19–010

Calendar No. 764

107TH CONGRESS REPORT " SENATE ! 2d Session 107–342

CHEMICAL SECURITY ACT OF 2002

NOVEMBER 15, 2002.—Ordered to be printed 

Mr. JEFFORDS, from the Committee on Environment and Public 

Works, submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[to accompany S. 1602] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Environment and Public Works, to which was 

referred a bill (S. 1602) to help protect the public against the 

threat of chemical attacks, having considered the same, reports favorably thereon with an amendment and recommends that the bill, 

as amended, do pass. 

GENERAL STATEMENT AND BACKGROUND

Congress has long been concerned about releases of hazardous 

chemicals from industrial facilities. In 1984, an accidental release 

of methyl isocyanate from a Union Carbide plant in Bhopal, India 

resulted in more than 2,000 deaths and hundreds of thousands of 

injuries. Reacting to this incident and a number of accidental 

chemical releases in the United States, Congress enacted several 

statutes to help prevent such releases and to improve preparedness 

and response capabilities. 

The Emergency Planning and Community Right-to-Know Act 

(EPCRA), passed in 1986, contains four major requirements designed to help facilities and communities understand, prepare for 
2

1Public Law 99–499. 2Public Law 101–549. 3RMP Info., U.S. Environmental Protection Agency. 

4Public Law 106–40. 

and respond to accidental releases of hazardous chemicals. 1 The 

four requirements are emergency planning, release notification, 

hazardous chemical storage reporting, and toxics release reporting. 

The emergency planning provisions of EPCRA established State 

Emergency Response Commissions (SERCs) and Local Emergency 

Planning Commissions (LEPCs). LEPCs are comprised of emergency responders and other local officials, and are required to develop emergency response plans and communicate these plans to 

the public. The EPCRA notification and storage reporting requirements establish thresholds and reporting requirements for releases 

and storage of certain extremely hazardous substances held onsite. 

EPCRA also created the Toxics Release Inventory, which requires 

facilities to report their releases of more than 600 chemicals into 

the environment. 

The Clean Air Act Amendments of 1990 included requirements 

that the Occupational Safety and Health Administration promulgate Process Safety Management (PSM) regulations that apply to 

chemical facilities. 2 The regulations increase worker safety by preventing or minimizing the consequences of catastrophic releases of 

toxic, reactive, flammable or explosive chemicals. The Clean Air 

Act Amendments of 1990 also include provisions in section 112(r) 

that are designed to prevent accidental releases of dangerous 

chemicals, and mitigate the consequences of releases that may 

occur. The requirements of this section apply to stationary facilities 

that process more than a threshold amount of certain dangerous 

chemicals. Approximately 15,000 facilities are subject to the requirements. These facilities must develop risk management programs that include a hazard assessment of the offsite consequences 

of releases under worst-case and alternate scenarios, a prevention 

program, and an emergency response program. Information about 

the program must be documented in a Risk Management Plan 

(RMP) that is submitted to EPA and made available to States and 

local planning agencies as well as the public according to procedures set forth in 40 CFR 68. 

RMPs were submitted by covered facilities pursuant to a statutory deadline on June 21, 1999. RMP data indicate that the potential for catastrophic chemical releases is widespread in the United 

States. According to EPA data, a ‘‘worst-case’’ release of toxic 

chemicals could threaten more than one million people at more 

than 123 U.S. facilities spread across 24 States. In addition to 

these 123 facilties, there are more than 700 facilities located in 39 

States at which a ‘‘worst-case’’ release of toxic chemicals could 

threaten more than one hundred thousand people. 3

Anticipating the deadline for submission of RMPs, Congress 

passed the Chemical Safety Information, Site Security and Fuels 

Regulatory Relief Act, Public Law 106–40, on August 2, 1999. 4

This Act amended section 112(r) of the Clean Air Act to limit the 

availability of RMPs to address concerns regarding the potential 

terrorist threat posed by Internet access to offsite consequence 

analysis information. The 1999 amendments also mandated a comprehensive Department of Justice study of the vulnerability of toxic 
3

5Agency for Toxic Substances and Disease Registry, Industrial Chemicals and Terrorism: 

Human Health Threat Analysis, Mitigation and Prevention, 1999. 6Department of Justice. Assessment of Increased Risk of Terrorist or Other Criminal Activity 

Associated with Posting Off-Site Consequence Analysis Information on the Internet. April 18, 

2000. pp. 23–24. 

chemical handling or manufacturing facilities to criminal and terrorist activity. In May of 2002, the Department of Justice completed an interim study, nearly 2 years after the statutory deadline 

of August 5, 2000. The results of this interim study are classified, 

and therefore cannot be discussed in this report. The final study 

was due to be completed August 5, 2002, and was not completed 

by that date or expected to be completed in the near future. 

Notwithstanding the failure by the Department of Justice to complete its full vulnerability study, existing evidence suggests that security is inadequate at many chemical facilities. In 1999, the Agency for Toxic Substances and Disease Registry studied security at 30 

chemical plants in three States. 5 The ATSDR found that ‘‘security 

at chemical plants ranged from fair to very poor.’’ In a separate 

study, the Department of Justice concluded in April, 2000 that ‘‘the 

risk of terrorists attempting in the foreseeable future to cause an 

industrial chemical release is both real and credible.’’ 6 In this same 

report, the Department of Justice noted that attacking an existing 

chemical facility, for example, presents an easier and more attractive alternative for terrorists than constructing a weapon of mass 

destruction. In addition, the Department concluded that many 

plants that contain hazardous chemicals would be attractive targets for terrorists because of the plants’ proximity to densely populated areas. 

Since September 11, there have been a variety of voluntary industry initiatives to improve security. The American Chemistry 

Council (ACC), for example, has adopted a security code as part of 

its Responsible Care program, and will require adherence to that 

code as a condition of membership in the ACC. But in spite of the 

ACC program and related efforts, there have been security gaps reported at numerous chemical facilities since September 11, 2001. 

Governor Tom Ridge echoed the conclusions of these investigations 

in his testimony before the Senate Committee on Environment and 

Public Works on July 10, 2002, stating that: ‘‘The fact is, we have 

a very diversified economy and our enemies look at some of our 

economic assets as targets. And clearly, the chemical facilities are 

one of them. We know that there have been reports validated about 

security deficiencies at dozens and dozens of those.’’

In spite of these documented security lapses and widespread 

agreement about the vulnerability of the nation’s chemical infrastructure, there are no Federal standards in place to require plants 

to assess their vulnerabilities and take steps to reduce them. As 

discussed above, there are several programs in place to plan for 

and mitigate the threat of accidental releases of chemicals. But 

these accidental release programs do not address the contingencies 

that a terrorist attack might entail, and therefore do not provide 

adequate protection. By contrast, nuclear plants are already subject 

to extensive security requirements designed to prevent armed intruders from sabotaging the plants. Industry groups, such as the 

American Chemistry Council, are in the process of implementing 

voluntary programs to reduce hazards and improve security at 
4

7The White House. National Strategies for Homeland Security, July 2002, pp. 29–35. 

their plants. However, the American Chemistry Council represents 

only approximately 10 percent of facilities that use large quantities 

of dangerous chemicals, and its measures are not enforceable and 

do not involve either Federal review of assessments and response 

plans or credible third-party review of such assessments and plans. 

OBJECTIVES OF THE LEGISLATION

S. 1602 is intended to ensure that the threat of terrorist attack 

on chemical facilities is addressed quickly, consistently and effectively across the spectrum of U.S. industrial facilities that have 

hazardous chemicals. The Act puts the Environmental Protection 

Agency (EPA) in the lead role in implementing the Act, with the 

Office of Homeland Security or its successor in a consultative role. 

This approach is consistent with the approach outlined in the 

President’s Homeland Security strategy. 7 The Act requires the 

EPA to consult with the Office of Homeland Security, as well as 

States and local governments, to identify ‘‘high-priority’’ facilities 

within the universe of approximately 15,000 facilities that have 

submitted risk management plans (RMPs) to EPA under the accidental release prevention programs established under section 

112(r) of the Clean Air Act. Population density, proximity to other 

critical infrastructure, and additional criteria, as appropriate, 

would be used to screen the 15,000 facilities to set the priority list. 

This would be accomplished through a rulemaking within one year 

of enactment. That rulemaking would also include requirements for 

each high priority facility to: conduct a vulnerability and hazard 

assessment, and; prepare a prevention, preparedness and response 

plan that addresses the hazards and vulnerabilities by improving 

security, employing safer technology, and other means. Copies of 

the assessments and plans must be submitted to EPA 12 and 18 

months, respectively, after the date of promulgation of regulations. 

EPA is required to review the documents in consultation with the 

Office of Homeland Security to determine whether the vulnerability 

assessments were conducted in compliance with the regulations 

and whether the response plans were prepared and are being implemented in compliance with the regulations. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short Title 

The Chemical Security Act of 2002. 

Sec. 2. Findings 

Section 2 contains four findings, which can be summarized as follows: 1) the chemical industry is a crucial part of the United States’

critical infrastructure; 2) the possibility of attacks on chemical facilities poses a serious threat to public health, safety and welfare 

as well as critical infrastructure and national security; 3) the possibility of chemical theft from a chemical facility also poses such 

threats, and; 4) there are significant opportunities to prevent attacks and threats, and reduce harm that would result by using 

safer technologies and improving site security. 
5

Sec. 3. Definitions 

SUMMARY

Section 3 defines ten terms for the purposes of the Act. Definitions include:

• ‘‘Chemical Source’’ is a stationary source (as defined in section 

112(r) of the Clean Air Act) that contains a substance of concern. 

• ‘‘Employee’’ means a duly recognized collective bargaining representative at a chemical source; or, in the absence of such a representative, other appropriate personnel. 

• ‘‘Head of the Office’’ means the head of the Office of Homeland Security or a successor agency. 

• ‘‘Safer Design and Maintenance’’ includes, to the extent practicable: use of inherently safer technology, use of secondary containment equipment, implementation of security measures, and use 

of buffer zones. 

• ‘‘Security Measure’’ means an action to increase the security 

of a chemical source, including employee training and background 

checks, perimeter and access controls, and cybersecurity. 

• ‘‘Substance of Concern’’ is any regulated substance under 

112(r) of the Clean Air Act, and any substance added by the Administrator through rulemaking. 

• ‘‘Unauthorized Release’’ is the removal or release from a 

chemical source of a covered substance of concern that is unauthorized or is caused, in whole or in part, by a criminal act. 

• ‘‘Use of Inherently Safer Technology’’ means use of a technology (or product, practice, etc.) that as compared with current 

practices, reduces or eliminates the possibility of a release of a substance of concern or threat to public health resulting from such a 

release. 

DISCUSSION

The definitions of ‘‘chemical source’’ and ‘‘substance of concern’’

set the parameters for the universe of substances and entities potentially covered by the Act, as described in the discussion of Section 4. The definition of ‘‘employee’’ is used in Section 4 to require 

that workers be consulted in the development of vulnerability assessments and response plans. The definition and its use in this 

Act in no way affects employer obligations under section 8(a)(2) of 

the National Labor Relations Act. The definition of ‘‘head of the Office’’ reflects the fact that Congress is considering the establishment of a Department of Homeland Security, which would replace 

the existing Office of Homeland Security. The term ‘‘practicable,’’ as 

used in the definition of ‘‘safer design and maintenance,’’ is intended to incorporate consideration of both technical feasibility and 

cost. 

Sec. 4. Designation and Regulation of High Priority categories 

SUMMARY

Subsection 4(a).—Designation and Regulation of High Priority Categories by the Administrator 

Subsection 4(a)(1).—Within one year of enactment, requires the 

Administrator, in consultation with the Office of Homeland Secu-
6

rity or its successor, and State and local emergency response agencies, to designate ‘‘high priority’’ combinations of chemical sources 

and substances of concern based on the threat of a release and criteria in subsection (a)(2). Subsection (a)(5) authorizes the Administrator, in consultation with the Office of Homeland Security, to add 

substances of concern as part of the rulemaking under subsection 

(a)(1). 

Subsection 4(a)(2).—Sets safety and security criteria for the Administrator, in consultation with the Office of Homeland Security, 

to consider in designating ‘‘high priority’’ categories, including severity of harm that could be caused by a release, proximity to population centers, threats to national security or critical infrastructure, 

threshold quantities of substances of concern that pose a serious 

threat, and such other safety or security factors that the Administrator considers appropriate. 

Subsection 4(a)(3).—Requires the Administrator, in consultation 

with the Office of Homeland Security, the Chemical Safety Board, 

and State and local agencies, to establish regulations for ‘‘high priority’’ chemical sources within one year of designating such categories under subsection (a)(1). Such regulations shall require 

chemical sources, in consultation with local law enforcement/emergency responders and employees, to:

• conduct a vulnerability assessment; 

• identify hazards that could result from a release; 

• prepare a plan that includes actions, and procedures, including safer design and maintenance, to eliminate or significantly reduce the potential consequences of a release.

Subsection 4(a)(4).—Requires the Administrator, in consultation 

with the Office of Homeland Security, to revise the regulations 

under subsections (a)(1) and (a)(3) within 5 years. 

DISCUSSION

Subsection 4(a) requires a two-part regulatory process that establishes the major requirements of the Act. First, the EPA must consult with the Office of Homeland Security, as well as the State and 

local agencies listed, to identify ‘‘high priority’’ categories. These 

high priority categories are combinations of chemical sources and 

substances of concern. It is the committee’s expectation that the facilities currently subject to EPA’s Risk Management Program requirements, established under Section 112(r) of the Clean Air Act, 

would be EPA’s starting point for determining the high priority categories. There are approximately 15,000 of these facilities, each of 

which has onsite more than a threshold quantity of at least one of 

140 listed toxic or flammable chemicals. The high priority list 

would be developed by screening the RMP list of 15,000 facilities 

using the criteria listed in subsection 4(a)(2). These criteria include 

the severity of harm that could be caused by a release of a substance of concern, proximity to population centers, threats to critical infrastructure or national security and threshold quantities. 

The size of the universe of high-priority facilities would therefore 

likely be smaller than the 15,000 that are subject to EPA’s RMP 

requirements. 

While the decision of how to develop and apply the criteria listed 

in subsection 4(a)(2) is left to the EPA, the committee does not ex-
7

pect that facilities located in remote areas, such as many agricultural retailers, would be included in the high priority categories. In 

addition, the committee notes that some facilities subject to the 

RMP requirements may exceed the RMP threshold quantities for 

brief periods during the year, making them less attractive targets 

for attack than RMP facilities that consistently exceed the threshold quantities. EPA should consider the frequency and duration 

that the threshold quantities of substance of concern are onsite at 

a particular facility in designating high priority categories. 

Subsection 4(a)(3) establishes the requirements applicable to 

high priority category chemical sources. These requirements must 

be developed through rulemaking no later than one year after enactment of the Act. The committee is aware that there are voluntary security programs currently being implemented at some of 

the facilities that may be subject to the requirements of this Act. 

For example, the American Chemistry Council has developed and 

adopted a security code as part of its Responsible Care program, 

and has made adherence to the security code a condition of membership in the American Chemistry Council. In addition, energy 

producers have conducted vulnerability assessments at a portion of 

their facilities in conjunction with the Department of Energy under 

Presidential Decision Directive 63. Finally, some community water 

suppliers are required to conduct vulnerability assessments with 

respect to attacks that could cause a disruption in water supplies 

under the bioterrorism bill that was signed into law earlier this 

year. The committee recognizes that these efforts may overlap with 

the assessment and planning requirements in subsection 4(a)(3). 

The committee does not intend unnecessary duplication of efforts, 

however, the committee has left to the Administrator and the Office of Homeland Security the determination of whether assessments required by other laws are duplicative of the purposes and 

requirements of this Act. With respect to voluntary programs such 

as the American Chemistry Council Responsible Care program, 

EPA may consider the requirements of such programs as it develops its regulations, but may not relieve any facility of the responsibility to comply with the provisions of this Act on the basis of participation in any such program. 

Subsection 4(b).—Compliance Certification 

Subsection 4(b)(1).—Requires each owner and operator of each 

high-priority chemical source to certify compliance with the vulnerability/hazard assessment regulations within one year of promulgation of applicable regulations. 

Subsection 4(b)(2).—Requires each owner and operator of each 

high-priority chemical source to certify compliance with the prevention, preparedness and response plan regulations within 18 months 

of promulgation of applicable regulations. 

Subsection 4(b)(3).—Requires review of assessments and plans 

and re-certification by chemical sources every 3 years. 

Subsection 4(b)(4).—Exempts from disclosure under the Freedom 

of Information Act all information provided to the Administrator 

under this section, with the exception of the compliance certifications described in subsections 4(b) and 5(a). The subsection also 

requires the Administrator, in consultation with the Office of 
8

Homeland Security, to develop protocols necessary to prevent unauthorized disclosure of assessments and plans. 

DISCUSSION

Subsection 4(b)(4) exempts the assessments and plans from disclosure under FOIA. It also directs EPA to develop protocols to prevent disclosure to unauthorized persons of the assessments and 

plans. During committee markup of the Act, an amendment was offered by Senator Bond, and accepted by voice vote, that requires 

specific protocols prohibiting disclosure to unauthorized persons to 

be developed. Notwithstanding the FOIA exemptions and protocols 

mentioned above, this subsection provides that certifications of 

compliance will be publicly available, so that the public will know 

whether a local facility has complied with the law. In addition, the 

certifications will provide a checklist to indicate whether the chemical source has implemented each of the four elements of safer design and maintenance. It is not the committee’s intent that such 

certification be utilized as demonstration of full compliance with 

the requirements of the Act. Rather, the EPA may utilize the authorities contained in current law to request access to and inspection of documents, facilities and other information to ascertain compliance with the Act. 

Sec. 5. Enforcement 

(a) Review of Assessments and Plans 

Subsection 5(a)(1).—Requires the Administrator, in consultation 

with the Office of Homeland Security, to review vulnerability assessments and response plans to determine their compliance with 

applicable regulations. 

Subsection 5(a)(2).—Requires the Administrator to certify each 

compliance determination in writing, including a checklist indicating consideration of safer design and maintenance. 

Subsection 5(a)(2)(C).—Establishes an ‘‘early compliance’’ authority. The Administrator, in consultation with the Office of Homeland 

Security, shall review assessments and plans submitted prior to 

publication of proposed regulations to determine compliance with 

the Act. No further revisions to the assessments or plans will be 

required if such a determination is made. This provision has been 

included to enable facilities that already have assessments and 

plans underway—such as American Chemistry Council members—

to continue their work and submit the assessments and plans for 

early approval by the Administrator if the Administrator determines that they assessments and plans meet the requirements of 

the Act. 

Subsection 5(a)(2)(D).—Requires the Administrator to establish a 

schedule for reviewing assessments and plans, not to exceed 3 

years beyond the deadline for submission of such assessments and 

plans. 

5(b) Compliance Assistance.—Requires the Administrator to provide notice and compliance assistance to a chemical source if the 

Administrator, after consultation with the Office of Homeland Security, determines that a chemical source has not complied with 

the assessment or planning regulations; or that a threat exists that 

is beyond the scope of a plan or implementation of a plan. 
9

5(c) Compliance Orders.—Thirty days after the later of the date 

that the Administrator first provides compliance assistance or a 

chemical source receives notice under (b), the Administrator may 

issue an order directing compliance after notice and opportunity for 

hearing. 

5(d) Abatement Orders.—Requires the Office of Homeland Security to provide notification to a chemical source if the Office of 

Homeland Security, in consultation with local law enforcement and 

first responders, determines that a terrorist threat exists that is 

beyond the scope or implementation of a response plan submitted 

by a chemical source. Requires the Office of Homeland Security to 

notify the Administrator and the Attorney General if the Office of 

Homeland Security determines that actions taken by a chemical 

source in response to the notification are insufficient. Once these 

preliminary steps have been taking, the Administrator and the Attorney General are then authorized to secure relief through court 

orders to protect the public health or welfare. 

DISCUSSION

Section 5 establishes requirements for review of assessments and 

plans submitted to EPA, and authorities and procedures for EPA 

to address deficiencies in these documents. 

Section 5(c) establishes an ‘‘early compliance’’ provision. As noted 

in the discussion of Section 4, industry groups such as the American Chemistry Council are in the process of implementing voluntary security measures. The aim of the Act is to encourage such 

voluntary efforts to continue, while ensuring that they meet the 

standards set out in the Act. To accomplish this goal, the Act includes an ‘‘early compliance’’ provision. Under this provision, chemical sources can submit assessments and response plans for review 

at any time after enactment of the Act. Assessments and plans received prior to publication of draft regulations must be reviewed by 

the Administrator and must meet the standards in the Act. Assessments or plans received after that date must meet the requirements of the final regulations. 

Sec. 6. Recordkeeping and Entry 

Section 6 establishes record retention requirements for covered 

chemical sources. The section also establishes authority for the Administrator, in carrying out the Act, to enter or request information 

from a chemical source. 

Sec. 7. Penalties 

Section 7 establishes civil penalties for violations of the Act and 

criminal penalties for knowing violations of the Act. 

Sec. 8. No Effect on Requirements Under Other Law 

Section 8 states that nothing under this Act affects any duty or 

other requirement imposed under any other Federal or State law. 

Sec. 9. Authorization of Appropriations 

Section 9 authorizes such sums as are necessary to carry out this 

Act. 
10

LEGISLATIVE HISTORY

S. 1602 was introduced on October 31, 2001 by Senator Corzine, 

with Senators Jeffords, Boxer and Clinton as cosponsors, and was 

referred to the Committee on Environment and Public Works. A 

hearing was held by the Subcommittee on Superfund, Toxics, Risk 

and Waste Management on November 14, 2001 to consider S. 1602; 

and a full committee oversight hearing was held on July 10, 2002 

to receive testimony the creation of a Department of Homeland Security. The full Committee on Environment and Public Works met 

on July 25, 2002 to consider S. 1602, and ordered it reported to the 

Senate with an amendment in the nature of a substitute. 

HEARINGS

On Wednesday, November 14, 2001, the Subcommittee on Superfund, Toxics, Risk and Waste Management of the Committee on 

Environment and Public Works held a legislative hearing to receive 

testimony on S. 1602, the Chemical Security Act. There were no 

prior congressional hearings on this legislation. Witnesses at the 

hearing appeared in the following order: Robert C. Shinn, Jr., Commissioner, New Jersey Department of Environmental Protection; 

Mr. Fred Webber, President and Chief Executive Officer, American 

Chemistry Council; Mr. Paul Orum, Director, Working Group on 

Community Right-to-Know; Mr. Bill Stanley, Synthetic Organic 

Chemical Manufacturers Association; and Ms. Rena Steinzor, Academic Fellow, National Resources Defense Council. 

ROLLCALL VOTES

On July 25, 2002, the Committee on Environment and Public 

Works met to consider S. 1602. The committee agreed, by voice 

vote, to an amendment in the nature of a substitute offered by Senator Corzine. Also, agreed to by voice vote was an amendment by 

Senator Bond that directs the Administrator to develop protocols to 

protect sensitive information received by EPA in the form of chemical facility vulnerability assessments and response plans. Finally, 

agreed to by voice vote was a technical amendment by Senator 

Corzine to the definition of ‘‘unauthorized release’’ on page 6, line 

18. A recorded vote on S. 1602 was requested by Senator Corzine 

and seconded by Senator Clinton. A recorded vote occurred on the 

bill, as amended. S. 1602 was unanimously ordered reported by 19 

ayes. 

REGULATORY IMPACT STATEMENT

In compliance with section 11(b) of rule XXVI of the Standing 

Rules of the Senate, the committee makes evaluation of the regulatory impact of the reported bill. The bill does not create any additional regulatory burdens, nor will it cause any adverse impact on 

the personal privacy of individuals. 

MANDATES ASSESSMENT

In compliance with the Unfunded Mandates Reform Act of 1995 

(Public Law 104–4), the committee finds that S. 1079 would not impose any Federal intergovernmental unfunded mandates on State, 

local, or tribal governments. 
11

COST OF LEGISLATION

Section 403 of the Congressional Budget and Impoundment Control Act requires that a statement of the cost of the reported bill, 

prepared by the Congressional Budget Office, be included in the report. That statement follows:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, October 1, 2002.

Hon. JAMES M. JEFFORDS, Chairman, 

Committee on Environment and Public Works, 

U.S. Senate, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1602, the Chemical Security 

Act of 2002. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Susanne S. Mehlman 

(for Federal costs), who can be reached at 226–2860, Greg Waring 

(for the State and local impact), who can be reached at 225–3220, 

and Lauren Marks (for the private-sector impact), who can be 

reached at 226–2940. 

Sincerely, 

DAN L. CRIPPEN. 

S. 1602, the Chemical Security Act of 2002, as ordered reported by 

the Senate Committee on Environment and Public Works on 

July 25, 2002

Summary 

S. 1602 would require the Environmental Protection Agency 

(EPA) to develop regulations to identify sources of industrial chemicals or facilities vulnerable to unauthorized releases of hazardous 

chemicals. The regulations would require owners and operators of 

those facilities to perform vulnerability assessments of chemical 

sources and to establish safety and security plans. EPA also would 

be responsible for developing methods to guard against inappropriate disclosure of the vulnerability assessment plans prepared by 

the owners of chemical sources that may pose a security threat, 

and for certifying their compliance with these plans. CBO estimates that implementing this bill would cost $80 million over the 2003–2007 period, assuming appropriation of the necessary funds. Enacting S. 1602 could affect direct spending and receipts because this bill would provide for civil and criminal penalties against owners of chemical sources who fail to comply with 

the bill’s requirements. However, CBO estimates that any such increase in civil and criminal penalties would be not be significant. 

S. 1602 would require the owners and operators of certain facilities to undertake measures to protect against the unauthorized release of chemical substances. Because the owners and operators of 

those facilities include both public and private-sector entities, the 

requirements would be both intergovernmental and private-sector 

mandates as defined in the Unfunded Mandates Reform Act 

(UMRA). Based on information from EPA and industry sources, 

CBO estimates that the cost to comply with the mandates would 
12

not exceed the annual thresholds established by UMRA ($58 million for intergovernmental mandates and $115 million for privatesector mandates in 2002, adjusted annually for inflation). 

Estimated Cost to the Federal Government 

The estimated budgetary impact of S. 1602 is shown in the following table. The costs of this legislation fall within budget function 300 (natural resources and environment).

By Fiscal Year, in Millions of Dollars 

2003 2004 2005 2006 2007

SPENDING SUBJECT TO APPROPRIATION 

Development of Regulations: 

Estimated Authorization Level .................................................... 1 1 * * *

Estimated Outlays ....................................................................... 1 1 * * *

Coordination with Office of Homeland Security and Technical Support: 

Estimated Authorization Level .................................................... 2 2 2 1 1

Estimated Outlays ....................................................................... 2 2 2 1 1

Review of Vulnerability Assessments, Certification of Compliance, and 

Enforcement: 

Estimated Authorization Level .................................................... 1 10 31 21 9

Estimated Outlays ....................................................................... 1 9 27 22 11

Total Proposed Changes: 

Estimated Authorization Level .................................................... 4 13 33 22 10

Estimated Outlays 4 12 29 23 12

NOTE : * = Less than $500,000. 

Basis of Estimate 

For this estimate, CBO assumes that S. 1602 will be enacted 

near the beginning of 2003. According to EPA, 12,000 to 15,000 

chemical plants and storage sites handle hazardous chemicals that 

could be vulnerable to unauthorized releases of hazardous material 

caused by terrorist attacks. Under this legislation, EPA would work 

with owners and operators of these facilities to develop vulnerability assessment guidelines, identify and correct problems related 

to the production and storage of hazardous chemicals, and obtain 

verification that problems have been remedied. CBO estimates that 

implementing these provisions would cost $80 million over the 

2003–2007 period, assuming appropriation of the necessary 

amounts. Such spending would fund additional personnel, travel 

expenses, and contract support services necessary to implement 

EPA’s three main responsibilities under this bill—to develop regulations, coordinate with the Office of Homeland Security (OHS) and 

provide technical support, and enforce the bill’s new requirements. 

Over the next 5 years, CBO estimates that efforts to support the 

development of regulations under S. 1602 would require about 12 

staff-years at a cost of about $1 million, as well as $1 million in 

contract services to support economic analyses and research required to establish the regulations. 

S. 1602 would require EPA to coordinate its oversight and enforcement activities with OHS and to establish and maintain computer systems for tracking information about possible threats and 

other recordkeeping associated with hazardous chemical sites. CBO 

estimates that coordinating with OHS and developing and maintaining information technology would require about 20 staff-years 
13

at a cost of about $2 million, as well as $6 million in contract services over the 2003–2007 period. 

Enforcing the bill’s requirements would demand the most resources from EPA. The bill would require the agency to review vulnerability assessments submitted by the owners and operators of 

chemical sources, certify whether sites are in compliance, and pursue enforcement actions when necessary. CBO estimates that over 

the 2003–2007 period such activities would require about 200 staff- years at a cost of about $20 million, plus $22 million in travel expenses and $28 million in contractor support services. 

Based on information from EPA, CBO assumes that following the 

submission and review of vulnerability assessments, EPA and contractor staff would travel to most of the 12,000–15,000 chemical 

sites or facilities. A site visit would include up to a three-person 

team performing inspection duties over a three-to 5-day period. 

Furthermore, because EPA expects that about 85 percent of the 

owners and operators of the sites would submit their assessments 

sometime in 2004, CBO estimates that the majority of the site inspections would occur over the 2004–2006 period. Thus, most of the 

personnel and related travel expenses would occur during that time 

period. 

Because those prosecuted and convicted for violation of the provisions of S. 1602 could be subject to criminal fines, the Federal Government might collect additional fines if the legislation is enacted. 

Collections of such fines are recorded in the budget as governmental receipts (revenues), which are deposited in the Crime Victims Fund and later spent. Civil penalties for violations could also 

be imposed under the bill, and such collections are recorded in the 

budget as governmental receipts. In recent years EPA has imposed 

fines on firms handling hazardous chemicals for violations of the 

clear air act totaling $1 million to $2 million a year. CBO expects 

that the amount of additional fines collected under this bill would 

be insignificant. 

Intergovernmental and Private-Sector Impact 

The bill would require EPA to develop regulations designating 

certain facilities as ‘‘high priority,’’ based upon the severity of the 

threat posed by an unauthorized release of chemicals from those facilities. Owners and operators of facilities designated as high priority would be required to undertake specific measures to protect 

against terrorist attacks, criminal acts, or other types of chemical 

releases. Because the high-priority facilities would be selected from 

about 15,000 public and private entities (including public water 

utilities and firms in the chemical industry), the bill would impose 

both intergovernmental and private-sector mandates, as defined in 

UMRA. 

Specifically, S. 1602 would require that owners and operators of 

affected facilities conduct an assessment of the vulnerability of 

their facility, identify the hazards that may result from a substance’s release, and develop and implement a plan to prepare, prevent, and respond to a release. According to EPA, owners and operators would be granted some flexibility in developing and implementing the response plans and could choose to upgrade security, 

redesign the manufacturing, refinement, or treatment processes 

that occur at the facility, or substitute for the materials used in 
14

their chemical processes. S. 1602 would further require that owners 

and operators certify completion of both the assessment and plan, 

submit copies to EPA, maintain records at the facility, and complete a periodic review of the assessment and plan. 

According to government and industry representatives, a substantial number of the facilities potentially affected by the bill’s 

provisions are actively engaged in activities similar to those that 

would be required under S. 1602. Such facilities are acting either 

in response to the terrorist attacks of September 11, 2001, as a condition of membership in chemical industry associations, or to comply with the Public Health Security and Bioterrorism Preparedness 

and Response Act of 2002. EPA has indicated that the efforts of 

such facilities would likely satisfy the requirements of the bill. 

Therefore, CBO expects that enactment would impose few additional costs on those facilities. Further, EPA does not expect to use 

its authority under the bill to require that owners and operators 

incorporate the more costly measures of process redesign or material substitution in order to mitigate the threat of a chemical release. 

Assuming that EPA does not use such authority, and based on 

information from government and industry sources on the costs of 

measures that would protect against a release, CBO estimates that 

the total cost of the mandates contained in the bill would not exceed the annual thresholds established by UMRA ($58 million for 

intergovernmental mandates and $115 million for private-sector 

mandates in 2002, adjusted annually for inflation).

Estimate Prepared By: Federal Costs: Susanne S. Mehlman (226–

2860); Impact on State, Local, and Tribal Governments: Greg 

Waring (225–3220); Impact on the Private Sector: Lauren Marks 

(226–2940).

Estimate Approved By: Robert A. Sunshine Assistant Director for 

Budget Analysis. 

ADDITIONAL VIEWS OF SENATOR INHOFE

On July 25, 2002, I supported the reporting of this bill from the 

Environment and Public Works Committee with every expectation 

that major improvements to the bill would occur. The legislation as 

reported out of committee does not address all of the concerns that 

were raised in the committee, including the role of the Department 

of Homeland Security, human resource needs, distribution of sensitive site vulnerability information, and incentives for early action 

on the part of companies. Additionally, the committee must address 

concerns regarding agricultural operations, fire emergency prevention and mitigation, consolidation of national security responsibility, energy assurance, overlapping government authorities, and 

others that have arisen from scores of stakeholders upon thoughtful consideration of this legislation. 

I wholeheartedly support the goal of ensuring the security of our 

nation’s chemical infrastructure. However, Congress should not let 

our chance to address such a critical issue miss the mark and possibly hurt our nation in the process. At a time when Congress has 

such major issues before it, I believe that Congress must work together to craft an effective solution to improving the security of our 

nation’s chemical infrastructure. 
15

CHANGES IN EXISTING LAW

Section 12 of rule XXVI of the Standing Rules of the Senate, provides that reports to the Senate should show changes in existing 

law made by the bill as reported. Passage of this bill will make no 

changes to existing law.

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