```

[Senate Report 109-332]
[From the U.S. Government Publishing Office]

109th Congress                                                   Report
                                 SENATE
 2d Session                                                     109-332

_______________________________________________________________________

                                     

                                                       Calendar No. 495

                                 SENATE                         109-332

    CHEMICAL FACILITY ANTI-TERRORISM ACT OF 2006

                               __________

                              R E P O R T

                                 OF THE

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                     UNITED STATES SENATE

                         CONFERENCE REPORT deg.

                              To accompany

                                S. 2145

                             together with

                            ADDITIONAL VIEWS

 TO ENHANCE SECURITY AND PROTECT AGAINST TERRORIST ATTACKS AT CHEMICAL 
                               FACILITIES

DATE deg.September 11, 2006.--Ordered to be printed

For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800  
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
TOM COBURN, Oklahoma                 THOMAS R. CARPER, Delaware
LINCOLN D. CHAFEE, Rhode Island      MARK DAYTON, Minnesota
ROBERT F. BENNETT, Utah              FRANK LAUTENBERG, New Jersey
PETE V. DOMENICI, New Mexico         MARK PRYOR, Arkansas
JOHN W. WARNER, Virginia
           Michael D. Bopp, Staff Director and Chief Counsel
                        Allison J. Boyd, Counsel
             Michael L. Alexander, Minority Staff Director
                   Holly A. Idelson, Minority Counsel
                  Trina Driessnack Tyrer, Chief Clerk

                                                       Calendar No. 495
109th Congress                                                   Report
                                 SENATE
 2d Session                                                     109-332

======================================================================

 
              CHEMICAL FACILITY ANTI-TERRORISM ACT OF 2006

                                _______
                                

               September 11, 2006.--Ordered to be printed

                                _______
                                

  Ms. Collins, from the Committee on Homeland Security and Government 
                    Affairs, submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 2145]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2145) to enhance 
security and protect against terrorist attacks at chemical 
facilities, having considered the same, reports favorably 
thereon as amended and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Summary.............................................1
  II. Background and Need for Legislation.............................2
 III. Discussion of Legislation......................................17
  IV. Legislative History............................................29
   V. Section-by-Section Analysis....................................34
  VI. Congressional Budget Office Cost Estimate......................47
 VII. Changes in Existing Law........................................54
VIII. Additional Views...............................................55

                         I. PURPOSE AND SUMMARY

    The purpose of S. 2145 is to enhance security and protect 
against terrorist attacks at chemical facilities. Among other 
things, S. 2145 gives the Department of Homeland Security (DHS) 
new authority to regulate the security of chemical facilities 
across the United States. The bill takes an integrated approach 
to security, comprehensively addressing vulnerabilities, 
threats, and consequences of a terrorist attack on a chemical 
facility.
    The bill gives DHS discretion to regulate the Nation's at-
risk chemical facilities. Under the bill, DHS would designate a 
facility for regulation only after a consideration of risk-
based factors such as the perceived threat to the facility; the 
potential extent and likelihood of death or injury, 
environmental harm, and economic loss that could result from a 
terrorist attack on the facility; the proximity of the facility 
to population centers; the nature and quantity of the chemical 
substance of concern at the facility; and the threat to 
economic and national security and critical infrastructure. The 
bill also requires DHS to place the designated facilities into 
risk-based tiers, so that the facilities of greatest concern 
from a security standpoint are required to put forward the 
greatest effort to reduce the risk of an attack on those 
facilities. All covered facilities must complete or update 
vulnerability assessments, security plans, and emergency 
response plans, and must submit these assessments and plans to 
DHS for approval. The Secretary must approve or disapprove all 
assessments and plans.
    The bill requires that vulnerability assessments and 
security plans be both risk-based and performance-based.
    The bill's risk-based approach requires security measures 
at a given facility to be proportional to the threat, 
vulnerabilities, and consequences of a potential terrorist 
attack at that facility. Therefore, the greater the risk of a 
potential terrorist attack on a particular facility, the 
greater the security measures required at that facility to 
protect against such an attack or to mitigate its consequences.
    Requiring performance-based standards means a facility 
governed by the bill can choose the most economical and 
effective means of addressing the vulnerabilities to, and the 
threat and consequence of, a terrorist attack on that 
particular facility. The Department is required to set 
performance standards for each risk-based tier.
    If DHS determines that a covered facility has not complied 
with the regulations or with an order issued under the bill, 
DHS may enforce those regulations and orders through a variety 
of mechanisms, including civil and criminal penalties, and 
issuing an order to a facility to cease operations.
    The Department is directed to create an office for chemical 
security and a regional and area structure for implementing the 
bill. The bill exempts protected information from disclosure 
under the Federal Freedom of Information Act (FOIA), and any 
State or local law providing for public access to information. 
The Secretary of Homeland Security is specifically authorized 
to regulate the handling and purchase of ammonium nitrate. The 
bill sets a uniform Federal standard for chemical security 
regulation, while preserving the right of State and local 
governments to adopt chemical security requirements more 
stringent than the Federal standard, provided that the state or 
local standard does not actually conflict with the Federal 
standard.

                II. BACKGROUND AND NEED FOR LEGISLATION

Background

    When al Qaeda terrorists hijacked commercial airplanes to 
attack American office buildings, it became clear that the 
United States' new enemy would target our infrastructure as 
well as seeking to inflict mass casualties. Indeed, few 
scenarios loom more ominously than terrorists leveraging a 
facility storing deadly chemicals against us. The potential 
devastation from a terrorist attack on a chemical facility was 
demonstrated on December 3, 1984, when poisonous cyanide gas 
was accidentally released from a pesticides plant in Bhopal, 
India, killing thousands within a few hours. A terror attack on 
such a facility would presumably be designed to take an even 
greater human toll.
    International and domestic terrorists have had U.S. 
chemical facilities in their cross-hairs for at least a 
decade.\1\ Terrorists have aimed not only to target facilities 
directly, but also to steal chemicals from facilities for 
nefarious purposes. One of the 1993 World Trade Center bombers, 
Nidal Ayyad, was employed as a chemical engineer and used 
company stationery to order the chemical ingredients to make 
the bomb. Testimony at the bombers' trial indicated that they 
had also stolen cyanide from a chemical facility and were 
planning to introduce it into the ventilation system of office 
buildings.\2\
---------------------------------------------------------------------------
    \1\ Congressional Research Service, ``Chemical Facility Security,'' 
August 2, 2006, at 4.
    \2\ Id.
---------------------------------------------------------------------------
    For years, the Federal government's law enforcement and 
intelligence community has been sounding the alarm regarding 
the terrorist threat to the chemical sector. The Department of 
Justice ``has been warning of the terrorist threat to such 
facilities for a number of years,'' and the Justice 
Department's ``risk assessment in 2000, conducted at the 
direction of the President and pursuant to the Clean Air Act, 
concluded in no uncertain terms that chemical facilities 
present attractive targets for terrorists.'' \3\ Justice 
``concluded that the risk of terrorists attempting in the 
foreseeable future to cause an industrial chemical release is 
both real and credible.'' \4\ In 2003, the Justice Department 
informed GAO about two attempts to attack chemical facilities 
in the late 1990s, including a 1998-99 episode where ``domestic 
terrorists plotted to use a destructive device against a 
facility outside of Sacramento which housed millions of gallons 
of propane.'' \5\ Moreover, in testimony from the Director of 
the Central Intelligence Agency on February 6, 2002, George 
Tenet warned of the potential for a terrorist attack on a 
chemical facility by al Qaeda.\6\
---------------------------------------------------------------------------
    \3\ Letter from Paul Corts, Assistant Attorney General for 
Administration, U.S. Department of Justice, to John Stephenson, 
Director, Natural Resources and Environment, GAO, Feb. 28, 2003, at 2.
    \4\ Id.
    \5\ Letter from Paul Corts, Assistant Attorney General for 
Administration, U.S. Department of Justice, to John Stephenson, 
Director, Natural Resources and Environment, GAO, Feb. 28, 2003, at 2.
    \6\ Id.; GAO, Homeland Security: Voluntary Initiatives Are Under 
Way at Chemical Facilities, But the Extent of Security Preparedness Is 
Unknown, Mar. 2003, GAO-03-439, at 9.
---------------------------------------------------------------------------
    Many security experts, including Richard Falkenrath, at a 
January 2005 Committee hearing, have identified chemical 
facilities as an especially vulnerable target. Falkenrath 
described terrorists' ability to exploit inadequately secured 
systems within the United States, as exemplified by the use of 
passenger aircraft on 9/11. Chemical facilities, Falkenrath 
said, were acutely vulnerable and uniquely dangerous--surpassed 
in danger only by threats such as nuclear devices and 
bioterrorism.\7\
---------------------------------------------------------------------------
    \7\ The Department of Homeland Security: The Road Ahead: Hearing 
Before the Senate Comm. on Homeland Security and Governmental Affairs, 
109th Cong. 29, 114-15 (2005) (testimony of Richard Falkenrath).
---------------------------------------------------------------------------
    Despite the abundance of evidence and warnings, the 
government has taken little action. In 2003, GAO reported that 
``Chemical facilities may be attractive targets for terrorists 
intent on causing massive damage.'' \8\ The EPA has cataloged 
some 15,000 facilities in the United States that manufacture, 
use or store hazardous chemicals under its Clean Air Act Risk 
Management Program (RMP). Using the EPA's RMP data, GAO noted 
that 123 chemical facilities in the United States have worst-
case scenarios in which a toxic release could potentially 
threaten at least 1,000,000 people if attacked.\9\ The 
Department of Homeland Security uses a different methodology, 
but still has identified 3,400 facilities that could affect 
more than 1,000 people if attacked.\10\ In creating its list of 
high risk chemical facilities, DHS started with the EPA's RMP 
list, and reduced it by eliminating facilities that were 
redundant, ``were no longer in business or were no longer RMP 
facilities * * * were the responsibility of another critical 
infrastructure sector,'' and agricultural facilities.\11\ 
According to DHS, of the 3,400 facilities on its list, 272 
facilities could potentially affect more than 50,000 
people.\12\ GAO reported that no Federal law explicitly 
required chemical facilities to ``assess vulnerabilities or 
take security actions to safeguard their facilities against 
terrorist attack,'' and that the Federal government ``has not 
comprehensively assessed the chemical industry's 
vulnerabilities to terrorist attacks.'' \13\
---------------------------------------------------------------------------
    \8\ GAO, Homeland Security: Voluntary Initiatives Are Under Way at 
Chemical Facilities, But the Extent of Security Preparedness is 
Unknown, Mar. 2003, GAO-03-439, at 3.
    \9\ Id. At 9-10 (citing EPA, Chemical Accident Risks in U.S. 
Industry--A Preliminary Analysis of Accident Risk Data from U.S. 
Hazardous Chemical Facilities, Sept. 25, 2000).
    \10\ GAO, Homeland Security: DHS Is Taking Steps to Enhance 
Security at Chemical Facilities, but Additional Authority Is Needed, 
Jan. 2006, GAO-06-150, at 22.
    \11\ Id. at 21.
    \12\ Id. at 22; Is the Federal Government Doing Enough to Secure 
Chemical Facilities and Is More Authority Needed: Hearing Before the 
Senate Comm. on Homeland Security and Governmental Affairs, 109th Cong. 
(2005) (testimony of Robert Stephan).
    \13\ Id. at 4.
---------------------------------------------------------------------------
    Also in 2003, GAO acknowledged the voluntary work of the 
chemical industry to enhance security at its facilities, 
particularly that of the American Chemistry Council (ACC), 
which requires members to conduct security vulnerability 
assessments and implement security improvements.\14\ Yet ACC 
members represent only a fraction of the chemical sector. GAO 
stated: ``Despite the voluntary industry initiatives to date, 
the extent of security preparedness across the chemical 
industry is unknown,'' and ``both the Secretary of Homeland 
Security and the Administrator of the EPA have stated that 
voluntary efforts alone are not sufficient to assure the public 
of the industry's preparedness.'' \15\ GAO therefore 
recommended in 2003 that DHS and EPA develop a comprehensive 
national chemical security strategy.\16\
---------------------------------------------------------------------------
    \14\ Id. at 5.
    \15\ Id. at 5, 23.
    \16\ Id. at 5.
---------------------------------------------------------------------------
    GAO repeated these conclusions the next year in testimony 
before a House subcommittee, stating, ``Experts agree that the 
Nation's chemical facilities may be attractive targets for 
terrorists intent on causing massive damage, but the extent of 
security preparedness since the events of September 11, 2001, 
is unknown.'' \17\ A year later, there was still no legal 
provision for Federal regulation of chemical sector security, 
and still no comprehensive Federal assessment of chemical 
facility security.\18\
---------------------------------------------------------------------------
    \17\ GAO, Homeland Security: Federal Action Needed to Address 
Security Challenges at Chemical Facilities, Feb. 23, 2004, GAO-04-482T, 
at 2 (testimony of John B. Stephenson, Director, Natural Resources and 
Environment, GAO, before the Subcommittee on National Security, 
Emerging Threats, and International Relations, Committee on Government 
Reform, U.S. House of Representatives).
    \18\ Id. at 3, 8-11.
---------------------------------------------------------------------------
    Also in 2004, the CBS News television magazine ``60 
Minutes'' focused on chemical security. The news show spoke 
with an investigative reporter at the Pittsburgh Tribune-
Review, who examined 60 plants in Chicago, Pittsburgh, 
Baltimore and Houston, and walked into them without difficulty. 
``We found gates unlocked or wide open, dilapidated fences, and 
unprotected tanks filled with deadly chemicals,'' the ``60 
Minutes'' reporter said of the facilities he examined in 
Chicago and California. Former Senator Warren Rudman, co-author 
of the blue ribbon task force on homeland security, told ``60 
Minutes'' that chemical security is an ``extraordinarily 
serious problem,'' and recommended that Congress authorize DHS 
to set and enforce chemical security standards.\19\
---------------------------------------------------------------------------
    \19\ Steve Kroft, ``Chemical Plant Insecurity; Concern Over 
Terrorist Access to U.S. Chemical Plants,'' 60 Minutes, Jun. 13, 2004 
(transcript).
---------------------------------------------------------------------------
    In January 2005, Richard Falkenrath of the Brookings 
Institution urged Congress to give DHS the authority to 
regulate the security of the Nation's at-risk chemical 
facilities, when he testified before the Committee's hearing, 
``The Department of Homeland Security: The Road Ahead.'' He 
cited that one acute and ``almost uniquely dangerous'' threat, 
``toxic-by-inhalation industrial chemicals.'' \20\ The impact 
of destroying certain chemical facilities, he said, could only 
be rivaled by an improvised nuclear device.\21\ He criticized 
the Federal government for having made ``no material reduction 
in the inherent vulnerability of hazardous chemical targets 
inside the United States,'' and recommended that ``doing so 
should be the highest critical infrastructure protection 
priority for the Department of Homeland Security in the next 
two years.'' \22\
---------------------------------------------------------------------------
    \20\ The Department of Homeland Security: The Road Ahead: Hearing 
Before the Senate Comm. on Homeland Security and Governmental Affairs, 
109th Cong. 29, 114-15 (2005) (testimony of Richard Falkenrath).
    \21\ Id.
    \22\ Id.
---------------------------------------------------------------------------
    The Department's ``National Strategy for Security of the 
Chemical Sector'' report, issued in May 2006, noted, ``Chemical 
facilities in the U.S. are ubiquitous and represent potentially 
attractive targets for a terrorist adversary. Because the 
potential for inflicting casualties and economic damage by 
attacking a chemical facility is relatively high, the U.S. will 
continually be concerned with Chemical Sector security.'' \23\
---------------------------------------------------------------------------
    \23\ National Strategy for Securing the Chemical Sector: A Report 
to the Committees on Appropriations of the United States Senate and 
House of Representatives, The U.S. Department of Homeland Security, 
April 2006, at 3. Although the cover of the report notes date of 
issuance as ``April 2006,'' the report was actually delivered to the 
Committees on Appropriations in May 2006.
---------------------------------------------------------------------------

Statutory authority

    Five years after the attacks of September 11, 2001, the 
Federal government lacks the statutory authority to 
comprehensively regulate the security of chemical facilities in 
the United States. Instead, the Federal government is 
authorized to regulate only segments of the chemical sector, 
creating a patchwork of regulation that has left far too many 
facilities completely unregulated. For example, DHS and the 
Department of Transportation have broad statutory authority to 
regulate the transportation of hazardous materials, but lack 
the authority to regulate their security when stored at most 
stationary facilities. Further, a small portion of chemical 
facilities are subject to two post-9/11 Federal statutes that 
specifically address the security concerns: the Maritime 
Transportation Security Act (MTSA), P.L. 107-295, and the 
Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002 (Bioterrorism Act), P.L. 107-188.
    Under MTSA, the U.S. Coast Guard--a component of DHS--
regulates chemical facilities that are located along navigable 
waterways and receive shipments via vessels. Under MTSA, the 
Coast Guard has reviewed 3,000 facility security plans and has 
jurisdiction over approximately 300 chemical and petrochemical 
facilities.\24\ Under the Bioterrorism Act, the EPA regulates 
security at community water systems. The Bioterrorism Act 
covers 8,400 of the largest water facilities in the United 
States. Both statutes require vulnerability assessments and the 
creation of or updating of emergency response plans. However, 
only MTSA requires facilities to submit security plans and 
install security measures; the Bioterrorism Act does not 
require a specific security plan or security measures. Further, 
MTSA provides for an ongoing security regime; the Bioterrorism 
Act requires that the assessments and plans be maintained for 
five years, but gives no clear guidance after that.
---------------------------------------------------------------------------
    \24\ Chemical Facility Security: What is the Appropriate Federal 
Role?: Hearing Before the Senate Comm. On Homeland Security and 
Governmental Affairs, 109th Cong. 16, 53 (2005) (testimony of Rear 
Admiral Craig E. Bone, Director of Port Security, Marine Safety, 
Security, and Environmental Protection Directorate, U.S. Coast Guard, 
and Bob Slaughter, President, National Petrochemical and Refiners 
Association).
---------------------------------------------------------------------------
    The Homeland Security Act of 2002 (HSA), P.L. 107-296, also 
provides some authority with respect to the Department's 
critical infrastructure protection mission, but the HSA does 
not specifically address chemical facility security. While it 
authorizes DHS to analyze vulnerabilities and to recommend 
measures to protect the critical infrastructure of the United 
States, of which the chemical sector is a part, it does not 
authorize DHS to mandate the submission of plans or the 
installation of any security measures. At the moment, DHS has 
no power to require these facilities to implement security 
enhancements.
    While the chemical industry has made some notable voluntary 
efforts to enhance security at chemical facilities, there is no 
comprehensive architecture of security across the chemical 
sector. As noted above, the Department itself, in testimony 
before the Committee given by Assistant Secretary Bob Stephan, 
noted that 20 percent of the 3,400 facilities deemed by the 
Department to be high risk are not participating in any kind of 
measurable voluntary code.\25\
---------------------------------------------------------------------------
    \25\ Is the Federal Government Doing Enough to Secure Chemical 
Facilities and Is More Authority Needed: Hearing Before the Senate 
Comm. On Homeland Security and Governmental Affairs, 109th Cong. 
(2005)(statement of Robert Stephan).
---------------------------------------------------------------------------
    As early as 2002, the Administration called for legislation 
to regulate the chemical sector.\26\ In 2003 and again in 2004, 
the President publicly stated his support for chemical security 
legislation, stating ``we're working with Congress on new 
legislation that establishes uniform standards for securing 
chemical sites, and gives DHS the power to enforce those 
standards.'' \27\ Robert Stephan, then Acting Under Secretary 
for Information Analysis and Infrastructure Protection, 
testified before the Committee in June 2005, saying Secretary 
Chertoff had concluded new regulatory authority was needed to 
secure the Nation's chemical facilities.\28\ On March 21, 2006, 
Secretary Chertoff gave a speech on chemical security at a 
George Washington University-American Chemistry Council-
sponsored event, asking for legislation that would grant DHS 
the authority to require security at chemical facilities to be 
enacted this year. Furthermore, the Department issued a 
``National Strategy for Security of the Chemical Sector'' in 
May, noting, ``legislation that would provide the Department of 
Homeland Security with overarching regulatory authority for 
Chemical Sector security should be enacted.'' \29\ The 
Department stated in the National Strategy that ``the lack of 
regulatory authority regarding chemical facility security is a 
serious impediment to the achievement of its vision and goals 
for the sector. Without regulatory authority, the Federal 
government will largely be forced to rely on voluntary 
performance by sector security partners, and will be extremely 
limited in its ability to ensure that facilities are meeting 
minimum performance standards commensurate with their level or 
risk.'' \30\ The President's FY07 budget proposal for the 
Department included a $10 million request for the creation of a 
chemical security office which would establish standards and 
ensure strong safeguards are in place to reduce the 
vulnerability of the chemical industry critical infrastructure 
from acts of terrorism.
---------------------------------------------------------------------------
    \26\ Thomas J. Ridge & Christine Todd Whitman, A Security 
Requirement, The Washington Post, October 6, 2002, at B6.
    \27\ ``President Marks Homeland Security's Accomplishments at Year 
One,'' Washington, DC, March 2, 2004. The President's expression of 
support for legislation was worded virtually the same and occurred 
during an address at the FBI Academy in Quantico, Virginia, on 
September 10, 2003.
    \28\ Is the Federal Government Doing Enough to Secure Chemical 
Facilities and Is More Authority Needed: Hearing Before the Senate 
Comm. On Homeland Security and Governmental Affairs, 109th Cong. (2005) 
(statement of Robert Stephan).
    \29\ National Strategy for Securing the Chemical Sector: A Report 
to the Committees on Appropriations of the United States Senate and 
House of Representatives, The U.S. Department of Homeland Security, 
April 2006, at 8.
    \30\ National Strategy for Securing the Chemical Sector: A Report 
to the Committees on Appropriations of the United States Senate and 
House of Representatives, The U.S. Department of Homeland Security, 
April 2006, at 8-9.
---------------------------------------------------------------------------

Hearings

    Four hearings held by this Committee showcased not only the 
threat to the chemical sector, but also the need for Federal 
legislation granting DHS the authority to regulate the security 
of the nation's at-risk chemical facilities.
    On April 27, 2005, Chairman Collins convened the first of 
the four hearings. At that time, there had been no national 
strategy for chemical facilities. This hearing, ``Chemical 
Attack on America: How Vulnerable Are We?,'' highlighted the 
vulnerability of thousands of largely unprotected chemical 
facilities nationwide. The series of hearings would examine the 
complex issue of chemical facility security, and determine 
whether the risk of a terrorist attack warrants a legislative 
solution.\31\ The Committee noted that chemical security has 
not received the attention it deserves, given the 
vulnerabilities involved and called on the Administration to 
work with it on a bipartisan basis in order to help pass 
effective legislation this session of Congress.\32\
---------------------------------------------------------------------------
    \31\ Chemical Attack on America: How Vulnerable Are We?: Hearing 
Before the Senate Comm. on Homeland Security and Governmental Affairs, 
109th Cong. 1 (2005) (statement of Sen. Susan M. Collins).
    \32\ Id. at 4 (statement of Sen. Joseph I. Lieberman).
---------------------------------------------------------------------------
    Witnesses at the hearing were then-Senator Jon Corzine, 
Carolyn Merritt of the U.S. Chemical Safety and Hazard 
Investigation Board (CSB), John Stephenson of the U.S. 
Government Accountability Office, Richard Falkenrath of the 
Brookings Institution and Stephen Flynn of the Council on 
Foreign Relations.
    The consensus among the witnesses was that the chemical 
sector was vulnerable to a deadly attack. Security experts 
Flynn and Falkenrath, detailed the potential consequences of an 
attack on a chemical facility located in or near a high-density 
population center and storing massive quantities of extremely 
hazardous chemicals. Flynn described these facilities as the 
military equivalent of a poorly guarded weapon of mass 
destruction.\33\ Falkenrath noted in his written testimony, 
``Of all the various remaining civilian vulnerabilities in 
America today, one stands alone as uniquely deadly, pervasive 
and susceptible to terrorist attack: toxic-inhalation-hazard 
industrial chemicals.'' \34\ The GAO's John Stephenson echoed 
the remarks of Flynn and Falkenrath, stating that experts agree 
chemical facilities are an attractive target for 
terrorists.\35\
---------------------------------------------------------------------------
    \33\ Id. at. 22 (testimony of Stephen E. Flynn).
    \34\ Id. at 83 (written testimony of Richard Falkenrath).
    \35\ Id. at 62 (written testimony of John Stephenson).
---------------------------------------------------------------------------
    Despite the clear danger presented by certain chemical 
facilities, the CSB's Carolyn Merritt testified that too many 
high-risk facilities continue to repeat the mistakes of Bhopal, 
leaving their plants vulnerable. She testified about her 
investigations of accidental chemical releases across the 
Nation revealed serious gaps in the preparations for major 
chemical releases by companies, emergency responders, 
government authorities and the public. She testified that the 
CSB regularly finds deficiencies similar to those at Bhopal at 
major accidental incidents in this country, including failure 
to prepare the public for chemical emergencies. It was the lack 
of preparation that made the Bhopal accident particularly 
devastating, adding to the casualties--something she said can 
be mitigated with better preparedness and response efforts.\36\
---------------------------------------------------------------------------
    \36\ Id. at 14-16, 25-26 (testimony of Carolyn Merritt).
---------------------------------------------------------------------------
    The witnesses also found that neither the chemical industry 
nor the Federal government had done enough to secure the 
potentially most deadly facilities. Stephenson stated that 
despite efforts by DHS to assess facility vulnerabilities, no 
comprehensive security assessment has been conducted 
nationwide, and that there are no Federal requirements that 
comprehensively address security at the Nation's chemical 
facilities.\37\ Testimony indicated the Federal government had 
not done enough to reduce the vulnerability of chemical 
facilities, nor did it have the authority to do so.\38\
---------------------------------------------------------------------------
    \37\ Id. at 63-64 (written testimony of John Stephenson).
    \38\ Id. at 48 (written testimony of Sen. Jon Corzine).
---------------------------------------------------------------------------
    The witnesses agreed that Congress should authorize the 
Federal government to regulate the security of the Nation's at-
risk chemical facilities.\39\ Falkenrath stated that a 
voluntary regime will not succeed: ``It is a fallacy to think 
that profit-maximizing corporations engaged in a trade as 
inherently dangerous as the manufacture and shipment of * * * 
chemicals will ever voluntarily provide a level of security 
that is appropriate given the larger external risk to society 
as a whole.'' \40\ Stephenson recommended that, even in the 
absence of legislation, the Federal government should develop a 
national strategy for chemical security.\41\
---------------------------------------------------------------------------
    \39\ Id. at 26-29 (testimony of Falkenrath, Flynn, Merritt, 
Stephenson).
    \40\ Id. At 87 (written testimony of Falkenrath).
    \41\ Id. at 64 (written testimony of John Stephenson).
---------------------------------------------------------------------------
    Flynn stated that decisions about adequate security require 
threat information, which is typically controlled by the 
government. Without intelligence about threats, chemical 
companies are only making their best guess as to how much 
security to invest in. But the government, he added, has yet to 
develop the underlying intelligence necessary for facilities to 
assess their security on the basis of threat information alone, 
forcing decisionmakers to assess and enhance security on the 
basis of potential consequences of an attack on a facility.\42\
---------------------------------------------------------------------------
    \42\ Id. at 35 (testimony of Flynn).
---------------------------------------------------------------------------
    Falkenrath testified that toxic-by-inhalation chemicals, 
such as chlorine and ammonia, are uniquely deadly, pervasive 
and susceptible to terrorist attack. He felt that there has 
been little progress made since 9/11 to secure chemical 
facilities. He outlined a regulatory approach that includes six 
parts: (1) a comprehensive inventory of all facilities; (2) 
mandatory, graduated Federal standards for security; (3) a 
certification procedure; (4) a verification procedure; (5) a 
compliance procedure; and (6) an appeals procedure.\43\ 
Falkenrath recommended that legislation include strong 
enforcement mechanisms, such as civil and criminal penalties, 
including the possibility of putting a facility out of 
business.\44\ He also stressed the importance of placing the 
facilities into different risk-based tiers, placing greater 
requirements on the facilities assigned to the tiers of 
greatest risk.\45\ Falkenrath explained that the tier-system 
would provide an incentive for facilities to enhance their 
security, so that they could fall to a lower risk tier and 
therefore be subject to fewer Federal mandates.\46\
---------------------------------------------------------------------------
    \43\ Id. at 20-21 (testimony of Falkenrath).
    \44\ Id. at 33 (testimony of Falkenrath).
    \45\ Id. at 34 (testimony of Falkenrath).
    \46\ Id. at 34 (testimony of Falkenrath).
---------------------------------------------------------------------------
    Finally, witnesses discussed the viability of whether the 
government should require or encourage facilities to use 
inherently safer technologies to help enhance security. 
Falkenrath and Flynn said the government should provide 
facilities with incentives to adopt security measures, 
including the substitution of a safer chemical for a deadly 
chemical.\47\ But Falkenrath counseled against authorizing the 
government to order facilities to switch to a safer 
chemical.\48\ Stephenson noted that using inherently safer 
technologies (IST) would require ``extreme investments'' for 
certain facilities,\49\ and Flynn said ``there is certainly 
legitimately a call on some Federal resources to help with this 
problem.'' \50\
---------------------------------------------------------------------------
    \47\ Id. at 30-31 (testimony of Falkenrath and Flynn).
    \48\ Id. at 30 (testimony of Falkenrath).
    \49\ Id. at 31 (testimony of Stephenson).
    \50\ Id. at 32 (testimony of Flynn).
---------------------------------------------------------------------------
    On June 15, 2005, the Committee held the second of four 
hearings on chemical security. This hearing was entitled, ``Is 
the Federal Government Doing Enough to Secure Chemical 
Facilities and Is More Authority Needed?'' This hearing looked 
directly at the actions and views of the Federal government, 
specifically DHS and EPA. The Committee heard from two 
witnesses: Robert B. Stephan, then-Acting Under Secretary for 
Information Analysis and Infrastructure Protection, U.S. 
Department of Homeland Security, and Thomas P. Dunne, Deputy 
Assistant Administrator, Office of Solid Waste and Emergency 
Response, U.S. Environmental Protection Agency.
    In December 2003, DHS replaced the EPA as the Federal 
government's lead agency for chemical security. The 
Administration's ``National Strategy for Homeland Security'' 
(July 2002) designated EPA as the lead agency responsible for 
the security of the chemical sector. Later that year, Congress 
created the Department of Homeland Security (DHS) and a 
subsequent White House directive--Homeland Security 
Presidential Directive 7 (HSPD-7)--designated DHS as the 
Federal government's lead agency for chemical sector security, 
in December 2003.
    In his written testimony, then-Acting Under Secretary 
Stephan said that ``Secretary Chertoff has concluded that from 
the regulatory perspective, the existing patchwork of 
authorities does not permit us to regulate industry 
effectively,'' and told the Committee that DHS will ``look 
forward to working with you in the coming weeks on the 
particulars of proposed legislation.'' \51\ Stephan testified 
before the Committee that ``it has become clear that the 
entirely voluntary efforts of these companies alone will not 
sufficiently address security for the entire chemical sector.'' 
\52\ In a response to a written question, Dunne wrote, ``EPA 
has no evidence to support the conclusion that market forces 
alone are sufficient to ensure adequate safety or security at 
hazardous chemical facilities * * * Therefore, the Agency 
believes that Federal safety and security requirements are 
necessary to ensure high-risk chemical facilities implement 
appropriate safety and security measures.'' \53\
---------------------------------------------------------------------------
    \51\ Id. at 36 (written statement of Robert Stephan).
    \52\ Id. at 7 (statement of Stephan).
    \53\ Id. at 63 (response of Dunne to questions for the record).
---------------------------------------------------------------------------
    Although Stephan and Dunne did not indicate that the 
Administration would send the Committee a proposal,\54\ Stephan 
advised that the legislation should adhere to three core 
principles. First, any Federal regulatory system should 
recognize that not all facilities present the same level of 
risk, and that most scrutiny should be focused on those 
facilities, which if attacked, ``could endanger the greatest 
number of American lives, have the greatest impact on the 
American economy, or present other significant risks.'' \55\ 
Second, chemical security regulations should be based on 
enforceable performance standards.\56\ Third, there should be a 
recognition of the progress many responsible companies have 
made to date in the area of chemical security.\57\ Stephan was 
unable to offer specifics about the Administration's desired 
legislative framework, but said that MTSA is a framework worth 
consideration because ``that particular way of doing business 
has achieved a certain level of success,'' while noting that 
``we have to * * * see if there are any deltas between the MTSA 
approach and whatever the overall more encompassing approach 
would be.'' \58\
---------------------------------------------------------------------------
    \54\ Id. at 15 (testimony of Stephan and Dunne).
    \55\ Id. at 5 (testimony of Stephan).
    \56\ Id.
    \57\ Id. at 6 (testimony of Stephan).
    \58\ Id. at 29 (testimony of Stephan).
---------------------------------------------------------------------------
    Stephan and Dunne agreed that DHS would be the appropriate 
lead agency for chemical security, consistent with HSPD-7.\59\ 
In support, Stephan reported on the Department's $13.6 million 
allocation to state and local governments for Buffer Zone 
Protection Plans, some of which would be dedicated to helping 
identify and recommend security measures, and coordinate local 
law enforcement for the area surrounding a chemical 
facility.\60\ He also described the 38 Site Assistant Visits 
that DHS has undertaken at some of the ``highest-consequence'' 
facilities, and the work of the Coast Guard regulating the 
security of the approximately 300 chemical sites governed by 
the MTSA regulations.\61\ He cited the Department's work with 
the private sector through the Chemical Sector Coordinating 
Council and the security guidance documents the Department has 
shared with the private sector.\62\ Finally, Stephan discussed 
the Department's tool for analyzing risk in the chemical sector 
and at individual facilities--the Risk Analysis and Management 
for Critical Asset Protection (RAMCAP).\63\ ``RAMCAP (and other 
risk methodologies) enables the Office of Infrastructure 
Protection to compare the risk of critical infrastructure 
assets within the chemical sector, thereby enabling DHS to 
prioritize * * * protective efforts and effective use of 
available resources,'' \64\ Stephan testified.
---------------------------------------------------------------------------
    \59\ Id. at 37, 58 (testimony of Stephan and Dunne).
    \60\ Id. at 38 (testimony of Stephan).
    \61\ Id. at 38-39 (testimony of Stephan).
    \62\ Id. at 40-41 (testimony of Stephan).
    \63\ Id. at 42 (testimony of Stephan).
    \64\ Id. at 51 (testimony of Stephan).
---------------------------------------------------------------------------
    The Committee also explored what role the EPA should play 
in chemical security. Dunne testified that the EPA supports DHS 
by providing information and analytical support as needed, and 
that the EPA would continue in a supporting role. Dunne added 
that only one department or agency should be in charge and 
Stephan agreed.
    Stephan and Dunne also provided data on the number of 
chemical facilities deemed to pose the greatest risk to the 
country. According to Stephan, DHS considers 3,400 facilities 
to be ``high-risk,'' with 272 facilities in the top tiers.\65\ 
Stephan said DHS arrived at 3,400 facilities by starting with 
the EPA's Risk Management Program (RMP) program list of 
approximately 15,000 facilities and then removing facilities 
that appeared more than once on the list, facilities that were 
no longer RMP-applicable, and facilities that DHS believed are 
under somebody else's regulatory framework.\66\ Responding to a 
written question, Stephan said that the 3,400 facilities would, 
if befallen to a catastrophic scenario, ``adversely affect'' at 
least 1,000 people.\67\
---------------------------------------------------------------------------
    \65\ Id. at 10 (testimony of Stephan).
    \66\ Id. at 26 (testimony of Stephan).
    \67\ Id. at 50, 52 (testimony of Stephan).
---------------------------------------------------------------------------
    Notably, Stephan testified that 20 percent of the 3,400 
facilities deemed by DHS to be high-risk because they would 
adversely affect at least 1,000 people are not participating in 
any kind of measurable voluntary code.\68\ Dunne testified that 
out of the 15,000 RMP facilities, only about seven to eight 
percent of them adhere to voluntary codes, amounting to about 
2,000 facilities.\69\ Dunne did not say whether those 2,000 
facilities represented some part of the high-risk portion of 
the 15,000 RMP facilities.
---------------------------------------------------------------------------
    \68\ Id. at 13-14, 53 (testimony of Stephan).
    \69\ Id. at 27 (testimony of Dunne).
---------------------------------------------------------------------------
    At the same hearing, the issue of whether local communities 
were prepared for terrorist attacks on nearby chemical 
facilities was explored, as a follow up to the April 27, 2005 
testimony from Carolyn Merritt of the CSB. Dunne explained that 
there are 3,900 Local Emergency Planning Committees (LEPCs) 
established by the Emergency Planning and Community Right-to-
Know Act, and that according to a 1999 survey, about 59 to 60 
percent of them are active.\70\ ``I am sure we are not well 
prepared across the board all the time,'' Dunne said.\71\
---------------------------------------------------------------------------
    \70\ Id. at 28 (testimony of Dunne).
    \71\ Id. at 28 (testimony of Dunne).
---------------------------------------------------------------------------
    On July 13, 2005, the Committee held the third of four 
hearings on chemical security. The hearing was entitled, 
``Chemical Facility Security: What Is the Appropriate Federal 
Role?'' The first panel featured witnesses from the chemical 
industry, including Martin J. Durbin, Managing Director, 
Security and Operations, American Chemistry Council (ACC); 
Matthew Barmasse, Environmental Health Safety and Quality 
Director, ISOCHEM, Inc., Synthetic Organic Chemical 
Manufacturers Association (SOCMA); and Bob Slaughter, 
President, National Petrochemical and Refiners Association 
(NPRA). Testifying on the second panel were the Honorable 
Gerald V. Poje, Former Board Member, U.S. Chemical Safety and 
Hazard Investigation Board; Glenn Erwin, Project Director, 
Triangle of Prevention Program, United Steelworkers 
International Union; and Carol L. Andress, Economic Development 
Specialist, Environmental Defense.
    The testimony included views from stakeholders in the 
chemical sector, including industry, environmental groups, 
labor, and public advocacy groups. These witnesses discussed 
the need for mandatory measures to complement industry's 
voluntary efforts.\72\
---------------------------------------------------------------------------
    \72\ Chemical Facility Security: What Is the Appropriate Federal 
Role?: Hearing Before the Senate Comm. on Homeland Security and 
Governmental Affairs, 109th Cong. 2 (2005) (statement of Senator Susan 
M. Collins).
---------------------------------------------------------------------------
    In his testimony, Marty Durbin, representing the ACC, 
advocated for chemical security legislation \73\ and the other 
industry witnesses representing SOCMA and NPRA did not oppose 
legislation.\74\ Like Stephan, these industry witnesses 
advocated a risk-based, performance-based approach to chemical 
security regulation.\75\ Durbin also testified that DHS should 
have ``the legal authority to police compliance with its 
standards and to take enforcement action if necessary,'' and to 
protect information about the security assessments and plans 
from public disclosure.\76\ Finally, each of the industry 
witnesses asked that the legislation include Federal preemption 
authority; Durbin said, ``a national program, not an incomplete 
patchwork of potentially conflicting State efforts, is 
necessary.'' \77\
---------------------------------------------------------------------------
    \73\ Id. at 8 (testimony of Durbin).
    \74\ Id. at 15 (testimony of Barmasse); Id. at 17-18 (testimony of 
Slaughter).
    \75\ Id. at 10, 15, 17-18 (testimony of Durbin, Barmasse, and 
Slaughter)
    \76\ Id. at 11 (testimony of Durbin).
    \77\ Id. at 11, 15, 18, 25 ((testimony of Durbin, Barmasse, and 
Slaughter).
---------------------------------------------------------------------------
    The industry witnesses added to the testimony from Stephan, 
Stephenson, and Falkenrath at the two previous hearings, saying 
that Federal legislation should give credit to the investments 
that certain facilities have already made in the enhancement of 
their security, similar to the credit given to facilities under 
MTSA.\78\ Durbin, for example, detailed the ACC's Responsible 
Care Security Code, which all ACC members must follow. Under 
the Responsible Care Security Code, facilities must develop 
vulnerability assessments, using methodologies developed by the 
Sandia National Laboratories and the Center for Chemical 
Process Safety; implement security measures to address the 
vulnerabilities identified in the assessments; and submit to a 
third-party for an audit.\79\
---------------------------------------------------------------------------
    \78\ Id. at 11, 15, 18 (testimony of Durbin, Barmasse, and 
Slaughter).
    \79\ Id. at 9 (testimony of Durbin).
---------------------------------------------------------------------------
    Industry witnesses supported the private sector's 
development of inherently safer technologies (IST), but 
expressed concerns about a regulatory framework that would 
authorize the government to review, approve, or disapprove a 
facility's decision of whether or not to use IST.\80\ First, 
industry witnesses pointed out that some facilities are using 
IST on their own (while acknowledging that many are not).\81\ 
Second, industry witnesses argue that, in some instances, using 
IST trades one risk against the potential of another--for 
example, reducing hazardous chemicals at a facility could mean 
their transfer to another location, thereby shifting the risk 
to that other location.\82\ Third, industry witnesses warned 
about the complexity of chemical industry processes and the 
absence of a ``standard process,'' thereby precluding the 
possibility of a one-size-fits-all prescription for IST.\83\ 
Fourth, some said DHS lacks the expertise to understand how to 
regulate chemical processes.\84\ Fifth, industry witnesses 
echoed Stephan's testimony at the June 15, 2005 hearing that 
the adoption of IST could require massive capital expenditures 
for certain facilities, particularly manufacturing facilities.
---------------------------------------------------------------------------
    \80\ Id. at 11-12, 14-15, 23-24 (testimony of Durbin, Slaughter, 
and Barmasse).
    \81\ Id. at 11 (testimony of Durbin, Barmasse, and Slaughter).
    \82\ Id. at 11, 14 (testimony of Durbin, Barmasse).
    \83\ Id. at 12 (testimony of Durbin).
    \84\ Id. at 27 (testimony of Barmasse).
---------------------------------------------------------------------------
    The industry witnesses on the first panel praised MTSA as a 
successful model on which chemical security regulation could be 
based. One industry witness, Slaughter of NPRA, asked that the 
legislation be modeled on MTSA because of its performance-based 
standards, its emphasis on self-assessments, its enforcement 
mechanisms, and the NPRA membership's praise of their 
relationship with the Coast Guard.\85\ When asked if he would 
support giving the Department similar shut-down authority 
already granted to the Coast Guard under MTSA, Mr. Slaughter 
responded that ``obviously, any regulatory entity * * * has got 
to have ultimate authority to enforce its requirements.'' \86\
---------------------------------------------------------------------------
    \85\ Id. at 17-19 (testimony of Slaughter).
    \86\ Id. at 24 (testimony of Slaughter).
---------------------------------------------------------------------------
    Witnesses on the second panel stressed the need for 
examining safer processes and chemicals as an integral part of 
chemical site security, as well as the importance of strong 
emergency response capabilities. Poje testified that chemical 
facilities in the United States have many safety and security 
deficiencies that could jeopardize large populations living 
nearby. Poje stressed the interconnection between safety and 
security, saying ``I urge the Committee to see the development 
and maintenance of competent management systems for safety as 
essential underpinnings to enhanced security.'' \87\ Poje said 
that an effective security program at DHS must: include 
coordination with other agencies that regulate aspects of the 
chemical sector; require sound ``management systems'' for 
security; and include strong planning and training for 
emergency response.\88\
---------------------------------------------------------------------------
    \87\ Id. at 32 (testimony of Poje).
    \88\ Id. at 32-33 (testimony of Poje).
---------------------------------------------------------------------------
    Andress testified that numerous water and wastewater 
facilities and refineries have already dramatically reduced 
their risk of a catastrophic accident or terrorist attack by 
switching to safer chemicals and processes.\89\ Andress said 
that because other similarly situated facilities have failed to 
make such changes, effective chemical security legislation 
should require these options where feasible.\90\ Erwin also 
advocated substituting less toxic materials where possible to 
reduce the potential risk to human life or storing smaller 
volumes of these chemicals, and said a mandatory review of such 
options should be part of a chemical security program. Erwin 
called for Federal funding to research and promote such 
inherently safer systems, as well as for training employees and 
first responders about safety and security issues.\91\
---------------------------------------------------------------------------
    \89\ Id. at 37-38 (testimony of Andress).
    \90\ Id. at 38 (testimony of Andress).
    \91\ Id. at 149 (written statement of Erwin)
---------------------------------------------------------------------------
    Erwin warned that chemical and petrochemical facilities 
pose a likely target because it is ``too easy'' to gain access 
to the facilities, and the potential economic disruption of an 
attack is so great.\92\ Erwin's testimony drew on his 
experience working in the industry, and on the results of a 
2004 employee survey at 125 facilities using hazardous 
chemicals. The survey found that security and safety measures 
at the facilities were dangerously lacking.\93\ Erwin called 
for greater perimeter security for chemical facilities as well 
as more careful access to hazardous areas within the plant.
---------------------------------------------------------------------------
    \92\ Id. at 33 (testimony of Erwin).
    \93\ ``PACE International Union Survey: Workplace Incident 
Prevention and Response Since 9/11'', October 2004, by Paper, Allied-
Industrial, Chemical and Energy Workers International Union (PACE).
---------------------------------------------------------------------------
    Andress also called for requirements that facilities 
involve workers and first responders in security planning and 
bolster emergency planning efforts.\94\ She testified that 
Congress should direct DHS to develop rules to prohibit the 
siting of new high risk chemical facilities in densely 
populated areas.\95\
---------------------------------------------------------------------------
    \94\ Chemical Facility Security: What Is the Appropriate Federal 
Role?: Hearing Before the Senate Comm. on Homeland Security and 
Governmental Affairs, 109th Cong. 2 (2005) (written testimony of 
Andress).
    \95\ Id.
---------------------------------------------------------------------------
    On July 27, 2005, the Committee held the fourth in its 
series of hearings. The hearing, ``Chemical Facility Security: 
What is the Appropriate Federal Role? (Part II)'' included a 
two-fold theme. First, the hearing was a continuation of the 
July 13 hearing, which focused on the views of various 
stakeholders in the chemical sector and their opinions on the 
need for Federal legislation and what that legislation should 
look like. Second, this hearing explored in more detail some of 
the issues that have been raised at the previous three 
hearings. This hearing included testimony from the Coast Guard 
on its implementation of MTSA as well as testimony from three 
company security chiefs, representing three different segments 
of the chemical sector. The first panel consisted of Rear 
Admiral Craig Bone, the Director of Port Security in the 
Maritime Safety, Security and Environment Protection 
Directorate at the U.S. Coast Guard Headquarters. The second 
panel consisted of Beth Turner, Director of Global Operations 
Security at DuPont; Jim Schellhorn, Director of Environmental, 
Health and Safety at Terra Industries, Inc., who also 
represented The Fertilizer Institute; John Chamberlain, 
Corporate Security Manager, Asset Protection for Shell, who 
also represented the American Petroleum Institute, and; Chief 
Robert Full, Fire Marshall and EMA Coordinator for the 
Allegheny County Department of Emergency Services in 
Pennsylvania.
    Previous hearing testimony from stakeholders and 
representatives of the Department of Homeland Security 
indicated that the framework under MTSA would be a good model 
in drafting a chemical security bill. During this hearing, Beth 
Turner of DuPont testified that the MTSA has proven ``to be a 
very effective security regulation'' and recommended it as a 
``model for regulating the highest priority facilities.'' \96\ 
Admiral Bone's testimony focused on the Coast Guard's role in 
securing chemical facilities on the waterways of the United 
States under the Maritime Transportation Security Act (MTSA). 
Adm. Bone testified that approximately 300 chemical facilities 
had facility security plans reviewed and approved under 
MTSA.\97\ The Coast Guard also approved an alternative security 
program for the American Chemistry Council, and approximately 
50 chemical facility operators had chosen to use the American 
Chemistry Council's alternative security program.\98\
---------------------------------------------------------------------------
    \96\ Id. at 66 (testimony of Turner).
    \97\ Id. at 53 (testimony of Bone).
    \98\ Id. at 53 (testimony of Bone).
---------------------------------------------------------------------------
    Admiral Bone testified that since July 1, 2004, the Coast 
Guard had taken ``control actions,'' which included 
restrictions and suspension of operations against 45 
facilities.\99\ The Coast Guard exercised its shut-down 
authority in 32 of those cases, and of these facilities, 3 were 
chemical facilities.\100\ Adm. Bone believed that it is 
important to give DHS shut-down authority because if one has a 
significant violation of security, such as access--illegal 
access or breach of the facility--then the security is 
compromised, as is the well-being of the public.\101\ He 
described the area maritime security committees, led by the 
local Coast Guard captain of the port, which have identified 
their port's specific vulnerabilities and created a plan to 
address those vulnerabilities (area security plan). These area 
plans focus on critical port operations and infrastructure, 
including the chemical facilities regulated under MTSA, as well 
as other facilities located in close proximity to navigable 
waterways.
---------------------------------------------------------------------------
    \99\ Id. at 53 (testimony of Bone).
    \100\ Id. at 56 (testimony of Bone).
    \101\ Id. at 56 (testimony of Bone).
---------------------------------------------------------------------------
    In discussing lessons learned from implementing MTSA that 
would be helpful in crafting a chemical security regime, Adm. 
Bone emphasized that in creating regulations, the regulator 
must engage with the industry component that will be regulated, 
and this relationship must continue as the process moves 
forward, because the industry has expertise that the regulator 
could utilize.\102\ Bone also testified that there has to be 
compliance and a mandated set of requirements. He also 
emphasized that the plans must be exercised and include not 
just the people in the facilities, but the emergency response 
component as well. In fact, Adm. Bone testified that it would 
be a ``big mistake'' if the emergency responders were not 
included in the drills and exercises.\103\
---------------------------------------------------------------------------
    \102\ Id. at 57-58 (testimony of Bone).
    \103\ Id. at 58 (testimony of Bone).
---------------------------------------------------------------------------
    Turner and Schellhorn testified that DuPont and the 
Fertilizer Institute respectively support chemical security 
legislation that incorporates several elements, including 
giving DHS the regulatory authority that is risk-based, 
flexible, focused on security and uses MTSA as a model.\104\ 
Turner and Schellhorn agreed that legislation should recognize 
the voluntary security efforts and investments already made to 
date by industry.\105\ They also favored a tiered approach to 
security regulations.\106\ In determining what facilities 
should be covered by Federal regulation, Turner noted that the 
ability to create an off-site consequence is a ``very important 
discriminator.'' Schellhorn also urged that Federal legislation 
preempt any State or local government's laws on the 
subject.\107\
---------------------------------------------------------------------------
    \104\ Id. at 66, 69 (testimony of Turner and Schellhorn).
    \105\ Id. at 66, 69-70 (testimony of Turner and Schellhorn).
    \106\ Id. at 66, 69-70 (testimony of Turner and Schellhorn).
    \107\ Id. at 70 (testimony of Schellhorn).
---------------------------------------------------------------------------
    Turner testified that inherently safer technology (IST) 
``has an important role to play in security,'' but she said it 
is a safety matter, not a security issue, and therefore should 
not be mandated in a chemical security context.\108\ Schellhorn 
testified that ``IST is not a security measure,'' but rather a 
safety concept that he feared ``could lead to the ban or 
restricted use of basic nitrogen fertilizers.'' \109\ 
Chamberlain testified that he is ``strongly oppose[d] to any 
environmental mandates for inherently safer technology pursued 
under the guise of security.'' \110\
---------------------------------------------------------------------------
    \108\ Id. at 66 (testimony of Turner).
    \109\ Id. at 69 (testimony of Schellhorn).
    \110\ Id. at 72 (testimony of Chamberlain).
---------------------------------------------------------------------------
    John Chamberlain of Shell Oil Company testified that a 
large number of security personnel in the oil and gas industry 
have the security clearances necessary for classified briefings 
with the Federal intelligence community.\111\ Chamberlain also 
emphasized the importance of information protection in any 
security legislation; in addition to a FOIA exemption, he would 
want any security information required under a Federal chemical 
security law to be exempt from civil discovery.\112\ Moreover, 
he would like MTSA-covered facilities to be exempt from any 
Federal chemical security law.\113\
---------------------------------------------------------------------------
    \111\ Id. at 71 (testimony of Chamberlain).
    \112\ Id. at 73 (testimony of Chamberlain).
    \113\ Id. at 73 (testimony of Chamberlain).
---------------------------------------------------------------------------
    Chief Full testified that he supports Federal chemical 
security legislation. As a critical component of this 
legislation, he emphasized the need for strong emergency 
planning and relationships between the chemical facilities and 
their local first responders. Good emergency planning can help 
to minimize the consequences of any terrorist event or natural 
disaster. He noted that ``it's not the time or place to 
exchange business cards during the time of an emergency.'' 
\114\ He also discussed the need to improve intelligence 
sharing between the Federal government with State and locals, 
though he noted information sharing has improved since 9/11, 
but it still has ``a long way to go.'' \115\
---------------------------------------------------------------------------
    \114\ Id. at 75 (testimony of Full).
    \115\ Id. at 76 (testimony of Full).
---------------------------------------------------------------------------
    These hearings culminated in Chairman Collins' and Ranking 
Member Lieberman's December 19, 2005 introduction of the 
Chemical Facility Anti-Terrorism Act of 2005.

                     III. DISCUSSION OF LEGISLATION

Department of Homeland Security authority/responsibility

    The Chemical Facility Anti-Terrorism Act of 2006 authorizes 
the Department of Homeland Security (DHS) to create a 
comprehensive chemical facility security program. The 
President, through Homeland Security Presidential Directive 7, 
has designated DHS as the lead agency for security of the 
chemical sector, and this legislation recognizes that vital 
role by directing and empowering the Department to create 
meaningful security requirements for facilities that use or 
store significant amounts of dangerous chemicals. This security 
program will replace an existing patchwork of voluntary and 
regulatory efforts with a national program that will establish 
meaningful security requirements for all chemical facilities 
that pose a significant homeland security risk. At the same 
time, the legislation seeks to recognize existing security 
efforts at some facilities by establishing flexible 
requirements that will allow facilities to build on security 
planning and measures already in place. The bill stresses a 
flexible and risk-based approach to chemical site security, 
focusing on those facilities that present the greatest risk and 
allowing those facilities to determine the most efficient and 
effective way to achieve the security performance standards 
established by the Department. DHS is empowered to require that 
facilities achieve the security performance standards that it 
sets.

Risk-based

    The Committee designed this bill to account for the 
diversity of the chemical sector, rather than imposing a one-
size-fits-all solution. The Committee recognizes the incredible 
diversity of the chemical sector, which includes chemical 
manufacturers, distributors, oil and petrochemical and 
agricultural companies, and both large and small businesses. 
There are tens of thousands of chemical facilities nationwide, 
but not all pose a high risk to a terrorist attack. Facilities 
located in a rural area with small quantities of non-toxic 
chemicals are unlikely to pose the same risk as a major toxic-
by-inhalation chemical manufacturer, for example, located 
inside a major metropolitan area, or a chemical facility that 
is a critical supplier to the regional or national economy or 
national security. The Committee believes that a risk-based 
approach to security is the most effective means to regulate 
the security of chemical facilities across the Nation.
    The Committee heard testimony during all four of its 
chemical security hearings that established a strong record of 
support for a risk-based approach, from security experts, the 
Administration, and stakeholders.
    Therefore, not all facilities that use or store chemicals 
will be subject to security requirements under this bill. 
Rather, under Section 3, the Department must establish criteria 
to determine which facilities pose a significant risk from a 
terrorist attack to warrant being included in the program. The 
bill directs the Secretary to ``consider'' those facilities 
that are required to complete a Risk Management Plan (RMP) 
under section 112(r)(2) of the Clean Air Act. The bill uses the 
list of RMP facilities as the best available initial starting 
point for possible chemical sources. The Committee does not 
anticipate that the Secretary will designate as chemical 
sources every RMP facility. The Secretary is directed to apply 
risk factors outlined in Section 3(b) to produce a list of 
regulated facilities. Those risk factors include: the perceived 
threat to a facility; the extent and likelihood of potential 
deaths or harm to humans or the environment; and the potential 
impact on national security, critical infrastructure or the 
economy. Further, those facilities that will face regulation 
under this bill will be grouped into tiers based on the 
severity of risk they present (Section 3(e)). The Secretary is 
expected to focus the regulatory program under this bill on 
high priority sites; in example, those that would be most 
attractive to potential terrorists due to the potentially high 
consequences of a successful terrorist attack. The bill 
requires security measures at a given facility to be 
proportional to the threat and consequence of a potential 
terrorist attack at that facility. The greater the threat or 
consequence of a potential terrorist attack, the greater the 
security measures required to protect against such an attack or 
mitigate the consequences if there is an attack.

Performance-based

    The bill also recognizes the diversity of chemical 
facilities by requiring DHS to develop performance-based 
standards for chemical site security (Section 3(f)). Facilities 
can choose the most economical and effective means of 
addressing the threat and consequence of a terrorist attack on 
their particular facility. Different means of mitigating the 
risk of a terrorist attack or the consequences of a terrorist 
attack are placed on a level playing field as long as they 
achieve the standards established by DHS. If DHS determines 
that a chemical facility has not met the performance standard, 
DHS can order compliance or, ultimately, order the closure of 
the facility until it is in compliance.
    By requiring performance standards, the Committee seeks to 
recognize that chemical facilities have the most information 
about their operations and should have the first opportunity to 
design appropriate, efficient and effective security measures. 
According to the National Strategy for Homeland Security (July 
2002), ``[i]n many cases private firms, not the government, 
possess the technical expertise and means to protect the 
infrastructure they control.'' \116\
---------------------------------------------------------------------------
    \116\ National Strategy for Homeland Security, The Office of 
Homeland Security, July 2002, at 33.
---------------------------------------------------------------------------

Vulnerability assessments and site security plans

    Section 4 lays out the core requirements of the chemical 
security program, specifically the requirement for facilities 
to conduct vulnerability assessments and to develop and 
implement security and emergency response plans that respond to 
those assessments.
    The Secretary would have one year from enactment of the 
bill to develop regulations requiring chemical facilities to 
conduct vulnerability assessments; prepare and implement a site 
security plan that addresses the risk identified in the 
vulnerability assessment; and prepare or update and implement 
an emergency response plan to reflect planning for a terrorist 
attack.
    The Secretary must develop or endorse a rigorous 
methodology for vulnerability assessments, to ensure that 
facilities consider the proper issues as they analyze their 
security needs. The bill specifies that vulnerability 
assessments must address the relevant performance standards and 
the sufficiency of security measures relative to the threat and 
consequences of a possible terrorist incident (Section 
4(a)(5)).
    Section 4(a)(6) details the requirements for security plans 
under the chemical security program. The plans would need to 
include security measures that address the vulnerabilities 
identified in the facility's vulnerability assessment, and meet 
the appropriate performance standards for that facility as 
determined by the tier to which the facility has been assigned 
pursuant to Section 3(e).
    As specified in Section 2(11), a ``security measure'' can 
be any of an array of possible means to improve the security of 
a chemical facility, including increased control of the 
facility perimeter, personnel-related measures such as training 
and background checks, or enhanced cybersecurity. A security 
measure might also include ``the modification, processing, 
substitution, or reduction of substances of concern'' as 
indicated in Section 2(11)(B)(vii)(III). These terms, which are 
considered to be elements of the concept of inherently safer 
technology (IST), are not included in the bill to provide the 
Secretary with the power to require a facility to implement 
IST. The list of possible security measures under Section 2(11) 
is permissive, not mandatory, and is not meant to exclude any 
other measures that would help enable an owner or operator to 
meet the designated security performance standards for that 
facility. Section 4(a)(6) simply directs that the security plan 
include security measures that ``in combination'' satisfy the 
appropriate performance standards and other required elements. 
During Committee markup, the Committee adopted an amendment 
clarifying this principle; Section 4(c)(2) specifies that the 
Secretary may not disapprove a site security plan due to the 
presence or absence of any particular security measure so long 
as the plan satisfies the applicable security performance 
standards. Moreover, during markup, the Committee also rejected 
an amendment that would have given the Secretary the power to 
require high risk facilities to implement IST. The Committee 
does not believe that this provision or the bill in general 
gives DHS the authority to require IST.

Emergency response plans

    The Committee believes that it is imperative to incorporate 
the concept of emergency response planning in any chemical 
security regime. During the Committee's four chemical security 
hearings, witnesses highlighted the importance of emergency 
preparedness in dealing with a chemical release as well as 
weaknesses in the current state of preparedness of many 
facilities and communities. In particular, Carolyn Merritt, 
Chairman of the U.S. Chemical Safety and Hazard Investigation 
Board (CSB), and Gerald Poje, a former member of the CSB, were 
critical of chemical plant preparedness across the country. 
Both Merritt and Poje emphasized in their testimony that 
effective emergency response planning and capabilities can 
mitigate the consequences of a terrorist attack on a chemical 
facility. In addition, the events of Hurricane Katrina 
demonstrated that the lack of effective emergency planning 
further exacerbates the consequences of a catastrophic event.
    The Committee acknowledges that many chemical facilities 
nationwide already have created emergency response plans 
pursuant to other Federal, State or local requirements, and it 
is not interested in duplicating efforts. Rather, the Committee 
intends this provision to build on and bolster existing 
emergency response plans such that they address the 
consequences of an intentional attack, such as a terrorism 
event, in addition to accidental releases. The Committee 
intends this provision to contribute to the chemical sector's 
all hazards preparedness planning, as opposed to planning 
purely for an accidental release or for a terrorist attack 
scenario. Where a chemical facility already has an existing 
emergency response plan, the bill requires it to update the 
existing plan by adding a security addendum which addresses a 
terrorist attack scenario. The bill further requires that 
emergency response plans specifically address the consequences 
of a terrorist attack identified in the vulnerability 
assessment and consistent with the facility's site security 
plan. The bill also requires that the emergency response plan 
identify the roles and responsibilities of employees at the 
chemical source. There is precedent for the revision and update 
of existing emergency response plans in post-9/11 security 
statutes. For example, the Bioterrorism Act included a 
provision that requires community water systems to ``prepare or 
revise, where necessary, an emergency response plan.''
    A security regime should encourage both preparedness and 
response, and the emergency response provision in this bill 
will encourage chemical facilities to work with their local 
communities to ensure that if a terrorist attack occurs, the 
community will be prepared.

Sharing of threat information

    The Secretary is required to provide State and local 
government officials and owners or operators of chemical 
sources with threat information that is relevant to the 
chemical sector in general, and to provide threat information 
relevant to a particular chemical source to relevant State and 
local government officials and the owner or operator of that 
particular source. The Secretary must share relevant 
information to the maximum extent permitted under other 
applicable laws and in the interests of national security. The 
Committee recognizes that information sharing in an appropriate 
manner, as noted in the legislation, is an important aspect of 
effective homeland security preparedness.

MTSA-regulated chemical facilities

    Currently the MTSA regulates approximately 300 chemical 
facilities in the Nation. The Committee did not exempt MTSA-
regulated chemical facilities from this bill because it 
believes that some of the highest risk chemical facilities 
nationwide are located in ports and should meet the security 
performance standards for their applicable tier, should they, 
in fact, be covered by this bill. In constructing a 
comprehensive and cohesive Federal chemical security regime, 
the Committee believes that MTSA-regulated chemical facilities 
should be subject to the security performance standards and 
other requirements of this bill. At the same time, the 
Committee also recognizes that MTSA-regulated chemical 
facilities have invested in security and are currently 
complying with a Federal statute, while many other high risk 
chemical facilities that are not complying with any Federal 
security law.
    The Committee does not want to duplicate efforts. The 
Committee included a provision directing that the Secretary 
must implement this bill in as consistent and integrated a 
manner as possible with MTSA. The Secretary must also ensure 
coordination between the Undersecretaryfor Preparedness and the 
Coast Guard Commandant in carrying out this bill for chemical sources 
that are also MTSA-regulated facilities. Under the bill, if a chemical 
facility owner or operator reviews the security performance standards 
and determines that he is already in compliance, based on his MTSA 
facility security plan, then the owner or operator is not required to 
implement additional security. The owners and operators of these 
facilities must review their own vulnerability assessment, security 
plan and emergency response plan prepared pursuant to MTSA and make any 
modifications necessary to comply with the security performance 
standards established for the tier in which it was placed under this 
Act. Depending on the tier an MTSA-regulated chemical facility is in, 
it may already have sufficient security to address the security 
performance standards set by DHS. The assessment and plans, with any 
appropriate modifications, must be submitted to the appropriate Federal 
Maritime Security Coordinator and the Secretary for approval within 6 
months after issuance of the regulations. Owners and operators of these 
facilities must also certify in writing to the Federal Maritime 
Security Coordinator for their area that the assessment and plans are 
in compliance with the security performance standards for their tier.

Voluntary activities and investments in security by chemical facilities

    The Committee recognizes the efforts and investments in 
security that some companies have made voluntarily over the 
last few years. This was one of the issues raised in testimony 
at the July 13 and July 27, 2005 hearings from companies and 
industry associations representing different aspects of the 
chemical sector, including chemical manufacturing, small 
chemical manufacturers, agriculture, and oil and petrochemical.
    The Committee included an alternative security programs 
provision (Section 4(f)) specifically to take account of the 
voluntary efforts already taken by chemical companies. The 
Committee did not want chemical companies to duplicate work 
already done and investments in security already made in 
creating vulnerability assessments, site security plans, and 
emergency response plans, for example. Under Section 4(f), the 
Secretary may consider petitions to approve alternative 
security programs. A person may submit a petition to the 
Secretary to have him consider alternative standards 
established by Federal, State, or local government authorities, 
or industry for determination whether assessments and plans 
prepared for the alternative program meet the requirements of 
this bill. If an alternate program meets the requirements, the 
assessments and plans may be submitted by a covered facility 
without further revision. If the Secretary determines that the 
assessments and plans under the alternate program do not meet 
the requirements of this legislation, he may specify necessary 
modifications. If an alternative security program is approved 
by the Secretary, each facility covered by that program must 
submit its assessments and plans to the Secretary, for review 
in accordance with the security performance standards for the 
pertinent tier. Each facility submission must be individually 
approved or disapproved.
    This provision reflects the Committee's desire that 
chemical facilities not be forced to duplicate significant work 
already done and security investments already made in creating 
vulnerability assessments, site security plans, and emergency 
response plans. However, the Committee feels strongly that the 
purpose of this bill is to create a strong, uniform 
Federalstandard for regulating the security of chemical facilities, so 
that all existing assessments and plans must meet its requirements to 
be approved by the Secretary.

DHS review

    In Section 4(c), the Secretary is required to review the 
assessment and plans to determine whether the submitted 
assessments and plans, and the implementation of such plans 
comply with the bill. If compliance is determined, then the 
Secretary would issue an approval notice; if non-compliance is 
determined, the Secretary would issue a disapproval notice. 
During Committee markup, an amendment was accepted that directs 
that the Secretary may not disapprove a site security plan 
because it either includes or excludes a specific security 
measure (Section 4(c)(2)). The amendment was intended to 
reiterate the performance-based, flexible construct of the bill 
and exclude prescriptive requirements. The Secretary must 
provide written notice to the owner or operator of the chemical 
source regarding the determination of approval or disapproval. 
For disapprovals, the Secretary must provide the owner or 
operator, in writing, a clear explanation of deficiencies and 
consult with them to identify appropriate steps to achieve 
compliance and provide additional time for the facility to come 
into compliance. If the owner or operator does not achieve 
compliance, the Secretary must issue an order requiring the 
owner or operator to correct the specified deficiencies. If the 
owner or operator continues to be in noncompliance, the 
Secretary may issue an order for the chemical source to cease 
operation. Hearing testimony from industry witnesses as well as 
Coast Guard Adm. Bone indicated that the Coast Guard possesses 
similar shut-down authority under MTSA.
    The Committee provided the Secretary with greater authority 
in dealing with higher risk tier facilities. For these 
facilities, the Secretary may issue an order to cease operation 
to a chemical source owner or operator as soon as the 
determination is made that the vulnerability assessment, site 
security plan, or emergency response plan is disapproved or 
determines that implementation does not comply with this 
Section. The Secretary is not required to provide additional 
time for compliance as noted for all other tiers.
    The Secretary is required to make the approval or 
disapproval determination within 5 years after the date of 
submission of the assessment and plans. For higher risk tier 
facilities, the Secretary must make the approval or disapproval 
determination within 1 year after the date of submission of the 
assessment and plans. The Secretary may conduct subsequent 
reviews and determinations of compliance on a schedule that he 
determines. Higher risk tier facilities must be given priority 
for review.

Inspections and audits

    The Committee believes that requiring vulnerability 
assessments, site security plans and emergency response plans, 
and the implementation of such plans is not enough to ensure 
adequate security for the Nation's high risk chemical 
facilities. The Committee included a section in the bill 
(Section 5) requiring the Department to conduct audits and 
inspections of covered chemical facilities to ensure compliance 
with the bill. Each chemical source must maintain a current 
copy of the vulnerability assessment, site security plan and 
emergency response plan onsite for 5 years after date of the 
approval determination. The Secretary is given the authority 
for a right of entry to chemical sources and any premises on 
which any record required to be maintained is located.
    The Secretary is directed to conduct, or require the 
conduct of, audits and inspections. The Secretary is given the 
discretion of determining the times and places of the audits 
and inspections, and he may establish the requirements of this 
section of the bill by rule, regulation, or order. The audits 
and inspections under this section are intended to determine 
whether a chemical source is in compliance with the bill.
    The Committee believes that higher risk facilities should 
be given priority for inspection and audits, and therefore the 
requirements for these facilities under this section are more 
stringent. The Secretary is directed to inspect or audit higher 
risk tier facilities at least once per year. The Committee also 
felt strongly that higher risk tier chemical sources that are 
also MTSA-regulated facilities should have a seamless audit and 
inspection regime. Therefore, the bill includes a provision 
that allows an MTSA audit or inspection to qualify as an audit 
or inspection under the bill's annual requirement.
    While the Committee wants the Department to focus its 
efforts and resources on the highest risk facilities, it did 
not want to unduly tie the hands of the Secretary in 
establishing an effective audit and inspection regime. 
Therefore, pursuant to an amendment adopted at Committee 
markup, if a higher risk tier facility has been found in 
compliance with this Act based upon 5 consecutive years of 
audits or inspections, the Secretary may exempt a chemical 
source from this annual requirement. The bill gives the 
Secretary the discretion to exempt a facility from the annual 
requirement, but the Secretary is not required to issue such 
exemption. If the Secretary exempts a higher risk tier facility 
from this annual requirement, such facility must be audited or 
an unannounced inspection must occur at least once per every 5 
years after the exemption determination. The Secretary may 
require the submission of or access to and copy any records or 
information, including the assessment and plans and any other 
documentation necessary for the review and analysis of such 
assessment and plans and the implementation of a security plan. 
If the Secretary determines that an owner or operator is not 
maintaining, producing, or permitting access to records or to 
the premises of the chemical source as required by this 
section, the Secretary may issue an order requiring compliance.

Infrastructure and implementation

    The Committee felt strongly that an effective chemical 
security regulatory regime, which would both help prevent 
future attacks and provide effective response capabilities 
should an attack occur, needed a robust infrastructure and 
implementation structure. The bill included such an 
architecture in Section 6, entitled ``Infrastructure and 
Implementation.'' The intent of Section 6 was to address 
effectively both the prevention and response capabilities 
simultaneously. As noted in the ``Emergency Response Plan'' 
subsection of this report, the Committee believes that a 
chemical security regime must contain both the prevention and 
the response capabilities. An effective response to a terrorist 
attack can mitigate the consequences and save lives.
    The Committee modeled Section 6 of this bill on MTSA to 
include its regulatory implementation structure for prevention 
and response. In turn, Committee discussions with the Coast 
Guard and others regarding MTSA described a regulatory 
implementation regime based directly upon the successful 
implementation of the Oil Pollution Act of 1990 (OPA-90) (PL 
101-380). It is the intent of the Committee that the Department 
should align its efforts with those of MTSA and the 
implementation efforts previously proven successful by the 
Coast Guard. The Committee intends for the Department to use 
MTSA as a model for this section and avoid developing an 
inconsistent security regime with one already covering some 
chemical facilities.
    The bill directs the Department to establish a national 
office to provide strategic and consistent doctrine for a 
unified and effective Federal effort for security and response. 
This national level office will work collaboratively to 
coordinate with other Federal, State and local government 
agencies and departments, law enforcement agencies and first 
responders, and chemical sources to provide the leadership, 
guidance, oversight, and adequate resources to protect the 
Nation's chemical facilities. The national office will have the 
responsibility of directly supervising Infrastructure 
Protection Regional Security Offices, designating areas within 
the regions, supporting the Area Security Committees when 
requested or needed, and assigning adequate and well-qualified 
staff to include the Federal Area Security Coordinator. The 
national office will also be responsible for approving both 
individual chemical source assessments and plans and area 
security plans, planning and conducting national-level 
exercises, issuing any reports required by this bill, and 
ensuring the prevention, preparedness, response, and recovery 
capabilities for the chemical sources. The national office will 
further delineate and assign functions and responsibilities to 
the regional and area offices as appropriate to achieve the 
intent of this bill.
    In order to implement an effective chemical critical 
infrastructure protection and response regime, the Committee 
believes that the Department needs to design and implement a 
regional operational structure. It is important for the 
Department to establish relationships with regional and local 
government agencies, first responders, and the chemical source 
owners and operators in order to provide for effective critical 
infrastructure protection and implement this bill effectively. 
Moreover, this regional structure for the chemical sector could 
ultimately provide the architecture for overseeing preparedness 
and protection for other critical infrastructure sectors. The 
bill directs the Department to establish Infrastructure 
Protection Regional Security Offices in each region of the 
Federal Emergency Management Agency (FEMA) Region, or the 
regional office of any successor agency with responsibility for 
emergency management, preparedness, and response. The purpose 
of these regional offices is to carry out this bill and 
coordinate regional chemical site security, as described by 
this section of the bill. Regional Offices will have the 
responsibility of reviewing and approving each Area Security 
Plan developed by each Area Security Committee within its 
region, ensuring consistent implementation of this bill across 
the region, providing direct supervision and support to each 
Federal Area Security Coordinator in the region, providing 
regional coordination between states and Areas (including Areas 
designated under MTSA), and planning and conducting regional 
level exercises. In addition, the regional offices of this bill 
shall coordinate and integrate their activities to the maximum 
extent possible with all other activities assigned to the 
FEMAregional offices in an effort to provide the maximum level of 
prevention, preparedness, response, and recovery capabilities possible 
for the region.
    The bill directs the Department to designate ``Areas,'' 
which will be overseen by an Area Security Committee, which 
will be comprised of security and response personnel from State 
and local government agencies, chemical sources, local 
emergency planning and response entities, other critical 
infrastructure sectors and other appropriate organizations. The 
Committee intends the Area Security Committee to coordinate 
with Federal, State and local officials and chemical sources to 
enhance security and emergency response planning. The Area 
Security Committee will be led by a designated Federal Area 
Security Coordinator (FASC). The Areas designated by the 
Secretary through the national office will cover all of the 
territory of the United States except for the Areas already 
designated by MTSA. The FASC will lead an Area Security 
Committee made up of members appointed by the Secretary through 
the national office of relevant Federal, State, local, and 
other stakeholders. The FASC and Area Security Committee will 
be responsible for preparing an Area Security Plan with the 
relevant stakeholders in each area based upon an area 
vulnerability assessment and review of each individual chemical 
source's security and response plan, planning and conducting 
area level and individual chemical source exercises, and 
coordinating with Federal, State, and local enforcement and 
response agencies to provide the maximum level of prevention, 
preparedness, response, and recovery capabilities possible for 
the area. The FASC is also responsible for conducting 
individual regulatory inspections and audits of chemical 
sources in compliance with the regulations promulgated by the 
Secretary. The Area Security Plans developed by the FASC and 
Area Committee will be aligned the National Response Plan, the 
National Infrastructure Protection Plan, and any other 
appropriate national security and response plans. The Area 
Security Plan will also address the responsibilities and 
resources available to prevent, prepare for, respond to, and 
recover from a terrorist release from a chemical source within 
the geographically defined Area.

Heightened threat authorities of the Secretary

    The Committee believes that the Secretary should have the 
authority to require greater security at chemical sources 
during times of heightened threat of terrorist attack. Section 
7 of the bill, ``Heightened Security Measures,'' is intended to 
address these situations, such as when the Federal government 
has intelligence about threats to the chemical sector or a 
threat assessment. In the event of such a situation, the 
Secretary may issue an order to the owner or operator of a 
chemical source to implement increased security measures, as 
pre-identified in the facility's site security plan. The bill 
requires a chemical source to include a provision in its site 
security plan detailing what additional security measures it 
would implement in situations of heightened threat (Section 
4(a)(6)(C)(iii)). If the Secretary issues an order pursuant to 
this section of the bill, the chemical source must implement 
the security measures pursuant to its site security plan. The 
Secretary does not have the authority to prescribe specific 
security measures pursuant to this section, nor does the 
Secretary have the authority to require that these heightened 
security measures remain in place indefinitely. This section 
limits the effect of an order for heightened security measures 
to 90 days, unless the Secretary files an action in Federal 
district court to extend the order.

Enforcement authority and penalties

    Section 8 provides for administrative, civil and criminal 
penalties for owners or operators of a chemical source who do 
not comply with orders or directives issued by the Secretary 
pursuant to this bill. This section provides for administrative 
penalties of not more than $25,000 per day and not more than a 
maximum of $1,000,000 for each year for failure to comply with 
an order or directive issued by the Secretary. This section 
also provides for a notice and hearing on the proposed penalty. 
This section also provides for civil penalties against the 
owner or operator of a chemical source that violates or fails 
to comply with an order or directive issued by the Secretary 
under this bill or a site security plan approved by the 
Secretary under this bill. These cases may be brought in a 
United States district court. A court may issue an order for 
injunctive relief or may award a civil penalty of not more than 
$50,000 for each day on which a violation occurs or a failure 
to comply continues.
    This section also permits criminal penalties to be brought 
against an owner or operator who knowingly and willfully 
violates any order issued by the Secretary under this bill or 
knowingly and willfully fails to comply with a site security 
plan approved by the Secretary under this bill. A court may 
fine an owner or operator not more than $50,000 for each day of 
such violation or imprison him for not more than 2 years or 
both.

Protection of information

    The new regulatory scheme proposed under the bill requires 
the Secretary to keep information defined as ``protected 
information'' secure and exempts such information from the 
public-disclosure requirements of the Freedom of Information 
Act (FOIA) or any State or local law providing for public 
access to information. The specific legislative language 
employed is that the Department and State and local agencies 
shall not be required under FOIA and State and local sunshine 
laws to make available to the public protected information. 
(The Maritime Transportation Security Act (MTSA), enacted in 
2002, employs similar language regarding Sensitive Security 
Information (SSI) obtained by the Department for purposes of 
MTSA, stating that, ``[n]otwithstanding any other provision of 
law, information developed under this chapter is not required 
to be disclosed to the public.'')
    Under the bill, protected information includes 
vulnerability assessments, site security plans, area security 
plans, and security addenda to emergency response plans, as 
well as certain other materials derived from them that would be 
harmful to security if disclosed. Also, the Secretary is 
required to establish confidentiality protocols that ensure 
records are maintained securely and that access is 
appropriately limited. These provisions together mandate that 
the Department and other agencies will maintain the secrecy and 
integrity of protected information.
    The bill provides guidance with respect to the handling of 
certifications of compliance and orders, directing that, 
generally, certifications and orders are not made available to 
the public, except where the Secretary makes a specific finding 
that releasing certifications of compliance from a chemical 
source to the Department or compliance certifications from the 
Department to a chemical source will not increase risk to a 
chemical source.
    The bill, while fostering an atmosphere of appropriate 
information sharing between the Department and State and local 
law enforcement, first responders and other officials, still 
contemplates protocols based on a need to know standard.
    The bill also provides that nothing in the bill will limit 
legally established whistleblower rights. The bill mandates 
that the protocols must provide guidance to Federal employees 
as to how to make protected disclosures without compromising 
security. This reflects that the integrity of protected 
information must be maintained without infringing upon 
whistleblower protections afforded for proper public interest 
disclosures nor a Federal employee's right to petition 
Congress.
    The bill also requires the Department to establish a 
process by which a person may submit a report to the Secretary 
regarding problems or vulnerabilities at a chemical source. To 
encourage such reporting, the bill requires the Secretary to 
keep the identity of any person submitting such a report 
confidential and forbids an employer from discharging or 
otherwise discriminating against an employee for making a 
report.
    The bill also provides for penalties with respect to any 
government employee who, in a manner not permitted by law, 
``knowingly discloses'' any record containing protected 
information.

Preemption of State and other laws

    Section 10(a) states that nothing in this bill precludes 
States or localities from adopting or enforcing chemical 
security requirements that are more stringent than the standard 
under this bill, unless there is an ``actual conflict'' between 
a provision of this bill and the law of a State or locality. 
Section 10(b) preserves the authority of states to regulate 
chemical facilities for purposes of environment, health, 
safety, or any other permissible purpose other than the 
security of chemical sources from acts of terrorism.

National strategy for chemical security

    Section 11 requires the Department to issue an updated 
national strategy for chemical security. This section requires 
the Department to submit to the Senate Homeland Security and 
Governmental Affairs Committee and the Homeland Security 
Committee and the Energy and Commerce Committee of the House of 
Representatives an update of its ``National Strategy for 
Securing the Chemical Sector.'' This document was originally 
required to be submitted to the House and Senate Committees on 
Appropriations, pursuant to a requirement in the Conference 
Committee Report on the Fiscal Year 2006 Homeland Security 
Appropriations Bill (Report 109-241). The conferees directed 
the Department to complete a national security strategy for the 
chemical sector by February 10, 2006. The report was submitted 
to the House and Senate Appropriations Committees in May 2006. 
As the terrorist threat continues to evolve, the Committee 
feels strongly that the Department must continue to plan for an 
implement a holistic, coordinated approach to chemical security 
and should update its National Strategy accordingly.

Judicial review

    This provision establishes the process of judicial review 
of regulations and orders under the bill and was added to the 
bill by amendment during Committee markup. The regulations 
under this Act may be challenged by any person in the U.S. 
Court of Appeals for the District of Columbia within 60 days 
after the date of promulgation. Further, an owner or operator 
of a chemical source may seek judicial review of a final agency 
action or order that affects the chemical source in a U.S. 
district court within 60 days of the final agency action. For 
example, an owner or operator may seek review of an order 
disapproving a vulnerability assessment or a site security 
plan. Such cases may be brought in the U.S. district court for 
which the chemical source is located or the owner or operator 
has its principal place of business. The parties in such civil 
actions are limited to the owner or operator filing the 
petition and the Secretary of DHS.
    The Administrative Procedure Act (chapter 7 of title 5, 
United States Code) standard of review would apply to the 
initial 60-day challenges for new regulations and to challenges 
brought by an owner or operator regarding final agency actions 
or orders issued with respect to an owner or operator of a 
chemical source. This section also provides that nothing in the 
Act creates a private right of action against an owner operator 
of a chemical source to enforce a provision of the Act.

Ammonium nitrate

    Ammonium nitrate is an important fertilizer critical to 
agriculture in the United States and around the world. It is 
also a serious security concern that should be addressed. 
Ammonium nitrate can be combined with fuel oil or other 
explosives to produce a powerful explosive.
    Since the 1990s, ammonium nitrate bombs have been used in 
some of the world's most infamous terrorist attacks. Ammonium 
nitrate was combined with fuel oil to create a truck bomb in 
Oklahoma City that destroyed the Alfred P. Murrah Federal 
Building in April 1995. The bombing, considered the deadliest 
incident of domestic terrorism in U.S. history, killed 168 
people and injured hundreds more. There is evidence that 
terrorists continue to plot attacks using ammonium nitrate. In 
June 2006, police uncovered a terrorist plot in Toronto, Canada 
involving 3 tons of ammonium nitrate that was intended to be 
used for an attack in Toronto. Based on these and other 
terrorist attacks and attempted attacks involving ammonium 
nitrate, and the threat of additional attacks using this 
product, the Committee believes that ammonium nitrate should be 
regulated for security. During Committee markup, this section 
(Section 14) requiring registration of ammonium nitrate buyers 
and sellers was added to the bill. This section is a step in 
making it more difficult for terrorists to commit acts of 
destruction using this product.

                        IV. LEGISLATIVE HISTORY

    S. 2145 was introduced on December 19, 2005 by Chairman 
Collins and Senator Lieberman. Senators Coleman, Carper and 
Levin were original cosponsors. S. 2145 was referred to the 
Committee on Homeland Security and Governmental Affairs. As 
described earlier in the report, the Committee held four 
hearings regarding chemical security. On June 14-15, 2006, the 
Committee took up S. 2145.
    A managers' amendment in the nature of a substitute, was 
offered by Chairman Collins and Ranking Member Lieberman, was 
adopted by voice vote. The managers' amendment included 
technical edits primarily. For example, it clarified that the 
Department has to put in writing the approval or disapproval 
decisions for site security plans. The more substantive 
modifications included: (1) adding cyber security as a 
requirement of a site security plan (section 4(a)(6)(C)(iii)) 
and modifying the existing cyber security requirements in the 
contents of a vulnerability assessment to mirror the site 
security plan language (section 4(a)(5)(D)(iii)); (2) adding a 
provision requiring DHS to notify facility owners and operators 
in writing as to whether their plans and assessments were 
approved or disapproved (Section 4(c)(1)(B)); segregating the 
determination as to whether a higher risk tier facility is 
implementing its security plan from the approval/disapproval 
determination for compliance with the assessment and plans 
submitted to DHS. This is a 2-step process now, as opposed to 
rolled into one (Section 4(c)(3)(B)(iv)); adding a requirement 
that higher risk tier facilities must be audited or inspected 
for compliance at least once per year (Section 5(b)(2)(c)). The 
managers' amendment also included a new guidance and 
consultation provision in two separate places in the bill that 
apply to higher risk tier facilities. Under the bill, DHS must 
provide guidance to all covered chemical facilities to help 
them meet the security performance standards specifically, as 
well as provide technical assistance on compliance with the 
overall bill. The managers' amendment provided that for higher 
risk tier facilities, the owner or operator of a facility in 
this tier may request that the Department provide consultation, 
in addition to the guidance already provided for, in coming 
into compliance with the bill, and in meeting the security 
performance standards. Because higher risk tier facilities must 
meet a stricter standard of security, the Committee wanted to 
ensure that the Department consulted and worked with these 
facilities so that they could achieve compliance with the Act.
    Senators present were Collins, Stevens, Voinovich, Coleman, 
Coburn, Chafee, Bennett, Warner, Lieberman, Akaka, Carper, 
Dayton, Lautenberg and Pryor.
    By a vote of 8-8, the Committee did not accept an amendment 
by Senator Voinovich to amend the regulatory regime created by 
S. 2145 with respect to chemical facilities already covered by 
the Maritime Transportation Security Act (MTSA) and to modify 
the standard of review for alternative security programs under 
S. 2145. The amendment requires the Secretary to consult with 
the Coast Guard Commandant to determine whether additional 
security measures are necessary at any MTSA-regulated facility 
in order to comply with the security performance standards 
established under S. 2145. The Secretary must review the 
assessment and plans for MTSA-regulated chemical sources within 
6 months of enactment of S. 2145. If additional security 
measures are determined to be required, the owner or operator 
of such chemical source must implement additional security 
measures to comply with the security performance standards 
within 6 months after receiving the request to comply from DHS. 
The amendment also modifies the standard in the Alternative 
Security Programs provision (Section 4(f)) such that assessment 
and plans prepared under an alternative security program must 
be ``substantially equivalent'' to the assessment and plans 
submitted under S. 2145, as opposed to the ``meets each 
required element'' standard of S. 2145.
    Yeas: Stevens, Voinovich, Coleman, Bennett and Pryor. Yeas 
by proxy: Coburn, Domenici and Warner. Nays: Collins, Chafee, 
Lieberman, Akaka, Carper, Dayton and Lautenberg. Nays by proxy: 
Levin.
    The Committee adopted by voice vote an amendment offered by 
Senator Akaka to clarify that whistleblower protection rights 
under any other Federal or State whistleblower protection law 
would not be limited by the bill. The bill already provided 
that it would not limit Federal employees' rights to make 
protected disclosures under applicable whistleblower protection 
statutes, 5 U.S.C. Sec. Sec. 2302(b)(8) and 7211.
    Senators present were Collins, Voinovich, Coleman, Chafee, 
Bennett, Lieberman, Akaka, Carper, Dayton, Lautenberg and 
Pryor.
    By a vote of 7-9, an amendment offered by Senator Voinovich 
was not agreed to that would have struck the State and local 
law provision in Section 10 and replaced it with a provision 
establishing Federal preemption of State and local laws in the 
regulation of chemical security. The amendment provides that a 
State or local law is preempted by the bill if complying with 
the State or local law and S. 2145 is not possible, or if the 
State or local law, as applied or enforced, is an obstacle to 
accomplishing and carrying out this bill or frustrates an 
overwhelming Federal need for consistency and uniformity for 
rules, and regulations resulting from this bill.
    Yeas: Voinovich, Coburn, Bennett and Pryor. Yeas by proxy: 
Stevens, Domenici and Warner. Nays: Collins, Coleman, Chafee, 
Lieberman, Akaka, Carper, Dayton and Lautenberg. Nays by proxy: 
Levin.
    By a vote of 5-11, the Committee did not agree to an 
amendment offered by Senators Lieberman and Lautenberg that 
would require mandatory consideration and implementation of 
inherently safer technology measures for higher risk tier 
chemical sources. The amendment requires each higher risk tier 
chemical source to implement inherently safer technology 
solutions, unless the owner or operator of the chemical source 
demonstrates to the Secretary one of the following three 
exceptions: (1) implementing such measures would not reduce the 
risk of the facility to an attack; (2) implementing such 
measures would be cost-prohibitive, and; (3) implementing such 
measures would be otherwise unfeasible. Any higher risk tier 
facility that demonstrates one of these 3 must reevaluate 
whether it should implement inherently safer technology 
measures at least once every five years that the facility 
remains assigned to a higher risk tier. The amendment also 
requires the Secretary to consult with other governmental 
agencies at the Federal, State, and local level (including the 
Chemical Safety and Hazard Investigation Board and the U.S. 
Environmental Protection Agency) to determine whether higher 
risk facilities have adequately evaluated such risk-reducing 
measures. The amendment also requires that the Secretary assign 
at least 360 facilities to its higher risk tier.
    Yeas: Lieberman, Akaka and Dayton. Yeas by proxy: Chafee 
and Lautenberg. Nays: Collins, Voinovich, Coleman, Coburn, 
Bennett, Carper and Pryor. Nays by proxy: Stevens, Domenici, 
Warner and Levin.
    When the Committee reconvened its business meeting on 
Thursday, June 15, Senator Voinovich offered an amendment which 
further clarifies the performance-based intent of S. 2145, and 
it was accepted by voice vote. The amendment provides that the 
Secretary may not disapprove a site security plan based on the 
presence or absence of a particular security measure, if the 
site security plan satisfies the security performance 
standards. The purpose of this amendment is to clarify the 
performance-based intent of the bill, that the Secretary cannot 
disapprove a site security plan because such plan does not 
embrace specific security measures.
    Senators present were Collins, Voinovich, Coleman, Coburn, 
Chafee, Bennett, Lieberman, Carper, Dayton and Pryor.
    The Committee adopted by voice vote an amendment by Senator 
Pryor that would provide the Department with the regulatory 
authority to track the handling and purchase of ammonium 
nitrate to prevent and deter terrorists from acquiring and 
utilizing ammonium nitrate to create explosives for use in acts 
of terrorism. The amendment would require that handlers and 
sellers of ammonium nitrate must register facilities and only 
sell or distribute ammonium nitrate to handlers and purchasers 
that are registered. Purchasers of ammonium nitrate are also 
required to be registered. Handlers must maintain records of 
sale or transfer of ownership of ammonium nitrate. The 
Secretary is required to consult with the Secretary of 
Agriculture in issuing regulations to avoid placing an undue 
burden on agricultural producers' access to ammonium nitrate.
    The Committee adopted by voice vote a second degree 
amendment by Senator Lieberman. The second degree amendment 
strikes the preemption provision in the ammonium nitrate 
amendment, with the effect that there is no preemption 
provision attached to the Pryor amendment. The second degree 
amendment also strikes the protection of information provision 
in the Pryor amendment and directs that registration 
information under the Pryor amendment be treated as a record as 
described in the protection of information (Section 9) of S. 
2145.
    Senators present were Collins, Voinovich, Coleman, Coburn, 
Chafee, Bennett, Lieberman, Carper, Dayton and Pryor.
    Senators present for the vote on Senator Pryor's first 
degree amendment were Collins, Voinovich, Coleman, Coburn, 
Chafee, Bennett, Lieberman, Carper, Dayton, and Pryor.
    Senator Voinovich offered a second degree amendment to 
modify his amendment and it was adopted by a vote of 9 to 5. 
The second degree amendment includes several provisions that 
would amend S. 2145 in different places. The second degree 
amendment includes: (1) adding an exemption for any facility 
owned or operated by a licensee or certificate holder of the 
Nuclear Regulatory Commission; (2) adding an interim notice 
provision for higher risk tier facilities; (3) modifying the 
heightened security measures provision in Section 7; (4) 
modifying the criminal penalties provision in Section 8; (5) 
adding a judicial review provision; (6) modifying the 
submission and certification of changes provision, and; (7) 
modifying the protection of information provision in Section 9.
    Yeas: Collins, Voinovich, Coleman and Carper. Yeas by 
proxy: Stevens, Coburn, Bennett, Domenici and Warner. Nays: 
Lieberman and Dayton. Nays by proxy: Levin, Akaka and 
Lautenberg. No instruction: Chafee.
    The amendment directs the Secretary to conduct a 
preliminary review and assessment of the vulnerability 
assessment, site security plan, and emergency response plan of 
chemical sources in a higher risk tier. This preliminary review 
must be conducted at least 3 months before the 1-year deadline 
by which chemical sources must have their assessments and plans 
approved. Following the review and assessment, if a chemical 
source in a higher risk tier appears to not be on track for 
compliance, the Secretary must provide notice and assistance to 
the source in complying with the Act.
    The amendment modifies Section 7 of S. 2145 by (1) adding a 
provision to the requirements of site security plans to require 
that such plans describe the security measures that would be 
implemented under an order issued by the Secretary pursuant to 
his Section 7 authority, and (2) clarifying the Secretary's 
authority to issue an order to an owner or operator of a 
chemical source to implement heightened security measures 
described in the chemical source's site security plan approved 
by the Secretary. The amendment (1) adds a heightened standard 
of knowingly and willfully for assigning criminal liability to 
an owner or operator, and (2) removes criminal liability for 
the violation of a site security plan.
    The amendment adds a new Section 13 to S. 2145 to provide a 
judicial review provision. This provision (1) allows any person 
to seek judicial review of a regulation within 60 days of its 
promulgation; (2) allows the owner or operator of a chemical 
source to seek judicial review of a final agency action under 
the Act within 60 days of the final agency action; (3) provides 
that no other judicial review will be permitted under the 
Administrative Procedures Act; and (4) provides that nothing in 
the bill creates a private right of action against an owner or 
operator of a chemical source to enforce a provision of the 
bill.
    The amendment provides that if a chemical source makes a 
change that would have a materially detrimental effect on the 
security of the chemical source, the owner or operator must (1) 
certify to the Secretary that the source has completed the 
review and implemented any necessary modifications to the 
assessment or plans and (2) provide the Secretary a description 
of any changes to the assessment or plans.
    The amendment included provisions on the protection of 
sensitive information that were incorporated into the bill in 
lieu of the provisions on information protection that were in 
the bill as introduced. The information protection provisions 
of the amendment grants exemptions from the Freedom of 
Information Act (FOIA) (5 U.S.C. Sec. 522) and from State and 
local sunshine laws for vulnerability assessments, site 
security plans, area security plans, and security addenda to 
emergency response plans. The amendment also provides these 
exemptions for materials obtained by DHS developed exclusively 
in preparation of the information listed immediately above 
(e.g., vulnerability assessments). The amendment also provides 
FOIA and sunshine law exemptions for (1) documents or other 
information obtained by DHS or a State or local government from 
a chemical source and (2) documents prepared by or provided to 
a Federal agency or State and local government, but only to the 
extent that the documents or information (noted in both (1) and 
(2)) describes a chemical source or its vulnerabilities, was 
taken from a vulnerability assessment or the other plans noted 
above, and, if disclosed, would be detrimental to the security 
of a chemical source. The amendment also forbids making any 
orders or disapprovals available to the public under FOIA, and 
provides a specific mechanism through which certain information 
(other than that described above) can be made available to the 
public (via the discretion of the Secretary). The amendment 
specifically notes that certain information--(a) certifications 
of compliance from a chemical source to DHS, (b) failure-to-
comply orders from DHS to a chemical source, (c) compliance 
certifications from DHS to a chemical source, and (d) other 
disapprovals and orders issued under the bill--shall not be 
made available to the public under FOIA, except that if the 
Secretary makes a specific finding that releasing a 
certification referenced in clause (a) or (c) will not increase 
the risk to a chemical source, the Secretary may release the 
certification. The amendment also contains a provision which 
works in favor of effective information sharing principles 
between the Federal, State and local governments. The amendment 
provides instruction with respect to the establishment of 
protocols under the bill which allow for permitted access to 
protected information to include not just State or local law 
enforcement officials, first responders, or other State or 
local government officials granted access to protected 
information for purposes of carrying out the bill, but also to 
provide such officials and first responders with information on 
the extent to which security of chemical sources in the State 
or local area is being achieved.
    The Committee adopted by voice vote a modified second 
degree amendment by Senator Carper to add language back into 
the criminal penalties provision (Section 8(c) of S. 2145) 
which was removed by Senator Voinovich's first degree 
amendment. The second degree amendment would make a chemical 
source owner or operator criminally liable for failing to 
comply with a site security plan approved by the Secretary 
under this bill. After some discussion during the mark-up, 
Senator Carper asked for and received unanimous consent to 
modify his second degree amendment to add the words ``knowingly 
and willfully'' to the failure to comply with a site security 
plan approved by the Secretary under this bill.
    Senators present were: Collins, Voinovich, Coleman, Chafee, 
Lieberman, Carper, Dayton, Pryor.
    The Committee adopted by voice vote a second degree 
amendment by Senator Coburn which would modify the audits and 
inspections requirements for higher risk tier facilities. The 
amendment would permit the Secretary to exempt a higher risk 
tier facility from the annual inspection if a facility is 
inspected or audited for 5 years in a row, and is found in 
compliance with the bill. The amendment then provides that for 
each 5-year period after an exemption, the Secretary must 
conduct at least one audit or unannounced inspection of the 
chemical source. This exemption is not mandatory; the Secretary 
has the discretion to exempt facilities or he could continue to 
require annual inspections.
    Senators present were: Collins, Voinovich, Coleman, Chafee, 
Lieberman, Carper, Dayton, Pryor.
    By a vote of 15-0, the Committee voted unanimously to 
report the bill to the full Senate.
    Yeas: Collins, Lieberman, Stevens (by proxy), Voinovich, 
Coleman, Coburn, Chafee, Bennett, Domenici (by proxy), Warner 
(by proxy), Levin (by proxy), Carper, Dayton, Lautenberg (by 
proxy), Pryor. Nays: none. Senator Akaka was not present and 
provided no instructions.

                     V. SECTION-BY-SECTION ANALYSIS

Section 1--Short Title; table of contents

Section 2--Defines key terms

Section 3--Designation of chemical sources and tiering

    Designate covered facilities. DHS is directed to designate 
the chemical facilities that are covered under this bill within 
one year of the date of enactment of this bill. DHS is directed 
to issue regulations that establish criteria for evaluating the 
types of facilities that should be covered. The regulations 
establishing the criteria for designations should (1) take 
account of the risk factors described in Section 3(b), and (2) 
evaluate the types of facilities described in Section 3(c). 
Section 3(b) lays out risk factors that the Secretary should 
consider in designating chemical sources: (1) the perceived 
threat to a facility, (2) the potential extent and likelihood 
of death, injury, or serious adverse effects to human health 
and safety or to the environment caused by a terrorist attack 
at a facility, (3) threats to or potential impact on national 
security or critical infrastructure, (4) potential threats or 
harm to the economy, (5) proximity of a facility to population 
centers, (6) the nature and quantity of substances of concern, 
and (7) other security-related factors necessary to protect 
public health and safety, critical infrastructure, and national 
and economic security. Section 3(c) directs DHS to (1) consider 
any facility that is a ``stationary source'' under the Clean 
Air Act (CAA), section 112(r)(2) and for which the owner or 
operator is required to complete a risk management plan in 
accordance with CAA section 112(r)(7)(B)(ii), (2) consider any 
other facility that uses, produces, or stores a ``substance of 
concern,'' and (3) determine whether additional facilities, 
outside of the first two categories, should be included on its 
list. The bill explicitly exempts chemical facilities owned or 
operated by the Departments of Defense and Energy, as well as 
any facility owned or operated by a licensee or certificate 
holder of the Nuclear Regulatory Commission.
    Subsection (e)--Establish a Tiered System. Within 1 year of 
the date of enactment of this bill, the Secretary must issue 
rules establishing a risk-based tiered system of ``chemical 
sources.'' The system must consist of several tiers and be 
based on risk criteria identified above. Within the first year, 
DHS must place each covered chemical facility in a tier. DHS 
must designate 1 or more of these tiers ``higher risk 
tier(s).'' Higher risk tiers have stricter requirements and 
standards, as indicated in Section 4. The rules must also 
provide guidance to owners and operators regarding steps that 
would enable a chemical source to move to a lower risk tier.
    Subsection (f)--Establish Security Performance Standards. 
DHS must create security performance standards for each tier. 
As the tiers increase in risk, the security performance 
standards should become correspondingly stricter, thereby 
requiring facilities to implement greater security measures to 
meet these standards. DHS must issue guidance as to the types 
of security measures that, if applied, could meet the security 
performance standards. Chemical facilities would have the 
flexibility to employ different security measures that those 
described in the guidance if such measures satisfy the security 
performance standards. For higher risk tier facilities, at the 
request of the owner or operator, the Secretary must provide 
consultation on the types of security measures, that, if 
applied, could satisfy the security performance standards. The 
standards must also include consideration of the criteria for 
designating chemical sources (under Section 3(a)), cost, 
technical feasibility, and scale of operations.
    Subsection (g)--Notice to Facilities. The Secretary must 
notify potentially regulated facilities within 6 months of 
enactment of the bill about the process and timeline for review 
and designation of chemical sources.
    Subsection (h)--Subsequent Determinations. The Secretary is 
required to review and revise as necessary the list of 
designated sources every 3 years. In addition to this periodic 
review, the Secretary at any time may determine whether to 
designate additional facilities or remove the designation of 
particular facilities.
    Identification of Additional Chemical Sources--The owner or 
operator of any chemical facility where a threshold quantity of 
a substance of concern is present to petition the Secretary for 
a determination on whether that facility should be designated a 
chemical source, if that facility has not been required to 
complete a risk management plan (under the CAA section 
112(r)(7)(B)(ii)). The owner or operator of any newly operation 
facility that handles at least the threshold quantity of a 
substance of concern to file a petition with the Secretary for 
a determination on whether that facility should be designated a 
chemical source. The Secretary is directed to consult with the 
EPA Administrator to establish a mechanism for the Department 
to receive timely notice when a facility is required to 
complete a risk management plan in accordance with CAA section 
112(r)(7)(B)(ii).
    Subsection (i)--Designating Substances of Concern. The 
Secretary may create a list of chemical substances of concern 
with corresponding threshold quantities. In doing so, the 
Secretary may, by regulation, designate or exempt a chemical 
substance as a substance of concern or establish or revise a 
threshold quantity. In designating or exempting substances of 
concern, the Secretary must consider the potential extent of 
death, injury, or serious adverse effects to human health and 
safety or the environment and the potential impact on national 
security, the economy or critical infrastructure that would 
result from a terrorist attack involving the chemical 
substance.

Section 4--Vulnerability assessments, security plans, and emergency 
        response plans

    Subsection (a)--Requirements for Assessments and Plans. DHS 
must issue regulations with requirements for conducting 
vulnerability assessments, creating and implementing site 
security plans that addresses the risks identified in the 
vulnerability assessment, and creating an emergency response 
plan or updating an existing plan to reflect planning for a 
terrorist attack scenario. The regulations must be risk-based, 
performance-based, and flexible, and must include consideration 
of the criteria for designating chemical sources (Section 
3(a)(1)). These regulations must allow for the cooperation 
among chemical sources operating at contiguous locations.
    Subsection (a)(4)--Sharing of Threat Information. The 
Secretary is directed to share relevant threat information with 
State and local government officials and with an owner or 
operator of a chemical source. The Secretary must take into 
account the interests of national security and applicable 
authority before sharing relevant threat information.
    Subsection (a)(5)--Contents of Vulnerability Assessments. 
Vulnerability assessments must (1) be based on a methodology 
developed or endorsed by the Secretary, (2) incorporate any 
threat information shared by DHS under subsection (a)(4), and 
(3) address the appropriate security performance standards for 
the facility's tier. In addition, vulnerability assessments 
must include an analysis of physical security, communications 
systems, cyber security, and the sufficiency of existing 
security measures relative to the threats and consequences of a 
terrorist attack, including vulnerabilities from hazardous 
chemicals.
    Subsection (a)(6)--Contents of Site Security Plans. Each 
site security plan must indicate the tier applicable to the 
facility, address risks identified in the vulnerability 
assessment and address the appropriate security performance 
standards. Site security plans must also include security 
measures (1) sufficient to deter, to the maximum extent 
practicable, a terrorist attack, (2) to mitigate the 
consequences of a terrorist incident, and (3) to increase cyber 
security. Further, these plans must describe contingency plans 
for the facility; identify roles and responsibilities of 
employees; identify steps taken to coordinate with government 
officials; describe training, drills, exercises, and security 
actions; and describe security measures that would be 
implemented in respond to an order under Section 7 in the event 
that heightened security measures became necessary for a 
particular facility.
    Subsection (a)(7)--Contents of Emergency Response Plans. 
Emergency response plans must address the consequences of a 
terrorist attack identified in the vulnerability assessment; is 
consistent with the site security plan; and identifies the 
roles and responsibilities of employees. Existing plans must be 
modified (to reflect the requirements noted in the previous 
sentence) versions of plans that have been Federally approved 
or certified and that are in effect on the date of enactment, 
if consistent with guidance provided by the National Response 
Team (NRT) established under the National Contingency Plan. If 
an owner or operator does not already have an emergency 
response plan, one must be created following the guidance of 
section 105 of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 (42 U.S.C.9605). Owners 
and operators are required to place security information in an addendum 
to the plan, if necessary, to protect it from public disclosure.
    Subsection (a)(8)--Guidance and Consultation. The Secretary 
must provide guidance to assist owners and operators of 
chemical sources in complying with this bill, including advice 
on aspects of compliance that may be unique to small 
businesses. An owner or operator of a higher risk tier facility 
may request, in addition to the guidance provided to all 
covered facilities that DHS consult with them on achieving 
compliance under this bill. Higher risk tier facilities may 
request that DHS consult with them on achieving compliance with 
the bill, in addition to the guidance provided for above.
    Subsection (b)--Certification and Submission of Assessments 
and Plans. Within 6 months after the regulations are issued 
under this section, all covered facilities must certify to DHS 
that they have complied with this section (completed a 
vulnerability assessment, developed and is implementing a site 
security plan and an emergency response plan) and submit to the 
Secretary for review and approval copies of the assessment and 
plans.
    Subsection (c)--Review by the Secretary. The Secretary is 
required to review the assessment and plans to determine 
whether such assessment and plans, and the implementation of 
such plans comply with this section. If compliance is 
determined, then the Secretary would issue an approval notice; 
if non-compliance is determined, the Secretary would issue a 
disapproval notice. The Secretary may not disapprove a site 
security plan based on the presence or absence of a particular 
security measure if the site security plan satisfies the 
security performance standards. The Secretary must provide 
written notice to the owner or operator of the chemical source 
regarding the determination of approval or disapproval. For 
disapprovals, the Secretary must provide the owner or operator, 
in writing, a clear explanation of deficiencies and consult 
with them to identify appropriate steps to achieve compliance 
and provide additional time for the facility to come into 
compliance. If the owner or operator does not achieve 
compliance, the Secretary must issue an order requiring the 
owner or operator to correct the specified deficiencies. If the 
owner or operator continues to be in noncompliance, the 
Secretary may issue an order for the chemical source to cease 
operation. The Secretary has greater authority in dealing with 
higher risk tier facilities. For these facilities, the 
Secretary may issue an order to a chemical source as soon as 
determining that the vulnerability assessment, site security 
plan, or emergency response plan or determines that 
implementation does not comply with this Section. The Secretary 
is not required to provide additional time for compliance as 
noted for all other tiers.
    The Secretary is required to make the approval or 
disapproval determination within 5 years after the date of 
submission of the assessment and plans. For higher risk tier 
facilities, the Secretary must make the approval or disapproval 
determination within 1 year after the date of submission of the 
assessment and plans. The Secretary may conduct subsequent 
reviews and determinations of compliance on a schedule that he 
determines, so long as such reviews occur not less than once 
every five years after the initial approval of a facility's 
assessments and plans. Higher risk tier facilities must be 
given priority for review, and these facilities must be 
reviewed not less than once every three years after the initial 
approval determination of its assessment and plans.
    Subsection (c)(3)(B)(i)--Interim Notice. For higher risk 
tier facilities, DHS must conduct a preliminary review of the 
vulnerability assessment, site security plan, and emergency 
response plan not later than 9 months after date of issuance of 
the regulations under this Section. If the preliminary review 
indicates that a disapproval determination is likely, DHS must 
provide to the chemical source assistance in achieving 
compliance with this bill.
    Subsection (d)--Submission and Certification of Changes. If 
an owner or operator makes a change to a chemical source that 
would have a materially detrimental effect on the security of 
the chemical source, the owner or operator must notify DHS in 
writing of such changes and provide a description of such 
changes. The owner or operator must also certify to DHS that it 
has reviewed and made any necessary changes to its assessment 
and plans and provided a description of any such modifications 
to DHS. If the Secretary determines that additional 
modifications, beyond what the owner or operator has made, are 
required, the Secretary must provide written notice to the 
owner or operator regarding the deficiencies and permit an 
additional 60 days for compliance. During the time before any 
revised security measures are implemented, the owner or 
operator must ensure temporary security measures are 
implemented to address the vulnerabilities previously 
identified.
    Subsection (e)--MTSA-regulated Facilities. A chemical 
facility that is regulated under the Maritime Transportation 
Security Act (MTSA) and designated as a chemical source under 
this Act must comply with this Act. The owners and operators of 
these facilities must review the vulnerability assessment, 
security plans and emergency response plans that they submitted 
to the Coast Guard pursuant to the MTSA and make any 
modifications necessary to comply with the security performance 
standards established for the tier in which it was placed under 
this Act. The assessment and plans, with any appropriate 
modifications, must be submitted to the appropriate Federal 
Maritime Security Coordinator and the Secretary for approval 
within 6 months after issuance of the regulations. Owners and 
operators of these facilities must also certify in writing to 
the Federal Maritime Security Coordinator for their area that 
the assessment and plans are in compliance with the security 
performance standards for their tier. The Secretary must 
consult with the Federal Maritime Security Coordinator to 
determine whether the security plan meets the security 
performance standards for the pertinent tier. Chemical sources 
that are regulated under the MTSA are exempt from the Section 6 
requirements of this Act. The Secretary must implement this Act 
in as consistent and integrated a manner as possible with the 
MTSA. The Secretary must also ensure coordination between the 
Undersecretary for Preparedness and the Coast Guard Commandant 
in carrying out this Act for chemical sources that are also 
MTSA-regulated facilities.
    Subsection (f)--Alternative Security Programs. The 
Secretary may also consider petitions to approve documents 
prepared for alternative security programs. A person may submit 
a petition to the Secretary to have him consider alternate 
standards established by Federal, State or local government 
authorities, or industry for a determination of whether 
documents prepared for that program meet each required element 
for assessments and plans under this bill. If so, the 
assessments and plans prepared under that program may be 
submitted without further revision. If the Secretary determines 
that the documents prepared under the alternate program do not 
meet all the required elements, he may specify modifications 
that would be necessary for the alternate program to comply 
with this bill. If an alternative security program is approved 
by the Secretary, each facility covered by that program must 
submit its assessments and plans to the Secretary for review in 
accordance with the security performance standards for the 
pertinent tier. Each facility submission must be approved or 
disapproved on an individual basis.

Section 5--Recordkeeping; site inspections; production of information

    Each chemical source must maintain a current copy of the 
vulnerability assessment, site security plan and emergency 
response plan onsite for 5 years after date of the approval 
determination. The Secretary may require the submission of or 
access to and may copy any records or information, including 
the assessment and plans and any other documentation necessary 
for the review and analysis of such assessment and plans and 
the implementation of a security plan. If the Secretary 
determines that an owner or operator is not maintaining, 
producing, or permitting access to records or to the premises 
of the chemical source as required by this section, the 
Secretary may issue an order requiring compliance. The 
Secretary has a right of entry to chemical sources and any 
premises on which any record required to be maintained is 
located. The Secretary has the authority to conduct security 
audits and inspections of chemical sources to determine 
compliance with the bill. The Secretary may also set 
requirements for these inspections and audits by rule, 
regulation or order.
    Subsection (b)(2(C)--Higher Risk Tiers. The Secretary must 
inspect or audit higher risk tier facilities at least once per 
year. If a higher risk tier facility has been found in 
compliance with this bill based upon 5 consecutive years of 
audits or inspections, then the Secretary may exempt a chemical 
source from this annual requirement. If the Secretary makes an 
exemption, such facility must be audited or and unannounced 
inspection must occur at least once per every 5 years after the 
exemption determination. For higher risk tier chemical sources 
that are also MTSA-regulated facilities, an audit or inspection 
conducted by the Coast Guard pursuant to the MTSA shall qualify 
as an audit or inspection under this section.

Section 6--Infrastructure protection and implementation

    The Secretary is directed to model the implementation of 
this section on MTSA. Moreover, the Department is directed to 
coordinate with the MTSA Federal area security and response 
committees already in place in order to provide a unified and 
effective Federal security effort. DHS is directed to establish 
an office within the Infrastructure Protection (IP) directorate 
that will be responsible for implementing and enforcing this 
bill. The Department is directed to create regional IP offices, 
aligned with the FEMA regions, or the regional office of any 
successor agency of FEMA, to implement this bill and coordinate 
regional security. These regional offices will oversee chemical 
facility compliance, conduct security inspections, audits and 
drills. Further, DHS is directed to create ``areas'' and assign 
a Federal security coordinator to oversee an area committee 
comprised of qualified and affected security and response 
personnel, including State and local government officials, 
chemical facilities and local emergency planning and response 
entities. Area committees would provide enhanced coordination 
for security and emergency response planning. Each area must 
create an area security plan and submit it to DHS for approval. 
An area plan must coordinate the resources of the area to deter 
or respond to a terrorist attack in the area, including 
coordinating with the appropriate Federal, State and local 
government agencies or local emergency planning entities. DHS 
must also conduct periodic drills and exercises of security and 
response capabilities for these areas. The Secretary must 
publish an annual report on the drills under this provision, 
including an assessment of the effectiveness of the area plans, 
lessons learned, and recommendations, if any, to improve 
programs, plans and procedures.

Section 7--Heightened security measures

    The Secretary is authorized to issue an order to the owner 
or operator of a chemical source mandating that the source 
implement the ``heightened security measures'' provision 
described in its site security plan pursuant to Section 
4(a)(6)(H), if the Secretary determines that additional 
security measures are necessary to respond to a threat. An 
order issued pursuant to this authority shall not remain in 
effect for a more than 90 days, unless the Secretary files an 
action in Federal district court and the court authorizes an 
extension.

Section 8--Penalties

    Administrative penalties for failure to comply with an 
order or directive issued under this bill are authorized for 
not more than $25,000 per day and not more than $1 million per 
year, but only after the Secretary has provided written notice 
of the proposed penalty and 30 days, during which the owner or 
operator may request a hearing. The Secretary must issue 
regulations establishing procedures for administrative hearings 
and reviews. The Secretary is authorized to pursue civil 
penalties by bringing an action in U.S. district court against 
an owner or operator who violates or fails to comply with an 
order or directive under this bill or his approved site 
security plan. The court may issue an order for injunctive 
relief and award a civil penalty of not more than $50,000 per 
day. Criminal penalties are authorized for of up to $50,000 per 
day and/or imprisonment for up to 2 years for an owner or 
operator of a chemical source who knowingly and willfully 
violates any order issued by the Secretary or knowingly and 
willfully fails to comply with an approved site security plan.

Section 9--Protection of Information

    As noted above, the bill defines ``protected information'' 
to include: vulnerability assessments, site security plans, 
area security plans, and security addenda to emergency response 
plans, materials obtained by DHS and developed or produced by a 
chemical source exclusively in preparation of the information 
listed immediately above (e.g., vulnerability assessments, 
etc.; and (1) documents or other information obtained by DHS or 
a State or local government, but only to the extent that the 
documents or information (noted in both (1) and (2)) contain an 
item of information that describes a chemical source or its 
vulnerabilities, was taken from a vulnerability assessment or 
the other plans noted above, and, if disclosed, would be 
detrimental to the security of the chemical source.
    Subsection (a)--Disclosure Exemptions. The new regulatory 
scheme proposed under the bill requires the Secretary to keep 
information defined as ``protected information'' secure and 
exempts such information from the public disclosure 
requirements of the Freedom of Information Act (FOIA) or any 
State or local law providing for public access to information. 
The specific legislative language employed is that the 
Department ``shall not be required under[FOIA] to make 
available to the public protected information''; other Federal agencies 
that receive a FOIA request for protected information ``shall not 
disclose the record'' and shall refer the request to the Department; 
and ``[a] State or local government agency shall not be required under 
any State or local law providing for public access to information to 
make available to the public protected information''; and, in Section 
9(c), that the Secretary shall establish confidentiality protocols that 
ensure records are maintained securely and that access is appropriately 
limited. These provisions together mandate that DHS and other agencies 
will maintain the secrecy and integrity of protected information, while 
not precluding the Secretary from disclosing specific information if he 
or she decides to grant public access to specific information pursuant 
to a proper FOIA request if the Secretary determines circumstances so 
warrant.
    The Maritime Transportation Security Act (MTSA), enacted in 
2002, employs similar language regarding Sensitive Security 
Information (SSI) obtained by the Department for purposes of 
MTSA. The relevant MTSA provision states that, 
``[n]otwithstanding any other provision of law, information 
developed under this chapter is not required to be disclosed to 
the public.'' \117\
---------------------------------------------------------------------------
    \117\ See 46 U.S.C. Sec. 70103(d) (emphasis added).
---------------------------------------------------------------------------
    Subsection (b)--Certifications and Orders. The bill 
provides guidance with respect to the handling of 
certifications and orders. The bill, under Section 9(b)(1)(A), 
directs that, generally, certifications of compliance from a 
chemical source to DHS (under Section 4(b)(1)); failure to 
comply orders from DHS to a chemical source (under Section 
4(b)(3)); compliance certifications from DHS to a chemical 
source (under Section 9(b)(2)); and other disapprovals and 
orders issued under the bill shall not be made available to the 
public under FOIA. However, Section 9(b)(1)(B)(i) provides for 
an exception to this rule where the Secretary makes a specific 
finding that releasing certifications of compliance from a 
chemical source to DHS or compliance certifications from DHS to 
a chemical source will not increase risk to a chemical source, 
the Secretary may make the record available to the public under 
FOIA.
    Under Section 9(b)(2), when the Secretary makes a 
determination that a chemical source is in compliance with the 
requirements of the bill, he or she must provide a certificate 
of approval to the chemical facility noting that the facility 
``is in compliance with the Chemical Facility Anti-Terrorism 
Act of 2006.''
    As a means of measuring the overall success of chemical 
facilities in implementing the requirements of the bill, 
Section 9(b)(3) requires that the Secretary, at least once a 
year, ``submit to Congress a public report on the performance 
of chemical sources under the bill, in the aggregate, including 
a description of common problems, solutions, and industry best 
practices.'' This clause is intended to have the Secretary 
inform Congress regarding both the advancements made, and the 
problems encountered, by chemical facilities pursuant to the 
requirements under the bill.
    Subsection (c)--Development of Protocols. Under Section 
9(c)(1) of the bill, the Secretary, in consultation with the 
Director of the Office of Management and Budget and the 
appropriate Federal law enforcement and intelligence officials, 
``and in a manner consistent with existing protections for 
sensitive or classified information,'' shall, by regulation, 
establish confidentiality protocols for the maintenance and use 
of records containing protected information. This clause 
explicitly acknowledges other regulatory schemes relating to 
sensitive or classified and states that the regulations 
promulgated under this bill should be consistent with such 
regulatory schemes. In drafting this legislation, the drafters 
were well aware of the sensitive and classified information 
protection protocols in effect, and specifically noted that the 
regulations promulgated under this bill must be consistent with 
such information protection regulatory schemes.
    Section 9(c)(2) articulates the requirements for the 
regulatory protocols promulgated under the bill and 
contemplated under Section 9(c)(1). The clause states that the 
protocols ``shall ensure, to the maximum extent practicable, 
that'' the records shall be securely maintained, and access to 
such records shall be limited as may be necessary to: ``enable 
enforcement of th[e] Act,'' or ``address an imminent and 
substantial threat to security, health, safety, or the 
environment;'' State or local law enforcement officials, first 
responders, or other officials granted access to such records 
for the purpose of carrying out the bill; and ``other persons 
granted access for the purpose of carrying out this Act.'' This 
bill, while fostering an atmosphere of appropriate information 
sharing between DHS and State and local law enforcement, first 
responders and other officials, still contemplates protocols 
based on a ``need to know'' standard.
    Section 9(c)(3) requires the establishment of other 
procedures in the regulatory protocols. Under Section 
9(c)(3)(A), the regulations are to provide for the labeling of 
any record containing protected information to enable the 
information contained therein ``to be traced back to the 
specific document from which the information was derived.'' 
Section 9(c)(3)(A) of this bill requires that the labeling of a 
record containing protected information be sufficient to enable 
a determination of ``the specific document from which the 
information was derived.'' This requirement is based on the 
fact that it is necessary to properly account for the genesis 
of protected information given that the definition of protected 
information not only specifically includes vulnerability 
assessments, site security plans, area security plans, and 
security addenda to emergency response plans, but also 
information and materials ``developed or produced exclusively 
in preparation of'' such documents, and information ``taken 
from'' such documents.\118\
---------------------------------------------------------------------------
    \118\ See Section 2(8)(B), (C), and (D) of the bill.
---------------------------------------------------------------------------
    Section 9(c)(3)(B) states that the protocols shall 
``accommodate'' the making of disclosures under 5 U.S.C. 
Sec. 2302(b)(8) and an employee's right to petition Congress 
under 5 U.S.C. Sec. 7211. Moreover, this section mandates that 
the protocols must also provide guidance to employees as to how 
to make these types of disclosures without compromising 
security. This section reflects that the integrity of protected 
information must be maintained without infringing upon the 
protections afforded to Federal employees for proper public 
interest disclosures and their right to petition Congress.
    Section 9(c)(3)(C) states that the protocols shall include 
procedures applicable to a FOIA request, ``requiring that any 
portion of a record that reasonably may be separated shall be 
provided to a person requesting the record after redaction of 
any portion that is exempt from disclosure.'' This mandate is 
intended to ensure that information that is not designated as 
protected information under the bill is not shielded from the 
public under a proper FOIA request merely because the non-
protected information exists in a document along with some 
protected information.
    Section 9(c)(3)(D) ensures that information designated as 
protected information shall not be shielded from the public 
under a proper FOIA request in perpetuity if, ``because of 
changed circumstances or the passage of time, disclosure of the 
record would not be detrimental to the security of a chemical 
source.'' There are circumstances where information once 
designated as protected information under the bill no longer 
needs the sort of heightened protection provided for under the 
bill. This section of the bill therefore requires the DHS 
Secretary to establish procedures by which a record containing 
protected information may lose its protected status under the 
bill and become subject to the requirements of public 
disclosure under FOIA if--because of the passage of time or 
changed circumstances--disclosure of the record would not be 
detrimental to the security of a chemical source.
    Subsection (d)--Process for Reporting Problems. Under 
Section 9(d)(1), the Secretary is required to establish and 
provide information to the public regarding a process by which 
a person may submit a report to the Secretary regarding 
``problems, deficiencies, or vulnerabilities at a chemical 
source.'' In an effort to encourage such reporting, Section 
9(d)(2) states that the Secretary shall keep the identity of 
any person submitting such a report confidential and that the 
report itself will be treated as protected information under 
the bill to the extent it does not contain information readily 
available to the public.
    If a report under Section 9(d)(1) identified the individual 
making the report, Section 9(d)(3) requires that the Secretary 
``promptly respond to such person and acknowledge receipt of 
the report.''
    Section 9(d)(4) ensures that the issues noted in a report 
submitted under Section 9(d)(1) are properly reviewed, by 
requiring that the Secretary ``review and consider the 
information provided'' and ``take appropriate steps'' under the 
bill to fully address the issues, problems, or deficiencies 
identified in the report.
    Section 9(d)(5) forbids an employer from discharging or 
otherwise discriminating against an employee (or a person 
acting pursuant to the request of the employee) for making a 
report under Section 9(d)(1).
    Section 9(d)(6) requires the Comptroller General of the 
United States to describe the number and type of problems, 
deficiencies and vulnerabilities identified in reports provided 
to the Secretary under Section 9(d)(1). Moreover, Section 
9(d)(6) also requires that the Comptroller General's report 
evaluate the Secretary's efforts to address the problems, 
deficiencies and vulnerabilities identified in the Section 
9(d)(1) reports. The Comptroller General's reports under 
Section 9(d)(6) are to be included in the annual reviews by the 
Governmental Accountability Office required under Section 12 of 
the bill.
    Subsection (e)--Protected Disclosures. The spirit of 
Section 9(e) is similar to that of Sections 9(c)(3)(B) and 
9(d)(5) as described above. Section 9(e)(1) states that nothing 
in the bill shall limit the right of a person to make 
disclosures under 5 U.S.C. Sec. 2302(b)(8) or a person's right 
to petition Congress under 5 U.S.C. Sec. 7211. Moreover, 
Section 9(e)(2) preserves a person's right to make a disclosure 
under any other Federal or State law that protects the 
disclosing individual against retaliation or discrimination for 
having made a disclosure in the public interest. Lastly, 
Section 9(e)(3) preserves a person's right to make a disclosure 
to the Special Counsel, the inspector general of an agency, or 
any other employee designated by the head of an agency to 
receive such disclosures.
    Subsection (f)--Materials Not Held by Agencies. Section 
9(f) notes that nothing under the bill shall be interpreted to 
limit the rights or obligations of a chemical source or any 
other entity that is not a Federal, State or local government 
entity in possession of a record containing protected 
information with respect to the withholding or disclosure of 
any information or record held by the chemical source or the 
entity ``regardless of whether or not the Department has 
received or possesses similar or identical information or a 
similar or identical record.'' Consistent with other sections 
of the bill, this section reflects the drafters' intention that 
the information protection clauses of the bill do not affect 
any rights and obligations of a private-sector entity with 
respect to a document or information in its possession, and 
generally do not interfere with disclosure rights and 
obligations in effect, other than those specifically noted in 
the bill.
    Subsection (g)--Disclosure of Independently Furnished 
Information. Section 9(g)(1) establishes that the provisions of 
the bill do not affect the handling or disclosure of a record 
or information obtained from a chemical source under any other 
law. Moreover, Section 9(g)(2) states that the bill does not 
affect any authority or obligation of an agency to disclose any 
record that the agency has received independently of a record 
exempt from FOIA requests under Section 9, ``regardless of 
whether or not the Department has an identical or similar 
record that is so exempt.'' These two provisions make it clear 
that if a record is produced to or obtained by an agency 
independently of this bill, even if the record contains 
protected information, the Chemical Facility Anti-Terrorism Act 
of 2006 does not affect or control the handling, treatment, or 
public disclosure of the record. The same principle for 
independently furnished information can be found at 6 CFR 
Sec. 29.3(d) with respect to Protected Critical Infrastructure 
Information (PCII) governed by the Homeland Security Act of 
2002.
    Subsection (h)--Other Obligations Unaffected. Under Section 
9(h)(1), the bill does not change any existing obligation of an 
owner or operator of a chemical facility to provide information 
to a Federal, State, or local government agency under any other 
law. Section 9(h) ensures that the bill is not intended to 
affect disclosure or submittal obligations under any other law 
not specifically mentioned in the bill. Moreover, under Section 
9(h)(2), the owner or operator of a chemical facility may not 
use a record containing protected information to meet a legal 
requirement other than a requirement under the bill; nor may 
such a record be used to obtain a grant, permit, contract, 
benefit, or other governmental approval.
    Subsection (i)--Availability of Information to Congress. 
Section 9(i) ensures that the bill may not be used in any way 
to authorize the withholding of information from Congress.
    Subsection (j)--Penalties for Unauthorized Disclosure. 
Section 9(j) states that any Federal, State, or local 
government officer or employee who, in a manner not permitted 
by law, ``knowingly discloses'' any record containing protected 
information will be imprisoned for not more than one year, 
fined (under Chapter 227 of title 18, United States Code), or 
both. Moreover, if the person who knowingly makes the non-
lawful disclosure is an officer or employee of the Federal 
government, then he or she shall be removed from his or her 
position.
    Subsection (k)--Public Availability of Information in 
Reports. Section 9(k) establishes that the Government 
Accountability Office may not disclose any protected 
information to the public in any report required of it under 
Section 12.

Section 10--State and other laws

    Nothing in this bill denies States or localities from 
adopting or enforcing chemical security requirements that are 
more stringent than the standard under this bill, unless there 
is an actual conflict between a provision of this bill and the 
law of a State or locality. In addition, nothing in this bill 
would preclude or deny the right of any State or locality to 
adopt or enforce any requirement, including air or water 
pollution requirements that are directed at problems other than 
reducing damage from terrorist attacks.

Section 11--National strategy for chemical security

    The Secretary is directed, within 6 months following 
enactment of this bill, to submit to the Senate Homeland 
Security and Governmental Affairs Committee, and the Homeland 
Security Committee and the Energy and Commerce Committees of 
the House of Representatives, an update of its national 
strategy for securing the chemical sector.

Section 12--Government accountability office review

    The Department is directed to provide the U.S. Government 
Accountability Office (GAO) with access to any document or 
information required to be submitted to, generated by, or 
otherwise in the possession of the Department under this Act. 
GAO is required to submit a report annually to the Senate 
Homeland Security and Governmental Affairs Committee and 
Committee on Homeland Security of the House of Representatives 
and the Energy and Commerce Committee of the House of 
Representatives, a review of vulnerability assessments, site 
security plans and emergency response plans under this bill, 
and a determination of whether such plans and assessments are 
in compliance with this bill.

Section 13--Judicial actions

    Any person is permitted to file a petition with the U.S. 
Court of Appeals for the District of Columbia for judicial 
review of a rule within 60 days of promulgation. The court is 
directed to review rules in accordance with the Administrative 
Procedure Act (5 U.S.C. Sec. 701 et seq.). The bill allows only 
an owner or operator whose facility is affected by a final 
agency action to file a petition in U.S. district court within 
60 days of its issuance. Only the owner or operator and the 
Secretary may participate in such civil actions. The bill 
precludes judicial review of final agency actions except as 
specified in this section and Section 7(b). The bill prohibits 
private civil actions against an owner or operator to enforce 
provisions of this bill.

Section 14--Ammonium nitrate

    The Secretary, in consultation with the Secretary of 
Agriculture, is directed to regulate the handling and sale of 
ammonium nitrate to prevent misappropriation or use in 
violation of law. The bill requires the registration of 
facilities and purchasers. The bill restricts sales to 
registered producers, sellers, and purchasers, and further 
requires that records of sales or distribution must be 
maintained. The registration information shall be treated as 
protected information under this bill. The Secretary of 
Homeland Security is authorized to establish a process for 
auditing handler records to determine compliance. Penalties for 
violations and compliance failures are authorized.

Section 15--Authorization of appropriations

    The bill authorizes such sums as are necessary to carry out 
this Act.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                                     July 25, 2006.
Hon. Susan M. Collins,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2145, the Chemical 
Facilities Anti-Terrorism Act of 2006.
    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, 
Melissa Merrell (for the state and local impact) and Paige 
Piper/Bach (for the private-sector impact).
            Sincerely,
                                          Donald B. Marron,
                                                   Acting Director.
    Enclosure.

S. 2145--Chemical Facilities Anti-Terrorism Act of 2006

    Summary: S. 2145 would authorize the Department of Homeland 
Security (DHS) to regulate the security of chemical facilities 
across the United States. Under the bill, DHS would identify 
such facilities and estimate the level of risk they pose to the 
nation's security. DHS would develop regulations to require the 
owners and operators of those facilities to perform 
vulnerability assessments and to establish site security plans 
and emergency response plans. The legislation would establish a 
chemical security office at DHS headquarters and offices at the 
regional level that would be responsible for auditing and 
inspecting the security of the nation's chemical facilities. In 
addition, DHS would be responsible for maintaining the 
information it receives on chemical facilities in a secure 
location. Finally, S. 2145 would require DHS to regulate the 
handling and purchase of ammonium nitrate.
    CBO estimates that implementing S. 2145 would cost $255 
million over the next five years, assuming appropriation of the 
necessary amounts. Of that amount, $210 million would be used 
to regulate and oversee an estimated 15,000 to 18,000 chemical 
facilities. The remaining $45 million would be used by DHS to 
regulate the handling and purchase of ammonium nitrate. 
Enacting S. 2145 could affect direct spending and receipts 
because the bill would establish new civil and criminal 
penalties against owners and operators of chemical facilities, 
handlers of ammonium nitrate, and officers or employees of 
federal, state, or local government agencies who fail to comply 
with the bill's requirements. However, CBO estimates that any 
collections from such civil and criminal penalties would not be 
significant.
    S. 2145 contains intergovernmental mandates, as defined in 
the Unfunded Mandates Reform Act (UMRA), because it would 
require the owners and operators of certain facilities, 
including those that provide public drinking water and 
wastewater treatment, to undertake measures to protect against 
the unauthorized release of chemical substances. It also would 
exempt certain security plans and documents from state and 
local laws that provide public access to information and 
preempt the authority of states to regulate the sale of 
ammonium nitrate in a manner that is less stringent that the 
requirements of the bill.
    Because some of the mandates are dependent upon future 
actions of the Department of Homeland Security, CBO cannot 
determine their exact costs. However, based on information from 
DHS and representatives of public water facilities, CBO 
estimates that, because it is likely those public facilities 
would be assigned to the lowest tier of risk and that DHS 
likely would consider activities that the facilities are 
currently doing to be sufficient to meet the requirements of 
this bill, additional costs for those public facilities would 
not exceed the annual threshold established in UMRA ($64 
million for intergovernmental mandates in 2006, adjusted 
annually for inflation).
    S. 2145 also would impose private-sector mandates, as 
defined in UMRA on owners and operators of certain chemical 
facilities and handlers and purchasers of ammonium nitrate. 
Based on information from industry and government sources, CBO 
expects that the aggregate direct cost of complying with those 
mandates would exceed the annual threshold established by UMRA 
for private-sector mandates ($128 million in 2006, adjusted 
annually for inflation) in at least one of the first five years 
the mandates are in effect.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2145 is shown in the following table. 
For this estimate, CBO assumes that the bill will be enacted 
near the end of fiscal year 2006, that the necessary amounts 
will be appropriated for each year, and that outlays will 
follow historical spending patterns for similar activities. The 
costs of this legislation fall within budget function 750 
(administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2006    2007    2008    2009    201O    2011
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

DHS Spending on Security of Chemical Sites Under Current Law:
    Budget Authority \1\........................................      15       0       0       0       0       0
    Estimated Outlays...........................................      10       5       0       0       0       0
Proposed Changes:
    Regulation Development, Review of Vulnerability Assessments,
     Site Security Plans, and Emergency Response Plans:
        Estimated Authorization Level...........................       0      13       1       1       1       1
        Estimated Outlays.......................................       0      11       3       1       1       1
    Establish Chemical Security Office and Regional Offices for
     Site Audits and Inspections:
        Estimated Authorization Level...........................       0     (*)      30      45      45      45
        Estimated Outlays.......................................       0     (*)      30      45      45      45
    Maintain Chemical Site Information:
        Estimated Authorization Level...........................       0      20       2       2       2       2
        Estimated Outlays.......................................       0      18       4       2       2       2
    Regulate Handlers and Purchasers of Ammonium Nitrate:
        Estimated Authorization Level...........................       0       6      10      10      10      11
        Estimated Outlays.......................................       0       5       9      10      10      11
        Total Proposed Changes:
            Estimated Authorization Level.......................       0      39      43      58      58      59
            Estimated Outlays...................................       0      34      46      58      58      59
DHS Spending. on Security of Chemical Sites Under S. 2145:
    Estimated Authorization Level \1\...........................      15      39      43      58      58      59
    Estimated Outlays...........................................      10      39      46      58      58      59
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 level is the amount appropriated for DHS to address security issues at chemical facilities in that
  year.

Note: * = less than $500,000.

    Basis of estimate: CBO estimates that implementing this 
legislation would cost $34 million in 2007 and $255 million 
over the 2007-2011 period, subject to appropriation of the 
necessary amounts. In addition, CBO estimates that enacting S. 
2145 could have an insignificant effect on direct spending and 
receipts by creating new criminal and civil penalties related 
to compliance with the bill's provisions.

Regulation development and risk assessment

    S. 2145 would require DHS to develop various regulations 
identifying facilities as chemical sources, determining the 
risk to the nation's security associated with those facilities, 
setting security performance standards for chemical facilities, 
and detailing the requirements for vulnerability assessments, 
security plans, and emergency response plans for chemical 
facilities. CBO estimates that implementing these provisions of 
the legislation would cost $17 million over the next five 
years, subject to appropriation of the necessary amounts.
    Based on information from DHS, CBO estimates that over the 
2007-2008 period, efforts to develop necessary regulations 
would require about 15 staff-years at a cost of about $2 
million, and $8 million for related contractor support for 
information technology, meeting and conference planning, and 
assistance in conducting various studies. In addition, under 
the bill, facilities that involve higher security risks would 
have to undergo a more detailed facility assessment. Currently, 
DHS is in the process of developing a risk assessment framework 
known as Risk Analysis and Management for Critical Asset 
Protection (RAMCAP). According to DHS, additional funding would 
be required to refine and manage the RAMCAP process to meet the 
bill's requirements for assessing risk. Based on information 
from DHS, CBO estimates that $3 million in 2007 and $1 million 
a year in subsequent years would be needed for additional 
training and technical modifications to RAMCAP to comply with 
requirements of S. 2145.

Chemical security office and regional offices

    The bill would direct DHS to create a chemical security 
office. The new office would be responsible for planning, 
management, assignment of facilities to risk tiers, review and 
maintenance of site vulnerability assessments and plans, and 
enforcement. Regional employees of the chemical security office 
would oversee facility compliance, conduct large-scale 
emergency response exercises, and work with local law 
enforcement and first responders on security and emergency 
planning. In addition, DHS expects that the regional offices 
would have primary responsibility for conducting audits and 
inspections of thefacilities to verify whether they are meeting 
applicable requirements. Under the bill, most of the nation's 15,000 to 
18,000 chemical facilities would be audited or inspected over the next 
10 years. In total, CBO estimates these efforts would cost $165 million 
over the 2007-2010 period, subject to appropriation of the necessary 
amounts.
    Based on information from DHS, CBO expects that the 
chemical security office would be operational by 2008 and fully 
staffed by 2009. We estimate that the office would require a 
staff of 20 with a first-year cost of about $2 million, and 
would need about $13 million for contractor support and 
information technology in 2008. In subsequent years, CBO 
estimates that $20 million would be required, including $5 
million for a staff of 50 and $15 million for contractor costs, 
travel expenses, and information technology.
    According to DHS, the agency would spend less than $500,000 
in 2007 to study how the field offices should be structured to 
meet the requirements of this legislation. DHS would need 
additional resources to audit and inspect chemical facilities 
and to oversee large-scale emergency response exercises and to 
coordinate efforts with local first responders. CBO estimates 
that DHS would spend about $15 million in 2008 to begin these 
effects, using a staff of 35 at a cost of about $4 million, and 
$11 million for contractor support, travel expenses, and 
information technology. After these initial efforts, we 
estimate that DHS would spend about $12 million on a staff of 
120 plus $13 million for related costs each year over the 2009-
2011 period.

Maintain chemical site information

    Based on information from DHS, CBO estimates that DHS would 
need about $20 million in 2007 to construct facilities to store 
the site chemical information it collects in a secure 
environment and to provide funding for information technology 
and support services for tracking such information. In 
subsequent years, CBO estimates that DHS would require $2 
million to provide ongoing support to maintain the site 
information.

Regulate handlers and purchasers of ammonium nitrate

    S. 2145 would require DHS to regulate the handling and 
purchase of ammonium nitrate. To meet this requirement, DHS 
would develop regulations requiring handlers of ammonium 
nitrate to register facilities, to sell or distribute ammonium 
nitrate only to registered handlers and purchasers, and to 
maintain records of sale. S. 2145 also would direct DHS to 
periodically inspect and audit these records.
    Based on information from industry associations, CBO 
estimates that there are about 2,000 handlers of ammonium 
nitrate in the United States. Based on the number of personnel 
employed by the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives to inspect handlers of firearms and explosives, CBO 
expects that DHS would need to hire about 60 people to carry 
out field inspections and audits of ammonium nitrate handlers. 
Once fully phased in, CBO estimates that the costs of these 
additional employees would reach $8 million annually, including 
salaries, benefits, training, and support costs. For this 
estimate, we assume that the new positions would be fully 
staffed by fiscal year 2008.
    In addition, we estimate that DHS would need to hire about 
20 people to register and communicate with handlers of ammonium 
nitrate, write regulations, and administer this new program. We 
estimate that costs for these personnel would total $2 million 
annually.
    S. 2145 would permit DHS to enter into agreements with 
states to register and inspect handlers of ammonium nitrate. 
Under the bill, DHS would reimburse states for their costs to 
carry out those responsibilities if states chose to enter into 
such agreements with DHS. CBO expects that the cost to carry 
out those registrations and inspections would be similar 
whether conducted by states or DHS.

Government Accountability Office (GAO) studies

    The legislation also would require GAO to prepare annual 
reports that would review the vulnerability assessments, site 
security plans, and emergency response plans submitted by the 
facilities no later than January 1 of the first year following 
the calendar year in which the regulations are developed and 
annually thereafter. CBO estimates that GAO would require less 
than $500,000 annually beginning in 2008 for such reports.
    Estimated impact on State, local, and tribal governments: 
S. 2145 contains several intergovernmental mandates as defined 
in UMRA. First it would require owners and operators of certain 
chemical facilities to undertake specific measures to protect 
against terrorist attacks, criminal acts, or other categories 
of chemical releases, based on regulations to be developed by 
DHS. Because the sites would be selected from public and 
private entities (including public drinking water and 
wastewater treatment facilities), the bill would impose 
intergovernmental mandates as defined in UMRA.
    The bill also includes two preemptions of state and local 
authority. It would exempt certain security plans and documents 
from state and local laws that provide public access 
toinformation and preempt the authority of states to regulate the sale 
of ammonium nitrate in a manner that is less stringent than the 
requirements of the bill. CBO estimates that the cost for state and 
local governments to comply with those mandates would be small and 
therefore would not exceed the annual threshold established in UMRA 
($64 million for intergovernmental mandates in 2006, adjusted annually 
for inflation).

Requirement for vulnerability assessments and security plans

    S. 2145 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 security plan 
to prevent or respond to those releases. S. 2145 would further 
require that owners and operators certify completion of both 
the assessment and plan, submit copies to DHS, maintain records 
at the facility, and complete a periodic review of the 
assessment and plan.
    According to government and industry representatives, many 
of the facilities potentially affected by the bill's provisions 
are currently engaged in activities similar to those that would 
be required under S. 2145. Such facilities are acting either in 
response to the terrorist attacks of September 11, 2001, as a 
condition of membership with chemical industry associations, or 
to comply with the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002, the Maritime 
Transportation Security Act, or other federal regulations. 
Information from DHS indicates that public water facilities 
likely would be assigned to the lowest tier of risk and that 
the department likely would consider activities that the 
facilities are currently doing to be sufficient. Assuming 
public facilities would not be required to undertake 
significant new activities, CBO expects that these mandates 
would impose little additional costs on those facilities.

Preemption of State authority to regulate ammonium nitrate

    S. 2145 would preempt the authority of states to regulate 
the sale of ammonium nitrate in a manner that is less stringent 
than the requirements of this bill. Currently nine states 
regulate the sale of ammonium nitrate, though none of those 
regulations are the same as the provisions of this bill, and 
all would be preempted. This bill would not require states to 
upgrade those regulations; rather the states could choose to 
stop regulating such sales and allow the federal government to 
do so. CBO estimates the states would incur little, if any, 
direct costs as a result of that preemption. The bill would 
allow states to enter into cooperative agreements with the 
federal government to implement the requirements of the bill 
and the Secretary of DHS would be authorized to provide those 
states with sufficientfunds to carry out such duties. CBO 
cannot estimate how many states may opt to implement those regulations, 
but assuming appropriation of funds, any costs incurred by those states 
would be paid for by the federal government.
    Estimated impact on the private sector: S. 2145 would 
impose private-sector mandates, as defined in UMRA, on owners 
and operators of certain chemical facilities and handlers and 
purchasers of ammonium nitrate. Based on information from 
industry and government sources, CBO expects that the aggregate 
direct cost of complying with those mandates would exceed the 
annual threshold established by UMRA for private-sector 
mandates ($128 million in 2006, adjusted annually for 
inflation) in at least one of the first five years the mandates 
are in effect.

Chemical facilities

    S. 2145 would require the Secretary of Homeland Security to 
issue regulations regarding the security of the chemical 
industry. The bill would require that not later than one year 
after the date of enactment, the Secretary would be required to 
establish security performance standards for chemical sources 
based on a risk-based tier system. Each chemical facility would 
be required to file a petition with DHS for a determination on 
whether the facility should be designated as a chemical source. 
In addition, not later than one year after the date of 
enactment of the bill, the Secretary of DHS would be required 
to promulgate regulations that would require the owner or 
operator of each chemical source to conduct a vulnerability 
assessment, to prepare and implement a site security plan, and 
to prepare and implement an emergency response plan. The owner 
or operator of a chemical source also would be required to 
retain a copy of the assessment, the site security plan and the 
emergency response plan for not less than five years after the 
assessment and plans are approved by the Secretary.
    According to industry and government sources, a large 
number of facilities are currently engaged in activities 
similar to the types of assessments and planning that would be 
required under this bill. According to those sources, 
approximately 15,000 to 18,000 chemical facilities would be 
affected by the security regulations. While the direct cost of 
complying with those mandates would depend on the regulations 
to be issued by DHS, based on information from industry and 
government sources, CBO expects that the incremental cost to 
comply with the security standards outlined in the bill would 
be substantial and would exceed the annual threshold 
established in UMRA in at least one of the first five years 
those requirements are in effect.

Whistleblower protection

    The bill also would prohibit owners or operators of 
chemical facilities from discharging any employee, or otherwise 
discriminating against such employees in the terms, conditions, 
or privileges of their employment because the employee 
submitted a report to the Secretary regarding problems or 
vulnerabilities at a chemical facility. Based on information 
from government sources, CBO estimates that those chemical 
sources would incur minimal, if any, direct cost to comply with 
such protection requirements for their employees.

Ammonium nitrate

    The bill also would impose mandates on producers, sellers, 
and purchasers of ammonium nitrate by requiring the Secretary 
of Homeland Security to regulate the handling and purchasing of 
the fertilizer. The Secretary would be required to promulgate 
regulations that would require producers and sellers of 
ammonium nitrate:
           To register facilities where ammonium 
        nitrate is produced or sold;
           To sell or distribute ammonium nitrate only 
        to registered handlers and purchasers; and
           To maintain records of sale or distribution 
        that include the name, address, telephone number, and 
        registration number of certain purchasers.
    In addition, the regulations would require purchasers of 
ammonium nitrate to be registered.
    Under current law, some producers and sellers of ammonium 
nitrate are required to submit information to the Attorney 
General. According to government and industry sources, the 
regulations would result in a modest increase in administrative 
costs to ammonium nitrate handlers and purchasers. Based on 
that information, CBO estimates that the direct cost to comply 
with those mandates would be small relative to the annual 
threshold.
    Previous CBO Estimate: On June 11, 2006, CBO transmitted a 
cost estimate for H.R. 3197, the Secure Handling of Ammonium 
Nitrate Act of 2006, as ordered reported by the House Committee 
on Homeland Security on June 14, 2006. Section 14 of S. 2145 is 
similar to that bill and CBO's estimates of the costs for H.R. 
3197 and section 14 of S. 2145 are identical.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman. 
Impact on State, Local, and Tribal Governments: Melissa 
Merrell. Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      VII. CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of the Standing Rules of 
the Senate, changes in existing law made by S. 2145, as 
reported, are shown as follows: there is no change to existing 
law.

                         VIII. ADDITIONAL VIEWS

                              ----------                              

                 ADDITIONAL VIEWS OF SENATOR VOINOVICH

    I commend the Committee Chairman and Ranking Member for 
their leadership on S. 2145, the Chemical Facility Anti-
Terrorism Act of 2005.
    The U.S. chemical sector is a major part of our nation's 
economic infrastructure and vitality. It includes chemical 
manufacturing, agriculture, healthcare, oil and natural gas, 
forest and paper, mining, dairy, and energy. Accordingly, 
chemical security legislation is of critical importance to our 
homeland security.
    I am pleased that legislation has been advanced that would 
provide comprehensive, risk-based standards that will protect 
chemical facilities and surrounding communities from terrorist 
attack. I am also pleased that agreement was reached on several 
of the amendments brought before the Homeland Security and 
Governmental Affairs Committee. However, I must express my 
serious concerns with certain provisions of S. 2145 as passed 
by the Committee on June 15, 2006.
    The bill reported out of Committee could make communities 
more vulnerable by:
           Promoting an unnecessary, redundant, complex 
        and confusing patchwork of local, state and federal 
        security regulations that would provide for 
        inconsistent levels of security across the country;
           Allowing the release of sensitive security 
        information to potential terrorists;
           Disrupting ongoing security operations;
           Creating the opportunity to define private 
        sector process change as a security measure; and
           Placing regulated industries at a 
        competitive disadvantage with the potential to lead to 
        facility closures and the loss of jobs to overseas 
        competitors, hurting the surrounding communities that 
        ironically, this bill intends to protect.
    While I wholeheartedly support the goal of ensuring the 
security of our nation's critical infrastructure, these issues 
must be addressed before S. 2145 becomes law.
Federal preemption
    Throughout Section II of the Committee Report, the need for 
``a comprehensive national chemical security strategy'' is 
emphasized. The report concludes that nearly five years after 
the attacks of September 11, 2001, ``the Federal government is 
authorized to regulate only segments of the chemical sector, 
creating a patchwork of regulation.'' Additionally, numerous 
witnesses testified regarding the importance of Federal 
preemption and the need to eliminate the patchwork of 
regulatory authority.
    In the Discussion of Legislation, Section III of the 
Committee Report states that S. 2145 ``will replace an existing 
patchwork of voluntary and regulatory'' measures. I strongly 
agree with the need to have a strong federal regulatory 
authority, but S. 2145 does not accomplish this goal. Rather 
the bill encourages states to further regulate facilities by 
declaring that none of its provisions affect any ``right'' of 
states to impose ``more stringent'' requirements. The bill's 
only limit on state regulation is if they ``actual[ly] 
conflict'' with a provision of the bill. Without strict federal 
preemption, the States will have incentive to further regulate 
facilities, regardless of this language.
    Article I Section 8 of the Constitution clearly states that 
Congress is delegated the power to provide for the common 
defense. We, in the Congress, have the duty to provide for the 
security of our states and our people. The absence of strong 
preemption language is an abdication of the Federal 
Government's Constitutional responsibility to national defense.
    Without Federal preemption, we also run the risk of 
disparate regulatory standards as states establish their own 
regulatory regimes in addition to the federal standard. Federal 
preemption of state regulation is necessary to establish a 
single set of national standards to avoid a confusing, costly, 
and inconsistent patchwork of security regulations with which 
the chemical industry has to comply.
Strong protection of information
    S. 2145 as introduced limited the degree of protection it 
provided for sensitive security information that DHS obtains 
from a chemical facility under the bill. Though I am pleased 
that many of these shortcomings were addressed during the 
Committee's consideration of the bill, S. 2145 still does not 
adequately protect sensitive security information. It contains 
no provision for protecting ``protected information'' submitted 
by DHS to a court or administrative law judge in the course of 
an enforcement action. It does not protect ``protected 
information'' in the hands of facility owners and operators 
from civil discovery. Further, it does not forbid the release 
of ``protected'' information by anyone at the Federal, State or 
local level.
    When the Federal government compels the disclosure of 
sensitive security and business related information from the 
private sector for the purpose of national security, this 
information should be comprehensively protected from public 
disclosure. Inadequate protection of information could provide 
terrorists and other criminals with a blue-print of the 
vulnerabilities of this nation's chemical sector. Congress must 
adequately protect sensitive security information by ensuring 
that the information shall not be subject to release or 
discovery in judicial or administrative proceedings, and that 
sensitive security information shall not be disclosed under any 
State or local law providing for public access to information.
Current security operations
    The U.S. Coast Guard enforces the performance-based 
standards of the Maritime Transportation Security Act (MTSA) 
for many of the nation's largest chemical plants. This bill 
would require those facilities that are already complying with 
MTSA to also comply with this act. The report states that ``the 
Committee does not want to duplicate efforts;'' however, the 
language in S. 2145 would do exactly that. S. 2145 subjects 
those facilities already regulated under MTSA to unnecessary 
additional regulation. This requirement would be unduly 
burdensome for companies that have already gone to great 
lengths to secure their facilities.
    On July 17, 2005, Coast Guard Admiral Craig E. Bone 
testified before the Committee that under MTSA, the Coast Guard 
reviews and approves federal security plans for over 300 
chemical facilities. In addition to that, the Coast Guard has 
completed inspections of all facilities that currently have 
Facility Security Plans or Alternative Security Plans to verify 
that they are in compliance. Admiral Bone described the 
compliance by the industry as ``commendable.'' We should not 
only allow, but encourage the Coast Guard to maintain the 
working relationship that it has established with those 
chemical facilities it regulates. S. 2145 should not disrupt 
this effective regulatory regime. We must harmonize the 
regulatory regime that this bill would establish withexisting 
Federal law and private sector efforts to provide for the security of 
chemical facilities. With seamless integration, we will both enhance 
security and preserve the working relationship between the Coast Guard 
and those facilities regulated under MTSA.

Environmental provisions

    The report notes that the bill's definition of a security 
measure might include ``the modification, processing, 
substitution, or reduction of substances of concern'' as 
indicated in Section 2(11)(B)(vii)(III).'' It further states 
that, although the terms are recognized as elements of the 
concept of inherently safer technology (IST), they ``are not 
included in the bill to provide the Secretary with the power to 
require a facility to implement IST.''
    First, there is no precedent for including the concept of 
process change in a security bill. The concept is not 
consistent with security precedent set by the BioTerrorism Act, 
the Maritime Transportation Security Act, the Atomic Energy 
Act, or the Homeland Security Act. These laws focus on 
hardening facilities, not mandating ``private sector'' process 
change.
    Second, IST is a safety and environmental issue to be 
addressed before the Environment and Public Works Committee. 
Within the executive branch, safety and environmental concerns 
are addressed and regulated by the Occupational Safety and 
Health Administration and by the Environmental Protection 
Agency (EPA), respectively through their Process Safety 
Management and Risk Management Program rules, not the 
Department of Homeland Security. Though the EPA encourages 
consideration of IST, during the Clinton Administration, EPA 
consciously chose not to mandate either analyses or 
implementation of IST, in their Risk Management Program. The 
preamble to the RMP rulemaking states the following:
           EPA has decided not to mandate inherently 
        safer technology analyses;
           As many commenters, including those that 
        support such analyses, pointed out, an assessment of 
        inherently safer design alternatives has the most 
        benefit in the development of new processes;
           Although some existing processes may be 
        superficially judged to be inherently less safer than 
        other processes, EPA believes these processes can be 
        safely operated through management and control of the 
        hazards without spending resources searching for 
        unavailable or unaffordable new process technologies'';
           ``Inherently safer processes'' is a 
        developing concept and is not ready for general 
        application; and
           The implementation of IST frequently 
        displaces risk rather than reducing it.
    Given this conclusion, it would be premature at best to 
include this concept in a security bill. The IST language 
should be removed from S. 2145.

Conclusion

    Despite these concerns, I wholeheartedly support the goal 
of ensuring the security of our nation's critical 
infrastructure. I look forward to continuing to work with all 
interested Senators to improve this important homeland security 
legislation.

                                               George V. Voinovich.

      ADDITIONAL VIEWS OF SENATORS LIEBERMAN, AKAKA AND LAUTENBERG

    This bill is the product of extensive work in the Homeland 
Security and Governmental Affairs Committee to explore the 
risks of a possible terrorist attack on our chemical 
facilities, as well as the best means to guard against those 
risks.
    The report well summarizes the background and need for this 
legislation, as well as the provisions of the bill. It reflects 
the strong bipartisan consensus behind most of the provisions 
of this legislation. We write separately, however, to express 
our distinct views on a few key areas of the legislation--the 
role of safer technologies to promote security, protection of 
information, and judicial review--and to underscore the 
importance of the bill's language on preemption.
Inherently Safer Technology (IST)
     This legislation recognizes that sometimes the best 
security will come not from adding guards and gates, but from 
reexamining the way chemical operations are carried out in 
order to reduce the amount of hazardous substances on site, 
improve the way they are stored or processed, or find safer 
substitutes for the chemicals themselves. These changes limit 
the loss of life or other damage in the event of an attack, and 
therefore make a facility a less inviting target for terrorists 
to begin with. They also have the added benefit of limiting the 
harm from an accidental release. This bill clearly requires 
facilities to look at the risks and consequences related to the 
dangerous chemicals on site and address those specific 
vulnerabilities in their security plan. And it includes these 
process changes among the menu of security measures that 
chemical facilities should examine when designing their 
security plans.
    Indeed, the central mission of this bill is to help these 
facilities reduce their risk. One of the most effective ways to 
reduce risk is to reduce the consequence of an attack, and the 
most effective way to eliminate consequence for certain 
facilities may be the reduction of deadly chemicals on site, 
the modification of the way they are made, or the substitution 
of safer chemicals.
    It is common sense that if a facility owner can replace a 
deadly chemical with a safer chemical that would not kill 
thousands of people, if released, then at the very least DHS 
should be able discuss such a consequence-reducing measure with 
an owner of a chemical facility. As repositories of extremely 
dangerous chemicals, too many of these facilities are--in the 
words of homeland security expert Steve Flynn--sitting 
``weapons of mass destruction.'' But as soon as they switch to 
safer chemicals or processes, the weapon is disarmed.
    During our hearings, we heard from several experts about 
the importance and viability of this approach for enhancing 
security as well as safety. The Honorable Gerald V. Poje, 
former Board Member, U.S. Chemical Safety and Hazard 
Investigation Board, testified on July 13, 2005 before the 
Committee, stressing the connection between safety and 
security, saying ``I urge the Committee to see the development 
and maintenance of competent management systems for safety as 
essential underpinnings to enhanced security.'' Also testifying 
before the Committee on the same day, Glenn Erwin, Project 
Director, Triangle of Prevention Program, United Steelworkers 
International Union, advocated substituting less toxic 
materials where possible toreduce the potential risk to human 
life or storing smaller volumes of these chemicals, and said a 
mandatory review of such options should be part of a chemical security 
program.
    Also on July 13, 2005, Carol L. Andress, Economic 
Development Specialist, Environmental Defense, testified that 
numerous water and wastewater facilities and refineries have 
already dramatically reduced their risk of a catastrophic 
accident or terrorist attack by switching to safer chemicals 
and processes. We had a powerful example of such an adjustment 
close by: after 9/11 focused our attention on potential targets 
in our midst, Washington D.C.'s water treatment facility ended 
the use of its potentially deadly liquid chlorine. Indeed, 
according to an April 2006 study by the Center for American 
Progress, almost 300 facilities that used acutely dangerous 
chemicals have dramatically reduced the risk to workers and 
surrounding communities by switching to less dangerous 
chemicals or processes. These include an array of facilities in 
fields ranging from electric power production to glass 
manufacturing to hazardous waste processing.
    We know that many facilities, and many security experts, 
already look to these less dangerous technologies as a potent 
and cost-effective way to improve security against a possible 
terror attack. But we also know that, for some facilities, 
there can be reluctance or structural impediments to looking at 
these technological solutions. That is why we feel this bill 
should go further and include more explicit requirements for 
chemical facilities to consider less dangerous technologies 
when they make the security enhancements required under this 
bill. In particular, the riskier facilities--some of which 
could endanger tens or hundreds of thousands of lives if 
attacked--should have to demonstrate that they have looked 
closely at options that would reduce the catastrophic 
consequences of a possible terrorist attack.
    During markup, Senator Lieberman and Senator Lautenberg 
offered an amendment that would have required that at least 360 
of the most high risk chemical facilities examine safer 
technologies as a means to improve security, and implement them 
where feasible.
    This is not a question of forcing industry to conduct its 
operations off a government-issued play book. Companies would 
analyze for themselves whether there are less dangerous ways to 
conduct their business and would not be required to implement 
any changes that were not feasible or merely shifted risk 
elsewhere. But given the extraordinary risks involved, it makes 
little sense not to require companies to at least take a long 
hard look at some of the common-sense solutions that have been 
advocated or already adopted by others within the industry.
    We regret that our colleagues did not adopt the Lieberman-
Lautenberg amendment, and we will continue to work to try to 
have such a provision adopted as part of final chemical 
security legislation.

Protection of information

    Of course, none of us would want to release sensitive 
information about a chemical plant that would be useful to a 
terrorist. However, excessive secrecy in a government security 
program can actually makes us less, not more safe. This is 
because some degree of transparency is necessary to help us 
make government programs more accountable and effective. Also, 
local communities and their elected officials deserve to know 
whether local facilities are being kept safe against a 
terrorist attack, and the community's vigilance can help make 
us all safer.
    We believe that the S. 2145 bill that the Chairman and 
Senator Lieberman introduced achieved the right combination of 
protecting real security information, while allowing enough 
disclosure to create accountability. We regret, however, that 
the Committee agreed to an amendment offered by Senator 
Voinovich that would tilt that balance in the direction of 
undue secrecy. Under the original bill, orders and 
certifications would be released to enable the community to 
know whether they are being kept safe and to keep the program 
accountable. But the Secretary could postpone the release of 
any order or certification as long as necessary, whether to 
give the source time to fix a problem, or for any other reason 
if the Secretary thinks that release would risk security. 
Senator Voinovich's amendment changed that and now the bill 
would require all orders to be kept secret, and would even make 
certifications and certificates of compliance secret unless the 
Secretary makes a specific finding that release would not 
create a security risk. Some have expressed concern that if DHS 
tells the public whether certain chemical plants are in 
compliance or not, terrorists will know where to devote their 
attention. However, we believe that concern is just not 
realistic. While the orders or certificates made public would 
identify the facility, they would not provide any detail about 
the facility or the kind of vulnerability involved. Moreover, 
if there ever actually were a potential risk from disclosing an 
order or certification, the original bill authorized the 
Secretary to protect this information, and keep it from being 
released to the public as long as necessary.

Judicial review

    We deeply regret that during markup our colleagues adopted 
language that would restrict judicial review under the 
regulatory program that would be established by the bill. These 
restrictions were added in an amendment offered by Senator 
Voinovich and received almost no discussion at the markup. They 
create a one-sided regime in which chemical facilities can 
challenge a regulatory determination regarding their facility, 
but no other parties can bring such a challenge or even 
participate in a proceeding initiated by industry. It also 
appears to preclude an array of possible challenges regarding 
overall administration of the chemical security program, 
including a lawsuit challenging lax administration or ``failure 
to act'' by the Department.
    We are unaware of any comparable restrictions for a similar 
program and proponents have not offered any clear justification 
for them. The Administrative Procedures Act, which governs 
these questions in the absence of overriding statutory language 
such as Senator Voinovich's amendment, already contains a 
series of checks and balances that have been carefully 
developed over time. Courts have well established procedures 
for handling sensitive or classified information. No one has 
explained to us why this system is not adequate to handle the 
chemical security program proposed by this legislation. In the 
absence of a compelling need, we do not think we should tamper 
with the rights of concerned parties to seek judicial review 
under this critical program. We are dealing with an issue that 
has enormous consequences for the lives and safety of hundreds 
of thousands of people living within range of a chemical plant; 
we should not restrict the right to seek judicial review under 
the chemical security program unless we have identified an 
overriding need to do so.

Anti-preemption

    Finally, we wish to emphasize the importance of this bill's 
provision regarding preemption. This bill recognizes that 
Congress is not the only body that can and should help ensure 
the safety and security of the nation's chemical facilities. 
States and localities have long regulated such facilities for 
various safety and environmental concerns. Since 9/11, some 
states have also moved to require security improvements at 
these facilities. These state and local protections are 
critical companions to our effort at the federal level, and we 
are pleased that this bill states clearly that it does not 
preempt state and local laws or regulations regarding the 
safety and security of chemical facilities. States and 
localities are free to enact more stringent chemical security 
legislation. Only if there is an absolute conflict, such that 
it is impossible for a facility to comply with both the federal 
law and a state or local law or regulation on chemical 
security, would the federal provision take precedence. The bill 
would not disrupt state and local safety and environmental law 
regarding chemical facilities, nor does it seek to dislodge or 
alter the operation of state common law with respect to such 
facilities. We are pleased that during markup the Committee 
voted to reject an amendment that would have weakened this non-
preemption mandate in the bill.
                                   Frank R. Lautenberg.
                                   Daniel K. Akaka.
                                   Joe Lieberman.

                 ADDITIONAL VIEWS OF SENATOR LAUTENBERG

    Securing our chemical facilities from terrorist or other 
criminal attacks is one of the most important steps that 
Congress can take to protect the public from grievous harm, and 
our infrastructure and economy from severe disruption. I am 
frustrated and disturbed at how difficult it has proven, in the 
wake of 9/11, for Congress and the President to ignore the 
clamor of special interests and pass a strong, meaningful 
chemical security bill.
    I introduced the first chemical security bill in Congress 
in 1999. Since then, I have worked with my fellow New Jersey 
Senators, John Corzine and Robert Menendez, to advance federal 
chemical security legislation and protect the right of New 
Jersey and other states to adopt strong chemical security 
protections.
    This year, I introduced a new chemical security bill, S. 
2486, the Chemical Security and Safety Act of 2006, with 
Senators Obama, Menendez, Kerry, Durbin and Biden. I did this 
in part because there are several important elements that I 
believe should be part of any chemical security bill Congress 
passes, that are not yet part of S. 2145. Some of these 
elements are briefly summarized below.
Inherently safer technology
    We should not mislead people to believe that simply adding 
gates, guards, and guns at our chemical facilities will be 
sufficient to protect workers and nearby residents from a 
terrorist attack. The legislation that I introduced in 1999 
required the nation's highest risk chemical facilities to adopt 
``inherently safer technology'' (IST) to the maximum extent 
possible. That approach made sense two years before 9/11, and 
it makes even greater sense now. The bill I introduced this 
year contains a similar approach, requiring the adoption of IST 
where possible. Whether substituting safer chemicals, adopting 
different manufacturing processes, reducing the amount of 
chemicals stored on site, or making other changes at these 
high-risk facilities, it is appropriate to improve the safety 
and security of the public from attacks or accidents where it 
is possible to do so.
    The Bush administration, the chemical industry, and others 
continue to suggest that IST is simply an environmental issue, 
unrelated to the issue of national security. But a recent 
report by the National Research Council of the National Academy 
of Sciences found ``the most desirable solution to preventing 
chemical releases is to reduce or eliminate the hazard where 
possible, not to control it.'' (Emphasis added) This study was 
requested by the Department of Homeland Security (DHS), and was 
written by a panel of chemical industry members, consultants, 
and academics. Their conclusion was about the benefits of IST 
for our security, not our environment.
    The presumed distinction between strong security measures 
and environmental protection is simply false. Our dependency on 
oil is a national security issue; while many of the ways to 
reduce that dependency would make us safer and would also 
benefit the environment. Similarly, requiring facilities to 
adopt IST where possible makes sense for security, 
productivity, profitability, and the environment.
    Hundreds of facilities have already adopted some form of 
IST. The citizens living near these facilities are now safer. 
We should ensure that the highest risk facilities in the nation 
make such changes where it is practical to do so. We don't have 
the resources to protect every chemical facility that is a 
potential target. So we need to eliminate as many potential 
targets as possible. Adopting safer technologies will allow us 
to focus on those facilities where the risk of attack can't be 
eliminated.
    At the mark-up of S. 2145, Senator Lieberman and I offered 
an IST amendment. Unfortunately, that amendment was defeated. I 
have joined Senator Lieberman's additional views, which contain 
additional discussion of the IST issue, and our amendment in 
particular. I appreciate Senator Lieberman's leadership and 
commitment to this important aspect of a meaningful chemical 
security policy, and I will continue to work with him to 
improve any chemical security legislation by ensuring that IST 
provisions are included.
A role for workers in ensuring chemical security
    My legislation contains several provisions that give 
workers at chemical facilities a role in developing 
vulnerability assessments, site security and response plans, 
participating in inspections, and ensuring the security and 
safety of their facilities generally.
    It is just common sense that workers at chemical plants 
should help develop assessments and plans, participate in 
inspections, and consult regularly with management. Workers 
have hands-on experience and up-close insights on how to 
improve safety and security where they work. They have the most 
to lose--their jobs and possibly their lives--if security falls 
short.
    We will have a weaker national chemical security policy if 
we don't involve those who are working in the plants that are 
at risk of attack. There is no good argument against including 
workers in the development of chemical plant security plans, 
and I hope that provisions to that effect will be included in 
whatever legislation is ultimately adopted.
General duty to protect the public from terrorist or other criminal 
        attacks
    Under Section 112(r) of the Clean Air Act, chemical 
facilities have a ``general duty'' to operate in a manner to 
protect public health and safety and the environment from 
chemical releases. Facilities are required to develop Risk 
Management Plans (RMPs) which include detailed safety and 
emergency response plans in the event of an accidental chemical 
release. The legislation I introduced in 1999, as well as the 
legislation I introduced this year with Senators Obama, 
Menendez, and others would amend the current ``general duty'' 
provision in the Clean Air Act to include a responsibility to 
protectworkers and the surrounding public from the threat posed 
by a terrorist or other criminal attack on these high-risk facilities.
    The facilities covered under Section 112(r) are the highest 
risk facilities in the country because they store a sufficient 
amount of dangerous chemicals to be a significant threat to the 
surrounding community if they are not operated in a safe 
manner. It is hard to understand why we would want these 
facilities to have a general duty to protect the public from an 
accidental chemical release, but not a release that could 
result from a terrorist or other criminal attacks.
    I recognize that in implementing whatever chemical security 
legislation is ultimately enacted, DHS and its partners at the 
federal, state, and local levels will need to prioritize their 
focus on those facilities that pose the greatest risk. S. 2486 
and S. 2145 both contain provisions to allow for such 
prioritization. DHS and others have advocated for legislation 
with a scope narrower than the facilities currently covered 
under section 112(r). I continue to believe that a general duty 
to operate in a manner that ensures the security and safety of 
workers and surrounding communities is appropriate for all of 
the facilities that are currently required to have Risk 
Management Plans.

Role of the environmental protection agency

    My legislation would ensure that, in establishing 
requirements for chemical facilities, and otherwise 
implementing a chemical security program, the Secretary of DHS 
consults with the Administrator of the Environmental Protection 
Agency (EPA).
    EPA has an enormous amount of institutional knowledge 
concerning chemical plants that can benefit DHS as it takes the 
lead role in implementing a national chemical security program. 
EPA has administered the nation's chemical safety program 
pursuant to the Clean Air Act since 1990.
    Chemical security legislation adopted by Congress should 
require DHS to consult with EPA, to ensure that DHS has the 
best possible information and analysis at its disposal in 
implementing our national chemical security policy. One of the 
lessons of Hurricane Katrina is that we don't want information 
to be ``stove-piped'' at different agencies. We need to ensure 
collaboration and cooperation across many departments and 
agencies to get the best results. That principle seems 
particularly important when the issue is preventing a terrorist 
attack on a chemical facility.
    I was very disturbed to hear that when the Government 
Accountability Office (GAO) recently recommended that DHS 
collaborate with EPA on studying the potential benefits of IST 
for improving chemical security, DHS rejected GAO's 
recommendation, in part out of concern that doing so would 
upset the chemical industry. That should not be the basis for 
developing any part of our national security policy. I 
recognize that the chemical industry would like to exclude EPA 
from any role in our chemical security policy, but we should 
not cater to the industry on this point.
    As chemical security legislation continues to be debated by 
the Congress, Members should ask themselves: If EPA's knowledge 
of chemical facilities is irrelevant to security concerns, why 
have we ceded responsibility for security at our wastewater and 
drinking water treatment facilities to EPA?
    Under S. 2486 and S. 2145, the Secretary of DHS will be in 
charge of our chemical security policy, but we should ensure 
that the Secretary and all other DHS personnel take advantage 
of the valuable institutional experience and knowledge residing 
at EPA.

Anti-preemption

    Perhaps the most important issue for New Jersey with regard 
to federal chemical security legislation is whether our State 
will retain the authority to adopt more stringent protections 
than whatever Congress may enact. Some 700 people from New 
Jersey were killed on 9/11. New Jersey is one of the states 
most vulnerable to a terrorist attack: It is home to what 
counter-terrorism experts at the Federal Bureau of 
Investigation have called ``the most dangerous two miles in 
America,'' the stretch between Newark Airport and Port 
Elizabeth, in great part due to the presence of chemical 
facilities. Elsewhere in the State, twelve million people could 
be endangered if the Kuehne chemical plant in Kearny were to be 
attacked.
    New Jersey has a long and proud history of adopting strong 
legislation to protect the health and safety of its citizens, 
and the environment, without waiting for the Federal Government 
to act. In the wake of the catastrophic chemical leak in 
Bhopal, India, in 1984, which killed thousands of innocent 
people, the New Jersey legislature passed the Toxic Catastrophe 
Prevention Act (TCPA). This law requires facilities that handle 
extraordinarily hazardous substances above certain inventory 
thresholds to prepare and implement risk management plans. The 
plans must include detailed procedures for safety reviews of 
design and operation, operating procedures, maintenance 
procedures, training activities, emergency response, process 
hazard analysis with risk assessment, and self-auditing 
procedures. The TCPA became the model for Section 112(r) of the 
Clean Air Act, which established a similar requirement to 
develop risk management plans for the highest risk chemical 
facilities in the country, of which there are approximately 
15,000.
    Since 9/11, New Jersey has taken several steps to 
strengthen the TCPA, and to adopt additional measures to 
enhance the security of New Jersey citizens from terrorist or 
other criminal attacks on chemical plants. I find it 
unbelievable that five years after 9/11, with no meaningful 
action by Congress, the administration, or the chemical 
industry to adopt strong chemical security legislation; there 
is now a push to prevent states and local communities from 
taking the necessary steps to protect their citizens. The 
safety of the citizens of New Jersey or any other state or 
local community which wishes to protect itself should not be 
subject to the delaying tactics of industries that seek to 
avoid regulation and oversight. Nor should state or local 
governments be forced to settle for whatever compromises are 
ultimately reached at the federal level if, in their view, 
greater protections are needed for their citizens.
    An amendment was offered at the Homeland Security and 
Government Affairs Committee mark-up of S. 2145 to preempt 
states and local communities from adopting stronger chemical 
legislation. Fortunately, the amendment was defeated. I thank 
those Senators who voted against that amendment, and 
particularly want to express my appreciation to the Chair and 
Ranking Member for their steadfast opposition to adding 
preemption language to any chemical security legislation.
    Although I believe that my legislation is superior to S. 
2145, I voted to report S. 2145 to the floor because I think it 
is imperative that we make progress in this critical area of 
our nation's security. S. 2145--as long as it retains explicit 
anti-preemption language--would be an improvement over the 
status quo. I appreciate the tremendous amount of work the 
Chair and Ranking Member and their staff put into developing 
this legislation, and I look forward to the opportunity to work 
with them to make a good bill better when the full Senate 
considers it.
                                               Frank R. Lautenberg.

                                  

```