFRRA

. SBA noted that it is typical for people to ask for more information, but commented that it would be helpful to see data on who has actually attended these types of meetings in the past, including records about attendance and fre quency of these public

events. EPA responded that we do have some information, but that it would be helpful for SERs to provide input based on their past experience on this issue . EPA requested SERs comment s on the appropriate trigger for a meeting and whether there are other alternative approaches (e.g. , facilities attending LEPC meetings that are focused on talking g enerally about risk and emergency response). EPA also noted that the agency did talk to people all around the country in a number of meetings in which people requested access to more informa tion, including having more public meetings.

A SER asked whether the people requesting this information know about easily accessible information

now provided on the Internet and wheth er they are actually using it , such as the Right

- to

- Know Network

. EPA responded that we do not have that information but EPA requested input from SERs about forms of outreach (social media, Internet sites, etc.) that they have successfully used for public outreach

. Noting that EPA is focused on public

- right

- to

- know, a SE R asked whether DHS has expressed any
concerns about LEPCs’ abilit y to protect this information. EPA stated that it always has and conti nues to work closely with DHS. EPA also stated that it is working to strike a balance between getting information

to the public and public security. DHS agreed with EPA’s response and stated that DHS fully supports information sharing wi th LEPCs and first responders. In response, a SER asked how DHS feels about providing t his information to the public. EPA responded that th e proposed requirements do not require disclosure of new information to the public, and that the information being disclosed to the public is different than that being disclosed to LEPCs.

**Costs**

Third

- party compliance audits

SBA asked for an explanation of the base costs associated with third

- party compliance audits. EPA responded that these are all incremental costs, and clarified that base costs for existing compliance
audits are not included. In relation to this provision and other provisions, SBA and SER s requested that EPA provide the original economic analysis from the 199 2 OSHA PSM and 1996 EPA RMP rule on which these incremental costs would be added. These commenters also requested that EPA combine the economic analyses performed for these two rules. EPA stated that it would provide copies of the RIAs, but that it would be unlikely that EPA could provide that combined data in time for SERs to consider this
material for written comments.

SBA and a few SERs asked for clarification on the definition of fa cility types. For example, a SER asked who is in small government versus large government. EPA clarified how the facility types were defined, including specifying that the small and large government categories are based on the SBA definitions that
relate t o the size of population served by the government entity.

Incident investigations & root cause analysisSBAR Panel Report Risk Management Modernization Rule



### 37 A SER questioned the assumption that incident investigations would not involve managers. EPA responded that these are incremental costs and that manager s are included in the base costs that are not
included in this assessment.

Another SER asked whether an engineer would be required. EPA responded that the estimated costs should not be interpreted as specifying the regulatory requirements. Instead, EPA sta ted that the costs are based on an example of what a typical facility might do in response to the requirements. An engineer is not an explicit requirement.

Safer alternatives analysis

A SER asked whether this cost estimate was based on a typical sco pe of w ork involved in a n SAA. EPA responded yes. The SER asked if that involves a life

- cycle type analysis where you are looking at waste disposal costs and transportation. EPA clarified that these costs do not include implementation of safer alternatives, but i t does include a labor model that was adapted from a PHA labor model by consultants that are involved in performing these kinds of analyses. SBA then asked for details about the scope of work described to the consultants when estimating these costs. EPA st ated that some of the people who
created the labor model up on which the SAA costs were estimated

, helped write the CCPS book. 17

A SER asked if it is assumed that costs are the same for a new process as for a five

- year revalidation of a
PHA. EPA confirmed th is assumption.

Local coordination

No comments were provided on the cost information on this issue at this meeting

. New responders

A SER asked whether EPA considered including costs for fire trucks. EPA responded that purchasing a
fire truck will not happen often, and those facilities (e.g., petrochemical companies) that are likely to do
this are already typically responders. The same SER questioned whether this requirement creates an incentive for fire fighters to start offloading responsibility on the facilities if they see that as an option. EPA responded that we do not think this is likely, but welcomed additional informati on on the likelihood of this

occur ring

.
Another SER asked whether the estimated costs included insurance costs. EPA stated that this was a good comment and that insuran ce costs were not yet included.

Exercises

No comments were provided on the cost information on this issue at this meeting

. Information sharing

A SER asked whether EPA had included costs for advertising for the public meetings. EPA responded that EPA did consider these costs, clarifying that these costs are included through la bor time.

**Benefits**

SBA asked which of the proposed changes are likely to have the greatest benefits, including most likely to prevent accidents and why. EPA responded that the three prevention program

- related provisions are most likely to help prevent accidents.

17 EPA was referring to CCPS. 2009. Inherently Safer Chemical Processes: A Life Cycle Approach, 2 nd ed. American Institute of Chemical Engineers, CCPS. New York, Wiley.SBAR Panel Report Risk Management Modernization Rule



### 38 SBA also questioned the benefits associated with third

- party audits and requested tangible evidence (e.g., academic studies) demonstrating the value added by this provision. EPA responded that we already gave the argument that if a facility had an audit and a subsequent accident, then the initial audit was not necessarily sufficient. EPA asserted that

, in that scenario, it would be helpful to have a fresh set of eyes to perform the next audit. SBA responded that an audit prior to an accident does not necessarily indicate
that the audit failed.

A SER noted that the vast majority of costs are associated with employees and on

- site deaths, and questioned how benefits will be allocated between EPA and OSHA for the revisions to the RMP rule and
the PSM rule. EPA responded that the two agencies are working together and that benefits accounted for
in whichever rule is finalized first will not be included in the other.

SBA also asked if it is possible to show the benefits by firm size and NAICS codes. EPA r esponded that it is possible but not trivial, and noted that the agency would not be able to provide this information in time for written comments from the SERs. As an alternative, SBA requested that EPA provide the source data
for how the monetized benefi ts were derived. EPA responded that this information would equate to an advanced copy of the RIA, which the agency is not prepared to provide.


### 6.2.2 Summary of Written Comments

Below are the SERs that submitted written comments following the Panel outreach meeting on November 19, 2015:

• American Refining Group, Inc.

• City of Troy, N.Y. Department of Public Utilities

• Cornerstone Chemical Company

• FutureFuel Chemical Company

• Gas Processors Association

• Glasgow Water Company

• Hydrite Chemical Company

• International Association of Refrigerated Warehouses

• International Dairy Foods Association/Perry’s Ice Cream Company

• Kugler Oil Company

• Minnesota Freezer Warehouse Company

• National Association of Chemical Distributors/Allied Universal Corporation

• National Rural Electric Cooperative Association

• Nebraska Fertilizer & Chemical Association

A copy of these comments is included in Appendix B. The following is a summary of the written

comments.

**General Comments**

A few SERs commented that the existing RMP rule is adequate to protect human health and the environment, and making the requirements more burdensome and less flexible will not enhance process safety. Other SERs stated that this rule seems to focus primarily on correcting problems after they occur,
rather than on more effective enforcement of existing regulations to ensure accident prevention. One SER noted that the proposed requirements apply to facilities regardless of their potential for offsite community impacts and suggests that use of risk tiering or ranking to ap ply requirements ( i.e., third

- party audits and root cause analysis) could significantly reduce undue burden on facilities where risk is low. One SER disagreed with EPA’s stance that this rule “clarifies” existing rules, arguing that redefining “catastrophi c release” to be the same as a reportable incident and expecting facilities to have the capability to respondSBAR Panel Report Risk Management Modernization Rule



### 39 to fires itself in the event the local fire department is unwilling or unable to respond are new requirements that go far beyond clarifying existi ng requirements.

A SER expressed disappointment that costs and benefits of the proposed rule have not been presented in a clear, rule

- element

- by

- rule

- element manner, making it difficult to assess the accuracy of each
modification. Another SER commented tha t EPA and OSHA must ensure that the regulatory impact analyses of the RMP rule and the PSM rule do not double count costs and benefits. The SER stated that costs avoided by preventing harm to employees should be assigned to the PSM rule. One SER requested that exemptions be made for locations that just “store” a product on the list of chemicals because they believe that several components of the provisions target a “process.”

**Third**

**- Party Compliance Audits** 

SERs questioned the assertion that third

- party audit ors are more qualified or objective than owner/operators and their employees that are familiar with the nuances of their chemical processes. One
SER offered that E PA and OSHA should interview individual potential auditors to question their competency instead of requiring they be ‘independent’ of the facility. One SER urged EPA to approve
third

- party auditors based on technical and other qualifications which would provide a list of acceptable auditors for industry to use. SERs questioned the scope of th e auditing requirement triggered by an
incident. SERs stated that conducting a full audit after a reportable incident

— as opposed to just investigating t he cause of the incident

— would not be the best use of resources. The SERs said that re

auditing elements unrelated to the incident would not result in incident reduction.

Several SERs asserted that the term “associated” is too expansive and vague for barring auditors from working with facilities for which they have another relationship. SERs said that it is often the case that the best auditors are retired employees

, former employees, employees who work at a sister facility, or employees who work for a parent enterprise who already have detailed knowledge of a facility’s

processes. One SER stated that if reti rees or other former employees receiving benefits cannot perform
third

- party audits, then EPA needs to clearly define what functi on a retiree/former employee may have within another company. One SER requested that EPA consider the impact of the exclusion a s auditors
who are retired employees participat ing in a corporate retirement plan for municipally owned utilities, because these facilities employees participate in a state

- managed retirement plan that includes not only water treatment operators, but OSHA and environmental inspectors, police officers, fire fighters and all other state employees as well. SERs expressed concern that preventing associated consulting firms from performing audits could even further limit the number of knowledgeable auditors avai lable. One SER suggested EPA consider revising the criteria to be similar to the Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) provision for third

- party audits in 30 CFR 250.1920(a) to require only the individual leadin g the audit team be independent. Another SER said that applying the independence requirement to an entire auditing firm, rather than the individual auditor, is impractical. Additionally, this SER commented that EPA does not have the statutory authority to limit the rights of an individual auditor from seeking employment from a facility where he conducted an audit. One SER stated that the vast majority of excellent auditors work for companies that provide multiple services such as employee training, engineer ing services and a wide variety of process safety management services and
that EPA ’s proposal would bar these auditors or deny access to their other valuable engineering and process safety services. Another SER stated that third

- party audits being proposed do not present a big business opportunity at only 150 RMP reportable accident per year and circumstances that would disqualify a company would likely result in most of the leading firms knowledgeable about process safety declining to conduct those audits. The SER further indicated that any firms conducting compliance auditors would likely lose their experience because they would not be doing consulting or hiring retirees who are knowledgeable. One SER stated that definitions of “competent” and “independent” are in conflictSBAR Panel Report Risk Management Modernization Rule



### 40 with each other because competency requires experience with a process that can only be gained by working in a facility, yet the proposal disqualifies an auditor from working in a facility for three years.

Several SERs asserted that third

- party audits would cost even more than EPA is estimating. Several SERs stated the independent third

- party requirement would be burdensome to small businesses and rural
facilities. A SER said t hat requiring all compliance audits be independent third

- party audits will substantially increase compliance costs for small businesses, and recommended revising the rule language to ensure that this requirement is not implied. One SER estimated the cost a nd time to find a
third

- party auditor could easily be well over $3500 and the limitations in the proposal could drive the cost to over $10,000. One SER stated that compliance costs displayed by EPA are roughly $10,000

- 15,000 too low. One SER suggested that to address concerns of the limited availability of independent and competent third

- party auditors, an alternative to EPA’s current proposal might be to set up an industry sharing option (similar to OSHA’s VPP auditors that use qualified personnel from oth er regulated facilities or company employees but from a different plant) that could be used in lieu of third

- party for

- profit auditing firms. The SER also suggested that EPA could provide a training program that an internal or
external auditor would be eli gible to complete to become a certified auditor.

SERs expressed concern about the availability of qualified third

- party auditors. One SER stated that it would likely be difficult to find a qualified auditor in the Midwest with knowledge of an anhydrous amm onia facility that did not have an association with their company. A SER requested the third

- party requirement be more flexible, if deemed necessary, and suggested small businesses should be allowed to use any qualified auditor or that third

- party audits b e dictated by EPA only on a case

- by

- case basis

. One SER stated that the provision that disqualifies a firm from being an auditor if a member of the audited facility’s company has a “Representative on the Board of Directors for a consultant firm” would not allow them to use their industry most notable audit firm, Respo nsibleAg, because their company does business with four of the companies represented on this [ResponsibleAg’s] board of directors.

SERs also expressed concern over the requirement that third

- pa rty auditors be certified Professional Engineers (PE). They questioned whether this qualification makes them more qualified to perform audits,
and said that requiring a PE perform the audit would further limit the pool of qualified auditors. One SER
noted that while a PE may be of value when looking at process safety information or management of chang e, the bulk of a compliance audit focuses on other elements (hazard assessment, incident investigation, employee involvement, training, emergency planning and response, contractor management, hot work and day

- to

- day program implementation and maintenance) that are the purview of the safety and environmental professions, rather than the engineer. This SER also pointed out that there are many professional certific ations other than a PE that require the holder to follow a code of ethics as well as require continuing education. SERs noted that others who might be qualified RMP auditors could be a chemist, chemical engineer , Certified Safety Professional (CSP), Certif ied Industrial Hygienist (CIH), Certified Fire Protection Specialist (CFPS), Certified Hazardou s Materials Manager (CHMM), Certified Professional Environmental Auditor (CPEA) , Dangerous Goods Safety Advisor (DGSA) or Certified Process Safety Auditor (CPSA)

. One SER noted that a PE license is a very general credential and asked if the PE would need to be licensed in chemical engineering and if not, what other licensure areas would apply. Another SER pointed out that many EPA inspectors are not PEs.

One SER s tated that the third

- party audit proposal does not address a real problem and noted that data from the Petroleum Refinery PSM National Emphasis Program (NEP) suggests that there is no significant problem with audits or auditors because less than 5% of the 1088 alleged violations issued during the NEP involved compliance auditing issues. One SER stated that estimated costs of an independent audit is far higher than EPA has estimated and that for a refinery a team of three competent au ditors using representat ive sampling would charge from $125

- 150K to conduct an RMP audit. One SER believes that EPA is considering a different method for conducting an audit in which all elements of the RMP rule mustSBAR Panel Report Risk Management Modernization Rule



### 41 be audited in all covered processes and that this would triple the estimated cost for a competent audit and will like reduce the quality of the audits. One SER questioned some of EPA’s cost estimates for small versus large government entiti es and why attorney hours for government entities would not be equivalent
for t hose estimated for priv ate entities.

One SER asked if the auditor and member of the audit team will be required to have a PE license in the

state of the facility being audited and who would have the responsibility of verifying that the PE license is
valid and up to date. This SER was also concerned that the proposal does not address proper treatment of confidential information by third

- party auditors. One SER requested that EPA provide a sample conflict
of interest statement or better outline the criteria t o be included in the statement.

**Incident Investigation/Root Cause Analysis**

A few SERs said that the rule should not prescribe root cause methodology as the only method av ailable for investigating incidents. One SER argued that this methodology is not inher ently better than other methodologies, and in fact could reduce the safety benefit of the investigation because of its focus on finding a management system failure. Another SER commented that 40 CFR 68.60 and 40 CFR 68.81(c)(5), (d), and (e) already addres s most of the “root cause analysis” requirements, and asked whether a facility would simply need to prepare a second copy of the incident investigation report with th e title, “root cause analysis.”

A few SERs discussed the burden associated with root cause analysis. One SER stated that requiring root cause analysis could have a significant burden on small businesses because few of them have employees trained in th is method. Another SER said that the Agency’s assumption that managers will have zero added hours due to a root cause analysis is inaccurate, since managers will be involved in the support and review of the investigation. One SER requests that EPA develop criteria f or allowing an
extension of the 12

- month timeframe for completing an investigation report as well as a timeframe for an implementing agency to respond to an extension request noting that procedures and guidelines could be developed similar to those request ing time extensions under the Clean Air Act section 608 Ref rigeration Recycling Rule.

A SER argued that the new definitions of “catastrophic release” and “near miss” significantly increase the scope of the RMP rule. The SER said that this broader scope now includes incidents that do not present a danger to public health or the environment. Another SER argued that “catastrophic release” should only be applied to incidents involving loss of life, serious injury, or significant dam age. Another SER believes
tha t the existing definition of catastrophic release is something worse than a n RMP reportable accident
because a catastrophe is viewed by the regulated community as a terrible disaster or momentous tragic event, thus the proposed rule would expand the scope of investigations, not clarify them, and a shelter

- in

place would then trigger an investigation, including a root cause analysis. Another SER believes that a reportable release does not result in deaths, injuries, evacuations, she lterin g

- in

- place, property damage or environmental damage, but that an accident is only reportable when a regulatory set amount of chemical is released over a certain time period. This SER also supports EPA’s coordination with OSHA
on definition of near m iss, but does not believe t hat OSHA’s definition complies with EPA’s statutory authority because OSHA‘s definition from its Accident Investigation Fact Sheet, defines a near miss as “incidents where no property was damaged and no personal injury was sustai ned, but where, give a slig ht shift in time or position, damage and/or injury easily could have occurred.”

Several SERs commented that there is no clear definition of “near miss” in the proposed regulation. They said that the examples provided are so broad that facilities could incu r significant burden investigating them, with little relative value achieved. Another SER encouraged EPA to determine the number of
events that would now be considered near misses and base the cost impacts on this number of investigations. The SER also ask ed EPA to provide further guidance regarding near misses, includingSBAR Panel Report Risk Management Modernization Rule



### 42 whether the activation of a relief valve to a closed fuel gas recovery system or activation of emergency shutdown procedures as part of a planned outage or testing of the system would cons titute RMP events. Two SERs argued that relief devices, used as intended, should not be considered a failure or “near miss” and investigated with a root cause analysis. Another SER suggested that “near miss” should be defined as the release of any chemical less than a reportable amount. Another SER recommended seeking public comment on the definition of “near miss,” particularly because different facilities have different definitions
of the term. One SER asked that EPA coordinate with OSHA to define “near m iss” to have a consistent definition for the incident investigation criteria. One SER stated that EPA should not require definition, investigatio n of or tracking of “near misses” because there are differences between companies and among facilities within t he same company that necessitate that facilities have the flexibility in defining and addressing incidents that do not cause a release, but could have potentially caused one. The SER indicated that the focus should be on internal reporting of near misses a nd a regulatory approach could have unintended consequences of personnel not bringing up issues to avoid a lengthy investigation, including root causes analysis.

One SER stated that a detailed investigation of an RMP incident will cost far more than EPA es timates and can involve investigative teams of 4

- 6 employees working over a period of months, special testing, experts, and RMP

- required participation of employees at time

- and

- a

- half labor rates. The SER stated that, a t the low end of the cost scale, a com prehensive investigation such as root cause analysis into an RMP incident will cost $15,000 and could easily exceed $100,000. One SER questioned EPA assumptions of zero added hours for management for an incident investigation and root cause analysis.

**Safer Alternatives Analysis** 

One SER noted that current approved PHA methodologies already provide for successful risk mitigation including the consideration of inherently safer design techniques and adding a new regulatory requirement for existing operations is unnecessary. Several SERs commented that SAA reviews are best applied during the design phase of a fa cility, and are of little utility as part of a process hazard analysis (PHA). One SER quoted EPA’s assertion in the 1996 rule that this type of assessment “had the most benefit in the design of new processes.” One SER said that the feasibility factors discussed in the proposal do not account for the full life cycle of a product. A SER argued that requiring SAA reviews during the PHA will detract from the pu rpose of the PHA. Another SER argued that the staff that conducts a PHA may not have the expertise to conduct an SAA. A different SER claimed that an SAA requires design engineers and that small facilities do not have staff des ign engineers which would res ult in a more costly requirement to retain them. A SER commented that the PHA conducted for OSHA compliance is currently considered adequate for EPA requirements; adding more requirements just for EPA will cause

sma ll businesses to incur additional costs.

One SER asked if the safer technologies and alternatives refers to equipment or products. The SER
indicated that f or farmer supply dealers of anhydrous ammonia, their customers dictate what products they will purchase for their crops. Another SER stated th at toll manufacturers will struggle to complete
SAA when specific processes and chemistry are required by the customer. Another SER stated concerns
with having a toll manufacturer engaging a customer to agree to a safer formulation would cause the

customer to look for another manufacturer. The SER commented that a short timeframe (matter of months) to start work and short manufacturing campaigns also prevent sufficient time to conduct any
SAA

. A few SERs said that this requirement could lead to liability issues for facilities that choose not to implement a particular inherently safer technology (IST) due to feasibility concerns. The SERs said that plaintiffs in a court case could argue that the facility wrongly described an IST as infeasible, possibly leading facilities to implement IST that they do not view as feasible in order to avoid litigation.SBAR Panel Report Risk Management Modernization Rule



### 43 Some SERs stated that this requirement will place additional burden on RMP facilities that do not have engineering staff to conduct an SAA review. A SER estimated that SAAs that include life cycle
considerations could be 50

- 100 percent more expensive than EPA has estimated for toll manufacturers. Another SER stated that using the labor and cost estimat e provided by EPA, SAA would add at least an additional full time employee for their company.

One SER said that requiring SAA in the liquid fertilizer manufacturing industry would be a waste of time and resources, because the most feasible processes are al ready being used. Another SER argued that it is a waste of resources to require facilities to conduct an SAA review but not implement anything. Another SER expressed concern that SAA require ments will be expanded to additional industries in the future,

cau sing disproportionate impacts to small businesses.

One SER noted that existing methodologies for PHAs and further analysis such as Levels of Protection Analysis (LOPA) are designed to identify risk gaps and result in recommendations that would mitigate any risk gaps. Requiring additional analysis when risks have already been addressed would be redundant and

unnecessary.
A SER stated that five feasibility factors in the rule, “economic, environmental, legal, social and technological” fail to provide adequate guidance and reasonable limitations for the SAA review. The SER further maintained that the feasibility factors ignore the reality of global competition, fail to address the full range of issues in the operational life of a project such as risks to downst ream consumers and environmental disposal hazards and costs. The SER also indicated that the feasibility factors provide no guidance on how to measure or balance risks or hazards. Another SER stated that “feasibility of implementation” can be interpreted v ery broadly and asked how detailed must it be and whether it can be
conducted in

- house by a small business or would an outside consultant or engineer be the only persons qualified t o complete this requirement

.
**Local Coordination**

Several SERs expressed concern that the Local Emergency Planning Committee (LEPC) in some communities do not have adequate staffing or resources, making coordination with them difficult and
burdensome to small businesses. One SER stated that requiring annu al coordination is akin to the current DOT Part 192 Public Awareness Rule and because volunteer departments do not have the manpower to cooperate in annual meetings, the rule should allow coordination through the mail, as does DOT Part 192.
A few SERs also commented that some LEPCs lack secure information systems, which could lead to the disclosure of confidential company information. Another SER said that it is not a private company’s responsibility to ensure that the LEPC is fully staffed and capable of r esponding to an emergency. One SER suggested that companies be permitted to contract with for

- profit emergency response contractors or engage in mutual aid agreements in areas where local emergency response resources are insufficient.
One SER stated that E PA has not defined or made clear what “coordination” means or what is actually required by facilities to meet this requirement. Another SER stated their belief that coordination obligations have been met for toxics if a facility has either notified the SER C or LEPC that they are
covered under EPCRA and ha ve coordinated with the local fire department for flammable and have mechanisms in place to notify responders. This SER notes that facilities have generally understood that once this notification is made, t hey would be included in the community emergency response plan because LEPCs are required to include them in such a plan.

A SER disagreed with the proposal that an LEPC be able to request that a facility develop an emergency response plan, commenting that governmental entities (e.g., OSHA, EPA, fire department) should be evaluating this plan and that there is no procedure to ensure that a LEPC request is both reasonable and necessary to ensure an adequate plan

. One SER commented that EPA does not have the a uthority to allow LEPCs to ask facilities to create an emergency response plan. Another SER expressed concernSBAR Panel Report Risk Management Modernization Rule



### 44 with this proposal, commenting th at EPA should describe their intent and specifications for this requirement to ensure that LEPCs do not create a second set of requirements in addition to the RMP.
Another SER was concerned the proposed provision could have the unintended consequence of incentivizing LEPCs and local responders to decline fulfilling their response obligations, knowing that
even small businesses would be then be required to become responding facilities, regardless of cost and feasibility.

A SER commented that the requirement for local coordination is already being done with Tier II reporting to the LEPC, fire department, and state emerg ency management agency, and this requirement constitutes a duplication of paperwork. Another SER said that they did not expect this requirement to add significant burden. A different SER stated that EPA has underestimated the costs associated with
coordina ting local responders. A few SERs commented that if local fire departments are able to decline to be the responding agency to an eme rgency, many small businesses will be required to take on significant additional burden to be the responding party. Another SER expressed concern that EPA has underestimated the cost for a facility to become a responding facility if they are unable to do cument adequate local coordination. This SER notes that equipment costs are not one

- time and equipment must be checked every m onth and replaced on a periodic basis. The SER further explained that at least six
hazmat

- trained employees who are available 24

- 7 are necessary to have a hazmat team, which must be able to conduct a full hazmat response and conduct an Emergency Response c ompliance audit to en sure that the facility can respond (29 CFR 1910.120). The SER asserts that EPA costs fail to consider that most facilities would purchase real decontamination showers at $1,000 each rather than use plastic kiddie pools or that most fac ilities keep their equipment in portable trailers that can cost $8

- 10K each, not including electricity and storage shelves for the trailer, which could increase cost to approximately $20

- 30K. The SER further asserts that EPA fails to include cost for garba ge cans, tarps, cones for direction and barrier tape. One SER stated that costs for new responders are seriously underestimated and do not capture the enormous cost of turnout gear, hoses, and in some cases, fire trucks that might be required if
local fire department would not respond and that the cost analysis should take into account that suc h facilities would be covered under an OSHA standard for fire brigades (29 CFR 1910.156) which could make costs prohibitive for many small companies.

**Emergency Respon se Exercises** 

A few SERs said that the proposed rule has not accounted for the burden on local responding agencies to conduct response exercises. A SER commented that this requirement adds more burden to the regulated entity. Another SER argued that facilit ies should only need to document their efforts to involve local emergency responders in exercises, since emergency responders are often unable to participate in such exercises. Another SER said that EPA should only require tabletop exercises because live e xercises are too costly and will have to be repeated to ensure all staff are properly trained. A SER said that the final rule should account for the significant time and expense required when field exercises are postponed due to a local emergency.

A SER su pported the frequencies of every five years for a field exercise and a tabletop exercise in the intervening years but commented that the definition of field exercise needs to be broad enough to include many offsite activities and drills required by other s tate and federal regulations. Existing HAZWOPER emergency response drills should also satisfy the new requirement for exercises. A few SERs said that the frequency and type of drills should not be prescribed in the final rule, and one SER said that the

age ncies and organizations involved should utilize lessons learne d from other emergencies to assist in their planning. Another SER expressed concern that the required components of various exercises and the evaluation report are too vague, leading to possible fines or determinations of noncompliance if an EPA inspecto r decides that they are not good enough.SBAR Panel Report Risk Management Modernization Rule



### 45 **Information Sharing**

Several SERs commented that providing the six required categories of information could expose business confidential information, and wo uld be of little assistance to emergency responders. A few SERs said that a better option would be for the facilities to have a discussion with the LEPCs about this information and allow the LEPCs to request any information they would find useful. One SER stated that community understanding of chemical ris ks is best relayed to the public by sharing information with LEPCs

, Community Advisory Panels (CAPs) and other near neighbor groups and local/state officials at regular opportunities to further the public’ s right

- to

- know, community transparency and participation. Another SER expressed significant concerns that releasing this information will create real and serious security concerns, particularly if not coordinated with the Department of Homeland Security r egarding maintaining

t he confidentiality of Sensitive Security Information (SSI), Chemical

- Terrorism Vulnerability Information (CVI) and the Department of Transportation for any SER regulated by the Maritime Transportation Security Act of 2002. For example, providing certain details regarding an incident investigation or exercise may publicize vulnerabilities.

A SER said that the proposal to require facilities to provide information to the public in an easily accessible manner is a subjective an d time consuming task, and EPA has not explained why existing information on company websites and social media are inadequate. One SER explained that the current RMP rule already requires an RMP to include an executive summary and there is no reason for fa cilities to prepare any additional summary information because the executive summary must contain a brief description of the following elements: the accidental release prevention and emergency response policies ; the stationary source and regulated substanc es handled; the general accidental release prevention program and chemical

- specific prevention steps; the five

- year accident history; the emergency response program; and planned changed to improve safety. Another SER stated that after a reportable quantity (RQ) event, facilities already are required by EPCRA to send a follow

- up incident report to the
LEPC and the SERC.

Many SERs expressed concern about the requirement to hold a public meeting within 30 days of an RMP incident, comme nting that investigations are typically not complete after 30 days, EPA has greatly underestimated the cost and time burdens of holding such a meeting , and meetings that have been held in the past have been sparsely attended or not attended at all. One SER had surveyed 31 faciliti es storing anhydrous ammonia that conducted public meetings in 1999/2000 and who were in communities with populations ranging from 79 to 12,000 people. The SER indicated that one meeting had 7 people, a few
had 1

- 3 people and almost 20 meetings had zero at tendees. One SER stated that the cost to rent a facility and host the meeting averages about $10,000 per meeting day and the time to pre pare presentations and handouts averages four to eight man days for which salaries w ould need to be
included in the esti mates.

One SER expressed a concern of potential legal implications to hold a public meeting after an accident as civil suits are being considered

. This could put small businesses in a vulnerable situation if they are being advised by legal counsel to limit the amount of information provided in the public meeting that could ultimately be used in legal proceedings. One SER suggested that a better alternative would be to provide a brief incident report at the county/community LEPC meeting within 9 months of an RMP incident, noting that LEPC meetings are regularly scheduled an d open to the public. A few SERs suggested that public meetings could be held at any meeting open to the general public, including city council and municipal board meetings, and up to 90 da ys after an event. A SER commented that EPA underestimated the cost of setting up a public meeting, stating that the true cost of hiring a third

- party organizer is two to three times what EPA estimated. One SER stated that exactly what information should b e provided at the public meeting by the facility is not clear, as well as, who constitutes the public

.SBAR Panel Report Risk Management Modernization Rule



### 46 

# 7. PANEL FINDINGS AND DISCUSSIONS

The Panel process brings together staff from the EPA, SBA and OMB to discuss ways that EPA can consider mitigat ing the effects of the proposed rule on small entities, specifically. Through this process,
the Panel hears concerns from small businesses affected by the rule and considers these concerns in developing panel recommendations. Representatives from OSHA and DHS also participated in these meetings in an effort to continue collaboration on activities under EO 13650.



## 7.1 **Number and Types of Entities Affected**

For a complete description of the small entities to which the proposed rules may apply, see Sections 3
and 4 of this document.



## 7.2 **Potential Reporting, Recordkeeping, and Compliance Requirements**

The potential reporting, recordkeeping, and compliance requirements are still under development. EPA expects that the proposed rule would include the following additiona l reporting, recordkeeping and compliance requirements:

• Hire a third

- party to conduct the compliance audit after a n RMP reportable accident ;

• Conduct and document a root cause analysis after a n RMP reportable accident ;

• Conduct and document an incident investigation, including root cause analysis, after a near miss;

• Conduct and document a safer technology alternatives analysis;

• Meet and coordinate with local responders;

• Come into compliance with requirements for responding to a release using facility sta ff, including developing an emergency response plan, conducting exercises, documenting training, and providing information to the LEPC;

• Conduct a notification drill to verify emergency contact information;

• Conduct and document emergency response exercises;

• Make certain information related to the risk management program available to the local community;

• Provide the LEPC and local responders with summaries of certain activities under the risk management program , upon request ; and

• Hold a public meeting within 30 days of an RMP reportable accident

. The Panel recommends that reporting and recordkeeping requirements should be streamlined if practicable. The P anel specifically highlighted a need for streamlining recordkeeping requirements for
exercises. The Panel anticipates that the requirements will be the minimum required by the statute to ensure compliance with the RMP requirements.



## 7.3 **Related Federal Rules**

The Panel recommends that EPA review EPCRA to ensure that provisions from this rule are not
d uplicative of other information reporting requirements. Several SERs commented that the information EPA would require facility owners or operators to report to LEPCs is already being collected and made available under EPCRA. As such, EPA may find value in reevaluating the information provided under EPCRA to achieve the objectives intended.

See Section 2.4 of this document for a discussion of related federal rules.SBAR Panel Report Risk Management Modernization Rule



### 47 

## 7.4 **Regulatory Flexibility Alternatives**

The Panel agrees that EPA should explore regulatory al ternatives and provide flexibility where appropriate. This flexibility can lessen impacts to small entities

, as well as to entities not classified as small. The SERs suggested alternative approaches for additional regulatory flexibility that are described
further in this section. The Panel recommends that EPA should include SER suggestions for additional flexibility

, where appropriate, and in other cases EPA should request comment on the other alternatives to give others affected by this rule the opportunit y through notice and comment rulemaking to weigh in.



### 7.4.1 Third

- Party Compliance Audits

**Eliminate provision**

SERs identified that this provision i s unnecessary because the existing incident investigation requirements are adequate

, more appropriate

, and already accomplish the desired remediation objectives of this provision. SERs also emphasized that internal auditors are more effective at performing these audits because they are more familiar with the facility processes and the facilities have a ves ted interest in completing an objective and thorough audit. SERs suggested that this provision

, to require a third

- party
audit after an accident

, should be deleted. SERs were substantially concerned about the availability of auditors that were knowledgeabl e in their industry. Finally, SERs pointed out that EPA already has authority to compel third

- party audits as a corrective action and therefore can do so on a case

- by

- case basis.

**Limit applicability**

SERs suggested limiting the requirement to a subset of Pr ogram 3 facilities. SERs further suggested that the requirement should be limited to those facilities with a major accident that has offsite impacts. EPA notes that the requirement would apply to a subset of facilities: only facilities with RMP reportable
accidents (i.e., accidental release s meeting the criteria of §68.42)

.
**Independence c**  **riterion**

SERs indicated that EPA should allow auditors who are associated with the company because these personnel have the proper training and familiarity with processes. SERs indicated that retired employees are among the best source of auditing expertise and suggest that they should not be barred from conducting third

- party audits. The SERs also indicated that they should be allowed to use firms that have performed past work because these firms tend to have the necessary expertise and familiarity with the facility. One SER suggested EPA consider revising the criteria to be similar to the Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) pr ovision for third

- party audits in 30 CFR 250.1920(a). BSEE only requires that the person leading the audit team be independent of the facility being audited. This allows the facility to use individuals with specialized knowledge as part of the

team.

**Eliminate independence criterion**

SERs suggested that the focus should be on the qualifications of the auditors and the core contents of the acceptable audits rather than restricting post

- accident audit s to non

- associated or independent auditors

a s currentl y defined. SERs also indicated that EPA should allow third

- party auditors who are associated with the company because these personnel have the proper training and familiarity with processes. Examples include : allowing retired employees to conduct audits or limiting the criterion to individuals conducting the audit rather than the entire company

. Moreover, the SERs specifically suggested that small business should be allowed to use qualified auditors that are associated with the company becauseSBAR Panel Report Risk Management Modernization Rule



### 48 they are less able to absorb significant costs of third

- party audits done by non

- associated third

- party
auditors.

**PE requirement**

The Panel also heard concerns on whether it is necessary to include a PE in the audit team. SERs expressed concerns that the requirement of a license is too restrictive because it requires five years of experience and two exams to obtain a professional license. SERs also supported that the elements of an
RMP audit are within the purview of a safety and environmental professional rather than a n engineer. SERs also made specific suggestions about other relevant professional credentials, including CSP, CIH, CFPS, CHMM, CPEA , DGSA

, or CPSA qualification s

. EPA is proposing that a PE be part of the audit team because these professionals have an ethical obligation to be independent (and not only because of their engineering background).

**Auditor availability**

SERs expressed concerns about the availability of third

- party auditors who are qualified with knowledge and experience with a facility’s proce ss, being able to meet the independence criterion. SERs noted that qualified auditing firms with specific industry expertise could be a very few, making it more difficult to
choose an unaffiliated firm. SERs emphasized that the problem of auditor availabil ity will be exacerbated for those facilities in rural areas who will have to seek out contractors outside of their immediate vicinity,
which will add to their costs.

**Security**

Furthermore, if EPA requires third

- party audits, SERs urged EPA to include protection of confidential business information (CBI) and address other security concerns. SERs requested that EPA include provisions to ensure that third

- party auditors do not pose a terrorism concern or release information that could cause a security concern

, and the auditor will protect CBI from disclosure

, for the facilities that they
audit.

Panel recommendations:

Based on the concerns and recommendations provided by the SERs, th e Panel recommends that EPA consider proposing streamlined independence requirements for small businesses (i.e. based on size of
the facility). The Panel also recommends that EPA limit the independence criteria to individuals participating in the audit rather than the entire company

.

The Panel also recommends that EPA seek comments on:

• Eliminating the independence requirement

, in its entirety

, and retaini ng existing requirement for compliance audits;

• L imit ing applicability of the third

- party audit provision by only requiring third

- party audits, for P3 facilities, triggered by major accidents that have offsite impacts and how to define or characterize “majo r accidents with offsite impacts” ;

• Deleting the current PE requirement and considering other independent accreditation for third

party auditors which also carry ethical requirements, such as CSP, CIH, CFPS, CHMM, CPEA, or
CPSA ; and

• The impacts a third

- part y auditor may have on a facility’s security and the measures that should
be included in the rule provision to protect facilities from terrorism or release of CBI from a third

party auditor.SBAR Panel Report Risk Management Modernization Rule



### 49 SBA Office of Advocacy r ecommendation s :
The SBA Office of Advocacy recommends that EPA employ the BSEE approach for small firms, using a simplified small business size standard, such as 250 employees. Secondly, the Office recommends that small firms can submit a waiver request of the independenc e requirement, based on consideration of the specific facts, such as the limited availability of qualified independent auditors. A waiver may be appropriate where the firm has been working closely with highly qualified auditors with specific expertise
in t he industrial processes.



### 7.4.2 Incident Investigations & Root Cause Analysis

**Eliminate p**  **rovision**

EPA understands root cause analysis to be a term understood by industry as encompassing several different methodologies, all capable of pointing out the “root cause (s) ” of a problem or accident. However, during the Panel outreach meetings and panel discussions, SERs expressed the need for more guidance on what a root cause analysis includes, and questioned whether a root cause analysis provision is necessary bas ed on the current incident investigation provision of the RMP rule. There was discussion, during pre

- panel and panel outreach meetings, about whether EPA was requiring a specific methodology. EPA confirmed that it was not requiring a specific methodology. SERs commented that it is a common
b usiness practice to evaluate the cause of any incident and to address it in a way to prevent its reoccurrence and that this proposal will merely add an additional paper work and reporting requirement.

**Limit applicability**

SERs suggested limiting the applicability of this provision; the SERs questioned whether a root cause analysis is necessary or appropriate for every RMP reportable accident and near miss. Others specifically stated that it may be too burdensome or not fea sible to conduct a root cause analysis on every near miss. SERs expressed concern that this would be especially burdensome for small businesses who will need to hire outside experts to conduct these analyses or incur the expense to train an existing employ ee. SERs also stated that the root cause analyses would be costly. Other SERs suggested that the requirement for a root cause analysis for a near miss should be eliminated altogethe r and instead should be reserved for
incidents that have actual releases.

**N**

**ew Definitions** 

SERs also expressed concern over EPA’s definition of “catastrophic release

. ” EPA is proposing to modify the definition of catastrophic release to use the same definition currently being used to identify reportable accidents under the five year accidental history requirement. Some SERs opposed the proposed changes
to the EPA definit ion of “catastrophic release” and expressed concern that these revisions would expand the scope of when incident investigations are required. Some SERs believed that the redefining of “catastrophic release” was broadening the definition to include OSHA jur isdiction

- related events. SERs believed that the catastrophic release definition should be limited to incidents involving loss of life, serious injury or significant damage or loss of offsite property.

SERs requested that EPA clarify what is meant by a “near miss

. ” EPA noted that we will work with OSHA to provide guidance on “near misses

. ” For example, i n the materials presented to the SERs, EPA has
stated that a near miss would trigger analyses of process upsets such as activation of relief valves, interlocks, blowdown systems or rupture disks.

While some SERs recommended that EPA not move forward with these definitions, others recognized the need for clearer definitions and suggested seeking public comment on this issue. However, the SERs requesting clearer definitions were not supporting broadening the scope of RMP reportable accidents, only clarity regarding the current definition.SBAR Panel Report Risk Management Modernization Rule



### 50 Panel r ecommendations:

Based on the concerns and recommendations provided by the SERs

, the Panel recommends that EPA clarify its intent that incident investigation s are not intended to cover minor accidents or minor near
misses that could not reasonably have resulted in a catastrophic release. The Panel further recommends
that EPA consider proposing to require root cause analysis only for reportable releases, not including
near misses. The Panel recommends that EPA clarify in the preamble the comparative advantages of a root cause analysis to the current incident investigation requirements in §§68.60 and 68.81 of the rule.

The Panel recommends that EPA seek comments on:

• Whether the root cause analysis requirement should be eliminated ;

• T he revised definition of catastrophic release and whether it should be limited to loss of life, serious injury or si gnificant damage or loss of off site property ; and

• Examples of near misses.

SBA Office of Advocacy r ecommendation s :
The SBA Office of Advocacy recommends that EPA retain the root cause analysis requirement, but not revise the definition of catastrophic rel ease from the 1996 version which SBA believes is limited to major accidents, and maintains consistency with the current OSHA PSM definition of catastrophic release which refers to a “major uncontrolled emission, fire or explosion”, presenting a “serious da nger.”



### 7.4.3 Safer Alternatives Analysis

**Eliminate provision**

Several SERs questioned the value of requiring the SAA

, which they viewed as a highly labor and resource intensive review, without a requirement to implement the resulting recommendations

, which in
their view could result in a paperwork exercise and a waste of resources. SERs predicted that the analysis will likely produce limited options , which will not be justified by the cost of doing the analysis

. SERs also cautioned that it could raise liability issues for facilities not implementing recommendations from the analysis. SERs also pointed to EPA’s rational e in the 1996 rule for rejecting this requirement and

assert ed that there are still no additional benefits gained from this analysis tha t will not already be gained through the existing PHA requirements

. SERs identified that the SAA requirement w ould be unnecessary because the existing PHA methodologies already provide successful risk mitigation

.
**Feasibility**

EPA has proposed to define feasible as “[c]apable of being successfully accomplished within a reasonable period of t ime, accounting for economic, environmental, legal, social and technological
factors.” SERs raised questions about how the evaluation would determine what is feasible and what is inherently safer technology. SERs asked if the feasibility evaluation take s into account life

- cycle effects, and tradeoffs between costs, safety to the public, workers and effects on the environment

. One SER appreciated EPA’s plan to simply require that facilities consider the feasibility of the SAA recommendations, rather than require implementation of these recommendations.

**Design stage**

Some SERs indicated that safer alternatives should be identified in the design stage of a process or facility

, rather than during a PHA

, because the costs to incorporate safer alternatives for an existing process could be prohibitive. One SER quoted EPA’s assertion that this type of assessment “had the
most benefit in the desi gn of new processes

. ” Some SERs also noted that this analysis will require additional staffing

, such as design engineers

, in addition to the chemical and mechanical engineersSBAR Panel Report Risk Management Modernization Rule



### 51 staffed for PHA analyses. SERs identified that most small facilities do not have design engineers on staff able to conduct this analysis

, and as a result

, w ould have to incur additional expense to retain them.

**Batch t**  **oll m**  **anufacturers**

Batch toll manufacturer SERs expressed concern that this requirement may result in loss of business if they will be required to evaluate alternatives for custom formula blends. SERs also expressed concerns that the analysis required by this provision will not be feasible for products regulated by FDA because they are subject to FDA approval. SERs further questioned whether the SAA should be applied to chemicals or processes that were required by government regulations, such as FDA and EPA (under the Federal Insecticide, Fungicide, and Rodenticide Act ).

Panel r ecommendations:

Based on the concerns and recommendations provided by the SERs

, the Panel recommends that EPA explain what evidence it has that causes it to reconsider the 1996 assessment that analysis of inherently
safe r technology was unlikely to yield additional benefits.

The Panel further recommends that EPA seek comments on :

• Whether to eliminate this requirement;

• L imiting this provision to require analyses only to b e conducted at the design stage of new
processes ; and

• E xempt ing batch toll manufacturers from this requirement

. SBA Office of Advocacy r ecommendation s :

The SBA Office of Advocacy recommends that small firms (under 250 employees) should not be subject to this provision until three years after the rule’s compliance date for large firms. This would allow EPA to

re

- exam ine the utility of such a provision for large firms for possible application to the firms for which this is most burdensome. Experimentation with different regulatory approaches is an innovation recommended by the Administrative Conference of the United St ates (Administrative Conference
Recommendation 2014

– 5; Retrospective Review of Agency Rules). “Where it is legally permissible and appropriate, agencies should consider designing their regulations in ways that allow alternative approaches in the rule that could help the agency in a subsequent review of the rule to determine whether there are more effective approaches to implementing its regulatory objective. For example, agencies could allow for experimentation, innovation, competition, and experiential lea rning (calling upon the insights of internal statistical offices, as well as policy and program evaluation offices, in order to design plans for reassessing regulations, to the extent they have such resources).” 79 Fed. Reg. 75116 (Dec. 17, 2014). This approach of delaying compliance for small firms until EPA can review the utility of the provision for large firms is appropriate for a potentially costly new requirement.

The Office also recommends that batch toll processors be exempt from this provision unless the firm has a contractual relationship with the customer of five or more years, given that t his requirement is unlikely to yield practical information for contracts of short duration.



### 7.4. 4 Local Coordination The current rule requires facilities to develop an emergency response program in accordance with the requirements of §68.95 except when : the community emergency response plan addresses toxic substances at the facility, or the owner/operator at the facility has coordinated response actions for flammable substances with the local fire department ; and has a mechanism in place to notify emergency responders when there is a need for a response

.SBAR Panel Report Risk Management Modernization Rule



### 52 **R esponsibilit**  **y to ensure adequate emergency response capabilities** 

Most SERs expressed frustration with the requirement to coordinate with local emergency response officials because some LEPCs are not active or do not have sufficient resources to fully implement
EPCRA emergency planning requirements. For example, SER s sta ted that the majority of fire departments are served by volunteers that often do not have the resources to coordinate with facilities. Some SERs believed that the coordination requirement was satisfied simply by notifying the LEPC (for toxic substances) or the local fire department (for flammable substances) of substances without confirming that the facility is included in the community response plan or coordinating response actions with the fire department. SERs suggested that the responsibility to ensure that a local community has properly planned for a possible event at a regulated facility should be borne by the community and not by the facility as currently required in EPCRA

. However, EPA notes that the current RMP rule includes a corresponding requirem ent for facilities to develop an emergency response program except when the community emergency response plan addresses toxic substances at the facility, or the owner/operator at the facility has coordinated response actions for flammable substances with l ocal fire departments. EPA
believes a simple notification does not meet the statutory requirements under CAA section 112(r)(7)(B)(ii)(III) 18 and the pursuant RMP regulatory requirements on when to develop an emergency

response program

. If an LEPC is inactive, then no community response plan has been developed, and as a result, a source with toxic substances is obligated to develop an emergency response program. In the 1996 final rule, EPA elaborated that when the source is not addressed in the community response plan or
ha s not coordinated response actions with the local FD, then the source must comply with the emergency

response program requirements

.
Because many sources covered by this rule may be too small to handle emergency response themselves, EPA has provided, in this new section, the actions they must take if they will not respond to releases. Specifically, for sources with regulated toxic su bstances, the source must be addressed in the community emergency response plan developed under EPCRA section 303. Sources with regulated flammable substances must coordinate response actions with the local fire department. These sources must also establis h a mechanism to contact local emergency responders. Sources that do not meet these requirements must comply with EPA’s emergency response program requirements. ( emphasis added ; see 61 FR 31712, June 20, 1996.)

**Eliminate provision**

SERs suggested that EPA address violation s of the existing requirements rather than impos e additional require ments on facilities. Many SERs expressed concerns of inactive or non

- responsive and non

existing LEPCs; the ir overall sense is that without actual coordination with LEPCs, the required documentation of coordination will only be a paperwork exercise.

SERs also expressed concerns that the provision will result in additional facilities becoming responders and that this transition will be costly and difficult for small businesses to absorb. SERs were also concerned that the consequences of the coordination req uirement will incentivize local governments to renounce future response at facilities. SERs noted that small facilities do not have the capability to provide response without the assistance of local responders and forcing them to become responding

18 CAA section 112(r)(7)(B)(ii)(III) requ ires a response program providing for specific actions to be taken in response to an accidental release of a regulated substance so as to protect human health and the environment, including procedures for informing the public and local agencies responsible for responding to accidental releases, emergency health care, and employee training measures.SBAR Panel Report Risk Management Modernization Rule



### 53 faciliti es may run them out of business. EPA has estimated that its clarification of local coordination requirements could cause several thousand facilities to become responders. SERs also indicated that EPA underestimated the costs of new responding facilities by not including firefighting equipment costs

. Finally, SERs expressed concerns with the provision empowering LEPC s to require a facility to develop an emergency response program and noted that LEPCs do not have legal authority to evaluate the adequacy o f such programs. In sum, the SERs favored elimination of this requirement.

Panel recommendations:

This provision is likely to be one of the most costly requirement s of the EPA modernization proposal, and thus, requires careful consideration. Based on the concerns and recommendations provided by the SERs

, the Panel recommends that EPA explain how coordination should occur between local emergency response officials and small facilities and clarify requirements for facilities that make a “good faith” effort
to coordinate with local emergency response officials

.
The Panel also recommends that EPA seek comment on the proposed frequency for annual coordination

. SBA Office of Advocacy r ecommendation s :
While EPA believes that the current regulation clearly places responsibilities on the facilities to meet the emergency response requirements alone in the absence of a public response mechanism, some SERs have disagreed with this interpretation. The SBA Off ice of Advocacy is unsure about which legal interpretation is correct, although the Office does believe that it is not appropriate to place this responsibility on small firms in these situations.

In a related rulemaking, the 1980 EPA emergency preparedness rule for hazardous waste generators (40 CFR 265.37) only required generators to “attempt” to make arrangements with local responders, and to document any failure to complete such arrangements, recognizing the difficulty of achieving such arrangements acro ss the country. Today, just as in 1980, the unavailability of local resources to provide the response function is still a problem. The Office recommends that EPA use this approach for emergency response within the RMP rule. This is one mechanism whereby th e facility can demonstrate its “good faith” in making such arrangements.



### 7.4.5 Emergency Response Exercises

EPA is considering requiring responding facilities to conduct field exercises every five years, tabletop exercises annually in the interim years, and invite local response programs to participate . Nonresponding and responding facilities would be required to conduct annual notification exercises. SERs have expressed that the proposed requirements for the field and tabletop exercises are too prescript ive and that the burden is inappropriately being placed on the facilities. SERs also observed that these requirements would create more resource demands on the local response community, which is already overburdened by the current requirements

. One SER sug gested that field exercises should allow for offsite activities such as a week of training at a reputable fire school. EPA notes that the purpose of a full

field exercise is to ensure that the facilit y’s response plan is appropriate to ensure adequate resp onse capabilities at the facility

- o ffsite training does not accomplish t hat goal.

SERs also expressed concern that the field exercises can be very expensive because it will require using equipment, production curtailment, employee evacuation, local respon der participation, and hours of planning and coordinating . SERs also expressed concern that local emergencies may force the facility to postpone an exercise which could be difficult to reschedule. SERs further noted that requiring a field
exercise for faci lities with a small number of employees may not be practical , for instance, when there are only one or two people in the facility and local responders are unable to participate . SERs overwhelminglySBAR Panel Report Risk Management Modernization Rule



### 54 suggested that the agency should focus its efforts on help ing fire departments and LEPCs with their
resources instead of applying this requirement to regulated facilities.

Panel recommendations:

Based on the concerns and recommendations provided by the SERs, the Panel recommends that EPA clarify that participation by local responder s is not required for a facility to comply with the requirements in this provision and that field exercises and drills required by other state and federal regulations could meet this requirement if the facilit y’s emergency r esponse plan is tested as part of those exercises.

Finally, the Panel recommends that EPA seek comments on:

• Whether the exercise provision should be eliminated;

• How to address postponement and rescheduling issues (which SERs have indicated may take up to a year);

• Limiting the requirement to only tabletop exercises ; and

• The frequency of required field and tabletop exercises

. SBA Office of Advocacy r ecommendations:

The SBA Office of Advocacy recommends that the Agency propose tabletop exercises alone, and include no minimum requirements for field exercises. The Office is concerned that LEPCs cannot achieve compliance with the current EPCRA requirements, and that add ing to them would be counterproductive. Field exercises at the facility without LEPC participation would be of limited value.



### 7.4.6 Information Sharing

**Information for LEPCs**

SERs expressed concern over the burden of summarizing highly technical informatio n and the capacity
for an LEPC to effectively use that information in decision

- making, due to differences in expertise, as well
as resource constraints. Specifically, SERs questioned the value of sharing information on compliance
audits and SAA . SERs pointed out that the most useful information is the chemical hazard information.
The SERs also indicated that the executive summary requirement of the RMP rule in §68.155 was designed to provide the most relevant and easily understandable information to th e public. The executive summary requires facilities to describe the stationary source and the regulated substances handled; accidental release prevention and emergency response policies; general accidental release prevention program and chemical

- specific p revention steps; five

- year accident history; the emergency response program; and planned changes to improve safety.

Several SERs suggested allowing an LEPC to request information, such as an accident history for a facility, if needed, rather than requiring all of the information to be provided upfront. SERs expressed concerns that this will be an unnecessary and duplica tive provision because adequate information is already being shared under existing requirements. EPA noted that currently, LEPCs may obtain RMPs from EPA, but those plans have limited information concerning facility emergency response programs, accidental releases, compliance audits, etc . In order for LEPCs to fully develop a local emergency response plan, it is useful for them to have summaries of key analysis, lessons learned, and changes (including information in compliance audits, incident investigations, safer alternatives implemente d, and drill and exercise reports) from the facility. Additionally, EPA noted that EPCRA only requires reporting of chemical inventories and notification of an accidental release. It does not require reporting of results from compliance audits, incident in vestigations, safer alternatives, and drills/exercises.SBAR Panel Report Risk Management Modernization Rule



### 55 Panel recommendations for LEPC information sharing :
In light of these concerns, the Panel recommends that EPA consider only requiring facilities to develop
chemical hazard information summaries and allowing LEPCs to make reasonable requests for additional
information. The Panel also recommends m aking chemical hazard information available upon request by the LEPC rather than requiring it to be automatically submitted by the facility

. This will help en sure that the LEPC receives and is able to get the necessary information to help conduct their activities, and is not overburdened by information that it has not requested.

The Panel also recommends that EPA seek comment on:

• Narrowing the approach to require a one page summary of each significant chemical hazard during a fire identi fying the product, its properties, its location and firefighting measures for responders

-- a one

- page summary of information that addresses chemical hazard information
and e mergency response measures ;

• Limiting the amo unt of information to be shared with LEPCs; and

• Whether EPA should specify a format for summary information to make it easier for local officials to find and interpret the information that they need.

**Information for the public** 

SERs noted that adequate information is already available for public access through the Right

- to

- Know Network, including the e xecutive s ummar y of the RMPs. EPA noted that it is not requiring new information to be provided ; 19 instead, it is requiring information to be provided in a mo re easily accessible manner.
SER s also expressed that they are comfortable with responding to specific information requests rather than a mandate that repackages existing public information. One S ER commented that CFAT S sites are unable to share the propose d information.

Panel recommendations for public information sharing :

Based on the concerns of the SERs, the Panel recommends that EPA seek comments on:

• Ways to limit the scope of the information elements shared with the public as well as the format in which information should be provided (e.g. a one

- page summary of information that addresses chemical hazard information and emergency response measures );

• W h e ther the existing RMP data , including the executive summary, are adequate for the public in the absence of a specific request, and

• Whether additional information should only be provided to the public upon request.

**Public meetings**

Several SERs questioned the value of public meetings and noted that, when held in the past, public meetings were not well attended . SERs further noted that in the absence of an accident

, most past public meetings had no public attendees . Some SERs suggested altering the requirement to allow for the request of a public meeting if a n LEPC or community felt it was necessary. Additionally, SERs expressed concern about the requirement to hold public meetings 30 days after an accident ; the SER suggestion s included expanding the timeframe from 60 days to 9 months. SERs indicated that m any small business may still be handling the aftermath of accidents, conducting incident investigations, and arranging audits in this time period, with limited attention to d evote to educating the public.

19 With the exception of exercise information because this is a new provision.SBAR Panel Report Risk Management Modernization Rule



### 56 Panel r ecommendations for public meetings :

Given these concerns, the Panel recommends that EPA require that a public meeting be held only after an RMP reportable accident

. EPA should consider allowing t he public meeting to be combined with any meeting open to the general public (e.g. city council

, municipal board , or LEPC meeting).

The Panel also recommends that EPA seek comments on:

• Whether it is appropriate to require public meetings;

• Whether to eliminate the public meeting requirement and instead require the facility to schedule a meeting with the LEPC and/or emergency responders 60 to 90 days after an accident or incident;

• Whether public meetings should be held upon request (e.g., LEPC or its community equiv alent)
rather than automatically within an established timeframe; and

• Extending the timeframe from 30 to 90 days or whether there is a more appropriate timeframe for scheduling a meeting following a n RMP reportable accident and who should be included in the invitation (e.g. limit to local emergency response officials and LEPCs).SBAR Panel Report Risk Management Modernization Rule



### 57 

# A PPENDIX A: List of Mate rials EPA shared with Small Entity Representatives

Pre

- Panel Outreach Meeting held on September 22, 201 5:

• Pre

- Panel Outreach Meeting Agenda

• SBAC presentation on the SBAR Panel Process

• List of Potential Small Entity Representatives

• Pre

- Panel RMP Outreach (P ower P oint presentation)

• PSM & RMP Common chemical list ( E xcel spreadsheet)

• EPA RMP 40 CFR 68.130 c hemical l ist

• OSHA PSM Appendix A chemical l ist

Panel Outreach Meeting held on November 19, 2015:

• Panel Outreach Meeting Agenda

• Panel RMP Outreach (P ower P oint presentation)

• PSM & RMP Common chemical list ( E xcel spreadsheet)

• EPA RMP 40 CFR 68.130 chemical li st

• OSHA PSM Appendix A chemical list

Supplemental Information Provided on November 23, 2015 :

• Updated Panel RMP Outreach (PowerPoint presentation) (dated November 23, 2015)

o Corrected references to “Additional Information

o Slide titles on 70 and 71 were altered to “Accident Costs” to more accurately reflect the information provided.

o SERs were provided with an updated due date for written comments (December 9, as agreed upon at the Panel outreach meeting).

• Final Regulatory Impact and Regulatory Flexibility Analysis of the Final Standard for Process Safety Management of Highly Hazardous Chemicals (1992 OSHA PSM RIA)

• Economic Analysis in Support of Final Rule on Risk Management Program Regulations for Chemical Accident Release Prevention, as Requir ed by Section 112(r) of the Clean Air Act (1996 EPA RMP RIA)

Supplemental Information Provided on December 7, 2015: RMP Reportable Accidents 2004

- 2013 by Year & NAICS Code (Word document; requested by a SER helper )SBAR Panel Report Risk Management Modernization Rule



### 58 

# APPENDIX B: Written Comments Submitted by Small Entity Representatives

Appendix B is a separate PDF file with document number EPA-HQ-OEM-2015-0725-0258.