Office of Infrastructure Protection

National Protection and Programs Directorate

U.S. Department of Homeland Security 

Washington, DC 20528

CHEMICAL FACILITY ANTI-TERRORISM STANDARDS

ADVANCE NOTICE OF PROPOSED RULEMAKING

LISTENING SESSION HELD IN PHILADELPHIA, PA ON

OCTOBER 7, 2014

CONTENTS:

Agenda

Transcript
Chemical Facility Anti-Terrorism Standards

Advance Notice of Proposed Rulemaking (CFATS ANPRM)

October 7, 2014 Listening Session 

Hosted by the Department of Homeland Security (DHS) – Montgomery County Public Safety Office and Fire Academy Auditorium, 

1175 Conshohocken Road, Conshohocken, PA 19428

Agenda

8:00 a.m. – 9:00 a.m. Registration

9:00 a.m. – 9:20 a.m. Welcome, Introductions, and Overview

Kate Finnerty, Facilitator

Amy Graydon, Department of Homeland Security, Office of Infrastructure Protection

9:20 a.m. – 9:30 a.m. Listening Session Format

Kate Finnerty, Facilitator

9:30 a.m. – 11:00 a.m. Public Listening Session

Comments from Listening Session Participants

11:00 a.m. – 11:15 a.m. BREAK

11:15 a.m. – 12:15 p.m. Public Listening Session

Comments from Listening Session Participants

12:15 p.m. – 12:45 p.m. Open Session (as time permits)

12:45 p.m. – 1:00 p.m. Closing Comments

1:00 p.m. Adjournment

Persons may also submit written comments to U.S. Department of Homeland Security, National Protection and Programs Directorate, 

Office of Infrastructure Protection, Infrastructure Security Compliance Division, 245 Murray Lane, Mail Stop 0610, Arlington, VA 20528-0610 

or through the Federal eRulemaking Portal at http://www.regulations.gov.

For more information on the CFATS ANPRM, please visit https://www.dhs.gov/CFATS-Rulemaking.
TRANSCRIPT OF PROCEEDINGS

IN THE MATTER OF: )

 )

DEPARTMENT OF HOMELAND SECURITY, )

CFATS ADVANCE NOTICE OF PROPOSED )

RULEMAKING, LISTENING SESSION )

REVISED AND CORRECTED TRANSCRIPT

Pages: 1 through 27

Place: Conshohocken, Pennsylvania

Date: October 7, 2014

HERITAGE REPORTING CORPORATION

Official Reporters

1220 L Street, N.W., Suite 600

Washington, D.C. 20005-4018

(202) 628-4888

contracts@hrccourtreporters.com
1

BEFORE THE DEPARTMENT OF HOMELAND SECURITY

IN THE MATTER OF: )

 )

DEPARTMENT OF HOMELAND )

SECURITY, CFATS ADVANCE )

NOTICE OF PROPOSED )

RULEMAKING, LISTENING )

SESSION )

Montgomery County Public

Safety Training and Fire

Academy Auditorium

1175 Conshohocken Road

Conshohocken, Pennsylvania

Tuesday,

October 7, 2014

The parties met, pursuant to the notice, at

9:05 a.m.

BEFORE: KATE FINNERTY

 Facilitator

PARTICIPANTS:

AMY GRAYDON, Branch Chief

DHS Infrastructure Security Compliance Division

MICHAEL KENNEDY

Agricultural Retailers Association

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1 P R O C E E D I N G S

2 (9:05 a.m.)

3 MS. FINNERTY: Good morning and welcome to 

4 the listening session for the Chemical Facility Anti5 Terrorism Standards Advance Notice of Proposed 

6 Rulemaking, or CFATS ANPRM, that was issued by the 

7 U.S. Department of Homeland Security on August 18, 

8 2014. We are glad that you were able to join us 

9 today.

10 This is the eighth and final listening 

11 session in a series that has been held across the 

12 country, including six in person and two via Webinar.

13 My name is Kate Finnerty with Energetics Incorporated. 

14 DHS, who is leading the proposed rulemaking, has 

15 asked me to be your moderator today.

16 Before we get started, I would like to make 

17 a couple of announcements. All stakeholders are 

18 welcome to submit written comments on the CFATS ANPRM 

19 in addition to speaking here today. The ways to 

20 submit public written comments are listed on your 

21 agenda and they are also located in the Federal 

22 Register notice. They include the Federal eRulemaking 

23 portal at www.regulations.gov and there's also a

24 physical mailing address should you not have internet 

25 access.

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1 The deadline to submit public comments is 

2 October 17, 2014, which is 60 calendar days after 

3 publication of the ANPRM in the Federal Register.

4 The comments provided during this session 

5 are being transcribed for note-taking purposes. A 

6 transcript of each listening session will be posted in 

7 a docket in the Federal Register at a later date. As 

8 such, for those making public comments today, please 

9 use the available microphones.

10 In case of emergency, you may exit out at 

11 the back of the auditorium into the lobby and outside 

12 through the glass doors. There is also a door to the 

13 left of the stage that has an exit door straight 

14 outside.

15 Restrooms are located in the lobby. As a 

16 courtesy to all those participating, please put your 

17 phones on mute. And, please no food or beverages here 

18 in the auditorium today.

19 The purpose of today's listening session is 

20 to gather public comments, data, or views on how the 

21 current CFATS regulation, 6 CFR Part 27, issued in 

22 2007, might be modified. Issuing the Advance Notice 

23 of Proposed Rulemaking enables the Department to 

24 provide stakeholders with an opportunity to provide 

25 comments and suggestions for identifying ways that the 

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1 program may be more effective in achieving its 

2 regulatory objectives.

3 We are going to begin with opening remarks, 

4 which will include a brief overview of the CFATS 

5 program. The remainder of the session today will be 

6 dedicated to listening to you.

7 At this time, I would like to introduce Ms. 

8 Amy Graydon, Branch Chief with the DHS Infrastructure 

9 Security Compliance Division. Ms. Graydon.

10 MS. GRAYDON: Good morning. I want to thank 

11 you for joining us today. I was going to stand up, 

12 but I think everybody can see me okay, so I think 

13 we're good. But, yes, I definitely appreciate you 

14 coming out this morning to hopefully give us some of 

15 your thoughts on how we can improve the CFATS program.

16 With that, the Homeland faces a persistent 

17 and evolving threat from terrorist groups and cells. 

18 Chemical facilities potentially are attractive targets 

19 as a successful attack on some chemical facilities 

20 could potentially cause a significant number of deaths 

21 and injuries. Certain chemical facilities possess 

22 materials that could be stolen or diverted and used or 

23 converted into weapons for use offsite.

24 In Section 550 of the DHS Appropriations Act 

25 of 2007, Congress authorized the Department to 

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1 regulate security at high-risk chemical facilities. 

2 Under this section, covered facilities must perform 

3 Security Vulnerability Assessments, SVAs, and 

4 implement Site Security Plans, SSPs, containing 

5 security measures that meet DHS-defined Risk-Based 

6 Performance Standards. The Department developed the 

7 Chemical Facility Anti-Terrorism Standards, 6 CFR Part 

8 27, to implement this authority.

9 To determine if a facility is subject to 

10 CFATS, DHS looks at the unique circumstances faced by 

11 the facility, starting with the quantities of 

12 Chemicals of Interest, COI, the facility possesses.

13 Potential regulation is not based on 

14 facility type but instead based on that different 

15 types of facilities may be covered by CFATS, so it 

16 could be your traditional chemical manufacturing; it 

17 could be oil and gas operations; it could be chemical 

18 repackaging; warehouse and distributors; hospitals; 

19 semi-conductor manufacturers; paint manufacturers; 

20 colleges and universities; and mining facilities.

21 Congress did exempt several types of 

22 facilities from the regulation: facilities regulated 

23 under the Maritime Transportation Security Act; 

24 facilities subject to regulation by the Nuclear 

25 Regulatory Commission; facilities owned or operated by 

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1 the Department of Defense or the Department of Energy; 

2 and public water systems and water treatment works 

3 regulated under certain federal water quality laws 

4 administered by the U.S. Environmental Protection 

5 Agency.

6 Since the program's inception more than 

7 3,000 facilities have voluntarily removed or reduced 

8 their onsite quantities of Chemicals of Interest or 

9 modified processes to the point where they are no 

10 longer considered high-risk. These actions have 

11 helped reduce the number of high-risk chemical 

12 facilities throughout the Nation and have 

13 correspondingly made the Nation more secure.

14 Some of our statistics: As of October 6, 

15 2014, CFATS covers 3,676 facilities; 3,051 are final16 tiered facilities and 625 are preliminarily-tiered 

17 facilities across all the states.

18 DHS has received and is in the process of 

19 reviewing an estimated 4,600 Site Security Plans and 

20 Alternate Security Programs. Of these, 2,246 Site 

21 Security Plans have been authorized, and 1,198 have 

22 been approved, and so we are pleased to have reached 

23 that number by the end of the fiscal year.

24 The first Authorization Inspection was 

25 conducted in the summer of 2010, and as of October 6, 

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1 we are pleased to say that we've conducted 1,607 

2 Authorization Inspections.

3 As you can hear, the Division is working to 

4 continuously strengthen the program and improve 

5 implementation of CFATS. Although work remains to be 

6 done, in the past two years significant progress has 

7 been made. This includes improving the Site Security 

8 Plan review process and increasing the pace of SSP 

9 reviews and approvals; engagement with industry on the 

10 development of Alternate Security Program templates; 

11 working with experts to evaluate and validate or 

12 recommend ways to improve the CFATS risk-tiering 

13 methodology; and introducing game-changing 

14 initiatives, such as one-day inspections with smaller 

15 inspection teams, corporate approach for companies 

16 with multiple facilities, and increased pre-inspection 

17 coordination and outreach.

18 Alternate Security Programs are one path to 

19 compliance. The Division is exploring with industry 

20 the possibility of creating segment-specific ASPs that 

21 include options for best practices that may be applied 

22 to certain types of facilities. We've met with 

23 various industry associations on this topic and 

24 continue to look for new opportunities for engagement.

25 The work industry has done with the 

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1 Department to develop the ASP is just a prime example 

2 of how working with industry on a risk-based 

3 performance program has been a success.

4 The Department supports permanent 

5 authorization for the CFATS program and is committed 

6 to working with Congress and other security partners 

7 to establish a permanent authority for the CFATS 

8 program.

9 DHS firmly believes permanent authorization 

10 will provide industry with the necessary stability to 

11 move forward in effectively implementing CFATS and 

12 will send a clear message to facilities that may be 

13 seeking to avoid their obligation to report dangerous 

14 chemicals that the CFATS program is here to stay.

15 H.R. 4007, the CFATS Authorization and 

16 Accountability Act of 2014, was passed in the U.S. 

17 House of Representatives in early July. The bill 

18 would permanently authorize the CFATS program and 

19 authorize appropriations for three fiscal years.

20 The Senate Committee on Homeland Security and 

21 Governmental Affairs passed the Senate version of the 

22 bill in late July. We are grateful that Congress has 

23 recognized the progress the program has made and the 

24 importance of permanently authorizing the program.

25 In August 2013, President Obama issued 

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1 Executive Order 13650, Improving Chemical Facility 

2 Safety and Security. This EO was designed to improve 

3 the safety and security of chemical facilities and 

4 reduce risks to workers, communities, and first 

5 responders.

6 The EO Working Group is tri-chaired by the 

7 Department of Homeland Security, the Department of 

8 Labor, and the U.S. Environmental Protection Agency. 

9 In early June, in fact, June 6, 2014, a status report 

10 to the President was released, the title of which was 

11 "Actions to Improve Chemical Facility Safety and 

12 Security: A Shared Commitment."

13 Recognizing that information, actions, and 

14 experiences of stakeholders are essential to 

15 understanding, managing, and mitigating the risks of 

16 potential chemical facility hazards, the Working Group 

17 initiated a robust stakeholder outreach to assist in 

18 identifying successes and best practices. The 

19 outreach included engagement across all levels of 

20 government, with owners and operators, industry 

21 associations, community groups, labor organizations, 

22 and just in general, communities affected by chemical 

23 plant disasters.

24 The status report highlights activities 

25 undertaken already to improve chemical facility safety 

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1 and security and outlines an action plan for moving 

2 forward. The action plan includes five thematic 

3 areas, which are strengthening community planning and 

4 preparedness; enhancing federal operation 

5 coordination; improving data management; modernizing 

6 policies and regulation; and incorporating stakeholder 

7 feedback in developing best practices.

8 The status report is a milestone, not an 

9 endpoint, and the most important lessons learned from 

10 this effort is that every stakeholder group in the 

11 chemical facility community has a role in ensuring 

12 safe and secure operations.

13 Safety and security are a shared commitment, 

14 and DHS along with our interagency partners are making 

15 progress on this front. One of the actions included 

16 in the report was issuing an Advance Notice of 

17 Proposed Rulemaking for the CFATS program. As we work 

18 to mature the CFATS regulatory program, DHS is 

19 initiating this rulemaking process to help identify 

20 how to make the CFATS program more effective in 

21 achieving its regulatory objectives.

22 DHS believes that after seven years of 

23 implementing the program, both DHS and the regulated 

24 community have gained first-hand insight into how a 

25 nonprescriptive security regulation can be most 

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1 effective.

2 The Advance Notice of Proposed Rulemaking 

3 provides an opportunity for the Department to hear and 

4 consider the views of the regulated industry and other 

5 interested members of the public on their 

6 recommendations for program modifications.

7 The Department invites interested persons to 

8 submit written comments, data, or views on how the 

9 current CFATS regulation, as Kate mentioned, 6 CFR 

10 Part 27, might be improved. The public is encouraged 

11 to comment on all aspects of the program. The 

12 rulemaking covers all regulatory and guidance 

13 documents, including Appendix A, and the list of 

14 Chemicals of Interest covered by the program.

15 In particular, we asked for comment on 

16 several areas: the general regulatory approach; 

17 treatment of nontraditional chemical facilities; 

18 clarification of terminology; Risk-Based Performance 

19 Standards; Appendix A; consideration for small 

20 businesses; and alignment with other regulatory 

21 programs.

22 Written comments may be submitted online 

23 through the Federal eRulemaking portal or via post, 

24 regular U.S. postal mail, and the addresses are on the 

25 agenda.

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1 So, again, I want to thank you for taking 

2 the time to be here today. We definitely look forward 

3 to hearing your ideas and thoughts as we move into the 

4 next chapter of the CFATS program.

5 MS. FINNERTY: Thank you, Ms. Graydon.

6 The remainder of the session today is set 

7 aside to hear from you, the stakeholders, but before 

8 we do that I would like to outline the format and 

9 ground rules for this session.

10 This is a listening session, with the 

11 purpose to hear a broad set of opinions from across 

12 the spectrum of stakeholders who have an interest in 

13 improving and streamlining the CFATS rule. We hope to 

14 hear a range of suggestions, and all viewpoints are 

15 welcome. As such, we are not seeking consensus or 

16 discussion today on any of the topics.

17 DHS is interested in comments on the topics 

18 described in Part 4 of the ANPRM and also listed by 

19 Ms. Graydon a few moments ago. All presenters are 

20 asked to keep their comments directly related to the 

21 topics contained in the rule.

22 The rest of today's listening session will 

23 include two parts. In a few minutes, I will ask those 

24 who have signed up to present today to come forward. 

25 Individuals will have a maximum of five minutes to 

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1 present to the panel, which does include any 

2 introduction to your remarks. The panel then may ask 

3 clarifying questions.

4 I will then open the floor to anyone who 

5 would like to speak on the topics, and you will also 

6 have a maximum of five minutes to present. To help 

7 with time-keeping, I will show a yellow card when you 

8 have one minute remaining and a red card when your 

9 time is up. We ask that you respect everyone's time 

10 and stay within the designated timeframes.

11 If there are no questions on the process 

12 today, let's go ahead and get started. I would like 

13 to start with individuals who registered to present 

14 this morning. Mr. Kennedy, if you are still 

15 interested in providing public comments --

16 MR. KENNEDY: Sure.

17 MS. FINNERTY: -- please join us at the 

18 microphone.

19 (Pause.)

20 MR. KENNEDY: Greetings. My name is

21 Michael -- wow, that's loud. That is loud.

22 (Pause.)

23 MR. KENNEDY: How are you doing? My name is 

24 Michael Kennedy. I represent the Agricultural 

25 Retailers Association. Our membership is derived from 

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1 7,200 sites in America.

2 MS. GRAYDON: Michael, hold on just one 

3 second.

4 (Pause.)

5 MS. GRAYDON: As long as we can hear him. I 

6 feel confident that I will be able to hear you.

7 MR. KENNEDY: I think you'll be able to hear 

8 me.

9 MS. GRAYDON: Thank you. Sorry, go ahead, 

10 sir.

11 MR. KENNEDY: We would like to comment on 

12 making the Department of Homeland Security's Chemical 

13 Facility Anti-Terrorism Standards better and improving 

14 a seven-year process where we could add a good amount 

15 of comments, issues, and also concerns with the 

16 program. A little bit about our membership, and I 

17 want to include some detail as we are part of the DHS 

18 Chemical Sector Coordinating Council. ARA has 

19 testified previously in support of long-term 

20 reauthorization. I personally have drafted many of 

21 the words that went into that. Our association is 

22 also a large part of the regulated community. Most of 

23 our members are regulated because they have or store 

24 anhydrous ammonium.

25 I don't know exactly what number or 

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1 percentage of the regulated community that we're at, 

2 but we speculate that it's upward of 1,000. That 

3 means one-fourth of all regulated CFATS facilities are 

4 part of our membership.

5 We are a farm supply dealer, so we give 

6 anything from seed, pesticides, fertilizers or 

7 anything that a farm needs, and certainly we're a 

8 cooperating partner in the regulated community. We 

9 understand the importance of chemical safety and 

10 security.

11 We've also initiated a Responsible Ag 

12 Program that definitely DHS could leverage. A 

13 Responsible Ag program is like some of the other 

14 chemical programs, but it's different. We've taken 

15 all the federal regulations and we've tried to put 

16 them into a checklist so retailers, so our members can 

17 comply with them. Instead of looking through CFR X,Y 

18 and Z, there's a straight-line checklist.

19 This does a couple things. It improves 

20 document industry-wide compliance. It prepares 

21 facilities for the regulated inspections, also 

22 including CFATS inspections. It validates internal 

23 compliance programs, and it demonstrates 

24 responsibility and transparency to public and to 

25 federal regulators.

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1 I will go into how it works, but it's 

2 basically a third-party compliance program, so your 

3 third party or an individual will get trained on these 

4 regulations and they will go out and do an inspection, 

5 pre-inspection.

6 I had just some procedural issues with the 

7 Advance Notice of Proposed Rulemaking, and I wanted to 

8 make sure in the next stage of the rulemaking, since 

9 this is an advance notice, not a notice for proposed 

10 rule, that DHS look into a couple things.

11 One, they've got to bifurcate issues. 

12 There's issues that could be changed through 

13 regulation and not changed through regulations. There 

14 are issues that could be changed tomorrow and others 

15 will need a formal rulemaking. DHS has to be specific 

16 in determining which one they think needs a rulemaking 

17 and which one they think can be done tomorrow.

18 As far as the advance notice, itself, it 

19 lacks a lot of details. It gives open-ended 

20 conclusions based on what the public thinks or what 

21 facilities think about what direction DHS should go. 

22 On one hand, I could understand this because this 

23 broadly-brushed advance notice of proposed rule gives 

24 DHS the flexibility to go either way on some of these 

25 issues.

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1 MS. FINNERTY: One minute.

2 MR. KENNEDY: I have one minute?

3 MS. FINNERTY: Yes, sir.

4 MR. KENNEDY: Can I ask for a two-minute 

5 extension?

6 MS. FINNERTY: I'm sorry. There will be an 

7 open comment period that you may use to return.

8 MR. KENNEDY: So I just want to go on the 

9 record I'm being denied a two-minute extension.

10 MS. FINNERTY: Every person has five minutes 

11 and you may return during the open comment period to 

12 finish your comments.

13 MR. KENNEDY: We believe in a holistic 

14 approach to CFATS when it comes to looking at 

15 nontraditional chemical regulations. We think that 

16 DHS should get cost impact assessments. They should 

17 look at the adverse effects to agribusinesses and look 

18 at reasonably feasible alternative approaches.

19 ARA does not support a two-inspection 

20 process or pre-authorizations. We find that this is a 

21 waste of time, considerable taxpayers' money.

22 MS. FINNERTY: Thank you, sir, for your 

23 comments.

24 MR. KENNEDY: ARA supports the use of 

25 Alternative Security Programs. ARA also --

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1 MS. FINNERTY: Thank you, Mr. Kennedy.

2 MR. KENNEDY: -- supports the clarification 

3 --

4 MS. FINNERTY: I appreciate your comments, 

5 sir.

6 MR. KENNEDY: -- of terminologies.

7 MS. FINNERTY: Sir, if you would please wrap 

8 up your comments. You may return during the open 

9 comment period.

10 MR. KENNEDY: If you just will allow me a 

11 minute, I will do that succinctly.

12 MS. FINNERTY: Sir, you may return --

13 MR. KENNEDY: ARA highly considers --

14 MS. FINNERTY: -- during the comment period.

15 MR. KENNEDY: -- diminished chemical 

16 responsibilities of COI when mixed. We have a big 

17 issue with the mixture rule. We do not find that it's 

18 threat-based and it has no determination in science in 

19 making those issues. That will be outlined in our 

20 comments and I will include them and attach them for 

21 the record.

22 MS. FINNERTY: Thank you, sir. The open 

23 comment period will be available for you to continue 

24 your comments.

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1 arranged speakers arrived today?

2 MS. BLACKMOOR: No.

3 MS. FINNERTY: Thank you, ma'am.

4 I would like to now open the floor for 

5 additional public comments in our open session. Are 

6 there any additional members of the public here today 

7 that would like to make public comment?

8 (No response.)

9 MS. FINNERTY: Okay. Sir, would you like to 

10 return to the mike to complete your comments?

11 MR. KENNEDY: I would.

12 MS. FINNERTY: You will have an additional

13 five minutes.

14 MR. KENNEDY: Thank you very much. I 

15 appreciate it.

16 MS. FINNERTY: You're welcome.

17 MR. KENNEDY: I want to go back a little 

18 bit. We absolutely support the Alternative Security 

19 Programs. We think it is a good thing. DHS has 

20 formally come to us to look for an Alternative 

21 Security Program for the agricultural sector. We 

22 think this is a good idea considering the number of 

23 facilities we have out there.

24 Unfortunately, some of the talks that we've 

25 had stalled. We would like to reengage that, but we 

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1 also want, and this is an issue for part of our 

2 membership, our members have already completed a long, 

3 extensive Site Security Plan. Now I'm asking them to 

4 do an Alternative Security Program also. What would 

5 really help the Department of Homeland Security in 

6 doing this is if they could actually formally present 

7 something in writing, not at a summit, not somewhere 

8 else, where they actually support Alternative Security 

9 Program and the use potentially over SSPs.

10 This would certainly not only help the whole 

11 process, the SSP process, but it would also help 

12 inspectors that inspect and I think have a bigger 

13 comfort ability with Alternative Security Programs 

14 than they do with SSPs.

15 The CSAT tool is cumbersome and quirky. It 

16 take a lot of man-hours to fill this out. Our 

17 association is looking at instead taking this through 

18 a different way of thinking, of looking at each 

19 question, or maybe doing it by sector, which might not 

20 be a bad idea, is that you should try to reduce the 

21 time spent in actually filling the thing out, and this 

22 will have a profound effect when you go to the next 

23 Notice of Proposed Rulemaking when OMB asks you how 

24 much time does it cost, what are the costs, what are 

25 the impacts. I think that's a good idea.

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1 In ARA, the corporate approach has been well 

2 accepted by a lot of our members. Many of our members 

3 not only have 10 to 20 sites, some have over 100 

4 sites. They find it beneficial that a compliance case 

5 manager is with them, understands the program, helps 

6 them with revisions of SSPs, which I think reduced a 

7 lot of time. Also, they went through a lot of the 

8 cyber and other Risk-Based Performance Standards 

9 beforehand when inspectors can come up on the back end 

10 and only inspect certain issues that need to be 

11 rectified at the site specifically.

12 We have serious issues with the 

13 classification of terminology and the mixture rule. 

14 This mixture rule I think is outdated and really needs 

15 to be looked at under a microscope, not only under a 

16 chemical microscope as far as DHS understanding how 

17 mixtures work, but also in a regulatory framework.

18 The issue comes up with all of the other 

19 release threats, the flammability threats, have a 

20 threshold of, well, if you have a mixture and it's 

21 more than 1 percent, then therefore it's a whole COI 

22 and you have to consider the whole thing.

23 But, when it comes to IED threats or theft 

24 and diversion, theft and diversion -- where is it? 

25 Theft and diversion, yeah, theft and diversion IED 

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1 threats, which a lot of our members handle ammonium 

2 nitrate, potassium chlorate, potassium nitrate, and 

3 other issues, it goes on to say that chemicals of 

4 interest, a facility shall count the total quality of 

5 all commercial grades of chemicals towards the STQ --

6 MS. FINNERTY: You have one minute, sir.

7 MR. KENNEDY: -- unless a specific minimum 

8 concentration is available. We find that this does 

9 not make sense. DHS is proposing to change the word 

10 "commercial," commercial grade. We find that the 

11 whole sector should be reevaluated.

12 In closing, I'd like 30 seconds. Material 

13 modifications -- we find, considering that we have 

14 chemicals onsite for sometimes 30 days at a time, 

15 sometimes 40 days, submitting a material modification 

16 is a paperwork burden. It should be reduced and there 

17 should be some sort of rule that comes out of this to 

18 change that.

19 Risk-Based Performance Standards -- they are 

20 inconsistent and sometimes duplicative. I won't go 

21 into that many details.

22 In closing, I just want to say that the 

23 Department of Homeland Security has to put out an 

24 ammonium nitrate fertilizer registration rule.

25 MS. FINNERTY: Thank you, sir.

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1 MR. KENNEDY: Thank you.

2 MS. FINNERTY: Ms. Graydon, do you have 

3 follow-up questions?

4 MS. GRAYDON: So you mentioned kind of the 

5 issues surrounding holding times. Do you have 

6 suggestions on how that might be worked?

7 MR. KENNEDY: Oh, you mean for material 

8 modifications? We think 30 days is pretty good. The 

9 problem that you might have if you start looking into 

10 non -- was it nontraditional chemical facilities? --

11 is that is "give or take," you know, within maybe 45 

12 to 60 days, is the amount that someone is going to 

13 hold something onsite.

14 As far as ag retailers, we have a growing 

15 season, so we'll be pretty much hot and heavy from 

16 fall up until maybe the winter, stop, and then we'll

17 get another shipment in the spring. So, for us to 

18 submit every three or four months, that really doesn't 

19 make sense. I sort of propose that either in your SSP 

20 or in an email or some sort of documentation that you 

21 can express when exactly you're holding these COIs.

22 We're pretty predictable per se. Some 

23 industries aren't that predictable. Some industries 

24 will get it and then automatically use it within like 

25 three or four days. So I guess I would say that there 

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1 is no one-size-fits-all, but I think ISCD should maybe 

2 frame it as a -- you know, you could say a reasonable 

3 amount of time or predictable amount of time that an 

4 inspector can come in and validate that.

5 MS. FINNERTY: Additional questions, Ms. 

6 Graydon?

7 MS. GRAYDON: So talk a little bit more 

8 about the mixture rule. Can you describe a little bit 

9 more what you would envision?

10 MR. KENNEDY: So right now one of our 

11 clients has two COIs, and they're both basically based 

12 on this rule of commercial grade. Both of these COIs 

13 mixed together do not make something that is a COI. 

14 However, under the rule, you know, if it's commercial 

15 grade, which is kind of sort of up in the air, and I 

16 think DHS is looking for comment, doesn't solve that 

17 issue because it really poses -- once these two things 

18 are mixed together it poses no threat.

19 We've proposed this and DHS has actually 

20 gone to their facility and said, yeah, we're kind of 

21 right on this. I mean, we understand it, but here are 

22 our rules. This is the way we define it. And, we've 

23 sort of -- regulatory-wise we painted ourselves into a 

24 corner because we have these hard and fast rules.

25 Now there is a caveat here. The Assistant 

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1 Secretary in Clause 27.20 has the power to determine 

2 whether a facility is high-risk or not high-risk. We 

3 would argue that if you look at the chemical 

4 properties of this issue that that facility is not 

5 high-risk. Therefore, the Assistant Secretary should 

6 make that determination.

7 MS. GRAYDON: Thanks for the clarification.

8 MR. KENNEDY: No problem.

9 MS. FINNERTY: Thank you, Mr. Kennedy.

10 We are currently in open session for the 

11 CFATS ANPRM Listening Session. Are there additional 

12 members of the public that would like to submit public 

13 comments at this time?

14 (No response.)

15 MS. FINNERTY: Seeing none, I will keep the 

16 floor open until 12:45 today for additional public 

17 comments. I will return to the podium when additional 

18 speakers are ready to present their comments. Until 

19 that time, please move about the room and speak with 

20 your colleagues today. Thank you.

21 (Whereupon, a short recess was taken.)

22 MS. FINNERTY: Good afternoon and thank you 

23 for participating in today's listening session on the 

24 Chemical Facility Anti-Terrorism Standards Advance 

25 Notice of Proposed Rulemaking.

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1 I will now turn to Ms. Amy Graydon for 

2 closing comments.

3 MS. GRAYDON: I just want to thank you for 

4 staying and know we appreciate the opportunity to have 

5 people come and present their comments and to hear 

6 what people think, you know, we can do to improve the 

7 CFATS program, so thanks.

8 MS. FINNERTY: Thank you, Ms. Graydon.

9 Please visit the docket in the Federal 

10 Register to view listening session notes and to submit 

11 additional written public comments.

12 We are now adjourned.

13 (Whereupon, at 12:50 p.m., the listening 

14 session in the above-entitled matter was concluded.)

15 //

16 //

17 //

18 //

19 //

20 //

21 //

22 //

23 //

24 //

25 //

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REPORTER'S CERTIFICATE

DOCKET NO.: N/A

CASE TITLE: DHS CFATS ANPRM Listening Session

HEARING DATE: October 7, 2014

LOCATION: Conshohocken, Pennsylvania

I hereby certify that the proceedings and 

evidence are contained fully and accurately on the 

tapes and notes reported by me at the hearing in the 

above case before the Department of Homeland Security.

Date: October 7, 2014

 

David W. Jones

Official Reporter

Heritage Reporting Corporation

Suite 600

1220 L Street, N.W.

Washington, D.C. 20005-4018

Heritage Reporting Corporation

(202) 628-4888