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[House Report 110-357]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-357

======================================================================
 
            SECURE HANDLING OF AMMONIUM NITRATE ACT OF 2007

                                _______
                                

October 2, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Thompson of Mississippi, from the Committee on Homeland Security, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1680]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security, to whom was referred 
the bill (H.R. 1680) to authorize the Secretary of Homeland 
Security to regulate the sale of ammonium nitrate to prevent 
and deter the acquisition of ammonium nitrate by terrorists, 
having considered the same, report favorably thereon with 
amendments and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     7
Background and Need for Legislation..............................     7
Hearings.........................................................     7
Committee Consideration..........................................     8
Committee Votes..................................................     8
Committee Oversight Findings.....................................     9
New Budget Authority, Entitlement Authority, and Tax Expenditures     9
Congressional Budget Office Estimate.............................     9
Statement of General Performance Goals and Objectives............    12
Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
  Benefits.......................................................    13
Federal Mandates Statement.......................................    13
Advisory Committee Statement.....................................    13
Constitutional Authority Statement...............................    13
Applicability to Legislative Branch..............................    13
Section-by-Section Analysis of the Legislation...................    13
Changes in Existing Law Made by the Bill, as Reported............    18
Minority Views...................................................    27

  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Secure Handling of Ammonium Nitrate 
Act of 2007''.

SEC. 2. SECURE HANDLING OF AMMONIUM NITRATE.

  (a) In General.--Title VIII of the Homeland Security Act of 2002 (6 
U.S.C. 361 et seq.) is amended by adding at the end the following new 
subtitle:

           ``Subtitle J--Secure Handling of Ammonium Nitrate

``SEC. 899A. DEFINITIONS.

  ``In this subtitle, the following definitions apply:
          ``(1) The term `ammonium nitrate' means--
                  ``(A) solid ammonium nitrate that is chiefly the 
                ammonium salt of nitric acid and contains not less than 
                33 percent nitrogen by weight; and
                  ``(B) any mixture containing a percentage of ammonium 
                nitrate that is equal to or greater than the percentage 
                determined by the Secretary under section 899B(b).
          ``(2) The term `ammonium nitrate facility' means any entity 
        that produces, sells, or otherwise transfers ownership of, or 
        provides application services for, ammonium nitrate.
          ``(3) The term `ammonium nitrate purchaser' means any person 
        who buys and takes possession of ammonium nitrate from an 
        ammonium nitrate facility.

``SEC. 899B. REGULATION OF THE SALE AND TRANSFER OF AMMONIUM NITRATE.

  ``(a) In General.--The Secretary shall regulate the sale and transfer 
of ammonium nitrate by an ammonium nitrate facility in accordance with 
this subtitle to prevent the misappropriation or use of ammonium 
nitrate in an act of terrorism.
  ``(b) Ammonium Nitrate Mixtures.--The Secretary, in consultation with 
the heads of appropriate Federal departments and agencies, including 
the Secretary of Agriculture, shall, through notice and comment and by 
no later than 90 days after the date of the enactment of this subtitle, 
establish a threshold percentage for ammonium nitrate in a substance. 
If a substance contains a percentage of ammonium nitrate that is equal 
to or greater than the percentage established by the Secretary, the 
substance shall be treated as ammonium nitrate for the purposes of this 
subtitle.
  ``(c) Registration of Owners of Ammonium Nitrate Facilities.--
          ``(1) Registration.--The Secretary shall establish a process 
        by which--
                  ``(A) any person who is the owner of an ammonium 
                nitrate facility is required to register with the 
                Department; and
                  ``(B) upon such registration, such person is issued a 
                registration number for purposes of this subtitle.
          ``(2)  Registration information.--The Secretary shall require 
        that each applicant for registration as the owner of an 
        ammonium nitrate facility must submit to the Secretary--
                  ``(A) the name, address, and telephone number of each 
                ammonium nitrate facility owned by the applicant;
                  ``(B) the name of the person designated by the owner 
                of the ammonium nitrate facility as the point of 
                contact of such facility, for purposes of this 
                subtitle;
                  ``(C) for each such facility, the amount of ammonium 
                nitrate that is sold or transferred during each year; 
                and
                  ``(D) such other information as the Secretary may 
                determine is appropriate.
  ``(d) Registration of Ammonium Nitrate Purchasers.--
          ``(1) Registration.--The Secretary shall establish a process 
        by which--
                  ``(A) any person who seeks to be an ammonium nitrate 
                purchaser is required to register with the Department; 
                and
                  ``(B) upon such registration, such person is issued a 
                registration number for purposes of this subtitle.
          ``(2)  Registration information.--The Secretary shall require 
        that each applicant for registration under this subsection as a 
        prospective ammonium nitrate purchaser must submit to the 
        Secretary the name, address, and telephone number of the 
        applicant and the intended use of ammonium nitrate to be 
        purchased by the applicant.
  ``(e) Records.--
          ``(1) Maintenance of records.--The Secretary shall require 
        the owner of an ammonium nitrate facility engaged in selling or 
        transferring ammonium nitrate to--
                  ``(A) maintain a record of each sale or transfer of 
                ammonium nitrate, during the two-year period beginning 
                on the date of such sale or transfer; and
                  ``(B) include in such record the information 
                described in paragraph (2).
          ``(2) Specific information required.--For each such sale or 
        transfer, the Secretary shall require the owner of an ammonium 
        nitrate facility to--
                  ``(A) record the name, address, telephone number, and 
                registration number issued under subsection (c) or (d) 
                of each person that takes possession of ammonium 
                nitrate from the owner of an ammonium nitrate facility, 
                in a manner prescribed by the Secretary;
                  ``(B) if applicable, record the name, address, and 
                telephone number of each individual who takes 
                possession of the ammonium nitrate on behalf of the 
                person referred to in subparagraph (A), at the point of 
                sale;
                  ``(C) record the date and quantity of ammonium 
                nitrate sold or transferred; and
                  ``(D) verify the identity of the persons referred to 
                in subparagraphs (A) and (B), as applicable, in 
                accordance with a procedure established by the 
                Secretary.
          ``(3) Protection of information.--In maintaining records in 
        accordance with paragraph (1), the owner of an ammonium nitrate 
        facility shall take reasonable actions to ensure the protection 
        of the information included in such records.
  ``(f) Exemption for Explosive Purposes.--The Secretary may exempt 
from this subtitle a person producing, selling, or purchasing ammonium 
nitrate exclusively for use as an explosive material under a license 
issued under chapter 40 of title 18, United States Code.
  ``(g) Consultation.--In carrying out this section, the Secretary 
shall consult with the Secretary of Agriculture, States, and 
appropriate private sector entities, to ensure that the access of 
agricultural producers to ammonium nitrate is not unduly burdened.
  ``(h) Data Confidentiality.--
          ``(1) In general.--Notwithstanding section 552 of title 5, 
        United States Code, or the USA PATRIOT ACT (Public Law 107-56; 
        115 Stat. 272), and except as provided in paragraph (2), the 
        Secretary may not disclose to any person any information 
        obtained under this subtitle.
          ``(2) Exception.--The Secretary may disclose any information 
        obtained by the Secretary under this subtitle to an officer or 
        employee of the United States, or a person that has entered 
        into a contract with the United States, who has a need to know 
        the information to perform the duties of the officer, employee, 
        or person, or to a State agency pursuant to section 899D, under 
        appropriate arrangements to ensure the protection of the 
        information.
  ``(i) Registration Procedures and Check of Terrorist Watch List.--
          ``(1) Registration procedures.--
                  ``(A) Generally.--The Secretary shall establish 
                procedures to efficiently receive applications for 
                registration numbers under this subtitle, conduct the 
                checks required under paragraph (2), and promptly issue 
                or deny a registration number.
                  ``(B) Initial six-month registration period.--The 
                Secretary shall take steps to maximize the number of 
                registration applications that are submitted and 
                processed during the six-month period provided for in 
                section 899F(e).
          ``(2) Check of terrorist watch list.--
                  ``(A) Check required.--The Secretary shall conduct a 
                check of appropriate identifying information of any 
                person seeking to register with the Department under 
                subsection (c) or (d) against identifying information 
                that appears on the terrorist watch list.
                  ``(B) Authority to deny registration number.--If the 
                person's identifying information appears on the 
                terrorist watch list and the Secretary determines such 
                person may pose a threat to national security, the 
                Secretary may deny issuance of a registration number 
                under this subtitle.
          ``(3) Expedited review of applications.--
                  ``(A) In general.--Following the six-month period 
                provided for in section 899F(e), the Secretary shall, 
                to the extent practicable, issue or deny registration 
                numbers under this subtitle not later than 72 hours 
                after the time the Secretary receives a complete 
                registration application, unless the Secretary 
                determines, in the interest of national security, that 
                additional time is necessary to review an application.
                  ``(B) Notice of application status.--In all cases, 
                the Secretary shall notify persons of the status of 
                their application not later than 72 hours after the 
                time the Secretary receives a complete registration 
                application.
          ``(4) Expedited appeals process.--
                  ``(A) Requirement.--
                          ``(i) Appeals process.--The Secretary shall 
                        establish an expedited appeals process for 
                        persons denied a registration number under this 
                        subtitle.
                          ``(ii) Time period for resolution.--The 
                        Secretary shall, to the extent practicable, 
                        resolve appeals not later than 72 hours after 
                        receiving a complete request for appeal unless 
                        the Secretary determines, in the interest of 
                        national security, that additional time is 
                        necessary to resolve an appeal.
                  ``(B) Consultation.--The Secretary, in developing the 
                appeals process under subparagraph (A), shall consult 
                with appropriate stakeholders.
                  ``(C) Guidance.--The Secretary shall provide guidance 
                regarding the procedures and information required for 
                an appeal under subparagraph (A) to persons denied 
                registration numbers under this subtitle.
          ``(5) Restrictions on use and maintenance of information.--
                  ``(A) In general.--Information obtained by the 
                Secretary under this section may not be made available 
                to the public.
                  ``(B) Use of certain information.--Any information 
                constituting grounds for denial of a registration 
                number under this section shall be maintained 
                confidentially by the Secretary and may be used only 
                for making determinations under this section. 
                Notwithstanding any other provision of this subtitle, 
                the Secretary may share any such information with 
                Federal, State, local, and tribal law enforcement 
                agencies, as appropriate.
          ``(6) Registration information.--
                  ``(A) Authority to require information.--The 
                Secretary may require a person applying for a 
                registration number under this subtitle to submit such 
                information as may be necessary to carry out the 
                requirements of this section.
                  ``(B) Requirement to update information.--The 
                Secretary may require persons issued a registration 
                under this subtitle to update registration information 
                submitted to the Secretary under this subtitle, as 
                appropriate.
          ``(7) Re-checks against terrorist watch list.--
                  ``(A) Re-checks.--The Secretary shall, as 
                appropriate, re-check persons provided a registration 
                number pursuant to this subtitle against the terrorist 
                watch list, and may revoke such registration number if 
                the Secretary determines such person may pose a threat 
                to national security.
                  ``(B) Notice of revocation.--The Secretary shall, as 
                appropriate, provide prior notice to a person whose 
                registration number is revoked under this section and 
                such person shall have an opportunity to appeal, as 
                provided in paragraph (4).

``SEC. 899C. INSPECTION AND AUDITING OF RECORDS.

  ``The Secretary shall establish a process for the periodic inspection 
and auditing of the records maintained by owners of ammonium nitrate 
facilities for the purpose of monitoring compliance with such section 
or for the purpose of deterring or preventing the misappropriation or 
use of ammonium nitrate in an act of terrorism.

``SEC. 899D. ADMINISTRATIVE PROVISIONS.

  ``(a) Cooperative Agreements.--The Secretary--
          ``(1) may enter into a cooperative agreement with the 
        Secretary of Agriculture, or the head of any State department 
        of agriculture or its designee involved in agricultural 
        regulation, in consultation with the State agency responsible 
        for homeland security, to carry out the provisions of this 
        subtitle; and
          ``(2) wherever possible, shall seek to cooperate with State 
        agencies or their designees that oversee ammonium nitrate 
        facility operations when seeking cooperative agreements to 
        implement the registration and enforcement provisions of this 
        subtitle.
  ``(b) Delegation.--
          ``(1) Authority.--The Secretary may delegate to a State the 
        authority to assist the Secretary in the administration and 
        enforcement of this subtitle.
          ``(2) Delegation required.--At the request of a Governor of a 
        State, the Secretary shall delegate to the State the authority 
        to carry out functions under sections 899B and 899C, if the 
        Secretary determines that the State is capable of 
        satisfactorily carrying out such functions.
          ``(3) Funding.--Subject to the availability of 
        appropriations, if the Secretary enters into an agreement with 
        a State under this subsection to delegate functions to the 
        State, the Secretary shall provide to the State sufficient 
        funds to carry out the delegated functions.
  ``(c) Provision of Guidance and Notification Materials to Ammonium 
Nitrate Facilities.--
          ``(1) Guidance.--The Secretary shall make available to each 
        owner of an ammonium nitrate facility registered under section 
        899B(c)(1) guidance on--
                  ``(A) the identification of suspicious ammonium 
                nitrate purchases or transfers or attempted purchases 
                or transfers;
                  ``(B) the appropriate course of action to be taken by 
                the ammonium nitrate facility owner with respect to 
                such a purchase or transfer or attempted purchase or 
                transfer, including--
                          ``(i) exercising the right of the owner of 
                        the ammonium nitrate facility to decline sale 
                        of ammonium nitrate; and
                          ``(ii) notifying appropriate law enforcement 
                        entities; and
                  ``(C) any such additional subjects as the Secretary 
                determines are appropriate to prevent the 
                misappropriation or use of ammonium nitrate in an act 
                of terrorism.
          ``(2) Use of materials and programs.--In providing guidance 
        under this subsection, the Secretary shall, to the extent 
        practicable, leverage any relevant materials and programs.
          ``(3) Notification materials.--
                  ``(A) In general.--The Secretary shall make available 
                materials suitable for posting at ammonium nitrate 
                facilities where ammonium nitrate is sold.
                  ``(B) Design of materials.--Such materials shall be 
                designed to notify prospective ammonium nitrate 
                purchasers of--
                          ``(i) the record-keeping requirements under 
                        section 899B; and
                          ``(ii) the penalties for violating such 
                        requirements.

``SEC. 899E. THEFT REPORTING REQUIREMENT.

  ``Any person who is required to comply with section 899B(e) who has 
knowledge of the theft or unexplained loss of ammonium nitrate shall 
report such theft or loss to the appropriate Federal law enforcement 
authorities within one calendar day of the date on which the person 
becomes aware of such theft or loss. Upon receipt of such report, the 
relevant Federal authorities shall inform State, local, and tribal law 
enforcement entities as appropriate.

``SEC. 899F. PROHIBITIONS AND PENALTY.

  ``(a) Prohibitions.--
          ``(1) Taking possession.--No person shall take possession of 
        ammonium nitrate from an ammonium nitrate facility unless such 
        person is registered under subsection (c) or (d) of section 
        899B, or is an agent of a person registered under subsection 
        (c) or (d) of that section.
          ``(2) Transferring possession.--An owner of an ammonium 
        nitrate facility shall not transfer possession of ammonium 
        nitrate from the ammonium nitrate facility to any person who is 
        not registered under subsection (c) or (d) of section 899B, 
        unless such person is an agent of a person registered under 
        subsection (c) or (d) of that section.
          ``(3) Other prohibitions.--No person shall--
                  ``(A) buy and take possession of ammonium nitrate 
                without a registration number required under subsection 
                (c) or (d) of section 899B;
                  ``(B) own or operate an ammonium nitrate facility 
                without a registration number required under section 
                899B(c); or
                  ``(C) fail to comply with any requirement or violate 
                any other prohibition under this subtitle.
  ``(b) Prohibitions.--No person shall--
          ``(1) buy and take possession of ammonium nitrate without a 
        registration number required under subsection (c) or (d) of 
        section 899B;
          ``(2) own or operate an ammonium nitrate facility without a 
        registration number required under section 899B(c); or
          ``(3) fail to comply with any requirement or violate any 
        other prohibition under this subtitle.
  ``(c) Civil Penalty.--A person that violates this subtitle may be 
assessed a civil penalty by the Secretary of not more than $50,000 per 
violation.
  ``(d) Penalty Considerations.--In determining the amount of a civil 
penalty under this section, the Secretary shall consider--
          ``(1) the nature and circumstances of the violation;
          ``(2) with respect to the person who commits the violation, 
        any history of prior violations, the ability to pay the 
        penalty, and any effect the penalty is likely to have on the 
        ability of such person to do business; and
          ``(3) any other matter that the Secretary determines that 
        justice requires.
  ``(e) Notice and Opportunity for a Hearing.--No civil penalty may be 
assessed under this subtitle unless the person liable for the penalty 
has been given notice and an opportunity for a hearing on the violation 
for which the penalty is to be assessed in the county, parish, or 
incorporated city of residence of that person.
  ``(f) Delay in Application of Prohibition.--Paragraphs (1) and (2) of 
subsection (a) shall apply beginning 6 months after the issuance by the 
Secretary of a final rule implementing this subtitle.

``SEC. 899G. PROTECTION FROM CIVIL LIABILITY.

  ``(a) In General.--Notwithstanding any other provision of law, an 
owner of an ammonium nitrate facility who in good faith refuses to sell 
or transfer ammonium nitrate to any person, or who in good faith 
discloses to the Department or to appropriate law enforcement 
authorities an actual or attempted purchase or transfer, based upon a 
reasonable belief that the person seeking purchase or transfer of 
ammonium nitrate may use the ammonium nitrate to create an explosive 
device to be employed in an act of terrorism (as defined in section 
3077 of title 18, United States Code), or to use ammonium nitrate for 
any other unlawful purpose, shall be immune from civil liability 
arising from that refusal to sell ammonium nitrate or from making that 
disclosure.
  ``(b) Limitation.--Subsection (a) shall not be construed to apply 
with respect to any refusal to sell or disclosure--
          ``(1) that violates--
                  ``(A) title VII of the Civil Rights Act of 1964 (42 
                U.S.C. 2000e et seq); or
                  ``(B) the Americans with Disabilities Act of 1990 (42 
                U.S.C. 12101 et seq.); or
          ``(2) made on the basis that the person seeking purchase or 
        transfer of ammonium nitrate is a veteran or member of the 
        armed forces of the United States.

``SEC. 899H. PREEMPTION OF OTHER LAWS.

  ``(a) Other Federal Regulations.--Except as provided in section 899G, 
nothing in this subtitle affects any regulation issued by any agency 
other than an agency of the Department.
  ``(b) State Law.--Subject to section 899G, this subtitle preempts the 
laws of any State to the extent that such laws are inconsistent with 
this subtitle, except that this subtitle shall not preempt any State 
law that provides additional protection against the acquisition of 
ammonium nitrate by terrorists or the use of ammonium nitrate in 
explosives in acts of terrorism or for other illicit purposes, as 
determined by the Secretary.

``SEC. 899I. DEADLINES FOR REGULATIONS.

  ``The Secretary--
          ``(1) shall issue a proposed rule implementing this subtitle 
        within six months after the date of the enactment of this 
        subtitle; and
          ``(2) issue a final rule implementing this subtitle within 
        one year after such date of enactment.

``SEC. 899J. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated to the Secretary such sums 
as may be necessary to carry out this subtitle for fiscal years 2007 
through 2011.''.
  (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended by adding at the end of the items relating to title 
VIII the following new items:

           ``Subtitle J--Secure Handling of Ammonium Nitrate

``Sec. 899A. Definitions.
``Sec. 899B. Regulation of the sale and transfer of ammonium nitrate.
``Sec. 899C. Inspection and auditing of records.
``Sec. 899D. Administrative provisions.
``Sec. 899E. Theft reporting requirement.
``Sec. 899F. Prohibitions and penalty.
``Sec. 899G. Protection from civil liability.
``Sec. 899H. Preemption of other laws.
``Sec. 899I. Deadlines for regulations.
``Sec. 899J. Authorization of appropriations.''.

  Amend the title so as to read:

      A bill to authorize the Secretary of Homeland Security to 
regulate the sale of ammonium nitrate to prevent and deter the 
acquisition of ammonium nitrate by terrorists, and for other 
purposes.

                          Purpose and Summary

    The purpose of H.R. 1680 is to authorize the Secretary of 
Homeland Security to regulate the sale of ammonium nitrate to 
prevent and deter the acquisition of ammonium nitrate by 
terrorists.

                  Background and Need for Legislation

    Ammonium nitrate is a highly effective and widely used 
agricultural fertilizer, but may also be utilized to create 
explosives employed in carrying out deadly terrorist attacks. 
Ammonium nitrate fertilizer is widely available, inexpensive, 
and relatively easy to manipulate into explosive form. It has 
been the explosive material of choice in a number of acts and 
attempted acts of terrorism. These include: the 1995 bombing of 
the Alfred P. Murrah building in Oklahoma City, Oklahoma; the 
1998 United States embassy bombings in United Republic of 
Tanzania and Republic of Kenya; the November 2003 bombings in 
Istanbul, Republic of Turkey; planned attacks on the United 
States embassy in the Republic of Singapore and the United 
States consulate in Karachi, the Islamic Republic of Pakistan, 
which were foiled by law enforcement authorities; and most 
recently, the suspected Toronto, Canada-based bomb plot 
thwarted by the Royal Canadian Mounted Police in June 2006.
    While the sale of ammonium nitrate based explosives are 
regulated by the Bureau of Alcohol, Tobacco, Firearms and 
Explosives, the sale of ammonium nitrate based fertilizers is 
not currently subject to Federal regulations. A handful of 
States, including New York, California, New Jersey, Nevada, 
Oklahoma, Missouri, South Carolina, Maryland, Michigan and 
Iowa, have enacted laws regulating the sale of ammonium nitrate 
based fertilizers, but there is currently no Federal nationwide 
requirement to record or monitor such transactions.
    This legislation is needed to create a nationwide, minimum 
standard for regulating the sale of ammonium nitrate based 
fertilizers nationwide that could be used in terrorist acts, 
without unduly burdening the agricultural sector's access to 
ammonium nitrate fertilizer for farming and other legitimate 
agricultural purposes. This legislation will aid law 
enforcement counterterrorism efforts by creating a paper trail 
for crimes involving purchases of ammonium nitrate and will 
also support honest retailers in their efforts to prevent 
terrorism.

                                Hearings

    No hearings were held in the 110th Congress.
    On December 14, 2005, the Subcommittee on Prevention of 
Nuclear and Biological Attack held a legislative hearing on 
H.R. 3197. The Subcommittee received testimony from Dr. Jimmie 
C. Oxley, Professor of Chemistry, University of Rhode Island; 
Mr. James W. McMahon, Director, New York State Office of 
Homeland Security; Mr. Gary W. Black, President, Georgia 
Agribusiness Council, Inc.; Mr. William Paul O'Neill, Jr., 
President, International Raw Materials, testifying on behalf of 
Agricultural Retailers Association; and Mr. Carl Wallace, Plant 
Manager, Terra Mississippi Nitrogen, Inc., testifying on behalf 
of The Fertilizer Institute.

                        Committee Consideration

    H.R. 1680 was introduced by Mr. Thompson of Mississippi, 
Mr. King of New York, Mr. Langevin, Mr. McCaul of Texas, Mr. 
Etheridge, Mr. Dent, Ms. Loretta Sanchez of California, and Ms. 
Jackson-Lee of Texas on March 26, 2007, and referred to the 
Committee on Homeland Security. Within the Committee on 
Homeland Security, H.R. 1680 was referred to the Subcommittee 
on Emerging Threats, Cybersecurity, and Science and Technology.
    On March 28, 2007, the Subcommittee on Emerging Threats, 
Cybersecurity, and Science and Technology considered H.R. 1680, 
and ordered the measure forwarded to the Full Committee for 
consideration with a favorable recommendation, without 
amendment.
    On April 17 and 26, 2007, the Full Committee on Homeland 
Security considered H.R. 1680 and on April 26, 2007, ordered 
the measure favorably reported to the House, amended, by voice 
vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto.
    The Committee on Homeland Security met, pursuant to notice, 
in open markup session, a quorum being present, on April 17 and 
26, 2007, to consider H.R. 1680. The Committee favorably 
ordered H.R. 1680 to be reported to the House, as amended, by 
voice vote.
    A unanimous consent request by Mr. Thompson to amend the 
title so as to read: ``H.R. 1680, to authorize the Secretary of 
Homeland Security to regulate the sale of ammonium nitrate to 
prevent and deter the acquisition of ammonium nitrate by 
terrorists, and for other purposes.''; was not objected to.
    The Committee adopted the bill, as amended, by voice vote.
    The following amendments were offered:
    An amendment offered by Mr. Thompson (#1), page 2, strike 
lines 18 through 20 and insert a new subsection (2); page 2, 
strike lines 21 through 23 and insert a new section (3); page 
3, strike lines 1 through 4 and insert a new section entitled 
``Sec. 899B. Regulation of the Sale and Transfer of Ammonium 
Nitrate.''; page 5, line 16, strike ``of ownership''.; page 5, 
line 23 strike ``that''.; page 5, line 24, strike ``shall'' and 
insert ``to''; page 5, strike lines 3 through 6 and insert the 
following ``subsection (c) or (d) of each person that takes 
possession of ammonium nitrate from the owner of an ammonium 
nitrate facility, in a manner prescribed by the Secretary.''; 
page 9, line 18, strike ``purchases'' both places it occurs and 
insert ``purchases or transfers''.; page 9, lines 21 and 22, 
strike ``purchase or attempted purchase'' and insert ``purchase 
or transfer or attempted purchase or transfer''.; Page 11, at 
the end of line 4, add the following: ``Upon receipt of such 
report, the relevant Federal authorities shall inform State, 
local, and tribal law enforcement entities as appropriate.''.; 
Page 11, strike lines 5 through 14 and insert a new section 
``Sec. 899F. Prohibitions and Penalty.''; Page 12, line 25, 
after ``terrorism'' insert ``or for other illicit purposes''.; 
and to make corrections to the table of contents; was AGREED TO 
by voice vote.
    An amendment offered by Mrs. Christensen (#2), on page 5, 
line 9, before the period insert ``and the intended use of 
ammonium nitrate to be purchased by the applicant.''; was 
AGREED TO by voice vote.
    An amendment offered by Ms. Brown-Waite (#3), on page 5, 
line 17, strike ``three-year period'' and insert ``two year 
period''.; was AGREED TO by voice vote.
    An amendment offered by Mr. King (#4), Page 12, after line 
14, insert a new subsection entitled ``Sec. 899G. Protection 
from Civil Liability.'' Page 12, line 16, strike ``Nothing'' 
and insert ``Except as provided in section 899G, nothing''. And 
to make additional confirming changes. was AGREED TO by voice 
vote.
    An amendment offered by Mr. Lungren (#5), to insert at the 
end of the proposed section 899B new subsections entitled ``(g) 
Check of Terrorist Watch Lists.''; was WITHDRAWN by unanimous 
consent. A unanimous consent request by Mr. Lungren to withdraw 
his amendment, was not objected to.
    An amendment offered by Mr. Lungren (#6), on page 3, line 
8, insert after ``The Secretary'' the following: ``, in 
consultation with the heads of appropriate Federal departments 
and agencies, including the Secretary of Agriculture,''. Insert 
at the end of the proposed section 899B a new subsection ``(g) 
Registration Procedures and Check of Terrorist Watch List.''; 
on page 12, lines 11 through 12, strike ``ON OWNER OF 
FACILITIES''.; and on page 12, line 12, strike ``Subsection 
(a)(2)'' and insert ``Paragraphs (1) and (2) of subsection 
(a)''.; was AGREED TO by voice vote.
    A motion by Mr. Thompson to authorized Staff to make any 
technical and conforming changes, was not objected to.
    A motion by Ms. Sanchez to authorize the Chairman to offer 
such motions as may be necessary in the House to go to 
Conference with the Senate on the bill just ordered reported by 
this Committee, or on a similar Senate bill; was not objected 
to.
    The Subcommittee on Emerging Threats, Cybersecurity, and 
Science and Technology met, pursuant to notice, in open markup 
session, a quorum being present, on Thursday, March 29, 2007, 
to consider H.R. 1680, and ordered the measure forwarded to the 
Full Committee for consideration, without amendment, by voice 
vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held oversight 
hearings and made findings that are reflected in this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
1680, the Secure Handling of Ammonium Nitrate Act of 2007, 
would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

                  Congressional Budget Office Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 21, 2007.
Hon. Bennie G. Thompson,
Chairman, Committee on Homeland Security, House of Representatives, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1680, the Secure 
Handling of Ammonium Nitrate Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark 
Grabowicz (for federal costs), and Melissa Merrell (for the 
impact on state, local, and tribal governments), and Amy Petz 
(for the impact on the private sector).
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 1680--Secure Handling of Ammonium Nitrate Act of 2007

    Summary: H.R. 1680 would authorize the Department of 
Homeland Security (DHS) to regulate the handling and purchase 
of ammonium nitrate. CBO estimates that implementing H.R. 1680 
would cost $45 million over the 2008-2012 period, assuming 
appropriation of the necessary amounts. Enacting the bill could 
affect revenues, but we estimate that any such effects would 
not be significant. Enacting H.R. 1680 would not affect direct 
spending.
    H.R. 1680 contains an intergovernmental mandate, as defined 
in the Unfunded Mandates Reform Act (UMRA), because it would 
preempt the authority of states to regulate the sale of 
ammonium nitrate in a manner that is less stringent than the 
requirements of this bill. However, CBO estimates that states 
would incur little, if any, direct costs as a result of that 
preemption; therefore, the annual threshold established in UMRA 
($66 million in 2007, adjusted annually for inflation) would 
not be exceeded.
    H.R. 1680 would impose private-sector mandates, as defined 
in UMRA, on owners of ammonium nitrate facilities and 
purchasers of ammonium nitrate. CBO expects that the aggregate 
direct cost of those mandates would fall below the annual 
threshold established by UMRA for private-sector mandates ($131 
million in 2007, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1680 is shown in the following table. 
The costs of this legislation fall within budget function 750 
(administration of justice).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...       6      10      10      10      11
Estimated Outlays...............       5       9      10      10      11
------------------------------------------------------------------------

    Basis of estimate: CBO estimates that implementing H.R. 
1680 would have discretionary costs of $45 million over the 
2008-2012 period. For this estimate, CBO assumes that the 
necessary amounts will be appropriated by the start of each 
fiscal year and that spending will follow historical patterns 
for similar activities. In addition, CBO estimates that the 
bill would have an insignificant effect on revenues.

Spending subject to appropriation

    H.R. 1680 would authorize DHS to regulate the handling and 
purchase of ammonium nitrate. The bill would require producers, 
sellers, and certain purchasers of ammonium nitrate to register 
with DHS and would make producers and sellers maintain certain 
sales records. H.R. 1680 would direct DHS to periodically 
inspect and audit those records.
    Using information from industry associations, CBO estimates 
that there are about 2,000 producers and sellers of ammonium 
nitrate in the United States. Based on the number of personnel 
employed by the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives to inspect handlers of firearms and explosives, CBO 
expects that DHS would need to hire about 60 people to carry 
out field inspections and audits of ammonium nitrate producers 
and sellers. Once fully phased in, CBO estimates that the costs 
of those additional employees would reach $8 million annually, 
including salaries, benefits, training, and support costs. For 
this estimate, we assume that the new positions would be fully 
staffed by fiscal year 2009.
    In addition, we estimate that DHS would need to hire about 
20 people to register and communicate with producers, sellers, 
and purchasers of ammonium nitrate, write regulations, and 
administer this new program. We estimate that costs for those 
personnel would total $2 million annually.
    H.R. 1680 would permit DHS to enter into agreements with 
states to register and inspect producers, sellers, and 
purchasers of ammonium nitrate. Under the bill, DHS would 
reimburse states for their costs to carry out those 
responsibilities if states chose to enter into such agreements 
with DHS. CBO expects that the cost to carry out those 
registrations and inspections would be similar whether 
conducted by states or DHS.

Revenues

    Enacting H.R. 1680 could increase collections of civil 
fines for violations of the bill's provisions for the handling 
and purchase of ammonium nitrate. CBO estimates that any 
additional collections would not be significant because of the 
small number of cases likely to be affected. Civil fines are 
recorded as revenues in the federal budget.
    Estimated impact on state, local, and tribal governments: 
H.R. 1680 contains an intergovernmental mandate, as defined in 
UMRA, because it would preempt the authority of states to 
regulate the sale of ammonium nitrate in a manner that is less 
stringent than the requirements of this bill. Currently, nine 
states regulate the sale of ammonium nitrate, though none of 
those regulations are the same as the provisions of this bill, 
and all of those regulations would be preempted. This bill 
would not require states to upgrade those regulations; rather, 
the states could choose to stop regulating such sales and allow 
the federal government to do so. CBO estimates the states would 
incur little, if any, direct costs as a result of that 
preemption; therefore, the annual threshold established in UMRA 
($66 million in 2007, adjusted annually for inflation) would 
not be exceeded.
    The bill would allow states to enter into cooperative 
agreements with the federal government to implement the 
requirements of the bill, and would authorize the Secretary of 
DHS to provide those states with sufficient funds to carry out 
such duties. CBO cannot estimate how many states may opt to 
implement those regulations, but assuming appropriation of the 
necessary funds, any costs incurred by those states would be 
paid for by the federal government.
    Estimated impact on the private sector: H.R. 1680 would 
impose private-sector mandates, as defined in UMRA, on owners 
of ammonium nitrate facilities and purchasers of ammonium 
nitrate. CBO expects that the aggregate direct cost of those 
mandates would fall below the annual threshold established by 
UMRA for private-sector mandates ($131 million in 2007, 
adjusted annually for inflation).
    The bill would direct the Department of Homeland Security 
(DHS) to regulate the sale and transfer of ammonium nitrate, 
which is commonly used in agriculture fertilizer. The bill 
would require owners of ammonium nitrate facilities and 
purchasers of ammonium nitrate to register with DHS. In 
addition, those owners would be required to maintain a record 
of each sale or transfer of ammonium nitrate for two years. 
Further, any facility owner with knowledge of any theft or 
unexplained loss of ammonium nitrate would be required to 
report it to law enforcement authorities within one day of the 
date on which the owner becomes aware of such an event.
    The direct cost of the mandates on owners would be the cost 
of registering with DHS, maintaining additional records for 
sales, and filing a report in the case of theft or an 
unexplained loss of ammonium nitrate. For purchasers, the 
direct cost would be the cost of registering with DHS. Based on 
information from industry sources, CBO expects that those 
administrative costs would be small relative to the annual 
threshold.
    Estimate prepared by: Federal Costs: Mark Grabowicz; Impact 
on State, Local, and Tribal Governments: Melissa Merrell; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, H.R. 1680, contains the following 
general performance goals, and objectives, including outcome 
related goals and objectives authorized.
    The purpose of this legislation is to authorize the 
Secretary of Homeland Security to regulate the sale of ammonium 
nitrate to prevent and deter the acquisition of ammonium 
nitrate by terrorists. Pursuant to clause 3(c)(4) of rule XIII 
of the Rules of the House of Representatives, H.R. 1680 
contains the following general performance goals and 
objectives, including outcome-related goals and objectives 
authorized: H.R. 1680 adds a new section 899I to the Homeland 
Security Act of 2002 (6 U.S.C. 361 et seq.), which requires the 
Secretary of Homeland Security to issue regulations within six 
months after the date of enactment of the Act, and to issue a 
final rule within one year of the date of enactment.

   Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    In compliance with rule XXI of the Rules of the House of 
Representatives, this bill, as reported, contains no 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of the rule 
XXI.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
article I, section 8, clause 1, which grants Congress the power 
to provide for the common Defense of the United States.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

Section 1. Short title

    This section states the short title of the measure as the 
``Secure Handling of Ammonium Nitrate Act of 2007.''

Section 2. Secure handling of ammonium nitrate

    This section amends Title VIII of the Homeland Security Act 
of 2002 (6 U.S.C. 361 et seq.) by inserting a new Subtitle J--
Secure Handling of Ammonium Nitrate:

Section 899A. Definitions

    This section defines the terms ``ammonium nitrate,'' 
``ammonium nitrate facility,'' and ``ammonium nitrate 
purchaser.''

Section 899B. Regulation of handling and purchase of ammonium nitrate

    This section requires the Secretary of Homeland Security 
(Secretary) to regulate the purchase and sale of ammonium 
nitrate. It requires the Secretary of Homeland Security, in 
consultation with the Secretary of Agriculture, to establish a 
threshold percentage of ammonium nitrate in a substance for 
purposes of the regulations through rulemaking. Moreover, this 
provision requires the Secretary to establish a process to 
issue registration numbers to owners of ammonium nitrate 
facilities. This section requires collected registration 
information to include: (1) the name, address, and telephone 
number of each facility owned by that registrant; (2) as the 
name and contact information of the person designated as the 
point of contact by the owner of the facility; (3) the amount 
of ammonium nitrate that is sold or transferred each year at 
each facility; and (4) any other information that the Secretary 
deems appropriate.
    This section requires the Secretary to establish a process 
to issue registration numbers to ammonium nitrate purchasers; 
the registration information to be collected shall include the 
name, address, and telephone number of the registrant.
    In addition, this section requires each owner of an 
ammonium nitrate facility to maintain records of sales or 
transfers of ammonium nitrate for up to two years that include 
the name, address, telephone number, registration number, and 
intended use of each person taking ownership of ammonium 
nitrate on their own behalf or as the stated agent of another, 
as well as the date and quantity of the ammonium nitrate sold 
or transferred. This provision also requires the owner of the 
facility to verify the identity of the ammonium nitrate 
purchaser or the purchaser's agent, in accordance with 
procedures established by the Secretary.
    This section allows the Secretary to exempt owners of 
ammonium nitrate facilities and ammonium nitrate purchasers 
from the registration requirement if they are regulated by the 
Department of Justice for use of ammonium nitrate exclusively 
for explosive purposes. It also requires the Secretary of 
Homeland Security to consult with the Secretary of Agriculture, 
States, and the appropriate private sector entities to ensure 
that those who need to access ammonium nitrate are not unduly 
burdened.
    This provision generally prohibits the disclosure of 
registration information; however, it allows disclosure to an 
officer or individual with a need to know to perform the duties 
of the officer or individual. Moreover, this section requires 
the Secretary to process registration and check registrants 
against the terrorist watch list and notify applicant of 
issuance or denial not later than 72 hours after the Secretary 
receives a completed application when practicable and unless 
the Secretary decides more time is needed in the interest of 
national security. It also requires the Secretary to establish 
an expedited appeals process whereby--when practicable--appeals 
are resolved not later than 72 hours after the Secretary 
receives a complete request for appeal, unless the Secretary 
determines, in the interest of national security, additional 
time is necessary to resolve an appeal.
    The Committee believes it is necessary to provide measures 
to secure the transfer and purchase of ammonium nitrate 
fertilizer while maintaining its availability and not unduly 
burdening its legitimate use by agricultural professionals, 
farmers, miners, quarry workers, and others that need access to 
ammonium nitrate. This legislation tightens controls on access 
to ammonium nitrate and strengthens the ability of the United 
States to keep ammonium nitrate out of the hands of terrorists. 
The Committee notes that terrorists find new and innovative 
ways to circumvent security measures and to construct explosive 
devices, and believes that the best way to adapt our security 
policies to counteract the terrorists' efforts is to provide 
the Secretary with the discretion to determine which ammonium 
nitrate mixtures are subject to this legislation.
    The Committee intends that the Secretary establish web-
based, toll-free telephone, and mail-in formats for 
registration and appeal. Prospective ammonium nitrate 
facilities and purchasers should be able to register and file 
their appeals online, via telephone, or through the U.S. postal 
system. The Committee understands that the 72 hours for 
response begins tolling only from the time the Department of 
Homeland Security receives the info via internet, telephone, or 
mail.
    Moreover, the Committee emphasizes that not only must an 
owner verify the identity of a purchaser in a manner determined 
appropriate by the Secretary, but that such identity 
verification shall include confirmation of the agency 
relationship where an agent takes possession of ammonium 
nitrate for the buyer. The Committee also believes it is 
important that the Department set out clear guidelines for 
ammonium nitrate facilities and purchasers to facilitate a 
clear understanding of what constitutes proper identification 
for matching with registration numbers.
    The Committee believes it in the interest of national 
security to check the names and identifying information of 
persons who sell, produce, purchase or otherwise take ownership 
of (and possess) ammonium nitrate against those of persons 
listed on the terrorist watch list. By referring to ``the 
terrorist watch list,'' the Committee intends to provide the 
Secretary with the discretion to utilize the Terrorist 
Screening Database (TSDB) and any other terrorist watch list 
derivative of TSDB that is most appropriate for carrying out 
the Secretary's obligation under this section to prevent 
potential terrorists from obtaining access to ammonium nitrate.
    The Committee notes that the Department's experience in 
checking aviation passengers and against terrorist watch lists 
shows that vast majority of checks can be completed quickly and 
without imposing unnecessary delays on the traveling public. 
The Committee recognizes that additional time may be necessary 
where paper applications are submitted and sent through the 
U.S. postal system.
    The Committee wishes to emphasize that the Secretary is 
directed to take steps to maximize the number of registration 
applications processed during the 6-month period following the 
issuance of the final regulations, when the 72-hour processing 
requirements do not apply. The Committee believes that 
encouraging registration during this period will serve to 
minimize the burden on the private sector and will reduce the 
impact on the Department in processing the vast majority of 
applications.

Section 899C. Inspection and auditing of records

    This section requires the Secretary of Homeland Security to 
establish a process for periodic inspection and auditing of 
records of the sales and transfers of ammonium nitrate.

Section 899D. Administrative provisions

    This section gives the Secretary of Homeland Security the 
discretion to enter into a cooperative agreement with the 
Secretary of Agriculture or the head of a State department of 
agriculture, in consultation with the State agency responsible 
for homeland security, and directs the Secretary to cooperate 
with the State agencies or their designees, wherever possible, 
in enforcing this law.
    This provision allows the Secretary to delegate authority 
to the States to assist in the administration and enforcement 
of this law. It requires the Secretary to delegate this 
authority to a State where the Governor requests that it be 
delegated and the Secretary determines that the State is 
capable of satisfactorily carrying out administration and 
enforcement. This section requires the Secretary to provide 
sufficient funds to each State that accepts the delegation of 
these functions, subject to the availability of appropriations.
    This section requires the Secretary to make guidance 
available to each owner of an ammonium nitrate facility that 
covers how to identify suspicious or attempted suspicious 
purchases and what steps to take to in such cases, including 
the exercise of the right to decline a sale. This section also 
directs the Secretary to leverage any relevant materials and 
programs to disseminate this guidance, to the extent 
practicable. This section requires the Secretary to make 
materials available for display at sales outlets that inform 
prospective purchasers about the recordkeeping requirement and 
the penalties for violations.
    The Committee observes that each State, through the 
Department of Agriculture or a Land Grant University, maintains 
a plant food office with a plant food control official whose 
primary responsibility is to register fertilizer products that 
are to be sold in that State. The plant food control official 
has responsibility for inspecting facilities that sell 
fertilizer in order to ensure the efficacy of the products 
sold. A similar official exists in each State through the 
Department of Agriculture for pesticide sales. The 
Environmental Protection Agency (EPA) has delegated authority 
to the state Departments of Agriculture for implementation of 
Federal Insecticide, Fungicide, and Rodenticide Act of 1972 
(FIFRA) (7 U.S.C. 136 et seq.) regulations for restricted-use 
pesticides. It is in this spirit that the Committee encourages 
the Department to enter into cooperative agreements with State 
agricultural departments.
    In addition, the Committee strongly suggests that the 
Department coordinate with the Department of Agriculture and 
agriculture stakeholders to develop clear, informative 
materials to publicize the new registration process and 
requirements. The fertilizer industry, in partnership with the 
Department, State departments of agriculture, and the Bureau of 
Alcohol, Tobacco, Firearms, and Explosives, has a public 
awareness campaign entitled, ``Be Aware for America.'' These 
brochures and posters have been widely distributed to 
agricultural retailers and law enforcement agencies. The 
Committee intends that the Department also work with the 
fertilizer industry and State departments of agriculture to 
update such materials to include the relevant requirements 
established in this legislation.

Section 899E. Theft reporting requirement

    This section requires owners of ammonium nitrate facilities 
and their staff to report all thefts and unexplained losses of 
ammonium nitrate to the appropriate Federal law enforcement 
authorities within one calendar day.

Section 899F. Prohibitions and penalty

    This section prohibits the purchase, sale, or transfer of 
ammonium nitrate without registration and provides for the 
assessment of a civil penalty of up to $50,000 per violation. 
In determining the amount of the civil penalty, this provision 
directs the Secretary to consider the nature and circumstances 
of the violation, including any history of prior violations. 
This section also prohibits the assessment of a civil penalty 
unless the person charged with the violation has been given 
notice and an opportunity for a hearing in the community where 
the person lives.
    The Committee intends that only purchasers who actually 
take physical possession of ammonium nitrate or purchasers who 
deploy an agent to take possession of ammonium nitrate on their 
behalf are required to register with the Department. In many 
instances, the ammonium nitrate facility provides agricultural 
services whereby the facility applies or spreads ammonium 
nitrate. The Committee intends that purchasers who use the 
services of a registered ammonium nitrate facility to custom-
apply ammonium nitrate do not require registration.

Section 899G. Protection from civil liability

    This section provides for immunity from civil liability 
arising from the refusal to sell ammonium nitrate for an owner 
of an ammonium nitrate facility who refuses to sell or transfer 
ammonium nitrate based upon a reasonable belief that the person 
is seeking purchase or transfer of ammonium nitrate to be 
employed in an act of terrorism. This subsection does not apply 
to refusals to sell that violate the Civil Rights Act (P.L. 88-
352, 78 Stat. 241, July 2, 1964) or the Americans with 
Disabilities Act (42 U.S.C. Sec. 12101), nor does it apply to 
refusals made on the basis that a person seeking purchase or 
transfer is a veteran or member of the armed forces of the 
United States.
    The Committee desires to change the culture surrounding the 
sale and purchase of ammonium nitrate so that sellers and 
purchasers alike understand that they are handling a product 
that can be used as a weapon of terror. In creating this 
heightened sense of awareness about the danger posed by 
ammonium nitrate in the hands of terrorists, we thought it 
prudent to protect sellers of ammonium nitrate from civil 
liability when they in good faith: (1) refuse to sell or 
transfer ammonium nitrate to a potential purchaser; or (2) 
disclose ammonium nitrate purchasing activity to the Department 
of Homeland Security or appropriate law enforcement entities. 
This civil liability protection is needed to enable ammonium 
nitrate sellers and transferors to feel confident there will be 
no legal ramifications should they refuse to sell ammonium 
nitrate when they see red flags, such as when a customer 
attempts to purchase ammonium nitrate out of season. It also 
encourages retailers to disclose suspect purchases or attempted 
purchases without fear of civil liability. To qualify for the 
civil liability protection, such refusal and disclosure must be 
made in good faith and be based upon a reasonable belief that 
the subject person may use ammonium nitrate to engage in 
terrorist activity or may otherwise utilize ammonium nitrate 
for unlawful purposes. This provision encourages the ``if you 
see something, say something'' approach to securing the 
homeland.

Section 899H. Preemption of other laws

    This section clarifies that the regulations required under 
this law will not affect any other regulations issued by any 
other agency of the Federal government. Moreover, this 
provision clarifies that the regulations required under this 
law preempt State laws that are inconsistent, except where a 
State law provides additional protections against the 
acquisition of ammonium nitrate by terrorists.

Section 899I. Deadlines for regulations

    This section requires the Secretary to issue proposed 
regulations within six months after the date of enactment of 
this Act and to issue a final rule within one year of the date 
of enactment.

Section 899J. Authorization of appropriations

    This section authorizes for appropriation such funds as may 
be necessary to carry out this subsection for the years 2007 
through 2011.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                     HOMELAND SECURITY ACT OF 2002

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) * * *
  (b) Table of Contents.--The table of contents for this Act is 
as follows:
     * * * * * * *

 TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
      UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

           Subtitle A--Coordination with Non-Federal Entities

Sec. 801. Office for State and Local Government Coordination.
     * * * * * * *

             Subtitle J--Secure Handling of Ammonium Nitrate

Sec. 899A. Definitions.
Sec. 899B. Regulation of the sale and transfer of ammonium nitrate.
Sec. 899C. Inspection and auditing of records.
Sec. 899D. Administrative provisions.
Sec. 899E. Theft reporting requirement.
Sec. 899F. Prohibitions and penalty.
Sec. 899G. Protection from civil liability.
Sec. 899H. Preemption of other laws.
Sec. 899I. Deadlines for regulations.
Sec. 899J. Authorization of appropriations.

           *       *       *       *       *       *       *

TITLE VIII--COORDINATION WITH NON-FEDERAL ENTITIES; INSPECTOR GENERAL; 
UNITED STATES SECRET SERVICE; COAST GUARD; GENERAL PROVISIONS

           *       *       *       *       *       *       *

            Subtitle J--Secure Handling of Ammonium Nitrate

SEC. 899A. DEFINITIONS.

  In this subtitle, the following definitions apply:
          (1) The term ``ammonium nitrate'' means--
                  (A) solid ammonium nitrate that is chiefly 
                the ammonium salt of nitric acid and contains 
                not less than 33 percent nitrogen by weight; 
                and
                  (B) any mixture containing a percentage of 
                ammonium nitrate that is equal to or greater 
                than the percentage determined by the Secretary 
                under section 899B(b).
          (2) The term ``ammonium nitrate facility'' means any 
        entity that produces, sells, or otherwise transfers 
        ownership of, or provides application services for, 
        ammonium nitrate.
          (3) The term ``ammonium nitrate purchaser'' means any 
        person who buys and takes possession of ammonium 
        nitrate from an ammonium nitrate facility.

SEC. 899B. REGULATION OF THE SALE AND TRANSFER OF AMMONIUM NITRATE.

  (a) In General.--The Secretary shall regulate the sale and 
transfer of ammonium nitrate by an ammonium nitrate facility in 
accordance with this subtitle to prevent the misappropriation 
or use of ammonium nitrate in an act of terrorism.
  (b) Ammonium Nitrate Mixtures.--The Secretary, in 
consultation with the heads of appropriate Federal departments 
and agencies, including the Secretary of Agriculture, shall, 
through notice and comment and by no later than 90 days after 
the date of the enactment of this subtitle, establish a 
threshold percentage for ammonium nitrate in a substance. If a 
substance contains a percentage of ammonium nitrate that is 
equal to or greater than the percentage established by the 
Secretary, the substance shall be treated as ammonium nitrate 
for the purposes of this subtitle.
  (c) Registration of Owners of Ammonium Nitrate Facilities.--
          (1) Registration.--The Secretary shall establish a 
        process by which--
                  (A) any person who is the owner of an 
                ammonium nitrate facility is required to 
                register with the Department; and
                  (B) upon such registration, such person is 
                issued a registration number for purposes of 
                this subtitle.
          (2)  Registration information.--The Secretary shall 
        require that each applicant for registration as the 
        owner of an ammonium nitrate facility must submit to 
        the Secretary--
                  (A) the name, address, and telephone number 
                of each ammonium nitrate facility owned by the 
                applicant;
                  (B) the name of the person designated by the 
                owner of the ammonium nitrate facility as the 
                point of contact of such facility, for purposes 
                of this subtitle;
                  (C) for each such facility, the amount of 
                ammonium nitrate that is sold or transferred 
                during each year; and
                  (D) such other information as the Secretary 
                may determine is appropriate.
  (d) Registration of Ammonium Nitrate Purchasers.--
          (1) Registration.--The Secretary shall establish a 
        process by which--
                  (A) any person who seeks to be an ammonium 
                nitrate purchaser is required to register with 
                the Department; and
                  (B) upon such registration, such person is 
                issued a registration number for purposes of 
                this subtitle.
          (2)  Registration information.--The Secretary shall 
        require that each applicant for registration under this 
        subsection as a prospective ammonium nitrate purchaser 
        must submit to the Secretary the name, address, and 
        telephone number of the applicant and the intended use 
        of ammonium nitrate to be purchased by the applicant.
  (e) Records.--
          (1) Maintenance of records.--The Secretary shall 
        require the owner of an ammonium nitrate facility 
        engaged in selling or transferring ammonium nitrate 
        to--
                  (A) maintain a record of each sale or 
                transfer of ammonium nitrate, during the two-
                year period beginning on the date of such sale 
                or transfer; and
                  (B) include in such record the information 
                described in paragraph (2).
          (2) Specific information required.--For each such 
        sale or transfer, the Secretary shall require the owner 
        of an ammonium nitrate facility to--
                  (A) record the name, address, telephone 
                number, and registration number issued under 
                subsection (c) or (d) of each person that takes 
                possession of ammonium nitrate from the owner 
                of an ammonium nitrate facility, in a manner 
                prescribed by the Secretary;
                  (B) if applicable, record the name, address, 
                and telephone number of each individual who 
                takes possession of the ammonium nitrate on 
                behalf of the person referred to in 
                subparagraph (A), at the point of sale;
                  (C) record the date and quantity of ammonium 
                nitrate sold or transferred; and
                  (D) verify the identity of the persons 
                referred to in subparagraphs (A) and (B), as 
                applicable, in accordance with a procedure 
                established by the Secretary.
          (3) Protection of information.--In maintaining 
        records in accordance with paragraph (1), the owner of 
        an ammonium nitrate facility shall take reasonable 
        actions to ensure the protection of the information 
        included in such records.
  (f) Exemption for Explosive Purposes.--The Secretary may 
exempt from this subtitle a person producing, selling, or 
purchasing ammonium nitrate exclusively for use as an explosive 
material under a license issued under chapter 40 of title 18, 
United States Code.
  (g) Consultation.--In carrying out this section, the 
Secretary shall consult with the Secretary of Agriculture, 
States, and appropriate private sector entities, to ensure that 
the access of agricultural producers to ammonium nitrate is not 
unduly burdened.
  (h) Data Confidentiality.--
          (1) In general.--Notwithstanding section 552 of title 
        5, United States Code, or the USA PATRIOT ACT (Public 
        Law 107-56; 115 Stat. 272), and except as provided in 
        paragraph (2), the Secretary may not disclose to any 
        person any information obtained under this subtitle.
          (2) Exception.--The Secretary may disclose any 
        information obtained by the Secretary under this 
        subtitle to an officer or employee of the United 
        States, or a person that has entered into a contract 
        with the United States, who has a need to know the 
        information to perform the duties of the officer, 
        employee, or person, or to a State agency pursuant to 
        section 899D, under appropriate arrangements to ensure 
        the protection of the information.
  (i) Registration Procedures and Check of Terrorist Watch 
List.--
          (1) Registration procedures.--
                  (A) Generally.--The Secretary shall establish 
                procedures to efficiently receive applications 
                for registration numbers under this subtitle, 
                conduct the checks required under paragraph 
                (2), and promptly issue or deny a registration 
                number.
                  (B) Initial six-month registration period.--
                The Secretary shall take steps to maximize the 
                number of registration applications that are 
                submitted and processed during the six-month 
                period provided for in section 899F(e).
          (2) Check of terrorist watch list.--
                  (A) Check required.--The Secretary shall 
                conduct a check of appropriate identifying 
                information of any person seeking to register 
                with the Department under subsection (c) or (d) 
                against identifying information that appears on 
                the terrorist watch list.
                  (B) Authority to deny registration number.--
                If the person's identifying information appears 
                on the terrorist watch list and the Secretary 
                determines such person may pose a threat to 
                national security, the Secretary may deny 
                issuance of a registration number under this 
                subtitle.
          (3) Expedited review of applications.--
                  (A) In general.--Following the six-month 
                period provided for in section 899F(e), the 
                Secretary shall, to the extent practicable, 
                issue or deny registration numbers under this 
                subtitle not later than 72 hours after the time 
                the Secretary receives a complete registration 
                application, unless the Secretary determines, 
                in the interest of national security, that 
                additional time is necessary to review an 
                application.
                  (B) Notice of application status.--In all 
                cases, the Secretary shall notify persons of 
                the status of their application not later than 
                72 hours after the time the Secretary receives 
                a complete registration application.
          (4) Expedited appeals process.--
                  (A) Requirement.--
                          (i) Appeals process.--The Secretary 
                        shall establish an expedited appeals 
                        process for persons denied a 
                        registration number under this 
                        subtitle.
                          (ii) Time period for resolution.--The 
                        Secretary shall, to the extent 
                        practicable, resolve appeals not later 
                        than 72 hours after receiving a 
                        complete request for appeal unless the 
                        Secretary determines, in the interest 
                        of national security, that additional 
                        time is necessary to resolve an appeal.
                  (B) Consultation.--The Secretary, in 
                developing the appeals process under 
                subparagraph (A), shall consult with 
                appropriate stakeholders.
                  (C) Guidance.--The Secretary shall provide 
                guidance regarding the procedures and 
                information required for an appeal under 
                subparagraph (A) to persons denied registration 
                numbers under this subtitle.
          (5) Restrictions on use and maintenance of 
        information.--
                  (A) In general.--Information obtained by the 
                Secretary under this section may not be made 
                available to the public.
                  (B) Use of certain information.--Any 
                information constituting grounds for denial of 
                a registration number under this section shall 
                be maintained confidentially by the Secretary 
                and may be used only for making determinations 
                under this section. Notwithstanding any other 
                provision of this subtitle, the Secretary may 
                share any such information with Federal, State, 
                local, and tribal law enforcement agencies, as 
                appropriate.
          (6) Registration information.--
                  (A) Authority to require information.--The 
                Secretary may require a person applying for a 
                registration number under this subtitle to 
                submit such information as may be necessary to 
                carry out the requirements of this section.
                  (B) Requirement to update information.--The 
                Secretary may require persons issued a 
                registration under this subtitle to update 
                registration information submitted to the 
                Secretary under this subtitle, as appropriate.
          (7) Re-checks against terrorist watch list.--
                  (A) Re-checks.--The Secretary shall, as 
                appropriate, re-check persons provided a 
                registration number pursuant to this subtitle 
                against the terrorist watch list, and may 
                revoke such registration number if the 
                Secretary determines such person may pose a 
                threat to national security.
                  (B) Notice of revocation.--The Secretary 
                shall, as appropriate, provide prior notice to 
                a person whose registration number is revoked 
                under this section and such person shall have 
                an opportunity to appeal, as provided in 
                paragraph (4).

SEC. 899C. INSPECTION AND AUDITING OF RECORDS.

  The Secretary shall establish a process for the periodic 
inspection and auditing of the records maintained by owners of 
ammonium nitrate facilities for the purpose of monitoring 
compliance with such section or for the purpose of deterring or 
preventing the misappropriation or use of ammonium nitrate in 
an act of terrorism.

SEC. 899D. ADMINISTRATIVE PROVISIONS.

  (a) Cooperative Agreements.--The Secretary--
          (1) may enter into a cooperative agreement with the 
        Secretary of Agriculture, or the head of any State 
        department of agriculture or its designee involved in 
        agricultural regulation, in consultation with the State 
        agency responsible for homeland security, to carry out 
        the provisions of this subtitle; and
          (2) wherever possible, shall seek to cooperate with 
        State agencies or their designees that oversee ammonium 
        nitrate facility operations when seeking cooperative 
        agreements to implement the registration and 
        enforcement provisions of this subtitle.
  (b) Delegation.--
          (1) Authority.--The Secretary may delegate to a State 
        the authority to assist the Secretary in the 
        administration and enforcement of this subtitle.
          (2) Delegation required.--At the request of a 
        Governor of a State, the Secretary shall delegate to 
        the State the authority to carry out functions under 
        sections 899B and 899C, if the Secretary determines 
        that the State is capable of satisfactorily carrying 
        out such functions.
          (3) Funding.--Subject to the availability of 
        appropriations, if the Secretary enters into an 
        agreement with a State under this subsection to 
        delegate functions to the State, the Secretary shall 
        provide to the State sufficient funds to carry out the 
        delegated functions.
  (c) Provision of Guidance and Notification Materials to 
Ammonium Nitrate Facilities.--
          (1) Guidance.--The Secretary shall make available to 
        each owner of an ammonium nitrate facility registered 
        under section 899B(c)(1) guidance on--
                  (A) the identification of suspicious ammonium 
                nitrate purchases or transfers or attempted 
                purchases or transfers;
                  (B) the appropriate course of action to be 
                taken by the ammonium nitrate facility owner 
                with respect to such a purchase or transfer or 
                attempted purchase or transfer, including--
                          (i) exercising the right of the owner 
                        of the ammonium nitrate facility to 
                        decline sale of ammonium nitrate; and
                          (ii) notifying appropriate law 
                        enforcement entities; and
                  (C) any such additional subjects as the 
                Secretary determines are appropriate to prevent 
                the misappropriation or use of ammonium nitrate 
                in an act of terrorism.
          (2) Use of materials and programs.--In providing 
        guidance under this subsection, the Secretary shall, to 
        the extent practicable, leverage any relevant materials 
        and programs.
          (3) Notification materials.--
                  (A) In general.--The Secretary shall make 
                available materials suitable for posting at 
                ammonium nitrate facilities where ammonium 
                nitrate is sold.
                  (B) Design of materials.--Such materials 
                shall be designed to notify prospective 
                ammonium nitrate purchasers of--
                          (i) the record-keeping requirements 
                        under section 899B; and
                          (ii) the penalties for violating such 
                        requirements.

SEC. 899E. THEFT REPORTING REQUIREMENT.

  Any person who is required to comply with section 899B(e) who 
has knowledge of the theft or unexplained loss of ammonium 
nitrate shall report such theft or loss to the appropriate 
Federal law enforcement authorities within one calendar day of 
the date on which the person becomes aware of such theft or 
loss. Upon receipt of such report, the relevant Federal 
authorities shall inform State, local, and tribal law 
enforcement entities as appropriate.

SEC. 899F. PROHIBITIONS AND PENALTY.

  (a) Prohibitions.--
          (1) Taking possession.--No person shall take 
        possession of ammonium nitrate from an ammonium nitrate 
        facility unless such person is registered under 
        subsection (c) or (d) of section 899B, or is an agent 
        of a person registered under subsection (c) or (d) of 
        that section.
          (2) Transferring possession.--An owner of an ammonium 
        nitrate facility shall not transfer possession of 
        ammonium nitrate from the ammonium nitrate facility to 
        any person who is not registered under subsection (c) 
        or (d) of section 899B, unless such person is an agent 
        of a person registered under subsection (c) or (d) of 
        that section.
          (3) Other prohibitions.--No person shall--
                  (A) buy and take possession of ammonium 
                nitrate without a registration number required 
                under subsection (c) or (d) of section 899B;
                  (B) own or operate an ammonium nitrate 
                facility without a registration number required 
                under section 899B(c); or
                  (C) fail to comply with any requirement or 
                violate any other prohibition under this 
                subtitle.
  (b) Prohibitions.--No person shall--
          (1) buy and take possession of ammonium nitrate 
        without a registration number required under subsection 
        (c) or (d) of section 899B;
          (2) own or operate an ammonium nitrate facility 
        without a registration number required under section 
        899B(c); or
          (3) fail to comply with any requirement or violate 
        any other prohibition under this subtitle.
  (c) Civil Penalty.--A person that violates this subtitle may 
be assessed a civil penalty by the Secretary of not more than 
$50,000 per violation.
  (d) Penalty Considerations.--In determining the amount of a 
civil penalty under this section, the Secretary shall 
consider--
          (1) the nature and circumstances of the violation;
          (2) with respect to the person who commits the 
        violation, any history of prior violations, the ability 
        to pay the penalty, and any effect the penalty is 
        likely to have on the ability of such person to do 
        business; and
          (3) any other matter that the Secretary determines 
        that justice requires.
  (e) Notice and Opportunity for a Hearing.--No civil penalty 
may be assessed under this subtitle unless the person liable 
for the penalty has been given notice and an opportunity for a 
hearing on the violation for which the penalty is to be 
assessed in the county, parish, or incorporated city of 
residence of that person.
  (f) Delay in Application of Prohibition.--Paragraphs (1) and 
(2) of subsection (a) shall apply beginning 6 months after the 
issuance by the Secretary of a final rule implementing this 
subtitle.

SEC. 899G. PROTECTION FROM CIVIL LIABILITY.

  (a) In General.--Notwithstanding any other provision of law, 
an owner of an ammonium nitrate facility who in good faith 
refuses to sell or transfer ammonium nitrate to any person, or 
who in good faith discloses to the Department or to appropriate 
law enforcement authorities an actual or attempted purchase or 
transfer, based upon a reasonable belief that the person 
seeking purchase or transfer of ammonium nitrate may use the 
ammonium nitrate to create an explosive device to be employed 
in an act of terrorism (as defined in section 3077 of title 18, 
United States Code), or to use ammonium nitrate for any other 
unlawful purpose, shall be immune from civil liability arising 
from that refusal to sell ammonium nitrate or from making that 
disclosure.
  (b) Limitation.--Subsection (a) shall not be construed to 
apply with respect to any refusal to sell or disclosure--
          (1) that violates--
                  (A) title VII of the Civil Rights Act of 1964 
                (42 U.S.C. 2000e et seq); or
                  (B) the Americans with Disabilities Act of 
                1990 (42 U.S.C. 12101 et seq.); or
          (2) made on the basis that the person seeking 
        purchase or transfer of ammonium nitrate is a veteran 
        or member of the armed forces of the United States.

SEC. 899H. PREEMPTION OF OTHER LAWS.

  (a) Other Federal Regulations.--Except as provided in section 
899G, nothing in this subtitle affects any regulation issued by 
any agency other than an agency of the Department.
  (b) State Law.--Subject to section 899G, this subtitle 
preempts the laws of any State to the extent that such laws are 
inconsistent with this subtitle, except that this subtitle 
shall not preempt any State law that provides additional 
protection against the acquisition of ammonium nitrate by 
terrorists or the use of ammonium nitrate in explosives in acts 
of terrorism or for other illicit purposes, as determined by 
the Secretary.

SEC. 899I. DEADLINES FOR REGULATIONS.

  The Secretary--
          (1) shall issue a proposed rule implementing this 
        subtitle within six months after the date of the 
        enactment of this subtitle; and
          (2) issue a final rule implementing this subtitle 
        within one year after such date of enactment.

SEC. 899J. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to the Secretary such 
sums as may be necessary to carry out this subtitle for fiscal 
years 2007 through 2011.

           *       *       *       *       *       *       *

                             MINORITY VIEWS

    Preventing the acquisition of ammonium nitrate for use as 
an explosive in carrying out terrorist attacks has long been a 
shared priority for the Committee on Homeland Security. While 
ammonium nitrate is a widely used and highly effective 
agricultural fertilizer, it can also be utilized to create high 
yield explosives, and as a result, its acquisition by 
terrorists poses a serious threat to homeland security. H.R. 
1680, which is modeled on legislation originally considered 
during the 109th Congress, creates a legal framework that 
prevents terrorists from acquiring this dangerous material, 
provides law enforcement with the requisite tools for 
investigating ammonium nitrate incidents, and supports honest 
retailers in their efforts to prevent terrorism without unduly 
burdening the legitimate user's ability to access ammonium 
nitrate.
    The need for this legislation is clear. Ammonium nitrate 
has been the explosive material of choice in a number of acts 
and attempted acts of terrorism, including the 1995 bombing of 
the Alfred P. Murrah Federal building in Oklahoma City, 
Oklahoma; the 1998 United States embassy bombings in Tanzania 
and Kenya; the Toronto, Canada-based bomb plot thwarted by the 
Royal Canadian Mounted Police in June 2006; and, most recently, 
the conspiracy of a London based-terrorist group to engage in 
acts of terrorism using ammonium nitrate explosive devices 
throughout the United Kingdom.
    While the sale of ammonium nitrate based explosives is 
regulated by the Bureau of Alcohol, Tobacco, Firearms and 
Explosives, the sale of ammonium nitrate based fertilizers is 
not currently subject to Federal regulations. A handful of 
States, including New York, California, New Jersey, Nevada, 
Oklahoma, Missouri, South Carolina, Maryland, and Iowa, have 
enacted laws regulating the sale ammonium nitrate based 
fertilizers, but there is currently no Federal nationwide 
requirement to record or monitor such transactions. This 
legislation is needed to create a nationwide standard for 
regulating the sale and transfer of ammonium nitrate based 
fertilizers.
    The text of H.R. 1680 is derived from H.R. 3197, a 
bipartisan bill which was introduced during the 109th Congress. 
The Subcommittee on Prevention of Nuclear and Biological Attack 
held a hearing during the 109th Congress to consider H.R. 3197, 
discuss security measures appropriate for selling and 
purchasing ammonium nitrate, and receive testimony on the 
legislation from homeland security officials, as well as 
affected industry and agricultural groups. The bill was later 
marked up by the Subcommittee and the full Committee and 
reported favorably to the House. Unfortunately, the session 
ended before H.R. 3197 could be enacted.
    We are pleased to see the Committee return to this 
important issue early in this Congress, given the threat posed 
by the unregulated accessibility to ammonium nitrate and its 
history of use as a weapon of terror. During the months since 
the Committee originally reported the measure, Members have 
worked on a bipartisan basis to improve and strengthen the 
bill, and to further our dialogue on the threat that the 
unregulated sale and transfer of ammonium nitrate poses to 
homeland security. In crafting the text of H.R. 1680, we worked 
extensively with our Democrat colleagues to strike a balance 
between the cost and burden upon industry, agriculture and the 
consumer, and the enormous price to be paid in terms of lives 
lost, property damage, and the diminished security of U.S. 
citizens that could result from terrorist exploitation of 
uncontrolled access to ammonium nitrate.
Overview and need for an ammonium nitrate purchaser registration 
        requirement
    During negotiations with the Majority, Republican Members 
insisted on a change to the bill requiring those who buy (or 
otherwise take ownership interest in) and take possession of 
ammonium nitrate (rather then just sellers and producers of 
ammonium nitrate), to register with the Secretary of Homeland 
Security. This provision enables the Department to track not 
only those who sell ammonium nitrate, but anyone who buys and 
possesses ammonium nitrate, so that the Department can 
recognize suspect purchase patterns and readily locate those 
responsible for such purchases. By tracking all transfers of 
ammonium nitrate through use of a unique registration number, 
H.R. 1680 now addresses the issue of a potential terrorist 
buying limited amounts of ammonium nitrate from multiple retail 
sources, as opposed to buying a large quantity from one retail 
outlet, so as not to arouse suspicion. The result of adding the 
purchaser registration requirement is that such purchases would 
no longer go unnoticed. This change, insisted on by Republican 
Members, is a substantial improvement to effectiveness of the 
bill.
Registration number applicant check against the terrorist watch list
    During consideration of H.R. 1680, we were pleased with the 
Committee's adoption of three Republican amendments to further 
strengthen the legislation and add an important prevention 
element to the bill. Most notably, the Committee accepted an 
amendment offered by Representative Daniel E. Lungren, which 
requires the Secretary to run checks of applicants for 
registration numbers required under this Act against the 
terrorist watch list. Such a check is crucial to the 
legislation's goal of preventing terrorist acts involving 
ammonium nitrate. This proposal was initially resisted by many 
Majority Members of the Committee who sought to delay the 
implementation of such checks and instead request a study of 
the issue. Given the immediacy of the threat posed by 
uncontrolled access to ammonium nitrate. Republican Members 
succeeded in convincing the Majority that waiting for a study 
was imprudent and would not provide the terrorism prevention 
element the bill lacked.
    While considering this terrorist watch list amendment, some 
Members of the Committee also voiced concerns about the 
potential for mistaken matches or ``false hits'' against the 
terrorists watch lists and the need for an expedited appeals 
process for applicants for registration numbers who trigger a 
watchlist match. The Majority's concern over false hits 
indicates a fundamental misunderstanding of how such terror 
watch lists check work. The Democrats repeatedly cited the 
difficulty airline passengers face when their names are 
mistaken matched to names on the terrorist watch list, and the 
difficulties those travelers faced in ``removing'' their names 
from the terrorist watch list. Mistaken matches or false hits 
against the terrorist watch list for air travel passengers is 
not uncommon because third parties (airlines) run those checks 
using only a person's first initial and last name. By contrast, 
checks for applicants for ammonium nitrate registration numbers 
would be conducted by the Department, which would process 
checks for applicants using full names and dates of birth or 
other appropriate identifying information. Because the Lungren 
amendment would authorize the Department to use additional 
identifying information, the chances of a mistaken or false hit 
is extremely small. To put the number of people who will be 
affected by such false hits in perspective, we can look to the 
Department's experience in 2005 when it checked HAZMAT 
endorsement applicants against the terrorist watch list. Out of 
2.7 million truck drivers screened against the terrorist watch 
list, approximately 100 people were flagged as hits against the 
list. Of those 100 people flagged, only about two dozen people 
were withheld credentialing (many of those people had already 
been arrested or deported due to terrorist ties), and the vast 
majority of those 100 flagged were cleared. Since far fewer 
than 2.7 million will be applying for DHS ammonium nitrate 
registration numbers, the number of people who will be impacted 
by false hits against the terrorist watch list will be 
extremely small, and in fact it could affect no one at all.
    The Democrats also articulated concerns that terrorist 
watch list checks could slow the Department's issuance of 
registration numbers to applicants and that this could prevent 
farmers, especially small farmers, from immediately accessing 
ammonium nitrate for their crops. These concerns are unfounded, 
as the requirement for a registration number already slightly 
delays farmers from accessing ammonium nitrate on a moment's 
notice and because checks against the terrorist watch lists 
would be conducted by the Department instantaneously as a 
matter of normal application processing.
    During the full Committee markup, when it became clear that 
there was sufficient support in the Committee for 
Representative Lungren's terrorist watch list amendment on both 
sides of the aisle, the Majority abruptly adjourned the markup 
over concerns about terrorist watch list checks slowing the 
issuance of registration numbers and the appeals process. When 
the Committee reconvened the markup nine days later, 
Representative Lungren withdrew his original amendment and 
offered a revised amendment, which the Committee adopted by 
voice vote. This revised amendment maintains the same 
requirement for the Secretary to perform terrorist watch list 
checks before issuing a registration number, but imposes 
general deadlines for the Secretary to process applications and 
requires an expedited appeals process in the unlikely event 
there is a mistaken hit against the terrorist watch list. The 
deadlines are not absolute. The amendment provides the 
Secretary with flexibility where such requirements may impact 
national security or where meeting such deadlines are not 
practicable given the sensitive nature of the required security 
checks. The amendment also directs the Secretary to conduct 
periodic rechecks of registrants against the terrorist watch 
list and requires registration holders to update their 
identifying information as appropriate.
    H.R. 1680 provides that the requirement for ammonium 
nitrate purchasers and handlers to hold registration numbers 
does not take effect for six months after the issuance of final 
regulations. To minimize the burdens on both the Department and 
the private sector, the Lungren amendment directs the Secretary 
to take steps to ensure the maximum number of registrations are 
processed during this 6-month delay period when processing and 
appeals deadlines are not applicable.
Civil liability protections for ammonium nitrate sellers
    The Committee adopted an amendment offered by Ranking 
Member Peter T. King to provide sellers of ammonium nitrate 
immunity from civil liability when they in good faith: (l) 
refuse to sell or transfer ammonium nitrate to a potential 
purchaser; or (2) disclose ammonium nitrate purchasing activity 
to the Department or appropriate law enforcement entities. This 
civil liability protection is needed to enable ammonium nitrate 
sellers and transferors to feel comfortable refusing the to 
sell ammonium nitrate when they see red flags, such as when a 
purchaser attempts to buy excessive quantities of ammonium 
nitrate or buys ammonium nitrate out of season. It also 
encourages retailers to disclose suspect purchases without fear 
of civil liability. To qualify for the civil liability 
protection, such refusal and disclosure must be made in good 
faith and be based upon a reasonable belief that the subject 
person may use ammonium nitrate to engage in terrorist activity 
or may otherwise utilize ammonium nitrate for unlawful 
purposes. This provision encourages the ``if you see something, 
say something'' approach necessary to effectively engage the 
private sector in securing the homeland.
Record-keeping requirement
    The Committee adopted an amendment offered by 
Representative Ginny Brown-Waite during the full Committee 
markup, which changed the ammonium nitrate record keeping 
requirement from three years to two years. This amendment helps 
streamline record-keeping requirements for agricultural retail 
outlets. Many ammonium nitrate sellers are also in the business 
of selling restricted use pesticides, and, in many states, such 
transactions are subject to a two-year, rather than three-year, 
record-keeping requirement. This amendment is in keeping with 
our intent for the legislation to minimize impact on the 
agricultural sector where appropriate.
En bloc amendment
    In addition to the three Republican amendments, we are 
pleased that the Committee adopted the en bloc amendment 
offered by Chairman Thompson. This amendment makes necessary 
technical changes to the bill and includes important provisions 
which make clear that regulations under this legislation would 
apply to non-money ammonium nitrate transactions, and not just 
to buy-sell transactions.
                                   Peter T. King.
                                   Christopher Shays.
                                   Tom Davis.
                                   Charles W. Dent.
                                   Gus M. Bilirakis.
                                   Lamar Smith.
                                   Mark E. Souder.
                                   Daniel E. Lungren.
                                   Michael T. McCaul.
                                   Ginny Brown-Waite.
                                   David Davis.

                                  
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