46908 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

DEPARTMENT OF HOMELAND 

SECURITY 

Office of the Secretary 

6 CFR Part 31 

[Docket ID 2008–0076] 

RIN 1601–AA52 

Ammonium Nitrate Security Program 

AGENCY: National Protection and 

Programs Directorate, DHS 

ACTION: Proposed rule; request for 

comments. 

SUMMARY: This proposed rule would 

implement anti-terrorism measures to 

better secure the homeland. The 

Department of Homeland Security 

would regulate the sale and transfer of 

ammonium nitrate pursuant to section 

563 of the Fiscal Year 2008 Department 

of Homeland Security Appropriations 

Act with the purpose of preventing the 

use of ammonium nitrate in an act of 

terrorism. This proposed rule seeks 

comment on both proposed text for such 

a regulation and on several practical and 

legal issues integral to the development 

of an Ammonium Nitrate Security 

Program. 

DATES: Comments and related material 

must either be submitted to our online 

docket via http://www.regulations.gov 

on or before December 1, 2011 or reach 

the Docket Management Facility by that 

date. Comments sent to DHS or the 

Office of Management and Budget 

(OMB) on collection of information 

must reach DHS or OMB on or before 

October 3, 2011. 

ADDRESSES: You may submit comments, 

identified by docket number 2008–0076, 

by one of the following methods: 

• Federal eRulemaking Portal: Follow 

the instructions at http:// 

www.regulations.gov for submitting 

comments. 

• Mail: U.S. Department of Homeland 

Security, National Protection and 

Programs Directorate, Infrastructure 

Security Compliance Division (NPPD/ 

ISCD), 245 Murray Lane, SW., Mail Stop 

0610, Arlington, VA 20598–0610. 

To avoid duplication, please use only 

one of these methods. For instructions 

on submitting comments, see the 

‘‘Public Participation’’ portion of the 

SUPPLEMENTARY INFORMATION section 

below. 

Collection of Information Comments: 

If you have comments on the collection 

of information discussed in section IV.F 

(‘‘Paperwork Reduction Act’’) of this 

Notice of Proposed Rulemaking 

(NPRM), you may submit comments to 

the DHS as indicated above, and you 

may also send comments to the Office 

of Information and Regulatory Affairs 

(OIRA), OMB. Comments on the 

collection of information must reach 

DHS or OIRA on or before October 3, 

2011. To ensure that your comments to 

OIRA are received on time, the preferred 

methods are by e-mail to 

oira_submission@omb.eop.gov (include 

the docket number and ‘‘Attention: Desk 

Officer for Department of Homeland 

Security/NPPD’’ in the subject line of 

the e-mail) or fax at 202–395–6566. An 

alternate, though slower, method is by 

U.S. mail to the Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, 725 17th 

Street NW., Washington, DC 20503, 

Attention: Desk Officer for Department 

of Homeland Security/NPPD. 

FOR FURTHER INFORMATION CONTACT: 

Ammonium Nitrate Security Program 

Manager, U.S. Department of Homeland 

Security, National Protection and 

Programs Directorate, Infrastructure 

Security Compliance Division (NPPD/ 

ISCD), 245 Murray Lane, SW., Mail Stop 

0610, Arlington, VA 20598–0610, 

telephone number (703) 235–5263. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Public Participation 

II. Background: Overview of Subtitle J and 

Associated Regulatory Development 

Activities 

A. Subtitle J 

B. October 2008 Report to Congress 

C. Advance Notice of Proposed 

Rulemaking 

D. Research Efforts and Findings 

1. Security Hazards Presented by Use of 

Ammonium Nitrate 

2. Detonability of Ammonium Nitrate 

3. Federal Regulations Addressing 

Ammonium Nitrate 

a. Chemical Facility Anti-Terrorism 

Standards 

b. U.S. Coast Guard Maritime Security 

Regulations 

c. Transportation Security Administration 

d. Bureau of Alcohol, Tobacco, Firearms 

and Explosives 

e. Department of Transportation Hazardous 

Materials Regulations 

f. Department of Commerce 

4. State Regulations Addressing 

Ammonium Nitrate 

5. Voluntary Programs Addressing 

Ammonium Nitrate 

III. Discussion of Proposed Rule: 

Implementing Subtitle J 

A. Ammonium Nitrate Subject to Subtitle 

J Requirements 

1. Mixture Requirement 

2. Threshold Weight and Individual 

Products Exemptions 

3. Explosives Exemption 

B. Requirements for the Registration of AN 

Sellers and AN Purchasers 

1. Overview 

2. Who Must Register 

3. Registering AN Sellers 

4. Registering AN Facility Representatives 

5. Registering a Designated AN Facility 

POC 

6. Summary of AN Facility Personnel 

Registration Proposals 

7. Registering AN Purchasers 

8. Federal/State/Tribal/Local GovernmentOwned Entities That Are AN Facilities or 

AN Purchasers 

9. Registration Process 

10. Initial Applications 

11. Applicant Vetting Process 

12. Notification of Approval or Denial 

13. Revocation of Registration Numbers 

14. Appealing Registration Denials and 

Registration Revocations 

15. Registration Updates and Expiration 

16. Initial Six-Month Registration Period 

C. Purchaser Verification Activities 

1. Overview 

2. Manner of Sale or Transfer of 

Ammonium Nitrate 

3. Required Verification Activities 

4. Verification of the Currency and 

Authenticity of a Prospective AN 

Purchaser’s AN Registered User Number 

5. Verification of a Prospective AN 

Purchaser’s Identity When the AN 

Purchaser Opts Not To Use An Agent 

6. Verification of a Prospective AN 

Purchaser’s Identity When the AN 

Purchaser Opts To Use An Agent 

7. For Sales Involving Agents, Verification 

That the Agent Is Acting on Behalf of the 

AN Purchaser 

8. Verification of the Agent’s Identity 

Based on the Visual Check of the Agent’s 

Photo Identification 

9. Timing of Verification Activities 

10. Departmental Role in Verification 

Process 

11. Purchaser Verification Portal 

12. Purchaser Verification Call Center 

13. Purchaser Verification Portal and Call 

Center 

14. Suspicious Purchases and Attempted 

Purchases of Ammonium Nitrate 

D. Recordkeeping 

1. Overview 

2. Entities Responsible for Keeping Records 

3. Records To Be Kept 

4. Length of Retention of Records 

5. Format and Storage of Records 

E. Reporting of Theft or Loss of 

Ammonium Nitrate 

1. Overview 

2. Who Must Report Theft or Loss 

3. Level of Theft or Loss Warranting 

Reporting 

4. Process for Reporting Theft or Loss 

F. Inspections and Audits 

G. Guidance Materials and Posters 

H. Civil Penalties, Civil Penalty 

Adjudications, and Civil Penalty 

Appeals 

I. Consultation Requirements 

J. Delegation of Authority 

IV. Regulatory Analyses 

A. Executive Order 12866 and Executive 

Order 13563: Regulatory Planning and 

Review 

1. Cost Impacts 

2. Benefits of the Ammonium Nitrate 

Security Program 

B. Regulatory Flexibility Act 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 46909 

1. Reasons for and Objectives of the 

Proposed Rule 

2. Affected Small Business Population and 

Estimated Impact of Compliance 

3. Number of Small Entities That Purchase 

Ammonium Nitrate 

4. Number of Small Entities That Sell 

Ammonium Nitrate 

5. Alternatives Considered 

6. Average Costs per AN Facility 

7. Identification of Duplication, Overlap 

and Conflict With Other Federal Rules 

C. Executive Order 13132: Federalism 

D. Unfunded Mandates Reform Act 

E. National Environmental Policy Act 

F. Paperwork Reduction Act 

G. International Trade Impact Assessment 

Abbreviations and Terms Used in This 

Document 

AN Ammonium Nitrate 

ANFO Ammonium Nitrate/Fuel Oil 

ANPRM Advance Notice of Proposed 

Rulemaking 

ATF Bureau of Alcohol, Tobacco, Firearms, 

and Explosives 

ATSA Aviation and Transportation 

Security Act 

CFATS Chemical Facility Anti-Terrorism 

Standards 

CFR Code of Federal Regulations 

COI Chemical of Interest 

CVI Chemical-terrorism Vulnerability 

Information 

DHS Department of Homeland Security 

DOT Department of Transportation 

EAR Export Administration Regulations 

FBI Federal Bureau of Investigation 

FR Federal Register 

HMR Hazardous Materials Regulations 

HMT Hazardous Materials Table 

IED Improvised Explosive Device 

IRFA Initial Regulatory Flexibility Analysis 

MTSA Maritime Transportation Security 

Act 

NAICS North American Industrial 

Classification System 

NPRM Notice of Proposed Rulemaking 

PCII Protected Critical Infrastructure 

Information 

PHMSA Pipeline and Hazardous Materials 

Safety Administration 

POC Point of Contact 

QATT Qualified Anti-Terrorism 

Technology 

RFA Regulatory Flexibility Act 

SAFETY Support Anti-Terrorism By 

Fostering Effective Technologies 

SBA Small Business Administration 

SORN System of Records Notice 

SSI Sensitive Security Information 

TSA Transportation Security 

Administration 

TSDB Terrorist Screening Database 

TWIC Transportation Worker Identification 

Credential 

UMRA Unfunded Mandates Reform Act 

USC United States Code 

USCG United States Coast Guard 

USDA United States Department of 

Agriculture 

VSL Value per Statistical Life 

I. Public Participation 

Interested persons are invited to 

participate in this rulemaking by 

submitting written data, views, or 

arguments on all aspects of this NPRM. 

The Department of Homeland Security 

(DHS or the Department) also invites 

comments that relate to the economic, 

environmental, or federalism effects that 

may result from this NPRM. Comments 

that will provide the most assistance to 

the Department in developing this 

proposed rule will refer to a specific 

provision of the NPRM or the Secure 

Handling of Ammonium Nitrate 

provisions in the Homeland Security 

Act, as amended, explain the reason for 

any comments, and include other 

information or authority that supports 

such comments. 

Submission of Sensitive Information: 

Do not submit comments that include 

trade secrets, confidential commercial 

or financial information, Chemicalterrorism Vulnerability Information 

(CVI), Protected Critical Infrastructure 

Information (PCII), or Sensitive Security 

Information (SSI) to the public 

regulatory docket. Please submit such 

comments separately from other 

comments on the proposed rule. 

Comments containing this type of 

information should be appropriately 

marked as containing such information 

and submitted by mail to the following 

address: U.S. Department of Homeland 

Security, National Protection and 

Programs Directorate, Infrastructure 

Security Compliance Division (NPPD/ 

ISCD), 245 Murray Lane, SW., Mail Stop 

0610, Arlington, VA 20598–0610. 

Upon receipt of such comments, DHS 

will not place the comments in the 

public docket and will handle them in 

accordance with applicable safeguards 

and restrictions on access. DHS will 

hold them in a separate file to which the 

public does not have access, and place 

a note in the public docket that DHS has 

received such materials from the 

commenter. If DHS receives a request to 

examine or copy this information, DHS 

will treat it as any other request under 

the Freedom of Information Act (FOIA), 

5 U.S.C. 552, and the Department’s 

FOIA regulation found in Part 5 of Title 

6 of the Code of Federal Regulations 

(CFR). 

Instructions: All submissions must 

include the agency name and docket 

number for this rulemaking. All 

comments received will be posted 

without change to http:// 

www.regulations.gov, including any 

personal information provided. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http:// 

www.regulations.gov. 

II. Background: Overview of Subtitle J 

and Associated Regulatory 

Development Activities 

A. Subtitle J 

Section 563 of the Fiscal Year 2008 

Department of Homeland Security 

Appropriations Act amends the 

Homeland Security Act of 2002 and 

directs DHS to ‘‘regulate the sale and 

transfer of ammonium nitrate by an 

ammonium nitrate facility * * * to 

prevent the misappropriation or use of 

ammonium nitrate in an act of 

terrorism.’’ See Public Law 110–161, 

Division E (2007). Section 563 amends 

the Homeland Security Act of 2002 (6 

U.S.C. 361 et seq.) by adding in a new 

Subtitle J—Secure Handling of 

Ammonium Nitrate, sections 899A–899J 

(to be codified from 6 U.S.C. 488 to 6 

U.S.C. 488i). All references to 6 U.S.C. 

488–488i throughout this document 

refer to the corresponding sections in 

the Homeland Security Act of 2002, as 

amended by section 563 of the Fiscal 

Year 2008 Department of Homeland 

Security Appropriations Act. All 

references to ‘‘Subtitle J’’ throughout 

this document refer to Subtitle J of the 

Homeland Security Act of 2002, as 

created by the Fiscal Year 2008 

Department of Homeland Security 

Appropriations Act. 

Pursuant to Subtitle J, the Department 

must develop regulations that require, at 

a minimum, the following activities: 

• Registration Applications: Certain 

ammonium nitrate sellers and 

prospective ammonium nitrate 

purchasers must apply for ammonium 

nitrate (AN) registration numbers from 

DHS in order to sell, transfer, and/or 

purchase ammonium nitrate. See 6 

U.S.C. 488a(c) and 6 U.S.C. 488a(d). 

• Terrorist Screening Database 

Checks: The Department must use 

identifying information of each 

prospective applicant to conduct a 

check against identifying information 

that appears in the Terrorist Screening 

Database (TSDB). See 6 U.S.C. 

488a(i)(2)(A). 

• Registration Numbers: The 

Department generally must issue an 

ammonium nitrate registration number 

or deny the registration of an applicant 

within 72 hours of receipt of each 

ammonium nitrate seller’s or 

ammonium nitrate purchaser’s complete 

registration application. See 6 U.S.C. 

488a(i)(3)(A). 

• Purchaser Verification Activities: At 

the point of sale, ammonium nitrate 

sellers must verify each potential 

ammonium nitrate purchaser’s identity 

and registration to purchase ammonium 

nitrate pursuant to procedures 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
46910 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

established by the Department. See 6 

U.S.C. 488a(e)(2)(D). 

• Recordkeeping: All ammonium 

nitrate facilities must keep records of 

sales or transfers of ammonium nitrate 

for at least two years after each 

transaction. See 6 U.S.C. 488a(e)(1) and 

6 U.S.C. 488a(e)(2). 

• Reporting Theft or Loss of 

Ammonium Nitrate: Certain ammonium 

nitrate sellers must report the theft or 

loss of ammonium nitrate to Federal 

authorities within one calendar day of 

discovery of theft or loss. See 6 U.S.C. 

488d. 

• Inspections and Audits: The 

Department must conduct or oversee 

regulatory compliance inspections and 

audits of ammonium nitrate facilities’ 

records, monitor compliance with the 

requirements of Subtitle J, and deter or 

prevent misappropriation of ammonium 

nitrate for use in terrorist acts. See 6 

U.S.C. 488b. 

• Guidance Materials and Posters: 

The Department must develop guidance 

materials that set forth procedures for 

appealing denial of an application for an 

ammonium nitrate registration number, 

guidance materials that help ammonium 

nitrate facilities identify suspicious 

ammonium nitrate purchases or 

attempted purchases or transfers, and 

posters providing information on 

sellers’ record-keeping responsibilities 

and on the penalties for violating 

requirements under the Department’s 

ammonium nitrate program. See 6 

U.S.C. 488a(i)(4)(c) and 6 U.S.C. 488c(c). 

• Establishing Threshold Percentage 

of Ammonium Nitrate in a Mixture: The 

Department must establish a threshold 

percentage of ammonium nitrate in a 

mixture for that mixture to be regulated 

under the Department’s ammonium 

nitrate program. See 6 U.S.C. 488a(b). 

• Appeals and Penalties: The 

Department must establish an expedited 

appeals process for applicants denied 

ammonium nitrate registration numbers, 

as well as an appeals process for 

individuals assessed civil penalties for 

violating the rules promulgated under 

Subtitle J. See 6 U.S.C. 488a(i)(4) and 6 

U.S.C. 488e(d). 

B. October 2008 Report to Congress 

In an Explanatory Statement 

accompanying section 563 of the Fiscal 

Year 2008 Department of Homeland 

Security Appropriations Act the 

Chairman of the House Committee on 

Appropriations indicated a desire for 

the Department’s National Protection 

and Programs Directorate to ‘‘provide a 

plan to implement [Subtitle J], including 

analysis of the resources required to do 

so, and a proposal for reallocating 

funding within the National Protection 

and Programs Directorate for doing so.’’ 

See Explanatory Statement Submitted 

by Mr. Obey, Chairman of the House 

Committee on Appropriations, 

Regarding the Consolidated 

Appropriations Amendment of the 

House of Representatives to the Senate 

Amendment to H.R. 2764, 153 Cong. 

Rec. H15741, H16092 (2007), available 

at http://www.gpo.gov/fdsys/pkg/CREC2007-12-17/pdf/CREC-2007-12-17- 

bk2.pdf. In October 2008, the 

Department submitted to Congress a 

report in response to this Explanatory 

Statement, outlining possible 

approaches to implementing Subtitle J 

and the potential costs associated with 

each approach. The Department’s report 

to Congress has aided in evaluating 

many of the approaches contained in 

this NPRM. The Department’s report can 

be found in the docket for this NPRM, 

which is available at http:// 

www.regulations.gov. 

C. Advance Notice of Proposed 

Rulemaking 

DHS published an Advance Notice of 

Proposed Rulemaking (ANPRM) titled 

‘‘Secure Handling of Ammonium Nitrate 

Program’’ on October 29, 2008. See 73 

FR 64280. The ANPRM solicited public 

comment on the following specific 

issues: 

• Comments regarding submission of 

registration applications (e.g., whether 

applications should be submitted 

electronically or in paper form; whether 

applications should be available only 

through DHS or through Local 

Cooperative Extension offices or at 

United States Post Offices); 

• Comments regarding the technical 

capabilities (e.g., access to computers; 

access to the Internet; average level of 

computing skills; frequency of use of 

integrated Information Technology 

systems) of ammonium nitrate 

manufacturers, distributors, sellers, and 

end-users; 

• Comments regarding DHS 

distribution of ammonium nitrate 

registration letters or certificates (e.g., 

whether DHS should use e-mail or 

regular mail); 

• Comments regarding a verification 

process for registrations and ammonium 

nitrate purchases, including methods for 

verifying the identity of any ammonium 

nitrate purchaser, as well as the identity 

of designated agents purchasing 

ammonium nitrate on behalf of 

registered ammonium nitrate 

purchasers; 

• Comments on the detonability of 

ammonium nitrate at certain 

concentrations, including research being 

conducted concerning the detonability 

of ammonium nitrate; 

• Comments on how likely 

ammonium nitrate fertilizer users would 

be to use an alternative fertilizer that is 

potentially less detonable, such as SulfN® 26 Fertilizer Process and Product 

(ammonium sulfate nitrate fertilizer) 

which DHS recently Designated as a 

Qualified Anti-Terrorism Technology 

(QATT) pursuant to 6 U.S.C. 441–444 

(the Support Anti-terrorism by Fostering 

Effective Technologies Act of 2002, or 

SAFETY Act). See http:// 

www.safetyact.gov; 

• Comments on how best to conduct 

or oversee regulatory compliance 

inspections and audits of ammonium 

nitrate facilities’ records to ensure that 

regulated ammonium nitrate facilities 

are properly maintaining records, to 

monitor compliance with the 

requirements of Subtitle J, and to deter 

or prevent misappropriation of 

ammonium nitrate for use in terrorist 

acts; 

• Comments on the economic impacts 

(both long-term and short-term, 

quantifiable and qualitative) of the 

implementation of Subtitle J, including 

potential impacts on State, local, and 

tribal governments of the United States; 

potential impacts on agri-business, 

including ammonium nitrate 

manufacturers, importers, packagers, 

distributors, retailers, and end-users 

including farmers (e.g., whether current 

ammonium nitrate purchasers would 

likely reduce their ammonium nitrate 

purchases as a result of a new regulatory 

regime); and potential impacts on small 

businesses; 

• Comments on the monetary and 

other costs anticipated to be incurred by 

U.S. citizens and others as a result of the 

new compliance requirements, such as 

the costs in time and money that an 

individual may incur to obtain an 

ammonium nitrate registration number. 

These costs may or may not be 

quantifiable and may include actual 

monetary outlays, transitional costs 

incurred to obtain alternative 

documents, and the costs that will be 

incurred in connection with potential 

delays at the point of sale; 

• Comments on a possible fee 

structure to address some or all of the 

costs of this new program, such as 

registration, TSDB checks, and issuance 

of ammonium nitrate registration 

numbers; 

• Comments on the benefits of this 

rulemaking; 

• Comments on any alternative 

methods of complying with Subtitle J; 

and 

• Comments on the best methods or 

processes for interacting with state and 

local governments regarding ammonium 

nitrate security. 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 46911 

See 73 FR 64280, 64281, section IV— 

Questions for Commenters. 

DHS received comments from 33 

organizations and individuals. The 

majority of the submissions, 20, were 

from private companies and trade 

associations, including associations 

affiliated with the farming, explosives, 

and mining industries. Three 

universities provided comments, as did 

three government agencies. Six 

individuals, including one farmer, also 

submitted comments. 

The topics addressed by the 

commenters covered a wide range of 

issues. The two issues that received the 

most attention were the registration 

process and the feasibility of using 

substances other than ammonium 

nitrate in agricultural operations. DHS 

received 15 comments concerning the 

registration process; all 15 commenters 

wanted the registration process to be as 

simple and straightforward as possible. 

Some commenters stated that if a 

registration process were to be 

implemented, then a registrant should 

receive his/her approval from DHS 

within 72 hours. The commenters 

expressed differing views on the 

technological capabilities of the 

regulated community. Some argued that 

computer use was sufficiently common 

for the entire process to be automated 

through an Internet-based portal. As 

articulated by these comments, an 

online process would be fast, 

inexpensive, and could be structured to 

allow individuals to apply from their 

homes or places of business. Others 

argued that computers are not common 

enough among ammonium nitrate users, 

who would either be forced to travel to 

different locations to register or to invest 

in computers. This second group of 

commenters believed that registration 

through an Internet-based portal would 

constitute an unjustified burden. 

Many commenters believed that 

regulating ammonium nitrate and not 

other types of fertilizer will cause a 

decrease in ammonium nitrate usage 

because of an expected rise in its cost. 

There was no agreement on the degree 

to which the cost of ammonium nitrate 

use would change, but multiple 

commenters indicated that cost would 

be passed along the supply chain until 

it ultimately reaches end-users. If the 

cost of ammonium nitrate were to go up, 

commenters hypothesized that 

ammonium nitrate alternatives may 

become preferable. Some comments 

suggested that continued ammonium 

nitrate use is based on historical 

ammonium nitrate use and that using an 

alternative would have no noticeable 

effect on operations. Others argued the 

opposite, stating that alternative 

fertilizers would not serve the needs of 

certain crops equally well. Commenters 

from certain States where ammonium 

nitrate is regularly used in agricultural 

operations indicated that ammonium 

nitrate is the best choice for nitrogen 

application for certain crops. Other 

commenters, however, asserted that 

viable alternatives exist with respect to 

the majority of crops for which 

ammonium nitrate currently is used as 

a fertilizer. 

There was a general consensus among 

commenters regarding the need to avoid 

duplication of other Federal licensing, 

regulatory, and inspection programs. 

Commenters stated that to be registered 

under the ammonium nitrate program 

could be unnecessary for individuals 

already registered under related 

regulatory programs covering 

ammonium nitrate use, such as DHS’s 

Chemical Facility Anti-Terrorism 

Standards (CFATS), Department of 

Transportation (DOT) hazardous 

materials regulations, and Bureau of 

Alcohol, Tobacco, Firearms, and 

Explosives (ATF) regulations. These 

commenters noted that ATF’s 

inspection process also could be used 

for ammonium nitrate inspections under 

this program to minimize inconvenience 

to ammonium nitrate users. 

A number of commenters indicated 

that some ammonium nitrate is 

normally lost as bulk ammonium nitrate 

moves through the supply chain. 

Commenters noted, for example, that 

equipment used for transporting bulk 

ammonium nitrate, such as hoppers, 

bins, and railcars are not shift-proof, 

resulting in incidental spillage of 

ammonium nitrate prills, which are the 

small, bead-like pellets of ammonium 

nitrate typically used in the 

manufacturing, transportation, and bulk 

use of ammonium nitrate. Additionally, 

commenters noted that there is normally 

loss during movement throughout the 

supply chain due to melting or 

solidification of ammonium nitrate 

prills based on nothing more than 

ambient temperature and humidity. For 

instance, commenters noted that in a 90- 

ton railcar shipment, it is not unusual 

for these phenomena to result in loss of 

200–500 pounds of ammonium nitrate. 

This may result because ammonium 

nitrate is hygroscopic in nature (i.e., it 

readily absorbs moisture). When 

ammonium nitrate prills come into 

contact with ambient moisture in the 

air, the prills may cake or meld together, 

which can simultaneously increase the 

overall mass of bulk ammonium nitrate 

while reducing its overall volume. 

These properties cause significant 

difficulty in accounting for ammonium 

nitrate on a fine scale. Consequently, 

these commenters stated that DHS 

should not require ammonium nitrate 

users to report losses of magnitudes 

normally encountered during 

ammonium nitrate use and transport. 

Several commenters addressed the 

threshold quantity or percentage 

composition of ammonium nitrate 

triggering regulation under this 

program. The universities that 

commented on the ANPRM addressed 

the use of ammonium nitrate in 

scientific research, while other 

commenters addressed the use of 

ammonium nitrate as a component of 

cold packs. These commenters stated 

that the quantities of ammonium nitrate 

used in scientific research and in cold 

pack manufacturing are so small that 

persons conducting scientific research 

or purchasing and selling cold packs 

should not be subjected to a rigorous 

regulatory scheme. Several commenters 

also recommended that DHS should 

exempt mixtures containing ammonium 

nitrate that ATF classified ‘‘explosives.’’ 

In developing this NPRM, DHS 

carefully considered all public 

comments submitted in response to the 

ANPRM. DHS will respond to the issues 

raised therein when responding to the 

comments received on this NPRM. 

D. Research Efforts and Findings 

In support of the effort to develop 

regulations to implement Subtitle J, the 

Department has examined and 

considered research into a variety of 

topics including the security hazards 

presented by the use of ammonium 

nitrate; its detonability; existing Federal 

and State ammonium nitrate programs; 

and voluntary security programs. In the 

course of conducting this research, the 

Department reviewed numerous 

materials, including, but not limited to, 

the following: 

• A. Bauer, R.D. Heater & J.H. 

Paterson, Queen’s Univ. Mining Eng’g 

Dep’t, The Sensitivity of Ammonium 

Nitrate Melts and Solutions to Projectile 

Impact (1981). 

• A. King & A. Bauer, Queen’s Univ. 

Mining Eng’g Dep’t, Shock Initiation 

Characteristics of Ammonium Nitrate 

(1980). 

• R.W. Van Dolah, F.C. Gibson & J.N. 

Murphy, U.S. Dep’t of Interior, Bureau 

of Mines, Further Studies on 

Sympathetic Detonation, Report of 

Investigations 6903 (1966). 

• R.W. Van Dolah, F.C. Gibson & J.N. 

Murphy, U.S. Dep’t of Interior, Bureau 

of Mines, Sympathetic Detonation of 

Ammonium Nitrate and Ammonium 

Nitrate-Fuel Oil, Report of 

Investigations 6746 (1966). 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
46912 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

• J.J. Burns, G.S. Scott, G.W. Jones & 

Bernard Lewis, U.S. Dep’t of Interior, 

Bureau of Mines, Investigations on the 

Explosibility of Ammonium Nitrate, 

Report of Investigations 4994 (1953). 

Information about these materials can 

be found in the docket for this NPRM. 

The Department seeks public comment 

on whether or not there are additional 

studies or other research materials the 

Department should consider in support 

of the development of the final 

regulations as well as any copies of such 

studies or research materials. 

1. Security Hazards Presented by Use of 

Ammonium Nitrate 

Ammonium nitrate is a chemical that 

exists in multiple concentrations and 

physical forms, and different 

concentrations and forms have different 

security implications. In the United 

States, the principal uses for ammonium 

nitrate are as a fertilizer or as part of an 

explosive mixture. Ammonium nitrate 

can be sensitized (made more sensitive 

to shocks, and thus easier to detonate) 

with the addition of organic material. 

One common example is when 

fertilizer-grade ammonium nitrate is 

mixed with fuel oil and creates an 

explosive mixture known as 

Ammonium Nitrate/Fuel Oil (ANFO). 

The fuel oil acts as an energy source. 

Both ammonium nitrate fertilizers and 

ANFO have been misused in acts of 

terrorism to cause catastrophic damage 

to human health, safety, national 

security, the economy, and critical 

infrastructure. 

Nationwide, fertilizer-grade 

ammonium nitrate is commonly used in 

agricultural operations and the chemical 

and explosives industries. See A. King 

& A. Bauer, 4. Due to its availability in 

small-scale packaging (e.g., 50-pound 

bags), ammonium nitrate is susceptible 

to theft and misuse in making 

improvised explosive devices (IEDs). 

Over the years, ammonium nitrate has 

been used as an explosives component 

in terrorist attacks, both domestically 

and internationally. The 1995 Murrah 

Federal Building attack in Oklahoma 

City claimed the lives of 168 individuals 

and demonstrated how ammonium 

nitrate could be misused to perpetrate 

deadly terrorist attacks. See Oklahoma 

City National Memorial, A Look at the 

Numbers, http://www.oklahomacity

nationalmemorial.org/secondary.php?

section=5&catid=145&id=83 (last 

visited Aug. 11, 2010). The Provisional 

Irish Republican Army also used 

ammonium nitrate as part of its London 

bombing campaign in the early 1980s. 

See Boyce Rensberger, Ammonium 

Nitrate Explosives Are Simple, Easily 

Made, Widely Used in Industry, Wash. 

Post, Apr. 21, 1995, at A28. More 

recently, ammonium nitrate was used in 

the 1998 East African embassy truck 

bombings, killing hundreds and injuring 

thousands at the U.S. embassies in Dar 

es Salaam, Tanzania, and Nairobi, 

Kenya. See Corky Siemaszko, Wtc 

Chemicals In Kenya Blast (Aug. 14, 

1998), http://www.nydailynews.com/

archives/news/1998/08/14/1998–08–14_

wtc_chemicals_in_kenya_blast.html 

(last visited May 11, 2011). Ammonium 

nitrate was also used in a November 

2003 series of truck bombings in 

Turkey, killing over 50 individuals and 

injuring an additional 700 individuals at 

multiple locations across Istanbul. See 

Lauren Johnston, CBSNews.com, 

Fertilizer Used in Terror Bombs (Apr. 

14, 2004), http://www.cbsnews.com/

stories/2004/04/14/world/main611898.

shtml (last visited Aug. 11, 2010). 

Additionally, since the events of 9/11, 

stores of ammonium nitrate have been 

confiscated during raids on terrorist 

sites around the world, including raids 

on sites in Canada (see Steve Schippert, 

Threats Watch, Canada Raid Breaks 

Cell: 3 Tons of Explosives Found (June 

3, 2006), http://threatswatch.org/inbrief/ 

2006/06/canada-raid-breaks-cell-3-tons/ 

(last visited Aug. 11, 2010)), England 

(see BBC News, Ammonium Nitrate 

‘Easy to Find’ (Mar. 30, 2004), http://

news.bbc.co.uk/2/hi/uk_news/3582921.

stm (last visited Aug. 11, 2010)), and the 

Philippines (see U.S. Dep’t of State, 

Office of the Coordinator for 

Counterterrorism, Country Reports on 

Terrorism 2005, p. 78). 

2. Detonability of Ammonium Nitrate 

It is understood that under proper 

conditions pure (unblended) 

ammonium nitrate is detonable. Making 

reliable explosives from ammonium 

nitrate is simplified through the 

addition of a fuel component with 

which it can react. In addition, though 

rare, accidental explosions have 

occurred during the manufacture, 

storage, and transport of ammonium 

nitrate. See J.J. Burns, G.S. Scott, G.W. 

Jones & Bernard Lewis, 1. Despite the 

explosive hazard presented by 

ammonium nitrate, however, it has been 

successfully and safely used for decades 

as a fertilizer. See R.W. Van Dolah, F.C. 

Gibson & J.N. Murphy; Report of 

Investigations 6746, 2. There is little 

scientific consensus about the critical 

diameter of an explosive required for 

detonation and the size of the 

conventional explosive charge (i.e., 

booster) necessary to detonate 

unblended ammonium nitrate. These 

questions about detonability all receive 

research attention today, and have also 

received research attention in the past. 

See A. Bauer, R.D. Heater & J.H. 

Paterson, 1, 5 (1981). Preliminary results 

of ongoing research suggest that 

unblended ammonium nitrate can be 

difficult to detonate with any reliability. 

To date, terrorists typically have 

employed combinations of ammonium 

nitrate and fuel oil when utilizing 

ammonium nitrate in terrorist attacks. 

To better understand the detonability 

of ammonium nitrate and its use in 

explosives, the Department reviewed, 

and considered the results of, a study 

conducted by Sandia National 

Laboratory. Due to the detailed nature of 

its content and findings, however, this 

study, which is ‘‘For Official Use Only,’’ 

is not available to the public. The 

Department has also consulted with the 

Federal Bureau of Investigation’s (FBI) 

Explosives Unit. This consultation 

helped the Department to understand 

the detonability of unblended 

ammonium nitrate, the detonability of 

ammonium nitrate mixtures, and the 

role ammonium nitrate plays in IED 

construction and terror-related 

activities. 

The Department seeks public 

comment on the detonability of 

ammonium nitrate. 

3. Federal Regulations Addressing 

Ammonium Nitrate 

In developing this proposed rule, DHS 

reviewed other Federal regulations that 

cover portions of the ammonium nitrate 

supply chain or deal with identity 

verification; a number of these other 

regulations are discussed below. DHS 

examined these regulations for potential 

overlap with the proposed Ammonium 

Nitrate Security Program. In developing 

this NPRM, the Department collaborated 

with many of its Federal security 

partners in an attempt to harmonize this 

proposed rule with other regulatory 

regimes. 

a. Chemical Facility Anti-Terrorism 

Standards 

In addition to the authority granted to 

DHS by Subtitle J, the Department had 

authority under section 550 of the 

Homeland Security Appropriations Act 

of 2007, Pub. L. 109–295, to issue 

regulations governing the security of 

high-risk chemical facilities. Under that 

authority, the Department promulgated 

an interim final rule titled the Chemical 

Facility Anti-Terrorism Standards 

(CFATS), 6 CFR part 27. See 72 FR 

17688 (April 9, 2007). Under CFATS, 

the Department regulates the security of 

high-risk chemical facilities, including 

high-risk chemical facilities that possess 

ammonium nitrate. 

To help the Department identify highrisk chemical facilities under CFATS, 


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the Department adopted a list of 

chemicals of interest (COI) as Appendix 

A to CFATS. See 72 FR 65396 

(November 20, 2007). Any chemical 

facility that possesses any COI at or 

above the applicable screening 

threshold quantity specified in 

Appendix A for that COI must complete 

and submit to DHS certain consequencebased information via an online tool 

called the Chemical Security 

Assessment Tool Top-Screen. Any 

chemical facility preliminarily 

determined to be high-risk after DHS 

review of the chemical facility’s TopScreen must then meet additional 

security-related requirements under 

CFATS. Due to the risks ammonium 

nitrate may pose if either (1) exploded 

on-site, or (2) stolen or diverted to 

produce IEDs, ammonium nitrate (in 

both explosive and specified fertilizer 

forms) is one of over 300 COI that DHS 

listed in Appendix A to CFATS. See 72 

FR 65407–65408, 65410. 

Although Subtitle J and CFATS share 

a goal of preventing terrorism risks 

associated with ammonium nitrate, the 

scopes and methods of regulation under 

Subtitle J and CFATS are very different. 

The CFATS rule—which addresses 

hundreds of chemicals in addition to 

ammonium nitrate—is directed at the 

security of high-risk chemical facilities. 

The CFATS rule does not, however, 

impose any limitations on the sale or 

transfer of ammonium nitrate. By 

contrast, Subtitle J does not address the 

physical security of ammonium nitrate 

facilities but does impose certain 

conditions on the sale or transfer of 

ammonium nitrate (e.g., requiring that 

ammonium nitrate may only be 

transferred between registered 

ammonium nitrate sellers and registered 

ammonium nitrate purchasers (or 

purchasers’ agents)). 

In developing the rule required by 

Subtitle J, DHS intends to draw on 

information gained under the CFATS 

program about ammonium nitrate, and 

will work to ensure that CFATS and the 

new Subtitle J program complement 

each other. For additional discussion of 

the CFATS program’s interaction with 

the proposed ammonium nitrate rule, 

see section III.A.1 of this NPRM. 

b. U.S. Coast Guard Maritime Security 

Regulations 

The U.S. Coast Guard (USCG) 

regulates ammonium nitrate under 

multiple programs. Under the Maritime 

Transportation Security Act (MTSA), 46 

U.S.C. 70101 et seq., USCG has 

authority to regulate security both 

aboard maritime vessels and at facilities 

located in, under, or adjacent to any 

waters subject to the jurisdiction of the 

United States. Through its MTSA 

regulations, USCG regulates the security 

of vessels transporting ammonium 

nitrate, as well as the security of certain 

facilities that store, manufacture, use, or 

distribute ammonium nitrate. In 

addition, USCG regulates the 

transportation of ammonium nitrate, 

and the loading or unloading of 

ammonium nitrate from vessels at any 

waterfront facility. See 33 CFR part 126 

(regulating the handling of ammonium 

nitrate at waterfront facilities, and 

establishing penalties for handling 

ammonium nitrate without a permit); 46 

CFR 148.01–7 (regulating the bulk 

shipment of ammonium nitrate). 

USCG has also designated as a 

‘‘Certain Dangerous Cargo’’ any 

ammonium nitrate that is not certain 

dangerous cargo residue. See 33 CFR 

160.204. Based on this designation, each 

vessel carrying ammonium nitrate on 

bodies of water other than certain 

portions of inland rivers must submit a 

Notice of Arrival prior to arrival in port. 

See 33 CFR part 160, subpart C. The 

Notice of Arrival must contain certain 

information, including the name of the 

vessel’s owner and operator, the names 

of the last five ports or places visited, 

the amount of ammonium nitrate on 

board, and information pertaining to 

each crewmember aboard. See 33 CFR 

160.206. Owners and operators of U.S.- 

flagged vessels carrying ammonium 

nitrate in bulk must have, and must 

operate in compliance with, USCGapproved vessel security plans. See 33 

CFR 104.410. Likewise, owners and 

operators of facilities that receive 

vessels carrying ammonium nitrate in 

bulk must have and operate in 

compliance with USCG-approved 

facility security plans. See 33 CFR 

105.410. 

c. Transportation Security 

Administration 

The Transportation Security 

Administration (TSA) has broad 

authority over security of all modes of 

transportation. These authorities are 

found primarily in the Aviation and 

Transportation Security Act of 2001 

(ATSA), Public Law 107–71, which 

regulates the transportation of cargo, 

including ammonium nitrate. ATSA 

broadly allows TSA to ‘‘exercise * * * 

powers, relating to transportation 

security as [TSA] considers 

appropriate.’’ See 49 U.S.C. 114. TSA 

exercises its authority under ATSA in 

part by performing threat assessments 

on truck drivers who must receive 

Hazardous Materials Endorsements in 

order to be authorized to transport 

ammonium nitrate. 

d. Bureau of Alcohol, Tobacco, 

Firearms, and Explosives 

ATF, a principal law enforcement 

agency within the U.S. Department of 

Justice, is dedicated to preventing 

terrorism, reducing violent crime, and 

protecting our nation. Among its 

authorities, under 27 CFR part 555, ATF 

is responsible for regulating the use of 

explosives, which are defined by 

inclusion in ATF’s annual List of 

Explosive Materials, ATF Publication 

5400.8. See 75 FR 1085 (Jan. 8, 2010) 

(notice of annual list). While ATF does 

not consider ammonium nitrate an 

explosive, ammonium nitrate explosive 

mixtures and ANFO are included in 

ATF’s list of explosive materials. ATF 

regulations require that no person, other 

than a licensee or permittee, knowingly 

transport or receive any explosive 

material (including ANFO). See 27 CFR 

555.26(a). Section III.A.3 of this NPRM 

discusses the interaction of ATF 

regulations with the proposed 

ammonium nitrate rule. 

e. Department of Transportation 

Hazardous Materials Regulations 

The Federal Hazardous Materials 

Transportation Law (Federal Hazmat 

Law, 49 U.S.C. 5101 et seq.) authorizes 

the Secretary of Transportation to 

‘‘prescribe regulations for the safe 

transportation, including security, of 

hazardous material in intrastate, 

interstate, and foreign commerce.’’ The 

Secretary of Transportation has 

delegated this authority to Pipeline and 

Hazardous Materials Safety 

Administration (PHMSA). PHMSA, 

through its Hazardous Materials 

Regulations (HMR; 49 CFR Parts 171– 

180), prescribes transportation 

requirements for hazardous materials, 

including ammonium nitrate. 

The Hazardous Materials Table (HMT; 

49 CFR 172.101) lists several shipping 

descriptions for ammonium nitrate and 

ammonium nitrate mixtures or 

solutions. These descriptions vary based 

on the properties of the particular 

ammonium nitrate at issue. As such, a 

shipment of ammonium nitrate may be 

classed and regulated as a Division 1.1D 

explosive, Division 5.1 oxidizer, or 

Class 9 miscellaneous hazardous 

material. For transport in commerce 

these materials must comply with all 

applicable HMR requirements (e.g., 

packaging, shipping papers, marking, 

labeling, placarding, security plans, 

emergency response information, 

training, etc.). 

f. Department of Commerce 

Under the Export Administration 

Regulations (EAR), the U.S. Department 


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46914 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

of Commerce’s Bureau of Industry and 

Security regulates the export and reexport of ammonium nitrate. A ‘‘reexport’’ is the shipment or transmission 

of an item subject to the EAR from one 

foreign country (i.e., a country other 

than the United States) to another 

foreign country. A re-export also occurs 

when there is release of technology or 

software subject to the EAR to a foreign 

national outside the United States. See 

15 CFR 734.2, and 15 CFR part 772 

(definition of ‘‘re-export’’). 

Specifically, under the EAR, licensees 

are authorized to export or re-export 

ammonium nitrate only to certain 

countries listed in the EAR, and 

consistent with the terms of the issued 

export license. See 15 CFR 742.6 and 15 

CFR 747.3. Under the EAR, ammonium 

nitrate is defined to include fertilizers 

and fertilizer blends containing more 

than 15% by weight ammonium nitrate, 

except liquid fertilizers (containing any 

amount of ammonium nitrate) or dry 

fertilizers which contain less than 15% 

by weight ammonium nitrate. See 15 

CFR part 774, Supplement 1 for itemspecific export licensing information. 

Individuals involved in the domestic 

sale or transfer of ammonium nitrate, as 

defined by DHS, at U.S.-based exporters 

of ammonium nitrate would be required 

to register with the Department under 

the proposed Ammonium Nitrate 

Security Program. 

4. State Regulations Addressing 

Ammonium Nitrate 

Virtually all 50 States regulate 

ammonium nitrate in some manner, 

based on its use either as a fertilizer, an 

explosive, or both. Although not in 

universal agreement, relevant State 

regulations typically define ammonium 

nitrate as an ammonium and nitrate 

mixture containing not less than 33 

percent nitrate; require purchasers and 

sellers of ammonium nitrate to register 

with a governing State body; and require 

sellers of ammonium nitrate to maintain 

records of sales of ammonium nitrate for 

at least two years. Many State 

regulations grant State officials both the 

authority to inspect facilities possessing 

or distributing ammonium nitrate and 

the authority to fine or otherwise 

penalize facilities or individuals who 

fail to comply with regulations 

concerning ammonium nitrate. 

5. Voluntary Programs Addressing 

Ammonium Nitrate 

In addition to efforts required by 

existing Federal and State regulations, 

many producers, distributors, and users 

of ammonium nitrate have undertaken 

voluntary efforts to secure the 

ammonium nitrate supply chain. Chief 

among these voluntary efforts is the 

‘‘America’s Security Begins With You’’ 

program. This program is a voluntary 

‘‘know-your-customer’’ program 

developed jointly by the ATF and 

members of the fertilizer industry 

following the 1995 attack on the Alfred 

P. Murrah Federal Building in 

Oklahoma City. The Department 

believes that, in many instances, 

voluntary programs already in place can 

serve as good building blocks for 

meeting regulatory requirements. The 

Department seeks comments providing 

details on voluntary programs related to 

ammonium nitrate security and how 

they could potentially be leveraged by 

ammonium nitrate users to meet the 

requirements of the proposed rule. 

III. Discussion of Proposed Rule: 

Implementing Subtitle J 

What follows is a discussion of the 

approach DHS is proposing to take in 

implementing Subtitle J. Where 

appropriate, potential alternative 

approaches are also discussed. DHS 

welcomes public comment on the 

proposed rule, and also on potential 

alternative approaches. 

The cost to the public of this 

proposed rule ranges from $300 million 

to $1.041 billion over 10 years at a 7% 

discount rate. The primary estimate is 

the mean which is $671 million. For 

comparison, at a 3% discount rate, the 

cost of the proposed rule ranges from 

$364 million to $1.3 billion with a 

primary (mean) estimate of $814 

million. The average annualized cost for 

the program ranges from $43 million to 

$148 million (with a mean of $85 

million), also employing a 7% discount 

rate. The following two tables present 

the summary discounted total and 

annualized costs for the rule. 

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

3 Percent discount rate 7 Percent discount rate 

Primary 

estimate 

(millions) 

Minimum 

estimate 

(millions) 

Maximum 

estimate 

(millions) 

Primary 

estimate 

(millions) 

Minimum 

estimate 

(millions) 

Maximum 

estimate 

(millions) 

Costs 

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

Benefits 

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

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

Registration Appeals Point of sale Recordkeeping Audits/ 

inspections Federal costs * Total cost 

PY1 .............................. 18.9 0.1 67.5 6.2 0.4 9.8 102.7 

PY2 .............................. 4.4 0.0 62.6 4.4 0.4 6.5 78.2 

PY3 .............................. 4.3 0.0 58.4 4.1 0.4 6.0 73.2 

PY4 .............................. 4.2 0.0 54.7 3.8 0.4 5.7 68.7 

PY5 .............................. 4.2 0.0 51.1 3.6 0.3 5.3 64.4 

PY6 .............................. 8.9 0.0 48.1 3.4 0.3 5.1 65.8 

PY7 .............................. 6.8 0.0 44.6 3.1 0.3 4.7 59.5 

PY8 .............................. 6.7 0.0 41.7 3.0 0.3 4.4 56.0 

PY9 .............................. 6.6 0.0 39.0 2.8 0.2 4.2 52.6 

PY10 ............................ 6.5 0.0 36.4 2.6 0.2 3.9 49.5 

Total ...................... 71.3 0.1 503.8 36.8 3.0 55.3 670.6 

* Reporting of Thefts rounds to zero in individual years and are omitted from this table but included in the total and regulatory analysis. 


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DHS also conducted a break-even 

analysis that examines the required 

reduction in the potential frequency of 

terrorist attacks involving ammonium 

nitrate. The proposed rule would be cost 

effective if it resulted in a reduction in 

attack frequency by at least one attack 

the size of the Oklahoma City bombing 

(which occurred 16 years ago) per 14 

years. For discussion of this analysis, 

and for explanation of other cost 

calculations, please see section IV of 

this NPRM, which discusses various 

regulatory analyses conducted by DHS. 

A. Ammonium Nitrate Subject to 

Subtitle J Requirements (See Section 

31.105 of the Proposed Rule) 

This section will address the 

definition of ammonium nitrate. 

Congress has defined ammonium nitrate 

for purposes of Subtitle J to include 

‘‘solid ammonium nitrate that is chiefly 

the ammonium salt of nitric acid and 

contains not less than 33 percent 

nitrogen by weight.’’ See 6 U.S.C. 

488(1)(A). DHS proposes to use this 

definition of solid ammonium nitrate in 

section 31.105 of the proposed rule. 

Also included in the definition of 

ammonium nitrate for purposes of 

Subtitle J is ‘‘any mixture containing a 

percentage of ammonium nitrate that is 

equal to or greater than the percentage 

determined by [DHS].’’ See 6 U.S.C. 

488(1)(B). In establishing this mixture 

percentage for purposes of Subtitle J, the 

Department was required to consult 

with the heads of appropriate Federal 

departments and agencies, including the 

Secretary of Agriculture, and to provide 

notice and an opportunity for comment. 

See 6 U.S.C. 488a(b). That consultation 

is discussed below. 

This section will also discuss the 

Department’s consideration of a 

minimum threshold amount of 

ammonium nitrate that would have to 

change hands as part of a sale or transfer 

before that sale or transfer (including 

the individuals participating in the 

transaction) would be subject to Subtitle 

J’s requirements. This section will also 

discuss the Department’s discretionary 

ability to exempt from regulation ‘‘a 

person producing, selling, or purchasing 

ammonium nitrate exclusively for use in 

the production of an explosive under a 

license or permit issued under chapter 

40 of title 18, United States Code.’’ See 

6 U.S.C. 488a(f). 

1. Mixture Requirement 

Mixtures containing high percentages 

of ammonium nitrate can be effectively 

used in bomb-making. By proposing to 

include a mixture requirement in the 

Ammonium Nitrate Security Program, 

the Department is seeking to capture 

under this rule mixtures that terrorist 

bomb-makers would be most interested 

in acquiring. To assist in determining an 

appropriate threshold percentage of 

ammonium nitrate in a mixture for 

purposes of Subtitle J, the Department 

reviewed multiple detonability studies, 

examined mixture requirements 

employed by other Federal and State 

regulatory programs, and consulted with 

a variety of Federal, State, and private 

sector entities. Based on this research 

and after consultation with the FBI’s 

Explosives Unit, the Department 

proposes to define ammonium nitrate in 

section 31.105 to include any mixture 

that is 30 percent or more ammonium 

nitrate by weight. By setting the mixture 

requirement at 30 percent, the 

Department believes the proposed rule 

will capture those ammonium nitrate 

mixtures that could be most effectively 

used in bomb-making, or that could be 

most effectively retooled or reconfigured 

for use in bomb-making. 

The Department is aware that this 

proposed mixture requirement differs 

from the mixture requirements used for 

ammonium nitrate under CFATS. Under 

CFATS, a mixture containing 

ammonium nitrate is counted towards 

the screening threshold quantity for 

ammonium nitrate if ammonium nitrate 

makes up 33 percent or more of the 

mixture. Therefore, this proposed 

mixture requirement for this rule would 

apply more broadly than the mixture 

requirement in CFATS; the ammonium 

nitrate mixtures covered under this 

proposed requirement would include 

ammonium nitrate mixtures containing 

between 30 and 33 percent ammonium 

nitrate by weight, while CFATS’ 

mixture requirements do not cover 

mixtures containing between 30 and 33 

percent ammonium nitrate by weight. 

There are two main reasons for the 

difference between the CFATS approach 

to ammonium nitrate mixtures and the 

proposed Ammonium Nitrate Security 

Program approach to mixtures. First, the 

two mixture requirements exist to 

accomplish different goals. The CFATS 

mixture requirements exist to help the 

Department identify potentially highrisk chemical facilities subject to 

CFATS. The CFATS mixture 

requirements are not an assertion by the 

Department that only ammonium nitrate 

mixtures containing 33 percent or more 

ammonium nitrate are vulnerable to 

misuse in acts of terrorism. The 

proposed Ammonium Nitrate Security 

Program mixture requirement, however, 

is solely meant to identify ammonium 

nitrate mixtures that have the potential 

to be misused in acts of terrorism. 

Accordingly, a more conservative and 

inclusive mixture requirement is 

appropriate for Subtitle J. 

Second, during the development of 

this proposed rule, the Department 

obtained information from the 

Department of Justice, indicating that 

under certain circumstances, 

experiments that have shown that 

mixtures containing as low as 30 

percent ammonium nitrate by weight 

can be used as components of viable 

explosives. This information was 

unavailable to DHS when it wrote and 

published the CFATS mixture 

requirements. In light of this evidence 

and the purpose for which the Subtitle 

J mixture requirement is being 

established, the Department believes 

that setting the proposed mixture 

requirement at 30 percent ammonium 

nitrate is the correct course of action. 

The Department’s proposed mixture 

requirement would exempt persons and 

entities from coverage under the 

proposed rule only to the extent that 

they possess or obtain mixtures 

containing less than 30 percent 

ammonium nitrate by weight. The 

proposed requirement would not 

exempt persons and entities from 

coverage to the extent that they possess 

or obtain solid ammonium nitrate which 

they intend to incorporate into 

ammonium nitrate mixtures. The 

Department thus proposes that the 

purchase, sale, transfer, or acquisition of 

solid ammonium nitrate to be 

incorporated into mixtures will be 

treated the same as the purchase, sale, 

transfer, or acquisition of ammonium 

nitrate not to be incorporated into 

mixtures. 

The Department is interested in 

receiving comments on this proposed 

approach, including comments on the 

Department’s proposal to define 

ammonium nitrate to include any 

mixture that is 30 percent or more 

ammonium nitrate by weight. DHS 

requests comments addressing the 

appropriateness of this percentage, 

comments addressing whether it would 

be more appropriate to express this 

percentage as a percentage of mixture 

weight or as a percentage of mixture 

volume, and comments discussing 

whether a higher or lower mixture 

percentage would be more appropriate. 

The Department is also interested in 

comments addressing possible 

consumer and retail impacts of the 

proposed mixture requirement, and on 

the detonability of ammonium nitrate 

and ammonium nitrate mixtures of 

varying percentages. 


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2. Threshold Weight and Individual 

Products Exemptions 

The Department’s understanding is 

that, outside of small sample or research 

quantities, ammonium nitrate is 

primarily sold either in bulk or in prepackaged bags containing no less than 

50 pounds of ammonium nitrate. 

Mixtures that contain small percentages 

or amounts of ammonium nitrate are 

also found in various retail products, 

including home and garden products 

(e.g., fertilizer mixtures) and cold packs. 

Under Subtitle J, the Department has 

authority to regulate transactions (and 

the individuals conducting them) 

involving any amount of ammonium 

nitrate. The Department is proposing to 

establish a threshold weight to which 

the regulation would apply, and is 

considering whether the marginal 

security benefits gained from regulating 

transactions involving de minimis 

quantities of ammonium nitrate are 

outweighed by the costs of regulating 

those transactions. Similarly, the 

Department is considering whether the 

security benefits gained from regulating 

transactions involving products 

packaged such that they are unlikely to 

be used to make an explosive are 

outweighed by the costs of regulating 

those transactions. To avoid capturing 

these transactions under its regulatory 

regime, and to avoid complicating 

ammonium nitrate transactions that may 

only pose a de minimis security risk, the 

Department is considering applying 

both a minimum threshold weight and 

an individual products exemption for 

cold packs to this rulemaking. 

The Department is considering 

establishing a threshold weight whereby 

each transaction would be subject to 

Subtitle J’s regulatory requirements only 

if the transaction involves the sale, 

transfer, or purchase of ammonium 

nitrate that, in the aggregate, is equal to 

or greater than the threshold weight. 

Specifically, section 31.105 of the 

proposed rule contains a 25 pound 

threshold weight. The Department 

believes that this weight is low enough 

to prevent a bad actor from easily 

acquiring a sufficient quantity of 

ammonium nitrate to pose a terrorist 

threat. The Department also believes 

that this weight is high enough to avoid 

capturing small laboratory quantities of 

ammonium nitrate or transactions 

involving other de minimis quantities of 

ammonium nitrate that are unlikely to 

be misappropriated for use in a terrorist 

act. The Department believes that such 

de minimis quantities are unlikely to be 

misappropriated for use in a terrorist act 

due to the large number of transactions 

in de minimis quantities that would be 

required to accumulate sufficient 

ammonium nitrate to construct an 

explosive that poses a significant 

terrorist threat. This threshold should 

also reduce the economic impact of the 

Ammonium Nitrate Security Program by 

avoiding regulation of those transactions 

that present de minimis security risk. 

In order to determine the utility of 

this approach, the Department solicits 

comments on the manners in which 

ammonium nitrate is sold and packaged, 

the manners and frequencies of use of 

ammonium nitrate in small quantities, 

and the utility of setting a threshold 

weight. The Department additionally 

requests comments addressing the 

appropriateness of the proposed 25 

pound threshold weight. Specifically, 

the Department asks whether another 

threshold weight, such as 5 pounds, 10 

pounds, 50 pounds, or another quantity, 

would better achieve the desired results 

of the proposed rule. 

If the Ammonium Nitrate Security 

Program does include a threshold 

weight, DHS proposes that the threshold 

weight would apply to mixtures as well 

as to unblended ammonium nitrate. As 

such, the proposed rule would apply to 

an ammonium nitrate mixture only if 

(1) the mixture weighs at least the 

threshold weight, and (2) the mixture 

contains at least 30 percent ammonium 

nitrate by weight. Both conditions 

would need to be satisfied in order for 

the proposed rule to apply to a given 

mixture. 

The Department proposes that when 

applying the threshold weight to an 

ammonium nitrate mixture, the total 

weight of the mixture should be 

counted, as opposed to just the weight 

of the ammonium nitrate in the mixture. 

In other words, all ten pounds of a 

single ten-pound bag (or all ten pounds 

of ten one-pound bags) of fertilizer 

mixture containing 30 percent 

ammonium nitrate by weight would 

count towards the threshold weight, and 

not just the three pounds which is the 

weight of the ammonium nitrate portion 

of that mixture. The Department 

believes this approach would be more 

effective at preventing a bad actor from 

acquiring sufficient quantities of 

ammonium nitrate than would an 

alternative approach under which only 

the ammonium nitrate content of a 

mixture is counted towards threshold 

weight. The Department solicits 

comments on the utility and manner of 

application of the proposed threshold 

weight to mixtures containing 

ammonium nitrate. 

In addition to including a threshold 

weight in the proposed rule, the 

Department is proposing to exempt cold 

packs containing ammonium nitrate 

from regulation. In section 31.105 of the 

proposed rule the Department proposes 

to define a ‘‘cold pack’’ as a small, 

commercially-available package 

commonly used as a replacement for ice 

in the application of first aid, containing 

unmixed water and ammonium nitrate 

that, immediately prior to use, can be 

manipulated to cause the comingling of 

the water and the ammonium nitrate 

resulting in an endothermic reaction 

that significantly lowers the temperature 

of the package. For the following 

reasons, DHS does not believe that 

Congress intended the people and 

facilities buying and selling cold packs 

to be regulated by Subtitle J. 

The Department believes that the 

security benefits obtained from 

regulating sales and transfers of cold 

packs would be minimal and 

outweighed by significant impact on the 

general public. Cold packs individually 

contain extremely small amounts of 

ammonium nitrate such that collecting 

very large numbers of them would be 

necessary in order to obtain enough 

ammonium nitrate to produce a 

dangerous explosive device. 

The Department also believes that 

regulating sales and transfers of cold 

packs would impose substantial 

economic impacts on the public, which 

would not be justified by the minimal 

security benefit gained by cold packs 

regulation. Specifically, DHS is 

concerned that regulation of cold packs 

would have serious and negative 

impacts on the provision of first aid, 

first responders, and the medical sector 

generally. These substantial impacts 

would be spread over a large variety of 

retail stores, medical facilities, health 

care providers, athletic teams, regulated 

industries that require first aid kits 

containing cold packs, and individuals 

using cold packs for personal first aid 

purposes. A preliminary examination 

indicates that the potential affected 

populations could easily exceed six 

million individuals, businesses, and 

organizations or public entities. 

Complicating the issue is the fact that 

many cold pack manufacturers do not 

use ammonium nitrate in their 

products—many manufactures assemble 

cold packs that contain other chemicals 

instead of ammonium nitrate. Cold pack 

purchasers or sellers might not know 

which chemicals are present in the cold 

packs they obtain, prior to obtaining 

them, which could complicate their 

abilities to comply with any regulatory 

requirements. 

For these reasons, the Department 

does not believe that Congress intended 

cold packs—or the sporting goods 

stores, recreational centers, schools, and 

other entities that purchase or sell 


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them—to be covered under Subtitle J. 

DHS requests comments describing the 

populations that could be impacted by 

cold packs regulation, including 

comments discussing those populations’ 

abilities to comply with the proposed 

regulatory requirements. 

The Department’s proposed cold 

packs exemption would exempt persons 

and entities from coverage under the 

rule only to the extent that they 

purchase, sell, or transfer cold packs 

containing ammonium nitrate. The 

proposed rule would not exempt 

persons and entities (such as 

manufacturers of cold packs) from 

coverage to the extent that they 

purchase or transfer ammonium nitrate 

which they intend to incorporate into 

cold packs. The Department thus 

proposes that the purchase, sale, 

transfer, or acquisition of ammonium 

nitrate to be incorporated into cold 

packs will be treated the same as the 

purchase, sale, transfer, or acquisition of 

ammonium nitrate not to be 

incorporated into cold packs. 

The Department solicits comments on 

these proposed exemptions. The 

Department also solicits comments 

describing uses for ammonium nitrate 

other than as a fertilizer, a cold packs 

component, or an explosives ingredient. 

DHS solicits comments on whether any 

other uses of ammonium nitrate warrant 

exemptions. 

3. Explosives Exemption 

The Department has the discretion to 

exempt from regulation persons and 

facilities producing, selling, 

transferring, or purchasing ammonium 

nitrate exclusively for use in the 

production of explosives under a license 

or permit issued under the Federal 

explosives laws, 18 U.S.C. Chapter 40, 

and associated regulations. See 6 U.S.C. 

488a(f). 

ATF is responsible for enforcing 

federal explosives laws and has 

established regulations for doing so. See 

27 CFR Part 555. ATF’s regulatory 

authority over a facility or individual 

licensed to use an ammonium nitratebased explosive is limited to ammonium 

nitrate that (1) has been mixed with a 

fuel (i.e., ANFO) which is defined in 27 

CFR 555.11 as an ‘‘explosive’’ and (2) is 

contained on ATF’s List of Explosive 

Materials. Unblended ammonium 

nitrate, however, is not defined as an 

explosive under 27 CFR part 555, and 

thus ATF does not regulate ammonium 

nitrate that has not been mixed with a 

fuel oil, outside of the limited 

separation distance requirements 

governing the storage of ammonium 

nitrate when stored in the vicinity of 

other high explosives and blasting 

agents, as set forth in 27 CFR 555.220. 

This is the case even where unblended 

ammonium nitrate is being produced, 

purchased, or stored by a facility 

regulated by ATF as a manufacturer of 

ANFO. It is also the Department’s 

understanding that facilities producing 

ANFO typically have inventories of 

ammonium nitrate on hand for use in 

manufacturing ANFO, while entities 

engaged solely in the re-sale or purchase 

of ANFO are unlikely to possess any 

ammonium nitrate other than that 

which is contained within ANFO 

mixtures. 

The Department is considering three 

possible approaches for regulating 

individuals and facilities involved in 

the production of ANFO. These 

approaches are summarized in the 

following table, and discussed 

thereafter. 

Option 1 Option 2 Option 3 

Would DHS opt to exempt individuals and facilities that purchase, 

sell, or transfer ammonium nitrate solely for use in the production of explosives? 

No ................................................. Yes ................................................ Partial Exemption. 

Brief description of option .............. Ammonium nitrate transactions 

would be regulated by DHS 

whether or not the ammonium 

nitrate purchased, sold, or 

transferred has been combined 

with fuel oil to create ANFO.

Ammonium nitrate purchases, 

sales, or transfers by individuals and facilities solely to enable use of ammonium nitrate 

in the production of explosives 

would not be regulated by DHS.

Ammonium nitrate combined with 

fuel oil (ANFO) would not be 

regulated by DHS. 

Would DHS regulate ammonium 

nitrate mixtures that are ‘‘explosives’’ subject to ATF regulation 

(i.e., ANFO)? 

Yes ................................................ No ................................................. No. 

What duplication would result from 

this option? 

Individuals and facilities would be 

subject to regulation by both 

DHS under Subtitle J and ATF 

under the Federal explosives 

laws.

Individuals and facilities regulated 

by ATF under the Federal explosives laws would not be regulated by DHS. No duplication 

would result.

Certain facilities (e.g., those that 

produce ANFO) would be subject to both DHS and ATF regulations. 

What gaps would result from this 

option? 

No gaps in coverage of ammonium nitrate as it moves 

through the supply chain.

Could create a considerable gap 

in regulatory coverage throughout the ammonium nitrate supply chain, as ATF regulations 

apply solely to ANFO and not 

the ammonium nitrate used to 

create it.

Compromise approach closes 

gaps in security of the ammonium nitrate supply chain. 

The first option is to apply the final 

rule implementing Subtitle J to 

individuals and facilities that purchase, 

sell, or transfer ammonium nitrate for 

use in the production of explosives. 

Under this approach, such individuals 

and facilities would be subject to 

regulation by both DHS under Subtitle 

J and ATF under the Federal explosives 

laws. By not exempting ammonium 

nitrate used in explosives from 

coverage, DHS would be treating all 

individuals and facilities who purchase, 

sell, or transfer ammonium nitrate— 

whether as part of ANFO mixtures or 

not—the same. This approach would 

ensure that there are no gaps in coverage 

of ammonium nitrate as it moves 

through the supply chain—ammonium 

nitrate would be captured under DHS’s 

ammonium nitrate program both before 

and after being combined with fuel oil 

to create ANFO, and would be captured 

under ATF’s regulations after being 


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combined with fuel oil to create ANFO. 

The major disadvantage of not 

exempting ammonium nitrate used in 

explosives is that individuals and 

facilities who purchase, sell, or transfer 

ammonium nitrate for the purpose of 

manufacturing explosives would be 

subject to potentially duplicative 

regulatory requirements, including two 

sets of licensing requirements, two sets 

of recordkeeping requirements, two sets 

of point of sale requirements, and 

inspections by both ATF and DHS. In 

response to the October 29, 2008 

ANPRM, some commenters expressed 

concern over these potentially repetitive 

regulatory requirements. 

The second option is to entirely 

exempt from Subtitle J requirements 

facilities and persons that purchase, 

sell, or transfer ammonium nitrate 

solely for use in the production of 

explosives, as they are already regulated 

by ATF. In this model, facilities and 

persons that are licensed by ATF to mix 

ammonium nitrate with fuel to create 

ANFO, but that do not purchase, sell, or 

transfer ammonium nitrate for other 

purposes and do not perform 

ammonium nitrate application services, 

would not be subject to the rule 

implementing Subtitle J. The primary 

advantage of this approach is that it 

would prevent potentially duplicative 

regulatory requirements from applying 

to ammonium nitrate facilities and 

individuals that are already subject to 

ATF regulations. This approach, 

however, could create a considerable 

gap in regulatory coverage throughout 

the ammonium nitrate supply chain, as 

ATF regulations apply solely to ANFO 

and not the ammonium nitrate used to 

create it. For example, facilities that 

produce ammonium nitrate to sell to 

manufacturers of ANFO but who 

themselves do not produce ANFO 

would be subject to neither ATF nor 

DHS regulation under this approach. 

Similarly, stores of ammonium nitrate at 

facilities producing ANFO would not be 

subject to any regulatory requirements 

(e.g., recordkeeping requirements, 

reporting of theft or loss requirements) 

by DHS or ATF under this approach. 

This would create regulatory gaps in the 

ammonium nitrate supply chain which 

could be exploited by terrorists. 

The third option would exempt from 

regulation ammonium nitrate mixtures 

that are ‘‘explosives’’ subject to ATF 

regulation (i.e., ANFO). DHS is 

proposing this option in section 31.305 

of the proposed rule. Under this 

approach, entities and individuals that 

purchase, sell, or transfer ANFO, but 

who do not produce ANFO or possess 

ammonium nitrate for other reasons, 

would be exempt from all Subtitle J 

requirements and would be subject 

solely to ATF regulation. Individuals 

producing ANFO, however, would be 

subject to the Subtitle J requirements, as 

they, by necessity, possess ammonium 

nitrate (which they possess as 

unblended ammonium nitrate before 

combining it with fuel oil to make 

ANFO). This approach recognizes both 

the fact that ATF already regulates 

ANFO, as well as the fact that ATF’s 

jurisdiction is limited such that ATF 

does not regulate the ammonium nitrate 

used by facilities to make ANFO. 

Through this compromise approach, 

individuals and entities whose 

ammonium nitrate-related operations 

are already regulated by ATF are spared 

the duplicative DHS oversight that 

would result from the first option 

(discussed above), while gaps in 

security of the ammonium nitrate 

supply chain that would be created by 

the second option (discussed above) are 

avoided. The primary drawback of this 

approach is that it would make certain 

facilities (e.g., those that produce 

ANFO) subject to both DHS and ATF 

regulations. To minimize this impact, 

the Department and ATF currently are 

discussing ways to coordinate 

inspections and other compliance 

activities for these ammonium nitrate 

facilities, and will work together to 

ensure that there is minimal duplication 

of effort or burden caused by this 

approach, if adopted. 

The Department welcomes comments 

on this proposed approach to 

ammonium nitrate produced, bought, 

sold, or transferred exclusively for the 

purpose of producing explosives. The 

Department also welcomes comments 

on any other exemptions that it should 

consider. 

B. Requirements for the Registration of 

AN Sellers and AN Purchasers (See 

Sections 31.200–31.250 of the Proposed 

Rule) 

1. Overview 

Pursuant to 6 U.S.C. 488a(c), 6 U.S.C. 

488a(d), 6 U.S.C. 488e(a)(3)(A), and 6 

U.S.C. 488e(a)(3)(B), the Department 

must establish a process by which 

persons owning or operating ‘‘AN 

Facilities’’ and persons intending to 

purchase ammonium nitrate must 

register with the Department. Section 

31.105 of the proposed rule defines an 

‘‘AN Facility’’ as any person or entity 

that produces, sells, or otherwise 

transfers ownership of, or provides 

application services for, ammonium 

nitrate. The Department proposes to 

define ‘‘application services’’ in section 

31.105 as the physical deposit of 

fertilizer onto turf, fields, crops, or other 

agricultural property, where these 

services are provided by an individual 

or entity other than the person or entity 

owning or operating the property upon 

which the fertilizer is deposited. The 

Department is interested in receiving 

comments on these definitions, as well 

as all other definitions included in the 

proposed rule. 

The proposed registration process 

would include conducting a check of 

appropriate identifying information of 

any person seeking to register against 

identifying information that appears in 

the Terrorist Screening Database. 

Accordingly, prospective applicants 

would be required to provide specific 

identifying information to the 

Department. Appearance in the TSDB is 

grounds for denial of a registration 

number (an ‘‘AN Registered User 

Number’’). In section 31.220(a)(1) of the 

proposed rule, the Department proposes 

to develop an online web portal through 

which individuals will apply for AN 

Registered User Numbers. The 

Department proposes that AN 

Registered User Numbers will be 

disseminated to successful applicants 

via e-mail or through the DHS web 

portal. The Department also proposes in 

section 31.235 to make AN Registered 

User Numbers valid for a period of five 

years. Additional proposals on who 

would be required to register and on 

various aspects of the registration 

process are discussed in the following 

paragraphs. The Department seeks 

public comment on its proposed 

registration methodology, on other 

methods the Department may consider 

for registration, and on the length of 

time registration numbers should 

remain valid. 

2. Who Must Register 

6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. 

488e(a)(3)(B) require owners and 

operators of AN Facilities (including 

facilities that provide ammonium nitrate 

application services) to register with the 

Department. For the reasons provided 

below, the Department proposes in 

section 31.200 that any person who may 

individually perform a sale or transfer of 

ammonium nitrate on behalf of an AN 

Facility would be required to register as 

an owner or operator. Registered AN 

Facility personnel (whether owners or 

operators) involved with sales, transfers, 

or provision of application services are 

collectively referred to in the proposed 

rule as ‘‘AN Sellers,’’ of which ‘‘AN 

Facility Representatives’’ and 

‘‘Designated AN Facility Points of 

Contact (POCs)’’ are subsets that have 

special responsibilities under the 

proposed rule. ‘‘AN Facility 

Representatives’’ are any AN Facility 


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personnel, be they owners or operators, 

designated to act on behalf of an AN 

Facility for purposes of compliance with 

this rule. A ‘‘Designated AN Facility 

POC’’ is the AN Facility Representative 

designated by an AN Facility to act as 

the primary point of contact with the 

Department on behalf of the AN Facility 

for purposes of compliance with this 

rule. 

6 U.S.C. 488a(d) and 6 U.S.C. 

488e(a)(3)(A) also require anyone who 

intends to purchase ammonium nitrate 

to register with the Department. The 

proposed rule refers to these individuals 

as ‘‘AN Purchasers.’’ 

Additional details on the registration 

of AN Sellers, AN Facility 

Representatives, Designated AN Facility 

POCs, and AN Purchasers follow. The 

Department welcomes public comment 

on the usefulness of these registration 

categories. 

DHS also welcomes public comment 

discussing other potential registration 

categories. DHS is interested in 

comments addressing the benefits and 

costs of potentially registering 

organizations in addition to the 

registration of individual persons. The 

Department’s proposed rule would 

require only the registration of 

individual persons, although DHS is 

interested in receiving comments 

addressing what benefits and costs, if 

any, there would be in requiring 

registration of organizations involved in 

ammonium nitrate sales, transfers, or 

application services. DHS is interested 

in receiving comments addressing 

which types of organizations (if any) 

should register—organizations affiliated 

with AN Facilities, organizations 

affiliated with AN Purchasers, both, or 

neither. The Department also invites 

comments addressing organizational 

structures, and whether different 

registration requirements should apply 

to organizations with different 

ownership, governance, or operational 

structures. The Department also seeks 

comments discussing potential ways in 

which organizational registration could 

take place. 

3. Registering AN Sellers 

6 U.S.C. 488a(c)(1)(A) and 6 U.S.C. 

488e(a)(3)(B) require persons who own 

and persons who operate AN Facilities 

to register with the Department. DHS 

believes that Subtitle J’s registration 

requirements for AN Facility personnel 

will be satisfied if AN Facilities 

designate AN Sellers, AN Facility 

Representatives, and/or Designated AN 

Facility POCs to register and perform 

the sale, transfer, and application 

service responsibilities discussed 

elsewhere in this NPRM. The 

Department proposes to require only 

those owners and operators actually 

involved in sales, transfers, or 

application services to register. DHS is 

also considering, however, whether 

Subtitle J requires all owners to register. 

DHS welcomes comments on this issue 

and the benefits and costs imposed by 

a registration requirement for various 

types of owners. We understand that 

some would consider it overly 

burdensome to require all owners or 

operators of AN Facilities to register, 

because not all owners or operators are 

involved in or have influence over their 

organizations’ ammonium nitrate 

operations, and because not all owners 

or operators have the capability to cause 

ammonium nitrate misappropriation. 

Some AN Facilities, such as those 

owned by large companies, may have 

many persons who could be considered 

owners under 6 U.S.C. 488a(c)(1)(A) and 

6 U.S.C. 488e(a)(3)(B). The Department 

requests comment on who should be 

required to register to fulfill Subtitle J’s 

owner registration requirements for 

these types of facilities. DHS also 

requests comment describing how 

registration of various owners would or 

would not fulfill the objective of 

Subtitle J—‘‘to prevent the 

misappropriation or use of ammonium 

nitrate in an act of terrorism.’’ See 6 

U.S.C. 488a(a). 

The Department is also interested in 

obtaining more information about 

individuals who operate (but do not 

own) AN Facilities, particularly at AN 

Facilities where owners themselves are 

not involved in day-to-day operations 

and do not personally sell, transfer, or 

perform application services for 

ammonium nitrate. Operators include 

employees or other persons who could 

act on behalf of a facility in conducting 

sales and transfers, such as sales clerks, 

cashiers, sales managers, and persons 

who provide ammonium nitrate 

transportation services (e.g., delivery 

truck drivers) or application services. 

Enabling operator registration is 

consistent with the Department’s 

authority under 6 U.S.C. 488a(a) and 6 

U.S.C. 488e(a)(3)(B), and is necessary in 

order to ensure that persons with the 

ability to sell, transfer, or provide 

application services for ammonium 

nitrate are not terrorists. DHS welcomes 

comments on which operators involved 

in the sale and transfer of ammonium 

nitrate, or involved in ammonium 

nitrate application services, should be 

required and why they should be 

required to register with the 

Department. 

In light of the Department’s 

understanding of the roles of AN 

Facility owners and operators, DHS is 

proposing that several categories of 

individuals register as ‘‘AN Sellers’’: 

(1) Any individual who has an 

ownership interest in an AN Facility 

may register as an AN Seller. 

(2) Any individual designated to act 

on behalf of an AN Facility for purposes 

of compliance with this regulation 

would be required to register as an AN 

Seller, such as, possibly, a site manager, 

sales manager, or corporate officer. 

(3) Any individual involved in the 

sale or transfer of ammonium nitrate on 

behalf of an AN Facility would be 

required to register as an AN Seller, 

such as a sales clerk or cashier. 

(4) Any individual performing 

ammonium nitrate application services 

on behalf of an AN Facility would be 

required to register as an AN Seller. 

DHS proposes that every sale, transfer, 

or provision of ammonium nitrate 

application services would have to be 

conducted by a registered individual (or 

by multiple registered individuals). 

Accordingly, while every AN Facility 

will be required to have at least one AN 

Seller registered with the Department, 

not every individual with job at an AN 

Facility would have to register to be an 

AN Seller. These proposals would 

largely give AN Facilities the flexibility 

to seek registration of and to conduct 

business with the personnel of their 

choosing, while also ensuring that all 

sales, transfers, and application services 

are conducted by individuals who have 

been vetted by and registered with the 

Department. 

DHS is proposing that within the 

category of AN Sellers there be a 

subcategory of individuals called ‘‘AN 

Facility Representatives.’’ The 

qualifications and responsibilities of AN 

Facility Representatives will be 

discussed in the following section. AN 

Sellers who are not AN Facility 

Representatives would have authority to 

perform all of the regulatory activities 

that owners or operators must perform 

pursuant to Subtitle J (e.g., verifying the 

identities of prospective AN Purchasers, 

recording the details of completed sales, 

and handing over possession of 

ammonium nitrate to approved AN 

Purchasers), but would not be 

responsible for ensuring that other AN 

Facility personnel are following the 

Department’s regulations. For a 

description of permissible 

responsibilities of AN Sellers, refer to 

section 31.210 of the proposed rule. 

The Department proposes that every 

AN Facility would have to have at least 

one registered AN Seller (i.e., the 

Designated AN Facility POC), but may 

seek the registration of as many other 

AN Facility Representatives and AN 

Sellers as it deems appropriate. The 


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Department proposes that whether or 

not an AN Facility seeks registration of 

more than a single person will be 

discretionary. 

In section 31.220(c)(3), the 

Department proposes that each person 

registering as an AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC will be expected to provide 

information identifying all AN Facilities 

at which he/she will perform sales or 

transfers of ammonium nitrate, or on 

behalf of which he/she will perform 

application services. In section 

31.220(b), the Department proposes that 

a single individual may serve as an AN 

Seller for multiple AN Facilities. 

4. Registering AN Facility 

Representatives 

The Department recognizes that not 

all AN Sellers will have the same level 

of non-regulatory responsibility and 

authority within an AN Facility, and 

that some AN Sellers may not be in a 

position to monitor or control overall 

AN Facility compliance or the 

compliance of other AN Facility 

employees with the final regulations. In 

light of this, in section 31.215(b), the 

Department is proposing the creation of 

a subcategory of individuals called ‘‘AN 

Facility Representatives’’ within the 

broader class of AN Sellers. The 

Department proposes that AN Facility 

Representatives would be AN Sellers 

who are not only responsible for their 

own compliance with the regulations, 

but also would be responsible for the 

AN Facility’s overall compliance with 

the regulations and the compliance of 

all other AN Facility employees. 

The Department also proposes that, 

for purposes of these regulations, the 

definition of ‘‘AN Facility 

Representative’’ be broad enough to 

include not only individuals who own 

all or part of AN Facilities, but also any 

non-owner AN Facility operators, 

employees, or contractors designated to 

act on behalf of an AN Facility for 

purposes of compliance with this 

proposed rule. Thus, for purposes of the 

proposed rule, an AN Facility would be 

allowed to designate as an AN Facility 

Representative an individual without 

any ownership in the AN Facility, such 

as, possibly, a site manager, sales 

manager, or corporate officer, to meet 

the ‘‘owner’’ and ‘‘operator’’ registration 

requirements of Subtitle J. 

In section 31.215(b), the Department 

proposes that every AN Facility would 

have to have at least one AN Facility 

Representative registered on its behalf, 

but may have as many AN Facility 

Representatives registered on its behalf 

as it deems appropriate. Whether or not 

an AN Facility seeks registration of any 

additional AN Facility Representatives 

is entirely discretionary. The 

Department also proposes that while an 

AN Facility would have to have at least 

one registered AN Facility 

Representative, whether or not an AN 

Facility seeks registration of any 

additional AN Sellers who are not AN 

Facility Representatives is entirely 

discretionary. Under the Department’s 

proposed approach, an AN Facility may 

decide that it is most cost-effective to 

register only AN Facility 

Representatives; however, in that case, 

AN Facility Representatives would have 

to be able to perform all applicable 

regulatory compliance activities in this 

rule. 

While the Department’s proposal does 

not preclude the registration of multiple 

AN Facility Representatives for a single 

AN Facility, each AN Facility will be 

required to designate a single AN 

Facility Representative to act as the 

primary point of contact with the 

Department on behalf of the AN 

Facility. This individual will be referred 

to as the ‘‘Designated AN Facility POC.’’ 

The qualifications and responsibilities 

of Designated AN Facility POCs will be 

discussed in the following section. 

An individual registering as an AN 

Facility Representative will be expected 

to provide the name of and contact 

information for the Designated AN 

Facility POC for each AN Facility on 

behalf of which he/she is registering. 

Please note that a single individual may 

serve as an AN Facility Representative 

for multiple AN Facilities. 

5. Registering a Designated AN Facility 

POC 

In section 31.215(a) of the proposed 

rule, the Department proposes requiring 

each AN Facility to designate a single 

AN Facility Representative to act as the 

primary point of contact with the 

Department on behalf of the AN 

Facility. The Department proposes that 

the Designated AN Facility POC will be 

the individual who is responsible for 

contacts with the Department regarding 

regulatory activities, such as the 

scheduling of inspections under 

sections 31.500 and 31.505 of the 

proposed rule. The Department 

proposes that the Designated AN 

Facility POC will have this point-ofcontact responsibility in addition to all 

other AN Facility Representative 

responsibilities. 

Please note that a single individual 

may serve as a Designated AN Facility 

POC for multiple AN Facilities. 

6. Summary of AN Facility Personnel 

Registration Proposals 

In summary, the Department is 

proposing that any individual working 

at or for an AN Facility that performs 

sales or transfers of ammonium nitrate, 

or that performs ammonium nitrate 

application services, would have to 

register with the Department. Sales, 

transfers, or application services may 

only be performed by an individual who 

successfully registers with the 

Department and is granted an AN 

Registered User Number as an AN Seller 

(or AN Facility Representative or 

Designated AN Facility POC, as both AN 

Facility Representatives and Designated 

AN Facility POCs are subsets of AN 

Sellers). An AN Facility may have as 

many or as few registered AN Sellers as 

it deems fit, and would be required to 

have at least one registered AN Facility 

Representative. 

AN Facility Representatives have 

several responsibilities that AN Sellers 

who are not AN Facility Representatives 

do not have (i.e., responsibilities for 

ensuring an AN Facility’s holistic 

compliance with Subtitle J 

requirements). Each AN Facility would 

be required to designate a single AN 

Facility Representative to be that 

facility’s Designated AN Facility POC, 

who will serve as the facility’s primary 

point of contact with the Department. 

The Department welcomes comments 

on the propriety and effectiveness of 

this proposed approach, including 

comments that address the following 

issues: 

• The ownership and management 

structures of AN Facilities; 

• The proposed qualifications for 

being an AN Facility Representative, 

including whether individuals who do 

not own all or part of an AN Facility 

should be able to register as AN Facility 

Representatives; 

• The proposed regulatory 

compliance responsibilities of AN 

Sellers and AN Facility Representatives, 

which will be described in further detail 

throughout the remainder of this NPRM; 

• Whether or not proof of ownership 

(for owners) or proof of delegation of 

authority from company ownership or 

management (for non-owners) should be 

required for individuals registering as 

AN Facility Representatives; and 

• The proposal that not all AN 

Facility owners or operators should be 

required to register. 

The Department also welcomes 

comments on potential alternative 

approaches. Several such alternative 

approaches follow: 

• Permitting only individuals who 

own all or part of an AN Facility to 


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1 If an owner or operator receives and possesses 

ammonium nitrate for any length of time before it 

is applied as fertilizer to his/her agricultural 

property, he/she would qualify as an AN Purchaser 

under the Department’s proposed rule. Such an 

owner or operator would have to register with DHS 

as an AN Purchaser, would have to be screened 

against the TSDB, and would have to fulfill the 

other proposed obligations of AN Purchasers as 

described elsewhere in this NPRM. 

register, and requiring those individuals 

to perform all applicable regulatory 

compliance activities, such as verifying 

AN Purchasers’ AN Registered User 

Numbers and identities (as described in 

sections 31.300 and 31.305 of the 

proposed rule); or 

• Permitting only AN Facility 

Representatives to register, but allowing 

any facility personnel to conduct 

ammonium nitrate sales, transactions, 

and application services; or 

• Permitting only AN Facility 

Representatives to register, but allowing 

non-registered facility personnel whose 

names have been provided to the 

Department to be involved in 

ammonium nitrate sales, transactions, 

and application services. 

7. Registering AN Purchasers 

6 U.S.C. 488a(d) and 6 U.S.C. 

488e(a)(3)(A) require any individual 

who intends to purchase or acquire 

ammonium nitrate to register with the 

Department. Specifically, the 

Department proposes in section 31.205 

to require that each individual person 

attempting to purchase or acquire 

ammonium nitrate from an AN Facility 

would be required to register with the 

Department. Whether that person is the 

owner of the purchasing entity or 

simply an employee thereof, the 

Department proposes to require that 

person to have a valid AN Registered 

User Number. Moreover, whether a 

purchasing entity would want to have a 

single individual complete all purchases 

or have multiple individuals with 

purchasing authority would be within 

that entity’s discretion, but the 

Department would require any 

individual attempting to purchase 

ammonium nitrate to be registered 

before an AN Facility would be 

authorized to sell ammonium nitrate to 

him/her. This is necessary to ensure that 

each individual taking ownership of 

ammonium nitrate has been vetted 

before obtaining ammonium nitrate. The 

Department welcomes public comment 

on this proposed approach. 

The Department also proposes that it 

will not require persons receiving 

ammonium nitrate application services 

to register as AN Purchasers. The 

Department does not believe that 

Subtitle J requires registration and TSDB 

vetting of owners/operators of 

agricultural property who receive 

application services, as long as those 

individuals do not otherwise qualify for 

registration under this proposed rule.1

DHS does not believe that ammonium 

nitrate fertilizer is likely to be 

misappropriated for use in acts of 

terrorism after it has been applied to 

agricultural property. The Department 

welcomes public comment on this 

conclusion. 

8. Federal/State/Tribal/Local 

Government-Owned Entities That Are 

AN Facilities or AN Purchasers 

While the Department does not 

believe that many Federal, State, tribal, 

or local governmentally-owned entities 

engage in the sale, transfer, or purchase 

of ammonium nitrate, the Department 

believes that some such entities do. In 

Subtitle J, Congress did not exempt from 

regulation AN Facilities that are owned 

by, or AN Purchasers who work for, 

Federal, State, tribal, or local 

governments. Accordingly, the 

Department is proposing to treat such 

entities like any other AN Facilities or 

AN Purchasers, and is proposing to 

require them to comply with all 

applicable regulatory requirements. The 

Department solicits comments on the 

existence of governmentally-owned 

entities engaged in the sale, transfer, or 

purchase of ammonium nitrate; on the 

existence of government-owned entities 

that provide application services; 

examples of such entities; and whether 

or not such entities should receive 

special treatment under the Ammonium 

Nitrate Security Program. 

9. Registration Process 

The Department is proposing that 

each applicant for an AN Registered 

User Number would be required to 

register as a Designated AN Facility 

POC, AN Facility Representative, AN 

Seller, and/or AN Purchaser through an 

online Web portal (the ‘‘AN User 

Registration Portal’’) developed by the 

Department and made available via the 

Internet. Proposed procedures for 

applying for an AN Registered User 

Number and registering as a Designated 

AN Facility POC, AN Facility 

Representative, AN Seller, and/or AN 

Purchaser can be found in section 

31.220 of the proposed rule. (This 

NPRM refers to applicants who have 

successfully registered under these 

proposed procedures as ‘‘registered 

users.’’) 

One alternative to Internet-only 

registration is to add a phone 

registration option to the current 

Internet option. This alternative would 

provide both an online Web portal and 

phone-based registration system. 

Applicants could choose between Web 

portal registration and phone 

registration—DHS would accept either if 

it implemented this alternative. Under 

this alternative, DHS could accept 

registration applications over the phone, 

vet applicants against the TSDB (as 

described in section III.B.11 of this 

NPRM), and subsequently mail 

applicants paper letters containing 

registration numbers or registration 

denials. DHS could also potentially 

provide each applicant with the option 

of receiving a call, conveying 

registration results or registration status, 

prior to receipt of a paper letter in the 

mail. Calls could be provided to enable 

applicants to learn their statuses prior to 

receiving letters in the mail. 

Although DHS is proposing Internetonly registration at this time, the 

Department invites public comments 

addressing the above alternative 

registration approach, and any other 

alternative registration approaches that 

commenters believe would enable 

applicants and DHS to efficiently carry 

out their respective registration 

obligations. Specifically, DHS is 

interested in identifying alternative 

approaches to the Internet that would 

allow DHS to meet its statutory 

requirements to, ‘‘to the extent 

practicable, issue or deny registration 

numbers under [Subtitle J] not later than 

72 hours after the time [DHS] receives 

a complete registration application, 

unless [DHS] determines, in the interest 

of national security, that additional time 

is necessary to review an application[,]’’ 

and to ‘‘notify a person seeking to 

register with the Department [* * *] of 

the status of the application of that 

person not later than 72 hours after the 

time [DHS] receives a complete 

registration application.’’ See 6 U.S.C. 

488a(i)(3). The Department will 

consider and examine alternatives 

suggested in public comments in 

assessing whether to require online 

registration in the final rule. DHS is 

particularly interested in receiving 

public comments addressing the 

business and economic impacts that 

various registration alternatives would 

have on the regulated community, 

including the costs and benefits of the 

various alternatives on individual 

registration applicants. Because it is 

proposing to implement an online 

registration system, DHS requests 

comments addressing the level of access 

to the Internet that registration 

applicants currently have, comments 

addressing the level of access applicants 

anticipate having in the future, and 


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comments addressing how registration 

applicants who do not have readilyaccessible Internet access could obtain 

the access necessary to register online. 

DHS specifically requests information, 

data, and/or studies pertaining to the 

regulated community’s access to the 

Internet. The Department will consider 

any data or studies received on any 

aspects of registration or on any 

alternatives, as well as other comments, 

and if appropriate, modify the 

registration system proposed in this 

NPRM. 

While not every potential applicant 

may have personal access to the 

Internet, the Internet is widely available, 

such as at public libraries or in other 

public buildings. AN Facilities are also 

welcome, but not required, to provide 

Internet access to potential applicants. 

The Department believes that there are 

significant benefits to an online 

approach. The benefits to applicants, 

registered users, and the Department of 

an online approach include: (1) Quicker 

response from the Department, thereby 

minimizing the time during which an 

applicant or registered user would not 

be able to purchase, sell, or transfer 

ammonium nitrate, or perform 

ammonium nitrate application services; 

(2) ability for an applicant or registered 

user to access, view, update, and 

manage his/her personally identifiable 

information; and (3) ability for a 

registered user to easily renew his/her 

AN Registered User Number once it has 

expired. Additional benefits of online 

registration, and description of 

rationales for online registration, follow. 

As described in section III.B.11 of this 

NPRM, DHS proposes to vet registration 

applicants against the TSDB as part of 

the Ammonium Nitrate Security 

Program. Accurate TSDB vetting 

depends upon DHS obtaining accurate 

information from registration 

applicants. Because TSDB vetting 

results or submissions of inaccurate or 

improper registration information to 

DHS could lead to registration denials 

or revocations (as described in sections 

III.B.12 and 13 of this NPRM), 

preventing individuals from being able 

to access ammonium nitrate and thus 

impacting their livelihoods, DHS 

believes that it should implement the 

most accurate registration system 

possible. DHS believes that 

implementing an online registration 

system would reduce the risk of human 

error in submission and transcription of 

registration information, as compared to 

the phone-in registration alternative 

mentioned above or as compared to 

mail-in or other possible registration 

alternatives. DHS is seeking comment 

on this assumption. DHS also believes 

that implementing an online registration 

system would reduce the risks of lost 

paperwork or misdirected mail, both by 

registration applicants and by DHS, 

which would be inherent in any 

alternative registration systems relying 

on mailed correspondence or paper 

forms. While allowing registration over 

the phone would eliminate the potential 

loss of mailed paper forms by 

registration applicants, it would not 

entirely eliminate the potential for some 

paper letters from DHS containing 

registration numbers or registration 

denials to be lost. DHS thus believes 

that an online registration system is 

likely to be the most accurate 

registration system possible; it would be 

less prone to the types of errors 

identified above than alternative 

registration systems. DHS seeks 

comments on how errors could be 

reduced through alternative registration 

systems. 

DHS proposes Internet-only 

registration because Subtitle J directs 

the Department to ‘‘establish procedures 

to efficiently receive applications for 

registration numbers.’’ See 6 U.S.C. 

488a(i)(1)(A). A major goal of Subtitle J 

is to expedite and streamline the 

registration and regulatory compliance 

processes that are part of the 

Ammonium Nitrate Security Program. 

See, e.g., 6 U.S.C. 488a(i)(3)(A) 

(directing DHS to, ‘‘to the extent 

practicable, issue or deny registration 

numbers under [Subtitle J] not later than 

72 hours after the time [DHS] receives 

a complete registration application 

[* * *]’’); 6 U.S.C. 488a(i)(1)(A) 

(directing DHS to ‘‘promptly issue or 

deny’’ registration numbers (emphasis 

added)); 6 U.S.C. 488a(i)(1)(B) (directing 

DHS to structure the program to 

maximize the number of registration 

applicants that apply for registration 

soon after implementation of the 

program); 6 U.S.C. 488a(i)(3)(B) 

(directing DHS to notify registration 

applicants whenever there are delays in 

processing registration applications); 

and 6 U.S.C. 488a(i)(4)(A) (directing 

DHS to create an expedited appeals 

process for individuals whose 

registration applications are denied). 

Implementing an online registration 

system would not only enable DHS to 

return registration results to applicants 

over the Internet within the 72-hour 

timeframe set forth in 6 U.S.C. 

488a(i)(3)(A), it would also enable DHS 

to return registration results to 

applicants faster than under any of the 

other possible registration alternatives, 

thereby best achieving the goal of 

expediting registration that underlies 

Subtitle J. The Department proposes the 

Internet-only approach because mail 

processing times, delays associated with 

transcribing phoned-in registrations, 

and delays associated with generating 

and processing paper forms mailed to or 

from DHS would slow DHS’s responses 

to registration applications. For these 

reasons, a phone-in or mail-in 

registration alternative would not 

expedite registration in comparison to 

online registration. However, DHS seeks 

comment on whether or not possible 

registration delays would be preferable 

to the burdens of having to access 

public computers that would be 

imposed by an Internet-only registration 

approach on individuals without 

readily-accessible Internet access. DHS 

is also seeking comments on other ways 

in which these burdens might be 

mitigated for those without readilyaccessible Internet access. 

DHS acknowledges that the proposed 

Internet-only registration procedures, if 

finalized, would impose costs and 

burden on regulated members of the 

public. Online registration would likely 

be more burdensome for individuals 

without readily-accessible access to the 

Internet than for others. Subtitle J, 

however, specifies that persons do not 

need to be registered to purchase, sell, 

transfer, or receive ammonium nitrate 

until six months after the issuance of 

the final rule implementing the 

Ammonium Nitrate Security Program. 

See 6 U.S.C. 488e(e). DHS believes that 

this six-month period will provide a 

sufficient opportunity for those without 

readily-accessible Internet access to 

obtain the brief Internet access 

necessary to register with the 

Department. The period of time between 

issuance of a final rule and 

implementation of the registration 

requirement (i.e., that individuals 

possess AN Registered User Numbers) 

should minimize burden or business 

disruption felt by registration 

applicants. Nevertheless, the 

Department seeks comments on the 

likely burdens (in terms of time and 

expense) on those who would need to 

access public computers in order to 

register online. DHS also seeks 

comments on any additional costs 

incurred besides those associated with 

registration. 

In Subtitle J, 6 U.S.C. 488a(i)(1)(B) 

additionally directs the Department to 

take steps to maximize the number of 

registration applications that are 

submitted and processed during the six 

months following the issuance of the 

final rule. In order to accomplish this, 

the Department intends to engage in a 

concerted outreach effort both 

immediately before and immediately 

after the release of the final rule in an 


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effort to raise awareness of Subtitle J’s 

registration requirements and the 

process for completing them. The 

Department welcomes public comments 

on both potential outreach targets and 

other steps the Department can take to 

maximize the number of registration 

applications that are submitted and 

processed during the initial six-month 

registration period. 

The Department’s proposal would 

require online registration, but would 

not mandate what sort of Internet access 

registration applicants must obtain in 

order to complete the registration 

process. As mentioned previously, 

registration applicants could use public 

computers and internet connections, or 

computers and Internet connections 

provided by AN Facilities, in order to 

register if they do not have access to 

personal computers and the internet. 

DHS recognizes that use of public 

computers or unsecured Internet 

connections can increase privacy risks 

and risks of loss of sensitive personal 

data. The Department has published a 

Privacy Impact Assessment 

concurrently with publication of this 

NPRM addressing these risks, and also 

addressing other privacy risks and 

safeguards relevant to the Ammonium 

Nitrate Security Program. The 

Department’s Ammonium Nitrate 

Security Program Privacy Impact 

Assessment can be found online, at 

http://www.dhs.gov/privacy. DHS 

encourages members of the public to 

read the Privacy Impact Assessment, 

and submit comments on this NPRM 

regarding the risks and safeguards that 

is addresses. The Department is 

particularly interested in receiving 

comments addressing privacy risks 

associated with use of public computers 

or unsecured internet connections as 

part of the proposed registration 

process, and comments addressing how 

DHS and registration applicants can 

protect personal information and 

sensitive information transmitted 

online. 

In summary, the Department proposes 

that registration applications be 

collected only though an online web 

portal. The Department seeks public 

comments on this proposed Internetonly approach, and on potential 

alternative approaches. DHS will 

consider alternatives submitted in 

selecting which type of registration 

system to implement as part of the final 

rule. 

10. Initial Applications 

Upon accessing the AN User 

Registration Portal, DHS proposes in 

section 31.220(c)(1) that each applicant 

will be asked a series of questions 

designed to allow the Department to vet 

the individual against the TSDB, and to 

subsequently enable point of sale 

verifications. The Department is 

proposing in section 31.220(c)(1) that 

each applicant provide his/her name, 

address, telephone number, photo 

identification document type, photo 

identification document issuing entity, 

photo identification document number, 

place of birth, date of birth, citizenship, 

and gender, along with any other 

information deemed necessary by the 

Department to carry out TSDB vetting. 

To ensure that appropriate user roles 

are assigned to each AN Registered User 

Number, DHS proposes in section 

31.220(b) that each applicant would also 

be asked to declare his/her ammonium 

nitrate user status in general terms (i.e., 

AN Seller; AN Facility Representative; 

Designated AN Facility POC; AN 

Purchaser). In section 31.220(b), the 

Department proposes to allow an 

applicant the ability to register as both 

an AN Seller and an AN Purchaser. The 

Department is interested in receiving 

comments on the utility of this 

proposal. 

The Department is also proposing in 

section 31.220(c)(3) that each AN Seller, 

AN Facility Representative, and 

Designated AN Facility POC would be 

required to submit information 

identifying all AN Facilities at or for 

which he/she serves as an AN Seller, 

AN Facility Representative, or 

Designated AN Facility POC. 

Under section 31.220(c)(1) of the 

proposed rule the Department may also 

collect information necessary to enable 

it to verify applicants’ enrollments in 

other TSDB vetting programs. The 

Department is considering exercising its 

authority under 6 U.S.C. 488a(i)(6)(A) to 

recognize the results of equivalent TSDB 

vetting conducted on applicants 

enrolled in other appropriate DHS 

programs where possible. This approach 

would limit the number of instances in 

which different DHS programs may vet 

the same applicant against the TSDB. 

The Department would appreciate 

comments regarding whether or not this 

or other information would be 

worthwhile to collect, and regarding the 

burden on the regulated community of 

such collection. The Department also 

welcomes public comment on the 

totality of this proposed registration 

application process, including public 

comment discussing potential 

alternative processes. 

Pursuant to the Privacy Act, 5 U.S.C. 

552a(e)(3), DHS intends to provide 

notice to individuals submitting 

information to DHS through the AN 

User Registration Portal about the 

authority for DHS’s collection of 

application information, the purposes 

for collecting application information, 

the uses of application information, and 

the impacts on individuals by providing 

or failing to provide application 

information. DHS expects to provide 

this notice electronically, within the AN 

User Registration Portal. 

11. Applicant Vetting Process 

In section 31.225, the Department 

proposes to vet applicants against the 

TSDB and/or verify each applicant’s 

enrollment in a Department program 

that conducts equivalent TSDB vetting 

prior to issuing him/her an AN 

Registered User Number. See 6 U.S.C. 

488a(i)(2)(A) (requiring TSDB vetting). 

Under section 31.230(b)(1) of the 

proposed rule, applicants whose 

identifying information appears in the 

TSDB may be denied AN Registered 

User Numbers. See 6 U.S.C. 

488a(i)(2)(B). Each applicant who 

applies for an AN Registered User 

Number will be vetted against the TSDB 

before being approved to purchase, sell, 

transfer, or provide application services 

for ammonium nitrate. 

The Department is aware that some 

applicants may have already been vetted 

against the TSDB as part of other DHS 

programs prior to submission of their 

AN Registered User Number 

applications. Sections 31.220 and 

31.230 of the proposed rule would 

enable, but would not require, DHS to 

recognize the results of TSDB vetting 

completed by other DHS programs as 

part of AN Registered User Number 

application reviews. The Department is 

interested in receiving comments on the 

utility of this proposal. 

The Department welcomes public 

comment on the means by which it 

proposes to accomplish vetting, and on 

any other aspects of the proposed 

approach to vetting applicants for AN 

Registered User Numbers. At a date after 

publication of the Ammonium Nitrate 

Security Program NPRM in the Federal 

Register, but prior to final rule 

implementation, the Department will 

publish in the Federal Register both a 

System of Records Notice (SORN) for 

the Ammonium Nitrate Security 

Program and a separate Notice of 

Proposed Rulemaking proposing to 

exempt the Ammonium Nitrate Security 

Program from certain Privacy Act 

requirements. The Department will also 

publish, on the Department’s Web site, 

a Privacy Impact Assessment. In these 

documents the Department will outline 

the potential privacy impacts of the 

proposed rule, including the privacy 

impacts of the vetting process and the 

circumstances under which DHS 

intends to share information collected 


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under the Ammonium Nitrate Security 

Program with Federal law enforcement 

agencies as a part of law enforcement 

investigations into terrorist ties of 

applicants for AN Registered User 

Numbers. 

12. Notification of Approval or Denial 

Consistent with 6 U.S.C. 488a(i)(3)(A) 

and 6 U.S.C. 488a(i)(3)(B), to the extent 

practicable, the Department intends to 

approve or deny each application for an 

AN Registered User Number, and to 

issue each AN Registered User Number, 

not later than 72 hours after the time the 

Department receives a complete 

application. The Department may deny 

an applicant an AN Registered User 

Number if that applicant’s name or 

identifying information appears in the 

TSDB. See 6 U.S.C. 488a(i)(2)(B). The 

Department proposes in section 

31.230(c) to provide notification of 

registration application approval or 

denial to each applicant electronically. 

If a registration application is 

approved, the notification of such 

approval will contain a unique AN 

Registered User Number assigned to the 

applicant. The Department is 

considering including in the notification 

issued to each successful applicant a 

certificate including the AN Registered 

User Number that he/she can print and 

keep as part of his/her records and use 

to facilitate the AN Purchaser 

verification process. 

The Department welcomes public 

comment on the efficiency and 

sufficiency of notifying applicants of 

AN Registered User Number approvals 

and denials via e-mail or other 

electronic means, and also welcomes 

public comment addressing potential 

alternative means for providing such 

notice, such as notification via 

telephone or letter. The Department also 

welcomes public comment addressing 

the appropriate contents of registration 

approvals and denials. 

The Department intends to issue or 

deny AN Registered User Numbers 

within 72 hours of application, as 

required by Subtitle J. See 6 U.S.C. 

488a(i)(3). When this is not practicable, 

or when the Department determines in 

the interest of national security that 

additional time is needed to review an 

application, the Department proposes to 

provide notice of delay to applicants 

whose registration determinations are 

delayed in the same manner as 

approvals or denials will be issued, as 

stated in section 31.230(e) of the 

proposed rule. The Department 

welcomes public comment on the 

efficiency, sufficiency, costs and 

benefits of this manner of providing 

notice of delay, and also welcomes 

public comment addressing potential 

alternative means of providing such 

notice. 

13. Revocation of Registration Numbers 

Under section 31.245 of the proposed 

rule, the Department proposes to revoke 

an individual’s AN Registered User 

Number upon determining that it is in 

the interest of national security to 

revoke that AN Registered User Number 

based on the results of the activities 

described in section 31.225 of the 

proposed rule, or that the AN Registered 

User holding that AN Registered User 

Number obtained it by submitting 

fraudulent or false information. See 6 

U.S.C. 488a(i)(7)(A). To support these 

determinations, in section 31.225(b) the 

Department proposes to recurrently vet 

individuals who have previously been 

issued AN Registered User Numbers. 

See 6 U.S.C. 488a(i)(7)(A). As 

appropriate, before revoking an 

individual’s AN Registered User 

Number, the Department must provide 

notice to the individual, and after the 

revocation of the AN Registered User 

Number, the Department must provide 

the affected individual an opportunity 

to appeal. See 6 U.S.C. 488a(i)(7)(B). In 

sections 31.245(b) and (c), DHS 

proposes that notification of revocation 

will be provided to each affected 

individual in writing, along with 

instructions on the process for 

appealing the Department’s revocation 

decision. The appellate process will 

mirror that provided to individuals 

whose initial applications for AN 

Registered User Numbers are denied, as 

described below in the following section 

and in section 31.250 of the proposed 

rule. The Department welcomes public 

comment on the efficiency and 

sufficiency of this method of providing 

notice of revocation and on the 

proposed appeals process, and also 

welcomes public comment on potential 

alternative means for either. 

14. Appealing Registration Denials and 

Registration Revocations 

This section discusses proposed 

appeal procedures for persons denied 

AN Registered User Numbers and for 

persons whose AN Registered User 

Numbers are revoked under Subtitle J. 

These procedures can be found in 

section 31.250 of the proposed rule. A 

later section of this NPRM, section III.H, 

discusses proposed adjudication and 

appeal procedures for persons and 

entities issued civil penalties by the 

Department under Subtitle J. These two 

sets of procedures are mutually 

exclusive; the Department proposes that 

registration and revocation appeals will 

be governed only by the appeals 

mechanisms described in this section of 

this NPRM, while civil penalty 

adjudications and appeals will be 

governed only by the mechanisms 

described in section III.H of this NPRM. 

The reason for this mutual exclusivity 

is because registration denials and 

revocations are fundamentally different 

from imposition of civil penalties under 

the Department’s proposed rule. Under 

the Department’s proposal, individuals 

or other entities will only be issued civil 

penalties for violating the rules of the 

Ammonium Nitrate Security Program. 

Individuals or other entities will not be 

issued civil penalties for having their 

registrations denied or revoked. 

Adjudication or appeal of civil penalties 

will thus involve assessment of whether 

or not individuals or other entities have 

violated the final Ammonium Nitrate 

Security Program rules. On the other 

hand, appeal of denial or revocation of 

registration numbers will involve 

review of the completeness and 

accuracy of registration applications, 

and review of TSDB vetting results and 

national security interests if applicable. 

The appeal procedures listed in this 

section of the NPRM are intended to 

enable reviews of registration 

application denials and revocations of 

registration numbers, while the 

adjudication and appeal procedures 

listed in section III.H are intended to 

enable reviews of civil penalties and of 

alleged regulatory violations. 

Subtitle J requires the Department to 

afford persons denied AN Registered 

User Numbers, and persons whose AN 

Registered User Numbers are revoked, 

the opportunity to appeal such denials 

and revocations in an expedited 

manner. See 6 U.S.C. 488a(i)(4). The 

Department proposes to fulfill this 

requirement by permitting each person 

to request copies of the materials on 

which denial or revocation was based, 

and to file statements explaining why 

he/she believes that he/she has been 

inappropriately denied registration and 

containing any applicable supporting 

evidence, to be reviewed by the 

Department. These proposed appeals 

procedures are based, in part, on 

appeals procedures the Department 

offers as part of the Transportation 

Worker Identification Credential (TWIC) 

and Hazardous Materials Endorsement 

(HME) programs. See 49 CFR 1515.9(a)– 

(b); 49 CFR 1515.5. 

Specifically, the Department proposes 

that, after having received an 

ammonium nitrate registration denial or 

revocation, a person may initiate an 

appeal by filing a written Request for 

Materials requesting copies of the 

materials on which denial or revocation 

was based. The Department proposes to 


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require that each Request for Materials 

be submitted to the Department within 

60 days of the date of denial or 

revocation. 

The Department proposes that after 

the receipt of a Request for Materials, it 

will send the appellant a DHS Response 

containing copies of the releasable 

materials upon which denial or 

revocation was based. DHS will not 

include any classified information in 

this DHS Response nor will it include 

any other information or material 

protected from disclosure under law, 

although as appropriate it will include 

unclassified summaries of classified 

evidence supporting denial or 

revocation. The Department proposes 

that it will serve its DHS Response on 

the appellant within 60 days of Request 

for Materials receipt, unless additional 

time is required in the interest of 

national security. 

Upon review of those releasable 

materials, the Department proposes that 

an appellant may reply to the 

Department with a Request for Appeal 

containing the rationale or information 

upon which he/she disputes the 

Department’s denial or revocation 

determination. The Department 

proposes that an appellant will have 60 

days from the date of the Department’s 

Response in which to file such rationale 

or information. The Department 

proposes that after reviewing this 

rationale or information, it will serve 

the appellant with a Final 

Determination of the Department’s 

resolution of his/her appeal. The 

Department proposes that it will 

perform this service within 72 hours of 

Request for Appeal receipt, to the extent 

practicable, as required by 6 U.S.C. 

488a(i)(4)(A)(ii). 

For good cause shown, the 

Department additionally proposes to 

grant appellants extensions of the 60- 

day appeals submission periods 

mentioned above. This will afford 

appellants the necessary time in which 

to work with other government agencies 

to correct records and materials 

contributing to the Department’s denial/ 

revocation determinations when those 

records and materials contain incorrect 

or outdated information. 

The Department welcomes public 

comment on this appeals mechanism, 

and also welcomes public comment on 

potential alternative appeals 

mechanisms. 

15. Registration Updates and Expiration 

Under Subtitle J, DHS may require 

registrants to update registration 

information submitted to DHS ‘‘as 

appropriate.’’ See 6 U.S.C. 488a(6)(b). 

Pursuant to this authority, section 

31.220(a)(2) proposes to require 

registration applicants and AN 

Registered Users to update submitted 

information within 30 days of a change 

to any of the information submitted as 

part of the application (e.g., name, 

address). An applicant or AN Registered 

User would be able to update his/her 

information through the proposed AN 

User Registration Portal. DHS seeks 

public comment on its proposed 

approach to updating registration 

information, including how often and 

under what circumstances to require 

registrants to update the information 

submitted to DHS as part of registration. 

DHS also requests public comments on 

potential alternative approaches to 

requiring registration information to be 

updated through the proposed AN User 

Registration Portal, including comments 

on the feasibility and practicality of 

allowing updates to be accomplished 

over the telephone or through the mail. 

The Department proposes in section 

31.235 of the proposed rule to make 

each AN Registered User Number issued 

under Subtitle J valid for five years after 

the date of issuance (unless revoked 

before expiration pursuant to 6 U.S.C. 

488a(i)(7)). Under this proposal, the 

Department expects many applicants to 

apply to renew their AN Registered User 

Numbers every five years. 

In proposing five years as the duration 

of each AN Registered User Number, the 

Department is seeking to balance the 

benefits of requiring renewals against 

the burdens to both the regulated 

community and the Department of the 

renewal process. As part of its 

evaluation of potential expiration and 

renewal processes, the Department has 

considered the expiration/renewal 

schedules for ATF’s Federal Explosives 

Regulations (three years), for DHS 

programs that conduct TSDB vetting 

(e.g., five years for TSA’s TWIC program 

and five years for U.S. Customs and 

Border Protection’s Trusted Traveler 

programs), and for various State 

ammonium nitrate licensing regulations 

(generally one year). The Department 

believes that the five-year renewal cycle 

for AN Registered User Numbers is 

appropriate because it will minimize the 

burden on the regulated community, in 

comparison to screening programs with 

shorter renewal cycles. Additionally, a 

five-year validity period aligns with 

DHS’s practice of recurrently vetting 

information against the TSDB for five 

years as part of certain transportation 

and critical infrastructure security 

programs. 

The Department proposes in section 

31.240 to allow each AN Registered 

User to apply for a five-year extension 

of his/her AN Registered User Number 

via the proposed AN User Registration 

Portal anytime beginning 60 days prior 

to the expiration of his/her AN 

Registered User Number through one 

year after the expiration of his/her AN 

Registered User Number. After 

completion of the renewal process, each 

renewed AN Registered User Number 

will be valid for an additional five years. 

To facilitate this, the Department 

intends to maintain an AN Registered 

User’s registration application 

information for a period of one year 

following the expiration of his/her AN 

Registered User Number. If an 

individual fails to renew his/her AN 

Registered User Number within one year 

of its expiration, the AN Registered User 

Number will be permanently retired. 

Such an individual will need to apply 

for a new AN Registered User Number 

to purchase, sell, transfer, or provide 

application services for ammonium 

nitrate after his/her initial AN Register 

User Number has been permanently 

retired. 

The Department seeks public 

comment on this proposed approach, 

including the utility, benefits, and costs 

of requiring re-registration of 

ammonium nitrate users in general, and 

on the proposed five-year time period in 

particular. 

16. Initial Six-Month Registration Period 

6 U.S.C. 488e(e) specifies that persons 

do not need to be registered to purchase, 

sell, transfer, or receive ammonium 

nitrate until six months after the 

issuance of the final rule implementing 

Subtitle J. 6 U.S.C. 488a(i)(1)(B) directs 

the Department to take steps to 

maximize the number of registration 

applications that are submitted and 

processed during the six months 

following the issuance of the final rule. 

In order to accomplish this, the 

Department intends to engage in a 

concerted outreach effort both 

immediately prior to and immediately 

following the release of the final rule in 

an effort to raise awareness of Subtitle 

J’s registration requirements and the 

process for completing them. The 

Department welcomes suggestions on 

both potential outreach targets and other 

steps the Department can take to 

maximize the number of registration 

applications that are submitted and 

processed during the initial six-month 

registration period. 

C. Purchaser Verification Activities (See 

Sections 31.300–31.310 of the Proposed 

Rule) 

1. Overview 

Subtitle J specifies that only 

individuals with valid AN Registered 


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User Numbers may purchase 

ammonium nitrate, and that AN Sellers 

would be required to refuse to sell 

ammonium nitrate to prospective AN 

Purchasers who do not possess valid AN 

Registered User Numbers. See 6 U.S.C. 

488e(a)(2) and 6 U.S.C. 488e(a)(3). To 

this end, AN Sellers would be required 

to verify that each prospective AN 

Purchaser has a valid (i.e., current and 

authentic) AN Registered User Number 

prior to transfer of ammonium nitrate. 

Subtitle J also requires AN Sellers to 

verify each prospective AN Purchaser’s 

identity prior to transfer of ammonium 

nitrate to that prospective AN 

Purchaser. See 6 U.S.C. 488a(e)(2)(D). 

DHS therefore proposes to require that 

an AN Facility refuse to sell or transfer 

ammonium nitrate to a prospective AN 

Purchaser whose identity or AN 

Registered User Number the AN Seller 

is unable to verify. These proposed 

requirements can be found in section 

31.300 of the proposed rule, and are 

further discussed throughout the 

remainder of section III.C of this NPRM. 

In addition to verifying the identity 

and AN Registered User Number of a 

prospective AN Purchaser, if an AN 

Purchaser whose identity and AN 

Registered User Number has been 

verified uses an agent on his or her 

behalf at the point of sale, the AN Seller 

must also verify the identity of the 

agent. See 6 U.S.C. 488a(e)(2)(D). 

Identity verification of AN Purchasers 

(and, where applicable, their agents) by 

AN Sellers is to occur in accordance 

with procedures proposed in section 

31.300. 

AN Facilities would also be required 

to record certain information regarding 

prospective AN Purchasers (and, if 

applicable, the agents acting on their 

behalves) for each sale or transfer as part 

of Subtitle J’s recordkeeping 

requirements. See 6 U.S.C. 488a(e)(2). 

2. Manner of Sale or Transfer of 

Ammonium Nitrate 

The Department is aware that the 

ways in which sales and transfers of 

ammonium nitrate are conducted can 

vary by AN Facility, and that differences 

in ammonium nitrate transaction 

protocols could impact the timing and 

performance of identity verification and 

other required point of sale activities. 

Through conversations with industry, 

the Department has identified three 

principal transaction formats commonly 

used to sell or transfer ammonium 

nitrate: (1) The AN Purchaser appears at 

an AN Facility and takes possession of 

ammonium nitrate from the AN Seller 

directly; (2) the AN Purchaser places an 

advanced order either in person or 

through other means (e.g., telephone, 

online), and the AN Seller delivers 

ammonium nitrate to the AN Purchaser; 

or (3) the AN Purchaser places an 

advanced order either in person or 

through other means (e.g., telephone, 

online), and an agent acting on behalf of 

the AN Purchaser takes possession of 

the ammonium nitrate from the AN 

Seller. Other transaction formats are 

also possible. 

In addition to the aforementioned 

approaches to transferring possession of 

ammonium nitrate as part of a sale or 

transfer, depending on the financial 

arrangements entered into between an 

AN Facility and an AN Purchaser, the 

payment of funds or other services in 

exchange for ammonium nitrate may 

occur prior to, concurrent with, or after 

the actual transfer of possession of 

ammonium nitrate. 

The Department is interested in 

comments regarding the frequency of 

these various modes of delivery and 

payment, as well as any other 

transactional formats that are used to 

sell or transfer ammonium nitrate. 

The verification activities described 

in section III.C of this NPRM are 

required for each sale or transfer of 

ammonium nitrate. The Department 

seeks comments on its proposed 

definition of ‘‘transfer,’’ including what 

should be considered a transfer subject 

to Subtitle J. For purposes of this rule, 

the Department is proposing that 

‘‘transfer’’ of ammonium nitrate be 

defined generally as ‘‘[t]he transfer of 

possession or ownership of ammonium 

nitrate from one person or entity to 

another person or entity for use outside 

of the AN Facility from which the 

ammonium nitrate is being transferred. 

Transfers of ammonium nitrate include 

transfers of possession or ownership 

that occur as part of sales and other 

business or commercial transactions, 

and also include transfers of possession 

or ownership that are not part of sales 

or other business or commercial 

transactions. The physical deposit of 

fertilizer onto turf, fields, crops, or other 

agricultural property is not a transfer of 

ammonium nitrate.’’ Elaboration on this 

definition follows. 

The Department is aware that 

transaction protocols may be different 

for sales or transfers that occur as part 

of imports or exports of ammonium 

nitrate than for purely domestic sales or 

transfers. As part of this proposed rule, 

DHS proposes to regulate all ammonium 

nitrate transfers that occur within the 

United States. As such, DHS would 

require the verification and 

recordkeeping activities described 

below whenever possession of 

ammonium nitrate changes hands inside 

the United States. For example, if an 

individual brings ammonium nitrate 

into the country and transfers 

possession of it to another person 

within the United States, the 

verification and recordkeeping activities 

described below would be required. 

Similarly, if an individual in the United 

States transfers possession of 

ammonium nitrate to another person 

who intends to export that ammonium 

nitrate, the verification and 

recordkeeping activities described 

below would be required. Verification 

and recordkeeping would not be 

required, however, if an individual 

transports ammonium nitrate out of the 

country as long as there is no transfer of 

possession of the ammonium nitrate 

when it is inside the United States. 

Likewise, verification and 

recordkeeping would not be required if 

an individual brings ammonium nitrate 

into the country as long as there was no 

transfer of possession of that ammonium 

nitrate when it is inside the United 

States. DHS seeks comments on this 

proposal, on the methods of conducting 

ammonium nitrate imports and exports, 

and on any potential alternative 

treatments of imported or exported 

ammonium nitrate. 

When ammonium nitrate is used or 

moved within a single AN Facility, or 

when possession of ammonium nitrate 

changes within a single AN Facility but 

that ammonium nitrate does not leave 

the AN Facility, the verification 

activities described below are not 

required. The reason for this is that, 

under Subtitle J, DHS is authorized only 

to regulate sales, transfers, and 

application services; how ammonium 

nitrate is stored, used, or processed 

within the confines of individual AN 

Facilities is not the subject of Subtitle J. 

As such, persons using or moving 

ammonium nitrate within an AN 

Facility, or obtaining possession of 

ammonium nitrate for use within the 

same AN Facility, would not need to be 

registered with DHS. 

The application of ammonium nitrate 

fertilizer to property by an application 

service would not be regulated as a 

transfer under the Department’s 

proposal. The Department does not 

believe that ammonium nitrate fertilizer 

is likely to be misused in acts of 

terrorism after it has been applied to 

agricultural property. Accordingly, 

farmers and other persons who have 

ammonium nitrate fertilizer spread on 

their agricultural property do not need 

to register with the Department, nor do 

their identities need to be verified by 

AN Sellers prior to their receipt of 


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2Persons who perform application services, 

however, must be registered with DHS under the 

proposed rule. For elaboration on this registration 

requirement, see section 31.210(c) of the proposed 

rule and see sections III.B.2 and 3 of this NPRM. 

3Transporters of ammonium nitrate can also be 

subject to other Federal and State regulations 

regarding the transportation of hazardous materials. 

Registration and compliance with DHS’s proposed 

Ammonium Nitrate Security Program would not 

relieve transporters of duties or registration 

requirements under USCG, TSA, or DOT rules, or 

under other Federal or State programs. See sections 

II.D.3 and II.D.4 of this document for descriptions 

of other select rules and programs. 

application services.2 Pursuant to the 

Department’s proposal, however, 

transfer of ammonium nitrate from an 

AN Facility to a separate application 

service would be regulated. Regulation 

of application services is required under 

Subtitle J. See 6 U.S.C. 488(2). 

Specifically, the Department believes 

that regulation of transfers to 

application services is necessary in 

order to ensure that terrorists cannot 

easily obtain ammonium nitrate by 

infiltrating, posing as, or working for 

application services. The Department 

seeks comments on these proposals, and 

is particularly interested in comments 

discussing interactions between AN 

Facilities, application services, and 

ammonium nitrate end users. 

Persons who transport ammonium 

nitrate from one AN Facility to a 

delivery location outside that AN 

Facility (e.g., truck drivers) conduct 

regulated transfers under this proposed 

rule, regardless of whether the AN 

Facility and delivery location are owned 

or operated by the same business or 

organization, and are therefore subject 

to this regulation. Ammonium nitrate 

transportation would be regulated in 

three ways under the proposed rule, 

depending upon particular transporters’ 

relationships with AN Facilities or AN 

Purchasers. Any particular 

transportation would have to be 

regulated pursuant to one (and only 

one) of the three options listed 

immediately below.3

(1) Transporters who are the agents of 

AN Purchasers. Any person possessing 

valid photo identification could 

transport ammonium nitrate from an AN 

Facility to an AN Purchaser, pursuant to 

the Department’s proposed rules for 

‘‘AN Agents’’ as described in sections 

III.C.4 through III.C.9 of this NPRM. 

‘‘AN Agent’’ transporters would not 

need to be registered with or vetted by 

DHS. Any AN Purchaser to which an 

‘‘AN Agent’’ transporter delivers 

ammonium nitrate, however, would 

need to be registered with and vetted by 

the Department. Similarly, any AN 

Seller from whom an ‘‘AN Agent’’ 

transporter obtains ammonium nitrate 

(i.e., any AN Seller who provides 

ammonium nitrate to be loaded into an 

‘‘AN Agent’’ transporter’s truck or other 

vehicle) would need to be registered 

with and vetted by the Department. 

Before an ‘‘AN Agent’’ transporter can 

pick up or obtain possession of 

ammonium nitrate (i.e., before it can be 

loaded into his/her truck or other 

vehicle), his/her identity would need to 

be verified by the AN Facility from 

which he/she seeks to pick up 

ammonium nitrate, as described in 

sections III.C.8 and III.C.9 of this NPRM. 

Before an ‘‘AN Agent’’ transporter can 

pick up ammonium nitrate, the AN 

Facility from which he/she seeks to pick 

it up would also need to verify that he/ 

she has legitimately been asked to serve 

as an ‘‘AN Agent’’ by a registered AN 

Purchaser. See sections III.C.7 and 

III.C.9 of this NPRM. Before an ‘‘AN 

Agent’’ transporter can pick up 

ammonium nitrate, the AN Facility from 

which he/she seeks to pick it up would 

also need to verify that the AN 

Purchaser to whom the ‘‘AN Agent’’ 

transporter plans to deliver the 

ammonium nitrate is properly registered 

with DHS. See sections III.C.4, 6, and 9 

of this NPRM. 

Under this proposed rule, an ‘‘AN 

Agent’’ transporter would not need to 

perform any identity verification or 

registration verification on the AN 

Purchaser to whom he/she delivers 

ammonium nitrate. Similarly, ‘‘AN 

Agent’’ transporters would not need to 

maintain any records or paperwork 

under this proposed rule. 

(2) Transporters who work for AN 

Facilities. Transporters could work for 

or deliver ammonium nitrate on behalf 

of AN Facilities, and could register 

under the Department’s proposed rules 

as AN Sellers for those facilities. See 

section III.B.3 of this NPRM. 

Transporters who register as AN Sellers 

would be vetted against the TSDB. See 

sections III.B.10 and III.B.11 of this 

NPRM. 

Once registered as an AN Seller on 

behalf of a particular AN Facility, a 

transporter could pick up or obtain 

possession of ammonium nitrate from 

that AN Facility (i.e., it could be loaded 

into his/her truck or other vehicle at 

that AN Facility) without having to 

undergo the identity verification or AN 

Registered User Number verification 

activities described in sections III.C.3 

through III.C.9 of this NPRM. Before a 

transporter who is registered as an AN 

Seller delivers or drops off ammonium 

nitrate to an AN Purchaser, however, 

he/she (or other registered employees of 

the AN Facility with which he/she is 

associated) would have to conduct 

registration verification and 

identification verification on the AN 

Purchaser receiving the ammonium 

nitrate. See sections III.C.3 through 

III.C.9 of this NPRM. The AN Facility 

with which the transporter is associated 

would also have to maintain records of 

the transporter’s delivery. See section 

III.D of this NPRM. 

(3) Independent transporters. 

Transporters who fit into neither of the 

previous two categories would be 

regulated as both AN Purchasers and 

AN Sellers under the Department’s 

proposed rule. As such, they would 

have to register with the Department 

and be vetted against the TSDB. See 

sections III.B.10 and III.B.11 of this 

NPRM. Any AN Seller from whom an 

independent transporter picks up or 

obtains ammonium nitrate (i.e., any AN 

Seller who provides ammonium nitrate 

to be loaded into the independent 

transporter’s truck or other vehicle) 

would also need to be registered with 

and vetted by the Department. 

Similarly, any AN Purchaser to whom 

an independent transporter delivers 

ammonium nitrate would also need to 

be registered with and vetted by the 

Department. 

Independent transporters would need 

to be registered as AN Purchasers in 

order to pick up or obtain ammonium 

nitrate (i.e., in order to have it loaded 

into their trucks or other vehicles). 

Before an independent transporter can 

pick up or obtain possession of 

ammonium nitrate (i.e., before it can be 

loaded into his/her truck or other 

vehicle), his/her identity would need to 

be verified and his/her AN Registered 

User Number would need to be verified 

by the AN Facility from which he/she 

seeks to pick up or obtain ammonium 

nitrate. See sections III.C.4, III.C.5, and 

III.C.9 of this NPRM. 

Independent transporters would also 

need to be registered as AN Sellers in 

order to deliver ammonium nitrate to 

other AN Purchasers. Before an 

independent transporter delivers or 

drops off ammonium nitrate to an AN 

Purchaser, he/she (or other employees 

registered on behalf of his/her 

organization) would have to conduct a 

registration verification and identity 

verification on the AN Purchaser 

receiving the ammonium nitrate. See 

sections III.C.3 through III.C.9 of this 

NPRM. The AN Facility with which the 

independent transporter is associated 

would also have to maintain records of 

the transporter’s delivery. See section 

III.D of this NPRM. 

The Department is interested in 

comments addressing coverage of truck 

drivers and other transporters of 

ammonium nitrate. The Department is 

particularly interested in comments 


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addressing transporters’ relationships to 

AN Facilities and AN Purchasers, and 

addressing transporters’ abilities to 

perform the activities required of 

regulated persons. The Department 

specifically requests comments 

addressing the three types of 

transportation arrangements described 

above, including comments discussing 

whether any particular types of 

transportation arrangements should be 

exempt from proposed regulatory 

requirements, and if so, discussing why 

particular transportation arrangements 

should be exempt. 

DHS proposes that transportation of 

ammonium nitrate where possession 

moves between different AN Facilities 

or other locations would be regulated as 

a transfer. Both of these types of 

transfers would require all the 

registration, verification, and 

recordkeeping activities required of 

transfers elsewhere in this NPRM. A 

person delivering ammonium nitrate 

from one AN Facility to another location 

would be regulated as part of one of the 

three transporter categories listed above, 

regardless of whether that person’s 

delivery location is part of the same 

company or business as the AN Facility 

from which he/she obtains the 

ammonium nitrate transported. 

By proposing to require that 

transportation between related business 

entities qualifies as a regulated transfer 

of ammonium nitrate, DHS would 

ensure that all entities from which 

transportation of ammonium nitrate 

originates have AN Registered Users on 

staff who are screened for terrorist ties 

who can be responsible for carrying out 

the security requirements of Subtitle J. 

Likewise, by proposing to require that 

transportation between related business 

entities qualifies as a regulated transfer 

of ammonium nitrate, DHS would also 

ensure that all entities receiving 

shipments of ammonium nitrate have 

AN Registered Users on staff who are 

screened for terrorist ties and who can 

be responsible for carrying out the 

security requirements of Subtitle J. 

Similarly, by proposing to require that 

transportation between related business 

entities qualifies as a regulated transfer 

of ammonium nitrate, DHS would also 

ensure that intra-company 

transportation of ammonium nitrate is 

conducted by AN Registered Users or 

‘‘AN Agents.’’ These features of the 

Department’s proposed rule would help 

to ensure that persons screened for 

terrorist ties (or their agents) would be 

responsible for a given company’s or 

business’s ammonium nitrate during 

times when that ammonium nitrate 

might be most vulnerable to 

misappropriation. 

The Department seeks comments on 

the proposal that transportation of 

ammonium nitrate would be regulated 

where possession moves between 

different locations but where ownership 

is not transferred (i.e., where transfer 

takes place within a single corporate 

entity). DHS realizes, however, that this 

proposal could have a significant impact 

on businesses with multiple locations, 

and that it might not increase 

ammonium nitrate security for every AN 

Facility or entity to which it would 

apply. Accordingly, the Department 

seeks comments on this proposal. DHS 

also seeks comments suggesting 

alternative ways in which Subtitle J’s 

requirements regarding the regulation of 

ammonium nitrate transfers could be 

achieved. The Department is interested 

in comments generally describing the 

organizational structures and 

transportation needs of the companies 

or other entities owning or operating AN 

Facilities, and in comments addressing 

whether transportation between 

locations owned or operated under the 

same corporate structure should be 

exempt from coverage under the 

Ammonium Nitrate Security Program. 

3. Required Verification Activities 

Based on statutory requirements and 

the Department’s understanding of the 

ways in which sales and transfers of 

ammonium nitrate typically occur, the 

Department is proposing to require that 

an AN Seller perform the specific 

verification activities discussed below 

for each sale or transfer of ammonium 

nitrate. 

The AN Seller would always be 

required to verify the currency and 

authenticity of the prospective AN 

Purchaser’s AN Registered User 

Number. 

The AN Seller would be required to 

verify the prospective AN Purchaser’s 

identity as specified by DHS. The 

manner of verification of a prospective 

AN Purchaser’s identity would vary 

depending on whether or not the AN 

Purchaser has opted to use an agent (an 

‘‘AN Agent’’) to procure ammonium 

nitrate for him/her. If the AN Purchaser 

opted not to use an agent, then the AN 

Seller verifies the AN Purchaser’s 

identity based upon the visual check of 

the AN Purchaser’s photo identification. 

If the AN Purchaser opted to use an 

agent, then the AN Seller verifies the 

AN Purchaser’s identity by submitting 

certain information provided by the AN 

Purchaser to the Department for 

comparison against information 

contained in the AN Purchaser’s AN 

Registered User Number application. 

In the event that a prospective AN 

Purchaser uses an agent to complete the 

transaction, the AN Seller would also be 

required to verify both (1) the agent’s 

identity based upon a visual check of 

the agent’s photo identification, and (2) 

that the agent is acting on the approved 

AN Purchaser’s behalf. 

Each of these required verification 

activities is described in greater detail in 

the following sections of the NPRM. 

Although the Department proposes to 

require these verification activities for 

sales and transfers of ammonium 

nitrate, DHS proposes not to require 

these verification activities prior to 

provision of ammonium nitrate 

application services. The Department 

seeks comments on its proposal not to 

require verification activities prior to 

provision of ammonium nitrate 

application services. 

4. Verification of the Currency and 

Authenticity of a Prospective AN 

Purchaser’s AN Registered User Number 

In order to bolster the effectiveness of 

AN Registered User Numbers in 

preventing the misappropriation of 

ammonium nitrate, DHS proposes that 

the AN Seller will be required to verify 

the currency and authenticity of a 

prospective AN Purchaser’s AN 

Registered User Number prior to 

completing a sale or transfer of 

ammonium nitrate. DHS proposes in 

section 31.305(a) to provide each AN 

Seller the capability to verify the 

currency and authenticity of a 

prospective AN Purchaser’s AN 

Registered User Number either 

electronically through a web portal 

designed by the Department (the 

‘‘Purchaser Verification Portal’’) or 

telephonically through a call center 

maintained by the Department (the 

‘‘Purchaser Verification Call Center’’). 

The Department proposes in section 

31.305(a)(3) to compare the prospective 

AN Purchaser’s name and AN 

Registered User Number, which a 

prospective AN Purchaser would be 

required to provide an AN Seller for 

submission to DHS, to information 

contained in the Department’s AN 

Registered User database, and to provide 

rapid confirmation or rejection of the 

prospective AN Purchaser’s information 

to the AN Seller via the same 

mechanism (i.e., the Purchaser 

Verification Portal or the Purchaser 

Verification Call Center). This approach 

provides a reasonable degree of 

confidence as to the currency and 

authenticity of the AN Purchaser’s AN 

Registered User Number. Both the 

proposed Purchaser Verification Portal 

and the proposed Purchaser Verification 

Call Center are described in greater 

detail below. 


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Verification of a prospective AN 

Purchaser’s AN Registered User Number 

would be required regardless of whether 

or not the AN Purchaser opts to use an 

agent on his or her behalf to take 

possession of ammonium nitrate. 

5. Verification of a Prospective AN 

Purchaser’s Identity When the AN 

Purchaser Opts Not To Use an Agent 

Consistent with 6 U.S.C. 

488a(e)(2)(D), the Department proposes 

that the AN Seller will be required to 

verify the prospective AN Purchaser’s 

identity. If the AN Purchaser opts not to 

use an agent, DHS proposes in section 

31.305(b) that the AN Seller would be 

required to verify, by performing a 

visual check of a photo identification 

document such as a driver’s license or 

passport, the identity of the AN 

Purchaser no later than when the AN 

Purchaser directly takes possession of 

ammonium nitrate from the AN Seller at 

the completion of the sale or transfer. 

The Department proposes using a 

definition of ‘‘photo identification 

document’’ similar to the definition 

used by the Department’s Secure Flight 

Program, to establish what qualifies as 

an acceptable form of identification for 

this verification process. Specifically, in 

section 31.105, the Department proposes 

defining ‘‘photo identification 

document’’ as ‘‘[a]ny of the following 

documents containing a unique 

document number: (1) An unexpired 

passport issued by a foreign government 

which contains a photograph; or (2) An 

unexpired document issued by a U.S. 

Federal, State, or tribal government that 

includes the following information for 

the person: (i) Full name; (ii) date of 

birth; and (iii) photograph; or (3) Such 

other documents that the Department 

may designate as valid identification 

documents.’’ Cf. 49 CFR 1560.3. The 

Department also assumes that each AN 

Purchaser and each AN Agent will 

possess a photo identification 

document. The Department seeks 

comments on this proposed requirement 

and assumption, including comment on 

the forms of identification that should 

be acceptable for purposes of the visual 

identification verification check. 

6. Verification of a Prospective AN 

Purchaser’s Identity When the AN 

Purchaser Opts to Use an Agent 

Consistent with 6 U.S.C. 

488a(e)(2)(D), the Department proposes 

in section 31.310(a) that the AN Seller 

will be required to verify the 

prospective AN Purchaser’s identity 

with DHS when the prospective AN 

Purchaser chooses to use an agent to 

take possession of ammonium nitrate. 

Specifically, before completing a sale or 

transfer of ammonium nitrate the AN 

Seller would have to provide certain 

prospective AN Purchaser information 

(e.g., name; photo identification 

document number; AN Registered User 

Number) to DHS either electronically 

through the Purchaser Verification 

Portal or telephonically through the 

Purchaser Verification Call Center. The 

Department proposes to compare this 

information, which a prospective AN 

Purchaser would be required to provide 

to an AN Seller for submission to the 

Department, to information contained in 

the Department’s AN Registered User 

Database. The Department would 

provide rapid confirmation or rejection 

of the prospective AN Purchaser’s 

information to the AN Seller via the 

same mechanism (i.e., the Purchaser 

Verification Portal or the Purchaser 

Verification Call Center). The 

Department believes that this 

confirmation or rejection would take 

about the same amount of time as it 

takes merchants to receive credit card 

authorizations at retail stores. 

This approach would enable use of an 

agent when it is not possible to verify 

the identity of the AN Purchaser in 

person (i.e., by conducting a visual 

inspection of the photo identification of 

the AN Purchaser and comparing the 

photo identification with the AN 

Purchaser physically present). The 

Department seeks comments on this 

approach, including comments 

addressing whether AN Purchasers 

would be likely to provide identity 

verification information to AN Sellers 

themselves (e.g., by providing this 

information to AN Sellers over the 

telephone), or whether AN Purchasers 

would be likely to ask their agents to 

provide this information to AN Sellers 

in person. DHS also seeks comments on 

the advisability, costs, and benefits of 

enabling agents to provide AN 

Purchasers’ identity verification 

information directly to AN Sellers, and 

seeks comments on possible alternative 

methods that could be employed to 

verify AN Purchasers’ identities in sales 

or transfers involving AN Agents. 

Both the proposed Purchaser 

Verification Portal and the proposed 

Purchaser Verification Call Center are 

described in greater detail below. 

7. For Sales Involving Agents, 

Verification That the Agent Is Acting on 

Behalf of the AN Purchaser 

Subtitle J limits registration and 

vetting requirements to AN Purchasers, 

and does not extend registration and 

vetting requirements to the agents of AN 

Purchasers. See 6 U.S.C. 488a(d) and 6 

U.S.C. 488a(e). In order to help 

minimize the likelihood that agents 

would be used to circumvent the 

intentions of Subtitle J, the Department 

believes it is imperative for AN Sellers 

to ensure that an agent is acting at the 

direction of a registered AN Purchaser 

before the AN Seller transfers 

possession of ammonium nitrate to that 

agent. To accomplish this, the 

Department is considering various 

approaches: 

(1) Requiring AN Purchasers to 

submit the names of their agents to DHS 

via the AN User Registration Portal, and 

requiring the AN Seller to confirm with 

DHS, prior to transferring possession of 

ammonium nitrate to an agent, that the 

name of that agent has been previously 

submitted to DHS by the relevant AN 

Purchaser. 

(2) Requiring the AN Seller to orally 

confirm with the prospective AN 

Purchaser prior to each transfer of 

ammonium nitrate that the agent is 

acting on behalf of the AN Purchaser. 

(3) Allowing both options, whereby 

an AN Seller first should check with 

DHS to see if the prospective AN 

Purchaser has submitted the name of the 

agent to DHS. If not, then the AN Seller 

would be required to orally confirm 

with the prospective AN Purchaser that 

the agent is acting on his/her behalf. 

DHS proposes this third approach in 

section 31.310(b) of the proposed rule. 

Under the first approach, each AN 

Purchaser would be required to provide 

to DHS the names of any agents that 

might act on his/her behalf at the point 

of sale. AN Purchasers would submit 

names of agents to DHS via the AN User 

Registration Portal. An AN Purchaser 

could submit an agent’s name when he/ 

she applies for an AN Registered User 

Number or at any other time prior to 

conducting a purchase involving that 

agent. Then, prior to transferring 

possession of ammonium nitrate to an 

agent, an AN Seller would need to 

verify with the Department that the 

prospective AN Purchaser has 

designated the agent as an approved 

agent to represent the AN Purchaser at 

the point of sale. This verification 

would occur through the same 

mechanism that is used for the other 

prospective AN Purchaser identity 

verification activities (i.e., the Purchaser 

Verification Portal or the Purchaser 

Verification Call Center). Note, however, 

that agent information that the AN 

Purchases and AN Sellers provided to 

the Department would not be vetted 

against the TSDB or otherwise checked 

by the Department; rather, it would 

simply be maintained in the AN 

Registered User Database as a data field 

linked to the AN Purchaser for use in 

the agent verification process. 


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Under the second approach, the 

Department would require an AN Seller 

to verify with the prospective AN 

Purchaser that the agent is actually 

acting on behalf of the prospective AN 

Purchaser for each specific transaction. 

Much like the other verification 

activities contained in the proposed 

rule, this could occur at the time the 

prospective AN Purchaser places the 

order, when the agent arrives to take 

possession of ammonium nitrate, or any 

other time, so long as it occurs prior to 

the AN Seller transferring possession of 

ammonium nitrate to the prospective 

AN Purchaser’s agent. Note, if this 

approach were adopted, the Department 

would propose requiring this 

confirmation to occur for each 

transaction/occurrence in which an 

agent is taking possession of ammonium 

nitrate; a blanket verification of an agent 

by an AN Purchaser would not be 

acceptable. Additionally, as an e-mail or 

letter can be easily forged, under this 

approach the Department would require 

that the AN Seller receive this 

verification orally (e.g., in person, 

telephonically) from the prospective AN 

Purchaser. 

The third approach—the option the 

Department proposes to use in this 

NPRM—is a combination of the first two 

approaches. Specifically, AN Purchasers 

would be expected to provide the 

Department with the names of their 

agent(s), and an AN Seller would be 

expected to verify either through the 

Purchaser Verification Portal or 

Purchaser Verification Call Center that 

the agent information has been provided 

by the AN Purchaser to the Department. 

As opposed to the first approach under 

which a sale cannot occur unless the 

agent’s name has been provided to the 

Department by the prospective AN 

Purchaser, this third option would 

allow the AN Seller to complete a sale 

or transfer after either (1) verifying that 

the agent has been designated by the 

prospective AN Purchaser through the 

Purchaser Verification Portal or 

Purchaser Verification Call Center, or (2) 

orally confirming with the prospective 

AN Purchaser that the agent is acting on 

the prospective AN Purchaser’s behalf 

for the sale or transfer at issue. The 

Department expects that in the majority 

of cases, this oral confirmation would 

occur telephonically. This third option 

has the benefit of minimizing the point 

of sale impact of the agent verification 

process while allowing a means for a 

sale or transfer to be completed even if 

a prospective AN Purchaser forgets or is 

otherwise unable to provide the 

Department with the agent’s name prior 

to using the agent at the point of sale. 

For these reasons, the Department 

proposes this third approach. 

If DHS implements either the first 

approach or the third approach in an 

Ammonium Nitrate Security Program 

final rule, the Department will construct 

the AN User Registration Portal such 

that AN Purchasers could submit the 

names of their agents to DHS through 

that portal. If so, DHS would require AN 

Purchasers to notify agents that their 

names could be submitted to DHS in 

this manner. DHS seeks public comment 

on how such notification should be 

carried out, if the Department 

implements either the first approach or 

the third approach. 

The Department seeks comment on 

the benefits, costs, economic impacts, 

and practicality of all these approaches, 

as well as any potential alternate 

approaches for verifying that an AN 

Agent is acting on behalf of a 

prospective AN Purchaser. 

8. Verification of the Agent’s Identity 

Based on the Visual Check of the 

Agent’s Photo Identification 

Consistent with 6 U.S.C. 

488a(e)(2)(D), DHS proposes in section 

31.310(c)(1) that the AN Seller would be 

required to verify, by performing a 

visual check of a photo identification 

document such as a driver’s license or 

passport, the identity of the agent taking 

possession of ammonium nitrate from 

the AN Seller at the completion of a sale 

or transfer. This visual check would 

mirror the process and requirements 

used by the AN Seller when performing 

a visual check on an AN Purchaser, 

when an AN Purchaser takes possession 

of ammonium nitrate. 

9. Timing of Verification Activities 

All of the aforementioned verification 

activities would be required to occur 

before the AN Seller transfers 

possession of ammonium nitrate to the 

prospective AN Purchaser or the agent 

acting on the prospective AN 

Purchaser’s behalf. Outside of that 

requirement, the time at which the AN 

Seller performs the verification 

activities would be entirely within the 

discretion of the AN Seller. For 

instance, in a situation where the AN 

Purchaser places an advance order for 

ammonium nitrate to be picked up at a 

later date, the AN Seller may perform 

these activities at the time of sale or at 

the time of transfer of possession. 

The proposed rule would regulate all 

transfers of ammonium nitrate, 

including both transfers that involve 

payments or sales, and transfers that do 

not involve payments or sales. Note that 

AN Sellers may transfer possession of 

ammonium nitrate to AN Purchasers or 

their agents only after the verification 

activities discussed above have been 

completed. Payment for transfer of 

possession may happen at any time, 

either before or after verification 

activities have been completed. 

10. Departmental Role in Verification 

Process 

As part of the verification process, the 

Department proposes to require AN 

Sellers to provide the Department with 

sufficient information to verify (1) the 

currency and authenticity of prospective 

AN Purchasers’ AN Registered User 

Numbers, and (2) prospective AN 

Purchasers’ identities when AN 

Purchasers use agents. The Department 

also proposes to enable AN Sellers to 

verify through DHS, where applicable, 

that prospective AN Purchasers have 

submitted the names of the agents acting 

on their behalves to the Department. To 

help AN Sellers accomplish this, the 

Department is considering developing a 

secure AN Purchaser verification web 

portal (‘‘Purchaser Verification Portal’’) 

and a call center (‘‘Purchaser 

Verification Call Center’’) through 

which AN Sellers can submit 

information to the Department that will 

allow the Department to nearly 

immediately (1) Verify or disaffirm 

prospective AN Purchasers’ AN 

Registered User Numbers, (2) verify or 

disaffirm prospective AN Purchasers’ 

identities, and, where applicable, (3) 

verify or disaffirm the preapproval of 

agents. 

11. Purchaser Verification Portal 

The first option the Department is 

considering is to develop a Purchaser 

Verification Portal that would be 

available via the Internet to registered 

AN Sellers only. To gain access to the 

portal, AN sellers would be asked to 

provide their AN Registered User 

Number, a password, and potentially 

other identifying information. The 

Department proposes in sections 31.305 

and 31.310 that, upon accessing the 

portal, an AN Seller would enter into 

the system, at a minimum, the 

prospective AN Purchaser’s name and 

AN Registered User Number to verify 

the prospective AN Purchaser’s AN 

Registered User Number. If the 

prospective AN Purchaser uses an agent, 

then the AN Seller would enter into the 

system the prospective AN Purchaser’s 

photo identification document number 

(along with additional photo 

identification document information, 

such as type of photo identification 

document, and photo identification 

document issuing entity), to aid in 

verifying the prospective AN 

Purchaser’s identity. This information 


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should allow the Department to verify 

for the AN Seller that the prospective 

AN Purchaser is who he/she claims to 

be and that he/she possesses a valid AN 

Registered User Number. The 

Department is interested in receiving 

comments on the information it 

proposes to collect for AN Purchaser 

verification purposes, including specific 

comments on potential photo 

identification document numbers that 

the Department may collect, such as 

driver’s license or passport numbers. 

The Department considered requiring 

individuals’ Social Security Numbers in 

lieu of photo identification document 

numbers. The Department believes, 

however, that photo identification 

document numbers are preferable to 

Social Security Numbers for two 

significant reasons. First, photo 

identification document numbers are 

typically contained on physical 

identification cards that include 

photographs that could be visually 

checked by AN Sellers. Second, use of 

photo identification document numbers 

would minimize the potential privacy 

impact on AN Purchasers of having to 

share their Social Security Numbers. 

The Department seeks comments on the 

costs and benefits of Social Security 

Number use. 

The Department is also considering 

requiring AN Sellers to enter additional 

information into the Purchaser 

Verification Portal, such as each 

quantity of ammonium nitrate sold or 

transferred and each prospective AN 

Purchaser’s proposed use of the 

ammonium nitrate to be procured. Such 

additional information could help 

strengthen the AN Purchaser 

identification process and facilitate the 

performance of compliance audits and 

inspections, and would generally help 

to prevent the misappropriation or use 

of ammonium nitrate in acts of 

terrorism. Comments on the utility of 

collecting additional information, as 

well as the types of information that it 

may be worthwhile for the Department 

to collect, are welcome. 

The Department proposes that 

information entered into the Purchaser 

Verification Portal will be transmitted to 

the Department which, upon receipt, 

will check the information against the 

AN Registered User records maintained 

by the Department. The Department 

would electronically notify the AN 

Seller of the result once the Department 

(1) verifies or disaffirms the prospective 

AN Purchaser’s identity (i.e., determines 

whether the identifying information 

provided matches the information 

submitted in the prospective AN 

Purchaser’s AN Registered User Number 

application), if appropriate, (2) verifies 

that the prospective AN Purchaser’s AN 

Registered User Number is current and 

authentic (i.e., matches the AN 

Registered User Number assigned to the 

prospective AN Purchaser), and (3) 

verifies that the prospective AN 

Purchaser has listed his/her agent with 

the Department as authorized to act on 

his/her behalf, if appropriate. 

To support recordkeeping 

requirements, the Department is 

considering providing to the AN Seller, 

along with its web verification notice, a 

confirmation number and/or printable 

web verification notice record receipt. 

For recordkeeping requirements, see 

sections III.C.4–8. Comments on the 

utility, benefits, and costs of providing 

either a confirmation number or 

printable record receipt via the 

Purchaser Verification Portal are 

welcome. 

The Department proposes that if the 

Department notified an AN Seller that 

the identity and AN Registered User 

Number of a prospective AN Purchaser 

were verified, then the AN Seller would 

proceed with the second portion of the 

identity verification—a visual check of 

the identification document of the 

individual taking possession of the 

ammonium nitrate (i.e., the AN 

Purchaser or, where applicable, his or 

her agent). 

If the Department were to discover 

that either (1) the prospective AN 

Purchaser’s identity does not match the 

information of record for the given AN 

Registered User Number, or (2) the AN 

Registered User Number provided by 

the prospective AN Purchaser is not 

current and authentic, then the 

Department would issue a notice to the 

AN Seller indicating that the sale or 

transfer of ammonium nitrate to the 

prospective AN Purchaser is not 

authorized. The Department anticipates 

that the confirmation or denial notice 

resulting from the web verification 

process will typically be sent to and 

received by the AN Seller quickly, much 

like how merchants receive approval or 

denial notices prior to authorizing 

purchases via credit card. 

As mentioned earlier, the Department 

is aware that sales and transfers of 

ammonium nitrate occur in many 

different ways, and that AN Facilities’ 

varying ammonium nitrate sales 

procedures can impact the timing and 

performance of verification activities. 

Depending on the structure of the 

transaction, the manner in which the 

AN Seller goes about verifying the 

prospective AN Purchaser’s identity, 

AN Registered User Number, and use of 

an agent may vary. In all cases, DHS 

proposes that the AN Seller will 

complete these verifications prior to 

transferring possession of ammonium 

nitrate. 

The Department welcomes public 

comment on the overall effectiveness, 

propriety, benefits, and costs of these 

Purchaser Verification Portal identity 

and registration verification 

mechanisms, and also welcomes public 

comment on or suggestion of potential 

alternative methods for identity and 

registration verification. 

12. Purchaser Verification Call Center 

The second option the Department is 

considering is to develop a Purchaser 

Verification Call Center. The overall 

principle behind a call center 

verification system is similar to the 

principle behind the Purchaser 

Verification Portal—that is, a 

prospective AN Purchaser’s identity (for 

sales involving an agent) and possession 

of a current and authentic AN 

Registered User Number could be 

verified quickly prior to the transfer of 

possession of ammonium nitrate 

through use of a call center verification 

system. Under this approach, AN Sellers 

would call a toll-free phone number 

established by the Department where 

they would either talk to a person or be 

led through a series of telephone tree 

menus. During the phone call, each AN 

Seller would be expected to provide, at 

a minimum, his/her name, his/her AN 

Registered User Number, and the 

prospective AN Purchaser’s name, AN 

Registered User Number, and, for sales 

involving an agent, the AN Purchaser’s 

photo identification document number. 

The Department is also considering 

requiring or enabling AN Sellers to 

provide additional information, such as 

the quantity and intended use of the 

ammonium nitrate being sold or 

transferred. The operator or automated 

telephone system would enter the 

information provided into the 

Department’s Registered User database 

system, wait for electronic confirmation, 

and then provide verbal confirmation to 

the caller along with a confirmation 

number for that specific transaction. 

A call center may be preferable to a 

web portal, as presumably all AN 

Facilities have telephones while not all 

AN Facilities have computers with 

Internet access, particularly at the point 

of sale. There are some potential 

disadvantages, though, including the 

likelihood that the call center approach 

would take more time per transaction 

than the web portal approach, and that 

it would be significantly more costly for 

the Department to establish and operate 

a call center. 


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13. Purchaser Verification Portal and 

Call Center 

A third option is for the Department 

to establish both a Purchaser 

Verification Portal and a Purchaser 

Verification Call Center. This is the 

approach the Department is proposing 

in sections 31.305 and 31.310. This 

approach is identical to the Purchaser 

Verification Portal option described 

above, integrated with the Purchaser 

Verification Call Center option. The 

advantage of this alternative is that all 

AN Facilities would be 

accommodated—those with telephone 

access only and those with both 

telephone and Internet access who find 

the verification web portal option more 

efficient. This approach, however, 

would be the most costly of the 

alternatives for the Department to 

establish and operate. 

As indicated in sections 31.305 and 

31.310 of the proposed rule, DHS 

proposes that as part of the verification 

processes described in section III.C of 

this NPRM, AN Purchasers and/or AN 

Agents will be required to provide 

information to AN Facilities in order to 

enable use of the Purchaser Verification 

Portal or the Purchaser Verification Call 

Center. DHS will require AN Facilities 

to notify the AN Purchasers and AN 

Agents providing this information about 

why it is collected. DHS will also 

require AN Facilities to notify AN 

Purchasers and AN Agents that the 

information they provide may be shared 

with DHS. DHS seeks public comment 

on how such notifications should be 

carried out. 

The Department welcomes public 

comment on the overall effectiveness 

and propriety of these alternative 

identity and registration verification 

mechanisms, and also welcomes public 

comment on or suggestion of potential 

alternative methods for identity and 

registration verification. 

14. Suspicious Purchases and 

Attempted Purchases of Ammonium 

Nitrate 

Subtitle J encourages AN Sellers to be 

wary of suspicious purchases and 

attempted purchases of ammonium 

nitrate. See 6 U.S.C. 488c(c)(1) and 6 

U.S.C. 488f. To this end, Subtitle J 

encourages AN Sellers to exercise their 

commercial rights to deny the sale or 

transfer of ammonium nitrate to 

prospective AN Purchasers when 

prospective AN Purchasers attempt to 

purchase ammonium nitrate under 

‘‘suspicious’’ circumstances. See 6 

U.S.C. 488f. Furthermore, Subtitle J 

encourages AN Sellers to contact law 

enforcement entities, as appropriate, in 

response to ‘‘suspicious’’ purchases or 

‘‘suspicious’’ attempted purchases. See 

6 U.S.C. 488c(c)(1)(A). Moreover, 

Subtitle J provides that if an AN Seller 

refuses to sell or transfer ammonium 

nitrate to any person, or in good faith 

discloses to the Department or 

appropriate law enforcement authorities 

the actual or attempted purchase or 

transfer of ammonium nitrate, based on 

a reasonable belief that the person 

seeking to purchase or transfer 

ammonium nitrate may use the 

ammonium nitrate to create an 

explosive device to be employed in an 

act of terrorism or for another unlawful 

purpose, the AN Seller shall not be 

liable in any civil action relating to that 

refusal to sell or that disclosure. See 6 

U.S.C. 488f(a). 

To assist AN Sellers in determining 

what a ‘‘suspicious’’ circumstance is 

and what appropriate responsive actions 

are, Subtitle J requires the Department 

to issue guidance addressing 

‘‘suspicious’’ circumstances. See 6 

U.S.C. 488c(c)(1). The Department will 

issue such guidance, along with other 

statutorily required guidance, along 

with the final rule implementing the 

Ammonium Nitrate Security Program. 

The Department welcomes public 

comment on topics to be addressed in 

this guidance, including comment on 

‘‘suspicious’’ purchases and attempted 

purchases. The Department also 

welcomes public comment on the 

formats in which its guidance materials 

should be published and the means of 

dissemination of guidance materials. 

D. Recordkeeping (See Sections 31.315 

and 31.515 of the Proposed Rule) 

1. Overview 

Pursuant to Subtitle J, AN Facilities 

must maintain records of each sale or 

transfer of ammonium nitrate for a twoyear period beginning on the date of that 

sale or transfer. See 6 U.S.C. 488a(e)(1). 

AN Facilities must take reasonable 

actions to ensure the protection of the 

information included in such records. 

See 6 U.S.C. 488a(e)(3). 6 U.S.C. 488b 

authorizes DHS to inspect and audit AN 

Facility records for the purpose of 

monitoring compliance with Subtitle J 

or for the purpose of deterring or 

preventing the misappropriation or use 

of ammonium nitrate in acts of 

terrorism. 

2. Entities Responsible for Keeping 

Records 

Pursuant to Subtitle J and section 

31.315(a) of the proposed rule, AN 

Facility Representatives must ensure 

that records of each sale or transfer of 

ammonium nitrate are maintained. See 

6 U.S.C. 488a(e)(1). As discussed above, 

the Department is aware that there are 

many types of facilities selling or 

transferring ammonium nitrate, 

including but not limited to 

corporations, partnerships, 

cooperatives, and sole proprietorships. 

For many of these organizational forms, 

it may not be reasonable to expect an 

AN Facility Representative to be 

engaged in or have direct oversight over 

recordkeeping at the AN Facility. In 

recognition of this, the Department is 

proposing that while a facility’s AN 

Facility Representative or 

Representatives would be responsible 

for their AN Facility’s compliance with 

the proposed rule’s recordkeeping 

requirements, any facility employee, 

regardless of whether or not he/she is a 

registered AN Seller, could perform 

recordkeeping activities on behalf of the 

facility. The Department, however, is 

proposing in sections 31.315(d) and (e) 

to require each AN Facility 

Representative to ensure that his/her 

facility maintains records in compliance 

with the rule. DHS welcomes public 

comment on the propriety and effect of 

this proposal. 

AN Purchasers are under no 

obligation to maintain records pursuant 

to Subtitle J. 

3. Records To Be Kept 

For each sale or transfer of 

ammonium nitrate, the Department is 

proposing in section 31.315(a) of the 

proposed rule to require that the records 

kept by the AN Facility include the date 

of sale/transfer; form and amount of 

payment; quantity of ammonium nitrate 

sold/transferred; type of packaging; 

delivery location; the name, address, 

telephone number, AN Registered User 

Number, and photo identification 

document information of the AN 

Purchaser to whom it was sold/ 

transferred; and, if the AN Purchaser 

uses an agent at the point of sale, the 

name, address, telephone number, and 

photo identification document 

information of the agent acting on behalf 

of the AN Purchaser. 

In addition to keeping records 

containing the information listed above, 

DHS proposes to require AN Facilities 

to maintain records related to the 

verification of a prospective AN 

Purchaser AN Registered User Number’s 

currency and authenticity, and 

verification of a prospective AN 

Purchaser’s and (where applicable) 

agent’s identity. These requirements are 

discussed in sections 31.315(a)(8) and 

(9) of the proposed rule. Such 

requirements are important to allow the 

Department to monitor compliance 

under the regulations, to deter or 


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Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 46933 

prevent the misappropriation or use of 

ammonium nitrate in acts of terrorism, 

and to support the investigation of 

reported theft or loss of ammonium 

nitrate. The Department welcomes 

comment on the benefits and costs of 

maintaining records regarding the AN 

Purchaser (and, where applicable, agent) 

verification process. 

In addition to the proposed records 

requirements discussed above, the 

Department also is considering 

requiring AN Facilities to keep 

photocopies of each individual AN 

Purchaser’s or agent’s photo 

identification document and/or 

printouts of the Department’s electronic 

verification of the authenticity and 

currency of each individual’s AN 

Registered User Number (if the 

Department decides to use the 

Purchaser Verification Portal). The 

Department is interested in receiving 

public comment regarding what types of 

records should be considered adequate 

records for the purpose of showing 

completed verification activities, as well 

as what the costs and benefits of 

generating and maintaining these 

records would be. 

In addition to transaction records and 

verification records, there are a variety 

of other records that may be necessary 

for AN Facilities to maintain in order to 

support compliance monitoring by the 

Department. These include: (1) 

Maintenance by each AN Facility of 

copies of the AN Registered User 

Number certificates of the AN Facility 

Representatives, Designated AN Facility 

POC, and/or all other AN Sellers 

employed by the facility (note, this 

presumes that the Department does in 

fact decide to issue approved applicants 

certificates along with their AN 

Registered User Numbers); (2) copies of 

reports of theft or loss made to the 

Federal Government pursuant to 

Subtitle J; (3) any reports showing the 

reconciliation of sales/transfers and 

inventory; and (4) any orders or other 

correspondence issued by the 

Department to an AN Facility regarding 

activities regulated by Subtitle J. These 

records all may have value in 

monitoring compliance with the 

regulations or in deterring or preventing 

the misappropriation or use of 

ammonium nitrate in acts of terrorism. 

The Department is considering requiring 

AN Facilities to maintain these records, 

and welcomes public comment on the 

value of each and the costs associated 

with each. 

As indicated in sections 31.315(b) and 

(c) of the proposed rule, DHS proposes 

that as part of ammonium nitrate sales 

or transfers AN Purchasers and/or AN 

Agents will be required to provide some 

of the information listed in this section 

of the NPRM to AN Facilities in order 

to enable facility recordkeeping. DHS 

will require AN Facility personnel to 

notify the AN Purchasers and AN 

Agents providing this information about 

why it is collected. DHS will also 

require AN Facility personnel to notify 

AN Purchasers and AN Agents that the 

information they provide may be shared 

with DHS. DHS seeks public comment 

on how such notifications should be 

carried out. 

4. Length of Retention of Records 

Subtitle J provides that each record of 

sale or transfer of ammonium nitrate 

must be maintained by the relevant AN 

Facility for at least two years from the 

date of the transaction that generates 

that record. See 6 U.S.C. 488a(e)(1)(A). 

For consistency purposes, in section 

31.315(d) of the proposed rule the 

Department proposes that an AN 

Facility would be required to maintain 

for two years all records required under 

this rule. The Department seeks 

comments on this proposal. 

5. Format and Storage of Records 

Pursuant to 6 U.S.C. 488a(e)(3), and as 

proposed in section 31.315(e), an AN 

Facility must take ‘‘reasonable actions’’ 

to ensure protection of the information 

included in records maintained 

pursuant to Subtitle J. Subtitle J, 

however, does not explicitly prescribe 

any format or storage requirements. In 

an effort to minimize the burden on 

regulated AN Facilities and to provide 

flexibility to allow AN Facilities to 

leverage existing recordkeeping efforts 

to meet this regulatory requirement, the 

Department proposes allowing AN 

Facilities to choose methods of records 

storage for themselves. The Department 

is considering, however, providing AN 

Facilities the capability to create and 

maintain appropriate records in the 

web-based Purchaser Verification Portal. 

This would give AN Facilities the 

opportunity to use the portal to store 

their records, but would not require 

them to do so. The Department 

welcomes comments on this proposal. 

DHS proposes that AN Facilities be 

allowed to maintain records in paper or 

electronic format, and that AN Facilities 

may use whatever template or form they 

choose for individual records. An AN 

Facility simply would be required to 

ensure that its records contain all of the 

data required by the final rule 

implementing the Ammonium Nitrate 

Security Program, and to make the 

records available for inspection by DHS 

officials as described in section 31.515 

of the proposed rule. DHS proposes that 

each AN Facility be required to make 

records available within the specified 

timeframes, and to take reasonable 

actions to protect the records. The 

Department proposes allowing an AN 

Facility to maintain records onsite or 

offsite, so long as the records are made 

available for inspection when DHS 

inspectors arrive for inspections where 

the AN Facility has received prior 

notice of the inspection or within four 

hours of inspectors’ arrivals for 

unannounced inspections. 

The Department also proposes giving 

AN Facilities flexibility to determine 

what constitutes ‘‘reasonable actions’’ 

for ensuring the protection of records, 

and is considering defining ‘‘reasonable 

actions’’ as actions commensurate with 

the actions that an AN Facility would 

take to secure sensitive or confidential 

business records. Typical actions could 

include storage in locked file cabinets 

for paper recordkeeping or passwordprotecting files for electronic 

recordkeeping. 

The Department welcomes public 

comment on the proposed record 

formatting options, security standards, 

and production timeframes, as well as 

any potential alternative approaches or 

additional requirements the Department 

should consider. 

E. Reporting of Theft or Loss of 

Ammonium Nitrate (See Sections 

31.400–31.405 of the Proposed Rule) 

1. Overview 

Pursuant to Subtitle J, any AN Facility 

Representative who has knowledge of 

theft or unexplained loss of ammonium 

nitrate is required to report such theft or 

loss to Federal law enforcement 

authorities within 24 hours of the time 

at which knowledge of theft or loss is 

acquired. See 6 U.S.C. 488d. The 

Department additionally encourages all 

other individuals who have possession 

of or control over ammonium nitrate to 

report any thefts or unexplained losses 

of ammonium nitrate of which they 

become aware. Voluntary reporting is 

provided for in section 31.405(b) of the 

proposed rule. 

2. Who Must Report Theft or Loss 

Although any employee at an AN 

Facility may report a theft or loss of 

ammonium nitrate, DHS proposes in 

section 31.400 that it will be the 

responsibility of each facility’s AN 

Facility Representatives to ensure that 

theft or loss from the facility is reported 

in a timely fashion. Additionally, while 

there is no legal requirement for AN 

Purchasers or agents acting on their 

behalf to report thefts or unexplained 

losses of ammonium nitrate, the 

Department encourages them to do so 


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using the same procedures that AN 

Facility personnel would use. 

3. Level of Theft or Loss Warranting 

Reporting 

Any time an AN Facility 

Representative or any other individual 

employed by an AN Facility comes to 

believe that a theft of ammonium nitrate 

has occurred, AN Facility 

Representatives would be responsible 

for ensuring that that theft is reported 

using the procedures set forth in section 

31.400. Determining when to report a 

loss, however, is not as straightforward 

a proposition, because it is typical for 

small percentages of bulk ammonium 

nitrate to be ‘‘lost’’ as part of normal 

bulk ammonium nitrate industrial and 

shipping business practices. While 

individually such losses may tend to be 

de minimis, in the aggregate they may 

amount to large amounts of lost 

ammonium nitrate. The Department 

seeks not to unduly burden individuals 

involved in the manufacturing, storage, 

transportation, or use of bulk 

ammonium nitrate, but on the other 

hand does seek to impose loss reporting 

requirements which will aid in 

preventing misappropriation of 

ammonium nitrate. Accordingly, the 

Department proposes to require that AN 

Facility Representatives ensure that 

losses of ammonium nitrate from their 

facilities be reported using the 

procedures described below when those 

losses deviate from the amount of loss 

that typically occurs during routine 

production, storage, transportation, or 

use of ammonium nitrate. 

The Department seeks public 

comment on its proposed approach to 

defining the circumstances under which 

a theft or loss would be required to be 

reported and whether the theft/loss 

reporting requirements should apply 

only to theft or loss of ammonium 

nitrate above a minimum threshold 

amount. If a minimum threshold 

amount should apply, the Department is 

also interested in receiving comments 

addressing the level at which this 

amount should be set. The Department 

is particularly interested in public 

comments addressing how theft/loss 

reporting requirements should vary, if at 

all, based on AN Facility business size 

or other AN Facility business 

characteristics. 

4. Process for Reporting Theft or Loss 

The Department proposes in section 

31.405(a) to require reporting of theft/ 

loss to ATF. The Department will 

coordinate with ATF to ensure proper 

tracking and coordination of reported 

ammonium nitrate thefts and losses; 

however, ATF, not the Department, will 

conduct appropriate law enforcement 

actions in response to theft/loss 

reporting, due to ATF’s unique 

explosives-related law enforcement 

mission. 

The Department welcomes public 

comment on this proposal to leverage 

ATF’s theft/loss reporting and response 

capabilities, and welcomes public 

comment on potential alternative 

reporting mechanisms. The Department 

also welcomes public comment on the 

information to be required as part of 

each theft/loss report. The Department 

proposes to require that each theft/loss 

report be made to ATF in a manner 

prescribed by DHS after consultation 

with ATF, and contain information 

similar to that currently required by 

ATF for reports of theft or loss of 

explosives. This likely would involve 

modified versions of the process and 

tools established by ATF in support of 

the ATF regulations regarding the 

reporting of theft or loss of explosive 

materials. See generally 27 CFR 555.30. 

ATF requires reporting of the theft or 

loss of explosives by telephoning a 

nationwide toll free number, followed 

up with submission to ATF of a 

completed form detailing the incident. 

The Department would work with ATF 

to determine the appropriate 

information to be reported and the 

proper template for a form specific to 

reporting the theft or loss of ammonium 

nitrate. The Department welcomes 

public comment on this proposed 

approach for reporting theft and loss of 

ammonium nitrate, and also welcomes 

public comment addressing any 

potential alternative approaches or 

additional requirements the Department 

should consider. 

Although there is no statutory 

requirement for AN Facility 

Representatives or other registered 

individuals who have knowledge of 

thefts or unexplained losses to report 

such incidents to local law enforcement, 

the Department encourages AN 

Facilities and individuals to do so in 

addition to reporting the theft or loss to 

ATF. 

F. Inspections and Audits (See Sections 

31.500–31.515 of the Proposed Rule) 

Subtitle J states that DHS ‘‘shall 

establish a process for the periodic 

inspection and auditing of the records 

maintained by owners of ammonium 

nitrate facilities for the purpose of 

monitoring compliance * * * or for the 

purpose of deterring or preventing the 

misappropriation or use of ammonium 

nitrate in an act of terrorism.’’ See 6 

U.S.C. 488b. As part of these inspections 

and audits, the Department proposes to 

inspect and audit the records required 

to be maintained under the 

‘‘recordkeeping’’ requirements of the 

final rule implementing the Ammonium 

Nitrate Security Program. (See section 

III.D of this NPRM for discussion of 

proposed recordkeeping requirements.) 

The Department welcomes public 

comment on the types of records and 

other items or activities it should review 

during inspections or audits. 

The Department proposes to conduct 

inspections at AN Facilities and/or any 

other locations where records subject to 

the inspection/audit requirements are 

located. The Department also proposes 

that it conduct inspections during AN 

Facilities’ regular business hours except 

when warranted by exigent 

circumstances. The Department 

welcomes public comment on 

inspections, including comments 

addressing how often inspections 

should be undertaken. 

Generally speaking, the Department 

will provide an AN Facility, via its 

Designated AN Facility POC, with a 

minimum of 24 hours notice prior to 

conducting an inspection or audit, as 

proposed in section 31.505(a). The 

Department, however, proposes to 

reserve the right to conduct audits or 

inspections without prior notice when 

warranted by exigent circumstances or 

when delay in conducting an inspection 

might be seriously detrimental to 

security, as described in sections 

31.505(a)(1) and (2). Such inspections, 

conducted without prior notice, will 

require approval by a supervisory 

manager at DHS. 

The Department has also considered 

not providing notice prior to conducting 

inspections or audits in order to align 

with inspections processes carried out 

by other agencies, such as ATF. The 

Department welcomes comments 

addressing how much notice, if any, 

should be provided to AN Facilities 

prior to inspections or audits, including 

comments addressing whether the 

Department should align its notice 

procedures with ATF’s (or with any 

other entity’s) notice procedures. 

When prior notice of an inspection 

has been provided to an AN Facility, 

DHS expects that the facility will have 

all records required to be maintained by 

this rule available for review/ 

inspection/audit at the time of arrival of 

inspectors, as proposed in section 

31.515(a). In cases where the 

Department has initiated an inspection 

or audit without giving an AN Facility 

prior notice, the facility will be 

expected to make all records required to 

be maintained by the final ammonium 

nitrate rule available to inspectors 

within four hours of receipt of an 

inspector request to review/inspect/ 


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audit such records, as proposed in 

section 31.515(b). 

Inspections and audits would be 

conducted by DHS personnel or by 

other Federal, State, local, or tribal 

government personnel authorized to 

perform AN Facility inspections 

pursuant to this rule. The Department 

may conduct remote inspections and 

audits in addition to in-person 

inspections and audits, as proposed in 

sections 31.500(b), 31.505(b), and 

31.515(c)–(d). The Department 

welcomes comments and suggestions as 

to when a remote inspection would be 

reasonable, cost effective, and of benefit 

to AN Facilities or the Department. 

G. Guidance Materials and Posters 

Under Subtitle J, the Department is 

required to develop and provide to 

members of the regulated community 

several types of guidance documents 

and materials. First, 6 U.S.C. 

488a(i)(4)(C) requires the Department to 

issue to any individual who is denied 

an AN Registered User Number 

guidance on the procedures for 

appealing that denial. Second, 6 U.S.C. 

488c(c)(1) requires the Department to 

make available to owners of AN 

Facilities guidance on the identification 

of suspicious ammonium nitrate 

purchases, transfers, attempted 

purchases, and attempted transfers, as 

well as guidance on appropriate actions 

to be taken by AN Facilities with respect 

to such suspicious activities. 

Additionally, 6 U.S.C. 488c(c)(3) 

requires the Department to make 

available materials suitable for posting 

at locations where ammonium nitrate is 

sold that notify prospective AN 

Purchasers of Subtitle J’s recordkeeping 

requirements and the penalties for 

violating those requirements. 

As the procedures and requirements 

that will be detailed in these materials 

are to a large degree dependent on the 

final rule for Subtitle J, the Department 

is still gathering information, input, and 

data, which it will use to assist in 

developing these guidance materials 

and posters. It is the Department’s intent 

to work with the regulated community 

to determine appropriate content and 

means of dissemination for these 

guidance materials and posters. The 

Department welcomes comments from 

the public on these matters. 

H. Civil Penalties, Civil Penalty 

Adjudications, and Civil Penalty 

Appeals (See Sections 31.600–31.735 of 

the Proposed Rule) 

This section discusses proposed 

requirements for adjudication and 

appeal procedures for the issuance and 

assessment of civil penalties by the 

Department under Subtitle J. An earlier 

section of this NPRM, section III.B.14, 

discusses proposed appeal rights and 

procedures for persons denied AN 

Registered User Numbers and for 

persons whose AN Registered User 

Numbers are revoked under Subtitle J. 

These two sets of procedures are 

mutually exclusive; the Department 

proposes that civil penalty 

adjudications and appeals would be 

governed only by the mechanisms 

described in this section, while 

registration and revocation appeals 

would be governed only by the appeals 

mechanisms described in section III.B of 

this NPRM. 

The reason for this mutual exclusivity 

is because registration denials and 

revocations are fundamentally different 

from imposition of civil penalties under 

the Department’s proposed rule. Under 

the Department’s proposal, individuals 

or other entities will only be issued civil 

penalties for violating the rules of the 

Ammonium Nitrate Security Program. 

Individuals or other entities will not be 

issued civil penalties for having their 

registrations denied or revoked. 

Adjudication or appeal of civil penalties 

will thus involve assessment of whether 

or not individuals or other entities have 

violated the final Ammonium Nitrate 

Security Program rules. On the other 

hand, appeal of denial or revocation of 

registration numbers will involve 

review of the completeness and 

accuracy of registration applications, 

and review of TSDB vetting results and 

national security interests if applicable. 

The adjudication and appeal procedures 

listed in this section of the NPRM are 

intended to enable reviews of civil 

penalties and of alleged regulatory 

violations, while the appeal procedures 

listed in section III.B are intended to 

enable reviews of registration 

application denials and revocations of 

registration numbers. 

The Department is authorized to 

assess civil penalties against persons 

violating the rules promulgated under 

Subtitle J. See 6 U.S.C. 488e(b). In 

section 31.600, the Department proposes 

that, upon becoming aware of regulatory 

violations, the Department would 

authorize and order civil penalties of up 

to $50,000 per regulatory violation 

against violating persons and entities 

much in the same way as the CFATS 

rules enable it to authorize and order 

civil penalties against chemical facilities 

violating CFATS. Specifically, the 

Department proposes to issue Orders 

Assessing Civil Penalty against persons 

(and, as appropriate, against entities 

owning or operating AN Facilities) for 

violating these rules. The Department 

proposes in section 31.700(a) that 

subject persons/entities shall have the 

option of initiating adjudicatory 

proceedings to challenge the propriety 

of the Department’s determinations. The 

Department also proposes in section 

31.735(a) that subject persons/entities 

may appeal adverse adjudication 

decisions. The Department welcomes 

public comment on these mechanisms, 

and welcomes suggestions of possible 

alternatives or modifications to them. 

Subtitle J requires the Department to 

consider a number of factors in issuing 

and setting the amounts of civil 

penalties against persons violating 

Subtitle J and its implementing 

regulations. See 6 U.S.C. 488e(c). The 

Department proposes to consider the 

factors listed in section 31.605, among 

other factors as justice requires, in 

issuing and setting the amounts of civil 

penalties. The Department welcomes 

public comment on additional factors 

that it should consider in issuing and 

setting civil penalties, and also 

welcomes public comment on the size 

of the civil penalties it should issue for 

different types of regulatory violations. 

Subtitle J also requires the 

Department to afford each person 

potentially subject to civil penalties the 

opportunity to defend himself in an 

administrative hearing to be held ‘‘in 

the county, parish, or incorporated city 

of residence of that person.’’ See 6 

U.S.C. 488e(d). As such, the Department 

proposes in section 31.725(b) to conduct 

all hearings and adjudications in the 

counties, parishes, or incorporated cities 

of residence of the persons or entities 

seeking those hearings and 

adjudications, unless those persons or 

entities waive this right. The 

Department believes that it may be more 

expeditious, from time to time, for the 

Department and for subject persons to 

conduct hearings and adjudications 

elsewhere, or to conduct them via 

teleconferencing or videoconferencing, 

and accordingly thinks it economical to 

all to offer subject persons this option. 

The Department welcomes public 

comment on the efficiency of allowing 

subject persons to waive the statutory 

right to local hearing and adjudication. 

I. Consultation Requirements 

6 U.S.C. 488a(g) requires the 

Department to ‘‘consult with the 

Secretary of Agriculture, States, and 

appropriate private sector entities, to 

ensure that the access of agricultural 

producers to ammonium nitrate is not 

unduly burdened.’’ Similarly, 6 U.S.C. 

488a(b) requires the Department to 

consult ‘‘with the heads of appropriate 

Federal departments and agencies 

(including the Secretary of Agriculture)’’ 

when establishing a threshold 


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percentage for ammonium nitrate in a 

substance. Finally, in 6 U.S.C. 

488a(i)(4)(B), Congress directed the 

Department to consult with appropriate 

stakeholders when developing the 

process for appealing the denial of an 

application for an AN Registered User 

Number. 

During the development of this 

NPRM, the Department has identified 

relevant points of contact for 

consultation purposes within numerous 

Federal, State, and private sector 

entities. For example, the U.S. 

Department of Agriculture (USDA) 

assisted the Department with gaining a 

better understanding of the potentially 

affected population, and with 

understanding how agricultural users 

acquire and use ammonium nitrate. The 

Explosives Unit at the FBI provided 

substantial insight into the detonability 

of ammonium nitrate and mixtures 

containing ammonium nitrate. The 

Office of Enforcement Programs and 

Services at ATF outlined how ATF 

regulates ammonium nitrate and 

ammonium nitrate explosive mixtures 

as well as how ATF manages the 

reporting of theft or loss of explosives. 

The Department also met with State 

fertilizer control officials from over a 

dozen States who provided significant 

insight into how ammonium nitrate is 

used within their States and how they 

currently regulate ammonium nitrate. 

The Department also held listening 

sessions with numerous industry 

associations representing members of 

the likely regulated community, as well 

as with individual producers, 

distributors, and users of ammonium 

nitrate. 

Subsequent to the release of this 

NPRM, the Department will continue to 

consult with Federal, State, and private 

sector entities as it develops the final 

rule. The Department intends to hold 

meetings, open to the public and to 

Federal and State government entities, 

at various locations across the country 

in order to further consult with 

ammonium nitrate stakeholders. The 

Department intends to publish the 

dates, times, and locations of these 

public meetings in the Federal Register. 

J. Delegation of Authority 

The Department may enter into 

cooperative agreements with USDA or 

any State department of agriculture to 

carry out certain provisions of Subtitle 

J. See 6 U.S.C. 488c(a)(1). Subtitle J 

further requires the Department, at the 

request of a governor of a State, to 

delegate to that State authority to carry 

out the administration and enforcement 

of select portions of Subtitle J, ‘‘if the 

Secretary [of Homeland Security] 

determines that the State is capable of 

satisfactorily carrying out such 

functions.’’ See 6 U.S.C. 488c(b)(2). If 

the Department delegates any functions 

to a State, ‘‘subject to the availability of 

appropriations * * * the Secretary shall 

provide to that State sufficient funds to 

carry out the delegated functions.’’ See 

6 U.S.C. 488c(b)(3). 

In regards to delegation of its 

authority to individual States, the 

Department proposes the following 

process: If a State is interested in 

performing the administration and 

enforcement activities required by 

Subtitle J, the governor of the State 

would submit a written request to the 

Department asking for delegation of 

those authorities and articulating the 

State’s ability to ‘‘satisfactorily carry out 

such functions.’’ See 6 U.S.C. 488c(b)(2). 

Upon receipt of the request, the 

Department would evaluate whether the 

State is ‘‘capable of satisfactorily 

carrying out such functions’’ and, upon 

completion of the evaluation, would 

provide the State with a written 

response informing it of the 

Department’s determination. In order to 

make a fair evaluation, the Department 

is likely to request information from the 

State and consult with the State before 

a final determination is made. 

IV. Regulatory Analyses 

Changes to Federal regulations must 

undergo several economic analyses. 

First, Executive Order 12866, as 

supplemented by Executive Order 

13563, Regulatory Planning and Review 

(58 FR 51735, October 4, 1993; 76 FR 

18134, January 18, 2011), directs each 

Federal agency to propose or adopt a 

regulation only upon a reasoned 

determination that the benefits of the 

intended regulation justify its costs. 

Second, the Regulatory Flexibility Act 

of 1980 (5 U.S.C. 601 et seq., as 

amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996) requires agencies to consider the 

economic impact of regulatory changes 

on small entities. Third, the Trade 

Agreements Act (19 U.S.C. 2531–2533) 

prohibits agencies from setting 

standards that create unnecessary 

obstacles to assess the effect of 

regulatory changes on foreign commerce 

of the United States. In developing U.S. 

standards, the Trade Agreements Act 

requires agencies to consider 

international trade standards where 

appropriate, as the basis of U.S. 

standards. Fourth, the Unfunded 

Mandates Reform Act of 1995 (2 U.S.C. 

1531–1538) requires agencies to prepare 

a written assessment of the costs, 

benefits, and other effects of proposed 

or final rules that include a Federal 

mandate likely to result in the 

expenditure by State, local, or tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

annually (adjusted for inflation). 

A. Executive Order 12866 and Executive 

Order 13563: Regulatory Planning and 

Review 

This proposed rule is an economically 

significant regulatory action under 

Executive Order 12866 as supplemented 

by Executive Order 13563, because it 

could result in the expenditure of over 

$100 million in any one year. 

Accordingly, this proposed rule has 

been reviewed by the Office of 

Management and Budget (OMB). The 

OMB Circular A–4 Accounting 

statement is included in the separate 

Regulatory Assessment. 

A Regulatory Assessment, which 

more thoroughly explains the 

assumptions used to generate the 

estimated costs and benefits of this 

proposed rule, is available in the docket 

as indicated under the ADDRESSES

section. Interested persons are invited to 

provide comment on all aspects of the 

Regulatory Assessment. Comments that 

will provide the most assistance to the 

Department with the rulemaking 

include the economic impact (both longterm and short-term, quantifiable and 

qualitative) of the implementation of 

Subtitle J; the monetary and other costs 

anticipated to be incurred by AN 

Facility Representatives, AN Sellers, AN 

Purchasers, and anyone else potentially 

impacted by Subtitle J, any 

distributional effects on U.S. citizens; 

and the security benefits of the 

rulemaking. 

Comments containing trade secrets, 

confidential commercial or financial 

information, CVI, or SSI should be 

appropriately marked and submitted per 

the directions in section I of this NPRM 

(Public Participation) above. 

1. Cost Impacts 

DHS estimates the number of entities 

that purchase ammonium nitrate to 

range from 64,950 to 106,200. These 

entities include farms, fertilizer mixers, 

farm supply wholesalers and co-ops, 

golf courses, landscaping services, 

explosives distributors, mines, retail 

garden centers, and lab supply 

wholesalers. The Department estimates 

between 2,486 and 6,236 entities sell 

ammonium nitrate, many of which also 

purchase ammonium nitrate as well. 

Entities that sell ammonium nitrate 

include ammonium nitrate fertilizer and 

explosive manufacturers, fertilizer 

mixers, farm supply wholesalers and coops, retail garden centers, explosives 

distributors, fertilizer applicator 


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services, and lab supply wholesalers. 

Individuals or firms that provide 

transportation services within the 

distribution chain may be categorized as 

sellers, agents, or facilities depending 

upon their business relationship with 

the other parties to the transaction. The 

total number of potentially regulated 

farms and other businesses ranges from 

64,986 to 106,236 (including overlap 

between the categories). 

The cost of the Ammonium Nitrate 

Security Program ranges from $300 

million to $1.041 billion over 10 years 

at a 7% discount rate. The primary 

estimate is the mean, which is $670.6 

million. For comparison, at a 3% 

discount rate, the cost of the program 

ranges from $364.2 million to $1.3 

billion with a primary (mean) estimate 

of $814 million. The average annualized 

cost for the program ranges from $43 

million to $148 million (with a mean of 

$96 million), also employing a 7% 

discount rate. The largest cost 

component of the proposed rule is 

related to the point of sale. The point of 

sale activities account for approximately 

55% to 80% of the total program cost. 

This is followed by registration 

activities, recordkeeping, inspections/ 

audits, and reporting theft/loss. 

2. Benefits of the Ammonium Nitrate 

Security Program 

This rule will help secure the nation’s 

supply of ammonium nitrate. According 

to a U.S. Department of Justice report, 

‘‘[t]he April 19, 1995, bombing of the 

Alfred P. Murrah Federal Building 

(Murrah Building) in Oklahoma City 

sent shock waves throughout America. 

The bombing took its toll in human life 

and property damage and changed the 

community’s and the Nation’s general 

sense of safety and security. The 

explosion rocked downtown Oklahoma 

City, reduced the north face of the 

Murrah Building to rubble, and dealt 

extensive damage to each of the nine 

floors as they collapsed into the center, 

pancaking one on top of the other. 

When the dust cleared, one-third of the 

building lay in ruins. The force of the 

blast damaged 324 surrounding 

buildings, overturned automobiles, 

touched off car fires, and blew out 

windows and doors in a 50-block area. 

News reports indicated the explosion 

was felt 55 miles from the site and 

registered 6.0 on the Richter scale.’’ See 

‘‘Responding to Terrorism Victims: 

Oklahoma City and Beyond,’’ U.S. 

Department of Justice, Office of Justice 

Programs, Office for Victims of Crime, 

October 2000, available at http:// 

www.ojp.usdoj.gov/ovc/publications/ 

infores/respterrorism/executive.html 

and http://www.ojp.usdoj.gov/ovc/ 

publications/infores/respterrorism/ 

chap1.html. The attack, which occurred 

16 years ago, killed 168 people (167 

individuals were killed by the explosion 

and 1 additional death of an emergency 

worker occurred during the rescue and 

recovery operation) and an additional 

592 people suffered non-fatal injuries. 

See ‘‘Physical Injuries and Fatalities 

Resulting From the Oklahoma City 

Bombing.’’ JAMA, August 7, 1996 Sue 

Mallonee, RN, MPH; Sheryll Shariat, 

MPH; Gail Stennies, MD, MPH; Rick 

Waxweiler, PhD; David Hogan, DO; Fred 

Jordan, MD, pp 382–387available at: 

http://jama.ama-assn.org/cgi/reprint/ 

276/5/382; http://jama.ama-assn.org/ 

cgi/content/abstract/276/5/382 

(estimates of injuries differ by source; 

DHS used the detailed JAMA article as 

it was based on survey and interview 

data and has thorough documentation). 

There are several key benefits of the 

Ammonium Nitrate Security Program 

proposed rule: 

• The Ammonium Nitrate Security 

Program will standardize and build 

upon successful industry ‘‘know your 

customer’’ initiatives and state 

regulations to prevent the 

misappropriation of ammonium nitrate. 

• The Ammonium Nitrate Security 

Program will provide timely, accurate 

vetting of persons wishing to possess 

and transfer ammonium nitrate. By 

requiring individuals to be vetted 

against the TSDB, known bad actors 

may be stopped from legally purchasing 

ammonium nitrate. 

• The Ammonium Nitrate Security 

Program will allow AN Sellers to 

identify non-authorized persons and 

requires them to deny sale of 

ammonium nitrate to these persons. By 

complying with the point of sale 

requirements to verify the accuracy and 

currency of a potential AN Purchaser’s 

AN Registered User Number and an 

inspection of his/her photo 

identification document, AN Sellers 

will have the knowledge to allow or 

deny sale of ammonium nitrate. 

• The Ammonium Nitrate Security 

Program will eliminate gaps in Federal 

oversight of ammonium nitrate supplies 

used in explosives manufacturing. 

To better inform the comparison of 

the costs of implementing the 

ammonium nitrate program in the 

proposed rule with the benefits to 

homeland security it will afford due to 

reduced risk of successful terror attack 

involving ammonium nitrate, DHS 

performed a break-even analysis. In this 

break-even analysis, DHS compared the 

annualized costs of the proposed rule to 

the expected benefits of preventing an 

ammonium nitrate based terrorist attack, 

such as the attack on the Murrah federal 

building. In order to estimate the impact 

of this attack in dollar terms, DHS must 

assume a value per statistical life (VSL). 

The Department emphasizes this VSL is 

not an estimate of what a particular life 

may be worth, but is only an estimate 

what one would be willing to pay to 

receive a reduction in mortality risk. 

The Department is assuming a VSL of $6 

million, which is equivalent to saying 

someone is willing to pay $6 to receive 

a one-in-a-million reduction in the risk 

of death or $60 to receive a one-in-aone-hundred-thousand reduction in the 

risk of death. 

Applying the $6 million VSL to the 

168 deaths from the Murrah attack plus 

the cost of other expenditures that are 

directly related to the attack (such as the 

cost of replacing the Murrah Building), 

DHS estimates the cost to society of the 

Murrah attack to be approximately of 

$1.35 billion (2010 dollars). As this 

proposed rule is expected to cost society 

approximately $95.5 million annually, 

this proposed rule would be cost 

effective if it prevented one terrorist 

attack similar to the Murrah building 

attack every 14.1 years ($1.35 billion 

attack cost/$95.5 million annual 

rulemaking cost). See the Regulatory 

Assessment in the public docket for 

more information on this break-even 

analysis. 

In addition to reducing the possibility 

of an ammonium nitrate-based terrorist 

attack, promulgating this rulemaking 

provides the benefit of allowing DHS to 

comply with the law. Subtitle J states 

the ‘‘Secretary shall regulate the sale 

and transfer of ammonium nitrate by an 

ammonium nitrate facility ...to prevent 

the misappropriation or use of 

ammonium nitrate in an act of 

terrorism.’’ Section II.A of this preamble 

provides a more detailed background 

discussion of the regulatory 

requirements expressly contained in 

Subtitle J, such as the registration 

requirement for certain ammonium 

nitrate sellers and purchasers. DHS 

believes this rulemaking allows the 

Department to comply with the 

regulatory requirements of Subtitle J. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act of 1980 

(RFA) establishes ‘‘as a principle of 

regulatory issuance that agencies shall 

endeavor, consistent with the objective 

of the rule and of applicable statutes, to 

fit regulatory and informational 

requirements to the scale of the 

business, organizations, and 

governmental jurisdictions subject to 

regulation.’’ To achieve that principle, 

the RFA requires agencies to consider 

the potential impacts of their rules on 

small entities. The RFA covers a wide 


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46938 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

range of small entities, including small 

businesses, not-for-profit organizations, 

and small governmental jurisdictions. 

Although DHS does not believe the 

proposed rule will have a significant 

economic impact on a substantial 

number of small entities, the agency has 

prepared an Initial Regulatory 

Flexibility Analysis (IRFA) for public 

review and comment. DHS requests 

comments on this IRFA and the 

potential impacts of the proposed rule 

on small entities. Below is a summary 

of the IRFA. 

1. Reasons for and Objectives of the 

Proposed Rule 

Reason for the Proposed Rule. Section 

563 of the Fiscal Year 2008 Department 

of Homeland Security Appropriations 

Act amends the Homeland Security Act 

of 2002 and provides DHS with the 

authority to ‘‘regulate the sale and 

transfer of ammonium nitrate by an 

ammonium nitrate facility * * * to 

prevent the misappropriation or use of 

ammonium nitrate in an act of 

terrorism.’’ For additional information 

on the security hazards presented by the 

use of ammonium nitrate, see sections 

II.D.1 and 2 of this preamble. 

Objective of the Proposed Rule. This 

proposed rule aims to prohibit a known 

or suspected terrorist from purchasing 

or legally acquiring ammonium nitrate 

from an AN Facility. Additionally, only 

individuals favorably vetted by the 

Department will be able to legally 

acquire ammonium nitrate above the 

threshold level proposed by this rule. 

2. Affected Small Business Population 

and Estimated Impact of Compliance 

At this time, DHS’s preliminary 

estimate of the number of 

establishments that either sell, 

purchase, or sell and purchase 

ammonium nitrate that will be covered 

by the Ammonium Nitrate Security 

Program rules range from 64,986 to 

106,236 facilities. This estimate is 

DHS’s best estimate based on listening 

sessions with industry representatives 

and plant food control officials, 

consultation with other Federal agencies 

and departments (e.g., USDA), and 

research across available information 

provided by industry and governmental 

sources. During the ANPRM, DHS did 

not receive any information on small 

nonprofits or small governmental 

jurisdictions that might be directly 

regulated by this rule. However, some of 

the entity types identified in the 

analysis of purchasers are similar to 

activities that could be conducted by 

small nonprofits or small governmental 

jurisdictions. DHS believes impacts on 

small nonprofits or small governmental 

jurisdictions would be similar as any 

other purchaser in this analysis. DHS 

invites comments from any small 

nonprofit or small governmental 

jurisdiction that believes it is being 

directly regulated by this rule. After AN 

Sellers and AN Purchasers register with 

DHS there will be a better 

understanding of how many and which 

specific AN Facilities will be subject to 

the requirements under the Ammonium 

Nitrate Security Program. Consequently, 

without the benefit of having the AN 

Registered User Number results, it is 

very difficult to know which AN 

Facilities will have to undergo the 

burden of verifying AN Registered User 

Numbers, and maintaining records of 

transactions involving ammonium 

nitrate. In addition, the Department has 

offered some degree of flexibility when 

choosing the method of verifying AN 

Registered User Numbers and 

maintaining records. DHS expects that 

AN Facilities will take full advantage of 

this flexibility in order to minimize the 

cost of this proposed rule to their 

operations. 

3. Number of Small Entities That 

Purchase Ammonium Nitrate 

The Small Business Administration 

(SBA) classifies farms as a small 

business if it has receipts less than 

$750,000. The USDA Census of 

Agriculture provides data on the 

number of farms by economic class 

based on the market value of 

agricultural products sold (excluding 

government payments). The next table 

shows that 94.5% of farms had receipts 

of $0.5 million or less; 97.4% of farms 

had receipts less than $1.0 million. 

Thus, it is clear that the majority of 

farms are small entities. Comments are 

requested concerning the provided 

information. 

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

[2007] 

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

Less than $1000 .......................................................................................................................................... 499,880 22.7 

$1000–$2,499 .............................................................................................................................................. 270,712 12.3 

$2500–$5,000 .............................................................................................................................................. 246,309 11.2 

$5,000–$9,999 ............................................................................................................................................. 254,834 11.6 

$10,000–$24,999 ......................................................................................................................................... 274,274 12.4 

$25,000–49,999 ........................................................................................................................................... 163,500 7.4 

$50,000–$99,999 ......................................................................................................................................... 129,124 5.9 

$100,000–$249,000 ..................................................................................................................................... 149,049 6.8 

$250,000–$499,999 ..................................................................................................................................... 96,251 4.4 

$500,000–$999,999 ..................................................................................................................................... 63,567 2.9 

More than $1,000,000 ................................................................................................................................. 57,292 2.6 

Total Farms .......................................................................................................................................... 2,204,792 100.0 

Source: 2007 Census of Agriculture, USDA (Table 3—page 10). 

The next two tables show the primary 

North American Industrial 

Classification System (NAICS) codes, 

descriptions and SBA definitions for 

small entities that purchase ammonium 

nitrate. This comparison shows that the 

majority of businesses likely to purchase 

ammonium nitrate are small entities. 


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PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY PURCHASE AMMONIUM

NITRATE

[Employee size] * 

NAICS Description 

Establishments by employee size 

0–4 5–9 10–19 20–99 100–499 (Subtotal) 

< 499 500+ 

2121 ....... Coal Mining .............................................. 194 96 100 233 149 772 375 

% of total ................................................. 17% 8% 9% 20% 13% 67% 33% 

2122 ....... Metal Mining ............................................ 131 39 18 26 21 235 72 

% of total ................................................. 43% 13% 6% 8% 7% 77% 23% 

2123 ....... Nonmetallic Mineral Mining and Quarrying.1,434 666 603 877 501 4,081 1,743 

% of total ................................................. 25% 11% 10% 15% 9% 70% 30% 

325314 ... Fertilizer (Mixing Only) Manufacturing .... 111 64 56 89 62 382 94 

% of total ................................................. 23% 13% 12% 19% 13% 80% 20% 

42491 ..... Farm Supplies Merchant Wholesalers .... 2,473 983 673 948 765 5,842 1,901 

% of total ................................................. 32% 13% 9% 12% 10% 76% 25% 

42469 ..... Other Chemical & Allied Products Merchant Wholesalers.3,352 1,155 846 1,082 648 7,083 2,405 

................ % of total ................................................. 35% 12% 9% 11% 7% 74% 25% 

* Totals may be affected by rounding. 

PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY PURCHASE AMMONIUM

NITRATE

[Sales size] * 

NAICS Description 

Establishments by sales size 

<$0.1 mill $.1–0.5 

mill 

$0.5–1 

mill $1–5 mill $5–10 mill 

(Subtotal) 

< $10 mill > $10 mill 

213113 ... Support services for Coal Mining ............ 47 98 38 101 16 300 46 

% of total ................................................. 14% 28% 11% 29% 5% 87% 13% 

213114 ... Support services for Metal Mining ........... 19 26 14 20 ................ 79 104 

% of total ................................................. 10% 14% 8% 11% 0% 43% 57% 

213115 ... Support services for Nonmetallic Mining 24 47 17 40 8 136 15 

% of total ................................................. 16% 31% 11% 26% 5% 89% 10% 

44422 ..... Nursery, Garden Center, and Farm Supply Stores.1,872 5,004 2,675 3,941 830 14,322 3,461 

% of total ................................................. 11% 28% 15% 22% 5% 81% 20% 

56173 ..... Landscaping Services ............................. 23,993 36,446 6,935 5,095 490 72,959 1,249 

% of total ................................................. 32% 49% 9% 7% 1% 98% 1% 

71391 ..... Golf Courses & Country Clubs ................ 1,172 3,802 2,041 3,333 588 10,936 906 

% of total ................................................. 10% 32% 17% 28% 5% 92% 7% 

* Totals may be affected by rounding. 

4. Number of Small Entities That Sell 

Ammonium Nitrate 

In addition to regulating AN 

Purchasers, the proposed rule places 

additional burdens on entities that sell 

ammonium nitrate. These additional 

burdens include registration for AN 

Registered User Number, verifying AN 

Purchasers’ AN Registered User Number 

and photo ID at the point of sale, 

maintaining records of point of sale 

transactions for two years and reporting 

theft and loss of AN. AN Facilities that 

are in the middle of the supply chain 

from manufacturer to end-use consumer 

both sell and purchase ammonium 

nitrate. The primary NAICS codes, 

descriptions, and definitions (both 

employee size and revenues) for small 

entities that sell ammonium nitrate are 

shown in the next two tables. The SBA 

classifies the majority of these AN 

Facilities as small entities. 

PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE

[Employee size] * 

NAICS Description 

Establishments by employee size 

0–4 5–9 10–19 20–99 100–499 (Subtotal) 

< 499 500+ 

325311 ... Nitrogenous Fertilizer Manufacturing ...... 46 19 23 15 11 114 31 

% of total ................................................. 32% 13% 16% 10% 8% 79% 21% 

325314 ... Fertilizer (Mixing Only) Manufacturing .... 111 64 56 89 62 382 94 

% of total ................................................. 23% 13% 12% 19% 13% 80% 20% 

32592 ..... Explosives Manufacturing ........................ 8 4 10 16 13 51 31 


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PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE— 

Continued 

[Employee size] * 

NAICS Description 

Establishments by employee size 

0–4 5–9 10–19 20–99 100–499 (Subtotal) 

< 499 500+ 

% of total ................................................. 10% 5% 12% 20% 16% 63% 38% 

42291 ..... Farm Supplies Merchant Wholesalers .... 2,473 983 673 948 765 5,842 1,901 

% of total ................................................. 32% 13% 9% 12% 10% 76% 25% 

42269 ..... Other Chemical and Allied Products Merchant Wholesalers.3,352 1,155 846 1,082 648 7,083 2,405 

% of total ................................................. 35% 12% 9% 11% 7% 74% 25% 

* Totals may be affected by rounding. 

PRIMARY NAICS CODES, DESCRIPTIONS AND DEFINITIONS FOR SMALL ENTITIES THAT MAY SELL AMMONIUM NITRATE

[Sales size] * 

NAICS Description 

Establishments by sales size 

> $10 mill < $0.1 

mill 

$.1–0.5 

mill 

$0.5–1 

mill $1.5 mill $5–10 mill 

(subtotal) < 

$10 mill 

115112 ... Soil Preparation, Planting, and Cultivating.509 

21% 

992 

41% 

413 

18% 

395 

16% 

30 

1% 

2,339 

96% 

86 

4% 

% of total ................................................. ................ ................ ................ ................ ................ ........................ ................

44422 ..... Nursery, Garden Center, and Farm Supply Stores.1,872 5,004 2,675 3,941 830 14,322 3,461 

% of total ................................................. 11% 28% 15% 22% 5% 81% 20% 

* Totals may be affected by rounding. 

5. Alternatives Considered 

The Department considered several 

alternatives when developing the 

Ammonium Nitrate Security Program 

proposed rule. The alternatives 

considered were: (a) Register 

individuals applying for an AN 

Registered User Number using a paper 

application (via facsimile or the U.S. 

mail) rather than through in person 

application at a local Cooperative 

Extension office or only through a webbased portal; (b) verify AN Purchasers 

through both an Internet based 

verification portal and call center rather 

than only a verification portal or call 

center; (c) communicate with applicants 

for an AN Registered User Number 

through U.S. Mail rather than only 

through e-mail or a secure web-based 

portal; (d) establish a specific capability 

within the Department to receive, 

process, and respond to reports of theft 

or loss rather than leverage a similar 

capability which already exists with the 

ATF; (e) require AN Facilities to 

maintain records electronically in a 

central database provided by the 

Department rather than providing 

flexibility to the AN Facility to maintain 

their own records either in paper or 

electronically; (f) require agents to 

register with the Department prior to the 

sale or transfer of ammonium nitrate 

involving an agent rather than allow 

oral confirmation of the agent with the 

AN Purchaser on whose behalf the agent 

is working; and (g) exempt explosives 

from this regulation rather than not 

exempting them. Each of these 

alternatives is discussed below. 

a. Registration 

The Department considered using one 

or more of three potential approaches 

for AN Seller and AN Purchaser 

registration: paper applications 

submitted via facsimile or U.S. Mail; 

electronic applications via a web-based 

portal; or telephone application for a 

limited number of applicants. The 

Department is proposing the use of a 

web-based portal—the ‘‘AN User 

Registration Portal’’—as the sole means 

for registering to be an AN Purchaser or 

AN Seller. 

1. Registration through Facsimile or U.S. 

Mail 

Paper registration via facsimile or U.S. 

Mail would require potential applicants 

to obtain and fill out an application 

form and fax it or mail it to the 

Department. The Department would 

then process the application and 

communicate the results back to the 

potential applicant via facsimile or U.S. 

Mail. 

Registration through facsimile or U.S. 

Mail would have costs to both the 

industry and the Department. For the 

industry, each prospective AN Seller or 

AN Purchaser applying for an AN 

Registered User Number would have to 

spend approximately 45 minutes 

reading about the rule and procedures 

for registration before completing the 

registration application. If the 

application is paper-based, DHS 

assumes it will take each applicant 

about 15 minutes to complete a paper 

application, fax or mail it to the 

Department, and file it for his or her 

records. For the Department, supporting 

paper submission of application 

materials via facsimile or U.S. Mail 

would require the hiring of staff to 

manually extract information from the 

submitted application form for 

performance of the TSDB check and 

submission into a registered user 

database maintained by the Department. 

The paper application process was not 

pursued or developed, as the 

Department believes that it would result 

in unacceptably lengthy application 

processing times, and unacceptable 

delays between submission of 

applications and receipt of AN 

Registered User Numbers. 

2. Registration Through Local 

Cooperative Extension Office 

During the ANPRM DHS received the 

suggestion to consider the USDA 

extension offices as an application 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
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method. The USDA provided 

explanations why this was not feasible. 

3. Registration Through the AN User 

Registration Portal 

Through a Department developed 

website, potential applicants could 

apply for an AN Registered User 

Number online. With the widespread 

availability of the Internet, applicants 

could apply from home, a public library, 

or place or employment, for instance. 

Further, nothing in the proposed rule 

would prohibit an AN Facility from 

providing an Internet access point to 

potential applicants for use when 

applying for AN Registered User 

Numbers. Potential applicants would go 

to the Department’s website and access 

the AN User Registration Portal. There, 

potential applicants would apply online 

for an AN Registered User Number and 

submit their application directly to the 

Department. The Department would 

receive the information, process it, and 

communicate back to the applicant via 

e-mail. 

Online registration through a 

Department developed, operated, and 

maintained website would have costs to 

both the industry and the Department. 

Each prospective AN Seller or AN 

Purchaser applying for an AN 

Registration User Number will spend 

approximately 45 minutes reading about 

the rule and procedures for registration 

before completing the registration 

application. If the application is online, 

the Department assumes it will take the 

applicant approximately 15 minutes to 

find the website, enter information, 

submit the information to the 

Department, and print and file a copy 

for his or her records. Both the 

individual applicant and government 

costs are developed in the relevant 

sections of the evaluation The 

Department intends to leverage the 

Chemical Security Assessment Tool 

developed and deployed in support of 

CFATS, thus significantly lowering both 

the initial development costs and the 

annual operating and maintenance 

costs. 

The Department is proposing that 

registration be done through an online 

web portal. See section III.B.1 of this 

preamble. While not every potential 

applicant may have personal access to 

the Internet, the Internet is widely 

available, and the Department believes 

that there are significant benefits to 

using an online approach. The benefits 

to both the applicant and the 

Department of an online approach 

include: (1) Substantially quicker 

response from the Department, thereby 

minimizing the time during which the 

applicant would not be able to purchase 

or sell ammonium nitrate; (2) the ability 

for an applicant or registered user to 

access, view, update, and manage their 

personally identifiable information; (3) 

and greater control over managing their 

participation in the Ammonium Nitrate 

Security Program, such as ease in 

renewing their AN Registered User 

Number. The Department proposes that 

neither paper registration applications 

nor in person applications at local 

Cooperative Extension offices be 

offered. 

Registration Via a Telephone 

Application Process 

The applicant would contact the AN 

Helpdesk and ask to register over the 

phone. The Helpdesk operator would 

collect all the information necessary to 

complete an application for an AN 

Registered User Number. The IT system 

would then route the application as if it 

were an application through the web 

portal. The evaluation of the vetting 

against the TSDB would be the same. 

Once a decision had been made as to 

whether or not to approve or deny an 

application, the system would identify 

the response to be mailed to the 

applicant. The system would route the 

information to a vendor to process the 

letter. The vendor would print and mail 

the letter. The letter would require 

tracking, signature, certification (i.e., 

verification of identify), and next day 

delivery. DHS would also require 

evidence of delivery from the vendor. 

These are required to ensure delivery 

and receipt of the AN Registered User 

Number to the correct individual. 

DHS is not recommending the 

telephone option but invites public 

comment on the concept. The following 

tables provide information on the costs 

that vary between the recommended 

web-portal approach and the phone 

approach. 

DIFFERENCES BETWEEN ALTERNATIVES COSTS

[$ millions, 10-year total costs, 7 percent discount] 

Web-portal Phone option Difference 

Registration Costs ..................................................................................................... 71.3 20.3 51.0 

Federal Costs ............................................................................................................ 55.3 81.5 ¥26.2 

All Other Costs .......................................................................................................... 544.0 540.7 3.3 

Total Costs ......................................................................................................... 670.6 642.5 28.1 

b. Verification 

The Department considered three 

potential approaches to verify a 

prospective AN Purchaser; establishing 

a web-based portal (i.e., Purchaser 

Verification Portal), establishing a call 

center, and establishing both 

capabilities. The Department is 

proposing to establish both a web-based 

portal and call center. 

1. Purchaser Verification Portal 

Verifying AN Purchaser status 

through a web-based portal will have 

costs to both industry and the 

Department. The Department will bear 

the cost of developing and maintaining 

the verification portal and related 

guidance on its use and proper 

verification processes. The cost to 

industry of this activity is having a 

computer and access to the Internet. 

Beyond that, cost to the industry is the 

incremental time spent during an 

ammonium nitrate transaction to verify 

the identity and AN Registered User 

Number of the prospective AN 

Purchaser. Accordingly, the overall cost 

would depend on the number of 

ammonium nitrate transactions that 

occur and the time it takes to perform 

a simple identity check and enter basic 

AN Purchaser information into the webportal. Based upon the detailed data in 

the evaluation, the following table 

summarizes the average costs per 

transaction. 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
46942 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

POINT OF SALE AVERAGE COST SUMMARY* 

Low total 

estimate 

High total 

estimate Mean 

Total POS Annual Costs ($) ...................................................................................... 23,886,565 120,516,567 72,201,566 

Purchaser POS Costs ($) .......................................................................................... 3,488,523 18,112,934 10,800,728 

Seller POS Costs ($) ................................................................................................. 20,398,042 102,403,633 61,400,837 

Transactions .............................................................................................................. 5,486,000 29,340,000 17,413,000 

Sellers ........................................................................................................................ 2,486 6,236 4,361 

Purchasers ................................................................................................................. 64,950 106,200 85,575 

Transactions/Seller/Week .......................................................................................... 42.4 90.5 66.5 

Transactions/Purchaser/Week ................................................................................... 1.6 5.3 3.5 

Seller Cost/Transaction ($) ........................................................................................ 3.7 3.5 3.5 

Purchaser Cost/Transaction ($) ................................................................................. 0.64 0.62 0.62 

* Data is for all entities and comes from the detailed evaluation, particularly Tables 9, 10, 26–29, 35–36. 

2. Purchaser Verification Call Center 

The Department also considered a 

Purchaser Verification Call Center. 

Under this approach, AN Sellers would 

use a telephone to call a toll-free phone 

number established by the Department 

where they would either talk to a person 

or be led through a series of telephone 

tree menus. During the phone call, the 

AN Seller would be expected to provide 

information about the AN Purchaser. 

The operator or automated telephone 

system would enter the information 

provided into the Department’s 

Registered User database system, wait 

for electronic confirmation, and then 

provide verbal confirmation to the caller 

along with a confirmation number for 

that specific transaction. 

Verifying AN Purchaser status 

through a call center will have costs to 

both industry and the Department. The 

burden to the industry for the call center 

option rests upon having a telephone 

and the time spent relaying the relevant 

AN Purchaser information to the call 

center. The cost to the Department is the 

establishment of the call center and 

potentially employing staff to standby 

and field calls regarding AN purchases. 

3. Purchaser Verification Portal and Call 

Center 

The Department proposes to establish 

both a Purchaser Verification Portal and 

a Purchaser Verification Call Center. See 

section III.C.13. This approach is 

identical to the Purchaser Verification 

Portal described above, integrated with 

the Purchaser Verification Call Center 

capability. This approach presumably 

would be the cheapest for the regulated 

community as each AN Facility likely 

would choose to employ the most costeffective means of verification; however, 

it would be the most costly of the 

alternatives for the Department to 

establish and operate as it would bear 

the costs associated with the 

development and maintenance of both a 

web verification portal and call center. 

When creating a manner in which AN 

Sellers can verify the required 

information on a potential ammonium 

nitrate purchase by an AN Purchaser, 

the Department found both advantages 

and disadvantages to each option 

considered. A call center may be 

preferable to a web portal, as 

presumably all AN Facilities have 

telephones while not all AN Facilities 

have computers with Internet access, 

particularly at the point of sale. 

However, there are some potential 

disadvantages. For instance, the call 

center approach would take more time 

per transaction than the web portal 

approach, and it would be significantly 

more costly for the Department to 

establish and operate a call center. The 

advantage of this alternative is that all 

AN Facilities would be 

accommodated—those with telephone 

access only and those with both 

telephone and Internet access who find 

the verification web portal option more 

efficient. As a result, the Department 

proposes to offer both online and call 

center options despite the higher costs 

to the Department. 

c. Communication With Applicants 

The Department must communicate 

with applicants throughout the 

registration process. The Department 

considered two alternatives to 

communicating with applicants: (1) 

communication by U.S. Mail, and (2) 

communication by electronic means. 

The Department proposes to 

communicate with applicants by 

electronic means. 

1. U.S. Mail 

The U.S. Mail could act as the 

communication medium between the 

Department and the regulated 

community. If the U.S. Mail were 

chosen as the communication 

mechanism, the Ammonium Nitrate 

Security Program would be paper-based. 

While there would be some minimal 

cost to the industry (e.g., postage), the 

time to complete paperwork would be 

equivalent to the submission of 

information electronically. The costs to 

the Department, however, would be 

more substantial. The Department 

would have to hire or devote staff to 

process incoming correspondence. 

2. Electronic Means 

The other option for communication 

could be by electronic means. Program 

communication would occur through email and secure web portals. The cost to 

the industry can be broken down to 

computer and Internet access. The cost 

to the Department hinges on developing 

web portals and databases to securely 

store information. 

The Department assumes that most 

applicants have Internet access with one 

exception. Based upon information from 

the USDA, approximately 60% of farms 

have Internet access. Thus, DHS 

assumes that in the agricultural sector, 

approximately 60% of farms have 

computers with Internet access. The 

Department therefore estimated that 

40% of these individuals will have to 

travel a short distance to public library, 

or other location where access to the 

Internet is available to apply for an AN 

Registered User Number. Further, DHS 

assumes that for applicants without 

Internet access, two trips will be 

required; one to complete the AN 

Registered User Number application, 

and a second trip after 72 hours to 

retrieve the e-mail containing the AN 

User Registration Number. The 

Department has assumed farmers 

without Internet access will make two 

trips. The Department assumes that the 

round trip distance is 50 miles per trip 

and has used the IRS mileage rate of 

$0.55 per mile. DHS assumes the total 

extra time for each trip will average 

approximately one hour each way. Each 

trip will include an additional hour for 

the Internet access and registration. 

Multiplying 50 miles times two trips 

times $0.55 per mile totals $55 per 

individual for the two trips associated 


srobinson on DSK4SPTVN1PROD with PROPOSALS2
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with applying for and receiving an AN 

Registered User Number. Additionally, 

DHS included approximately $1.9 

million for farmers who attempt to make 

a purchase without knowing about the 

regulation and must then make one 

extra trip. These calculations are 

detailed in Tables 11 and 12 in Section 

7 of the full evaluation. Because of the 

minimal time and effort it takes to apply 

for and receive an AN Registered User 

Number, the Department believes this 

approach to be a cost-effective way to 

prevent misappropriation of ammonium 

nitrate. 

The Department considered using the 

U.S. Mail as the primary medium for 

communication; however, the 

Department ultimately rejected this 

approach due to the additional time it 

would take to notify applicants of their 

AN Registered User Number. The 

Department also cited the significant 

availability of the Internet. Therefore, 

the Department is proposing to use 

electronic means as the primary 

medium for communication. 

Additionally, the Department believes 

that electronic communication is more 

secure and faster than U.S. Mail. 

d. Reporting Theft or Loss 

The Department considered two 

alternatives pursuant to Subtitle J, 

which requires an AN Facility 

Representative who has knowledge of 

theft or unexplained loss of ammonium 

nitrate to report such theft or loss to 

Federal law enforcement authorities 

within 24 hours of the time at which 

knowledge of theft or loss is acquired. 

The Department considered requiring an 

AN Facility Representative to report to 

either the Department or ATF. The 

Department proposes to require 

reporting of theft/loss to ATF. 

Under either option, there is a burden 

to the industry. The cost to industry of 

this activity will be the time to gather 

details and report the theft or loss of 

AN. Because of the seriousness of theft 

or loss of AN, the total time to report a 

theft or loss is assumed to include two 

hours each for an inventory manager 

and sales person, plus one hour for the 

general manager. This includes the time 

for the reporter to organize useful 

details for law enforcement and conduct 

a brief investigation. There will likely be 

additional time for a necessary followup investigation. Strictly for purposes of 

this analysis, the Department assumes 

that two percent of AN Facilities and 

AN Purchasers will report loss or theft 

once per year. Based on these 

assumptions, there will be 88 reports of 

theft or loss annually, at a total annual 

cost to industry of $13,350. 

1. ATF Reporting 

One of the many responsibilities of 

ATF is regulating the use of explosives. 

Because pure ammonium nitrate does 

not fall within the scope of the statutory 

definition of ‘‘explosives’’ set forth at 18 

U.S.C. 841(d), it is not subject to ATF’s 

controls on importation, manufacture, 

distribution or storage; however, 

ammonium nitrate explosive mixtures 

and ANFO are included in ATF’s List of 

Explosive Materials. ATF has an 

existing program for reporting the theft 

or loss of explosives. Individuals that 

discover the theft or unexplained loss of 

ammonium nitrate would contact ATF 

by phone and facsimile and provide the 

pertinent information. The costs to the 

industry for reporting to ATF the theft 

or unexplained loss of ammonium 

nitrate would be minimal. The costs to 

the Department would be minimal as 

well, unless DHS funded ATF efforts. 

2. DHS Reporting 

Similar to ATF’s method for reporting 

theft or loss of explosives, individuals 

upon discovering the theft or 

unexplained loss of ammonium nitrate 

would contact DHS. The costs to the 

industry for reporting the theft or 

unexplained loss of ammonium nitrate 

to DHS would be minimal. The costs to 

the Department would be greater than 

when compared to the ATF reporting 

requirement. DHS would be required to 

create and establish the theft/loss 

reporting policies, procedures, and 

infrastructure. 

The Department is proposing to 

require reporting of theft/loss to ATF. 

See section III.E of this preamble. ATF 

already possesses the unique experience 

in collecting and responding to the 

theft/loss of explosive related materials. 

Additionally, DHS wishes to avoid 

duplicative efforts at the Federal level. 

e. Recordkeeping 

The Department considered two 

options to maintain records: (1) 

Mandatory use of a central electronic 

database, and (2) the flexibility to 

maintain records in paper format or in 

electronic format. The Department 

proposes allowing AN Facilities to 

select the method of records storage for 

themselves. See section III.F of this 

preamble. 

The Department selected this 

alternative because the burden to submit 

and maintain electronic records in a 

central database would increase the 

burden on the industry without 

measurable benefit to the industry. The 

benefit would be limited to the 

confidence an AN Facility would have, 

that if it maintained its records in a 

central database, it would meet 

Department recordkeeping 

requirements. 

The costs to industry associated with 

this alternative are the costs of the time 

spent during each transaction collecting 

and recording the information required 

under the regulations, the costs of the 

time spent on ongoing recordkeeping 

activities throughout the year, and any 

capital investment costs an AN Facility 

incurs in acquiring equipment to 

facilitate the safe storage of the AN 

transaction records. 

f. Agents 

The Department considered three 

options to minimize the likelihood that 

agents are used to circumvent the 

intentions of Subtitle J. Specifically, the 

Department believes it is imperative for 

AN Sellers to ensure that an agent is 

acting at the direction of a registered AN 

Purchaser before the AN Seller transfers 

possession of ammonium nitrate to that 

agent. To accomplish this, the 

Department is considering the following 

alternatives: 

1. Requiring AN Purchasers to submit 

the names of their agents to DHS via the 

AN User Registration Portal, and 

requiring the AN Seller to confirm with 

DHS, prior to transferring possession of 

the ammonium nitrate, that the 

prospective AN Purchaser has 

submitted the name of the agent to DHS; 

2. Requiring the AN Seller to orally 

confirm with the prospective AN 

Purchaser prior to each sale that the 

agent is acting on behalf of the AN 

Purchaser; 

3. A combination of the first two 

options, whereby an AN Seller first 

should check with DHS to see if the 

prospective AN Purchaser has 

submitted the name of the agent to DHS 

and, if not, then the AN Seller must 

orally confirm with the prospective AN 

Purchaser that the agent is acting on his/ 

her behalf. DHS is proposing this third 

approach. 

Under the first approach, each AN 

Purchaser would be required to provide 

to DHS the names of any agents that 

might act on his/her behalf at the point 

of sale. The AN purchaser would submit 

names of agents to DHS via the AN User 

Registration Portal. An AN Purchaser 

could submit an agent’s name when he/ 

she applies for an AN Registered User 

Number or at any other time prior to 

conducting a purchase involving that 

agent. Then, prior to transferring 

possession of ammonium nitrate to an 

agent, an AN Seller would need to 

verify with the Department that the 

prospective AN Purchaser has 

designated the agent as an approved 

agent to represent the AN Purchaser at 


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the point of sale. This verification 

would occur through the same 

mechanism that is used for the other 

prospective AN Purchaser verification 

activities (i.e., the Purchaser 

Verification Portal or the Purchaser 

Verification Call Center). The agent’s 

information provided to the Department 

by AN Purchasers and AN Sellers would 

not be vetted against the TSDB nor 

otherwise checked by the Department; 

rather, it would simply be maintained in 

the AN Registered User Database as a 

data field linked to the AN Purchaser for 

use in the agent verification process. 

Under the second approach, the 

Department would require the AN Seller 

to verify with the prospective AN 

Purchaser that the agent is actually 

acting on behalf of the prospective AN 

Purchaser for each specific transaction. 

Much like the other verification 

activities, this could occur at the time 

the prospective AN Purchaser places the 

order, when the agent arrives to take 

possession of ammonium nitrate, or any 

other time, so long as it occurs prior to 

the AN Seller transferring possession of 

ammonium nitrate to the prospective 

AN Purchaser’s agent. If this approach 

were adopted, the Department would 

propose requiring this confirmation to 

occur for each transaction/occurrence in 

which an agent is taking possession of 

ammonium nitrate; a blanket 

verification of an agent by an AN 

Purchaser would not be acceptable. 

Additionally, as an e-mail or letter can 

be easily forged, under this approach 

the Department would require that the 

AN Seller must receive this verification 

orally (e.g., in person; telephonically) 

from the prospective AN Purchaser. 

The third approach—the option the 

Department is proposing in this 

NPRM—is a combination of the first two 

approaches. Specifically, AN Purchasers 

would be expected to provide the 

Department with the names of their 

agent(s), and an AN Seller would be 

expected to verify either through the 

Purchaser Verification Portal or 

Purchaser Verification Call Center that 

the agent information has been provided 

by the AN Purchaser to the Department. 

As opposed to the first approach, under 

which a sale cannot occur unless the 

agent’s name has been provided to the 

Department by the prospective AN 

Purchaser, under this third option the 

AN Seller would be allowed to complete 

the sale or transfer after either (1) 

verifying the agent has been designated 

by the prospective AN Purchaser in the 

Purchaser Verification Portal or 

Purchaser Verification Call Center, or (2) 

orally confirming with the prospective 

AN Purchaser that the agent is acting on 

the prospective AN Purchaser’s behalf 

for this individual sale. The Department 

expects that in the majority of cases this 

oral confirmation would occur 

telephonically. This third option has the 

benefit of minimizing the point of sale 

impact of the agent verification process, 

while allowing a means for a sale or 

transfer to be completed even if a 

prospective AN Purchaser forgets or is 

otherwise unable to provide the 

Department with the agent’s name prior 

to using the agent at the point of sale. 

For these reasons, this third approach is 

the option proposed by the Department. 

g. Exemption of Explosives Regulated by 

ATF 

Pursuant to Subtitle J, the Department 

has the discretion to exempt from 

regulation persons producing, selling, or 

purchasing ammonium nitrate 

exclusively for use in the production of 

explosives under a license or permit 

issued under the Federal explosives 

laws, 18 U.S.C. Chapter 40, and 

associated regulations. ATF is 

responsible for enforcing Federal 

explosives laws, and has established 

regulations for doing so. The 

Department is proposing to exempt from 

regulation ammonium nitrate mixtures 

that are ‘‘explosives’’ subject to ATF 

regulation (i.e., ANFO). The Department 

also considered two other approaches. 

The first option is to apply these rules 

to individuals who purchase, sell, or 

transfer ammonium nitrate for use in the 

production of explosives. The other 

option considered is to entirely exempt 

from Subtitle J requirements facilities 

and persons that purchase, sell, or 

transfer ammonium nitrate solely for 

use in the production of explosives, as 

they are already regulated by ATF. 

1. Exempt AN Mixtures That Are 

‘‘Explosives’’ Subject to ATF Regulation 

Under this approach, entities and 

individuals that purchase, sell, or 

transfer ANFO, but who do not produce 

ANFO or possess ammonium nitrate for 

other reasons, would be exempt from all 

Subtitle J requirements and would be 

subject solely to ATF regulation. This 

approach minimizes cost to the industry 

as well as the Department. 

2. Regulate Individuals Who Purchase, 

Sell, or Transfer AN for the Production 

of Explosives 

Under this approach, such 

individuals would be subject to 

regulation by both DHS under Subtitle 

J and ATF under the Federal explosives 

laws. By not exempting ammonium 

nitrate used in explosives, DHS would 

be treating all individuals who 

purchase, sell, or transfer ammonium 

nitrate—whether as part of ANFO 

mixtures or not—the same. This 

approach would ensure that there are no 

gaps in coverage of ammonium nitrate 

as it moves through the supply chain— 

ammonium nitrate would be captured 

under DHS’s ammonium nitrate 

program both before and after being 

combined with fuel oil to create ANFO, 

and would be captured under ATF’s 

regulations after being combined with 

fuel oil to create ANFO. There could 

potentially be heightened costs to the 

industry due to potentially duplicative 

regulation. The costs to the Department 

would hinge upon a greater number of 

AN Facilities to regulate. 

3. Entirely exempt from Subtitle J 

requirements facilities and persons that 

purchase, sell, or transfer ammonium 

nitrate solely for use in the production 

of explosives 

Under this approach, facilities and 

persons that purchase, sell, or transfer 

ammonium nitrate solely for use in the 

production of explosives would be 

entirely exempt from Subtitle J 

requirements, as they are already 

regulated by ATF. In this model, 

facilities and persons that are licensed 

by ATF to mix ammonium nitrate with 

fuel to create ANFO which do not 

purchase, sell, or transfer ammonium 

nitrate for other purposes would not be 

subject to these regulations. This 

approach, however, could create a 

considerable gap in regulatory coverage 

throughout the ammonium nitrate 

supply chain, as ATF regulations apply 

solely to ANFO and not the ammonium 

nitrate used to create it. The costs to the 

industry, as well as the Department, 

would be low because certain 

individuals and facilities would not fall 

under the regulation. 

The Department proposes to exempt 

from all Subtitle J requirements entities 

and individuals that purchase, sell, or 

transfer ANFO, but who do not produce 

ANFO or possess ammonium nitrate for 

other reasons. These entities and 

individuals are regulated by ATF. This 

approach avoids duplicative regulation 

yet it does not create a potential 

regulatory gap in the ammonium nitrate 

supply chain. 

6. Average Costs per AN Facility 

The largest cost driver is activities 

related to the point of sale. While 

variation in cost by facility is largely 

driven by the number of point of sale 

transactions that each AN Facility 

conducts, it is helpful to examine the 

average cost per AN Purchaser and AN 

Facility. 

The average costs per entity that 

purchases ammonium nitrate are 

presented in the following tables. Both 


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the lower and upper bounds of the 

estimate are provided. In either case, the 

highest cost will be for farms without 

Internet access. The cost of compliance 

to AN Purchasers is the time to apply 

for an AN Registered User Number with 

the Department of Homeland Security 

and additional time during the 

purchase. This registration cost averages 

$57 to $700 once every five years. DHS 

believes for even the smallest farms, 

other businesses, nonprofits, and small 

jurisdictions that only purchase 

ammonium nitrate, this registration cost 

does not represent a significant 

economic impact. DHS invites 

comments on this impact, particularly 

impacts related to the point of sale 

costs. 

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

Purchaser 

registration 

($) 

Appeals 

($) 

Purchase opportunity cost 

($) 

Total 

purchaser 

cost 

($) 

Number of 

entities 

Average cost 

per entity 

($) 

Farms with internet access .................................. 2,079,500 28,100 1,674,500 3,782,100 30,000 126 

Farms w/o internet access ................................... 12,998,000 18,700 1,116,300 14,133,000 20,000 707 

Golf courses ......................................................... 169,000 3,500 334,900 507,400 6,000 85 

Landscaping services .......................................... 144,000 2,900 251,200 398,100 4,500 88 

Blasting services .................................................. 16,000 200 14000 30,200 300 121 

Mines .................................................................... 71,000 1,500 97,700 170,200 1,800 97 

Total .............................................................. 15,477,500 54,900 3,488,500 19,020,900 62,500 304 

* Totals may not add due to rounding. 

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

Purchaser 

registration 

($) 

Appeals 

($) 

Purchase 

opportunity 

cost 

($) 

Total 

purchaser 

cost 

($) 

Number of 

entities 

Average cost 

per entity 

($) 

Farms with internet access .................................. 3,119,300 42,100 8,150,800 11,312,200 45,000 251 

Farms w/o internet access ................................... 19,497,500 28,100 5,433,900 24,959,500 30,000 832 

Golf courses ......................................................... 339,000 6,900 2,173,600 2,519,500 12,000 210 

Landscaping services .......................................... 287,000 5,800 1,630,200 1,923,000 9,000 214 

Blasting services .................................................. 33,000 700 90600 124,300 500 249 

Mines .................................................................... 142,000 2,800 634,000 778,800 3,500 223 

Total .............................................................. 23,417,800 86,400 18,112,900 41,617,100 100,000 416 

* Totals may not add due to rounding. 

The average per AN Facility cost to 

comply with the proposed rule ranges 

from $6,400 for laboratory suppliers 

(low population/low transactions 

scenario) to $23,800 for an explosives 

distributor (high population/high 

transactions scenario). 

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

Reg. 

activities 

($) 

Appeals 

($) 

Point of sale 

(Web 

portal) 

($) 

Recordkeeping 

($) 

Reporting 

theft/loss 

($) 

Audits/ 

inspections 

($) 

Total seller 

cost 

($) 

Number of 

AN facilities 

Average 

cost 

($) 

AN fert. manuf. .......................... 8,000 0 125,800 43,100 100 2,700 179,700 0 6,900 

AN expl. manuf. ........................ 3,000 0 50,800 17,400 0 1,100 72,400 0 7,200 

Fertilizer mixers ......................... 83,000 1,700 1,935,500 663,200 1,100 41,500 2,726,000 400 6,800 

Explosives dist. ......................... 102,000 2,100 5,494,500 834,200 1,500 51,600 6,486,000 500 13,000 

Farm whol./co-ops ..................... 92,000 1,800 4,524,100 742,100 1,600 52,600 5,414,100 500 10,800 

Retail garden ctrs. ..................... 72,000 1,300 3,791,900 703,400 1,600 49,200 4,619,400 500 9,200 

Fertilizer app. ............................ 73,000 1,300 4,254,800 717,100 1,400 50,100 5,097,700 500 10,200 

Lab. supply ................................ 9,000 0 220,700 83,400 100 5,600 318,800 100 6,400 

Total ................................... 442,000 8,200 20,398,100 3,803,900 7,400 254,400 24,914,100 2,500 10,000 

* Totals may not add due to rounding. 

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

Reg. 

activities 

($) 

Appeals 

($) 

Point of sale 

(Web 

portal) 

($) 

Recordkeeping 

($) 

Reporting 

theft/loss 

($) 

Audits/ 

inspections 

($) 

Total seller 

cost 

($) 

Number of 

AN facilities 

Average 

cost 

($) 

AN fert. manuf. .......................... 8,000 0 311,200 43,100 100 2,700 365,100 0 14,000 

AN expl. manuf. ........................ 3,000 0 125,700 17,400 0 1,100 147,300 0 14,700 

Fertilizer mixers ......................... 123,000 2,600 7,181,800 994,800 1,700 62,200 8,366,000 600 13,900 

Explosives dist. ......................... 202,000 4,200 21,807,900 1,668,500 3,100 103,200 23,788,900 1,000 23,800 


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46946 Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 

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

Reg. 

activities 

($) 

Appeals 

($) 

Point of sale 

(Web 

portal) 

($) 

Recordkeeping 

($) 

Reporting 

theft/loss 

($) 

Audits/ 

inspections 

($) 

Total seller 

cost 

($) 

Number of 

AN facilities 

Average 

cost 

($) 

Farm whol./co-ops ..................... 184,000 3,400 17,841,300 1,484,200 3,200 105,100 19,621,100 1,000 19,600 

Retail garden ctrs. ..................... 357,000 6,000 37,281,300 3,517,200 7,900 246,100 41,415,400 2,500 16,600 

Fertilizer app. ............................ 146,000 2,800 16,764,200 1,434,200 2,900 100,100 18,450,200 1,000 18,500 

Lab. supply ................................ 19,000 500 1,090,400 166,800 300 11,100 1,288,200 100 12,900 

Total ................................... 1,042,000 19,500 102,403,800 9,326,200 19,200 631,600 113,442,200 6,200 18,200 

* Totals may not add due to rounding. 

7. Identification of Duplication, Overlap 

and Conflict With Other Federal Rules 

A thorough discussion of the 

relationship to other rules is provided 

earlier in section II.D of this preamble. 

C. Executive Order 13132: Federalism 

Executive Order 13132 requires DHS 

to develop a process to ensure 

‘‘meaningful and timely input by State 

and local officials in the development of 

regulatory policies that have federalism 

implications.’’ To meet this 

requirement, the Department has, and 

will continue to, consult with State 

fertilizer control officials, members of 

the American Association of Plant Food 

Control Officials, and others throughout 

the development of these regulations. 

Such consultation is expressly required 

by 6 U.S.C. 488a(g). Consultation with 

the aforementioned groups has informed 

the Department on potential regulatory 

avenues, and on the use and movement 

of ammonium nitrate through its life 

cycle within the potentially regulated 

community. Additionally, the 

Department is hereby specifically 

requesting comments from State and 

local officials on regulatory policies that 

have federalism implications. 

Chief among potential federalism 

implications is preemption of State 

ammonium nitrate regulations. As 

discussed in Part II.D of this preamble, 

a number of States currently regulate the 

security of ammonium nitrate. Subtitle 

J explicitly addresses preemption of 

such regulations, and ‘‘preempts the 

laws of any State, to the extent that such 

laws are inconsistent with [Subtitle J], 

except that [Subtitle J] shall not preempt 

any State law that provides additional 

protection against the acquisition of 

ammonium nitrate by terrorists or the 

use of ammonium nitrate in explosives 

in acts of terrorism or for other illicit 

purposes, as determined by the 

[Department].’’ See 6 U.S.C. 488g(b). 

The Department specifically seeks 

comment on the interaction of the 

proposed rule with existing State and 

local laws and regulations, including 

comment on any laws that may be 

inconsistent with Subtitle J and laws 

that provide additional protections 

against the acquisition of ammonium 

nitrate or its use in terrorist attacks. 

D. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

of 1995 (UMRA), enacted as Public Law 

104–4 on March 22, 1995, is intended, 

among other things, to curb the practice 

of imposing unfunded Federal mandates 

on State, local, and tribal governments. 

Title II of UMRA requires each Federal 

agency to prepare a written statement 

assessing the effects of any Federal 

mandate in a proposed or final agency 

rule that may result in a $100 million or 

more expenditure (adjusted annually for 

inflation) in any one year by State, local, 

and tribal governments, in the aggregate, 

or by the private sector. The primary 

cost estimate for this proposed 

rulemaking would not impose such an 

unfunded mandate on State, local, or 

tribal governments, but the upper end of 

the estimate would show an unfunded 

mandate in excess of $100 million 

(adjusted for inflation) on the private 

sector. The analysis required under Title 

II of UMRA is satisfied by the regulatory 

impact assessment prepared in 

conjunction with this NPRM. 

The Department recognizes that some 

AN Facilities of entities that purchase 

ammonium nitrate may be owned by 

state or local government entities. These 

entities would be required to comply 

with the provisions of this proposed 

rule. 

Further, under Subtitle J, the 

Department may enter into cooperative 

agreements with the USDA or any State 

department of agriculture to carry out 

the provisions of Subtitle J. See 6 U.S.C. 

488c(a)(1). Subtitle J further requires the 

Department, at the request of a governor 

of a State, to delegate to that State the 

authority to carry out the administration 

and enforcement of Subtitle J, if the 

Department determines that the State is 

capable of satisfactorily carrying out 

such functions. See 6 U.S.C. 488c(b)(2). 

If the Department delegates any 

functions to a State, subject to the 

availability of appropriations, the 

Department must provide to the state 

sufficient funds to carry out those 

functions. See 6 U.S.C. 488c(b)(3). 

The Department proposes the 

following process for evaluating 

requests from governors: If a State is 

interested in performing the 

administration and enforcement 

activities required by Subtitle J, the 

governor of the State must submit a 

written request to the Department 

asking for delegation of those 

authorities. Upon receipt of the request, 

the Department will initiate an 

evaluation to determine if the State is 

capable of satisfactorily performing 

those functions and, upon completion of 

the evaluation, will provide the State 

with a written response informing it of 

the Department’s determination. In 

order to make a fair evaluation, the 

Department is likely to request 

information from the State and consult 

with the State before a final 

determination is made. Because the 

responsibility would be transferred only 

at the request of the state, and only 

when funding is available, no unfunded 

mandate would be created. 

E. National Environmental Policy Act 

The Department has analyzed this 

proposed rule for purposes of the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321–4347) under 

Department of Homeland Security 

Directive 023–01—Environmental 

Planning Program, and has concluded 

that this proposed rule comes within 

Categorical Exclusion A3 ‘‘promulgation 

of rules * * * (a) of a strictly 

administrative or procedural nature.’’ 

We find no basis for believing that there 

are extraordinary circumstances which 

would require further analysis; 

however, we invite comment on this 

conclusion. 

F. Paperwork Reduction Act 

This NPRM contains collection of 

information requirements under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3520). ‘‘Collection of 

information,’’ as defined in 5 CFR 

1320.3(c), includes reporting, record 


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keeping, monitoring, posting, labeling, 

and other similar actions. 

Subtitle J provides DHS with 

authority to regulate the sale and 

transfer of ammonium nitrate. This 

collection will enable the Department to 

‘‘regulate the sale and transfer of 

ammonium nitrate by an ammonium 

nitrate facility * * * to prevent the 

misappropriation or use of ammonium 

nitrate in an act of terrorism.’’ See 6 

U.S.C. 488a(a). 

This NPRM introduces a new 

collection with OMB Control Number 

1670–NEW. The Ammonium Nitrate 

Security Program information collection 

has eight new instruments: Ammonium 

Nitrate Registration; Appeals for Denial 

or Revocation of AN Registered User 

Numbers; Purchaser Verification; 

Ammonium Nitrate Helpdesk; 

Electronic Recordkeeping Database; 

Reporting Theft and Loss; Adjudication 

or Appeal of an Order Assessing Civil 

Penalty; and Inspections and Audits. 

This NPRM includes a solicitation for 

comments for a new information 

collection, 1670–NEW. Any comments 

submitted will be reviewed by DHS and 

OMB prior to publication of a final rule, 

and prior to OMB approval of this new 

information collection. This NPRM 

describes the nature of the information 

collection, the categories of 

respondents, and estimated burdens and 

costs. 

Under the protections provided by the 

Paperwork Reduction Act, as amended, 

an agency may not conduct or sponsor, 

and a person is not required to respond 

to, a collection of information unless it 

displays a valid OMB control number. 

The Department will begin collecting 

information as soon as an OMB control 

number is issued, or as soon as the 

mechanism for collecting information is 

publicly available, or when the rule 

implementing the Ammonium Nitrate 

Security Program becomes effective, 

whichever is latest. 

TABLE 1—ESTIMATES OF ANNUALIZED BURDEN HOURS AND COSTS

Instrument Number of 

respondents 

Responses 

per 

respondent 

Avg. burden 

per response 

(in hours) 

Total annual 

burden 

(in hours) 

Total annual 

respondent 

cost 

(in dollars) 

Ammonium Nitrate Registration ........................................... 116,800 1 2.02 235,912 11,114,000 

Appeals for Denial or Revocation of AN Registered User 

Numbers ........................................................................... 223 1 6.00 1,336 49,500 

Purchaser Verification .......................................................... 6,236 4,705 0.08 2,445,001 93,262,600 

Ammonium Nitrate Helpdesk ............................................... 248,460 119 0.02 551,114 20,680,100 

Electronic Recordkeeping Database ................................... 6,236 4,705 0.02 448,992 8,591,600 

Reporting of Theft & Loss .................................................... 125 1 2.80 349 18,300 

Adjudication or Appeal of an Order Assessing Civil Penalty .................................................................................... Less Than 10 N/A N/A N/A N/A 

Inspections and Audits ......................................................... 1,559 1 12.00 18,708 621,100 

Title: Ammonium Nitrate Registration 

Summary of Collection of 

Information: Information is collected 

through a web-based portal directly 

from each applicant who wishes to 

apply for an AN Registered User 

Number. The information collected will 

be used to determine if the applicant is 

eligible for an AN Registered User 

Number. Specifically, 6 U.S.C. 

488a(i)(2)(A) requires the Department to 

conduct a check of identifying 

information of all applicants against 

identifying information that appears in 

the TSDB. 

Consistent with 6 U.S.C. 488a(i)(3)(A) 

and 6 U.S.C. 488a(i)(3)(B), to the extent 

practicable, the Department intends to 

approve or deny each registration 

application, and to issue each AN 

Registered User Number, not later than 

72 hours after the time DHS receives a 

complete registration application. DHS 

may deny an applicant an AN 

Registered User Number if the TSDB 

indicates that the applicant may pose a 

threat to national security. See 6 U.S.C. 

488a(i)(2)(B). 

As proposed in section 31.215(a), at 

least one individual who is designated 

to act on behalf of a facility for purposes 

of compliance with this regulation must 

(1) apply for an AN Registered User 

Number, and (2) register as a Designated 

AN Facility POC for the AN Facility. In 

addition, sections 31.210 and 31.215 

would allow any individual who has an 

ownership interest in an AN Facility; is 

designated to act on behalf of a facility 

for purposes of compliance with this 

regulation, such as, possibly, a site 

manager, sales manager, or corporate 

officer; is involved in the sale or transfer 

of ammonium nitrate at an AN Facility, 

such as a sales clerk or cashier; or 

performs ammonium nitrate application 

services to register as an AN Seller. 

Sections 31.210 and 31.215 would 

require that any person who 

individually performs a sale or transfer 

of ammonium nitrate on behalf of an AN 

Facility, or who performs ammonium 

nitrate application services, must be 

registered. Pursuant to section 31.205 of 

the proposed rule, any person who 

intends to purchase ammonium nitrate 

must also be registered. 

Use of: The information collected will 

be used to (1) conduct a check of 

identifying information of applicants 

against identifying information that 

appears in the TSDB, and (2) issue the 

Department’s approval or denial of each 

registration application. 

Need for Information: The 

information collected is needed to 

comply with section 563 of the Fiscal 

Year 2008 Department of Homeland 

Security Appropriations Act, which 

requires the Department to issue AN 

Registered User Numbers. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 116,800 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 2.02 hours to register, update, 

and subsequently renew his/her AN 

Registered User Number. The annual 

hour burden is estimated to be 235,912 

hours. 

Title: Appeals for Denial or 

Revocation of AN Registered User 

Numbers. 

Summary of Collection of 

Information: Individuals who have had 

their AN Registered User Numbers 

denied or revoked may appeal the 

Department’s denials or revocations, 

pursuant to section 31.250 of the 

proposed rule. Each individual 

requesting an appeal is required to file 

a Request for Materials, a Request for 

Appeal, and other filings as necessary. 

Use of: The information collected will 

be used to process appeals. 

Need for Information: The 

Department needs the collected 


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information to ensure that all necessary 

information is collected in order to 

process appeals and records correction 

requests. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 223 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 6 hours to complete the 

necessary filings. The annual hour 

burden is estimated to be 1,336 hours. 

Title: Purchaser Verification. 

Summary of Collection of 

Information: AN Sellers will be required 

to conduct verification of AN 

Purchaser’s identities and AN 

Registered User Numbers prior to sales 

and transfers of ammonium nitrate, as 

required by sections 31.305, 31.310, and 

31.315 of the proposed rule. Verification 

will involve the submission to DHS by 

AN Sellers of prospective purchasers’ 

AN Registered User Numbers, of 

matching information (e.g., names and 

drivers’ license numbers) from AN 

Purchasers’ photo identification 

documents, and of the names of AN 

Agents taking possession of ammonium 

nitrate on behalf of prospective 

purchasers. As part of this information 

collection AN Sellers will also submit 

information identifying themselves, 

including their own AN Registered User 

Numbers, to DHS. AN Sellers will 

submit this information to DHS through 

the Purchaser Verification Portal or the 

Purchaser Verification Call Center. The 

Purchaser Verification Portal or 

Purchaser Verification Call Center will 

compare information submitted as to 

each AN Purchaser or AN Seller against 

the information on record for that AN 

Purchaser or AN Seller. 

Use of: The information collected will 

be used to conduct verification of AN 

Registered User Numbers and of AN 

Purchasers’ and AN Agents’ identities, 

prior to transfer of ammonium nitrate, 

as required by sections 31.305, 31.310, 

and 31.315 of the proposed rule. 

Need for Information: The 

Department needs the information to 

verify that ammonium nitrate is only 

sold or transferred by individuals 

authorized by the Department to 

individuals authorized by the 

Department. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 6,236 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 0.08 hours to complete AN 

Registered User Number verification. 

The annual hour burden is estimated to 

be 2,445,001 hours. 

Title: Ammonium Nitrate Helpdesk. 

Summary of Collection of 

Information: The Ammonium Nitrate 

Helpdesk will respond to questions 

from industry and the public. 

Use of: The information collected will 

be used to respond to questions from 

industry and the public. 

Need for Information: The 

Department needs to collect the 

information from the individuals 

contacting the Ammonium Nitrate 

Helpdesk to respond to their questions. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 248,460 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 0.02 hours per AN Helpdesk 

contact. The annual hour burden is 

estimated to be 551,114 hours. 

Title: Electronic Recordkeeping 

Database. 

Summary of Collection of 

Information: To collect information to 

support AN Facilities with the 

recordkeeping requirements proposed in 

section 31.315 of the proposed rule. 

Use of: The information collected will 

be used to support AN Facilities with 

the recordkeeping requirements 

proposed in section 31.315 of the 

proposed rule. 

Need for Information: Under section 

31.315, AN Facilities would be required 

to keep various records. The use of this 

recordkeeping instrument, however, is 

voluntary. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 6,236 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 0.02 hours. The annual hour 

burden is estimated to be 448,992 hours. 

Title: Reporting Theft and Loss. 

Summary of Collection of 

Information: To report a theft or loss of 

ammonium nitrate, an individual would 

contact ATF. ATF will collect 

information and other details for a 

report of a theft or loss of ammonium 

nitrate, pursuant to sections 31.400 and 

31.405 of the proposed rule. 

Use of: The information collected 

would be used to track and potentially 

respond appropriately to the theft or 

loss of ammonium nitrate. 

Need for Information: The 

information collected is needed to track 

and potentially respond appropriately to 

the theft or loss of ammonium nitrate. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 125 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 2.8 hours to complete a theft 

or loss of ammonium nitrate report. The 

annual hour burden is estimated to be 

349 hours. 

Title: Adjudication or Appeal of an 

Order Assessing Civil Penalty. 

Summary of Collection of 

Information: Pursuant to section 31.700 

of the proposed rule, any person or 

entity against whom an Order Assessing 

Civil Penalty has been issued is entitled 

to a hearing and adjudication, by a 

Presiding Officer, on any issue of 

material fact relevant to any civil 

penalty issued against such person or 

entity. Pursuant to section 31.735 of the 

proposed rule any person or entity 

having received an Initial Decision has 

the right to appeal. 

Use of: The information collected will 

be used to conduct hearings, 

adjudications, and appeals. 

Need for Information: The 

information collected is needed to 

conduct hearings, adjudications, and 

appeals. 

Description of the Respondents: DHS 

anticipates that there will be fewer than 

10 respondents annually. 

Frequency of Response: On occasion. 

Annual Burden Estimate: The 

Department did not estimate the annual 

burden. 

Title: Inspections and Audits 

Summary of Collection of 

Information: Pursuant to section 31.500 

of the proposed rule, the Department is 

authorized to enter AN Facilities, or 

other locations where records are stored, 

to inspect and audit the records 

proposed in section 31.315. DHS may 

also inspect and audit any other records 

that pertain to misappropriation or 

preventing misappropriation of 

ammonium nitrate, and to inspect and 

audit any other records required by the 

Assistant Secretary to be maintained 

pursuant to Subtitle J. During an 

inspection or audit the Department may 

copy such records. DHS may also take 

original copies of pertinent records out 

of the subject AN Facilities for 

duplication. DHS may also perform 

remote inspections or audits, and 

require AN Facilities, AN Facility 

Representatives, and Designated AN 

Facility POCs to make the records 

available to the Department by 

facsimile, mail, or e-mail. 

Use of: The information collected will 

be used to perform inspections or 

audits. 

Need for Information: The 

information collected is needed to 

perform inspections or audits. 

Description of the Respondents: DHS 

anticipates that there will be an average 

of 1,559 respondents annually. 

Frequency of Response: On occasion. 


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Annual Burden Estimate: Each 

respondent is estimated to have a 

burden of 12 hours to prepare for and 

comply with an inspection or audit. The 

annual hour burden is estimated to be 

18,708 hours. 

Solicitation of Comments 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), the Department has submitted 

a copy of the proposed rule to OMB for 

its review of the collections of 

information. DHS is soliciting 

comments to: 

(1) Evaluate whether the proposed 

information requirement is necessary for 

the proper performance of the functions 

of the agency, including whether the 

information will have practical utility; 

(2) Evaluate the accuracy of the 

agency’s estimate of the burden; 

(3) Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

(4) Minimize the burden of the 

collection of information on those who 

are to respond, including using 

appropriate automated, electronic, 

mechanical, or other technological 

collection techniques or other forms of 

information technology. 

Individuals and organizations may 

submit comments to DHS or OMB on 

the information collection requirements 

by October 3, 2011. Direct information 

collection comments to the DHS or 

OMB addresses listed in the ADDRESSES

section of this NPRM. A comment is 

most effective if DHS or OMB receives 

it within 30 days of the publication of 

this NPRM. 

G. International Trade Impact 

Assessment 

The Trade Agreement Act of 1979 

prohibits Federal agencies from 

activities that create unnecessary 

obstacles to the foreign commerce of the 

United States. Legitimate domestic 

objectives, such as security, are not 

considered unnecessary obstacles. The 

statute also requires consideration of 

international standards and, where 

appropriate, that they be the basis for 

U.S. standards. In addition, the general 

benefits and desirability of free trade 

influenced the development of this 

notice of proposed rulemaking to 

remove or diminish, to the extent 

feasible, barriers to international trade, 

including both barriers affecting the 

export of American goods and services 

to foreign countries and barriers 

affecting the import of foreign goods and 

services into the United States. 

As entities that purchase or sell 

ammonium nitrate, or as individual AN 

Purchasers and AN Sellers, importers 

and exporters would be required to 

register with the Department and 

comply with the requirements of the 

NPRM in the same manner as their 

domestic counterparts when ammonium 

nitrate physically changes possession, 

as a part of sales or transfers by 

ammonium nitrate facilities, within the 

jurisdiction of the United States. Thus, 

DHS has assessed the potential effect of 

this NPRM and has determined that it 

would not create unnecessary barriers to 

international trade. 

For the reasons set forth in the 

preamble, the Department of Homeland 

Security proposes to add Part 31 to Title 

6, Code of Federal Regulations, to read 

as follows: 

Title 6—Domestic Security 

Chapter 1—Department of Homeland 

Security, Office of the Secretary 

PART 31—AMMONIUM NITRATE 

SECURITY PROGRAM 

Subpart A—General 

Sec. 

31.100 Purpose. 

31.105 Definitions. 

31.110 Applicability. 

31.115 Severability. 

Subpart B—Registration of AN Purchasers, 

AN Sellers, AN Facility Representatives, 

and Designated AN Facility POCs 

31.200 Permitted Applicants, Generally. 

31.205 Permitted AN Purchasers. 

31.210 Permitted AN Sellers. 

31.215 AN Facility personnel registration 

requirements. 

31.220 Registration procedures and 

registration updates. 

31.225 AN Registered User number 

applicant vetting. 

31.230 Registration approval and denial. 

31.235 Registration expiration. 

31.240 Registration extension. 

31.245 Registration revocation. 

31.250 Appealing registration denial or 

revocation determination. 

Subpart C—Point of Sale Requirements 

31.300 General transfer and sale 

restrictions. 

31.305 Verification of AN Purchaser AN 

Registered User numbers and 

identities—purchases not involving AN 

Agents. 

31.310 Verification of AN Purchaser AN 

Registered User numbers and 

identities—purchases involving AN 

Agents. 

31.315 Recordkeeping requirements. 

Subpart D—Reporting Theft and Loss 

31.400 Reporting obligations. 

31.405 Reporting. 

Subpart E—Inspections and Audits 

31.500 Authority. 

31.505 Manner of inspections and audits. 

31.510 Inspectors. 

31.515 Records availability requirements. 

Subpart F—Civil Penalties 

31.600 Orders Assessing Civil Penalty, 

generally. 

31.605 Setting Civil Penalty amounts. 

31.610 Procedures for issuing Orders 

Assessing Civil Penalty. 

Subpart G—Adjudications and Appeals 

31.700 Neutral adjudications, generally. 

31.705 Appointment of presiding officers. 

31.710 Commencement of adjudication 

proceedings. 

31.715 Prohibition on ex parte 

communications during adjudication. 

31.720 Burden of proof. 

31.725 Hearing and adjudication 

procedures. 

31.730 Completion of adjudication 

procedures. 

31.735 Appeals. 

Subpart H—Other 

31.800 State law preemption. 

Authority: Pub. L. 110–161, sec. 563. 

Subpart A—General 

§ 31.100 Purpose. 

The purpose of this part is to enhance 

the security of the Nation by regulating 

the sale and transfer of ammonium 

nitrate, and to implement Section 563 of 

the Fiscal Year 2008 Consolidated 

Appropriations Act, Public Law 110– 

161 (December 26, 2007). 

§ 31.105 Definitions. 

Ammonium nitrate (AN). (1) 

Notwithstanding paragraph (2) of this 

definition, ammonium nitrate is— 

(i) Solid ammonium nitrate that is 

chiefly the ammonium salt of nitric 

acid, that contains not less than 33 

percent nitrogen by weight, or 

(ii) Any mixture containing 30 

percent or more solid ammonium 

nitrate, by weight, that is chiefly the 

ammonium salt of nitric acid. The solid 

ammonium nitrate in the mixture must 

contain not less than 33 percent 

nitrogen by weight. 

(2) The following are not ammonium 

nitrate: 

(i) Mixtures containing less than 30 

percent ammonium nitrate; or 

(ii) Mixtures classified as 

‘‘explosives’’ under 27 CFR 555.11; or 

(iii) Ammonium nitrate or mixtures 

containing ammonium nitrate weighing 

less than 25 pounds; or 

(iv) Cold packs. 

AN Agent. Any person who obtains 

possession of ammonium nitrate on 

behalf of an AN Purchaser. 

AN Facility. Any person or entity that 

produces, sells or otherwise transfers 

ownership of, or provides application 

services for, ammonium nitrate. 

AN Facility Representative. Any AN 

Facility operator, owner, or employee 

who is designated as an AN Facility 


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Representative by the subject AN 

Facility. 

AN Purchaser. Any person, other than 

an AN Agent, who purchases or obtains 

ammonium nitrate from an AN Facility. 

AN Registered User. A person who 

possesses a valid AN Registered User 

Number for the purpose(s) of acquiring, 

possessing, producing, purchasing, 

selling, transferring ownership or 

possession of, and/or providing 

application services for ammonium 

nitrate. 

AN Registered User Number. A 

registered user number issued by the 

Department of Homeland Security 

under subpart B of this part to a person 

intending to acquire, possess, produce, 

purchase, sell, transfer ownership or 

possession of, and/or provide 

application services for ammonium 

nitrate. 

AN Seller. Any person designated as 

an AN Seller by the AN Facility at 

which he/she works or with which he/ 

she is associated, for the purpose(s) of 

performing sales or transfers of 

ammonium nitrate or for performing 

certain other regulatory compliance 

activities under this Part. 

Applicant. Any person who has 

submitted an application for an AN 

Registered User Number for the 

purpose(s) of acquiring, possessing, 

producing, purchasing, selling, 

transferring ownership or possession of, 

and/or providing application services 

for ammonium nitrate. 

Application services. The provision of 

services related to the physical deposit 

of fertilizer onto turf, fields, crops, or 

other agricultural property, where these 

services are provided by a person or 

entity other than the person or entity 

owning or operating the property upon 

which the fertilizer is deposited. The 

provision of application services is not 

a sale or transfer of ammonium nitrate. 

Assistant Secretary. The Assistant 

Secretary for Infrastructure Protection of 

the United States Department of 

Homeland Security, or any successors to 

that position within the Department, or 

such other Department officials as may 

be designated by the Assistant Secretary 

to act on his/her behalf. 

Cold pack. A small, commerciallyavailable package commonly used as a 

replacement for ice in the application of 

first aid, containing unmixed water and 

ammonium nitrate that, immediately 

prior to use, can be manipulated to 

cause the comingling of the water and 

the ammonium nitrate resulting in an 

endothermic reaction that significantly 

lowers the temperature of the package. 

Department. The United States 

Department of Homeland Security. 

Designated AN Facility POC. An AN 

Facility Representative who is 

designated by an AN Facility as that AN 

Facility’s chief point of contact (POC) 

for communications with the 

Department for purposes of compliance 

with this Part. 

Office of the General Counsel. The 

Office of the General Counsel of the 

United States Department of Homeland 

Security. 

Photo identification document. Any 

of the following documents containing a 

unique document number: 

(1) An unexpired passport issued by 

a foreign government which contains a 

photograph; or 

(2) An unexpired document issued by 

a U.S. Federal, State, or tribal 

government that includes the following 

information for the person: 

(i) Full name; 

(ii) Date of birth; and 

(iii) Photograph; or 

(3) Such other documents that the 

Department may designate as valid 

identification documents. 

Secretary. The Secretary of Homeland 

Security or such other Department 

officials as may be designated by the 

Secretary of Homeland Security to act 

on his/her behalf. 

Subtitle J. Subtitle J of the Homeland 

Security Act of 2002, as created by 

Section 563 of the Fiscal Year 2008 

Consolidated Appropriations Act, 

Public Law 110–161 (December 26, 

2007). 

Transfer. The transfer of possession or 

ownership of ammonium nitrate from 

one person or entity to another person 

or entity for use outside of the AN 

Facility from which the ammonium 

nitrate is being transferred. Transfers of 

ammonium nitrate include transfers of 

possession or ownership that occur as 

part of sales and other business or 

commercial transactions, and also 

include transfers of possession or 

ownership that are not part of sales or 

other business or commercial 

transactions. The physical deposit of 

fertilizer onto turf, fields, crops, or other 

agricultural property is not a transfer of 

ammonium nitrate. 

Under Secretary. The Under Secretary 

for National Protection and Programs of 

the United States Department of 

Homeland Security, or any successors to 

that position within the Department, or 

such other Department officials as may 

be designated by the Under Secretary to 

act on his/her behalf. 

§ 31.110 Applicability. 

This Part applies to any person or 

entity that possesses, acquires, 

purchases, sells, transfers, or provides 

application services for ammonium 

nitrate. 

§ 31.115 Severability. 

If a court finds any portion of this Part 

to have been promulgated without 

proper authority, the remainder of this 

Part will remain in full effect. 

Subpart B—Registration of AN 

Purchasers, AN Sellers, AN Facility 

Representatives, and Designated AN 

Facility POCs 

§ 31.200 Permitted applicants, generally. 

Only persons who intend to acquire, 

possess, produce, purchase, sell, 

transfer ownership or possession of, 

and/or provide application services for 

ammonium nitrate may register or 

attempt to register under this Subpart. 

§ 31.205 Permitted AN Purchasers. 

No person may purchase or take 

ownership of ammonium nitrate, or 

request that an AN Agent take 

possession of ammonium nitrate on his/ 

her behalf, without a valid AN 

Purchaser AN Registered User Number 

issued under this Subpart. 

§ 31.210 Permitted AN Sellers. 

(a) Only persons registered under this 

Subpart as AN Sellers, AN Facility 

Representatives, or Designated AN 

Facility POCs may sell or transfer 

possession of ammonium nitrate to any 

person or entity. 

(b) Only persons registered under this 

Subpart as AN Sellers, AN Facility 

Representatives, or Designated AN 

Facility POCs may, as required by this 

Part, verify AN Registered User 

Numbers of AN Purchasers, the 

identities of AN Purchasers, and the 

identities of AN Agents. 

(c) Only persons registered under this 

Subpart as AN Sellers, AN Facility 

Representatives, or Designated AN 

Facility POCs may perform ammonium 

nitrate application services. 

§ 31.215 AN Facility personnel registration 

requirements. 

(a) Designated AN Facility POC. (1) 

Each AN Facility must have one 

Designated AN Facility POC registered 

on its behalf. 

(2) Only one Designated Facility POC 

can be registered for each AN Facility. 

(b) AN Facility Representatives. Each 

AN Facility must have at least one AN 

Facility Representative registered on its 

behalf. 

(c) AN Sellers. Any person affiliated 

with an AN Facility, who is neither a 

Designated AN Facility POC nor an AN 

Facility Representative, must register 

under this Subpart as an AN Seller in 

order to perform the activities described 

in 6 CFR 31.210. 


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§ 31.220 Registration procedures and 

registration updates. 

(a) Submission of Application 

Information. (1) Applications for 

registration under this Subpart must be 

submitted to the Department through an 

online web portal to be developed by 

the Department. The web address of this 

online web portal will be announced by 

the Department in a future notice 

published in the Federal Register. 

(2) Each applicant and AN Registered 

User must notify the Department of any 

changes to his/her submitted 

application information, within 30 days 

of any such changes, through the online 

web portal used for registration 

application. 

(b) Application Information 

Identifying Type of Applicant. In order 

for an applicant to be considered for 

registration, he/she must identify 

whether he/she is applying as an AN 

Seller, AN Facility Representative, 

Designated AN Facility POC, and/or AN 

Purchaser. An applicant may apply for 

more than one role. 

(c) Application Information—General. 

(1) In order for an applicant to be 

considered for registration, his/her 

registration application must include 

his/her name, address, telephone 

number, photo identification document 

type, photo identification document 

issuing entity, photo identification 

document number, place of birth, date 

of birth, citizenship, gender, any other 

information deemed necessary by the 

Department to carry out vetting under 6 

CFR 31.225, and, as appropriate, any 

other information deemed necessary by 

the Department to verify the applicant’s 

enrollment in a Department program 

that conducts equivalent TSDB vetting. 

(2) Each AN Purchaser applicant’s 

registration application must also 

include a description of the intended 

use of the ammonium nitrate planned to 

be purchased or acquired by the 

applicant. 

(3) Each AN Seller, AN Facility 

Representative, and Designated AN 

Facility POC must also submit 

information identifying all AN Facilities 

at or for which he/she will serve as an 

AN Seller, AN Facility Representative, 

or Designated AN Facility POC. 

(d) Identifying AN Agents. (1) AN 

Purchasers and AN Purchaser 

applicants may, through the online web 

portal mentioned in 6 CFR 31.220(a), 

identify any AN Agents whom they 

authorize to obtain ammonium nitrate 

on their behalves. 

(2) When a person named as an AN 

Agent is no longer authorized to obtain 

ammonium nitrate on behalf of an 

applicant or AN Purchaser, the 

applicant or AN Purchaser must notify 

the Department through the online web 

portal within 30 days of the date on 

which the AN Agent becomes 

unauthorized to obtain ammonium 

nitrate. 

§ 31.225 AN Registered User number 

applicant vetting. 

(a) The Department will vet 

applicants’ identifying information 

against the Terrorist Screening Database 

(TSDB) and/or verify each applicant’s 

enrollment in a Department program 

that conducts equivalent TSDB vetting. 

(b) The Department will compare each 

AN Registered User’s identifying 

information against new and/or updated 

TSDB records as those new and/or 

updated records become available. 

§ 31.230 Registration approval and denial. 

(a) Registration approval. The 

Department will issue AN Registered 

User Numbers based on the results of 

TSDB vetting and the submission of 

complete registration applications by 

applicants. 

(b) Registration denial. A registration 

applicant may be denied an AN 

Registered User Number if: 

(1) Based on TSDB vetting and/or 

verification of previous TSDB vetting 

results under 6 CFR 31.225, the 

Assistant Secretary determines that it is 

in the interest of national security to 

deny the registration application; or 

(2) The applicant submits an 

incomplete registration application; or 

(3) Information contained in the 

registration application is fraudulent or 

false. 

(c) AN Registered User number 

issuance. The Department will provide 

AN Registered User Numbers to 

approved applicants by e-mail or by an 

online web portal to be developed by 

the Department. 

(d) Notice of registration denial. The 

Assistant Secretary will provide Notice 

of Registration Denial to denied 

applicants by e-mail or by an online 

web portal to be developed by the 

Department. This Notice will include 

the date of denial, and will also include 

instructions about how to appeal such a 

denial pursuant to 6 CFR 31.250. 

(e) Notice of delay. (1) When the 

Department is unable to approve or 

deny a registration application within 

72 hours of receipt, the Department will 

provide Notice of Delay to the applicant 

by e-mail or by an online web portal to 

be developed by the Department. 

(2) When the Department determines 

that, in the interest of national security, 

longer than 72 hours is required to 

review a registration application or to 

issue or deny an AN Registered User 

Number, the Department will provide 

Notice of Delay to the applicant by email or by an online web portal to be 

developed by the Department. 

§ 31.235 Registration expiration. 

An AN Registered User Number 

issued under this subpart expires five 

years after the date it is issued. 

§ 31.240 Registration extension. 

(a) Extension prior to registration 

expiration. An AN Registered User can 

apply for an extension of his/her AN 

Registered User Number not more than 

60 days before its scheduled expiration. 

(b) Extension after registration 

expiration. An AN Registered User can 

apply for an extension of his/her AN 

Registered User Number after the 

expiration date of that AN Registered 

User Number for up to one year from the 

date of expiration. 

(c) Application for new number after 

registration expiration of more than one 

year. An AN Registered User with an 

AN Registered User Number that has 

been expired for more than one year 

must apply for, and obtain, a new AN 

Registered User Number before engaging 

in the acquisition, purchase, sale, or 

transfer of ammonium nitrate, or before 

providing ammonium nitrate 

application services. 

(d) Extension procedures. An AN 

Registered User can apply for an 

extension of his/her AN Registered User 

Number by following the registration 

procedures set forth in 6 CFR 31.220. 

Extensions will be issued or denied 

using the registration issuance and 

denial procedures and criteria set forth 

in 6 CFR 31.230. 

§ 31.245 Registration revocation. 

(a) The Assistant Secretary may 

revoke an AN Registered User Number 

if he/she determines that: 

(1) It is in the interest of national 

security to revoke that AN Registered 

User Number based on the results of the 

activities described in 6 CFR 31.225; or 

(2) The AN Registered User holding 

that AN Registered User Number 

obtained it by submitting fraudulent or 

false information. 

(b) The Assistant Secretary will 

provide Notice of Revocation to each 

AN Registered User whose AN 

Registered User Number is revoked. 

Notice of Revocation will be provided 

prior to the effective date of revocation, 

unless the Assistant Secretary 

determines that it is in the interest of 

national security to revoke an AN 

Registered User Number prior to or at 

the same time as provision of Notice of 

Revocation. Notice of Revocation will 

include both the date on which the 

subject AN Registered User Number is 


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to be revoked and the means by which 

revocation can be appealed. 

(c) Notices of Revocation will be 

disseminated to subject AN Registered 

Users by e-mail, by an online web portal 

to be developed by the Department, or 

by other written communication. 

§ 31.250 Appealing registration denial or 

revocation determination. 

(a) Appealing registration denial. A 

person whose application for 

registration has been denied may appeal 

the Assistant Secretary’s denial of his/ 

her application under this subsection. 

(b) Appealing revocation. A person 

who has received a Notice of Revocation 

may appeal the Assistant Secretary’s 

revocation determination under this 

subsection. 

(c) Appellant’s request for materials. 

To appeal a denial or revocation 

determination, a person whose 

registration application is denied, or 

whose AN Registered User Number is 

revoked, must initiate an appeal by 

filing a Request for Materials with the 

Office of the General Counsel. This 

Request for Materials must be submitted 

to the Office of the General Counsel 

within 60 days of the date of denial or 

revocation. 

(d) The department’s response. The 

Department will serve the appellant 

with copies of the releasable materials 

upon which denial or revocation was 

based within 60 days of receipt of a 

Request for Materials, unless the 

Department determines that additional 

time is required in the interest of 

national security. The Department will 

not include any classified information 

in this Response, nor will it include any 

other information or material protected 

from disclosure under law. As 

appropriate, the Department will 

include in this Response unclassified 

summaries of classified evidence 

supporting denial or revocation. 

(e) Appellant’s request for appeal. To 

appeal the denial or revocation, the 

appellant must serve upon the Office of 

the General Counsel a Request for 

Appeal within 60 days of service of the 

Department’s Response under paragraph 

(d) of this section. The appellant’s 

Request for Appeal must be written and 

include the rationale and information 

upon which the appellant disputes the 

basis of denial or revocation. 

(f) Correcting materials. The Request 

for Appeal must include any 

corrections, additions, or clarifications 

to the materials provided by the 

Department under paragraph (d) of this 

section if the appellant believes that his/ 

her denial or revocation was based on 

materials or information that he/she 

believes to be erroneous or incomplete. 

(g) Final determination. (1) After 

reviewing an appellant’s Request for 

Appeal, the Department will serve the 

appellant with a Final Determination. 

(2) A Final Determination will be 

signed by the Under Secretary, and will: 

(i) Uphold the denial or revocation; or 

(ii) Reverse the denial or revocation. 

(3) To the extent practicable, the 

Department will issue a Final 

Determination within 72 hours of 

receipt of the appellant’s Request for 

Appeal, unless the Department 

determines that additional time is 

required in the interest of national 

security. The Department will not 

include any classified information in 

this service, nor will it include any 

other information or material protected 

from disclosure under law. 

(4) Following a Final Determination 

reversing a registration denial, the 

Department will issue to the appellant 

an AN Registered User Number as 

described in 6 CFR 31.230(c). 

(h) Extension of time. For good cause 

shown, the Department may grant an 

appellant an extension of time to file a 

Request for Materials or Request for 

Appeal. An appellant’s request for an 

extension of time must be in writing and 

must be received by the Office of the 

General Counsel within a reasonable 

time before the due date to be extended; 

or an appellant may request an 

extension after the passing of a due date 

by sending a written request describing 

why the failure to file within the 

prescribed time limits should be 

excusable. 

(i) Final agency action. For purposes 

of judicial review, a Final Determination 

constitutes final agency action by the 

Department. A Notice of Registration 

Application Denial or a Notice of 

Registration Revocation constitutes final 

agency action if not timely appealed 

pursuant to this section. 

Subpart C—Point of Sale 

Requirements 

§ 31.300 General transfer and sale 

restrictions. 

(a) An AN Facility, AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC may only transfer 

possession of ammonium nitrate to an 

AN Purchaser in possession of a valid 

AN Registered User Number issued 

under subpart B of this part, or to a 

person acting as an authorized AN 

Agent under this Part. 

(b) An AN Facility, AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC may only transfer 

possession of ammonium nitrate to an 

AN Purchaser or AN Agent after 

verification of his/her identity as 

required by this subpart. 

(c) An AN Facility, AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC may not transfer 

possession of ammonium nitrate to an 

AN Agent when such AN Agent is 

attempting to obtain ammonium nitrate 

on behalf of an AN Purchaser whose 

registration is deficient under this Part. 

(d) An AN Facility, AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC may only transfer 

possession of ammonium nitrate to an 

AN Agent after confirming with either 

the Department or the AN Purchaser 

that the AN Agent is authorized to act 

on the AN Purchaser’s behalf. 

§ 31.305 Verification of AN Registered 

User Numbers and Identities—purchases or 

transfers not involving AN Agents. 

(a) AN Purchaser electronic or 

telephonic verification. Prior to 

transferring possession of ammonium 

nitrate, the AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC conducting the sale or 

transfer must obtain the unexpired AN 

Registered User Number and the name 

of the AN Purchaser seeking to take 

possession of ammonium nitrate. 

(1) Prior to transfer, the AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC conducting the sale or 

transfer must submit this collected 

information to the Department by 

telephone or through an online web 

portal to be developed by the 

Department. 

(2) Prior to transfer, the AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC conducting the sale or 

transfer must also submit information 

identifying the AN Facility from which 

ammonium nitrate is being transferred, 

as well as his/her own name and his/her 

own AN Registered User Number, to the 

Department by telephone or through the 

online web portal mentioned in 6 CFR 

31.305(a)(1). 

(3) Upon receipt of this information, 

the Department will determine whether 

the information provided indicates that 

the AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC submitting this 

information is authorized to sell or 

transfer ammonium nitrate. The 

Department will also determine whether 

the information provided indicates that 

the person attempting to purchase or 

obtain ammonium nitrate is authorized 

under Subpart B of this Part to do so. 

(4) The Department will then notify 

the AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC, by telephone or through 

the online web portal mentioned in 6 

CFR 31.305(a)(1), of the determinations 

made pursuant to 6 CFR 31.305(a)(3). 


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The AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC may not transfer 

ammonium nitrate unless and until each 

of these determinations indicates that 

the Department has authorized the sale 

or transfer. 

(b) AN Purchaser visual verification. 

Prior to transferring possession of 

ammonium nitrate, the AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC conducting the sale or 

transfer must examine the photo 

identification document of the AN 

Purchaser seeking to take possession of 

ammonium nitrate. 

(1) The photo identification document 

must contain a photograph of the person 

attempting to take possession of the 

ammonium nitrate. AN Sellers, AN 

Facility Representatives, or Designated 

AN Facility POCs must not transfer 

possession of ammonium nitrate to any 

person unable to provide a photo 

identification document. No AN 

Purchaser may take possession of, or 

attempt to take possession of, 

ammonium nitrate without presenting a 

photo identification document. 

(2) The AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC conducting the sale or 

transfer must not transfer possession of 

ammonium nitrate unless he/she 

determines, to the best of his/her ability, 

that the person attempting to take 

possession of ammonium nitrate is the 

same person as the person who is 

depicted on the examined photo 

identification document. 

§ 31.310 Verification of AN Registered 

User Numbers and Identities—purchases or 

transfers involving AN Agents. 

(a) AN Purchaser electronic or 

telephonic verification. An AN Seller, 

AN Facility Representative, or 

Designated AN Facility POC, prior to 

transferring possession of ammonium 

nitrate to an AN Agent, must obtain the 

name, the unexpired AN Registered 

User Number, the photo identification 

document type, the photo identification 

document issuing entity, and the photo 

identification document number of the 

AN Purchaser. 

(1) Prior to transfer, the AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC conducting the sale or 

transfer must submit this collected 

information to the Department by 

telephone or through an online web 

portal to be developed by the 

Department. 

(2) Prior to transfer, the AN Seller, AN 

Facility Representative, or Designated 

AN Facility POC conducting the sale or 

transfer must also submit information 

identifying the AN Facility from which 

ammonium nitrate is being transferred, 

as well as his/her own name and his/her 

own AN Registered User Number, to the 

Department by telephone or through the 

online web portal discussed in 6 CFR 

31.310(a)(1). 

(3) Upon receipt of this information, 

the Department will determine whether 

the information provided indicates that 

the AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC submitting this 

information is authorized to sell or 

transfer ammonium nitrate. The 

Department will also determine whether 

the information provided indicates that 

the AN Purchaser is authorized under 

Subpart B of this Part to purchase or 

obtain ammonium nitrate. The 

Department will not determine that the 

AN Purchaser is authorized to purchase 

or obtain ammonium nitrate unless the 

photo identification document 

information provided matches the photo 

identification document information 

previously provided by that person to 

the Department under 6 CFR 

31.220(a)(2) or (c)(1). 

(4) The Department will then notify 

the AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC, by telephone or through 

the online web portal mentioned in 6 

CFR 31.310(a)(1), of the determinations 

made pursuant to 6 CFR 31.310(a)(3). 

The AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC may not transfer 

ammonium nitrate unless and until each 

of these determinations indicates that 

the Department has authorized the 

transfer. 

(b) Confirmation of agency. An AN 

Seller, AN Facility Representative, or 

Designated AN Facility POC, prior to 

transferring possession of ammonium 

nitrate to an AN Agent, must obtain 

confirmation from the Department or 

from the AN Purchaser that the AN 

Agent is authorized to act on the AN 

Purchaser’s behalf. This confirmation 

must be obtained in either of two ways: 

(1) By submitting the name of the AN 

Agent to the Department by telephone 

or through the online web portal 

mentioned in 6 CFR 31.310(a)(1). If the 

named AN Agent has been previously 

authorized by the AN Purchaser to take 

possession of ammonium nitrate on his/ 

her behalf, pursuant to 6 CFR 31.220(d), 

then the Department will provide a 

notice of confirmation, by telephone or 

through online web portal, to the AN 

Seller, AN Facility Representative, or 

Designated AN Facility POC making this 

submission. 

(2) Orally from the AN Purchaser. 

Oral confirmation may be obtained by 

an AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC representing the AN 

Facility conducting the transfer. Such 

oral confirmation must be obtained in 

person or by telephone, prior to transfer 

of possession to the AN Agent. 

(c) AN Agent visual verification. Prior 

to transferring possession of ammonium 

nitrate to an AN Agent, an AN Seller, 

AN Facility Representative, or 

Designated AN Facility POC must 

examine the photo identification 

document of the AN Agent seeking to 

take possession of ammonium nitrate. 

(1) The photo identification document 

must contain a photograph of the person 

attempting to take possession of the 

ammonium nitrate. AN Sellers, AN 

Facility Representatives, or Designated 

AN Facility POCs may not transfer 

possession of ammonium nitrate to 

persons unable to provide photo 

identification documents. An AN Agent 

must not take possession of, or attempt 

to take possession of, ammonium nitrate 

without presenting a photo 

identification document. 

(2) The AN Seller, AN Facility 

Representative, or Designated AN 

Facility POC must not transfer 

possession of ammonium nitrate unless 

he/she determines, to the best of his/her 

ability, that the person attempting to 

take possession of the ammonium 

nitrate is the same person as the person 

who is depicted on the examined photo 

identification document, and is the 

same person as confirmed to be an 

authorized AN Agent under 6 CFR 

31.310(b). 

§ 31.315 Recordkeeping requirements. 

(a) An AN Facility and its AN Facility 

Representative(s) and Designated AN 

Facility POC must each ensure that the 

AN Facility maintains records 

pertaining to each sale or transfer of 

ammonium nitrate consisting, at a 

minimum, of the following: 

(1) Date of sale or transfer; 

(2) Form and amount of payment, if 

any; 

(3) Quantity of ammonium nitrate 

sold or transferred; 

(4) Type of packaging of the 

ammonium nitrate sold or transferred; 

(5) Location where the AN Purchaser, 

or if applicable AN Agent, will take 

possession of the ammonium nitrate 

sold or transferred; 

(6) Name, address, telephone number, 

AN Registered User Number, photo 

identification document type, photo 

identification document issuing entity, 

and photo identification document 

number of the AN Purchaser purchasing 

or taking possession of the ammonium 

nitrate sold or transferred; 


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(7) If an AN Agent takes possession of 

ammonium nitrate, name, address, 

telephone number, photo identification 

document type, photo identification 

document issuing entity, and photo 

identification document number of the 

AN Agent taking possession of the 

ammonium nitrate sold or transferred; 

(8) If an AN Agent takes possession of 

ammonium nitrate, a record of the date 

and means by which confirmation of 

agency was received pursuant to 6 CFR 

31.310(b); and 

(9) Confirmation numbers or 

confirmation records, if any, received 

from the Department as part of the 

notification processes described in 6 

CFR 31.305(a)(4) and 6 CFR 

31.310(a)(4). 

(b) In sales or transfers not involving 

AN Agents, AN Purchasers must 

provide the information required by 6 

CFR 31.315(a)(6) to AN Facility 

personnel prior to transfer of 

ammonium nitrate. AN Facilities, AN 

Sellers, AN Facility Representatives, 

and Designated AN Facility POCs must 

not transfer possession of ammonium 

nitrate to any persons failing to provide 

this information prior to transfer. 

(c) In sales or transfers involving AN 

Agents, AN Purchasers and/or the AN 

Agents obtaining ammonium nitrate on 

their behalves must provide the 

information required by 6 CFR 

31.315(a)(6) and (7) to AN Facility 

personnel prior to transfer of 

ammonium nitrate. AN Facilities, AN 

Sellers, AN Facility Representatives, 

and Designated AN Facility POCs must 

not transfer possession of ammonium 

nitrate to any AN Agent if this 

information has not been provided prior 

to transfer. 

(d) An AN Facility and its AN Facility 

Representative(s) and Designated AN 

Facility POC must each ensure that the 

AN Facility maintains the records 

required by 6 CFR 31.315(a), as to each 

sale or transfer of ammonium nitrate, for 

a minimum of two years from the date 

of sale or transfer. 

(e) An AN Facility and its AN Facility 

Representative(s) and Designated AN 

Facility POC must each take reasonable 

actions to ensure that the AN Facility 

secures the records required by 6 CFR 

31.315(a) from damage, theft, and loss. 

Subpart D—Reporting Theft and Loss 

§ 31.400 Reporting obligations. 

(a) Any AN Facility Representative or 

Designated AN Facility POC who has 

knowledge of the theft or unexplained 

loss of ammonium nitrate must report 

such theft or loss to the Bureau of 

Alcohol, Tobacco, Firearms and 

Explosives of the U.S. Department of 

Justice (ATF), or direct other AN 

Facility personnel to report such theft or 

loss to ATF, as provided in 6 CFR 

31.405. 

(b) Each AN Facility and its AN 

Facility Representative(s) and 

Designated AN Facility POC must 

ensure that the AN Facility implements 

internal reporting procedures which 

require all AN Facility Representatives, 

AN Sellers, and other AN Facility 

personnel (as appropriate) to notify the 

appropriate AN Facility Representative 

or Designated AN Facility POC of any 

theft or unexplained loss of ammonium 

nitrate, to report such theft or loss 

directly to ATF, or both. 

§ 31.405 Reporting. 

(a) General reporting requirements. 

Persons required to report theft or loss 

under this Subpart must report each 

theft or loss to ATF by telephone and by 

facsimile, not later than 24 hours after 

becoming aware of such theft or loss. If 

facsimile is not available, persons 

required to report theft or loss under 

this Subpart must report each theft or 

loss to ATF by telephone and U.S. mail, 

not later than 24 hours after becoming 

aware of such theft or loss. 

(b) Voluntary reporting. Persons not 

required to report theft or loss under 

this Subpart may report theft or loss of 

ammonium nitrate by contacting ATF 

by the same means described in 

paragraph (a) of this section. 

Subpart E—Inspections and Audits 

§ 31.500 Authority. 

(a) On-site inspections and audits. In 

order to assess compliance with the 

requirements of this part and with the 

requirements of subtitle J, and in order 

to prevent the misappropriation or use 

of ammonium nitrate in acts of 

terrorism, authorized Department 

officials may enter AN Facilities, or 

other locations where records are stored, 

to inspect and audit the records 

required to be maintained pursuant to 6 

CFR 31.315, to inspect and audit any 

other records that pertain to 

misappropriation or preventing 

misappropriation of ammonium nitrate, 

and to inspect and audit any other 

records required by the Assistant 

Secretary to be maintained pursuant to 

Subtitle J. 

(b) Remote inspections and audits. In 

order to assess compliance with the 

requirements of this part and with the 

requirements of subtitle J, and in order 

to prevent the misappropriation or use 

of ammonium nitrate in acts of 

terrorism, the Department may require 

AN Facilities, AN Facility 

Representatives, and Designated AN 

Facility POCs to make the records 

mentioned in 6 CFR 31.500(a) available 

to the Department by facsimile, mail, or 

e-mail. 

§ 31.505 Manner of inspections and audits. 

(a) On-Site inspections and audits. 

Authorized Department officials will 

conduct on-site inspections and audits 

at reasonable times and in reasonable 

manners. The Department will provide 

a minimum of 24 hours notice to an AN 

Facility, if possible through its 

Designated AN Facility POC, before any 

on-site inspection and audit, except 

when: 

(1) The Assistant Secretary 

determines that an on-site inspection 

and audit without such notice is 

warranted by exigent circumstances and 

approves such on-site inspection and 

audit; or 

(2) Any delay in conducting an on-site 

inspection and audit might be seriously 

detrimental to security, and the 

Assistant Secretary determines that an 

on-site inspection and audit without 

notice is warranted, and approves an 

Inspector to conduct such on-site 

inspection and audit. 

(b) Remote inspections and audits. 

Authorized Department officials will 

conduct remote inspections and audits 

at reasonable times and in reasonable 

manners. The Department will provide 

a minimum of 24 hours notice to an AN 

Facility, if possible through its 

Designated AN Facility POC, before that 

AN Facility is required to remotely 

submit records to the Department. The 

Department may provide less than 24 

hours notice before an AN Facility is 

required to remotely submit records to 

the Department only when: 

(1) The Assistant Secretary 

determines that a remote inspection and 

audit without such notice is warranted 

by exigent circumstances and approves 

such remote inspection and audit; or 

(2) Any delay in conducting a remote 

inspection and audit might be seriously 

detrimental to security, and the 

Assistant Secretary determines that a 

remote inspection and audit without 

notice is warranted, and approves an 

Inspector to conduct such remote 

inspection and audit. 

§ 31.510 Inspectors. 

(a) Inspections and audits will be 

conducted by personnel duly authorized 

and designated for that purpose as 

‘‘Inspectors’’ by the Assistant Secretary, 

or any person who is authorized by the 

Department to perform inspections 

pursuant to a cooperative agreement or 

a delegation of authority established 

under subtitle J. 


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(b) An Inspector will, on request, 

present his or her credentials for 

examination by AN Facility personnel 

during an on-site inspection and audit, 

but these credentials may not be 

reproduced or retained by any AN 

Facility, by any AN Facility personnel, 

by any AN Seller, by any AN Facility 

Representative, or by any Designated 

AN Facility POC. 

§ 31.515 Records availability 

requirements. 

(a) Records availability during on-site 

inspections and audits for which the 

department has provided at least 24 

hours notice. Each AN Facility and its 

AN Facility Representative(s) and 

Designated AN Facility POC must make 

all records required to be maintained by 

this Part available to Inspectors 

immediately upon the commencement 

of an on-site inspection and audit. Each 

AN Facility and its AN Facility 

Representative(s) and Designated AN 

Facility POC must provide Inspectors 

with the use of photocopiers, 

computers, and other equipment 

necessary to copy such records, if 

subject AN Facilities have access to 

such equipment. If Inspectors deem that 

photocopying or other reproduction of 

records is necessary, but subject AN 

Facilities do not have access to 

necessary photocopying/reproduction 

equipment, Inspectors must be 

permitted to take original copies of 

pertinent records out of the subject AN 

Facilities for duplication and prompt 

return. 

(b) Records availability during on-site 

inspections and audits for which the 

department has provided less than 24 

hours notice. Each AN Facility and its 

AN Facility Representative(s) and 

Designated AN Facility POC must make 

all records required to be maintained by 

this Part available to Inspectors as 

quickly as possible upon the 

commencement of an on-site inspection 

and audit. Each AN Facility and its AN 

Facility Representative(s) and 

Designated AN Facility POC must make 

such records available, at a maximum, 

within four hours of the commencement 

of an on-site inspection and audit. 

Inspectors must be provided with the 

use of photocopiers, computers, and 

other equipment necessary to copy such 

records, if subject AN Facilities have 

access to such equipment. If Inspectors 

deem that photocopying or other 

reproduction of records is necessary, but 

subject AN Facilities do not have access 

to necessary photocopying/reproduction 

equipment, Inspectors must be 

permitted to take original copies of 

pertinent records out of the subject AN 

Facilities for duplication and prompt 

return. 

(c) Records availability for remote 

inspections and audits for which the 

department has provided at least 24 

hours notice. Each AN Facility and its 

AN Facility Representative(s) and 

Designated AN Facility POC must 

remotely submit any and all records 

requested by the Department under this 

Part to the Department by the time 

prescribed in the Department’s notice. 

(d) Records availability for remote 

inspections and audits for which the 

department has provided less than 24 

hours notice. Each AN Facility and its 

AN Facility Representative(s) and 

Designated AN Facility POC must 

remotely submit all records requested 

by the Department under this Part to the 

Department as quickly as possible after, 

and in no case more than four hours 

later than, receipt of the Department’s 

notice. 

Subpart F—Civil Penalties 

§ 31.600 Orders Assessing Civil Penalty, 

generally. 

When the Assistant Secretary 

determines that any person or entity has 

violated any provision or provisions of 

this Part, the Assistant Secretary may 

issue an Order Assessing Civil Penalty 

against such person or entity making 

such person or entity liable to the 

United States for a civil penalty of not 

more than $50,000 per violation of this 

part. 

§ 31.605 Setting civil penalty amounts. 

In determining the amount of a civil 

penalty, the Assistant Secretary will 

consider: The nature and circumstances 

of the violation(s) underlying the civil 

penalty; the history of prior violations 

by the person or entity determined to 

have committed the violation 

underlying the civil penalty; the ability 

to pay of the person or entity 

determined to have committed the 

violation underlying the civil penalty; 

the ability to continue to do business of 

the person or entity determined to have 

committed the violation underlying the 

civil penalty; and any other matters that 

the Assistant Secretary determines that 

justice requires. 

§ 31.610 Procedures for issuing Orders 

Assessing Civil Penalty. 

(a) At a minimum, each Order 

Assessing Civil Penalty will be signed 

by the Assistant Secretary, dated, and 

include as to each person or entity 

subject to such Order Assessing Civil 

Penalty: 

(1) The name, address, and (where 

applicable) AN Registered User Number 

of such person or entity; 

(2) A listing of the provision(s) of this 

Part alleged to have been violated; 

(3) A statement of facts upon which 

the alleged instances of violation are 

based; 

(4) A statement of the amount of the 

civil penalty assessed; 

(5) A statement of the date by which 

such person or entity must pay the civil 

penalty assessed, and a statement of the 

date by which such person or entity 

may file a Notice for Application for 

Review pursuant to Subpart G of this 

Part, as an alternative to civil penalty 

payment; 

(6) A statement of the means by which 

such person or entity may file a Notice 

for Application for Review pursuant to 

Subpart G of this Part; and 

(7) A statement of the means by which 

payment may be made. 

(b) The Assistant Secretary may 

establish procedures for issuance of 

Orders Assessing Civil Penalty. 

(c) Each person or entity subject to an 

Order Assessing Civil Penalty must 

comply with the terms of such Order 

Assessing Civil Penalty by the date 

specified in such Order Assessing Civil 

Penalty unless such person or entity has 

filed a timely Notice for Application for 

Review under Subpart G of this Part. 

(d) An Order Assessing Civil Penalty 

issued under this section becomes a 

final agency action when the time 

specified in such Order Assessing Civil 

Penalty to file a Notice for Application 

for Review has passed without such 

filing. 

Subpart G—Adjudications and Appeals 

§ 31.700 Neutral adjudications, generally. 

(a) Any person or entity against whom 

an Order Assessing Civil Penalty has 

been issued is entitled to a hearing and 

adjudication, by a Presiding Officer, on 

any issue of material fact relevant to any 

civil penalty issued against such person 

or entity under this Part. 

(b) A Presiding Officer will issue an 

Initial Decision on any material issue 

related to an Order Assessing Civil 

Penalty before any such issue is 

reviewed on appeal pursuant to 6 CFR 

31.735. 

§ 31.705 Appointment of Presiding 

Officers. 

(a) Immediately upon the filing of any 

Notice for Application for Review under 

6 CFR 31.710, the Secretary shall 

appoint an attorney, who is employed 

by the Department and who has not 

performed any investigative or 

prosecutorial function with respect to 

the matter, to act as a neutral 

adjudications officer or Presiding 

Officer for the compilation of a factual 


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record and the recommendation of an 

Initial Decision for each Proceeding. 

(b) Notwithstanding paragraph (a) of 

this section, the Secretary may appoint 

one or more attorneys who are 

employed by the Department and who 

do not perform any investigative or 

prosecutorial function with respect to 

this subpart, to serve generally in the 

capacity as Presiding Officer(s) for such 

matters pursuant to such procedures as 

the Secretary may hereafter establish. 

§ 31.710 Commencement of Adjudication 

Proceedings. 

(a) Any person or entity against whom 

an Order Assessing Civil Penalty has 

been issued may institute proceedings 

to review the propriety of such civil 

penalty by filing a Notice for 

Application for Review specifying that 

such person or entity requests a hearing 

and adjudication. 

(b) Each person or entity requesting a 

hearing and adjudication must serve 

each Notice for Application for Review 

and all subsequent filings on the Office 

of the General Counsel. 

(c) Each Notice for Application for 

Review must be accompanied by all 

appropriate legal memoranda, 

declarations, affidavits, other 

documents and other evidence 

supporting the position asserted by the 

person or entity requesting a hearing 

and adjudication. 

(d) The Assistant Secretary will file 

and serve a Response, accompanied by 

all appropriate legal memoranda, 

declarations, affidavits, other 

documents and other evidence 

supporting the position asserted by the 

Assistant Secretary, within 14 calendar 

days of the filing and service of the 

Notice for Application for Review and 

all supporting papers. 

§ 31.715 Prohibition on ex parte 

communications during adjudication. 

(a) At no time after the designation of 

a Presiding Officer for a proceeding and 

prior to the issuance of a Final Decision 

on an appeal pursuant to 6 CFR 

31.735(e) will the designated Presiding 

Officer, or any person who will advise 

that official in the decision on the 

matter, discuss ex parte the merits of the 

proceeding with any interested person 

outside the Department, with any 

Department official who performs a 

prosecutorial or investigative function 

in such proceeding or a factually related 

proceeding, or with any representative 

of such person. 

(b) If, after the designation of a 

Presiding Officer and prior to the 

issuance of a Final Decision on an 

appeal pursuant to 6 CFR 31.375(e), the 

designated Presiding Officer, or any 

person who will advise that official in 

the decision on the matter, receives 

from or on behalf of any party, by means 

of an ex parte communication, 

information which is relevant to the 

decision of the matter and to which 

other parties have not had an 

opportunity to respond, a summary of 

such information will be served on all 

other parties, who will have an 

opportunity to reply to the ex parte 

communication within a time set by the 

designated Presiding Officer. 

(c) The consideration of classified or 

Sensitive But Unclassified information 

or materials pursuant to an in camera 

procedure does not constitute a 

prohibited ex parte communication for 

purposes of this subpart. 

§ 31.720 Burden of proof. 

The Assistant Secretary bears the 

initial burden of proving the facts 

necessary to support the challenged 

Order Assessing Civil Penalty at every 

proceeding instituted under this 

subpart. 

§ 31.725 Hearing and adjudication 

procedures. 

(a) Following filing and receipt of 

Notice for Application for Review and 

Response, the assigned Presiding Officer 

will conduct scheduling conferences or 

issue scheduling orders as appropriate; 

accept or order pre-hearing memoranda, 

motions, and briefings as appropriate; 

and order discovery as appropriate. 

(b) Any hearing and adjudication will 

be held as expeditiously as possible in 

the county, parish, or incorporated city 

of residence of the person or entity 

filing the Notice for Application for 

Review instituting the hearing and 

adjudication, at a precise location to be 

determined by the assigned Presiding 

Officer, or, with the consent of such 

person or entity, at any other location 

conducive to a prompt presentation of 

any necessary testimony or other 

proceedings. 

(c) Videoconferencing and 

teleconferencing may be used where 

appropriate at the discretion of the 

assigned Presiding Officer. 

(d) Each party offering the affirmative 

testimony of a witness must present that 

testimony by declaration, affidavit, or 

other sworn statement submitted in 

advance as ordered by the assigned 

Presiding Officer. 

(e) Any witness presented for 

examination will be asked to testify 

under oath or affirmation. 

(f) The hearing and adjudication will 

be recorded verbatim. 

(g) A person or entity may appear to 

be heard on his own behalf or through 

any counsel of his choice. 

(h) A person or entity, individually or 

through counsel, may offer relevant and 

material information including written 

direct testimony which that person or 

entity believes should be considered in 

opposition to the Order Assessing Civil 

Penalty at issue. 

(i) A person or entity, individually or 

through counsel, may conduct crossexamination as may be specifically 

allowed by the assigned Presiding 

Officer for a full determination of 

relevant facts. 

§ 31.730 Completion of adjudication 

procedures. 

(a) The assigned Presiding Officer will 

close and certify the record of the 

adjudication promptly upon the 

completion of the hearing and upon the 

submission of post-hearing briefs, if any 

are ordered by the assigned Presiding 

Officer. 

(b) The assigned Presiding Officer will 

issue an Initial Decision based on the 

certified record, and the decision will be 

subject to appeal pursuant to 6 CFR 

31.735. 

(c) An Initial Decision will become a 

final agency action on the expiration of 

the time for an appeal pursuant to 6 CFR 

31.735. 

(d) An Initial Decision will specify the 

time by which the subject person or 

entity must pay the ordered civil 

penalty, or the Presiding Officer’s 

modification of such penalty, if any. 

Such deadline will be stayed, however, 

during the pendency of any appeal 

pursuant to 6 CFR 31.735. 

§ 31.735 Appeals. 

(a) Right to appeal. The Assistant 

Secretary, or any person or entity having 

received an Initial Decision under this 

Subpart, has the right to appeal to the 

Under Secretary acting as a neutral 

appeals officer. 

(b) Procedure for appeals. (1) The 

Assistant Secretary, or any person or 

entity who has received an Initial 

Decision under this Subpart, may 

institute an appeal by filing a Notice of 

Appeal with the Office of the General 

Counsel. 

(2) A Notice of Appeal must be filed 

within seven calendar days of the 

service of the Presiding Officer’s Initial 

Decision. Where the Assistant Secretary 

initiates an appeal, the Assistant 

Secretary will serve a copy of this 

Notice of Appeal on the appellee. 

(3) An Initial Decision is stayed from 

the timely filing of a Notice of Appeal 

until the Under Secretary issues a Final 

Decision. 

(4) The appellant must file a Brief 

with the Office of the General Counsel 

within 28 calendar days of the filing of 


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Federal Register / Vol. 76, No. 149 / Wednesday, August 3, 2011 / Proposed Rules 46957 

the Presiding Officer’s Initial Decision. 

Where the Assistant Secretary initiates 

an appeal, the Assistant Secretary will 

serve a copy of this Brief on the 

appellee. 

(5) The appellee must file its/his/her 

Opposition Brief with the Office of the 

General Counsel within 28 calendar 

days of the filing of the appellant’s 

Brief. Where the Assistant Secretary is 

an appellee, the Assistant Secretary will 

serve a copy of this Opposition Brief on 

the appellant. 

(c) Expedited appeals. The Under 

Secretary may provide for expedited 

appeals for appropriate matters. 

(d) Ex parte communications. (1) At 

no time after the filing of a Notice of 

Appeal and prior to the issuance of a 

Final Decision on an appeal pursuant to 

6 CFR 31.735(e) will the Under 

Secretary, his designee, or any person 

who will advise that official in the 

decision on the matter discuss ex parte 

the merits of the proceeding with any 

interested person outside the 

Department, with any Department 

official who performs a prosecutorial or 

investigative function in such 

proceeding or a factually related 

proceeding, or with any representative 

of such person. 

(2) If, after the filing of a Notice of 

Appeal and prior to the issuance of a 

Final Decision on an appeal pursuant to 

6 CFR 31.375(e), the Under Secretary, 

his designee, or any person who will 

advise that official in the decision on 

the matter receives from or on behalf of 

any party, by means of an ex parte 

communication, information which is 

relevant to the decision of the matter 

and to which other parties have not had 

an opportunity to respond, a summary 

of such information will be served on all 

other parties, who will have an 

opportunity to reply to the ex parte 

communication within a time set by the 

Under Secretary or his/her designee. 

(3) The consideration of classified or 

Sensitive But Unclassified information 

or materials pursuant to an in camera 

procedure does not constitute a 

prohibited ex parte communication for 

purposes of this subpart. 

(e) Final decisions. The Under 

Secretary will issue a Final Decision 

and serve it upon the parties. A Final 

Decision made by the Under Secretary 

constitutes final agency action. 

(f) Conduct of appeals. The Secretary 

may establish procedures for the 

conduct of appeals pursuant to this 

subpart. 

Subpart H—Other 

§ 31.800 State law preemption. 

Subject to subtitle J, the laws of any 

State are preempted to the extent that 

such laws are inconsistent with this part 

or with subtitle J, except that this 

section shall not preempt any State law 

that provides additional protection 

against the acquisition of ammonium 

nitrate by terrorists or the use of 

ammonium nitrate in explosives in acts 

of terrorism or for other illicit purposes, 

as determined by the Secretary. 

Janet Napolitano, 

Secretary. 

[FR Doc. 2011–19313 Filed 8–2–11; 8:45 am] 

BILLING CODE 9119–9P–P 


srobinson on DSK4SPTVN1PROD with PROPOSALS2