O ffic e o f Infrast r uctur e Protection Nationa l Protect i on a n d Program s Directorate U. S . D e partment o f Homela n d S e curi t y Washington , D C 2 0528



### 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: 2 0 a .m. Welcome, Introductions, and Overview Kate Finnerty , Facilitator

Amy Graydon

, Department of Homeland Security, Office of Infrastructure Protection

9 : 2 0 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

11:0 0 a .m.

– 11:15 a .m. BREAK

11:15 a.m.

– 12:15 p .m. Public Listening S ession 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 205 2 8

- 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

- R ulemaking

.

# 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.com1

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

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

(9:05 a.m.) 2

MS. FINNERTY: Good morning and welcome to 3

the listening session for the Chemical Facility Anti

4

Terrorism Standards Advance Notice of Proposed 5

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

U.S. Department of Homela nd Security on August 18, 7

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

today. 9

This is the eighth and final listening 10

session in a series that has been held across the 11

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

My name is Kate Finnerty with Energetics Incorporated. 13

DHS, who is leading the proposed rulemaking, has 14

asked me to be your moderator today. 15

Before we get started, I would like to make 16

a couple of announcements. All stakeholders are 17

welcome to submit written comments on the CFATS ANPRM 18

in addition to speaking here today. The ways to 19

submit public written comments are listed on your 20

agenda and they are also located in the Federal 21

Register notice. They include the Federal eRulemaking 22

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

physical mailing address should you not have internet 24

access. 25

Heritage Reporting Corporation (202) 628

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The deadline to submit public comments is 1

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

publication of the ANPRM in the Federal Register

. 3

The comments provided during this session 4

are b eing transcribed for note

- taking purposes. A 5

transcript of each listening session will be posted in 6

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

such, for those making public comments today, please 8

use the available microphones. 9

In case of emer gency, you may exit out at 10

the back of the auditorium into the lobby and outside 11

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

left of the stage that has an exit door straight 13

outside. 14

Restrooms are located in the lobby. As a 15

courtesy to all tho se participating, please put your 16

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

in the auditorium today. 18

The purpose of today's listening session is 19

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

current CFATS regulation, 6 CFR Part 27, is sued in 21

2007, might be modified. Issuing the Advance Notice 22

of Proposed Rulemaking enables the Department to 23

provide stakeholders with an opportunity to provide 24

comments and suggestions for identifying ways that the 25

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program may be more effective in achiev ing its 1

regulatory objectives. 2

We are going to begin with opening remarks, 3

which will include a brief overview of the CFATS 4

program. The remainder of the session today will be 5

dedicated to listening to you. 6

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

Amy Graydon, Branch Chief with the DHS Infrastructure 8

Security Compliance Division. Ms. Graydon. 9

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

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

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

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

coming out this morning to hopefully give us some of 14

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

With that, the Homeland faces a persistent 16

and evolving threat from terrorist groups and cells. 17

Chemica l facilities potentially are attractive targets 18

as a successful attack on some chemical facilities 19

could potentially cause a significant number of deaths 20

and injuries. Certain chemical facilities possess 21

materials that could be stolen or diverted and used or 22

converted into weapons for use offsite. 23

In Section 550 of the DHS Appropriations Act 24

of 2007, Congress authorized the Department to 25

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regulate security at high

- risk chemical facilities. 1

Under this section, covered facilities must perform 2

Security Vuln erability Assessments, SVAs, and 3

implement Site Security Plans, SSPs, containing 4

security measures that meet DHS

- defined Risk

- Based 5

Performance Standards. The Department developed the 6

Chemical Facility Anti

- Terrorism Standards, 6 CFR Part 7

27, to implement this authority. 8

To determine if a facility is subject to 9

CFATS, DHS looks at the unique circumstances faced by 10

the facility, starting with the quantities of 11

Chemicals of Interest, COI, the facility possesses. 12

Potential regulation is not based on 13

facil ity type but instead based on that different 14

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

could be your traditional chemical manufacturing; it 16

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

repackaging; warehouse and distributors; hospitals; 18

s emi

- conductor manufacturers; paint manufacturers; 19

colleges and universities; and mining facilities. 20

Congress did exempt several types of 21

facilities from the regulation: facilities regulated 22

under the Maritime Transportation Security Act; 23

facilities subj ect to regulation by the Nuclear 24

Regulatory Commission; facilities owned or operated by 25

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the Department of Defense or the Department of Energy; 1

and public water systems and water treatment works 2

regulated under certain federal water quality laws 3

administere d by the U.S. Environmental Protection 4

Agency. 5

Since the program's inception more than 6

3,000 facilities have voluntarily removed or reduced 7

their onsite quantities of Chemicals of Interest or 8

modified processes to the point where they are no 9

longer consi dered high

- risk. These actions have 10

helped reduce the number of high

- risk chemical 11

facilities throughout the Nation and have 12

correspondingly made the Nation more secure. 13

Some of our statistics: As of October 6, 14

2014, CFATS covers 3,676 facilities; 3,05 1 are final

15

tiered facilities and 625 are preliminarily

- tiered 16

facilities across all the states. 17

DHS has received and is in the process of 18

reviewing an estimated 4,600 Site Security Plans and 19

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

Security P lans have been authorized, and 1,198 have 21

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

that number by the end of the fiscal year. 23

The first Authorization Inspection was 24

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

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we are pleased to say t hat we've conducted 1,607 1

Authorization Inspections. 2

As you can hear, the Division is working to 3

continuously strengthen the program and improve 4

implementation of CFATS. Although work remains to be 5

done, in the past two years significant progress has 6

be en made. This includes improving the Site Security 7

Plan review process and increasing the pace of SSP 8

reviews and approvals; engagement with industry on the 9

development of Alternate Security Program templates; 10

working with experts to evaluate and validate or 11

recommend ways to improve the CFATS risk

- tiering 12

methodology; and introducing game

- changing 13

initiatives, such as one

- day inspections with smaller 14

inspection teams, corporate approach for companies 15

with multiple facilities, and increased pre

- inspection 16

coordination and outreach. 17

Alternate Security Programs are one path to 18

compliance. The Division is exploring with industry 19

the possibility of creating segment

- specific ASPs that 20

include options for best practices that may be applied 21

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

various industry associations on this topic and 23

continue to look for new opportunities for engagement. 24

The work industry has done with the 25

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Department to develop the ASP is just a prime example 1

of how working with industry on a risk

- based 2

performance program has been a success. 3

The Department supports permanent 4

authorization for the CFATS program and is committed 5

to working with Congress and other security partners 6

to establish a permanent authority for the CFATS 7

program. 8

DH S firmly believes permanent authorization 9

will provide industry with the necessary stability to 10

move forward in effectively implementing CFATS and 11

will send a clear message to facilities that may be 12

seeking to avoid their obligation to report dangerous 13

che micals that the CFATS program is here to stay. 14

H.R. 4007, the CFATS Authorization and 15

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

House of Representatives in early July. The bill 17

would permanently authorize the CFATS program and 18

authorize appropr iations for three fiscal years. 19

The Senate Committee on Homeland Security and 20

Governmental Affairs passed the Senate version of the 21

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

recognized the progress the program has made and the 23

importance of per manently authorizing the program. 24

In August 2013, President Obama issued 25

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Executive Order 13650, Improving Chemical Facility 1

Safety and Security. This EO was designed to improve 2

the safety and security of chemical facilities and 3

reduce risks to workers, communities, and first 4

responders. 5

The EO Working Group is tri

- chaired by the 6

Department of Homeland Security, the Department of 7

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

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

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

"Actions to Improve Chemical Facility Safety and 11

Security: A Shared Commitment." 12

Recognizing that information, actions, and 13

experiences of stakeholders are essential to 14

understanding, managing, and mitigating the ris ks of 15

potential chemical facility hazards, the Working Group 16

initiated a robust stakeholder outreach to assist in 17

identifying successes and best practices. The 18

outreach included engagement across all levels of 19

government, with owners and operators, indust ry 20

associations, community groups, labor organizations, 21

and just in general, communities affected by chemical 22

plant disasters. 23

The status report highlights activities 24

undertaken already to improve chemical facility safety 25

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and security and outlines an act ion plan for moving 1

forward. The action plan includes five thematic 2

areas, which are strengthening community planning and 3

preparedness; enhancing federal operation 4

coordination; improving data management; modernizing 5

policies and regulation; and incorpora ting stakeholder 6

feedback in developing best practices. 7

The status report is a milestone, not an 8

endpoint, and the most important lessons learned from 9

this effort is that every stakeholder group in the 10

chemical facility community has a role in ensuring 11

s afe and secure operations. 12

Safety and security are a shared commitment, 13

and DHS along with our interagency partners are making 14

progress on this front. One of the actions included 15

in the report was issuing an Advance Notice of 16

Proposed Rulemaking for the CFATS program. As we work 17

to mature the CFATS regulatory program, DHS is 18

initiating this rulemaking process to help identify 19

how to make the CFATS program more effective in 20

achieving its regulatory objectives. 21

DHS believes that after seven years of 22

imp lementing the program, both DHS and the regulated 23

community have gained first

- hand insight into how a 24

nonprescriptive security regulation can be most 25

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effective. 1

The Advance Notice of Proposed Rulemaking 2

provides an opportunity for the Department to hear and 3

consider the views of the regulated industry and other 4

interested members of the public on their 5

recommendations for program modifications. 6

The Department invites interested persons to 7

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

current CFATS regulation, as Kate mentioned, 6 CFR 9

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

to comment on all aspects of the program. The 11

rulemaking covers all regulatory and guidance 12

documents, including Appendix A, and the list of 13

Chemicals of Interest c overed by the program. 14

In particular, we asked for comment on 15

several areas: the general regulatory approach; 16

treatment of nontraditional chemical facilities; 17

clarification of terminology; Risk

- Based Performance 18

Standards; Appendix A; consideration for small 19

businesses; and alignment with other regulatory 20

programs. 21

Written comments may be submitted online 22

through the Federal eRulemaking portal or via post, 23

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

agenda. 25

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So, again, I want to thank you f or taking 1

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

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

next chapter of the CFATS program. 4

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

The remainder of the session today is set 6

aside to hear fr om you, the stakeholders, but before 7

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

ground rules for this session. 9

This is a listening session, with the 10

purpose to hear a broad set of opinions from across 11

the spectrum of stakeholders who have an inter est in 12

improving and streamlining the CFATS rule. We hope to 13

hear a range of suggestions, and all viewpoints are 14

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

discussion today on any of the topics. 16

DHS is interested in comments on the topics 17

descri bed in Part 4 of the ANPRM and also listed by 18

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

asked to keep their comments directly related to the 20

topics contained in the rule. 21

The rest of today's listening session will 22

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

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

Individuals will have a maximum of five minutes to 25

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present to the panel, which does include any 1

introduction to your remarks. The panel then may ask 2

clarifying questions. 3

I wi ll then open the floor to anyone who 4

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

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

with time

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

have one minute remaining and a red card when your 8

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

and stay within the designated timeframes. 10

If there are no questions on the process 11

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

to start with individuals who registered to present 13

this morning. Mr. Ke nnedy, if you are still 14

interested in providing public comments

-- 15

MR. KENNEDY: Sure. 16

MS. FINNERTY:

-- please join us at the 17

microphone. 18

(Pause.) 19

MR. KENNEDY: Greetings. My name is 20

Michael

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

(Pause.) 22

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

Michael Kennedy. I represent the Agricultural 24

Retailers Association. Our membership is derived from 25

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7,200 sites in America. 1

MS. GRAYDON: Michael, hold on just one 2

second. 3

(Pause.) 4

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

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

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

me. 8

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

sir. 10

MR. KENNEDY: We would like to comment on 11

making the Department of Homeland Security's C hemical 12

Facility Anti

- Terrorism Standards better and improving 13

a seven

- year process where we could add a good amount 14

of comments, issues, and also concerns with the 15

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

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

Chemical Sector Coordinating Council. ARA has 18

testified previously in support of long

- term 19

reauthorization. I personally have drafted many of 20

the words that went into that. Our association is 21

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

our members are regulated because they have or store 23

anhydrous ammonium. 24

I don't know exactly what number or 25

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

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

means one

- fourth of all regulated CFATS facilities are 3

part of our membership. 4

We are a farm supply dealer, so we give 5

anything from seed, pesticides, fertilizers or 6

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

cooperating partner in the regulated community. We 8

understand the impor tance of chemical safety and 9

security. 10

We've also initiated a Responsible Ag 11

Program that definitely DHS could leverage. A 12

Responsible Ag program is like some of the other 13

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

all the federal regulations a nd we've tried to put 15

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

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

and Z, there's a straight

- line checklist. 18

This does a couple things. It improves 19

document industry

- wide compliance. It pr epares 20

facilities for the regulated inspections, also 21

including CFATS inspections. It validates internal 22

compliance programs, and it demonstrates 23

responsibility and transparency to public and to 24

federal regulators. 25

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

basically a third

- party compliance program, so your 2

third party or an individual will get trained on these 3

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

pre

- inspection. 5

I had just some procedural issues with the 6

Advance Notice of Proposed Rulema king, and I wanted to 7

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

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

rule, that DHS look into a couple things. 10

One, they've got to bifurcate issues. 11

There's issues that could be changed through 12

regulation and not changed through regulations. There 13

are issues that could be changed tomorrow and others 14

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

in determining which one they think needs a rulemaking 16

and which one they think can be done t omorrow. 17

As far as the advance notice, itself, it 18

lacks a lot of details. It gives open

- ended 19

conclusions based on what the public thinks or what 20

facilities think about what direction DHS should go. 21

On one hand, I could understand this because this 22

bro adly

- brushed advance notice of proposed rule gives 23

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

issues. 25

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MS. FINNERTY: One minute. 1

MR. KENNEDY: I have one minute? 2

MS. FINNERTY: Yes, sir. 3

MR. KENNEDY: Can I ask for a two

- minute 4

extension ? 5

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

open comment period that you may use to return. 7

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

record I'm being denied a two

- minute extension. 9

MS. FINNERTY: Every person has five minutes 10

and you may return du ring the open comment period to 11

finish your comments. 12

MR. KENNEDY: We believe in a holistic 13

approach to CFATS when it comes to looking at 14

nontraditional chemical regulations. We think that 15

DHS should get cost impact assessments. They should 16

look at th e adverse effects to agribusinesses and look 17

at reasonably feasible alternative approaches. 18

ARA does not support a two

- inspection 19

process or pre

- authorizations. We find that this is a 20

waste of time, considerable taxpayers' money. 21

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

comments. 23

MR. KENNEDY: ARA supports the use of 24

Alternative Security Programs. ARA also

-- 25

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

MR. KENNEDY:

-- supports the clarification 2

-- 3

MS. FINNERTY: I appreciate your comments, 4

sir. 5

M R. KENNEDY:

-- of terminologies. 6

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

up your comments. You may return during the open 8

comment period. 9

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

minute, I will do that succinctly. 11

MS. FINNERTY: Sir, you may return

-- 12

MR. KENNEDY: ARA highly considers

-- 13

MS. FINNERTY:

-- during the comment period. 14

MR. KENNEDY:

-- diminished chemical 15

responsibilities of COI when mixed. We have a big 16

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

threat

- based a nd it has no determination in science in 18

making those issues. That will be outlined in our 19

comments and I will include them and attach them for 20

the record. 21

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

comment period will be available for you to continue 23

you r comments. 24

Ms. Blackmoor, have any of our other pre

25

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arranged speakers arrived today? 1

MS. BLACKMOOR: No. 2

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

I would like to now open the floor for 4

additional public comments in our open session. Are 5

there any additio nal members of the public here today 6

that would like to make public comment? 7

(No response.) 8

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

return to the mike to complete your comments? 10

MR. KENNEDY: I would. 11

MS. FINNERTY: You will have an additional 12

five minutes. 13

MR. KENNEDY: Thank you very much. I 14

appreciate it. 15

MS. FINNERTY: You're welcome. 16

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

bit. We absolutely support the Alternative Security 18

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

formally come to us to look for an Alternative 20

Security Program for the agricultural sector. We 21

think this is a good idea considering the number of 22

facilities we have out there. 23

Unfortunately, some of the talks that we've 24

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

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

membership, our members have already completed a long, 2

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

do an Alternative Security Program also. What would 4

really help the Department of Ho meland Security in 5

doing this is if they could actually formally present 6

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

else, where they actually support Alternative Security 8

Program and the use potentially over SSPs. 9

This would certainly not only help the whole 10

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

inspectors that inspect and I think have a bigger 12

comfort ability with Alternative Security Programs 13

than they do with SSPs. 14

The CSAT tool is cumbersome and quirky. It 15

take a lot of man

- hou rs to fill this out. Our 16

association is looking at instead taking this through 17

a different way of thinking, of looking at each 18

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

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

time spent in actuall y filling the thing out, and this 21

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

Notice of Proposed Rulemaking when OMB asks you how 23

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

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

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In ARA, the corporate approach has been well 1

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

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

sites. They find it beneficial that a compliance case 4

manager is with them, understands the program, helps 5

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

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

cyber and other Risk

- Based Performance Standards 8

beforehand when inspectors can come up on the back end 9

and only inspect certain issues that need to be 10

rectified at the sit e specifically. 11

We have serious issues with the 12

classification of terminology and the mixture rule. 13

This mixture rule I think is outdated and really needs 14

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

chemical microscope as far as DHS understandi ng how 16

mixtures work, but also in a regulatory framework. 17

The issue comes up with all of the other 18

release threats, the flammability threats, have a 19

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

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

a nd you have to consider the whole thing. 22

But, when it comes to IED threats or theft 23

and diversion, theft and diversion

-- where is it? 24

Theft and diversion, yeah, theft and diversion IED 25

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threats, which a lot of our members handle ammonium 1

nitrate, potass ium chlorate, potassium nitrate, and 2

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

interest, a facility shall count the total quality of 4

all commercial grades of chemicals towards the STQ

-- 5

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

MR. KENNEDY:

-- unless a specific minimum 7

concentration is available. We find that this does 8

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

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

whole sector should be reevaluated. 11

In closing, I'd like 30 seconds. Ma terial 12

modifications

-- we find, considering that we have 13

chemicals onsite for sometimes 30 days at a time, 14

sometimes 40 days, submitting a material modification 15

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

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

change that. 18

Risk

- Based Performance Standards

-- they are 19

inconsistent and sometimes duplicative. I won't go 20

into that many details. 21

In closing, I just want to say that the 22

Department of Homeland Security has to put out an 23

ammonium nitr ate fertilizer registration rule. 24

MS. FINNERTY: Thank you, sir. 25

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MR. KENNEDY: Thank you. 1

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

follow

- up questions? 3

MS. GRAYDON: So you mentioned kind of the 4

issues surrounding holding times. Do you have 5

suggest ions on how that might be worked? 6

MR. KENNEDY: Oh, you mean for material 7

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

problem that you might have if you start looking into 9

non

-- was it nontraditional chemical facilities?

-- 10

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

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

hold something onsite. 13

As far as ag retailers, we have a growing 14

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

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

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

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

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

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

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

We're pretty predictable per se. Some 22

industries aren't that predictable. Some industries 23

will get it and then automatically use it within like 24

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

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is no one

- size

- fits

- all, but I think ISCD should maybe 1

frame it as a

-- you know, you could say a reasonable 2

amount of time or predictable amount of time that an 3

inspector can come in and validate that. 4

MS. FINNERTY: Additional questions, Ms. 5

Graydon? 6

MS. GRAYDON: So talk a little bit more 7

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

more what you would envision? 9

MR. KENNEDY: So right now one of our 10

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

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

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

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

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

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

issue because it really poses

-- once these two things 17

are mixed together it poses no threat. 18

We've proposed this and DHS has actually 19

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

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

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

sort of

-- regulatory

- wise we painted ourselves into a 23

corner because we have these hard and fast rules. 24

Now there is a caveat here. The Assistant 25

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Secretary in Clause 27.20 has the power to determine 1

whether a facility is high

- risk or not high

- risk. We 2

would argue that if y ou look at the chemical 3

properties of this issue that that facility is not 4

high

- risk. Therefore, the Assistant Secretary should 5

make that determination. 6

MS. GRAYDON: Thanks for the clarification. 7

MR. KENNEDY: No problem. 8

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

We are currently in open session for the 10

CFATS ANPRM Listening Session. Are there additional 11

members of the public that would like to submit public 12

comments at this time? 13

(No response.) 14

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

floor open until 12:45 today for additional public 16

comments. I will return to the podium when additional 17

speakers are ready to present their comments. Until 18

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

your colleagues today. Thank you. 20

(Whereupon, a short recess was taken.) 21

MS. FINNERTY: Good afternoon and thank you 22

for participating in today's listening session on the 23

Chemical Facility Anti

- Terrorism Standards Advance 24

Notice of Proposed Rulemaking. 25

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I will now turn to Ms. Amy Graydon for 1

closing comments. 2

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

staying and know we appreciate the opportunity to have 4

people come and present their comments and to hear 5

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

CFATS program, so thanks. 7

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

Please visit the docket in the Federal 9

Register to view listening session notes and to submit 10

additional written public comments. 11

We are now adjourned. 12

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

session in the above

- entitled matter was concluded.) 14

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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 Offic ial Reporter Heritage Reporting Corporation Suite 600 1220 L Street, N.W. Washington, D.C. 20005

- 4018

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