Regulatory Assessment

The Ammonium Nitrate Security Program

Notice of Proposed Rulemaking

DHS-2008-0076

July 1, 2011

U.S. Department of Homeland Security
2

Acronyms

AN Ammonium Nitrate

ANFO Ammonium Nitrate Fuel Oil explosives

ANPRM Advanced Notice of Proposed Rulemaking

ATF Bureau of Alcohol, Tobacco, Firearms, and Explosives

CFATS Chemical Facility Anti-Terrorism Standards

CSAT Chemical Security Assessment Tool

DOJ Department of Justice

DOT Department of Transportation

FAST Free and Secure Trade

HME Hazardous Materials Endorsement

IED Improvised Explosive Device

IME Institute of Makers of Explosives

IRFA Initial Regulatory Flexibility Analysis

NAICS North American Industrial Classification System

NPRM Notice of Proposed Rulemaking

POC Point of Contact

RFA Regulatory Flexibility Act

SBA Small Business Administration

TSDB Terrorist Screening Database

TWIC Transportation Workers Identification Credential

UMRA Unfunded Mandates Reform Act

4USDA U.S. Department of Agriculture

VSL Value of Statistical Life
3

Contents

1. Executive Summary.................................................................................................................... 8

2. OMB Accounting Statement..................................................................................................... 10

3. Benefits of the Ammonium Nitrate Security Program ............................................................. 11

4. NPRM Description.................................................................................................................... 20

5. Period of Analysis..................................................................................................................... 23

6. Estimates of Regulated Population ........................................................................................... 23

Mixtures .................................................................................................................................... 25

Purchaser.................................................................................................................................. 26

Agents........................................................................................................................................ 26

Sellers........................................................................................................................................ 26

7. Registration of AN Sellers and AN Purchasers........................................................................ 31

Appeals...................................................................................................................................... 41

8. Point of Sale Activities............................................................................................................. 44

Verification of AN Purchaser’s Identity ................................................................................... 46

Verification of AN Purchaser’s Registered User Number........................................................ 46

Purchaser Verification Portal................................................................................................ 47

Purchaser Verification Call Center....................................................................................... 48

Purchaser Verification Portal and Call Center...................................................................... 49

Visual Check of Photo ID ......................................................................................................... 49

Creation of the Transaction Record ......................................................................................... 49

Agent Verification ..................................................................................................................... 54

Opportunity Cost....................................................................................................................... 59

9. Recordkeeping .......................................................................................................................... 60

10. Reporting Theft and/or Loss................................................................................................... 67

11. Audits and Inspections............................................................................................................ 71

12. Federal Costs........................................................................................................................... 73

13. Total Costs.............................................................................................................................. 77

14. Initial Regulatory Flexibility Analysis.................................................................................... 80

Section 1: Reasons for and Objectives of the Proposed Rule................................................... 81

Section 2: Affected Small Business Population and Estimated Impact of Compliance............ 81

Number of Small Entities that may be AN Purchasers............................................................. 82
4

Number of Small Entities that may be AN Sellers..................................................................... 85

Alternatives Considered............................................................................................................ 87

Average Costs per Facility........................................................................................................ 98

Identification of Duplication, Overlap and Conflict with Other Federal Rules..................... 101

15. International Trade Impact Assessment................................................................................ 101

16. Unfunded Mandates Reform Act (UMRA) .......................................................................... 102

Appendix A – Population Estimates........................................................................................... 104

Appendix B – Wage Rates.......................................................................................................... 107

Appendix C – Computer and Internet Access on US Farms ...................................................... 111
5

Table 1. Summary of Estimated Total Costs ($ millions) .............................................................. 9

Table 2. Summary of Estimated Annualized Costs ($ millions) .................................................... 9

Table 3. Estimated 10-year Cost by Program Element ($ millions)............................................... 9

Table 4. OMB Accounting Statement of Annualized Costs and Benefits (Program Years 1-10) 10

Table 5. Cost Valuation of an Attack Based upon 1995 Murrah Federal Building Attack (Primary 

VSL Estimate; All $ millions) ...................................................................................................... 17

Table 6. Cost Valuation of an Attack Based upon 1995 Murrah Federal Building Attack (Lower 

VSL Estimate; All $ millions) ...................................................................................................... 18

Table 7. Cost Valuation of an Attack Based upon 1995 Murrah Federal Building Attack (High 

VSL Estimate; All $ millions) ...................................................................................................... 19

Table 8. Frequency of Attacks Averted for AN Security Costs to Equal Expected Benefits ($ 

millions; Frequency years)............................................................................................................ 20

Table 9. AN Purchasers ................................................................................................................ 30

Table 10. AN Sellers..................................................................................................................... 31

Table 11. Cost of Registration Activities for AN Purchasers – Low Population Estimate* ........ 34

Table 12. Cost of Registration Activities for AN Purchasers – High Population Estimate*........ 36

Table 13. Cost of Pre-Registering Agents – Low Population Estimate*...................................... 36

Table 14. Cost of Pre-Registering Agents – High Population Estimate....................................... 37

Table 15. Cost of Registration Activities for AN Sellers – Low Population Estimate*............... 38

Table 16. Cost of Registration Activities for AN Sellers – High Population Estimate ................ 38

Table 17. Summary Cost of Registration Activities – Initial Year, Low Population Estimate .... 39

Table 18. Summary Cost of Registration Activities – Initial Year, High Population Estimate ... 39

Table 19. Assumptions Regarding Growth in Registrations ........................................................ 40

Table 20. Total Registration Activity Costs by Program Year..................................................... 40

Table 21. Cost of Appeals for AN Purchasers –Initial Year, Low Population Estimate*............ 42

Table 22. Cost of Appeals for AN Purchasers –Initial Year, High Population Estimate* ........... 42

Table 23. Cost of Appeals for AN Sellers –Initial Year, Low Population Estimate* .................. 43

Table 24. Cost of Appeals for AN Sellers –Initial Year, High Population Estimate*.................. 43

Table 25. Cost of Appeals by Program Year................................................................................ 44

Table 26. Physical Costs for Web Portal-Based Point of Sale Activities – Low Population 

Estimate......................................................................................................................................... 50

Table 27. Physical Costs for Web Portal-Based Point of Sale Activities – High Population 

Estimate......................................................................................................................................... 51

Table 28. Web Portal-based Seller Transaction and Labor Cost by Industry, Low Population 

(First Year).................................................................................................................................... 51

Table 29. Web Portal-based Seller Transaction and Labor Cost by Industry,.............................. 52

Table 30.Call Center-Based Transactions for Point of Sale Activities (Hours Spent)................. 53

Table 31. Labor Costs for Call Center-Based Point of Sale Activities – Low Population Estimate

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

Table 32. Labor Costs for Call Center-Based Point of Sale Activities – High Population Estimate

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

Table 33. Labor Costs for Agent Verification – Low Population Estimate*................................ 55

Table 34. Labor Costs for Agent Verification – High Population Estimate*............................... 56

Table 35. Total Costs for Web Portal-Based Point of Sale Activities by Program Year – Low 

Population Estimate ($)................................................................................................................. 57
6

Table 36. Total Costs for Web Portal-Based Point of Sale Activities by Program Year– High 

Population Estimate ($)................................................................................................................. 58

Table 37. Total Costs for Call Center -Based Point of Sale Activities by Program Year – Low 

Population Estimate ($)................................................................................................................. 58

Table 38. Total Costs for Call Center-Based Point of Sale Activities by Program Year – High 

Population Estimate ($)................................................................................................................. 58

Table 39. Point of Sale Opportunity Costs (First Year Detail and Yrs 1 -10).............................. 59

Table 40. Physical Costs for Paper-Based Recordkeeping – Low Population Estimate .............. 61

Table 41. Physical Costs for Paper-Based Recordkeeping – High Population Estimate.............. 62

Table 42. Labor Costs for Paper-Based Recordkeeping – Low Population Estimate .................. 62

Table 43. Labor Costs for Paper-Based Recordkeeping – High Population Estimate.................. 63

Table 44. Total Costs for Paper-Based Recordkeeping – Low Population Estimate ................... 63

Table 45. Total Costs for Paper-Based Recordkeeping – High Population Estimate................... 64

Table 46. Physical Costs for Electronic-Based Recordkeeping – Low Population Estimate....... 64

Table 47. Physical Costs for Electronic-Based Recordkeeping – High Population Estimate ...... 65

Table 48. Labor Costs for Electronic-Based Recordkeeping – Low Population Estimate........... 65

Table 49. Labor Costs for Electronic-Based Recordkeeping – High Population Estimate .......... 66

Table 50. Total Costs for Electronic-Based Recordkeeping – Low Population Estimate ............ 66

Table 51. Total Costs for Electronic-Based Recordkeeping – High Population Estimate ........... 67

Table 52. Estimated Number of Theft/Loss Reports Generated................................................... 69

Table 53. Costs for Reporting Theft and Loss – Low Population Estimate ................................. 69

Table 54. Costs for Reporting Theft and Loss – High Population Estimate................................. 70

Table 55. Annual Costs for Reporting Theft and Loss................................................................. 70

Table 56. Cost of Audits/Inspections – Low Population Estimate ............................................... 72

Table 57. Cost of Audits/Inspections – High Population Estimate .............................................. 73

Table 58. Cost of Inspections/Audits............................................................................................ 73

Table 59. Federal Costs System and Support, Fixed Level, All Populations.............................. 75

Table 60. Federal Costs System and Support, Fixed Level, All Populations (cont’d) ................ 75

Table 61.Federal Vetting and Total Costs, Low Population Scenario.......................................... 75

Table 62. Federal Vetting and Total Costs, High Population Scenario........................................ 76

Table 63.Federal Vetting and Total Costs, Mean Population Scenario........................................ 76

Table 64. . Summary of Costs (Undiscounted $ millions) – Low Population/Low Transactions 

Estimate......................................................................................................................................... 77

Table 66. Summary of Costs (Undiscounted $ millions) – High Population/High Transactions 

Estimate......................................................................................................................................... 78

Table 70. Summary of Costs (3 percent discount rate, $ millions) – Low Population/Low 

Transactions Estimate ................................................................................................................... 79

Table 71. Summary of Costs (3 percent discount rate, $ millions) – Primary Estimate (mean of 

High and Low).............................................................................................................................. 79

Table 72. Summary of Costs (3 percent discount rate, $ millions) – High Population/High 

Transactions Estimate ................................................................................................................... 80

Table 73. Number of U.S. Farms by the Market Value of Agricultural Products Sold (2007).... 83

Table 74. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be 

AN Purchasers (Employee Size)*................................................................................................. 83

Table 75. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be 

AN Purchasers (Sales Size)* ........................................................................................................ 85
7

Table 76. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be 

AN Sellers (Employee Size)* ....................................................................................................... 86

Table 77. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be 

AN Sellers (Sales Size)*............................................................................................................... 87

Table 78. Differences between alternatives costs......................................................................... 90

Table 79. Point of Sale Average Cost Summary* ........................................................................ 91

Table 80. Average Cost per AN Purchaser - Low Population/Low Transactions *.................... 99

Table 81. .Average Cost per AN Purchaser - High Population/High Transactions *................. 100

Table 82. . Average Cost per AN Seller Facility - Low Population/Low Transactions Estimate*

..................................................................................................................................................... 100

Table 83. Average Cost per AN Facility - High Population/High Transactions Estimate ......... 101

Table 84 . Hourly Wage Rates at 50th Percentile (median) ($/hour) .......................................... 108

Table 85. Total Compensation/Wage and Salary Multiplier...................................................... 108

Table 86. Loaded Wage Rates at 50th Percentile (Hourly wage rate * multiplier) ($/hour)....... 109

Table 87, Calculation of Population Weighted Average Fully loaded Rate for Opportunity cost 

for purchasers; Low Population.................................................................................................. 109

Table 88, Calculation of Population Weighted Average Fully loaded Rate for Opportunity cost 

for purchasers; High Population ................................................................................................. 110

Table 89. Computer and Internet Access for Top 15 Ammonium Nitrate Consuming States, 2007

..................................................................................................................................................... 112
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1. Executive Summary

After the catastrophic terrorist attack in Oklahoma City in April 1995, in which ammonium 

nitrate was used in the bomb that killed 168 people and injured nearly 600 more, industry 

practices regarding the sale and transfer of ammonium nitrate have become increasingly 

more secure. However, in the interest of national security, Congress has directed the 

Department of Homeland Security (DHS or the Department) to promulgate regulations to 

protect the public from the misuse of ammonium nitrate in an act of terrorism.

As a result, the Department proposes the Ammonium Nitrate Security Program, which is

outlined in the Notice of Proposed Rulemaking (NPRM). The program seeks to reduce the 

likelihood of a terrorist attack involving misused ammonium nitrate.

Broadly speaking, this proposed rule creates a registration program for purchasers and 

sellers of ammonium nitrate. Each purchaser and seller will be required to apply for an 

Ammonium Nitrate (AN) Registered User Number with the Department. Suitability for 

registration will be based on a comparison of the applicant against the Terrorist Screening 

Database (TSDB). Transactions involving the sale or transfer of ammonium nitrate will be 

regulated at the point of sale and procedures for reporting a theft or loss of ammonium 

nitrate will be established. Sellers of ammonium nitrate will be required to deny sale or 

transfer of ammonium nitrate to individuals who do not possess a valid AN Registered User 

Number accompanied by a valid photo ID. Businesses will be required to keep records of all 

ammonium nitrate transactions for two years. 

The Department estimates the number of persons and entities that purchase ammonium 

nitrate to range from 64,950 to 106,200. These purchasers include farms, fertilizer mixers, 

farm supply wholesalers and cooperatives (co-ops), golf courses, landscaping services, 

explosives distributors, mines, retail garden centers and lab supply wholesalers. The 

Department estimates the number of persons and entities that sell ammonium nitrate to be 

between 2,486 and 6,236, many of which are also purchasers. These sellers include 

ammonium nitrate fertilizer and explosive manufacturers, fertilizer mixers, farm supply 

wholesalers and co-ops, retail garden centers, explosives distributors, fertilizer applicator 

services, and lab supply wholesalers. Individuals or firms that provide transportation 

services within the distribution chain may be categorized as sellers, agents, or facilities 

depending upon their business relationship with the other parties to the transaction. The 

total number of potentially regulated farms and other businesses ranges from 64,986 to 

106,236 (including overlap between the categories).
9

The cost of this proposed rule ranges from $300 million to $1,041 million over 10 years at a 

7% discount rate. The primary estimate is the mean which is $670.6million. For 

comparison, at a 3% discount rate, the cost of the program ranges from $364 million to 

$1.3 billion with a primary (mean) estimate of $814 million. The average annualized cost 

for the program ranges from $43 million to $148 million (with a mean of $96 million), also 

employing a 7% discount rate. Tables 1 and 2 present the summary discounted total and 

annualized costs for the rule.

Table 1. Summary of Estimated Total Costs ($ millions)

10 year/

Discount Rate Primary estimate

Low population 

estimate 

High population 

estimate 

10 year , 7% 670.6 300.2 1,041.0

10 year, 3% 814.0 364.2 1,263.7

Table 2. Summary of Estimated Annualized Costs ($ millions)

Primary estimate

Low population 

estimate 

High population 

estimate 

10 year , 7% 95.5 42.7 148.2

10 year, 3% 95.4 42.7 148.1

The largest cost component of the proposed rule is related to the point of sale. Depending 

on scenario (low population/low transactions vs. high population/high transactions), point 

of sale activities account for 55% to 80% of the total program cost. This is followed by 

registration activities, federal costs, recordkeeping, inspections/audits, and reporting 

theft/loss. Table 3 presents the estimated 10-year cost by program element.

Table 3. Estimated 10-year Cost by Program Element ($ millions)

Registration Appeals

Point of 

Sale

Record

keeping

Reporting 

Theft/

Loss

Audits/

Inspcts.

Federal

Costs Total Cost

7% Discounted -

Low–

56.2 0.2 166.0 21.4 0.1 1.8 54.6 300.2

7% Discounted -

High–

86.3 0.4 841.6 52.2 0.1 4.4 56.0 1,041.0

3% Discounted -

Low–

68.5 0.3 201.5 25.9 0.1 2.1 65.9 364.2

3% Discounted -

High–

105.1 0.5 1,022.0 63.1 0.2 5.3 67.6 1,263.7
10

DHS conducted a break-even analysis that examines the required reduction in the potential 

frequency of an attack. The proposed rule is cost effective if the result is a reduction in the 

event frequency by at least one event the size of the Oklahoma City bombing per 14 years.

2. OMB Accounting Statement

As required by OMB Circular A-4, the Department has prepared an accounting statement 

showing the classification of the costs and benefits associated with this rule. Table 4

provides an estimate of the dollar amount of these costs and benefits expressed in 2009 

dollars, at three percent and seven percent discount rates. The Department estimates the 

cost of this rule will be approximately $95.5 million annualized at the 7 percent discount 

rate and $95.4 million annualized at the 3 percent discount rate. Non-quantified benefits 

are reduced vulnerability.

Table 4. OMB Accounting Statement of Annualized Costs and Benefits (Program Years 1-10)

3% discount rate 7% discount rate

Primary 

Estimate

Minimum 

Estimate

Maximum 

Estimate

Primary 

Estimate

Minimum 

Estimate

Maximum 

Estimate

COSTS

Annualized monetized costs $95.4

million

$42.7

million

$148.1

million

$95.5

million

$42.7milli

on

$148.2

million

Annualized quantified, but unmonetized costs

None None

Qualitative (un-quantified) costs None None

BENEFITS

Annualized monetized benefits None None

Annualized quantified, but unmonetized benefits

None None

Qualitative (un-quantified) benefits Reduced vulnerability to terrorist 

attack using ammonium nitrate

Reduced vulnerability to terrorist 

attack using ammonium nitrate
11

3. Benefits of the Ammonium Nitrate Security Program

“The April 19, 1995, bombing of the Alfred P. Murrah Federal Building (Murrah Building) in 

Oklahoma City sent shock waves throughout America. The bombing took its toll in human 

life and property damage and changed the community's and the Nation's general sense of 

safety and security. The explosion rocked downtown Oklahoma City, reduced the north face 

of the Murrah Building to rubble, and dealt extensive damage to each of the nine floors as 

they collapsed into the center, pancaking one on top of the other. When the dust cleared, 

one-third of the building lay in ruins. The force of the blast damaged 324 surrounding 

buildings, overturned automobiles, touched off car fires, and blew out windows and doors 

in a 50-block area. News reports indicated the explosion was felt 55 miles from the site and 

registered 6.0 on the Richter scale.”1 “The bomb damaged 312 buildings in Oklahoma City. 

Thirty buildings were heavily damaged and approximately 16 have since been torn down. 

Twenty blocks of downtown [Oklahoma City] had to be cordoned off due to the bomb’s 

extent.”2 “At the close of the response, over 6,800 volunteers had worked on the job.”3

“Within days after a terrorist bomb destroyed [the] Murrah Federal Building and took 168 

lives in Oklahoma City, on April 19, 1995, [the Federal government] embarked upon a 

program that has significantly upgraded security in the facilities under our control. Since 

that awful day, [the Federal government has]:

• Supervised the placement of nearly 8,000 security countermeasures 

recommended by lay committees in Federal buildings;

• Nearly doubled the size of our uniformed Federal Protective Service 

Officers, from 376 officers to a planned strength of 724 (with all but 52 

actually on board);

 1Data comes from multiple sources and is adjusted to $ 2010 using a 42.3% increase in the Consumer Price 

Index (all items) between 1995 and 2010(Bureau of Labor Statistics, http://data.bls.gov/cgi-bin/cpicalc.pl ). 

For various discussions of injuries and costs see:

"Physical Injuries and Fatalities Resulting From the Oklahoma City Bombing.” JAMA, August 7, 1996 

Sue Mallonee, RN, MPH; Sheryll Shariat, MPH; Gail Stennies, MD, MPH; Rick Waxweiler, PhD;

David Hogan, DO; Fred Jordan, MD, pp 382-387available at:

http://jama.ama-assn.org/cgi/reprint/276/5/382 ; estimates of injuries differ by source. DHS used the detailed 

JAMA article as it was based on survey and interview data and has thorough documentation. 167 individuals 

were killed by the explosion and 1 additional death of an emergency worker occurred during the rescue and 

recovery operation.

“Responding to Terrorism Victims: Oklahoma City and Beyond,” U.S. Department of Justice, Office of Justice 

Programs, Office for Victims of Crime, October 2000, available at 

http://www.ojp.usdoj.gov/ovc/publications/infores/respterrorism/welcome.html 2 National Park Service OKC FAQs available at http://www.nps.gov/okci/faqs.htm 3 The Oklahoma Department of Civil Emergency Management After Action Report: Alfred P. Murrah Federal 

Building Bombing, 19 April 1995 in Oklahoma City, Oklahoma. Available at 

http://www.ok.gov/OEM/documents/Bombing%20After%20Action%20Report.pdf
12

• More than doubled the number of contracted guards in Federal work 

locations, from 2,300 to more than 5,000;

• Enhanced intelligence-sharing with other Federal law enforcement 

agencies; and, revised our policies to provide more protected sites for 

many new buildings and to discourage co-locating low-risk agencies with 

higher-risk ones;

• The Federal government has redirected training and duties of our 

security force and issued revised design criteria for new and renovated 

Federal buildings;

• All this comes at a cost, of course. The [Building Security Committee] 

countermeasures, which include large numbers of security screening and 

surveillance devices and additional personnel to monitor them, have 

come at a capital cost of $148 million, and with additional operating costs 

totaling $249 million, for a cost of $397 million since 1995. Virtually all of 

this cost has been funded through the Federal Buildings Fund, except for 

a small supplemental appropriation in fiscal year 1995.”4

While the attack in Oklahoma City marks the most significant, successful terrorist attack 

using ammonium nitrate in the United States, for 30 years or more, ammonium nitrate has 

been used successfully in terrorist attacks throughout the world. For instance, the 

Provisional Irish Republican Army also used ammonium nitrate as part of its London 

bombing campaign in the early 1980s.5 More recently, ammonium nitrate was used in the 

1998 East African embassy truck bombings, killing hundreds and injuring thousands at the 

U.S. embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya.6 Ammonium nitrate was 

also used in a November 2003 series of truck bombings in Turkey, killing over 50 

individuals and injuring an additional 700 individuals at multiple locations across 

Istanbul.7 Additionally, since the events of 9/11, stores of ammonium nitrate have been 

confiscated during raids on terrorist sites around the world, including raids on sites in 

Canada,8 England,9 India,10 and the Philippines.11

 4 Security In Federal Buildings, Statement Of Robert A. Peck, Commissioner , Public Buildings Service, General 

Services Administration, Before The Subcommittee On Public Buildings And Economic Development, 

Committee On Transportation And Infrastructure United States House Of Representatives, June 4, 1998. As 

Retrieved From the Web on 03/18/2010. 

http://www.gsa.gov/portal/gsa/ep/contentview.do?contenttype=gsa_basic&contentid=11807&noc=t 5 http://www.encyclopedia.com/doc/1P2-834282.html 6 http://www.justice.gov/opa/pr/2009/May/09-ag-496.html 7 http://www.cbsnews.com/stories/2004/04/14/world/main611898.shtml

8 http://threatswatch.org/inbrief/2006/06/canada-raid-breaks-cell-3-tons/ 9 http://news.bbc.co.uk/2/hi/uk_news/3582921.stm

10 http://www.zeenews.com/news605486.html

11 US Department of State Office of the Coordinator for Counterterrorism Country Reports on Terrorism 2005, pg 

78
13

By securing the nation’s supply of ammonium nitrate, it will be much more difficult for 

terrorists to obtain ammonium nitrate materials for use in improvised explosive devices 

(IEDs). As a result, there is a direct value in the deterrence of a catastrophic terrorist attack 

using ammonium nitrate.

There are several key benefits of this proposed rule. 

• This proposed rule will standardize and build upon successful industry “know 

your customer” initiatives and state regulations to prevent the misappropriation 

or use of ammonium nitrate in a terrorist attack. 

• This proposed rule will provide timely, accurate vetting of persons wishing to 

possess or transfer ammonium nitrate. By requiring individuals to be vetted 

against the TSDB, known and suspected terrorists would be denied an AN 

Registered User Number. 

• This proposed rule will allow AN Sellers to identify non-authorized persons and 

requires them to deny sale or transfer of ammonium nitrate to these persons. By 

complying with the point of sale requirements to verify the accuracy and 

currency of a potential purchaser’s AN Registered User Number and an 

inspection of his/her photo ID, AN Sellers will have the knowledge to allow or 

deny sale or transfer of ammonium nitrate.

• This proposed rule will eliminate gaps in Federal oversight of ammonium nitrate 

supplies used in explosives manufacturing. 

To understand the cost-benefit relationship, costs and benefits of reducing the risk of a 

terrorist attack must first be quantified. The benefit of reducing risk of a terrorist attack is 

comprised of two components: the incremental risk reduction and the value of such a 

reduction. The incremental risk reduction is estimated in terms of casualties, property 

damage, and other non-monetary impacts resulting from the implementation of the 

proposed rule. Casualty and other non-monetary impacts are then translated into 

monetary terms via one of several widely accepted valuation methods, such as willingness 

to pay.

Ideally, the quantification and monetization of the beneficial security effects of this 

proposed regulation would involve two steps. First, the Department would estimate the 

reduction in the probability of a successful terrorist attack and avoidance of the 

consequences of the terror attack resulting from implementation of the proposed rule. 

Second, the Department would identify individuals’ willingness to pay for this incremental 

risk reduction and multiply it by the population experiencing the benefit. Both of these 

steps, however, rely on key data that are not available for the proposed rule. In light of 
14

these limitations, the Department conducted a “break-even” analysis to determine what 

reduction of overall risk of a terror attack, and consequently the resulting reduction in the 

expected losses for the nation due to a terror attack, would be necessary in order for the 

expected benefits of the proposed rule to exceed the domestic costs of compliance with the 

proposed rule.

Break-Even Analysis12

A break-even analysis for a rulemaking such as this proposed rule is aimed at framing the 

relationships between the effects of the rulemaking (in increasing domestic security and 

reducing the risk of terror attack), the cost of implementing the rule, and the baseline risks 

of domestic terror attacks which would be mitigated by increased security of the AN supply 

chain. Given the complex nature of the benefits expressed as reduced risk, it is difficult to 

quantify these kinds of benefits with any certainty. This is also the case with quantifying 

the risk reduction attributed to this proposed rule compared to the baseline risk of a terror 

attack involving ammonium nitrate.

The intent of the analysis is to organize information on benefits and costs and present them 

in a way to further inform decision makers in their assessment of the proposed rule. The 

proposed rule is cost beneficial if the benefits of risk reduction exceed the cost of 

implementing this proposed rule. The damages from a terror attack are many and it is 

difficult to quantify such losses. Data from past attacks are a starting point for analysis, but 

are imperfect proxies for what may occur in the future. In addition, it is difficult to estimate 

the likelihood with which a successful attack may occur over any given time period. In fact, 

this likelihood and the degree to which authorities are able to gauge it may change over 

time as geopolitical circumstances change. 

The types of attacks that would be prevented by this regulation could vary widely in 

intensity and effect, depending both on the intent and effectiveness of those undertaking 

the attack. The most widely known incident involving ammonium nitrate in the U.S. was the 

April 19, 1995, bombing of the Alfred P. Murrah Federal Building in Oklahoma City.

The practice of benefits valuation is based on an extensive literature of an individual’s 

willingness to pay for an incremental reduction in the risk of injury or death, constrained 

by that individual’s financial resources. Because the willingness to pay for a reduction in 

risk of injury or death is not observable in the marketplace, economists use other methods 

 12 For a background on break even analysis as applied to regulatory analysis in the context of terrorism 

prevention, see Latourrette, T. and Henry H. Willis, Rand Corporation, “Using Probabilistic Terrorism Risk 

Modeling for Regulatory Benefit-Cost Analysis: Application to the Western Hemisphere Travel Initiative 

Implemented in the Land Environment”, May 2007, available at 

http://www.rand.org/pubs/working_papers/2007/RAND_WR487.pdf.
15

to elicit the value society places on these risk reductions. Surveys of individuals’

preferences in a hypothetical situation can reveal these values, as can observations of 

individuals’ purchases of items that reduce risk of injury or death (e.g., bike helmets). This

measure of willingness to pay is known as Value of a Statistical Life (VSL). In order to 

compare the losses associated with such an event to the cost of the proposed rule, the 

Department assigns a statistical monetary value to potential casualties, and also takes into 

account other direct costs due to the attack, such as property damage. This analysis uses 

the Department of Transportation’s (DOT) VSL of $6.0 million.13 The VSL represents an 

individuals’ willingness to pay to avoid a fatality, based on economic studies of the value 

individuals place on small changes in risk. The same guidance on the use of VSL 

recommends the use of a range of values rather than a point estimate. For this analysis the 

Department used the DOT 2009 guidance of one standard deviation which results in a 

range from $3.4 million to $8.6 million ($6.0±$2.6). Lastly, based on the same DOT 

standards, DHS values moderate injuries at 1.55% of the VSL and severe injuries at 18.75% 

of the VSL. The Department emphasizes that the VSL is a statistical value used only for 

regulatory comparison and in no way suggests that the actual value of a life can be stated in 

dollar terms. 

Table 5 shows many cost components from the Oklahoma City attack. For the purpose of 

the break-even analysis, the Department believes that this is the best example to use as a 

potential attack. There were 168 deaths which are used as the multiplier times the value of 

a statistical life which results in just over $1 billion in valuation. ($6.0 million/statistical life 

* 168 lives = $1,008 million). The Department utilized “Physical Injuries and Fatalities 

Resulting from the Oklahoma City Bombing” for the injury data. Because the article 

categorizes injuries as to where they were treated and separately by specific kinds of 

injuries but without severity, there was no definite crosswalk to the DOT injury categories 

the Department utilizes. The Department used the hospitalization numbers for the severe 

injuries (18.75% of the VSL) and non-hospitalization valued at the DOT moderate category 

(1.55% of the VSL). The 83 hospitalizations results in $93.4 million while the nonhospitalization injuries add another $47.3 million. The statistical valuation for fatalities and 

injuries equates to somewhat more than $1.1 billion. The emergency appropriations in 

199514

 13 U.S. Department of Transportation memorandum, Treatment of the Economic Value of a Statistical Life in 

Departmental Analyses. 2009 Annual Revision. Office of the Secretary of Transportation, March 19, 2009 at 

http://gov.rosenet.org/uploads/254/treatment_of_a_statistical_life_dot.pdf

provided funding for the Federal building replacement and a number of 

Department of Justice (DOJ) emergency expenses directly related to the incident. Other 

agencies received emergency appropriations to cover losses but the information in the act 

is less clear as to the nature of the expenses. The DOJ expenses are clearly direct expenses 

14 The emergency appropriations language and values is available at http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=104_cong_public_laws&docid=f:publ19.104.pdf
16

and would likely represent similar costs should another event occur. The statute and other 

references mentioned earlier in this section identify damage to 312 other buildings and 

businesses. The appropriation identified these costs at $39.4 million. The Oklahoma 

Department of Civil Emergency Management After Action Report15 and GSA Commissioner 

Peck’s testimony16 reports these values as substantially higher with significantly more 

categories of expense. However, the descriptions mix indirect with direct cost so the 

Department has not included the larger numbers. Those items were described at the 

beginning of the benefits section to provide insight to potential costs even though not 

included in the values below. When the1995 non-injury costs are adjusted with an inflation 

factor of 1.4217 the total event valuation is approximately $1.35 billion. The Department

notes that our $1.35 billion estimate may not include every possible societal cost that 

stemmed from the attack, such as the economic turmoil it caused. The Department

welcomes additional information from commenters that further informs our $1.35 billion 

estimate. 

In addition to reducing the possibility of an ammonium nitrate-based terrorist attack, 

promulgating this rulemaking provides the benefit of allowing the Department to comply 

with the law. The Consolidated Appropriations Act, 200818, (H.R. 2764; Public Law 110–

161) states the “Secretary shall regulate the sale and transfer of ammonium nitrate by an 

ammonium nitrate facility . . . to prevent the misappropriation or use of ammonium nitrate 

in an act of terrorism.” Section II. A of the accompanying preamble provides a more 

detailed background discussion of the regulatory requirements expressly contained in the 

statute, such as the registration requirement for certain ammonium nitrate sellers and 

purchasers. 

 15 The Oklahoma Department of Civil Emergency Management After Action Report: Alfred P. Murrah Federal 

Building Bombing, 19 April 1995 in Oklahoma City, Oklahoma. Available at 

http://www.ok.gov/OEM/documents/Bombing%20After%20Action%20Report.pdf

16 Security In Federal Buildings, Statement Of Robert A. Peck, Commissioner , Public Buildings Service, 

General Services Administration, Before The Subcommittee On Public Buildings And Economic Development, 

Committee On Transportation And Infrastructure United States House Of Representatives, June 4, 1998. As 

Retrieved from the Web on 03/18/2010. 

http://www.gsa.gov/portal/gsa/ep/contentview.do?contenttype=gsa_basic&contentid=11807&noc=t

17 CPI-U seasonally adjusted values from BLS. http://www.bls.gov/cpi/#data as of 4/12/2010 and represent 

the most recently available and August 1995 for the appropriations values (217.59/152.9=1.42). 18 The Consolidated Appropriations Act, 2008, (H.R. 2764; Public Law 110–161) as found on pages 1002-

1009. Retrieved from http://frwebgate.access.gpo.gov/cgibin/getdoc.cgi?dbname=110_cong_house_committee_prints&docid=f:39564e.pdf. All references in this 

evaluation to this act refer to this citation. For simplicity, some references have been shortened to the 2008 

Consolidate Appropriations Act, Subtitle J, or merely legislation when mentioned near text that also discusses 

the statute.
17

Table 5. Cost Valuation of an Attack Based upon 1995 Murrah Federal Building Attack 

(Primary VSL Estimate; All $ millions)

Number VSL

VSL

Multiplier

for

Injuries Valuation

(A) (B) (C) (D)= A*B*C

Lives Lost 168 $6.0 100% $ 1,008.0

Severe Injuries 83 $6.0 18.75% $ 93.4

Moderate Injuries 509 $6.0 1.55% $ 47.3

Subtotal Valuation Life and Injuries $ 1,148.7

Value

($1995)

Inflation

Multiplier

Value

($2010)

(D) (E) (F)=D*E

Murrah Building Replacement Costs $ 40.4 1.42 $ 57.5

Congressional Emergency Appropriation

Other Building Recovery and community aid $ 39.4 1.42 $ 56.1

Attorney General Terrorism fund associated to 

OKC $ 34.2 1.42 $ 48.7

US Attorney Extraordinary expenses due to 

bombing $ 10.3 1.42 $ 14.7

Additional Judge Security $ 16.6 1.42 $ 23.6

Subtotal Property and Other Direct $ 200.5

Total Impact (sum of 2 subtotals) $ 1,349.2

Because VSL is likely to represent a range, this analysis uses the DOT guidance of plus or 

minus 1 standard deviation. Based on $6.0 million ± $2.6 million the lower VSL is $3.4 

million and the upper is $8.6 million. The non-injury costs do not change but using the 

upper and lower VSL values moves costs ± $497.8 million around the $1.35 billion 

estimate. The detailed calculations are shown in the next two tables.
18

Table 6. Cost Valuation of an Attack Based upon 1995 Murrah Federal Building Attack 

(Lower VSL Estimate; All $ millions)

Number VSL

VSL

Multiplier

for

Injuries Valuation

(A) (B) (C)

(D)= 

A*B*C

Lives Lost 168 $3.4 100% $ 571.2 

Severe Injuries 83 $3.4 18.75% $ 52.9 

Moderate Injuries 509 $3.4 1.55% $ 26.8 

Subtotal Valuation Life and Injuries $ 650.9 

Value

($1995)

Inflation

Multiplier

Value

($2010)

(D) (E) (F)=D*E

Murrah Building Replacement Costs $ 40.4 1.42 $ 57.5 

Congressional Emergency Appropriation

Economic revitalization, Other Building Recovery $ 39.4 1.42 $ 56.1 

Attorney General Terrorism fund associated to OKC $ 34.2 1.42 $ 48.7 

US Attorney Extraordinary expenses due to bombing $ 10.3 1.42 $ 14.7 

Additional Judge Security $ 16.6 1.42 $ 23.6 

Subtotal Property and Other Direct $ 200.6

Total Impact (sum of 2 subtotals) $ 851.5
19

Table 7. Cost Valuation of an Attack Based upon 1995 Murrah Federal Building Attack (High 

VSL Estimate; All $ millions)

Number VSL

VSL

Multiplier

for

Injuries Valuation

(A) (B) (C)

(D)= 

A*B*C

Lives Lost 168 $8.6 100% $ 1,444.8

Severe Injuries 83 $8.6 18.75% $ 133.8

Moderate Injuries 509 $8.6 1.55% $ 67.8

Subtotal Valuation Life and Injuries $ 1,646.5

Value

($1995)

Inflation

Multiplier

Value

($2010)

(D) (E) (F)=D*E

Murrah Building Replacement Costs $ 40.4 1.42 $ 57.5

Congressional Emergency Appropriation

Economic revitalization, Other Building Recovery $ 39.4 1.42 $ 56.1

Attorney General Terrorism fund associated to OKC $ 34.2 1.42 $ 48.7

US Attorney Extraordinary expenses due to bombing $ 10.3 1.42 $ 14.7

Additional Judge Security $ 16.6 1.42 $ 23.6

Subtotal Property and Other Direct $ 200.5

Total Impact (sum of 2 subtotals) $ 1,847.0

If the program is to be cost effective, the amount by which baseline risk must be reduced by 

the Ammonium Nitrate Security Program can be directly calculated as a ratio of annualized, 

discounted program costs to attack consequences. However, the underlying baseline risk of 

an attack in any given year is highly uncertain and variable over time, making the breakeven analysis especially useful. To determine the frequency of attack that results in a 

break-even point, we divide the total attack valuation by the annualized proposed rule 

program costs discounted at 7%. The table below shows the calculation for three VSL 

values. The minimum frequency reductions in years between attacks are 14.1, 8.9, and 19.3 

which represent the minimum reduction of one attack the size of the 1995 Oklahoma City 

bombing per the calculated number of years. 
20

Table 8. Frequency of Attacks Averted for AN Security Costs to Equal Expected Benefits ($

millions; Frequency years)

VSL=$6.0

VSL-1 Std 

Deviation

($3.4)

VSL+1 Std 

Deviation

($8.6)

Total Impact (sum of 2 subtotals) $1,349.2 $851.4 $1,847.0 

Total rule cost annualized at 7% 

(from Accounting Summary) $95.5 $95.5 $95.5

Frequency of Attacks Averted by AN 

Security Procedures to Break Even. 

(Total Impact/Total Cost) 

Interpret attack rate as one attack per 

number of years

One attack every 

14.1 years

One attack every

8.9

years

One attack every

19.3

Years

4. NPRM Description

The 2008 Consolidated Appropriations Act amends the Homeland Security Act of 2002 and 

provides the Department with the authority to “regulate the sale and transfer of 

ammonium nitrate by an ammonium nitrate facility . . . to prevent the misappropriation or 

use of ammonium nitrate in an act of terrorism.” The Department published an Advance 

Notice of Proposed Rulemaking (ANPRM) for the Secure Handling of Ammonium Nitrate 

Program on October 28, 2008 (73 FR 64280). The ANPRM summarized the activities 

expected to be covered in this proposed regulatory program, including registration 

activities, point of sale activities, theft or loss reporting, inspections and audits, appeals and 

penalties, and establishing a threshold level of ammonium nitrate in a mixture for the 

purposes of regulation under this program. Simultaneously with the release of this 

Regulatory Assessment, the Department is releasing a Notice of Proposed Rulemaking 

containing a proposed rule. The proposed rule includes alternatives considered, and 

solicits public comment on the proposed approach.

This regulatory evaluation attempts to mirror the provisions laid out in the NPRM. The 

Department has made no attempt, however, to precisely replicate rule or NPRM language 

in this regulatory evaluation. Should there be a discrepancy between the regulatory 

evaluation and the proposed rule or NPRM, the language of the proposed rule or NPRM will 
21

have precedence. This is particularly important with regards to terminology describing AN 

Facilities and AN Purchasers. For regulatory purposes, these two terms have specific legal 

definitions. To clearly identify cost groups and specific definitions applicable to analysis in 

support of the Regulatory Flexibility Act, such as the Initial Regulatory Flexibility Act 

Analysis (IRFA) in this document, some compromise and simplification is necessary to 

maintain simplicity when labeling cost information, particularly in tables. DHS believes the 

use of these two terms and similar terms in this document should be readily 

understandable. Use of these terms in this document does not alter the specific definitions 

and usage in the proposed rule text or in the NPRM. When we use these terms in this 

document, we are using them terms in broad manners, not in the precise manners in which 

they are used in the NPRM or in the proposed rule text. For purposes of this document only, 

‘AN Sellers’ can include individuals who are AN Sellers, AN Facility Representatives, and 

Designated AN Facility POCs, and can also include businesses, organizations, and other 

entities that sell or transfer ammonium nitrate. Similarly, for purposes of this document 

only, ‘AN Purchasers’ can include individuals who are AN Purchasers, and can also include 

businesses, organizations, and other entities that buy or obtain ammonium nitrate. DHS 

invites comments on the clarity of the use of these simplified terms in this document.

For purposes of the proposed rule, an AN Facility is any person or entity that produces, 

sells, or otherwise transfers ownership of, or provides application services for, ammonium 

nitrate. The proposed rule requires that all AN Sellers (i.e., any individual involved in the 

sale or transfer of ammonium nitrate from an AN Facility or designated to act on behalf of 

an AN Facility for purposes of compliance with the proposed rule) and AN Purchasers (i.e., 

any individual seeking to purchase ammonium nitrate from an AN Facility) register with 

the Department to obtain an AN Registered User Number. Each applicant for an AN 

Registered User Number must apply electronically using the AN User Registration Portal, 

an online web portal. AN Facilities include producers, distributors, and some independent 

transporters of ammonium nitrate. The term producer is not used in Subtitle J and 

therefore the Department has not used this term in the proposed preamble and rule. For 

purposes of this Regulatory Assessment, the Department considers producers to be a 

subset of AN Facilities because they manufacture ammonium nitrate, sell or transfer the 

ammonium nitrate to distributors, applicators, retailers, etc. Therefore, producers of 

ammonium nitrate are subject to the same regulatory requirements as all other AN 

Facilities.

To register, AN Sellers must provide information including: name, address, telephone 

number, photo identification document number, place of birth, date of birth, citizenship, 

gender, and information identifying all AN Facilities where applicant will serve as an AN 

Seller or AN Facility Representative or Designated AN Facility POC. Additionally, 

application information we are reserving the right to collect includes any other information 
22

deemed necessary by the Department to carry out vetting, and any other information 

deemed necessary by the Department to verify the results of previous TSDB vetting. Each 

applicant will be checked against the TSDB and may be denied an AN Registered User 

Number if there is a match on the TSDB. The Department intends to provide each applicant 

with their AN Registered User Number via e-mail within 72 hours. Where this is not 

practicable, the Department intends to provide notice of the delay to the applicants within 

the 72 hour timeframe. Each AN Registered User Number would be valid for five years after 

its generation by the Department.

Purchasers of ammonium nitrate will also have to register with the Department using the 

AN User Registration Portal. They will have to provide information as describe above for 

sellers, and may also provide names of any agents who may act on the AN Purchaser’s 

behalf at the point of sale. Each purchaser’s registration application will also have to 

provide a description of the intended use of the ammonium nitrate the purchaser plans to 

procure. As with AN Sellers, AN Purchaser’s information will be checked against the TSDB.

If a person moves, changes their name, etc., they are responsible for notifying the 

Department of these changes. They must notify the Department via the AN Registered User 

Portal. 

The proposed rule requires the AN Seller to verify the purchaser holds a valid AN 

Registered User Number. The Department believes this will occur at the point of sale19

although that is not a requirement. To do this, the Department is considering requiring the 

AN Seller to enter the potential purchaser’s AN Registered User Number into an online web 

portal or call a call-center established by the Department for verification of the prospective 

purchaser’s AN Registered User Number. For purposes of the primary estimate in this 

Regulatory Assessment, the Department is assuming that only the online web portal will be 

available to AN Sellers to use for this verification. The Department will confirm that the 

number provided is a valid AN Registered User Number.

The AN Seller must also perform a visual check of the photo identification (e.g., driver’s 

license; passport) of the individual taking possession of the ammonium nitrate (i.e., the AN 

Purchaser or his/her agent). The AN Seller must record pertinent details about each 

ammonium nitrate transaction, including the AN Purchaser’s (and, if applicable, agent’s) 

name, address, telephone number, AN Registered User Number, Department Confirmation, 

documentation that a photo ID was inspected, and amount of ammonium nitrate in the 

transaction. Where an agent is used, photo ID of the agent must also be presented to verify 

the identity of the agent. The AN Facility must keep these records for at least two years.

 19 The “point of sale” is the point at which the possession of AN is transferred from an AN Facility to an AN 

Purchaser or his/her agent pursuant to a sale or transfer of AN.
23

Further, the Department requires that these records be and secured during this two-year 

period. 

AN Facility Representatives (i.e., any AN Seller with responsibility for an AN Facility’s 

overall compliance with the proposed rule) and Designated AN Facility POCs must report a 

theft or loss of ammonium nitrate to Federal law enforcement within one calendar day of 

discovering the theft or loss. The Department recognizes that much of the ammonium 

nitrate supply is bulk and because of the hygroscopic nature of the material, some losses 

are inevitable. 

5. Period of Analysis

The Department has presented the costs for a ten year period. The Department assumes 

implementation will begin early in 2012 or 2013.

6. Estimates of Regulated Population

Congress defines ammonium nitrate for purposes of the 2008 Consolidated Appropriations 

Act as “solid ammonium nitrate that is chiefly the ammonium salt of nitric acid and 

contains not less than 33 percent nitrogen by weight.” Included in the definition of 

ammonium nitrate is “any mixture containing a percentage of ammonium nitrate that is 

equal to or greater than the percentage determined by [the Department].” In establishing 

this mixture percentage, the Department is required to consult with the heads of 

appropriate Federal departments and agencies (including the Secretary of Agriculture) and 

to provide notice and an opportunity for comment. The Department is also considering 

establishing a minimum threshold amount of ammonium nitrate that must change hands as 

part of a sale or transfer before that sale or transfer (including the individuals participating 

in the transaction) is subject to Subtitle J’s requirements. 

Ammonium nitrate is primarily used as a nitrogen source in fertilizer and as an input into 

industrial explosives. The majority of ammonium nitrate in commerce is solid while a small 

amount of solution is used as a direct application fertilizer. Under Subtitle J, the 

Department has authority to regulate transactions (and the individuals conducting them) 

involving any amount of ammonium nitrate regardless of packaging. The Department 

believes, however, that the security benefits gained from regulating transactions involving 

either de minimis quantities of ammonium nitrate or products packaged in such a way as to 

make them unlikely to be chosen by an individual for conversion to an ammonium nitratebased explosive may be outweighed by the costs of regulating those transactions. To avoid 

including these transactions and the individuals conducting them under its regulatory 
24

authority, the Department is considering including both a minimum threshold weight and 

an individual products exemption in the definition of ammonium nitrate.

In agricultural applications, ammonium nitrate is used to fertilize pastureland, wheat, corn, 

grapes, fruit orchards, and other agricultural products. It is a readily available source of 

nitrogen and its fast release makes it a preferred fertilizer to other nitrogenous fertilizers 

(including urea, calcium ammonium nitrate, and ammonium sulfate) in relatively dry 

climates. According to the Fertilizer Institute, the largest ammonium nitrate consuming 

States include: Missouri, Alabama, Tennessee, Texas, Mississippi, Kentucky, Kansas, 

Arkansas, Georgia, and Oklahoma. Combined, these ten States accounted for 77.4% of 

ammonium nitrate fertilizer consumption in 2007.20 There is no source of information 

about how many individual farms use ammonium nitrate fertilizer. According to the U.S. 

Department of Agriculture, 1,022,036 farms incurred expenses for Commercial fertilizer, 

lime, and soil conditioners. 21 Only a fraction of these farms use ammonium nitrate 

fertilizer, however. The Department assumes that between 100,000 and 150,000 farms use 

ammonium nitrate based on information provided by state plant food control officials.22

Informed by discussions with the fertilizer industry, the Department assumes 

approximately 50% of these farms use fertilizer applicator services,23 and thus never 

purchase ammonium nitrate directly. Rather, they purchase ammonium nitrate application 

services. Others in the ammonium nitrate supply chain include manufacturers, fertilizer 

mixers, explosives distributors, farm wholesalers/co-ops, retail garden centers, golf 

courses, landscaping services, blasting services, mines, and laboratory supply companies. 

Refer to Appendix A for more information on population estimates. Because point 

estimates were difficult to obtain, the Department has provided range estimates for several 

segments of the potentially regulated population. The Department welcomes comment on 

the estimates of AN Purchasers, Agents and Facilities.

Ammonium nitrate is also used in very small amounts in first aid cold packs24

 

20 Association of American Plant Food Control Officials and The Fertilizer Institute, Commercial Fertilizers 

2007, page 11.

to generate 

an endothermic reaction when mixed with water. At this time, the list of such products that 

21 U.S. Department of Agriculture, National Agricultural Statistics Services, 2007 Census of Agriculture (US 

data), Table 45.

22 4/17/09 listening session with plant food control officials from several States. Roughly 50,000 – 75,000 

farms in Missouri and 3,000 farms in Texas were reported to use AN fertilizer. Estimating the average 

fertilizer consumption per State and applying to the national totals, DHS estimates roughly 100,000 to 

150,000 farms using AN fertilizer.

23 4/17/09 listening session with plant food control officials from several States. Nationally, about half of 

farms were thought to use applicator services and thus never take custody of ammonium nitrate fertilizer.

24 For purposes of the proposed rule, the Department proposes defining a cold pack as a small, commerciallyavailable package commonly used as a replacement for ice in the application of first-aid. Only those cold 

packs containing unmixed water and AN that, immediately prior to use, is manipulated to cause the 

comingling of the water and the AN resulting in an endothermic reaction that significantly lowers the 
25

the Department is considering granting an individual exemption to is limited to cold packs.

The Department believes that not only would the cost of regulating cold packs far exceed 

the security benefit gained by including them in the regulations, but also that Congress did 

not intend cold packs—nor the sporting goods stores, recreational centers, schools, and 

other entities that purchase or sell/transfer them—to be covered under the Act.

Mixtures

For purposes of the proposed rule, the Department proposes to define ammonium nitrate 

to include any mixture that is 30 percent or more ammonium nitrate by weight. By setting 

the mixture rule at 30 percent, the Department believes the regulations will capture those 

ammonium nitrate mixtures that could be most effectively used in bomb-making, or that 

could be most effectively retooled or reconfigured for use in bomb-making.

The Department is aware that this proposed mixture rule differs from the mixture rule 

used for ammonium nitrate under the DHS Chemical Facility Anti-Terrorism Standards 

(CFATS).

25 Under CFATS, a mixture containing ammonium nitrate is counted towards the 

screening threshold quantity for ammonium nitrate if the ammonium nitrate represents 33 

percent or more of the mixture. There are two primary reasons for the difference between 

this and the CFATS approach to ammonium nitrate mixtures. First, the two mixture rules 

exist to accomplish two different goals. First, the CFATS mixture rule exists to help the 

Department identify potentially high-risk chemical facilities subject to CFATS, and at the 

time of the development of CFATS, the Department believed that setting the ammonium 

nitrate mixture at 33 percent accomplished this goal. For this proposed rule, the threshold

is solely meant to identify ammonium nitrate mixtures that have the potential to be 

misused in acts of terrorism. Accordingly, a more conservative and inclusive mixture rule is 

appropriate. Second, the CFATS mixture rule was based on the best information available 

to the Department at the time of the issuance of CFATS Appendix A, which occurred over 

eighteen months ago. Since that time the Department has better information from the FBI’s 

Explosives Unit concerning experiments that have shown that mixtures containing as low 

as 30 percent ammonium nitrate by weight can be processed into viable explosives. In light 

of this new evidence, , the Department believes that setting the mixture rule for this 

rulemaking at 30 percent ammonium nitrate is the correct course of action.

 

temperature of the package, could be affected. Many cold packs do not contain AN and would not require an 

exemption.

25 CFATS was implemented by rulemaking and is an ongoing program. The original final rule can be viewed at 

http://www.regulations.gov/search/Regs/contentStreamer?objectId=09000064802228b5&disposition=attachment&c

ontentType=pdf
26

For a variety of reasons discussed more extensively in the NPRM, the Department is 

proposing exempting mixtures regulated as “explosives” by the Bureau of Alcohol, Tobacco, 

Firearms, and Explosives (ATF) from the definition of ammonium nitrate for purposes of 

the regulation. 

Purchaser

Individuals seeking to purchase or otherwise acquire 25 pounds or more of ammonium 

nitrate must apply to the Department of Homeland Security for an AN Registered User 

Number. As mentioned in the NPRM, most home use fertilizer doesn’t contain enough AN to 

be regulated. The purchaser will be required to present his/her AN Registered User 

Number and submit to a purchaser identity verification process in order to purchase 

ammonium nitrate based upon the proposed thresholds for weight and mix.

Agents

The use of agents during the conduct of purchases or transfers of ammonium nitrate is a 

common practice. For example, an AN Purchaser’s agent or representative will go to an AN 

Seller to arrange a transaction of ammonium nitrate and take custody of the ammonium 

nitrate on behalf of the AN Purchaser. Agents are not required to possess an AN Registered 

User Number. The Department may, however, require AN Purchasers to identify on their 

applications for a Registered AN User Number agents who they intend to use at the point of 

sale and/or to verify for the AN Seller at the time of an ammonium nitrate transaction that 

an individual is acting as an agent on the AN Purchaser’s behalf. 

Sellers

AN Sellers that must register with the Department include any person who may 

individually perform all aspects of a sale or transfer of ammonium nitrate on behalf of an 

AN Facility, including purchaser identity verification activities. Under this proposed rule 

framework, there are three categories of AN Sellers: 

1. AN Seller

2. AN Facility Representative

3. Designated AN Facility POC

Subtitle J requires any person who owns an AN Facility to register with the Department.

The Department is aware, however, that facilities selling or transferring ammonium nitrate

come in many forms, including but not limited to corporations, partnerships, cooperatives, 

and sole proprietorships. For many of these organizations, it may not be practical or 
27

sensible to require all “owners” to register (for example, it would not be sensible to require 

every shareholder of a publically-held company to register with the Department). Similarly, 

for some AN Facilities, such as those owned by large, publically-held companies, there is no 

single “owner” who can register on behalf of the AN Facility. Moreover, in many cases 

regardless of ownership structure, the AN Facility “owner” is not involved in the day-to-day 

transactions of an AN Facility, and thus would have no direct involvement in, or potentially 

even oversight of, sales or transfers of ammonium nitrate. For these reasons, simply 

requiring all AN Facility “owners” to register is not practicable.

In light of this, the Department is proposing that, any individual who has an ownership or 

operator interest in an AN Facility; is designated to act on behalf of an AN Facility for 

purposes of compliance with this regulation, such as, possibly, a site manager, sales 

manager, or corporate officer; or is involved in the sale or transfer of ammonium nitrate at 

an AN Facility, such as a sales clerk or cashier, may register as an “AN Seller.” This would 

allow AN Facilities to conduct sales or transfers without direct involvement of an owner of 

the AN Facility, while also ensuring that no sale or transfer on behalf of an AN Facility is 

conducted by an individual who has not been vetted by and registered with the 

Department. For these reasons, the Department also is proposing that, while every AN 

Facility will be required to have at least one AN Seller registered with the Department, not 

every individual with an ownership interest in an AN Facility must register to be an AN 

Seller.

Within the category of AN Sellers, there is a subcategory of individuals called “AN Facility 

Representatives.” The qualifications and responsibilities of AN Facility Representatives are

discussed below. AN Sellers who are not AN Facility Representatives would have authority 

to perform all of the regulatory activities that “owners” must (e.g., verifying the identities of 

prospective AN Purchasers, recording the details of completed sales or transfers, and 

handing over possession of ammonium nitrate to approved AN Purchasers), but would not 

be liable for ensuring that other AN Facility personnel are following the Department’s 

regulations.

The Department proposes that every AN Facility must have at least one registered AN 

Seller, but may register as many AN Sellers as it deems appropriate. Whether or not an AN 

Facility seeks registration of any additional AN Sellers is entirely discretionary. Under the 

Department’s proposed approach, an AN Facility may decide that it is most cost-effective to 

register only a single AN Seller; however, in that case the single AN Seller must perform all 

point of sale purchaser verification activities and other regulatory compliance activities 

proposed by the NPRM.
28

The Department recognizes that not all AN Sellers will have the same level of nonregulatory responsibility and authority within an AN Facility, and that some AN Sellers may 

not be in a position to monitor or control overall AN Facility compliance or the compliance 

of other AN Facility employees with the final regulations. In light of this, the Department is 

proposing the creation of a subcategory of individuals called “AN Facility Representatives” 

within the broader class of AN Sellers. The Department proposes that AN Facility 

Representatives would be AN Sellers who are not only responsible for their own 

compliance with the regulations, but also would be responsible for the AN Facility’s overall 

compliance with the regulations and the compliance of all other AN Facility employees.

The Department also proposes that, for purposes of these regulations, the definition of “AN 

Facility Representative” be broad enough to include not only individuals who own all or 

part of an AN Facility, but also any non-owner AN Facility employee or contractor 

designated to act on behalf of an AN Facility for purposes of compliance with this 

regulation. Thus, for purposes of the proposed regulation, an AN Facility would be allowed 

to designate as an “AN Facility Representative” an individual without any ownership in the 

AN Facility, such as, possibly, a site manager, sales manager, or corporate officer, to meet 

the “owner” registration requirements. 

The Department proposes that every AN Facility must register at least one AN Facility 

Representative, but may register as many AN Facility Representatives as it deems 

appropriate. Whether or not an AN Facility seeks registration of any additional AN Facility 

Representatives is entirely discretionary. The Department also proposes that while an AN

Facility must have at least one registered AN Facility Representative, whether or not an AN

Facility seeks registration of any additional AN Sellers who are not AN Facility 

Representatives is entirely discretionary.

While the Department’s proposal does not preclude the registration of multiple AN Facility 

Representatives for a single AN Facility, each AN Facility will be required to designate a 

single AN Facility Representative to act as the primary point of contact with the 

Department on behalf of the AN Facility. This individual will be referred to as the 

“Designated AN Facility POC.” The Designated AN Facility POC will be the individual 

responsible for contacts with the Department regarding regulatory activities, such as the 

scheduling of inspections.

An individual registering as an AN Facility Representative will be expected to provide the 

name of and contact information for the Designated AN Facility POC for each AN Facility on 

behalf of which he/she is registering. Please note that a single individual may serve as an 

AN Facility Representative and/or Designated AN Facility POC for multiple AN Facilities.
29

Individuals can register for more than one class and the Department expects that many 

will. For the purpose of this analysis, however, the Department assumes that AN 

Purchasers and AN Sellers will be unique individuals.

The Department recognizes that some AN Facilities may be owned by State or local 

government entities. DHS invites comments about this kind of entity to assist in evaluating 

the burden on other government entities These AN Facilities would be required to comply 

with the provisions of this proposed rule.

The estimated number of AN Purchasers and AN Sellers is based in large part on 

discussions between the Department and members of multiple agricultural fertilizer and 

explosive industry associations, who represent a cross-section of many of the industry 

segments most likely to be covered by these regulations. These estimates also are based on 

discussions between the Department and various State officials (e.g., State plant food 

control officials) responsible for overseeing ammonium nitrate use within their respective 

States. The Department welcomes comment on the size of the regulated population. 

Table 9 estimates the number of purchasers of ammonium nitrate that will apply for an AN 

Registered User Number. For the purpose of this analysis, it is assumed that each 

establishment will have more than one person apply for an AN Registered User Number. 

The Department assumes that farms, mines, golf courses, landscaping and landscaping

services will register two people at each establishment. Larger businesses and businesses 

engaged in reselling or distributing ammonium nitrate are assumed to have three 

applicants per establishment. The Department welcomes comment on the number of AN 

Purchasers and the number of AN Registered Users per establishment.
30

Table 9. AN Purchasers

Number of 

establishments

Number of individual 

applicants

Average 

number of AN 

Registered 

Users per 

establishment

(C)

(A) (B) (A x C) (B x C)

Low High Low High 

Agricultural sector

 Fertilizer mixers 400 600 1,200 1,800 3

 Farm wholesalers/co-ops 500 1,000 1,500 3,000 3

 Retail garden centers 500 2,500 1,500 7,500 3

 Fertilizer applicators 500 1,000 1,500 3,000 3

 Farms 50,000 75,000 100,000 150,000 2

 Golf courses 6,000 12,000 12,000 24,000 2

 Landscaping services 4,500 9,000 9,000 18,000 2

Explosives Sector

 Explosives distributors 500 1,000 1,500 3,000 3

 Blasting services 250 500 750 1,500 3

 Mines 1,750 3,500 3,500 7,000 2

Other

 Laboratory supply 50 100 150 300 3

Total AN Purchasers 64,950 106,200 132,600 219,100 n/a
31

Table 10 estimates the number of AN Sellers. Many AN Sellers are also AN Purchasers due 

to their “middle position” in the supply chain. The Department assumes that most 

businesses will have five AN Registered Users at each establishment. Manufacturers of 

ammonium nitrate fertilizer and explosives are assumed to have ten AN Sellers at each 

establishment, while fertilizer applications are assumed to have three registered AN Sellers 

at each establishment. The Department welcomes comment on the number of AN Sellers 

and the assumptions regarding the number of AN Registered Users per establishment.

Table 10. AN Sellers

Number of 

establishments

Number of 

individual applicants

Average 

number of AN 

Registered 

Users per 

establishment

(C)

(A) (B) (A x C) (B x C)

Low High Low High 

AN fertilizer manufacturers 26 26 260 260 10

AN explosives manufacturers 10 10 100 100 10

Fertilizer mixers 400 600 2,000 3,000 5

Explosives distributors 500 1,000 2,500 5,000 5

Farm wholesalers/co-ops 500 1,000 2,500 5,000 5

Retail garden centers 500 2,500 2,500 12,500 5

Fertilizer applicators 500 1,000 1,500 3,000 3

Laboratory supply 50 100 250 500 5

Total AN Sellers 2,486 6,236 11,610 29,360 n/a

7. Registration of AN Sellers and AN Purchasers

In order to legally sell or transfer ammonium nitrate, individuals, including those acting on 

behalf of a business enterprise, must first register with the Department to receive an AN 

Registered User Number. 

The Department proposes registering to become an AN Seller (including designation as an 

AN Facility Representative or Designated AN Facility POC), will be done through an online 

web portal (the “AN User Registration Portal”) developed by the Department and made 

available via the Internet. The Department preliminarily has decided that this will be the 

only available means of registration, and that alternate registration application processes

will not be available. The Department will check the applicant’s personal information 

against the TSDB and may deny the applicant an AN Registered User Number if their 

information matches information contained in the TSDB. 
32

An individual may choose to register for multiple categories. Transporters of AN will 

register in one or more categories based upon the three different possible business 

relationship in their transactions. Based on the category(s) selected, the individual will be 

asked to provide answers to a series of questions, including, at a minimum, the following 

statutorily required information: name; address; telephone number; and, for AN 

Purchasers, the intended use of the ammonium nitrate.

OMB Circular A-4 directs agencies to consider alternative regulatory approaches; however, 

the Circular also affords agencies considerable flexibility to specify the number and type of 

alternatives that should be fully analyzed according to the formal principles of Executive 

Order 12866. In this case, the Department used this discretion to define a set of alternative 

approaches that reflected the most relevant policy choices made for this rulemaking.

The Department briefly considered having a paper-based registration system. This may 

have lowered costs for some applicants who will have to travel to use a computer with 

Internet access. Paper-based registration introduces opportunities for transcribing errors 

and subsequent delays in receiving an AN Registered User Number. It would be difficult to 

assure that AN Registered User Numbers could be generated within the 72 hour window 

because of the delay with mail and/or fax. Once DHS determined the paper option would 

not comply with the maximum response time, no further consideration or development of 

the concept was pursued. Also, the Department has had success with the Chemical Security 

Assessment Tool (CSAT) system for Top-Screen under CFATS and expects the regulated 

community will find the AN Registration Portal to be equally easy to navigate.

Tables 11 and 12 present the cost of registration activities for AN Purchasers for both the 

low and high population estimates. To estimate the cost of the time to register for an AN 

Registered User Number, the Department has assumed that individuals equivalent to a 

“purchasing manager” will undergo the application process. An average hourly wage at the 

50th percentile plus benefits is assumed for each industry. To estimate the cost of 

individual’s time registering for an AN Registered User Number, the Department has 

applied a loaded average hourly rate. Hourly rates represent the 50th percentile hourly 

rates published by the Bureau of Labor Statistics (BLS), Occupational Employment and 

Wage estimates (May 2008.26

According to the U.S. Department of Agriculture (USDA), approximately 60% of crop farms 

have Internet access.

27

 26 All wage rate information with links to BLS data is provided in table form in Appendix B. 

Thus, the Department assumes that in the agricultural sector, 

27 Sources: “Farm Computer Usage and Ownership,” United States Department of Agriculture National 

Agricultural Statistics
33

approximately 60% of farms have computers with Internet access. For this portion of the 

population, the time to apply for an AN Registered User Number is limited to the time to 

access the website, provide the required information, check their e-mail for registration 

confirmation, and record their AN Registered User Number. For the 40% of farms without 

computers with Internet access, the Department assumes that these AN Purchasers will 

travel a short distance public library, or other location where access to the Internet is 

available to apply for an AN Registered User Number. Further, the Department assumes 

that for applicants without Internet access, two trips will be required; one to complete the 

AN Registered User Number application, and a second trip after 72 hours to retrieve the email containing the AN Registered User Number. The Department assumes that the round 

trip distance is 50 miles per trip28 and has used the IRS mileage rate of $0.55 per mile.29

The Department assumes the total extra time for each trip will average approximately one

hour each way plus 1 hour for Internet access and registration for a total of 6 hours per 

farm registration. By multiplying 50 miles times two trips times $0.55 per mile totals $55 

per individual for the mileage for the two trips associated with applying for and receiving 

an AN Registered User Number. Because of the minimal time and effort it takes to apply for 

and receive an AN Registered User Number, the Department believes this approach to be a 

cost-effective way to prevent ammonium nitrate misappropriation. DHS recognizes that in 

some instances farmers may be unaware of the requirements to have a registration 

number to make an Ammonium Nitrate purchase. These individuals would incur the 

opportunity cost of time to travel to make their purchase, but would not be able to 

complete their purchase in that trip. In order to calculate the opportunity cost of these 

missed purchases, we first need to determine how much of the regulated population might 

be unaware of the requirements of this regulation. DHS was unable to find a study that was 

highly specific to the population being regulated by thus rule; however, DHS did consult 

two papers30

 Service, August 2009, p. 1. As retrieved at 

that addressed regulatory non-compliance due to lack of knowledge of the 

http://usda.mannlib.cornell.edu/usda/current/FarmComp/FarmComp-08-14-2009.pdf

on 7/22/2010 28 DHS is using an average of one way distance of 25 miles based upon: “In the 2004 Agricultural Resource 

Management Survey, a joint effort by ERS and USDA’s National Agricultural Statistics Service, farmers were asked 

how far they travel to purchase most of their farm inputs and equipment. Farmers were also asked the distance to the 

nearest town (the average was 8.3 miles) and nearest city of more than 10,000 people (the average was 24.2 miles).” 

USDA, Economic Research Service using data from USDA’s Agricultural Resource Management Survey, 2004 Phase III, Version 1, 

summarized in Amber Waves, June 10, 2010, retrieved at http://www.ers.usda.gov/AmberWaves/June10/PDF/FarmExpenditures.pdf on 

07/22/2010

29 http://www.irs.gov/formspubs/article/0,,id=178004,00.html. IRS lists the data currency as “Page Last 

Reviewed or Updated: January 07, 2010” 30 EPA/CMA Root Cause Analysis Pilot Project: An Industry Sur-vey” EPA 305 R 99 001) at 

http://www.epa.gov/compliance/resources/publications/assistance/sectors/rootcauseanalysis.pdf?bcsi_scan_1CFAD6D

3D20A37D6=0&bcsi_scan_filename=rootcauseanalysis.pdf (27% p14); and Use of Random Response to Estimate Angler 

Noncompliance with Fishing Regulations North American Journal of Fisheries Management Volume 15, Issue 4, 1995, 

Pages 721 - 731 Authors: D. I. Schilla; P. A. Klinea at 

https://research.idfg.idaho.gov/Fisheries%20Research%20Reports/ResSchilil1996%20Use%20of%20Random%20Response%20to%20Estimate%20Angler%20Noncompliance%20With%20Fi
34

requirements. For the purpose of this analysis, DHS considered the likely differences in the 

effectiveness of the planned outreach program and the very likely difference that farmers

with internet have more access to information. DHS considered the available information 

and used the average of the two papers at the high end, 25% noncompliance for farmers 

without internet. For farmers with internet DHS believes the requirements will be much 

better known. As a starting point for public comment, DHS has used one quarter of the 

upper estimate average or 6.5% for the farmers with internet. 

DHS assumes farmers attempting to make a purchase that do not have registration 

numbers will proceed directly to a public internet access point and register. For those 

farmers without internet, an additional 30 minutes was added onto their time to account 

for the opportunity cost of the missed purchase. Table 11 below provides the weighted 

average time for all farmers without internet which includes the additional 30 minutes that 

25% of the farmers will need. 

For farmers with internet, DHS assumes one additional trip for the 6.5% of the farmers that 

were unable to make the purchase and went home to register. The opportunity cost of this 

additional trip includes the estimated 2 hours to drive to and from the store (6.5% * 60,000 

farmers * 2 hours) as well as the mileage cost (25% * 60,000 farmers * $.55/mile * 50 

miles). The time for the additional trip for 6.5% of the farmers with internet has been 

added in to the total amount of time for all farmers with internet to register and divided by 

the total population to arrive at a weighted average registration time. These additional 

opportunity costs have been included in Table 11 below. 

Businesses have a higher Internet penetration rate and usually are in close proximity to

other businesses or public Internet access. Therefore, DHS has not adjusted other 

estimates for the opportunity cost of the missed purchase.

Table 11. Cost of Registration Activities for AN Purchasers – Low Population Estimate*

Number of 

Applicants

Loaded 

Hourly 

Wage -

Purchasing 

Agents*

Hours 

required to 

register for 

AN 

Registered 

User 

Number

Total 

Hours

Cost of Time 

to apply for 

AN 

Registered 

User 

Number

($)

Travel 

Mileage 

Cost

($)

Total 

Registration 

Cost

($)

A B C AxC AxBxC D (AxBxC)+D

 shing%20Regulations.pdf (pp 721, 725, and 726: 29% noncompliance * 75% accidental = 22%) Averaging 22% and the 

27% yields 25% Additionally different sampled populations had noncompliance rates from .4% to 28% )
35

Fertilizer mixers 1,200 39 0.5 600 24,000 n/a 24,000 

Farm wholesalers/coops

1,500 32 0.5 750 24,000 n/a 24,000

Retail garden centers 1,500 16 0.5 750 12,000 n/a 12,000

Fertilizer applicators 1,500 40 0.5 750 30,000 n/a 30,000

Farms w/ Internet

access 60,000 41 0.6 

37,500 

 

1,539,000 

 

412,500 

1,951,500 

Farms w/o Internet

access 40,000 41 6.5 260,000 

 

10,670,000 2,200,000 12,870,000 

Golf courses 12,000 25 0.5 6,000 150,000 n/a 150,000 

Landscaping services 9,000 28 0.5 4,500 128,000 n/a 128,000 

Explosives distributors 1,500 39 0.5 750 29,000 n/a 29,000

Blasting services 750 38 0.5 375 14,000 n/a 14,000

Mines 3,500 36 0.5 1,750 63,000 n/a 63,000

Laboratory supply 150 39 0.5 75 3,000 n/a 3,000

Total 132,600 n/a n/a 313,800 11,557,000 

2,612,500 

 

15,298,500 

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.
36

Table 12. Cost of Registration Activities for AN Purchasers – High Population Estimate*

Number of 

Applicants

Loaded 

Hourly 

Wage -

Purchasing 

Agents*

Hours 

required to 

register for 

AN 

Registered 

User 

Number

Total 

Hours

Cost of Time 

to apply for 

AN 

Registered 

User 

Number

($)

Travel 

Mileage 

Cost

($)

Total 

Registration 

Cost

($)

A B C AxC AxBxC D (AxBxC)+D

Fertilizer mixers 1,800 39 0.5 900 35,000 n/a 35,000 

Farm wholesalers/co-ops 3,000 32 0.5 1,500 47,000 n/a 47,000 

Retail garden centers 7,500 16 0.5 3,750 61,000 n/a 61,000 

Fertilizer applicators 3,000 40 0.5 1,500 61,000 n/a 61,000 

Farms w/ Internet access 90,000 41 0.6 56,250 2,308,000 618,750 2,926,750 

Farms w/o Internet access 60,000 41 6.5 390,000 16,005,000 3,300,000 19,305,000 

Golf courses 24,000 25 0.5 12,000 301,000 n/a 301,000 

Landscaping services 18,000 28 0.5 9,000 255,000 n/a 255,000 

Explosives distributors 3,000 39 0.5 1,500 58,000 n/a 58,000 

Blasting services 1,500 38 0.5 750 29,000 n/a 29,000 

Mines 7,000 36 0.5 3,500 126,000 n/a 126,000 

Laboratory supply 300 39 0.5 150 6,000 n/a 6,000 

Total 219,100 n/a n/a 480,800 19,292,000 3,918,750 23,210,750 

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

While not required by this proposed rule, AN Purchasers may wish to register their agents 

with the Department of Homeland Security through the secure User Number Registration 

Portal. The pre-registration of agents is assumed to take 15 minutes (0.25 hours) for each 

AN Purchaser that pre-registers agents, including the time to log into the system and 

update the AN Registered User Number’s record to include the names of his/her agents.

The submission of an agent’s name would simply be for ease of point of sale transactions, 

not for vetting against the TSDB. The agent’s name is simply stored in the AN Purchaser 

Verification Portal to facilitate transactions involving a AN Purchaser’s regular agent. As 

discussed in Section 7 - Point of Sale transactions, an oral confirmation (via telephone or in 

person) may be required when a transaction involves an agent that is not pre-registered 

with the Department. When a pre-registered agent appears at an AN Facility to take 

possession of ammonium nitrate on behalf of a registered AN Purchaser, the agent’s name 

will be linked to the AN Registered User Number of the AN Purchaser and the time 

consuming process of obtaining a verbal confirmation is avoided. The Department assumes 

that 25% of AN Purchasers will register one or more agents. Tables 13 and 14 present the 

costs related to pre-registering agents.

Table 13. Cost of Pre-Registering Agents – Low Population Estimate*
37

Number of AN 

Purchasers that will 

Pre-Register Agents

Loaded Hourly 

Wage - Purchasing 

Agents

Hours 

Required to 

Pre-Register 

Agents

Total Hours to 

Pre-Register 

Agents 

Cost of Time to 

Pre-Register 

Agents

A B C AxC AxBxC

Fertilizer mixers 300 39 0.25 75 $3,000 

Farm wholesalers/co-ops 375 32 0.25 94 $3,000 

Retail garden centers 375 16 0.25 94 $2,000 

Fertilizer applicators 375 40 0.25 94 $4,000 

Farms 25000 41 0.25 6250 $256,000 

Golf courses 3000 25 0.25 750 $19,000 

Landscaping services 2250 28 0.25 563 $16,000 

Explosives distributors 375 39 0.25 94 $4,000 

Blasting services 187.5 38 0.25 47 $2,000 

Mines 875 36 0.25 219 $8,000 

Laboratory supply 37.5 39 0.25 9 -

Total 33,150 n/a n/a 8,289 $317,000 

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

Table 14. Cost of Pre-Registering Agents – High Population Estimate

Number of AN 

Purchasers that 

will PreRegister Agents

Loaded Hourly 

Wage -

Purchasing 

Agents*

Hours 

Required to 

Pre-Register 

Agents

Total Hours 

to PreRegister 

Agents 

Cost of Time 

to PreRegister 

Agents

A B C AxC AxBxC

Fertilizer mixers 450 39 0.25 113 $4,000 

Farm wholesalers/co-ops 750 32 0.25 188 $6,000 

Retail garden centers 1,875 16 0.25 469 $8,000 

Fertilizer applicators 750 40 0.25 188 $8,000 

Farms 37,500 41 0.25 9,375 $385,000 

Golf courses 6,000 25 0.25 1,500 $38,000 

Landscaping services 4,500 28 0.25 1,125 $32,000 

Explosives distributors 750 39 0.25 188 $7,000 

Blasting services 375 38 0.25 94 $4,000 

Mines 1,750 36 0.25 438 $16,000 

Laboratory supply 75 39 0.25 19 $1,000 

Total 54,775 n/a n/a 13,697 $509,000 

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

Tables 15 and 16 present the costs for registration activities of AN Sellers at the low and 

high population. The Department proposes requiring each AN Facility to register one and 

only one Designated AN Facility POC, while an AN Facility may register as many AN Sellers 

as it chooses. For the purpose of estimating the cost of their time, the Department assumes 

that the Designated AN Facility POC is an individual equivalent to a Sales Manager, and AN 

Sellers are individuals who are equivalent to “sales representatives.” 
38

Table 15. Cost of Registration Activities for AN Sellers – Low Population Estimate*

No. of 

AN Seller 

Owners/

POC

Other AN 

Seller 

Applicants

Total 

Number of 

Applicants

Loaded 

Hourly 

Wage –

Sales 

Manager

Loaded 

hourly 

Wage -

Sales 

Rep.

Hours 

required to 

apply for AN 

Registered 

User 

Number Total Hours 

Total 

Registration 

Cost 

A B A+B C D E (AxE)+(BxE)

(AxExC)+

(BxExD)

AN fertilizer manuf. 26 234 260 61 52 0.5 137 7,000

AN explosives manuf. 10 90 100 74 54 0.5 53 3,000

Fertilizer mixers 400 1,600 2,000 61 52 0.5 1050 56,000

Explosives distributors 500 2,000 2,500 73 47 0.6 1375 72,000

Farm wholes./co-ops 500 2,000 2,500 63 38 0.6 1438 62,000

Retail garden centers 500 2,000 2,500 44 32 0.6 1438 50,000

Fertilizer applicators 500 1,000 1,500 87 36 0.6 863 46,000

Laboratory supply 50 200 250 73 47 0.5 131 7,000

Total 2,486 9,124 11,610 n/a n/a n/a 6,485 303,000

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

Table 16. Cost of Registration Activities for AN Sellers – High Population Estimate

No. of 

AN Seller 

Owners/

POC

Other AN 

Seller 

Applicants

Total 

Number of 

Applicants

Loaded 

Hourly 

Wage -

Sales 

Manager

Loaded 

hourly 

Wage -

Sales 

Rep.

Hours 

required to 

apply for AN 

Registered 

User 

Number Total Hours 

Total 

Registration 

Cost 

A B A+B C D E (AxE)+(BxE)

(AxExC)+

(BxExD)

AN fertilizer manuf. 26 234 260 $61 $52 0.5 137 7,000

AN explosives manuf. 10 90 100 $74 $54 0.5 53 3,000

Fertilizer mixers 600 2,400 3000 $61 $52 0.5 1,575 85,000

Explosives distributors 1,000 4,000 5000 $73 $47 0.6 2,750 144,000

Farm wholes./co-ops 1,000 4,000 5000 $63 $38 0.6 2,875 124,000

Retail garden centers 2,500 10,000 12500 $44 $32 0.6 7,188 248,000

Fertilizer applicators 1,000 2,000 3000 $87 $36 0.6 1,725 91,000

Laboratory supply 100 400 500 $73 $47 0.5 263 14,000

Total 6,236 23,124 29,360 n/a n/a n/a 16,564 716,000

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.
39

Tables 17 and 18 summarize the cost of registration activities for the low and high 

population estimates as detailed in Tables 11 - 16. The individual agent is not a registrant 

but providing the purchasers provision of the information as part of the registration or 

update process is a part of the costs of registering. Therefore the pre-registration of agents 

is a registration activity that is included in summary calculations from this point forward. 

Table 17. Summary Cost of Registration Activities – Initial Year, Low Population Estimate

Total 

Number of 

Applicants/

Activities

Total 

Hours Travel Cost

Total 

Registration 

Cost

AN Purchaser Registration 132,600 313,800 2,612,500 15,298,500

Pre-Registration of AN Agents 33,150 8,289 n/a 317,000

AN Seller Registration 11,610 6,485 n/a 304,000

Total AN Purchasers and Sellers 177,360 328,574 2,612,500 15,919,500

Table 18. Summary Cost of Registration Activities – Initial Year, High Population Estimate

Total Number 

of Applicants/

Activities

Total 

Hours Travel Cost

Total 

Registration 

Cost

AN Purchaser Registration 219,100 480,800 3,918,750 23,210,750

AN Purchasers Pre-Registering Agents 54,775 13,697 n/a 509,000

AN Seller Registration 29,360 16,564 n/a 740,000

Total AN Purchasers and Sellers 303,235 511,061 3,918,750 24,459,750

Table 19 presents the Department’s assumptions regarding patterns in registration

activity. Based upon DHS program staff industry knowledge and the conversations with 

industry described elsewhere, the Department assumes that new entrants will apply for AN 

Registered User Numbers at a rate of 20% of the total registered user population per 

year31

 31 When individuals move between employers, their existing registration number remains valid at the new employer. 

Because of this provision, many “new” employees will already have numbers in the system. As in all aspects of the 

evaluation, DHS invites comments on these assumptions.

. In addition, the Department assumes 5% of applicants will update their information 

in a given year. Both updating and renewing an AN Registration are assumed to take 30 

minutes, the same amount of time as an initial AN Registration. Following the five-year 

registration period, the Department assumes 15% of AN Registered Users will leave the 

program (i.e., not renew after five years). The timely renewal of an AN Registered User 

Number will allow the user to keep the same number. An applicant may renew his/her AN 

Registered User Number within 60 days before its expiration. After one year beyond the 

expiration of the AN Registered User Number, the applicant will be required to submit a 

new application and will receive a new AN Registered User Number. 
40

Table 19. Assumptions Regarding Growth in Registrations

New Entrants 20%

Updated Information 5%

Leaving Program (not renewing) 15%

* Note: These averages apply against different base amounts therefore cannot be

summed for a net percentage. Details are provided in the next two charts

Table 20 presents the total registration activity costs by program year. Each AN Registered 

User Number is valid for five

years. For purposes of this Regulatory Assessment, the Department assumes all AN 

Purchasers and AN Sellers will register during the first year of implementation. 

Table 20. Total Registration Activity Costs by Program Year

Registration

Activities

Low Population

Total Registration 

Cost - Low 

Population

Registration Activities

High Population

Total Registration 

Cost - High 

Population

PY1 177,360 $15,918,500 303,235 $24,435,750

PY2 44,340 $3,979,600 75,809 $6,108,938

PY3 46,557 $4,178,600 79,599 $6,414,384

PY4 48,885 $4,387,500 83,579 $6,735,104

PY5 51,329 $4,606,900 87,758 $7,071,859

PY6 116,589 $10,464,200 199,334 $16,063,031

PY7 95,814 $8,599,600 163,815 $13,200,820

PY8 100,605 $9,029,600 172,006 $13,860,861

PY9 105,635 $9,481,000 180,606 $14,553,904

PY10 110,917 $9,955,100 189,637 $15,281,600

Total 898,032 $80,600,600 1,535,379 $123,726,251
41

Appeals

Individuals denied an AN Registered User Number, or whose AN Registered User Number 

has been revoked by the Department have the opportunity to appeal. The Department 

proposes to fulfill this requirement by permitting each person to request copies of the 

materials on which denial or revocation was based, and to file statements explaining why 

he/she believes that he/she has been inappropriately denied registration and containing 

any applicable supporting evidence, to be reviewed by the Department. These proposed 

appeals procedures are based, in part, on appeals procedures the Department offers as part 

of the TWIC and HME programs. Specifically, the Department proposes that a person may 

initiate an appeal by filing a written Request for Materials requesting copies of the 

materials on which denial or revocation was based within 60 days of the date of denial or 

revocation. Upon review of those releasable materials, the appellant will have 60 days to 

file a Request for Appeal containing the rationale or information upon which he/she 

disputes the Department’s denial or revocation determination. After reviewing this 

rationale or information, the Department will serve the appellant with a Final 

Determination of the Department’s resolution of his/her appeal.

It is difficult to estimate the number of individuals that may be found to be a potential 

security threat. Strictly for purposes of this analysis, we will assume approximately 0.2% of 

workers may be disqualified based on their TSDB vetting results. Of these, DHS assumes 

95% will appeal. The remaining 5% may be discouraged and will not seek an appeal. DHS 

assumes the time it will take to prepare the needed paperwork to request the appeal, if 

necessary, would take an average of 6 hours to complete. As discussed previously, DHS 

assumes a weighted average loaded hourly wage rate of $16-$42 per hour based on the 

50th percentile hourly wage for AN Purchasers. For AN Sellers, the weighted average 

loaded hourly wage rate ranges from $64-$86. The costs of appeals are presented in Tables 

21 through 24.
42

Table 21. Cost of Appeals for AN Purchasers –Initial Year, Low Population Estimate*

Number of 

Applicants DQ Rate

% of 

Applicants 

that Appeal

No. of 

Hours 

per 

Appeal

Loaded 

hourly 

Wage -

Prchsng.

Agent

Total 

Number of 

Appeals

Total Cost of 

Appeals 

A B C D E AxBxC AxBxCxDxE

Fertilizer mixers 1,200 0.20% 95% 6 $39 2 500

Farm wholesalers/co-ops 1,500 0.20% 95% 6 $32 3 600

Retail garden centers 1,500 0.20% 95% 6 $16 3 300

Fertilizer applicators 1,500 0.20% 95% 6 $40 3 500

Farms with Internet access 50,000 0.20% 95% 6 $41 95 23,400

Farms w/o Internet access 50,000 0.20% 95% 6 $41 95 23,400

Golf courses 12,000 0.20% 95% 6 $25 23 3,500

Landscaping services 9,000 0.20% 95% 6 $28 17 2,900

Explosives distributors 1,500 0.20% 95% 6 $39 3 700

Blasting services 750 0.20% 95% 6 $38 1 200

Mines 3,500 0.20% 95% 6 $36 7 1,500

Laboratory supply 150 0.20% 95% 6 $39 0 0

Total 132,600 n/a n/a n/a n/a 252 57,500

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

Table 22. Cost of Appeals for AN Purchasers –Initial Year, High Population Estimate*

Number of 

Applicants DQ Rate

% of 

Applicants 

that 

Appeal

No. of 

Hours 

per 

Appeal

Loaded 

hourly Wage 

- Prchsng.

Agent

Total 

Number 

of 

Appeals

Total Cost 

of Appeals 

A B C D E AxBxC AxBxCxDxE

Fertilizer mixers 1,800 0.20% 95% 6 $39 3 700

Farm wholesalers/co-ops 3,000 0.20% 95% 6 $32 6 1,100

Retail garden centers 7,500 0.20% 95% 6 $16 14 1,400

Fertilizer applicators 3,000 0.20% 95% 6 40 6 1,500

Farms with Internet access 90,000 0.20% 95% 6 $41 171 42,100

Farms w/o Internet access 60,000 0.20% 95% 6 $41 114 28,100

Golf courses 24,000 0.20% 95% 6 $25 46 6,900

Landscaping services 18,000 0.20% 95% 6 $28 34 5,800

Explosives distributors 3,000 0.20% 95% 6 $39 6 1,400

Blasting services 1,500 0.20% 95% 6 $38 3 700

Mines 7,000 0.20% 95% 6 $36 13 2,800

Laboratory supply 300 0.20% 95% 6 $39 1 200

Total 219,100 n/a n/a n/a n/a 417 92,700

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.
43

Table 23. Cost of Appeals for AN Sellers –Initial Year, Low Population Estimate*

Number 

of 

Applicants

DQ 

Rate

% of 

Applicants 

that 

Appeal

No. of 

Hours 

per 

Appeal

Loaded 

hourly 

Wage -

Sales 

Rep.

Total

Number 

of 

Appeals

Total Cost 

of Appeals 

A B C D E AxBxC AxBxCxDxE

AN fertilizer manuf. 260 0.20% 95% 6 52 0 $0 

AN explosives manuf. 100 0.20% 95% 6 54 0 $0 

Fertilizer mixers 2,000 0.20% 95% 6 52 4 $1,200 

Explosives distributors 2,500 0.20% 95% 6 47 5 $1,400 

Farm wholesalers/coops2,500 0.20% 95% 6 38 5 $1,200 

Retail garden centers 2,500 0.20% 95% 6 32 5 $1,000 

Fertilizer applicators 1,500 0.20% 95% 6 36 3 $600 

Laboratory supply 250 0.20% 95% 6 47 0 $0 

Total 11,610 n/a n/a n/a n/a 22 $5,400 

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

Table 24. Cost of Appeals for AN Sellers –Initial Year, High Population Estimate*

Number 

of 

Applicants

DQ 

Rate

% of 

Applicants 

that 

Appeal

No. of 

Hours 

per 

Appeal

Loaded 

hourly 

Wage -

Sales 

Rep.

Total 

Number 

of 

Appeals

Total Cost 

of Appeals

A B C D E AxBxC AxBxCxDxE

AN fertilizer manuf. 260 0.20% 95% 6 52 0 $0 

AN explosives manuf. 100 0.20% 95% 6 54 0 $0 

Fertilizer mixers 3,000 0.20% 95% 6 52 6 $1,900 

Explosives distributors 5,000 0.20% 95% 6 47 10 $2,800 

Farm wholesalers/coops5,000 0.20% 95% 6 38 10 $2,300 

Retail garden centers 12,500 0.20% 95% 6 32 24 $4,600 

Fertilizer applicators 3,000 0.20% 95% 6 36 6 $1,300 

Laboratory supply 500 0.20% 95% 6 47 1 $300 

Total 29,360 n/a n/a n/a n/a 57 $13,200 

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.

The costs of appeals by program year are presented below. The Department assumes that 

the number of new entrants into the system is 20% per year and 5% of applicants will 

update their information in a given year. By year 4, the Department assumes 15% of 

applicants will leave the program. The annual changes combined with the mass registration 
44

in the beginning which is good for five years results in peaks beginning every five years

thereafter. The cost appeals by program year are detailed in Table 25. 

Table 25. Cost of Appeals by Program Year

Total Appeals Cost -

Low Population

Total Appeals 

Cost - High 

Population 

PY1 $63,100 $105,900

PY2 $15,900 $26,600

PY3 $16,600 $27,900

PY4 $17,500 $29,300

PY5 $18,400 $30,800

PY6 $41,700 $69,700

PY7 $34,300 $57,400

PY8 $35,900 $60,100

PY9 $37,800 $63,200

PY10 $39,600 $66,400

Total $320,800 $537,300

8. Point of Sale Activities

Only AN Purchasers with valid AN Registered User Numbers may purchase ammonium 

nitrate. AN Facilities must refuse to sell or transfer ammonium nitrate to prospective AN 

Purchasers who are not validly registered. The “point of sale” is the point at which the 

possession of ammonium nitrate is transferred from an AN Facility to an AN Purchaser or 

his/her agent pursuant to a sale or transfer of ammonium nitrate.

AN Facilities must refuse to sell or transfer ammonium nitrate to prospective AN 

Purchasers unable to satisfactorily prove their identities at the point of sale. AN Facilities 

must also record certain identity information at the point of sale. Further, DHS is required 

to encourage AN Facilities to exercise caution in selling or transferring ammonium nitrate 

under suspicious circumstances, and to take other precautionary measures designed to 

prevent the misappropriation of ammonium nitrate. AN Sellers should deny a sale or 

transfer of ammonium nitrate under “suspicious” circumstances and are encouraged to 

contact law enforcement officials in the event of a “suspicious” ammonium nitrate

transaction or attempted transaction.

As mentioned previously, the Department is aware that ammonium nitrate transactions 

occur in a variety of formats and that there may be a time lag between when the 

ammonium nitrate is ordered and when it is ultimately transferred. All of the verification 

activities must occur before the AN Seller transfers possession of ammonium nitrate to the 
45

prospective AN Purchaser or an agent acting on the prospective AN Purchaser’s behalf.

Outside of that requirement, the time at which the AN Seller performs the verification 

activities is entirely within the discretion of the AN Seller. For instance, in a situation where 

the AN Purchaser places an advance order for ammonium nitrate to be picked up at a later 

date, the AN Seller may perform these activities at the time of sale or at the time of transfer 

of possession. Similarly, for transactions in which the prospective AN Purchaser intends to 

use an agent on his or her behalf, the identity verification activities can occur 

simultaneously (e.g., when the prospective AN Purchaser places the order; when the agent 

arrives to take possession of the ammonium nitrate), or can be done separately (e.g., 

verifying the identity and AN Registered User Number of the prospective AN Purchaser 

when the order is placed and verifying the agent’s identity immediately prior to transfer of 

possession). At least 12 states already have a similar process in place which reduces the 

expected burden due to this proposed regulation. 

Based upon the DHS staff industry experience, the Department has identified three 

principal transaction formats commonly used to sell or transfer ammonium nitrate:

1. The AN Purchaser appears at the AN Facility and takes possession of the ammonium 

nitrate from the AN Seller directly. Based upon DHS program industry knowledge, 

DHS believes that sales models will resemble other commercial purchases with 

order information provided to a customer service representative separate from the 

payment or verification step which allows the purchaser to minimize delay. For this 

reason, DHS has shown the opportunity cost of this delay as similar to a merchant 

credit card or check transaction (calculations and costs shown in at the end of this 

section);

2. The AN Purchaser places an advanced order either in person or through other 

means (e.g., via telephone; online), and the AN Seller delivers the ammonium nitrate

to the AN Purchaser; or 

3. The AN Purchaser places an advanced order either in person or through other 

means (e.g., via telephone; online), and an agent acting on behalf of the AN 

Purchaser takes possession of the ammonium nitrate from the AN Seller.

The Department is proposing to require that an AN Seller perform the following specific 

verification activities for each sale or transfer of ammonium nitrate:

1. Verification of a prospective AN Purchaser’s identity (based on the prospective AN 

Purchaser’s AN Registered User Number application information);

2. Verification of the currency and accuracy of the prospective AN Purchaser’s AN 

Registered User Number;
46

3. Visual check of the photo identification of the individual taking possession of 

ammonium nitrate (either the AN Purchaser or his/her agent); and

4. If an agent is used, verification that the agent is acting on the approved AN 

Purchaser’s behalf.

Verification of AN Purchaser’s Identity

The AN Seller must verify the prospective AN Purchaser’s identity as required by the 

Department. The manner of verification of a prospective AN Purchaser’s identity varies 

depending on whether or not the AN Purchaser has opted to use an agent. If the AN 

Purchaser opted not to use an agent, then the AN Seller verifies the AN Purchaser’s identity 

based upon the visual check of the AN Purchaser’s photo identification. If the AN Purchaser 

opted to use an agent, then the AN Seller verifies the AN Purchaser’s identity by submitting 

certain information provided by the AN Purchaser to the Department for comparison 

against information contained in the AN Purchaser’s AN Registered User Number 

application.

In the event a prospective AN Purchaser’s uses an agent to complete the transaction, the 

AN Seller must also verify both (1) the agent’s identity based upon a visual check of the 

agent’s photo identification, and (2) that the agent is acting on the approved AN 

Purchaser’s behalf.

Verification of AN Purchaser’s Registered User Number

In order to bolster the effectiveness of AN Registered User Numbers in preventing the 

misappropriation of ammonium nitrate, the Department proposes that the AN Seller will be 

required to verify the authenticity and currency of a prospective AN Purchaser’s AN 

Registered User Number prior to completing transfer of ammonium nitrate. This will be 

done in the same manner as the verification of the prospective AN Purchaser’s identity 

against information contained in the prospective AN Purchaser’s AN Registered User 

Number Application (i.e., through either the Purchaser Verification Portal or the Purchaser 

Verification Call Center).

To provide sellers of ammonium nitrate with the ability to check the accuracy and currency 

of a prospective AN Purchaser AN Registered User Number, the Department is considering 

several approaches:

• Purchaser Verification Portal (an Internet-based application)

• Purchaser Verification Call Center

• Combination of both the Internet-based verification portal and the call center.
47

Purchaser Verification Portal

The first option is to create a secure purchaser verification web portal (“Purchaser 

Verification Portal”) through which AN Sellers can submit information to the Department 

that will allow the Department to confirm or deny for the AN Seller the prospective AN 

Purchaser’s right to purchase or possess ammonium nitrate. The Department proposes 

making the Purchaser Verification Portal available via the Internet to registered AN Sellers 

only, who will be asked to provide their AN Registered User Number and authenticate 

themselves (enter a password or answer a series of security questions) to gain access to 

the portal. Upon accessing the portal, the AN Seller will enter into the system, at a 

minimum, the prospective AN Purchaser’s name and AN Registered User Number. To help 

strengthen the purchaser identification process, facilitate the performance of compliance 

audits and inspections, and better prevent the misappropriation or use of ammonium 

nitrate in an act of terrorism, the Department is considering requiring the AN Seller to 

enter additional information into the portal, such as the quantity of ammonium nitrate 

being purchased and the prospective AN Purchaser’s proposed use of the ammonium 

nitrate.

The Department anticipates that the confirmation or denial notice resulting from the web 

verification process will typically be sent to and received by the seller much like how 

merchants receive approval or denial notices prior to authorizing purchases via credit card.

To support recordkeeping requirements, the Department is considering providing to the 

AN Seller, along with its web verification notice, confirmation and/or printable web 

verification notice record receipt.

To be able to use the Purchaser Verification Portal, an AN Seller must have a computer and 

an Internet connection. DHS assumes the majority of AN Facilities already have this 

equipment in order to conduct business. Table 26 provides a description of assumptions by 

industry and cost component32. For the purpose of this analysis, DHS assumes a percentage 

of AN Facilities will require the purchase of a computer and the installation and 

maintenance of a second phone line to be used for point of sale AN Purchaser verification. 

DHS assumes a standard computer and printer can be purchased for $1,000.33

 32 The Impact of Broadband Speed and Price on Small BusinessColumbia Telecommunications Corporation for 

SBA Office of Advocacy. . Vol. under contract number SBAHQ-09-C-0050., 2010. ; page 33. Approximately 94% 

of businesses responding to the survey use computers, including 95% of metro businesses and 90% of rural 

businesses. DHS applied the report percentages to the seller population to determine how many would need to 

make the purchases.

According to 

33 http://www.dell.com.
48

the Federal Communications Commission the average installation cost for a business phone 

line is $100, and the average annual cost of maintaining a business phone line is $600 per 

year.

34 The Department assumes that businesses will purchase a new computer and printer 

every five years as equipment becomes obsolete.

Purchaser Verification Call Center

The second option the Department is considering is the creation of a Purchaser Verification 

Call Center to perform verification of an AN Purchaser’s AN Registered User Number. Via 

the call center, the AN Seller would dial a toll-free number to connect via telephone to the 

Department. Once connected to the Department, the AN Seller would talk to a person or be 

led through a series of telephone tree menus. During the phone call, the AN Seller would be 

expected to provide, at a minimum, the prospective AN Purchaser’s name and AN 

Registered User Number. An option being considered would have AN Sellers provide 

information regarding quantities being transferred and other data that would allow the 

Department to monitor the accuracy of records during AN Facility inspections. The 

operator or automated telephone system would enter the information provided into the 

Department’s Registered User database system, wait for electronic confirmation, and then 

provide verbal confirmation to the caller along with a Department confirmation for that 

specific transaction.

A call center may be preferable to a web portal, as presumably all AN Sellers have 

telephones, while not all AN Sellers have computers with Internet access, particularly at the 

point of sale. There are some potential disadvantages, though, including the likelihood that 

the call center approach would take more time per transaction than the web portal 

approach; if manned at all, the call center potentially would only be manned during specific 

times (e.g., regular business hours); and it would be significantly more costly for the 

government to establish and operate a call center.

For the purpose of this analysis, the Department assumes that some AN Sellers will install a 

dedicated phone line to handle ammonium nitrate verification activities. The average 

installation cost for a business phone line is $100 and the average annual cost of 

maintaining a business phone line is $600 per year.35

 34 Federal Communications Commission, Reference Book of Rates, Price Indices, and Household Expenditures 

for Telephone Service (2008). http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-292593A1.pdf. The 

Internet market and pricing is constantly changing. Very low cost dialup still exists while testimony before the FCC 

put broadband costs around $36/month. The $600 per year is likely to be a conservative cost estimate as the 

$36/month equates to $432/month. The testimony is available at 

http://www.ustelecom.org/uploadedFiles/Issues/Filings/USTelecom-CITI-Comments.pdf. 35 Federal Communications Commission, Reference Book of Rates, Price Indices, and Household Expenditures 

for Telephone Service (2008). http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-292593A1.pdf
49

Purchaser Verification Portal and Call Center

The third approach DHS is considering is providing both the Internet-based verification 

portal and a call center. The advantage of this alternative is that all AN Facilities would be 

accommodated – those with telephone access only and those with Internet access who find 

the verification web portal option more efficient. However, this approach would be the 

most costly of the alternatives for the government to establish and operate but is the 

method in the costing of the primary alternative.

Visual Check of Photo ID

DHS also proposes that the AN Seller must verify, by performing a visual check of an 

identification document such as a driver’s license or passport, the identity of the individual 

(either the prospective AN Purchaser or an AN Agent acting on his/her behalf) who will be 

taking possession of ammonium nitrate from the AN Seller at the completion of the sale or 

transfer. The Department proposes using the definition of “identification document” 

similar to that used by the Department’s Secure Flight Program, 49 CFR 1560.3, to establish 

what qualifies as an acceptable form of identification for this verification process.

Specifically, the Department proposes defining “identification document” as: “Any of the 

following documents containing a unique document number: (a) An unexpired passport 

issued by a foreign government which contains a photograph; or (b) An unexpired 

document issued by a U.S. Federal, State, or tribal government that includes the following 

information for the person: (1) full name; (2) date of birth; and (3) photograph; or (3) Such 

other documents that the Department may designate as valid identification documents.”

Creation of the Transaction Record

For each sale or transfer of ammonium nitrate, the AN Seller must record, among other 

things, the name, address, telephone number, and AN Registered User Number issued to 

the purchaser of ammonium nitrate; if applicable, must record the name, address, and 

telephone number of an agent acting on behalf of the registered AN Purchaser at the point 

of sale; and must record the date of sale or transfer and the quantity of ammonium nitrate 

sold. In addition, the AN Seller may be required to record the DHS confirmation and photo 

identification document number. The Department allows some flexibility regarding how 

these records are stored. These records could be stored electronically or on paper, either as 

an amendment to a sales invoice or with a log book similar to the one many pharmacies use 

to record information on sales of certain regulated medicines. Some states with the same 

requirement have recommended the information be recorded directly on the retained 
50

invoice copy. If the Department decides to use a Purchaser Verification Portal online, it

may require that the confirmation that appears on the screen be printed and attached to 

other paper records. The Department assumes that each transaction will take five minutes 

to complete (or 0.083 hours) for transactions using the web-based Purchaser Verification 

Portal. Each transaction is assumed to take six minutes (0.10 hours) when the call center is 

used. The additional minute for the call center option factors in additional time to use a 

phone tree menu and the relative awkwardness of using a telephone keypad vs. computer 

keyboard. In addition to the per transaction costs, the Department assumes each AN 

Facility will spend one hour each year to train each registered AN Seller to conduct 

compliant ammonium nitrate transactions.

The Department recognizes that some AN Facilities may choose to integrate this process 

into their existing point of sale systems. Because electronic records are not required, 

estimates to retrofit existing point of sale and other accounting/billing software to capture 

ammonium nitrate transactions are not presented in this analysis. The Department 

welcomes comments on these costs.

Tables 26 and 27 present the assumptions regarding how many AN Seller Facilities will 

have a computer with Internet access required to use the web-based Purchaser Verification 

Portal and the costs associated with purchasing a computer, printer, and bringing in an 

extra phone line. Based upon the SBA Office of Advocacy (2010) report just mentioned, 

DHS assumed that only a handful of ammonium nitrate manufacturers, mixers, and 

laboratory supply businesses (5%) will require the purchase of a new computer and the 

installation of an extra phone line. The Department assumes 10% of explosives distributors 

and 15% of farm wholesalers/co-ops and retail garden centers will require the additional 

equipment. 

Table 26. Physical Costs for Web Portal-Based Point of Sale Activities – Low Population 

Estimate

Number of 

AN Facilities

% without 

computer & 

phone

Initial 

Installation 

Cost

Computer & 

Printer

Annual Cost 

of Phone 

Line

Total Initial 

Cost

Total Annual 

Cost

A B C D E AxBx(C+D+E) AxBxE

AN fertilizer manuf. 26 5% 100 1,000 600 2,200 800

AN explosives manuf. 10 5% 100 1,000 600 900 300

Fertilizer mixers 400 5% 100 1,000 600 34,000 12,000

Explosives distributors 500 10% 100 1,000 600 85,000 30,000

Farm wholesalers/coops

500 15% 100 1,000 600 127,500 45,000

Retail garden centers 500 15% 100 1,000 600 127,500 45,000

500 15% 100 1,000 600 127,500 45,000

Laboratory supply 50 5% 100 1,000 600 4,300 1,500
51

Total 2,486 n/a n/a n/a n/a $508,900 $179,600

Table 27. Physical Costs for Web Portal-Based Point of Sale Activities – High Population 

Estimate

Number of 

AN Facilities

% without 

computer & 

phone

Initial 

Installation 

Cost

Computer & 

Printer

Annual Cost

of Phone 

Line

Total Initial 

Cost

Total Annual 

Cost

A B C D E AxBx(C+D+E) AxBxE

AN fertilizer manuf. 26 5% 100 1,000 600 2,200 800

AN explosives manuf. 10 5% 100 1,000 600 900 300

Fertilizer mixers 600 5% 100 1,000 600 51,000 18,000

Explosives distributors 1000 10% 100 1,000 600 170,000 60,000

Farm wholesalers/coops1000

15% 100 1,000 600 255,000 90,000

Retail garden centers 2500 15% 100 1,000 600 637,500 225,000

1000 15% 100 1,000 600 255,000 90,000

Laboratory supply 100 5% 100 1,000 600 8,500 3,000

Total 6,236 n/a n/a n/a n/a $1,380,100 $487,100

Table 28 presents DHS estimates of the total hours per year spent on point of sale activities 

using the web-based AN Verification Portal. DHS assumes that all the point of sale activities 

and transaction record creation will take five minutes per transaction (or 0.083 hours).

Further, DHS assumes that the number of annual transactions per AN Facility to be 

between 1,000 and 5,000 per year based on discussions with the fertilizer and explosives 

industries and State plant food control officials.36 The total number of annual ammonium 

nitrate transactions at all points in the supply chain range from 5 million to 30 million. DHS 

welcomes comment on the number of transactions.

Table 28. Web Portal-based Seller Transaction and Labor Cost by Industry, Low Population 

(First Year)

Number of 

AN 

Facilities

Number of 

Transactions 

per Facility

Total 

Number of 

Transactions

Estimated 

Total Annual 

Hours

(5 minutes/60 

minutes/hr * 

transactions)

Loaded hourly 

Wage - Sales 

Representative

$

Annual Cost 

of 

Compliance

$

Avg Cost/

Transaction

A B C = A x B D = 5/60 * C E F = D x E G = F / C

Ammonium 

nitrate fertilizer

manufacturers

26 1,000 26,000 2,167 52 112,400 

4.32 

 36 There is a dearth of information on the number of transactions that occur in the ammonium nitrate supply 

chain. Some AN Facilities may have relatively few transactions during a given year while others may be 

involved in a high number of transactions. The number of transactions drives the point of sale costs and thus, 

the cost of the program. DHS has assumed a broad range to capture the potential variation in this variable and 

seeks comment on these assumptions. 
52

AN explosives 

manufacturers 10 1,000 10,000 833 54 45,400 4.54 

Fertilizer mixers 400 1,000 400,000 33,333 52 1,728,700 4.32 

Explosives 

distributors 500 2,500 1,250,000 104,167 47 4,917,700 

3.93 

Farm 

wholesalers/coop

s

500 2,500 1,250,000 104,167 38 3,996,900 

3.20 

Retail garden 

centers

500 2,500 1,250,000 104,167 32 3,331,300 

2.67 

Fertilizer 

applicators 500 2,500 1,250,000 104,167 36 3,752,100 

3.00 

Laboratory supply 50 1,000 50,000 4,167 47 196,700 3.93 

 Total 2,486 n/a 5,486,000 457,168 n/a 18,081,200 3.30 

Average 2,207 184 3.30 

* Wage rate information is fully explained in Appendix B.

Tables 29 and 30 present the labor costs for web portal-based point of sale activities for the 

low and high population estimates. AN Sellers engaged in day-to-day sales are assumed to 

be equivalent to a sales representative.

Table 29. Web Portal-based Seller Transaction and Labor Cost by Industry,

High Population Estimate

Number of 

AN Facilities

Number of 

Transactions 

per Facility

Total 

Number of 

Transactions

Estimated 

Total Annual 

Hours

(5 minutes/60 

minutes/hr * 

transactions)

Loaded 

hourly Wage 

- Sales Rep

$

Annual

Cost of 

Compliance

$

Avg Cost/

Transaction

A B C = A x B D = 5/60 * C E F = D x E

G =

F / C

Ammonium nitrate 

fertilizer manufacturers 26 2,500 65,000 5,417 52 280,900 4.32

AN explosives 

manufacturers 10 2,500 25,000 2,083 54 113,500 4.54

Fertilizer mixers 600 2,500 1,500,000 125,000 52 6,482,500 4.32

Explosives distributors 1,000 5,000 5,000,000 416,667 47 19,670,800 3.93

Farm 

wholesalers/coops 1,000 5,000 5,000,000 416,667 38 15,987,500 3.20

Retail garden centers 2,500 5,000 12,500,000 1,041,667 32 33,312,500 2.67

Fertilizer applicators 1,000 5,000 5,000,000 416,667 36 15,008,300 3.00

Laboratory supply 100 2,500 250,000 20,833 47 983,500 3.93

Total 6,236 n/a 29,340,000 2,445,001 n/a 91,839,500 3.13

Average 4,705 392 3.13

* Wage rate information is fully explained in Appendix B.
53

In lieu of (or in addition to) the web-based portal, the Department is also considering a call 

center-based system to verify AN Purchasers’ AN Registered User Numbers. All activities 

conducted with the web-based portal (including verification of an AN Registered User 

Number, checks of pre-registered agents, etc.) could be conducted telephonically via the 

call center. Table 30 estimates the total hours spent on point of sale activities under the call 

center option. DHS estimates it will take six minutes per transaction (0.10 hours) to obtain 

and record verification via a call center. 

Table 30.Call Center-Based Transactions for Point of Sale Activities (Hours Spent)

Number of 

Transactions per AN 

Facility Hours per 

Transaction

Hours Spent on POS 

Transactions per Year

Low High Low High

A B C AxC BxC

AN fertilizer manufacturers 1,000 2,500 0.1 100 250

AN explosives manufacturers 1,000 2,500 0.1 100 250

Fertilizer mixers 1,000 2,500 0.1 100 250

Explosives distributors 2,500 5,000 0.1 250 500

Farm wholesalers/co-ops 2,500 5,000 0.1 250 500

Retail garden centers 2,500 5,000 0.1 250 500

Fertilizer applicators 2,500 5,000 0.1 250 500

Laboratory supply 1,000 2,500 0.1 100 250

Tables 31 and 32 present the labor costs for call center-based point of sale activities for the 

low and high population estimates. AN Sellers engaged in day-to-day sales are assumed to 

be equivalent to a sales representative. These estimates are presented for comparison 

purposes.

Table 31. Labor Costs for Call Center-Based Point of Sale Activities – Low Population 

Estimate

Number 

of AN 

Facilities

Estimated 

Annual 

Hours

Estimated Total 

Annual Hours

Loaded hourly 

Wage - Sales 

Representative

Annual Cost of 

Compliance

A B AxB C AxBxC

AN fertilizer manuf. 26 100 2,600 52 $134,800

AN explosives manuf. 10 100 1,000 54 $54,500

Fertilizer mixers 400 100 40,000 52 $2,074,400

Explosives distributors 500 250 125,000 47 $5,901,300

Farm wholesalers/co-ops 500 250 125,000 38 $4,796,300

Retail garden centers 500 250 125,000 32 $3,997,500

Fertilizer applicators 500 250 125,000 36 $4,502,500

Laboratory supply 50 100 5,000 47 $236,100

Total 2,486 n/a 548,600 n/a $21,697,400
54

* Wage rate information is fully explained in Appendix B.

Table 32. Labor Costs for Call Center-Based Point of Sale Activities – High Population 

Estimate

Number 

of AN 

Facilities

Estimated 

Annual 

Hours

Estimated Total 

Annual Hours

Loaded hourly 

Wage - Sales 

Representative

Annual Cost of 

Compliance

A B AxB C AxBxC

AN fertilizer manuf. 26 250 6,500 52 $337,100

AN explosives 

manuf. 10 250 2,500 54 $136,200

Fertilizer mixers 600 250 150,000 52 $7,779,000

Explosives 

distributors 1,000 500 500,000 47 $23,605,000

Farm 

wholesalers/co-ops 1,000 500 500,000 38 $19,185,000

Retail garden 

centers 2,500 500 1,250,000 32 $39,975,000

Fertilizer applicators 1,000 500 500,000 36 $18,010,000

Laboratory supply 100 250 25,000 47 $1,180,300

Total 6,236 n/a 2,934,000 n/a $110,207,600

* Wage rate information is fully explained in Appendix B.

Agent Verification 

An agent is a person obtaining possession of ammonium nitrate on behalf of an AN 

Purchaser. Because agents are not required to apply for and present an AN Registered User 

Number, measures must be taken to confirm that the agent who is taking possession of 

ammonium nitrate has been authorized to do so by the AN Purchaser. The Department 

proposes three options to verify the identity of AN Purchaser’s agents.

1. Requiring AN Purchasers to submit the names of their agents to the Department via 

the User Number Registration Portal, and requiring the AN Seller to confirm with 

the Department, prior to transferring possession of the ammonium nitrate, that the 

prospective AN Purchaser has submitted the name of the agent to the Department;

2. Requiring the AN Seller to orally confirm with the AN Purchaser prior to each sale or 

transfer that the agent is acting on behalf of the AN Purchaser;

3. A combination of the first two options, where an AN Seller checks with the 

Department to see if the prospective AN Purchaser has submitted the name of the 

agent to the Department and, the AN Seller verbally confirms with the prospective 

AN Purchaser that the agent is acting on his/her behalf.
55

Based on discussions with industry, the Department assumes about 20% of ammonium 

nitrate transactions will involve an agent. For the purposes of analysis, the Department

assumes that 25% of agent transactions (5% of the total transactions) will require verbal 

confirmation. The AN Seller must confirm with the AN Purchaser that the agent is acting on 

the AN Purchaser’s behalf prior to the transfer of ammonium nitrate to the agent. Each 

agent verification is assumed to take 10 minutes. The Department assumes the remaining 

75% of transactions involving agents will use an agent that has been pre-registered with 

the Department, and thus, will not require verbal confirmation. The costs of preregistration of agents by AN Purchasers are discussed in Section 6 - Registration Activities.

Tables 33 and 34 present the costs associated with verifying agents.

Table 33. Labor Costs for Agent Verification – Low Population Estimate*

Number 

of AN 

Facilities

5% of 

Transactions 

per AN 

Facility

Hours per 

verification

(10 

minutes)

Hours Spent 

on POS 

Agent 

Verifications 

per Year

Loaded hourly 

Wage - Sales 

Representative

Annual Cost 

of Agent 

Verification

A B C BxC D AxBxCxD

AN fertilizer manuf. 26 50 0.2 8.3 $52 11,200

AN explosives manuf. 10 50 0.2 8.3 $54 4,500

Fertilizer mixers 400 50 0.2 8.3 $52 172,900

Explosives distributors 500 125 0.2 20.8 $47 491,800

Farm wholesale/coops 500 125 0.2 20.8 $38 399,700

Retail garden centers 500 125 0.2 20.8 $32 333,100

Fertilizer applicators 500 125 0.2 20.8 $36 375,200

Laboratory supply 50 50 0.2 8.3 $47 19,700

Total 2,486 n/a n/a n/a n/a 1,808,100

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.
56

Table 34. Labor Costs for Agent Verification – High Population Estimate*

Number 

of AN 

Facilities

5% of 

Transactions 

per AN 

Facility

Hours per 

verification

10 

minutes)

Hours Spent 

on POS 

Agent 

Verifications 

per Year

Loaded hourly 

Wage - Sales 

Representative

Annual Cost 

of Agent 

Verification

A B C BxC D AxBxCxD

AN fertilizer manuf. 26 125 0.2 20.8 $52 28,100 

AN explosives manuf. 10 125 0.2 20.8 $54 11,300 

Fertilizer mixers 600 125 0.2 20.8 $52 648,300 

Explosives distributors 1000 250 0.2 41.7 $47 1,967,100 

Farm wholesale/coops1000 250 0.2 41.7 $38 1,598,800 

Retail garden centers 2500 250 0.2 41.7 $32 3,331,300 

Fertilizer applicators 1000 250 0.2 41.7 $36 1,500,800 

Laboratory supply 100 125 0.2 20.8 $47 98,400 

Total 6,236 n/a n/a n/a n/a 9,184,100

* Wage rate information is fully explained in Appendix B. Rounding may affect totals.
57

Tables 35 to 36 present the total costs by program year for web portal-based point of sale 

activities. 

Table 35. Total Costs for Web Portal-Based Point of Sale Activities by Program Year – Low 

Population Estimate ($)

Computer and 

Phone Line

Labor Costs 

(Transactions)

Agent 

Verification

Purchaser 

Opportunity 

Cost

Total 

Annual 

Costs

PY1 508,900 18,081,000 1,808,100 3,488,500 23,886,500

PY2 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY3 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY4 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY5 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY6 508,900 18,081,000 1,808,100 3,488,500 23,886,500

PY7 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY8 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY9 179,600 18,081,000 1,808,100 3,488,500 23,557,200

PY10 179,600 18,081,000 1,808,100 3,488,500 23,557,200

Total 2,454,600 180,810,000 18,081,000 34,885,000 236,230,600
58

Table 36. Total Costs for Web Portal-Based Point of Sale Activities by Program Year– High

Population Estimate ($)

Computer and 

Phone Line

Labor Costs 

(Transactions)

Agent 

Verification

Purchaser 

Opportunity 

Cost

Total Annual 

Costs

PY1 1,380,100 91,839,600 9,184,000 18,112,900 120,516,600

PY2 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY3 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY4 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY5 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY6 1,380,100 91,839,600 9,184,000 18,112,900 120,516,600

PY7 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY8 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY9 487,100 91,839,600 9,184,000 18,112,900 119,623,600

PY10 487,100 91,839,600 9,184,000 18,112,900 119,623,600

Total 6,657,000 918,396,000 91,840,000 181,129,000 1,198,022,000

Tables 37 and 38 present the total costs by program year for call center-based point of sale 

activities.

Table 37. Total Costs for Call Center -Based Point of Sale Activities by Program Year – Low 

Population Estimate ($)

Labor Costs 

(Transactions)

Agent

Verification

Total

Annual Costs

PY1 21,697,200 1,808,100 23,505,300

PY2 21,697,200 1,808,100 23,505,300

PY3 21,697,200 1,808,100 23,505,300

PY4 21,697,200 1,808,100 23,505,300

PY5 21,697,200 1,808,100 23,505,300

PY6 21,697,200 1,808,100 23,505,300

PY7 21,697,200 1,808,100 23,505,300

PY8 21,697,200 1,808,100 23,505,300

PY9 21,697,200 1,808,100 23,505,300

PY10 21,697,200 1,808,100 23,505,300

Total 216,972,000 18,081,000 235,053,000

Table 38. Total Costs for Call Center-Based Point of Sale Activities by Program Year – High

Population Estimate ($)

Labor Costs 

(Transactions) Agent Verification Total Annual Costs
59

PY1 110,207,500 9,184,000 119,391,500

PY2 110,207,500 9,184,000 119,391,500

PY3 110,207,500 9,184,000 119,391,500

PY4 110,207,500 9,184,000 119,391,500

PY5 110,207,500 9,184,000 119,391,500

PY6 110,207,500 9,184,000 119,391,500

PY7 110,207,500 9,184,000 119,391,500

PY8 110,207,500 9,184,000 119,391,500

PY9 110,207,500 9,184,000 119,391,500

PY10 110,207,500 9,184,000 119,391,500

Total 1,102,075,000 91,840,000 1,193,915,000

Opportunity Cost

Whether the seller utilizes a web-based portal, the call center option, or some combination, 

the purchaser will likely have some additional time added to the transaction purchase. As 

described at the beginning of this section (Point of Sale Activities) any increase in time is an 

opportunity cost to the purchaser. Based upon the Department’s estimate that the average 

increase will resemble a credit card or check verification, the Department has used an 

estimate of an average of 60 seconds (.017 hrs) for each transaction times the number of 

transactions times the average loaded wage rate from Appendix B. DHS believes most 

transactions will resemble existing commercial order fulfillment with orders being place in 

advance such that the purchaser contact time for information exchange will be minimal, 

perhaps almost as quick as a normal credit card transaction. Additionally, as previously 

mentioned, 12 states already require the same basic information except for the registration 

number DHS is proposing. The following table shows the calculations of this marginal cost.

Table 39. Point of Sale Opportunity Costs (First Year Detail and Yrs 1 -10)

First Year Detail

Total 

Number of 

Transactions

(A)

Hrs/

Transaction

(B)

Total Hours

(C=A*B)

Weighted 

Average 

Wage Rate

(D: From 

Appendix 

B)

Purchaser 

Opportunity 

Cost

(E=C*D)

Avg Cost/

Transaction

(F=E/A)

Low Estimate 5,486,700 0.017 91,445 $38.15 $3,488,523 $0.64 

High Estimate 29,342,486 0.017 489,041 $37.04 $18,112,934 $0.62 
60

9. Recordkeeping

The Department requires that AN Facilities maintain records of each ammonium nitrate 

sale or transfer that include among other elements:

• Date of sale or transfer; 

• Quantity of ammonium nitrate sold or transferred; 

• Name, address, telephone number, AN Registered User Number, and passport or 

photo identification document number of the AN Purchaser purchasing or taking 

possession of the ammonium nitrate sold or transferred; 

• If an AN Agent purchases or takes possession of ammonium nitrate, name, address, 

telephone number, and passport or driver’s license number of the AN Agent 

purchasing or taking possession of the ammonium nitrate sold or transferred; and

• Confirmation received from the Department as part of the notification process 

described in 6 CFR 31.305(a) (4) and 6 CFR 31.310(a) (4).

The records generated at the point of sale must be kept on file for two years. These records 

could be stored electronically or on paper, in any format the seller chooses, for example as 

an amendment to a sales invoice or with a log book similar to the one many pharmacies use 

to record information on sales of certain regulated medicines. The cost of creating the 

transaction record is included in the cost of point of sale activities. The Department 

requires that these records be protected by reasonable actions. Recent point of sale records 

can be kept out of public view in an employee-only area.

For the purpose of this analysis, the Department assumes that all AN Facilities will 

purchase a locked filing cabinet to maintain records at a cost of $350 each.37 In addition, 

AN Facilities that use paper records will also incur the cost of additional paper and printer 

ink/toner. The department assumes an additional box of paper ($50) and additional 

printer ink/toner supplies ($200).38

The Department assumes an administrative or office worker will spend 48 hours per year 

(four hours per month) maintaining records, such as filing, binding, etc. The average loaded 

hourly wage at the 50th percentile ranges from $17 to $24 per hour. 

The Department also considered requiring maintaining records in encrypted electronic 

files. This would have placed a significant burden on the regulated community with little 

gain in the security of the records. Rather, the Department is allowing the regulated 

 37 http://www.staples.com. 38 http://www.staples.com.
61

community to maintain their records either electronically or on paper as long as 

reasonable actions are taken to protect the information.

The Department also considered requiring AN Facilities to keep more detailed transaction 

records, including information on the number of acres treated (for agricultural consumers). 

AN Purchasers are under no obligation to maintain records proposed in this rule. Tables 

40-45 show the costs for paper-based recordkeeping, the primary estimate.

Table 40. Physical Costs for Paper-Based Recordkeeping – Low Population Estimate

Number 

of AN 

Facilities

Locked 

filing 

cabinet

Paper & 

Toner Initial Cost

Annual 

Cost

Total 

Initial 

Cost

Total 

Annual 

Cost

A B C B+C C Ax(B+C) AxC

AN fertilizer manuf. 26 350 250 600 250 15,600 6,500

AN explosives manuf. 10 350 250 600 250 6,000 2,500

Fertilizer mixers 400 350 250 600 250 240,000 100,000

Explosives distributors 500 350 250 600 250 300,000 125,000

Farm wholesalers/co-ops 500 350 250 600 250 300,000 125,000

Retail garden centers 500 350 250 600 250 300,000 125,000

Fertilizer applicators 500 350 250 600 250 300,000 125,000

Laboratory supply 50 350 250 600 250 30,000 12,500

Total 2,486 350 250 600 250 1,491,600 621,500
62

Table 41. Physical Costs for Paper-Based Recordkeeping – High Population Estimate

Number 

of AN 

Facilities

Locked 

filing 

cabinet

Paper & 

Toner Initial Cost

Annual 

Cost

Total 

Initial 

Cost

Total 

Annual 

Cost

A B C B+C C Ax(B+C) AxC

AN fertilizer manuf. 26 350 250 600 250 15,600 6,500

AN explosives manuf. 10 350 250 600 250 6,000 2,500

Fertilizer mixers 600 350 250 600 250 360,000 150,000

Explosives distributors 1,000 350 250 600 250 600,000 250,000

Farm wholesalers/co-ops 1,000 350 250 600 250 600,000 250,000

Retail garden centers 2,500 350 250 600 250 1,500,000 625,000

Fertilizer applicators 1,000 350 250 600 250 600,000 250,000

Laboratory supply 100 350 250 600 250 60,000 25,000

Total 6,236 350 250 600 250 3,741,600 1,559,000

Table 42. Labor Costs for Paper-Based Recordkeeping – Low Population Estimate

Number of 

AN Facilities

Average loaded 

hourly wage -

Office & 

administrative 

support services

Hours per AN 

Facility spent 

on 

recordkeeping

Total cost for 

recordkeeping

A B C AxBxC

AN fertilizer manufacturers 26 $22 48 27,500 

AN explosives manufacturers 10 $24 48 11,400 

Fertilizer mixers 400 $22 48 423,200 

Explosives distributors 500 $22 48 534,200 

Farm wholesalers/co-ops 500 $18 48 442,100 

Retail garden centers 500 $17 48 403,400 

Fertilizer applicators 500 $17 48 417,100 

Laboratory supply 50 $22 48 53,400 

Total 2,486 n/a n/a 2,312,300

* Wage rate information is fully explained in Appendix B.
63

Table 43. Labor Costs for Paper-Based Recordkeeping – High Population Estimate

Number of 

AN Facilities

Average loaded 

hourly wage -

Office & 

administrative 

support services*

Hours per AN 

Facility spent 

on 

recordkeeping

Total cost for 

recordkeeping

A B C AxBxC

AN fertilizer manufacturers 26 $22 48 27,500 

AN explosives manufacturers 10 $24 48 11,400 

Fertilizer mixers 600 $22 48 634,800 

Explosives distributors 1,000 $22 48 1,068,500 

Farm wholesalers/co-ops 1,000 $18 48 884,200 

Retail garden centers 2,500 $17 48 2,017,200 

Fertilizer applicators 1,000 $17 48 834,200 

Laboratory supply 100 $22 48 106,800 

Total 6,236 n/a n/a 5,584,600

* Wage rate information is fully explained in Appendix B.

Table 44. Total Costs for Paper-Based Recordkeeping – Low Population Estimate

Physical costs 

for 

recordkeeping

Labor costs for 

recordkeeping

Total cost for 

time for

recordkeeping

PY1 1,491,600 2,312,400 3,804,000

PY2 621,500 2,312,400 2,933,900

PY3 621,500 2,312,400 2,933,900

PY4 621,500 2,312,400 2,933,900

PY5 621,500 2,312,400 2,933,900

PY6 621,500 2,312,400 2,933,900

PY7 621,500 2,312,400 2,933,900

PY8 621,500 2,312,400 2,933,900

PY9 621,500 2,312,400 2,933,900

PY10 621,500 2,312,400 2,933,900

Total 7,085,100 23,124,000 30,209,100
64

Table 45. Total Costs for Paper-Based Recordkeeping – High Population Estimate

Physical costs 

for 

recordkeeping

Labor costs for 

recordkeeping

Total cost for 

time for 

recordkeeping

PY1 3,741,600 5,584,600 9,326,200

PY2 1,559,000 5,584,600 7,143,600

PY3 1,559,000 5,584,600 7,143,600

PY4 1,559,000 5,584,600 7,143,600

PY5 1,559,000 5,584,600 7,143,600

PY6 1,559,000 5,584,600 7,143,600

PY7 1,559,000 5,584,600 7,143,600

PY8 1,559,000 5,584,600 7,143,600

PY9 1,559,000 5,584,600 7,143,600

PY10 1,559,000 5,584,600 7,143,600

Total 17,772,600 55,846,000 73,618,600

Alternatively, although it is not required, businesses may keep their records electronically. 

Under this scenario, DHS assumes that a small number of businesses will need to purchase 

a computer loaded with basic spreadsheet software. Additionally, there may be a larger 

time commitment to updating records and inputting data into a spreadsheet. Therefore, 

DHS estimates six hours per month to maintain electronic records. Tables 46 to 51 present 

the costs associated with the alternative electronic-based recordkeeping. 

Table 46. Physical Costs for Electronic-Based Recordkeeping – Low Population Estimate

Number of 

AN Facilities

% without 

computer

Computer & 

Printer Initial Cost

Annual 

Maintenance

(10% of total)

A B C D=AxBxC .1 * D

AN fertilizer manufacturers 26 5% 1,000 1,300 130

AN explosives manufacturers 10 5% 1,000 500 50

Fertilizer mixers 400 5% 1,000 20,000 2,000

Explosives distributors 500 10% 1,000 50,000 5,000

Farm wholesalers/co-ops 500 15% 1,000 75,000 7,500

Retail garden centers 500 15% 1,000 75,000 7,500

Fertilizer applicators 500 15% 1,000 75,000 7,500

Laboratory supply 50 5% 1,000 2,500 250

 Total 2,486 n/a n/a 299,300 29,930
65

Table 47. Physical Costs for Electronic-Based Recordkeeping – High Population Estimate

Number 

of AN 

Facilities

% 

without 

computer

Computer 

& Printer

Initial 

Cost

Annual 

Maintenance

(10% of 

total)

A B C D=AxBxC .1 * D

AN fertilizer manufacturers 26 5% 1000 1,300 130

AN explosives manufacturers 10 5% 1000 500 50

Fertilizer mixers 600 5% 1000 30,000 3,000

Explosives distributors 1000 10% 1000 100,000 10,000

Farm wholesalers/co-ops 1000 15% 1000 150,000 15,000

Retail garden centers 2500 15% 1000 375,000 37,500

Fertilizer applicators 1000 15% 1000 150,000 15,000

Laboratory supply 100 5% 1000 5,000 500

Total 6,236 n/a n/a 811,800 81,180

Table 48. Labor Costs for Electronic-Based Recordkeeping – Low Population Estimate

Number of 

AN 

Facilities

Average loaded 

hourly wage -

Office & 

administrative 

support services*

Hours per AN 

Facility spent 

on 

recordkeeping

Total cost for 

recordkeeping

A B C AxBxC

AN fertilizer manufacturers 26 22 72 41,259 

AN explosives manufacturers 10 24 72 17,107 

Fertilizer mixers 400 22 72 634,752 

Explosives distributors 500 22 72 801,360 

Farm wholesalers/co-ops 500 18 72 663,120 

Retail garden centers 500 17 72 605,160 

Fertilizer applicators 500 17 72 625,680 

Laboratory supply 50 22 72 80,136 

Total 2,486 n/a n/a 3,468,574 

* Wage rate information is fully explained in Appendix B.
66

Table 49. Labor Costs for Electronic-Based Recordkeeping – High Population Estimate

Number of 

AN Facilities

Average loaded 

hourly wage -

Office & 

administrative 

support services*

Hours per AN 

Facility spent 

on 

recordkeeping

Total cost for 

recordkeeping

A B C AxBxC

AN fertilizer manufacturers 26 22.04 72 41,259

AN explosives manufacturers 10 23.76 72 17,107

Fertilizer mixers 600 22.04 72 952,128

Explosives distributors 1,000 22.26 72 1,602,720

Farm wholesalers/co-ops 1,000 18.42 72 1,326,240

Retail garden centers 2,500 16.81 72 3,025,800

Fertilizer applicators 1,000 17.38 72 1,251,360

Laboratory supply 100 22.26 72 160,272

Total 6,236 n/a n/a 8,376,886 

* Wage rate information is fully explained in Appendix B.

Table 50. Total Costs for Electronic-Based Recordkeeping – Low Population Estimate

Physical costs 

for 

recordkeeping

Labor costs for 

recordkeeping

Total cost for time 

for recordkeeping

PY1 299,300 3,468,574 3,767,874

PY2 29,930 3,468,574 3,498,504

PY3 29,930 3,468,574 3,498,504

PY4 29,930 3,468,574 3,498,504

PY5 29,930 3,468,574 3,498,504

PY6 299,300 3,468,574 3,767,874

PY7 29,930 3,468,574 3,498,504

PY8 29,930 3,468,574 3,498,504

PY9 29,930 3,468,574 3,498,504

PY10 29,930 3,468,574 3,498,504

Total 838,040 34,685,741 35,523,781
67

Table 51. Total Costs for Electronic-Based Recordkeeping – High Population Estimate

Physical costs for 

recordkeeping

Labor costs for 

recordkeeping

Total cost for time for

recordkeeping

PY1 811,800 8,376,886 9,188,686

PY2 81,180 8,376,886 8,458,066

PY3 81,180 8,376,886 8,458,066

PY4 81,180 8,376,886 8,458,066

PY5 81,180 8,376,886 8,458,066

PY6 811,800 8,376,886 9,188,686

PY7 81,180 8,376,886 8,458,066

PY8 81,180 8,376,886 8,458,066

PY9 81,180 8,376,886 8,458,066

PY10 81,180 8,376,886 8,458,066

Total 2,273,040 83,768,861 86,041,901

10. Reporting Theft and/or Loss

Any AN Facility Representative who has knowledge of theft or unexplained loss of 

ammonium nitrate is required to report such theft or loss to Federal law enforcement 

authorities within 24 hours of the time at which knowledge of theft or loss is acquired. The 

Department additionally encourages all other individuals who have possession or control 

over ammonium nitrate (be they AN Sellers, AN Purchasers, any agents acting on their 

behalf, or any other individuals) similarly to report any theft or unexplained loss of 

ammonium nitrate that they become aware of.

Any time an AN Facility Representative or any other individual employed by an AN Facility 

encounters a situation where they believe a theft of ammonium nitrate has occurred, the 

AN Facility Representative is responsible for ensuring that the theft is reported using the 

procedures described below. Determining when to report a loss, however, is not as 

straightforward a proposition, as for bulk ammonium nitrate (as opposed to packaged or 

bagged ammonium nitrate), it is not atypical for small percentages of ammonium nitrate to 

be “lost” as part of normal industrial and shipping business practices. While individually, 

such losses may tend to be de minimis, in the aggregate, they may amount to large amounts 

of lost ammonium nitrate. The Department seeks not to unduly burden individuals 

involved in the manufacturing, storage, transportation, or use of bulk ammonium nitrate, 

but on the other hand does seek to impose loss reporting requirements which will aid the 

Federal government in preventing terrorist misappropriation of ammonium nitrate.

Accordingly, the Department is proposing to require the AN Facility Representative to 

report any loss of ammonium nitrate they become aware of to ATF when the loss deviates 
68

from the amount of loss that typically occurs during routine production, storage, 

transportation, or use of the ammonium nitrate. Because of ATF’s unique explosivesrelated law enforcement mission, the Department is proposing allowing ATF to take the 

lead on investigating theft or loss of ammonium nitrate. If this occurs, the Department will 

coordinate with ATF to ensure proper tracking and coordination of reported ammonium 

nitrate thefts and losses. 

Thefts and losses of ammonium nitrate are to be reported to ATF by telephoning a 

nationwide toll free number, followed up with submission to ATF of a completed paper 

form detailing the incident. The Department would work with ATF to determine the 

appropriate information to be reported and proper template for a form specific to 

reporting the theft or loss of ammonium nitrate. While there is no statutory requirement 

for AN Facility Representatives or other registered individuals who have knowledge of a 

theft or unexplained loss to report such incidents to local law enforcement, the Department 

encourages AN Facilities and individuals to do so in addition to reporting the theft or loss 

to ATF.

Because of the seriousness of theft or loss of ammonium nitrate, the total time to report a 

theft or loss is assumed to include 1.8 hours of an inventory manager plus one hour of the 

general manager. This includes the time for the reporter to organize useful details for law 

enforcement and conduct a brief investigation. There will likely be additional time for a 

more thorough follow-up investigation. Strictly for purposes of this analysis, the 

Department assumes that 2% of AN Facilities will report loss or theft once per year.
69

Table 52 shows the number of theft and loss reports expected to be generated in a typical 

year.

Table 52. Estimated Number of Theft/Loss Reports Generated

AN Facility Owners

% of AN Facilities 

reporting 

theft/loss

Annual Number of

Theft/Loss Reports

Generated

Low High Low High

A B C AxC BxC

AN fertilizer manufacturers 26 26 2.0% 0.5 0.5

AN explosives manufacturers 10 10 2.0% 0.2 0.2

Fertilizer mixers 400 600 2.0% 8 12

Explosives distributors 500 1,000 2.0% 10 20

Farm wholesalers/co-ops 500 1,000 2.0% 10 20

Retail garden centers 500 2,500 2.0% 10 50

Fertilizer applicators 500 1,000 2.0% 10 20

Laboratory supply 50 100 2.0% 1 2

Total 2,486 6,236 n/a 50 125

Tables 53 through 55 present the costs for reporting theft and loss.

Table 53. Costs for Reporting Theft and Loss – Low Population Estimate

Annual 

Number of 

Reports

Total Hours 

for 

Inventory 

Manager 

(1.8 hours 

per report)

Average 

loaded hourly 

wage -

Transportation

,

storage, & 

dist mgr*

Total 

Hours for 

General 

Manager 

(1.0 hour 

per 

report)

Average 

loaded 

hourly 

wage -

General 

Manager Total cost

A Ax1.8 B Ax1.0 C (1.8AxB)+(AxC)

AN fertilizer 

manufacturers

0.5 0.9 47 0.5 61 76

AN explosives 

manufacturers

0.2 0.4 52 0.2 74 34

Fertilizer mixers 8 14.4 47 8 61 1166

Explosives distributors 10 18.0 52 10 73 1661

Farm wholesalers/co-ops 10 18.0 48 10 63 1486

Retail garden centers 10 18.0 47 10 44 1294

Fertilizer applicators 10 18.0 45 10 87 1671

Laboratory supply 1 1.8 52 1 73 166

Total 50 89.5 n/a n/a 7,554

* Wage rate information is fully explained in Appendix B.
70

Table 54. Costs for Reporting Theft and Loss – High Population Estimate

Annual 

Number of 

Reports

Total Hours 

for 

Inventory 

Manager 

(1.8 hours 

per report)

Average 

loaded hourly 

wage -

Transportation

,

storage, & dist 

mgr*

Total 

Hours 

for 

General 

Manager 

(1.0 hour 

per 

report)

Average 

loaded 

hourly 

wage -

General 

Manager Total cost

A Ax1.8 B Ax1.0 C (1.8AxB)+(AxC)

AN fertilizer 

manufacturers 0.5 0.9 47 0.52 61 76

AN explosives 

manufacturers 0.2 0.4 52 0.2 74 34

Fertilizer mixers 12 21.6 47 12 61 1,749

Explosives distributors 20 36.0 52 20 73 3,323

Farm wholesalers/coops 20 36.0 48 20 63 2,971

Retail garden centers 50 90.0 47 50 44 6,470

Fertilizer applicators 20 36.0 45 20 87 3,343

Laboratory supply 2 3.6 52 2 73 332

Total 125 224.0 n/a 125 n/a 18,297

* Wage rate information is fully explained in Appendix B.

Table 55. Annual Costs for Reporting Theft and Loss

Low Population High population

PY1 7,556 19,143

PY2 7,556 19,143

PY3 7,556 19,143

PY4 7,556 19,143

PY5 7,556 19,143

PY6 7,556 19,143

PY7 7,556 19,143

PY8 7,556 19,143

PY9 7,556 19,143

PY10 7,556 19,143

Total 75,556 191,428
71

11. Audits and Inspections

The proposed rule requires AN Facilities to undergo an inspection or audit of their records 

to evaluate their compliance with the ammonium nitrate rules. This includes a review of all 

records maintained as part of the recordkeeping requirements for point of sale 

transactions. Further, the Department is considering inspecting documents relating to the 

identities and registration status of persons selling, transferring, and/or purchasing 

ammonium nitrate. For this analysis, it is assumed that 25% of AN Facilities will be 

audited/inspected per year. Thus, about 500-1,300 inspections/audits would be performed 

each year. Generally speaking, DHS inspectors will give AN Facilities a minimum of 24 

hours notice prior to an audit/inspection. Preparation for an inspection/audit will take two 

hours of both an AN Facility Manager (or equivalent position) and a clerical person. The 

audits could take less than an hour for a small business to a full day for a larger volume 

business, but on average, each audit is assumed to take four hours to complete. During the 

day of the audit/inspection, the Department assumes another four hours for both the AN 

Facility Manager and a clerical person who will be on hand to retrieve the records and be 

available to answer questions of the auditor. Thus, each inspection is expected to require a 

total of six hours of each the AN Facility Manager and a clerical person. The average loaded 

hourly wage for the AN Facility Manager ranges from $47-$52 and the average loaded 

hourly wage for the clerical person ranges from $17 - $24.
72

Tables 56 to 58 present the costs associated with preparing for and undergoing audits and 

inspections.

Table 56. Cost of Audits/Inspections – Low Population Estimate

AN Facilities 

% 

Receiving 

Inspection

Hours of 

inspection

Loaded hourly 

wage -

Transportation

, storage, & 

dist mgr*

Loaded hourly 

wage - Office & 

administrative 

support 

services

Total Cost 

per 

Inspection

Total Cost 

of Audits/

Inspections

A B C D E Cx(D+E)

AxBxCx

(D+E)

AN fertilizer 

manuf.

26 25% 6 47 22 415 2,696

AN explosives 

manuf.

10 25% 6 52 24 455 1,138

Fertilizer mixers 400 25% 6 47 22 415 41,484

Explosives 

distributors

500 25% 6 52 22 446 55,703

Farm wholesalers/

co-ops

500 25% 6 48 18 397 49,673

Retail garden 

centers

500 25% 6 47 17 384 48,008

Fertilizer 

applicators

500 25% 6 45 17 372 46,538

Laboratory supply 50 25% 6 52 22 446 5,570

Total 2,486 n/a n/a n/a n/a n/a 250,809

* Wage rate information is fully explained in Appendix B.
73

Table 57. Cost of Audits/Inspections – High Population Estimate

AN 

Facilities 

% 

Receiving 

Inspection

Hours of 

inspection

Loaded hourly 

wage -

Transportation

, storage, & 

dist mgr*

Loaded hourly 

wage - Office & 

administrative 

support services

Total 

Cost 

per 

Inspecti

on

Total Cost of 

Audits/

Inspections

A B C D E

Cx(D+E

)

AxBxCx

(D+E)

AN fertilizer manuf. 26 25% 6 47 22 415 2,696

AN explosives manuf. 10 25% 6 52 24 455 1,138

Fertilizer mixers 600 25% 6 47 22 415 62,226

Explosives distributors 1000 25% 6 52 22 446 111,405

Farm wholesalers/

co-ops

1000 25% 6

48 18 397 99,345

Retail garden centers 2500 25% 6 47 17 384 240,038

Fertilizer applicators 1000 25% 6 45 17 372 93,075

Laboratory supply 100 25% 6 52 22 446 11,141

Total 6,236 n/a n/a n/a n/a n/a 621,064

* Wage rate information is fully explained in Appendix B.

Table 58. Cost of Inspections/Audits

Low 

Population 

Estimate

High 

Population 

Estimate

PY1 250,809 621,064

PY2 250,809 621,064

PY3 250,809 621,064

PY4 250,809 621,064

PY5 250,809 621,064

PY6 250,809 621,064

PY7 250,809 621,064

PY8 250,809 621,064

PY9 250,809 621,064

PY10 250,809 621,064

Total 2,508,088 6,210,635

12. Federal Costs

The federal government will incur cost to create, staff, and maintain the infrastructure the 

rule implementation will require. A number of the costs are fairly constant over time after 

initial startup and certain costs are dependent upon the number of vetting transactions 
74

that occur in a year. The first group of costs relate to the web-portal, the purchaser 

verification portal, electronic records database, theft report support, inspection and audit, 

the help desk, and various TSA support costs. The various vetting costs vary with the 

annual vetting transactions. Tables 59-60 reflect these fixed level costs for 10 years of the 

program and are made up of the following types of costs:

Registration Web-Portal Costs

The annual registration web-portal costs include: (1) Operating and Maintenance (O&M) 

costs estimated at $750,000; and (2) the associated management and coordination costs 

for the web-portal activity estimated at $165,900. (i.e., the fully loaded cost of employing 

one government employee at the GS-14 level).

Purchaser Verification Portal Costs

The annual Purchaser Verification Portal costs include: (1) Operating and Maintenance 

(O&M) costs estimated at $750,000 and (2) the associated management and coordination 

costs for the web-portal activity estimated at $165,900 (i.e., the fully loaded cost of 

employing one government employee at the GS-14 level).

Electronic Recordkeeping Database Web-Portal

The annual Electronic Recordkeeping Database web-portal costs include: (1) Operating and 

Maintenance (O&M) costs estimated at $750,000 and (2) the associated management and 

coordination costs for the web-portal activity estimated at $165,900 (i.e., the fully loaded 

cost of employing one government employee at the GS-14 level).

Reporting Theft and Loss

Funds to support the ATF activities associated with theft and loss reporting are estimated 

to be $250,000.

Inspections & Audits

The associated management and coordination costs for the information collected due to 

Inspections & Audits are equivalent to the fully loaded cost of employing two government 

employees at the GS-14 level and are estimated to be $331,800.

Ammonium Nitrate Helpdesk Costs

Based upon historical experience, the annual cost to implement and manage a helpdesk is 

estimated to be $2,400,000.

TSA Support Costs
75

In addition to the vetting, TSA will charge the program for TSA program support, startup 

capital, O&M, and match resolution. These costs are $3.2 million for the first year and 

$$1.4 million for out years.

Table 59. Federal Costs System and Support, Fixed Level, All Populations

Web Registration Portal

Purchaser Verification 

Portal 

Electronic Records 

Database Portal

Startup 

and O&M 

(A)

Portal 

Manager 

(B)

Portal 

Manager 

(C) O&M (D) 

Portal 

Manager 

(E) O&M (F) 

PY1 1,500,000 165,900 165,900 750,000 165,900 750,000

PY2 750,000 165,900 165,900 750,000 165,900 750,000

PY3 750,000 165,900 165,900 750,000 165,900 750,000

PY4 750,000 165,900 165,900 750,000 165,900 750,000

PY5 750,000 165,900 165,900 750,000 165,900 750,000

PY6 750,000 165,900 165,900 750,000 165,900 750,000

PY7 750,000 165,900 165,900 750,000 165,900 750,000

PY8 750,000 165,900 165,900 750,000 165,900 750,000

PY9 750,000 165,900 165,900 750,000 165,900 750,000

PY10 750,000 165,900 165,900 750,000 165,900 750,000

Total 8,250,000 1,659,000 1,659,000 7,500,000 1,659,000 7,500,000

Table 60. Federal Costs System and Support, Fixed Level, All Populations (cont’d)

Theft 

Report 

Processing 

(G)

Inspection 

and Audits 

(H)

Help Desk 

(I)

TSA 

Support 

Costs (J) 

SubTotal System and 

Support Costs

(Sum of Table 58 and 

59 A-K)

PY1 250,000 331,800 2,400,000 3,167,689 9,647,189

PY2 250,000 331,800 2,400,000 1,418,235 7,147,735

PY3 250,000 331,800 2,400,000 1,418,235 7,147,735

PY4 250,000 331,800 2,400,000 1,418,235 7,147,735

PY5 250,000 331,800 2,400,000 1,418,235 7,147,735

PY6 250,000 331,800 2,400,000 1,418,235 7,147,735

PY7 250,000 331,800 2,400,000 1,418,235 7,147,735

PY8 250,000 331,800 2,400,000 1,418,235 7,147,735

PY9 250,000 331,800 2,400,000 1,418,235 7,147,735

PY10 250,000 331,800 2,400,000 1,418,235 7,147,735

Total 2,500,000 3,318,000 24,000,000 15,931,804 73,976,804

Tables 61-63 show the annual transactions times the cost/transaction for the annual 

vetting cost for low, high, and mean population scenarios.

Table 61.Federal Vetting and Total Costs, Low Population Scenario
76

 New Vetting 

Transactions 

Cost / 

Transaction Vetting Cost 

Subtotal from 

Detailed 

Federal 

Tables 

Total Federal 

Costs 

PY1 144,210 3.97 572,514 9,647,189 10,219,703

PY2 36,053 3.97 143,128 7,147,735 7,290,863

PY3 37,855 3.97 150,285 7,147,735 7,298,020

PY4 39,748 3.97 157,799 7,147,735 7,305,534

PY5 41,735 3.97 165,689 7,147,735 7,313,424

PY6 94,798 3.97 376,346 7,147,735 7,524,081

PY7 77,906 3.97 309,287 7,147,735 7,457,022

PY8 81,801 3.97 324,751 7,147,735 7,472,486

PY9 85,891 3.97 340,988 7,147,735 7,488,723

PY10 90,186 3.97 358,038 7,147,735 7,505,773

Total 730,183 3.97 2,898,825 73,976,804 76,875,629

Table 62. Federal Vetting and Total Costs, High Population Scenario

 New Vetting 

Transactions 

Cost / 

Transaction Vetting Cost 

Subtotal from 

Detailed Federal 

Tables 

Total Federal 

Costs 

PY1 248,460 3.97 986,386 9,647,189 10,633,575

PY2 62,115 3.97 246,597 7,147,735 7,394,332

PY3 65,221 3.97 258,926 7,147,735 7,406,661

PY4 68,482 3.97 271,873 7,147,735 7,419,608

PY5 71,906 3.97 285,466 7,147,735 7,433,201

PY6 163,327 3.97 648,409 7,147,735 7,796,144

PY7 134,224 3.97 532,871 7,147,735 7,680,606

PY8 140,936 3.97 559,515 7,147,735 7,707,250

PY9 147,982 3.97 587,490 7,147,735 7,735,225

PY10 155,382 3.97 616,865 7,147,735 7,764,600

Total 1,258,035 3.97 4,994,398 73,976,804 78,971,202

Table 63.Federal Vetting and Total Costs, Mean Population Scenario

 New Vetting 

Transactions 

Cost / 

Transaction Vetting Cost 

Subtotal from 

Detailed Federal 

Tables 

Total Federal 

Costs 

PY1 196,335 3.97 779,450 9,647,189 10,426,639 

PY2 49,084 3.97 194,862 7,147,735 7,342,597 

PY3 51,538 3.97 204,606 7,147,735 7,352,341 

PY4 54,115 3.97 214,836 7,147,735 7,362,571 

PY5 56,821 3.97 225,578 7,147,735 7,373,313 

PY6 129,062 3.97 512,378 7,147,735 7,660,113 

PY7 106,065 3.97 421,079 7,147,735 7,568,814 

PY8 111,368 3.97 442,133 7,147,735 7,589,868 

PY9 116,937 3.97 464,239 7,147,735 7,611,974 

PY10 122,784 3.97 487,451 7,147,735 7,635,186 

Total 994,109 3.97 3,946,612 73,976,804 77,923,416 
77

13. Total Costs

Tables 64 to 72 detail the total costs by program year of this proposed rule. The 

undiscounted 10 year costs range from $433 million for the low population/low 

transactions scenario to $1.5 billion for the high population/high transactions scenario. 

Similarly, we have provided estimates of the total costs for the proposed rule at discount 

rates of 7% and 3%. The average costs by type of AN Facility and program element for this 

proposed rule are presented in Section 14 – Initial Regulatory Flexibility Analysis in Tables 

79 through 83.

Table 64. . Summary of Costs (Undiscounted $ millions) – Low Population/Low Transactions

Estimate*

Registration Appeals

Point 

of 

Sale

Recordkeeping Reporting 

Theft/Loss 

Audits/

Inspections 

Federal 

Costs

Total 

Cost 

PY1 15.9 0.1 23.9 3.8 0.0 0.3 10.2 54.2

PY2 4.0 0.0 23.6 2.9 0.0 0.3 7.3 38.1

PY3 4.2 0.0 23.6 2.9 0.0 0.3 7.3 38.3

PY4 4.4 0.0 23.6 2.9 0.0 0.3 7.3 38.5

PY5 4.6 0.0 23.6 2.9 0.0 0.3 7.3 38.7

PY6 10.5 0.0 23.9 2.9 0.0 0.3 7.5 45.1

PY7 8.6 0.0 23.6 2.9 0.0 0.3 7.5 42.9

PY8 9.0 0.0 23.6 2.9 0.0 0.3 7.5 43.3

PY9 9.5 0.0 23.6 2.9 0.0 0.3 7.5 43.8

PY10 10.0 0.0 23.6 2.9 0.0 0.3 7.5 44.3

Total 80.7 0.1 236.6 29.9 0.0 3.0 76.9 427.2

*Totals may not sum due to rounding

Table 65. Summary of Costs (Undiscounted $ millions) – Primary Estimate (mean of High and 

Low)*

Registration Appeals

Point of 

Sale

Recordkeeping Reporting 

Theft/Loss 

Audits/

Inspections 

Federal 

Costs Total Cost 

PY1 20.2 0.1 72.2 6.6 0.0 0.5 10.4 109.9

PY2 5.1 0.0 71.6 5.0 0.0 0.5 7.4 89.5

PY3 5.3 0.0 71.6 5.0 0.0 0.5 7.4 89.7

PY4 5.6 0.0 71.6 5.0 0.0 0.5 7.4 90.0

PY5 5.9 0.0 71.6 5.0 0.0 0.5 7.4 90.3

PY6 13.3 0.1 72.2 5.0 0.0 0.5 7.7 98.7

PY7 10.9 0.1 71.6 5.0 0.0 0.5 7.6 95.6

PY8 11.5 0.1 71.6 5.0 0.0 0.5 7.6 96.2

PY9 12.1 0.1 71.6 5.0 0.0 0.5 7.6 96.8

PY10 12.7 0.1 71.6 5.0 0.0 0.5 7.7 97.4

Total 102.3 0.4 717.2 51.6 0.0 4.5 77.9 953.8

*Totals may not sum due to rounding
78

Table 66. Summary of Costs (Undiscounted $ millions) – High Population/High Transactions

Estimate*

Registration Appeals

Point of 

Sale

Recordkeeping Reporting 

Theft/Loss 

Audits/

Inspections 

Federal

Costs Total Cost 

PY1 24.4 0.1 120.5 9.3 0.0 0.6 10.6 165.5

PY2 6.1 0.0 119.6 7.1 0.0 0.6 7.4 140.8

PY3 6.4 0.0 119.6 7.1 0.0 0.6 7.4 141.1

PY4 6.7 0.0 119.6 7.1 0.0 0.6 7.4 141.4

PY5 7.1 0.0 119.6 7.1 0.0 0.6 7.4 141.8

PY6 16.1 0.1 120.5 7.1 0.0 0.6 7.8 152.2

PY7 13.2 0.1 119.6 7.1 0.0 0.6 7.7 148.3

PY8 13.9 0.1 119.6 7.1 0.0 0.6 7.7 149.0

PY9 14.6 0.1 119.6 7.1 0.0 0.6 7.7 149.7

PY10 15.3 0.1 119.6 7.1 0.0 0.6 7.8 150.5

Total 123.8 0.6 1,197.8 73.2 0.0 6.0 78.9 1,480.3

*Totals may not sum due to rounding

Table 67. Summary of Costs (7 percent discount rate, $ millions) – Low Population/Low 

Transactions Estimate*

Registration Appeals

Point of 

Sale Record-keeping 

Reporting 

Theft/Loss 

Audits/

Inspections 

Federal

Costs

Total 

Cost 

PY1 14.9 0.1 22.3 3.6 0.0 0.2 9.6 50.7

PY2 3.5 0.0 20.6 2.6 0.0 0.2 6.4 33.3

PY3 3.4 0.0 19.2 2.4 0.0 0.2 6.0 31.2

PY4 3.3 0.0 18.0 2.2 0.0 0.2 5.6 29.3

PY5 3.3 0.0 16.8 2.1 0.0 0.2 5.2 27.6

PY6 7.0 0.0 15.9 2.0 0.0 0.2 5.0 30.1

PY7 5.4 0.0 14.7 1.8 0.0 0.2 4.6 26.7

PY8 5.3 0.0 13.7 1.7 0.0 0.1 4.3 25.1

PY9 5.2 0.0 12.8 1.6 0.0 0.1 4.1 23.8

PY10 5.1 0.0 12.0 1.5 0.0 0.1 3.8 22.5

Total 56.2 0.2 166 21.4 0.1 1.8 54.6 300.2

*Totals may not sum due to rounding

Table 68. Summary of Costs (7 percent discount rate, $ millions) – Primary Estimate

(mean of High and Low)*

Registration Appeals

Point of 

Sale

RecordkeepingReporting 

Theft/Loss

Audits/

Inspections

Federal 

Costs Total Cost

PY1 18.9 0.1 67.5 6.2 0.0 0.4 9.8 102.7

PY2 4.4 0.0 62.6 4.4 0.0 0.4 6.5 78.2

PY3 4.3 0.0 58.4 4.1 0.0 0.4 6.0 73.2

PY4 4.2 0.0 54.7 3.8 0.0 0.4 5.7 68.7

PY5 4.2 0.0 51.1 3.6 0.0 0.3 5.3 64.4

PY6 8.9 0.0 48.1 3.4 0.0 0.3 5.1 65.8

PY7 6.8 0.0 44.6 3.1 0.0 0.3 4.7 59.5
79

PY8 6.7 0.0 41.7 3.0 0.0 0.3 4.4 56.0

PY9 6.6 0.0 39.0 2.8 0.0 0.2 4.2 52.6

PY10 6.5 0.0 36.4 2.6 0.0 0.2 3.9 49.5

Total 71.3 0.1 503.8 36.8 0.0 3.0 55.3 670.6

*Totals may not sum due to rounding

Table 69. Summary of Costs (7 percent discount rate, $ millions) – High Population/High 

Transactions Estimate

Registratio

n

Appeal

s

Point of 

Sale

RecordkeepingReporting 

Theft/Loss

Audits/

Inspectio

ns

Federal 

Costs

Total 

Cost

PY1 22.8 0.1 112.6 8.7 0.0 0.6 9.9 154.7

PY2 5.3 0.0 104.5 6.2 0.0 0.5 6.5 123.0

PY3 5.2 0.0 97.6 5.8 0.0 0.5 6.0 115.1

PY4 5.1 0.0 91.3 5.4 0.0 0.5 5.7 108.0

PY5 5.0 0.0 85.3 5.1 0.0 0.4 5.3 101.1

PY6 10.7 0.0 80.3 4.8 0.0 0.4 5.2 101.4

PY7 8.2 0.0 74.5 4.4 0.0 0.4 4.8 92.3

PY8 8.1 0.0 69.6 4.2 0.0 0.4 4.5 86.8

PY9 7.9 0.0 65.1 3.9 0.0 0.3 4.2 81.4

PY10 7.8 0.0 60.8 3.6 0.0 0.3 3.9 76.4

Tota

l 86.3 0.4 841.6 52.2 0.1 4.4 56 1,041.0

*Totals may not sum due to rounding

Table 70. Summary of Costs (3 percent discount rate, $ millions) – Low Population/Low 

Transactions Estimate*

Registratio

n

Appeal

s

Point of 

Sale

RecordkeepingReporting 

Theft/Loss

Audits/

Inspectio

ns

Federal 

Costs

Total 

Cost

PY1 15.5 0.1 23.2 3.7 0.0 0.2 9.9 52.6

PY2 3.8 0.0 22.2 2.8 0.0 0.2 6.9 35.9

PY3 3.8 0.0 21.6 2.7 0.0 0.2 6.7 35

PY4 3.9 0.0 20.9 2.6 0.0 0.2 6.5 34.1

PY5 4.0 0.0 20.3 2.5 0.0 0.2 6.3 33.3

PY6 8.8 0.0 20.0 2.5 0.0 0.2 6.3 37.8

PY7 7.0 0.0 19.2 2.4 0.0 0.2 6.1 34.9

PY8 7.1 0.0 18.6 2.3 0.0 0.2 5.9 34.1

PY9 7.3 0.0 18.1 2.2 0.0 0.2 5.7 33.5

PY10 7.4 0.0 17.5 2.2 0.0 0.2 5.6 32.9

Tota

l 68.5 0.3 201.5 25.9 0.1 2.1 65.9 364.2

*Totals may not sum due to rounding

Table 71. Summary of Costs (3 percent discount rate, $ millions) – Primary Estimate (mean 

of High and Low)*

Registration Appeals

Point of 

Sale

RecordkeepingReporting

Theft/Loss

Audits/

Inspections

Federal 

Costs Total Cost

PY1 19.6 0.1 70.1 6.4 0.0 0.4 10.1 106.7

PY2 4.8 0.0 67.5 4.8 0.0 0.4 7.0 84.4
80

PY3 4.9 0.0 65.6 4.6 0.0 0.4 6.8 82.2

PY4 5.0 0.0 63.6 4.5 0.0 0.4 6.6 80.0

PY5 5.1 0.0 61.8 4.4 0.0 0.4 6.4 77.9

PY6 11.2 0.1 60.5 4.3 0.0 0.4 6.4 82.7

PY7 8.9 0.0 58.3 4.1 0.0 0.4 6.2 77.7

PY8 9.0 0.0 56.5 4.0 0.0 0.4 6.0 75.8

PY9 9.3 0.0 54.9 3.9 0.0 0.4 5.8 74.2

PY10 9.4 0.0 53.3 3.8 0.0 0.4 5.7 72.5

Total 86.9 0.2 611.9 44.5 0.0 3.7 66.8 814.0

*Totals may not sum due to rounding

Table 72. Summary of Costs (3 percent discount rate, $ millions) – High Population/High 

Transactions Estimate*

Registratio

n

Appeal

s

Point of 

Sale

RecordkeepingReporting 

Theft/Loss

Audits/

Inspectio

ns

Federal 

Costs

Total 

Cost

PY1 23.7 0.1 117.0 9.1 0.0 0.6 10.3 160.8

PY2 5.8 0.0 112.8 6.7 0.0 0.6 7.0 132.9

PY3 5.9 0.0 109.5 6.5 0.0 0.6 6.8 129.3

PY4 6.0 0.0 106.3 6.3 0.0 0.6 6.6 125.8

PY5 6.1 0.0 103.2 6.2 0.0 0.5 6.4 122.4

PY6 13.5 0.1 100.9 6.0 0.0 0.5 6.5 127.5

PY7 10.7 0.0 97.3 5.8 0.0 0.5 6.2 120.5

PY8 10.9 0.0 94.4 5.6 0.0 0.5 6.1 117.5

PY9 11.2 0.0 91.7 5.5 0.0 0.5 5.9 114.8

PY10 11.4 0.0 89.0 5.3 0.0 0.5 5.8 112

Tota

l 105.1 0.5 1,022.0 63.1 0.2 5.3 67.6 1,263.7

*Totals may not sum due to rounding

14. Initial Regulatory Flexibility Analysis

The Regulatory Flexibility Act of 1980 (RFA) establishes “as a principle of regulatory 

issuance that agencies shall endeavor, consistent with the objective of the rule and of 

applicable statutes, to fit regulatory and informational requirements to the scale of the 

business, organizations, and governmental jurisdictions subject to regulation.'' To achieve 

that principle, the RFA requires agencies to consider the potential impacts of their rules on 

small entities. The RFA covers a wide range of small entities, including small businesses, 

not-for-profit organizations, and small governmental jurisdictions.

Although the Department does not believe the proposed rule will have a significant

economic impact on a substantial number of small entities, the agency has prepared an 

Initial Regulatory Flexibility Analysis (IRFA) for public review and comment. The 
81

Department requests comments on this IRFA and the potential impacts of the proposed 

rule on small entities.

Section 1: Reasons for and Objectives of the Proposed Rule

The FY 2008 Department of Homeland Security Appropriations Act (P.L. 110-161) amends 

the Homeland Security Act of 2002 and provides the Department with the authority to 

“regulate the sale and transfer of ammonium nitrate by an ammonium nitrate facility . . . to 

prevent the misappropriation or use of ammonium nitrate in an act of terrorism.” For 

additional information on the security hazards presented by the use of ammonium nitrate, 

see Sections II.D.1 & 2 of the preamble. For additional information on the benefits of this 

rule, please refer to Section 3 above. 

Reason for the Proposed Rule

This proposed rule aims to prohibit a known or suspected terrorist from purchasing or 

legally acquiring ammonium nitrate from an ammonium nitrate facility; additionally, only 

individuals favorably vetted by the Department will be able to legally acquire ammonium 

nitrate. 

Objective of the Proposed Rule

Section 2: Affected Small Business Population and Estimated Impact of Compliance

At this time, the Department’s preliminary estimate of the number of establishments that 

either sell, purchase, or sell/transfer and purchase ammonium nitrate that will be covered 

by this proposed rule range from 64,986 to 106,236 AN Facilities. This estimate is the 

Department’s best estimate based on listening sessions with industry representatives and 

plant food control officials, consultation with other Federal agencies and departments (e.g., 

USDA), and research across available information provided by industry and governmental 

sources. Some of the business types identified in the analysis of purchasers are similar to 

activities that could be conducted by nonprofits or small jurisdiction. The Department

believes impacts on nonprofits or small jurisdictions would be the same as any other 

purchaser in this analysis. During the advanced notice of proposed rulemaking, the 

Department did not receive any information on nonprofits or small jurisdictions that might 

be impacted and invites comments from these entities. After AN Sellers and AN Purchasers 

register with the Department there will be a better understanding of how many and which 

specific AN facilities will be subject to the requirements under this proposed rule. 

Consequently, without the benefit of having the AN Registered User Number results, it is 

very difficult to know which AN Facilities will have to undergo the burden of verifying AN 

Registered User Numbers, and maintaining records of ammonium nitrate transactions. In 
82

addition, the Department has offered some degree of flexibility when choosing the method 

of verifying AN Registered User Numbers and maintaining records. The Department

expects that AN Facilities will take full advantage of this flexibility in order to minimize the 

cost of this rule to their operations. These uncertainties make it very difficult to estimate 

the extent of the economic impact of this rule on small entities.

Number of Small Entities that may be AN Purchasers

The Small Business Administration (SBA) classifies farms as a small business if it has 

receipts less than $750,000. The USDA Census of Agriculture provides data on the number 

of farms by economic class based on the market value of agricultural products sold 

(excluding government payments). Table 64 shows that 94.5% of farms had receipts of 

$0.5 million or less; 97.4% of farms had receipts less than $1.0 million. Thus, it is clear that 

the majority of farms are small entities.
83

Table 73. Number of U.S. Farms by the Market Value of Agricultural Products Sold (2007)

Market value of 

agricultural products 

sold ($) Number of Farms % of Total

less than $1000 499,880 22.7%

$1000-$2,499 270,712 12.3%

$2500-$5,000 246,309 11.2%

$5,000-$9,999 254,834 11.6%

$10,000-$24,999 274,274 12.4%

$25,000-49,999 163,500 7.4%

$50,000-$99,999 129,124 5.9%

$100,000-$249,000 149,049 6.8%

$250,000-$499,999 96,251 4.4%

$500,000-$999,999 63,567 2.9%

more than $1,000,000 57,292 2.6%

Total Farms 2,204,792 100.0%

Source: 2007 Census of Agriculture, USDA (Table 3 - page 

10)

Tables 74 and 75 show the primary North American Industrial Classification System 

(NAICS) codes, descriptions and SBA definitions for small entities that are AN Purchasers. 

This comparison shows that the majority of businesses likely to be AN Purchasers are small 

entities.

Table 74. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be

AN Purchasers (Employee Size)*

Establishments by Employee Size

NAICS Description 0-4 5-9 10-19 20-99 100-499

(Subtotal)

<499 500+

2121 Coal Mining 194 96 100 233 149 772 375

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

2122 Metal Mining 131 39 18 26 21 235 72

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

2123 Nonmetallic Mineral Mining 

and Quarrying 1,434 666 603 877 501 4,081 1,743

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

325314 Fertilizer (Mixing Only) 

Manufacturing

111 64 56 89 62 382 94

% of total 23% 13% 12% 19% 13% 80% 20%
84

42491 Farm Supplies Merchant 

Wholesalers 2,473 983 673 948 765 5,842 1,901

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

42469

Other Chemical & Allied 

Products Merchant 

Wholesalers

3,352 1,155 846 1,082 648 7,083 2,405

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

* Totals may be affected by rounding.
85

Table 75. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be

AN Purchasers (Sales Size)*

Establishments by Sales Size

NAICS Description

< $0.1 

mill

$.1-0.5 

mill $0.5-1 mill

$1-5 

mill

$5-10 

mill

(Subtotal) 

<$10 mill >$10 mill

213113 Support services 

for Coal Mining

47 98 38 101 16 300 46

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

213114 Support services 

for Metal Mining

19 26 14 20 - 79 104

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

213115

Support services 

for Nonmetallic 

Mining

24 47 17 40 8 136 15

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

44422

Nursery, Garden 

Center, and Farm 

Supply Stores

1,872 5,004 2,675 3,941 830 14,322 3,461

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

56173 Landscaping 

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

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

71391

Golf Courses & 

Country Clubs 1,172 3,802 2,041 3,333 588 10,936 906

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

* Totals may be affected by rounding.

Number of Small Entities that may be AN Sellers

In addition to regulating purchasers of ammonium nitrate, the proposed rule places 

additional burdens on AN Sellers. These additional burdens include application for AN 

Registered User Number, verifying AN Purchasers’ AN Registered User Numbers and photo 

ID at the point of sale, maintaining records of point of sale transactions for two years and 

reporting theft and loss of ammonium nitrate. AN Facilities that are in the middle of the 

supply chain from manufacturer to end-use consumer are both AN Sellers and AN 

Purchasers. Data for each side of the transaction is included in the appropriate seller or 

purchaser analysis. Costs to business that are both are likely to be something slightly less 

than the sum of the two corresponding amounts for their business. It is likely that some of 

the individuals needing registration numbers will conduct both sales and purchase 

transactions. To the degree that this happens, the costs presented here are overstated by 
86

the number of individuals who only have to go through the registration process once 

(subject to renewal and updates), rather than having two separate individuals.

Tables 76 and 76 show the primary NAICS codes, descriptions and definitions (both 

employee size and revenues) for small entities that are AN Sellers. The majority of these AN 

Facilities are classified as small entities by the Small Business Administration. 

Table 76. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be

AN Sellers (Employee Size)*

Establishments by Employee Size

NAICS Description 0-4 5-9 10-19 20-99 100-499

(Subtotal)

<499 500+

325311 Nitrogenous Fertilizer 

Manufacturing

46 19 23 15 11 114 31

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

325314 Fertilizer (Mixing Only) 

Manufacturing

111 64 56 89 62 382 94

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

32592 Explosives Manufacturing 8 4 10 16 13 51 31

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

42291 Farm Supplies Merchant 

Wholesalers 2,473 983 673 948 765 5,842 1,901

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

42269

Other Chemical and Allied 

Products Merchant 

Wholesalers

3,352 1,155 846 1,082 648 7,083 2,405

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

* Totals may be affected by rounding.
87

Table 77. Primary NAICS Codes, Descriptions and Definitions for Small Entities that May Be

AN Sellers (Sales Size)*

Establishments by Sales Size

NAICS Description

< $0.1 

mill

$.1-0.5 

mill

$0.5-1 

mill

$1-5 

mill

$5-10 

mill

(Subtotal) 

<$10 mill

>$10 

mill

115112 Soil Preparation, 

Planting, and Cultivating

509 992 413 395 30 2,339 86

% of total 21% 41% 17% 16% 1% 96% 4%

44422 Nursery, Garden Center, 

and Farm Supply Stores 1,872 5,004 2,675 3,941 830 14,322 3,461

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

* Totals may be affected by rounding.

Alternatives Considered

The Department considered several alternatives when developing this proposed rule. The 

alternatives considered were: (1) register individuals applying for an AN Registered User 

Number using a paper application (via facsimile or the US mail); through a web-based 

portal, or a telephone application process; (2) verify AN Purchasers through both an 

Internet-based verification portal and call center rather than only a verification portal or 

call center; (3) communicate with applicants for an AN Registered User Number through 

US Mail rather than only through e-mail or a secure web-portal; (4) establish a specific 

capability within the Department to receive, process, and respond to reports of theft or loss 

rather than leverage a similar capability which already exists with the ATF; (5) require AN 

Sellers and AN Facilities to maintain records electronically in a central database provided 

by the Department rather than providing flexibility to the AN Seller and AN Facility to 

maintain their own records either in paper or electronically; (6) require agents to register 

with the Department prior to the sale or transfer of ammonium nitrate involving an agent 

rather than allow oral confirmation of the agent with the AN Purchaser on whose behalf the 

agent is working; and (7) exempt explosives from this regulation rather than not exempting 

them. Each of these alternatives is discussed below.
88

A. Registration

B. Verification

C. Communication with Applicants

D. Reporting Theft or Loss

E. Recordkeeping

F. Agents

G. Exemption of Explosives Regulated by ATF

A. Registration

The Department considered using one or more of three potential approaches for AN Seller 

and AN Purchaser registration: paper applications submitted via facsimile or US Mail; 

electronic applications via a web-based portal; or telephone application for a limted 

number of applicants. The Department is proposing the use of a web-based portal - the “AN 

User Registration Portal” – as the sole means for registering to be an AN Purchaser or AN 

Seller.

1. Registration through Facsimile or US Mail

Paper registration via facsimile or US Mail would require potential applicants to obtain and 

fill out an application form and fax it or mail it to the Department. The Department would 

then process the application and communicate the results back to the potential applicant 

via facsimile or US Mail.

Registration through facsimile or US Mail would have costs to both the industry and the 

Department. For the industry, each prospective AN Seller or AN Purchaser applying for an 

AN Registered User Number would have to spend approximately 45 minutes reading about 

the rule and procedures for registration before completing the registration application. If 

the application is paper-based, the Department assumes it will take each applicant about 

15 minutes to complete a paper application, fax or mail it to the Department, and file it for 

his or her records. For the Department, supporting paper submission of application 

materials via facsimile or US Mail would require the hiring of staff to manually extract 

information from the submitted application form for performance of the TSDB check and 

submission into a registered user database maintained by the Department. The paper 

application process was not pursued or developed as the Department believes that it would 

result in unacceptably lengthy application processing times, and unacceptable delays 

between submission of applications and receipt of AN Registered User Numbers.

2. Registration through USDA Extension Service Office
89

During the ANPRM DHS received the suggestion to consider the USDA extension offices. As 

an application method. The USDA provided explanations why this was not feasible; DHS 

did not develop the idea beyond the intial concept.

3. Registration through the AN User Registration Portal

Through a Department developed website, potential applicants could apply for an AN 

Registered User Number online. With the wide spread availability of the Internet, 

applicants could apply from home, a public library, or place of employment, for instance.

Potential applicants would go to the Department’s website and access the AN User 

Registration Portal. There, potential applicants would apply online for an AN Registered 

User Number and submit their application directly to the Department. The Department 

would receive the information, process it, and communicate back to the applicant via email.

Online registration through a Department developed, operated, and maintained website 

would have costs to both the industry and the Department. Each prospective AN Seller or 

AN Purchaser applying for an AN Registration User Number will spend approximately 45 

minutes reading about the rule and procedures for registration before completing the 

registration application. If the application is online, the Department assumes it will take the 

applicant approximately 15 minutes to find the website, enter information, submit it to the 

Department, and print and file a copy for his or her records. Both the individual applicant 

and government costs are developed in the relavent sections of the evaluation If the 

Department is able to leverage CSAT or another existing secure web-portal, both the initial 

development costs and the annual operating and maintenance costs likely would be 

significantly lowered.

The Department is proposing that registering be done through an online web portal (see 

Section B 9). While not every potential applicant may have personal access to the Internet, 

the Internet is widely available, and the Department believes that there are significant 

benefits to using an online approach. The benefits to both the applicant and the 

Department of an online approach include: (1) substantially quicker response from the 

Department thereby minimizing the time during which the applicant would not be able to 

purchase or sell/transfer ammonium nitrate; (2) ability for an applicant or registered user 

to access, view, update, and manage their personally identifiable information; (3) and 

greater control over managing their participation, such as ease in renewing their AN 

Registered User Number. The Department proposes that neither paper registration 

applications no in person applications at USDA Extension Service Offices be offered.

4. Registration via a telephone application process.
90

The applicant would contact the AN helpdesk and the helpdesk operator would collect all 

the information necessary to complete an application for an AN Registered User Number. 

The IT system would then route the application as if it were an application through the web 

portal. The evaluation of the vetting against the TSDB would be the same.

Once a decision had been made as to whether or not to approve or deny an application the 

system would identify the response to be mailed to the applicant. The system would route 

the information to a vendor to process the letter. The vendor would print and mail the 

letter. The letter would require tracking, signature, certification (i.e., verification of 

identity), and next day delivery. DHS would also require evidence of delivery from the

vendor. These are required to ensure delivery and receipt of the AN Registered User 

Number to the correct individual. 

DHS is not recommending the telephone option but invites public comment on the concept. 

The following tables provide information on the costs that vary between the recommended 

web-portal approach and the phone approach.

Table 78. Differences between alternatives costs 

($ millions, 10-year total costs, 7% Discount)

Web-portal Phone Option Difference

Registration Costs 71.3 20.3 51.0 

Federal Costs 55.3 81.5 -26.2

All Other Costs 544.0 540.7 3.3 

Total Costs 670.6 642.5 28.1 

B. Verification

The Department considered three potential approaches to verify a prospective AN 

Purchaser; establishing a web-based portal (i.e., Purchaser Verification Portal), establishing 

a call center, and establishing both capabilities. The Department is proposing to establish 

both a web-based portal and call center.

1. Purchaser Verification Portal

Verifying AN Purchaser status through a web-portal will have costs to both industry and 

the Department. The Department will bear the cost of developing and maintaining the 

verification portal and related guidance on its use and proper verification processes.

The cost to industry of this activity is having a computer and access to the Internet. Beyond 

that, cost to the industry is the incremental time spent during an ammonium nitrate
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transaction to verify the identity and AN Registered User Number of the prospective AN

Purchaser. Accordingly, the overall cost would depend on the number of ammonium nitrate

transactions that occur and the time it takes to perform a simple identity check and enter 

basic AN Purchaser information into the web-portal. Based upon the detailed data in the 

evaluation, the following table summarizes the average costs per transaction.

Table 79. Point of Sale Average Cost Summary*

Low Total Estimate High Total Estimate Mean

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

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

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

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

Sellers 2,486 6,236 4,361 

Purchasers 64,950 106,200 85,575 

Transactions/Seller/Week 42.4 90.5 66.5 

Transactions/Purchaser/Week 1.6 5.3 3.5 

Seller Cost/Transaction ($) 3.7 3.5 3.5 

Purchaser Cost/Transaction ($) 0.64 0.62 0.62 

* Data is for all entities and comes from the detailed evaluation, 

 particularly Tables 9,10,26-29,35-36

2. Purchaser Verification Call Center

The Department also considered a Purchaser Verification Call Center. Under this approach, 

AN Sellers would use a telephone to call a toll-free phone number established by the 

Department where they would either talk to a person or be led through a series of 

telephone tree menus. During the phone call, the AN Seller would be expected to provide 

information about the AN Purchaser. The operator or automated telephone system would 

enter the information provided into the Department’s Registered User database system, 

wait for electronic confirmation, and then provide verbal confirmation to the caller along 

with a confirmation number for that specific transaction.

Verifying AN Purchaser status through a call center will have costs to both industry and the 

Department. The burden to the industry for the call center option rests upon having a 

telephone and the time spent relaying the relevant AN Purchaser information to the call 

center. The cost to the Department is the establishment of the call center and potentially 

employing staff to standby and field calls regarding ammonium nitrate purchases.

3. Purchaser Verification Portal and Call Center
92

The Department proposes to establish both a Purchaser Verification Portal and a Purchaser 

Verification Call Center (see Section C 6). This approach is identical to the Purchaser 

Verification Portal described above, integrated with the Purchaser Verification Call Center 

capability. This approach presumably would be the cheapest for the regulated community 

as each AN Facility likely would choose to employ the most cost-effective means of 

verification; however, it would be the most costly of the alternatives for the Department to 

establish and operate as it would bear the costs associated with the development and 

maintenance of both a web verification portal and call center.

When creating a manner in which AN Sellers can verify the required information on a 

potential ammonium nitrate purchase by an AN Purchaser, the Department found both 

advantages and disadvantages to each option considered. A call center may be preferable to

a web-portal, as presumably all AN Sellers have telephones while not all AN Sellers have 

computers with Internet access, particularly at the point of sale. However, there are some 

potential disadvantages. For instance, the call center approach would take more time per 

transaction than the web portal approach, and that it would be significantly more costly for 

the Department to establish and operate a call center. The advantage of this alternative is 

that all AN Facilities would be accommodated – those with telephone access only and those 

with both telephone and Internet access who find the verification web portal option more 

efficient. As a result, the Department proposes to offer both online and call center options 

despite the higher costs to the Department.

C. Communication with Applicants

The Department must communicate with applicants throughout the registration process.

The Department considered two alternatives to communicating with applicants: (1) 

communication by US Mail, and (2) communication by electronic means. The Department 

proposes to communicate with applicants by electronic means.

1. US Mail

The US Mail could act as the communication medium between the Department and the 

regulated community. If the US Mail was chosen as the communication mechanism the 

Ammonium Nitrate Security Program would be paper-based. While there would be some 

minimal cost to the industry (e.g. postage). The time to complete paperwork would be 

equivalent to the submission of information electronically. The costs to the Department, 

however, would be more substantial. The Department would have to hire or devote staff to 

process incoming correspondence.
93

2. Electronic Means

The other option for communication could be by electronic means. Program 

communication would occur through e-mail and secure web portals. The cost to the 

industry can be broken down to computer and Internet access. The cost to the Department 

hinges on developing web portals and databases to securely store information.

The Department assumes that most applicants have Internet access with one exception.

Based upon the USDA, approximately 60% of farms have Internet access. Thus, DHS 

assumes that in the agricultural sector, approximately 60% of farms have computers with 

Internet access. The Department therefore estimated that these individuals will have to 

travel a short distance to an agricultural extension office, public library, or other location 

where access to the Internet is available to apply for an AN Registered User Number.

Further, DHS assumes that for applicants without Internet access, two trips will be 

required; one to complete the AN Registered User Number application, and a second trip 

after 72 hours to retrieve the e-mail containing the AN Registered User Number. In the vast 

majority of cases, the e-mail containing the AN User Registration will be sent within an 

hour, but to be conservative, the Department has assumed farmers without Internet access 

will make two trips. The Department assumes that the round trip distance is 50 miles per 

trip and has used the standard IRS mileage rate of $0.55 per mile. The Department assumes 

the total extra time for each trip will average approximately one hour each way plus 1 hour 

for Internet access and registration for a total of 6 hours per farm registration. By 

multiplying 50 miles times two trips times $0.55 per mile totals $55 per individual for the 

mileage for the two trips associated with applying for and receiving an AN Registered User 

Number. Additionally, DHS included approximately $1.9 million for farmers who attempt to 

make a purchase without knowing about the regulation and must then make one extra trip. 

These calculations are detailed in Tables 11 and 12 in Section 7 of this evaluation. Because 

of the minimal time and effort it takes to apply for and receive an AN Registered User 

Number, the Department believes this approach to be a cost-effective way to prevent 

misappropriation of ammonium nitrate.

The Department considered using the US Mail as the primary medium for communication; 

however, the Department ultimately rejected this approach due to the additional time it 

would take to notify applicants of their AN Registered User Number. The Department also 

cited the significant availability of the Internet. Therefore, the Department is proposing to 

use electronic means as the primary medium for communication. Additionally, the 

Department believes that electronic communication is more secure and faster than US Mail.

D. Reporting Theft or Loss
94

The Department considered two alternatives for reporting theft or loss to Federal law 

enforcement authorities within 24 hours of the time at which knowledge of theft or loss is 

acquired. The Department considered requiring an AN Facility Representative to report to 

either the Department or ATF. The Department proposes to require reporting of theft/loss 

to ATF.

Under either option there is a burden to the industry. The cost to industry of this activity 

will be the time to gather details and report the theft or loss of ammonium nitrate. Because 

of the seriousness of theft or loss of ammonium nitrate, the total time to report a theft or 

loss is assumed to include two hours each for an inventory manager, plus one hour for the 

general manager. This includes the time for the reporter to organize useful details for law 

enforcement and conduct a brief investigation. There will likely be additional time for a 

necessary follow-up investigation. Strictly for purposes of this analysis, the Department 

assumes that two percent of AN Facilities and AN Purchasers will report loss or theft once 

per year. Based on these assumptions, on average there will be 88 reports of theft or loss 

annually, at an average total annual cost to industry of $13,350.

1. ATF Reporting

One of the many responsibilities of ATF is regulating the use of explosives. While ATF does 

not consider ammonium nitrate an explosive, ammonium nitrate explosive mixtures and 

ammonium nitrate fuel oil explosives (ANFO) are included in ATF’s list of explosive 

materials. ATF has an existing program for reporting the theft or loss of explosives.

Individuals that discover the theft or unexplained loss of ammonium nitrate would contact 

ATF by phone or facsimile and provide the pertinent information. The costs to the industry 

for reporting to ATF the theft or unexplained loss of ammonium nitrate would be minimal.

The costs to the Department would be minimal as well, unless the Department funded ATF 

efforts.

2. DHS Reporting

Similar to ATF’s method for reporting theft or loss of explosives, individuals upon 

discovering the theft or unexplained loss of ammonium nitrate would contact DHS. The 

costs to the industry for reporting the theft or unexplained loss of ammonium nitrate to the 

Department would be minimal. The costs to the Department would be greater than when 

compared to the ATF reporting requirement. The Department would be required to create 

and establish the theft/loss reporting policies, procedures, and infrastructure.
95

The Department is proposing to require reporting of theft/loss to ATF (see Section E). ATF 

already possesses the unique experience in collecting and responding to the theft/loss of 

explosive related materials. Additionally, the Department wishes to avoid duplicative 

efforts at the Federal level.

E. Recordkeeping

The Department considered two alternatives for maintaining records: (1) mandatory the 

use of a central electronic database, and (2) the flexibility to maintain their records in 

paper format or in electronic format. The Department proposes allowing AN Facilities to 

select the method of records storage for themselves (see Section F).

The Department selected this alternative because the burden to submit and maintain 

electronic records in a central database would increase the burden on the industry without 

measurable benefit to the industry. The benefit would be limited to the confidence an AN 

Facility would have, that if it maintained its records in a central database, it would meet 

Department recordkeeping requirements.

The costs to industry associated with this alternative are the costs of the time spent during 

each transaction collecting and recording the information required under the regulations, 

the costs of the time spent on ongoing recordkeeping activities throughout the year, and 

any capital investment costs an AN Facility incurs in acquiring equipment to facilitate the 

safe storage of the ammonium nitrate transaction records.

F. Agents

The Department considered three options to minimize the likelihood that agents are used 

to circumvent the requirements of this proposed rule. Specifically, the Department 

believes it is imperative for AN Sellers to ensure that an agent is acting at the direction of a 

registered AN Purchaser before the AN Seller transfers possession of ammonium nitrate to 

that agent. To accomplish this, the Department is considering the following alternatives:

• Requiring AN Purchasers to submit the names of their agents to the 

Department via the AN User Registration Portal, and requiring the AN 

Seller to confirm with the Department, prior to transferring possession of 

the ammonium nitrate, that the prospective AN Purchaser has submitted 

the name of the agent to the Department;

• Requiring the AN Seller to orally confirm with the prospective AN 

Purchaser prior to each sale or transfer that the agent is acting on behalf 

of the AN Purchaser;
96

• A combination of the first two options, where an AN Seller first should 

checks with the Department to see if the prospective AN Purchaser has 

submitted the name of the agent to the Department and, if not, than the 

AN Seller must verbally confirms with the prospective AN Purchaser that 

the agent is acting on his/her behalf.

Under the first approach, each AN Purchaser would be required to provide to the 

Department the names of any agents that might act on his/her behalf at the point of sale. 

Agent names would be submitted by the AN Purchaser to the Department via the AN User 

Registration Portal. An AN Purchaser could submit an agent’s name when he/she applies 

for an AN Registered User Number or at any other time prior to conducting a purchase 

involving that agent. Then, prior to transferring possession of ammonium nitrate to an 

agent, an AN Seller would need to verify with the Department that the prospective AN 

Purchaser has designated the agent as an approved agent to represent the AN Purchaser at 

the point of sale. This verification would occur through the same mechanism that is used 

for the other prospective AN Purchaser verification activities (i.e., the Purchaser 

Verification Portal or the Purchaser Verification Call Center). The agent’s information 

provided to the Department by AN Purchasers and AN Sellers would not be vetted against 

the TSDB nor otherwise checked by the Department; rather, it would simply be maintained 

in the AN Registered User Database as a data field linked to the AN Purchaser for use in the 

agent verification process.

Under the second approach, the Department would require the AN Seller to verify with the 

prospective AN Purchaser that the agent is actually acting on behalf of the prospective AN 

Purchaser for each specific transaction. Much like the other verification activities, this 

could occur at the time the prospective AN Purchaser places the order, when the agent 

arrives to take possession of ammonium nitrate, or any other time, so long as it occurs 

prior to the AN Seller transferring possession of ammonium nitrate to the prospective AN 

Purchaser’s agent. If this approach were adopted, the Department would propose requiring 

this confirmation to occur for each transaction/occurrence in which an agent is taking 

possession of ammonium nitrate; a blanket verification of an agent by an AN Purchaser 

would not be acceptable. Additionally, as an e-mail or letter can be easily forged, under this 

approach the Department would require that the AN Seller must receive this verification 

orally (e.g., in person; telephonically) from the prospective AN Purchaser.

The third approach – the option the Department is proposing in this NPRM – is a 

combination of the first two approaches. Specifically, AN Purchasers would provide the 

Department with the names of their agent(s), and an AN Seller would verify either through

the Purchaser Verification Portal or Purchaser Verification Call Center that the agent 

information has been provided by the AN Purchaser to the Department. As opposed to the 
97

first approach under which a sale or transfer cannot occur unless the agent’s name has 

been provided to the Department by the prospective AN Purchaser, under this third option 

the AN Seller would be allowed to complete the sale or transfer after either (1) verifying 

the agent has been designated by the prospective AN Purchaser in the Purchaser 

Verification Portal or Purchaser Verification Call Center, or (2) orally confirming with the 

prospective AN Purchaser that the agent is acting on the prospective AN Purchaser’s behalf 

for this individual sale or transfer. The Department expects that in the majority of cases 

this oral confirmation would occur telephonically. This third option has the benefit of 

minimizing the point of sale impact of the agent verification process, while allowing a 

means for a sale or transfer to be completed even if a prospective AN Purchaser forgets or 

is otherwise unable to provide the Department with the agent’s name prior to using the 

agent at the point of sale. For these reasons, this third approach is the option proposed by 

the Department.

G. Exemption of Explosives Regulated by ATF

The Department has the discretion to exempt from regulation persons producing, 

selling/transferring, or purchasing ammonium nitrate exclusively for use in the production 

of explosives under a license or permit issued under the Federal explosives laws, 18 U.S.C. 

Chapter 40, and associated regulations. ATF is responsible for enforcing Federal explosives 

laws, and has established regulations for doing so. The Department is proposing to exempt 

from regulation ammonium nitrate mixtures that are “explosives” subject to ATF regulation 

(i.e., ANFO). The Department also considered two other approaches. The first approach is 

to apply these rules to individuals who purchase, sell, or transfer ammonium nitrate for use 

in the production of explosives. The second approach considered is to entirely exempt 

facilities and persons that purchase, sell, or transfer ammonium nitrate solely for use in the 

production of explosives, as they are already regulated by ATF. 

1. Exempt ammonium nitrate mixtures that are “explosives” subject to ATF 

regulation

Under this approach, entities and individuals that purchase, sell, or transfer ANFO, but who 

do not produce ANFO or possess ammonium nitrate for other reasons, would be exempt 

from these requirements and would be subject solely to ATF regulation. This approach 

minimizes cost to the industry as well as the Department.

2. Regulate individuals who purchase, sell, or transfer ammonium 

nitrate, whether that ammonium nitrate is incorporated into 

“explosives” or not
98

Under this approach, such individuals would be subject to regulation by both the 

Department and ATF under the Federal explosives laws. By not exempting ammonium 

nitrate used in explosives, the Department would be treating all individuals who purchase, 

sell, or transfer ammonium nitrate – whether as part of ANFO mixtures or not – the same.

This approach would ensure that there are no gaps in coverage of ammonium nitrate as it 

moves through the supply chain – ammonium nitrate would be captured under the 

Department’s ammonium nitrate program both before and after being combined with fuel 

oil to create ANFO, and would be captured under ATF’s regulations after being combined 

with fuel oil to create ANFO. There could potentially be heightened costs to the industry 

due to potentially duplicative regulation. The costs to the Department would hinge upon a 

greater number of AN Facilities to regulate.

3. Entirely exempt facilities and persons that purchase, sell, or 

transfer ammonium nitrate solely for use in the production of 

explosives

Under this approach facilities and persons that purchase, sell, or transfer ammonium 

nitrate solely for use in the production of explosives would be entirely exempt from these 

requirements, as they are already regulated by ATF. In this model, facilities and persons 

that are licensed by ATF to mix ammonium nitrate with fuel to create ANFO which do not 

purchase, sell, or transfer ammonium nitrate for other purposes would not be subject to 

these regulations. This approach, however, could create a considerable gap in regulatory 

coverage throughout the ammonium nitrate supply chain, as ATF regulations apply solely 

to ANFO and not the ammonium nitrate used to create it. The costs to the industry, as well 

as the Department, would be low because certain individuals and AN Facilities would not 

fall under the regulation.

The Department proposes to exempt entities and individuals that purchase, sell, or transfer 

ANFO, but who do not produce ANFO or possess ammonium nitrate for other reasons.

These entities and individuals are regulated by ATF. This approach avoids duplicative 

regulation yet it does not create a potential regulatory gap in the ammonium nitrate supply 

chain.

Average Costs per Facility

The largest cost driver is activities related to the point of sale. While variation in cost by AN 

Facility is largely driven by the number of point of sale transactions that each AN Facility 

conducts, it is helpful to examine the average cost per AN Purchaser and AN Facility. The 

average costs per AN Purchaser are presented in tables 74 and 75. The average costs per 

AN Facility are presented in tables 76 and 77. Both the lower and upper bounds of the 
99

estimate are provided. In either case, the highest cost will be for farms without Internet

access. The cost of compliance to AN Purchasers is the time to apply for an AN Registered 

User Number with the Department of Homeland Security and additional time during the 

purchase. This registration cost averages $57 to $700 once every five years. The 

Department believes for even the smallest farms and other businesses that only purchase 

ammonium nitrate, this registration cost does not represent a significant economic impact.

The Department invites comments on this impact.

Table 80. Average Cost per AN Purchaser - Low Population/Low Transactions *

Purchaser 

Registration Appeals 

Purchase 

Opportunity 

Cost

Total

Purchaser

Cost 

Number 

of 

Facilities 

Average 

Cost per 

AN 

Purchaser 

Farms with Internet

access 2,079,500 28,100 1,674,500 3,782,100 30,000 126

Farms w/o Internet 

access 12,998,000 18,700 1,116,300 14,133,000 20,000 707

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

Landscaping 

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

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

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

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

*Totals may not add due to rounding.
100

Table 81. .Average Cost per AN Purchaser - High Population/High Transactions *

Purchaser 

Registration Appeals 

Purchase 

Opportunity 

Cost

Total

Purchaser

Cost 

Number 

of 

Facilities 

Average 

Cost per 

AN 

Purchaser 

Farms with Internet 

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

Farms w/o Internet 

access 19,497,500 28,100 5,433,900 24,959,500 30,000 832

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

Landscaping 

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

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

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

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

*Totals may not add due to rounding.

The average per AN Seller facility cost to comply with the proposed rule ranges from 

$6,400 for laboratory suppliers (low population/low transactions scenario) to $23,800 for 

an explosives distributor (high population/high transactions scenario).

Table 82. . Average Cost per AN Seller Facility - Low Population/Low Transactions Estimate*

Reg. 

Activities Appeals

Point of Sale 

(Web Portal)

Recordkeeping

Reporting 

Theft/

Loss

Audits/

Inspections

Total 

Seller Cost

Number 

of AN 

Facilities

Average 

Cost

AN fert. 

Manuf. 8,000 0 125,800 43,100 100 2,700 179,700 0 6,900

AN expl. 

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

Fertilizer 

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

Explosives 

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

Farm 

whol./coops

92,000 1,800 4,524,100 742,100 1,600 52,600 5,414,100 500 10,800

Retail 

garden 

ctrs.

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

Fertilizer 

app.

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

Lab. 

Supply 9,000 0 220,700 83,400 100 5,600 318,800 100 6,400

Total 442,000 8,200 20,398,100 3,803,900 7,400 254,400 24,914,100 2,500 10,000
101

Table 83. Average Cost per AN Facility - High Population/High Transactions Estimate

Reg. 

Activities Appeals

Point of Sale 

(Web Portal)

Recordkeeping

Reporting 

Theft/

Loss

Audits/

Inspections

Total Seller 

Cost

Number 

of AN 

Facilities

Average 

Cost

AN fert. 

Manuf. 8,000 0 311,200 43,100 100 2,700 365,100 0 14,000

AN expl. 

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

Fertilizer 

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

Explosives 

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

Farm 

whol./coops

184,000 3,400 17,841,300 1,484,200 3,200 105,100 19,621,100 1,000 19,600

Retail 

garden 

ctrs.

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

Fertilizer 

app.

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

Lab. 

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

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

*Totals may not add due to rounding.

Identification of Duplication, Overlap and Conflict with Other Federal Rules

A thorough discussion of the relationship to other rules is provided earlier in Section II.D 

Research Efforts and Findings of the rule preamble.

15. International Trade Impact Assessment

The Trade Agreement Act of 1979 prohibits Federal agencies from activities that create 

unnecessary obstacles to the foreign commerce of the United States. Legitimate domestic 

objectives, such as security, are not considered unnecessary obstacles. The statute also 

requires consideration of international standards and, where appropriate, that they be the 

basis for U.S. standards. In addition, the general benefits and desirability of free trade

influenced the development of this notice of proposed rulemaking to remove or diminish, 

to the extent feasible, barriers to international trade, including both barriers affecting the 

export of American goods and services to foreign countries and barriers affecting the 

import of foreign goods and services into the United States.

As entities that purchase or sell ammonium nitrate, or as individual AN Purchasers and AN 

Sellers, importers and exporters would be required to register with the Department and 

comply with the requirements of the NPRM in the same manner as their domestic 
102

counterparts when ammonium nitrate physically changes possession, as a part of sales or 

transfers by ammonium nitrate facilities, within the jurisdiction of the United States. Thus, 

the Department has assessed the potential effect of this NPRM and has determined that it 

would not create barriers to international trade.

16. Unfunded Mandates Reform Act (UMRA)

The Unfunded Mandates Reform Act of 1995 (UMRA), enacted as Public Law 104-4 on 

March 22, 1995, is intended, among other things, to curb the practice of imposing unfunded 

Federal mandates on State, local, and tribal governments. Title II of UMRA requires each 

Federal agency to prepare a written statement assessing the effects of any Federal mandate 

in a proposed or final agency rule that may result in a $100 million or more expenditure 

(adjusted annually for inflation) in any one year by State, local, and tribal governments, in 

the aggregate, or by the private sector. The primary (i.e., mean) estimate for this proposed 

rulemaking would not impose an unfunded mandate on State, local, or tribal governments, 

but the upper end of the estimate would show an unfunded mandate in the aggregate. The 

analysis required under Title II of UMRA is satisfied by this regulatory impact assessment.

The Department recognizes that some AN Sellers or AN Purchasers may be by State or local 

government entities. These AN Facilities would be required to comply with the provisions 

of this proposed rule.

Further, under Subtitle J, the Department may enter into cooperative agreements with the 

U.S. Department of Agriculture or any State department of agriculture to carry out the 

provisions of this subtitle. The statute

In regards to delegation of its authority to individual States, the Department proposes the 

following process: If a State is interested in performing the administration and 

enforcement activities, the Governor of the State must submit a written request to the 

Department asking for delegation of those authorities. Upon receipt of the request, the 

Department will initiate an evaluation to determine if the State is capable of satisfactorily 

performing those functions and, upon completion of the evaluation, will provide the State 

with a written response informing it of the Department’s determination. In order to make a 

fair evaluation, the Department is likely to request information from the State and consult 

with the State before a final determination is made. Because the responsibility would be 

further requires the Department, at the request of a 

Governor of a State, to delegate to that State authority to carry out the administration and 

enforcement if the Department determines that the State is capable of satisfactorily 

carrying out such functions. If the Department delegates any functions to a State, subject to 

the availability of appropriations, the Department must provide to the State sufficient funds 

to carry out those functions.
103

transferred only at the request of the State, and then with funding, no unfunded mandate is 

created.
104

Appendix A – Population Estimates

This regulatory evaluation makes several assumptions regarding the number of businesses 

potentially impacted by this proposed rule. Below are the details of the sources and 

underlying assumptions for each category of the regulated population considered. The 

Department seeks comment on the number of businesses potentially affected by this 

proposed rule. Unless noted otherwise, NAICS specific business populations come directly 

from the U.S. Census Statistics of US Business, 2006, US All Industries, available at 

http://www2.census.gov/econ/susb/data/2006/us_6digitnaics_2006.xls.

AMMONIUM NITRATE FOR FERTILIZER

Farms: According to the U.S. Department of Agriculture, 1,022,036 farms incurred expenses 

for Commercial fertilizer, lime, and soil conditioners.

39 Only a fraction of the total use 

ammonium nitrate fertilizer. According to the 4/17/09 listening session with plant food 

control officials from several States, roughly 50,000 – 75,000 farms in Missouri and 3,000 

farms in Texas were reported to use ammonium nitrate fertilizer. Estimating the average 

fertilizer consumption per farm in those States and applying to the national totals, DHS 

estimates roughly 100,000 to 150,000 farms using ammonium nitrate fertilizer. In a 

4/17/09 listening session with plant food control officials from several States, the 

Department heard that nationally, about half of farms were thought to use applicator 

services and thus, never take custody of ammonium nitrate fertilizer, thus for this analysis, 

the Department assumes 50,000 to 75,000 farms could be impacted by this proposed rule.

Fertilizer applicator services: The Department assumes that about 25% to 50% of NAICS 

115112 (soil preparation, planting and cultivating) provide applicator services for 

ammonium nitrate. Thus, 500 to 1,000 of these businesses could be impacted by this 

proposed rule.

Ammonium nitrate (for fertilizer): According to SRI Consulting, there were 26 

manufacturers of ammonium nitrate fertilizer in 2008.

Fertilizer mixers: According to the Census Bureau,40

 

39 U.S. Department of Agriculture, National Agricultural Statistics Services, 2007 Census of Agriculture (US 

data), Table 45.

there were 476 businesses engaged in 

mixing fertilizers, which is creating formulations of fertilizer materials for specific plant 

nutrition purposes. Thus, the Department has assumed a range of 400 to 600 fertilizer 

mixers that could be impacted by this proposed rule.

40 NAICS 325314 at Statistics of US Business, 2006, US All Industries available at 

http://www2.census.gov/econ/susb/data/2006/us_6digitnaics_2006.xls
105

Farm wholesalers/co-ops: During the 4/17/09 listening session with plant food control 

officials, it was suggested that the number of farm wholesalers/co-ops selling/transferring

ammonium nitrate fertilizer ranged from 500 to 1,000.

Retail garden centers: Because of the concern regarding the misappropriation of 

ammonium nitrate, State plant food control officials advised the Department that very few, 

if any, retail outlets are still in the business of selling straight ammonium nitrate fertilizer.

None of the big home improvement/garden center chains carry pure ammonium nitrate.

To include these businesses in the regulatory evaluation, the Department assumes that 500 

to as many as 2,500 retail garden centers nationwide sell ammonium nitrate in its pure 

form. 

Golf courses: According to the Census Bureau,41 there were nearly 12,000 golf courses and 

country clubs (NAICS 71391). The Department assumes that many of these apply 

ammonium nitrate fertilizer, thus 6,000 to 12,000 golf courses and country clubs may be 

impacted by this proposed rule. 

Landscaping services: According to the Census Bureau there were about 90,000 

landscaping businesses (NAICS 56173).42 Only a fraction of these services apply fertilizer, 

and a fraction of those apply ammonium nitrate fertilizer. As a result, the Department

assumes that many of these apply ammonium nitrate fertilizer, thus 4,500 to 9,000 of these 

businesses may be impacted by this proposed rule.

Laboratory supply: The Department assumes that approximately 50 - 100 laboratory 

supply wholesalers may stock ammonium nitrate above the threshold. 

AMMONIUM NITRATE FOR EXPLOSIVES 

Ammonium nitrate (for explosives) manufactures: According to data from the 2002 Census 

of Manufacturers, there were approximately 10 manufacturers of low-density ammonium 

nitrate for use in explosives. This was confirmed by members of the Institute of Makers of 

Explosives (IME).

Explosives distributors:

 41 Statistics of US Business, 2006

According to the IME, there are a relatively small number of 

explosives distributors that process transactions involving ammonium nitrate. DHS 

assumes that 500 to 1,000 explosives distributors could be affected by this proposed rule.

42 Statistics of US Business, 2006
106

Blasting services: A specialized sub-segment of NAICS 213113-5 (Support Services for 

Mining, excluding oil and gas drilling), these businesses are engaged in coming to the mine 

site and preparing and detonating explosives, including making ammonium nitrate fuel oil 

(ANFO) mixtures. Members of the IME suggested that only a fraction of 750 businesses in 

NAICS 213113-5 was engaged in blasting activities. The Department assumes that 250-500 

of these businesses could be affected by this proposed rule.

Mines: According to the Mine Safety and Health Administration’s Part 50 data, there were 

about 7,000 mines. Members of the IME suggested that 50%-75% of these mines use 

blasting services and thus never take custody of ammonium nitrate. As a result, the 

Department assumes 1,750 to 3,500 mines could be impacted by this proposed rule.
107

Appendix B – Wage Rates

Wage rates for non-farm workers are readily available from the Bureau of Labor statistics 

and our methodology is explained below. Attributing a wage to farm owners or managers is 

much more difficult as these wages are specifically excluded from BLS data. The U.S 

Department of Agriculture, Economic Research Service (ERS), studies the economic issues 

of agriculture. One of the known characteristics of farm income, and therefore a wage 

proxy, is highly volatile over time. Additionally, much of the income may come from off 

farm activity. This volatility is explored in the ERS report, Income, Wealth, and the 

Economic Well-Being of Farm Households, Ashok K. Mishra, Hisham S. El-Osta, Mitchell J. 

Morehart, James D. Johnson, and Jeffrey W. Hopkins, Agricultural Economic Report No. 

(AER812) 77 pp, July 2002. It is available at 

http://www.ers.usda.gov/publications/aer812/aer812.pdf. Because there is no truly 

representative wage rate specifically for the farm owners or managers who will be 

applying for an AN Registered User Number, the Department is using an average of the 

loaded wage rates for all affected populations.

For non-farm wages, the wage rates used throughout this analysis reflect the 50th

percentile (median) hourly wage rate for each occupational classification for each industry.

The base hourly wages were pulled from the Bureau of Labor Statistics Occupational 

Employment Statistics Survey (May 2008). Wage rates can be retrieved from BLS several 

different ways. Detailed wage tables are available at various NAICS industry level. The 

Department used the files that matched the corresponding NAICS level of detail in the 

charts below. Those wage rates are available as complete tables at 

http://www.bls.gov/oes/oes_dl.htm, as follows:

National 3-digit NAICS Industry-Specific 

estimates (1,966 KB)

ftp://ftp.bls.gov/pub/special.requests/oes/oesm08in

3.zip

National 4-digit NAICS Industry-Specific 

estimates (4,397 KB)

ftp://ftp.bls.gov/pub/special.requests/oes/oesm08in

4.zip

National 5-digit NAICS Industry-Specific 

estimates (745 KB)

ftp://ftp.bls.gov/pub/special.requests/oes/oesm08in

5.zip

Where exact data matches were unavailable, wage rates from a similar occupational 

classification or aggregate industry were substituted. To reflect a “loaded” wage (including 

employer-paid benefits), each base wage was multiplied by benefit multiplier. BLS reports 

employer costs by industry and broad occupational category which provides different 

multipliers for different wages. These multipliers are listed below and were retrieved on: 

March 30, 2010 from BLS at http://data.bls.gov/cgi-bin/surveymost for complete data 

tables and http://data.bls.gov:8080/PDQ/outside.jsp?survey=cm for menu driven query.

The multiplier is derived for each intersection of occupation and NAICS by dividing total 
108

compensation by wages and salaries. The values range from 1.32 to 1.54 and are multiplied 

times the corresponding wage rate to get a total compensation loaded wage rate. All labor 

pricing throughout the evaluation utilizes the corresponding industry and occupation 

loaded rate developed below.

Table 84 . Hourly Wage Rates at 50th Percentile (median) ($/hour)

Industry Category

NAICS 

Code

Purchasing 

agents, 

except 

wholesale, 

retail, and 

farm products 

Sales 

Manager 

Sales 

representatives, 

wholesale and 

manufacturing, 

technical and 

scientific 

products 

Transportation, 

storage, and 

distribution 

managers 

Office and 

administrat

ive support 

13-1023 11-1022 41-4011 11-3071 43-0000 

Fertilizer applicator services 115100 $27.34 $65.01 $24.36 $30.21 $12.16

Mines 212000 $25.17 $44.33 $29.13 $38.36 $14.78

Blasting services 213000 $24.86 $43.78 $32.36 $38.41 $14.47

AN fertilizer manuf./Fertilizer mixers 325300 $25.51 $45.70 $33.71 $31.85 $15.42

AN explosives manuf. 325900 $24.70 $55.62 $35.40 $35.24 $16.63

Explosives distributors/Laboratory supply 424600 $25.12 $54.35 $33.11 $35.17 $15.58

Farm wholesalers/co-ops 424900 $22.17 $46.86 $26.91 $32.33 $12.89

Retail garden centers 444200 $12.30 $33.31 $24.13 $31.92 $11.76

Landscaping 561730 $21.44 $29.84 $23.09 $33.77 $13.29

Golf courses 713900 $18.96 $39.02 $16.19 $35.35 $11.44

Table 85. Total Compensation/Wage and Salary Multiplier

Industry Category

NAICS 

Code

Purchasing 

agents, 

except 

wholesale, 

retail, and 

farm 

products

Sales 

Manager

Sales 

representatives

, wholesale and 

manufacturing, 

technical and 

scientific 

products

Transportation

, storage, and 

distribution 

managers

Office and 

administrativ

e support 

occupations

13-1023 11-1022 41-4011 11-3071 43-0000

Fertilizer applicator services 115100 1.48 1.33 1.48 1.48 1.43 

Mines 212000 1.43 1.33 1.48 1.48 1.43 

Blasting services 213000 1.54 1.33 1.54 1.48 1.43 

AN fertilizer manuf./Fertilizer mixers 325300 1.54 1.33 1.54 1.48 1.43 

AN explosives manuf. 325900 1.54 1.33 1.54 1.48 1.43 

Explosives distributors/Laboratory supply 424600 1.54 1.33 1.43 1.48 1.43 

Farm wholesalers/co-ops 424900 1.43 1.33 1.43 1.48 1.43 

Retail garden centers 444200 1.33 1.33 1.33 1.48 1.43 

Landscaping 561730 1.32 1.33 1.32 1.48 1.43 

Golf courses 713900 1.32 1.33 1.32 1.48 1.43 
109

Table 86. Loaded Wage Rates at 50th Percentile (Hourly wage rate * multiplier) ($/hour)

Industry Category

NAICS 

Code

Purchasing 

agents, 

except 

wholesale, 

retail, and 

farm products 

Sales 

Manager 

Sales 

representatives, 

wholesale and 

manufacturing, 

technical and 

scientific 

products 

Transportation, 

storage, and 

distribution 

managers 

Office and 

administrat

ive support 

13-1023 11-1022 41-4011 11-3071 43-0000 

Fertilizer applicator services 115100 40.42 86.73 36.02 44.67 17.38

Mines 212000 36.10 59.14 43.07 56.73 21.12

Blasting services 213000 38.24 58.40 49.78 56.80 20.68

AN fertilizer manuf./Fertilizer mixers 325300 39.24 60.97 51.86 47.10 22.04

AN explosives manuf. 325900 38.00 74.20 54.46 52.11 23.76

Explosives distributors/Laboratory supply 424600 38.64 72.51 47.21 52.01 22.26

Farm wholesalers/co-ops 424900 31.61 62.51 38.37 47.81 18.42

Retail garden centers 444200 16.30 44.44 31.98 47.20 16.81

Landscaping 561730 28.37 39.81 30.55 49.94 18.99

Golf courses 713900 25.08 52.05 21.42 52.28 16.35

As discussed at the beginning of this section, the average of rates in Table 75, $41.04 is 

used for farm applicants.

Table 87, Calculation of Population Weighted Average Fully loaded Rate for Opportunity cost 

for purchasers; Low Population

Industry Category

Purchasing 

agents, except 

wholesale, retail, 

and farm 

products

Registration 

Population Share of total

Contribution to 

weighted average

13-1023

Agricultural sector

 Fertilizer mixers 39.24 1,200 0.009 $ 0.36 

 Farm wholesalers/co-ops 31.61 1,500 0.011 $ 0.36 

 Retail garden centers 16.30 1,500 0.011 $ 0.18 

 Fertilizer applicators 40.42 1,500 0.011 $ 0.46 

 Farms 41.04 100,000 0.754 $ 30.95 

 Golf courses 25.08 12,000 0.090 $ 2.27 

 Landscaping services 28.37 9,000 0.068 $ 1.93 

Explosives Sector

 Explosives distributors 38.64 1,500 0.011 $ 0.44 

 Blasting services 38.24 750 0.006 $ 0.22 

 Mines 36.10 3,500 0.026 $ 0.95 

Other

 Laboratory supply 38.64 150 0.001 $ 0.04 

Total 132,600 1.00 $ 38.15 
110

Table 88, Calculation of Population Weighted Average Fully loaded Rate for Opportunity cost 

for purchasers; High Population

Industry Category

Purchasing 

agents, except 

wholesale, retail, 

and farm 

products

Registration 

Population Share of total

Contribution to 

weighted average

13-1023

Agricultural sector

 Fertilizer mixers 39.24 1,800 0.008 $ 0.32 

 Farm wholesalers/co-ops 31.61 3,000 0.014 $ 0.43 

 Retail garden centers 16.30 7,500 0.034 $ 0.56 

 Fertilizer applicators 40.42 3,000 0.014 $ 0.55 

 Farms 41.04 150,000 0.685 $ 28.10 

 Golf courses 25.08 24,000 0.110 $ 2.75 

 Landscaping services 28.37 18,000 0.082 $ 2.33 

Explosives Sector

 Explosives distributors

 Blasting services 38.64 3,000 0.014 $ 0.53 

 Mines 38.24 1,500 0.007 $ 0.26 

 36.10 7,000 0.032 $ 1.15 

Other

 Laboratory supply 38.64 300 0.001 $ 0.05 

Total 219,100 1.00 $ 37.04 
111

Appendix C – Computer and Internet Access on US Farms

The question has been raised of whether the potential regulated community for this 

proposed rule has sufficient access to the Internet for the purpose of conducting one-time 

online registration. The Department provides the following snapshot as information only. 

State specific data is not used in the evaluation. Data from USDA suggests that only slightly 

more than half of all farms in the States likely to be the most affected had access to the 

Internet in 2007. Using historical growth rates on the proliferation of Internet access on 

farms, about 58% of farms will have Internet access in 2009. For farms without direct 

Internet access, however, access to the Internet is generally available in these communities 

through other venues, such as State extension offices, public libraries, etc. 

According to the 2007 Census of Agriculture (USDA) Volume 1, Table 46, nationwide, 63% 

of farms had computer access and 55% had Internet access. There was considerable 

variability between States with regard to Internet access. Wyoming was the most 

“connected” with 75% of farms having Internet access. The least connected State was 

Kentucky with 39% of farms with Internet access. 

Looking at just the top 15 ammonium nitrate consuming States (direct application only), 

which combined account for 88.8% of direct application ammonium nitrate consumption, 

the median percentage of farms with Internet access was slightly more than half at 52% in 

2007. Using data from 2003-2007, we project about 58% of these farms will have Internet

access in 2009. The table below details computer and Internet access by the top 15 

ammonium nitrate consuming States in 2007. Based upon a more recent USDA survey 

(

The Department has assumed that 60% of farms will have Internet access.

http://usda.mannlib.cornell.edu/usda/current/FarmComp/FarmComp-08-14-2009.pdf)
112

Table 89. Computer and Internet Access for Top 15 Ammonium Nitrate Consuming States, 

2007 

Rank State

Percent of 

Farms with 

Computer 

Access

Percent of 

Farms with 

Internet

access

Consumption of 

AN* (short tons 

material) 

% Total US AN 

Consumption

1 Missouri 56% 50% 221,357 21.0%

2 Alabama 48% 40% 123,331 11.7%

3 Tennessee 60% 52% 105,246 10.0%

4 Texas 62% 57% 89,637 8.5%

5 Mississippi 51% 41% 73,150 6.9%

6 Kentucky 50% 39% 58,090 5.5%

7 Kansas 68% 57% 43,803 4.1%

8 Arkansas 59% 52% 37,714 3.6%

9 Georgia 46% 42% 35,553 3.4%

10 Oklahoma 55% 51% 29,870 2.8%

11 Louisiana 57% 55% 28,022 2.7%

12 North Carolina 61% 55% 27,384 2.6%

13 Wyoming 82% 75% 23,967 2.3%

14 Florida 61% 55% 20,611 2.0%

15 Nebraska 66% 55% 20,207 1.9%

Top 15 59% 52% 937,942 88.8%

Total US 63% 55% 1,056,148 100.0%

*Direct application only

Sources: Computer access is available in table 46, Volume 1, of the 2007 U.S. Census of Agriculture available at 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/usv1.pdf, p. 619 or 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_US_State_Level/st99_2_04

6_046.pdf. Phone conversations with two State officials who are a part of Association of American Plant Food 

Control Officials provided the Department with their State information on direct application of ammonium nitrate. 

Using their information, application rates were then used to estimate State consumption. Additionally, 

"Commercial Fertilizers 2007", The Fertilizer Institute (report is not online but is available for order at 

http://www.tfi.org/publications/commercialorder.pdf) provided additional consumption information. The 

Department invites comments providing improved data sources.