[Federal Register Volume 72, Number 67 (Monday, April 9, 2007)]
[Rules and Regulations]
[Pages 17688-17745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-6363]



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Part III





 Department of Homeland Security





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6 CFR Part 27



 Chemical Facility Anti-Terrorism Standards; Final Rule

Federal Register / Vol. 72, No. 67 / Monday, April 9, 2007 / Rules 
and Regulations

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DEPARTMENT OF HOMELAND SECURITY

6 CFR Part 27

[DHS-2006-0073]
RIN 1601-AA41


Chemical Facility Anti-Terrorism Standards

AGENCY: Department Of Homeland Security.

ACTION: Interim final rule.

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SUMMARY: The Department of Homeland Security (DHS or Department) issues 
this interim final rule (IFR) pursuant to Section 550 of the Homeland 
Security Appropriations Act of 2007 (Section 550), which provided the 
Department with authority to promulgate ``interim final regulations'' 
for the security of certain chemical facilities in the United States.
    This rule establishes risk-based performance standards for the 
security of our Nation's chemical facilities. It requires covered 
chemical facilities to prepare Security Vulnerability Assessments 
(SVAs), which identify facility security vulnerabilities, and to 
develop and implement Site Security Plans (SSPs), which include 
measures that satisfy the identified risk-based performance standards. 
It also allows certain covered chemical facilities, in specified 
circumstances, to submit Alternate Security Programs (ASPs) in lieu of 
an SVA, SSP, or both.
    The rule contains associated provisions addressing inspections and 
audits, recordkeeping, and the protection of information that 
constitutes Chemical-terrorism Vulnerability Information (CVI). 
Finally, the rule provides the Department with authority to seek 
compliance through the issuance of Orders, including Orders Assessing 
Civil Penalty and Orders for the Cessation of Operations.

EFFECTIVE DATES: This regulation is effective June 8, 2007, except for 
Appendix A to part 27. A subsequent final rule document will announce 
the effective date of Appendix A to Part 27.
    Comment related to the addition of Appendix A to part 27 only will 
be accepted until May 9, 2007.

ADDRESSES: You may submit comments, identified by docket number 2006-
0073, by one of the following methods:
    <bullet> Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Mail: IP/CSCD/Dennis Deziel, Mail Stop 8100, Department of 
Homeland Security, Washington, DC 20528-8100.

FOR FURTHER INFORMATION CONTACT: Dennis Deziel, Chemical Security 
Regulatory Task Force, Department of Homeland Security, 703-235-5263.

SUPPLEMENTARY INFORMATION: This interim final rule is organized as 
follows: Section I explains the public participation provisions and 
provides a brief discussion of the statutory and regulatory authority 
and history; Section II summarizes the changes from the Advance Notice 
of Rulemaking and discusses the revised rule text; Section III 
summarizes and responds to the comments the Department received in 
response to the Advance Notice of Rulemaking; and Section IV contains 
the regulatory analyses for this interim final rule.

Table of Contents

I. Introduction and Background
    A. Public Participation
    B. Statutory and Regulatory Authority and History
II. Interim Final Rule
    A. Summary of Changes From Advance Notice of Rulemaking
    B. Rule Provisions
III. Discussion of Comments
    A. Applicability of the Rule
    1. Definition of ``Chemical Facility or Facility''
    2. Multiple Owners or Operators
    3. Classifying Facilities Based on Hazard Class
    4. Applicability to Specific Chemicals or Quantities of 
Chemicals
    5. Applicability to Types of Facilities
    6. Statutory Exemptions
    B. Determining Which Facilities Present a High-Level of Security 
Risk
    1. Use of the Top-Screen Approach
    2. Assessment Methodologies
    3. Risk-Based Tiers
    C. Security Vulnerability Assessments and Site Security Plans
    1. General Comments
    2. Submitting a Site Security Plan
    3. Content of Site Security Plans
    4. Approval of Site Security Plans
    5. Timing
    6. Alternate Security Programs
    D. Risk-Based Performance Standards
    1. General Approach To Performance Standards
    2. Comments about Specific Performance Standards
    3. Variations in Performance Standards for Risk Tiers
    4. Adoption of MTSA Provisions
    E. Background Checks
    F. Inspections and Audits
    1. Inspections
    2. Third-Party Auditors and Inspectors
    G. Recordkeeping
    H. Orders
    I. Adjudications and Appeals
    J. Information Protection: Chemical-terrorism Vulnerability 
Information (CVI)
    1. General
    2. Disclosure of CVI
    3. Scope of CVI
    4. Relation of CVI to Other Categories of Protected Information 
and FOIA
    5. Sharing CVI with State and Local Officials, the Public, and 
Congress
    6. Litigation
    7. Protection of CVI
    K. Preemption
    L. Implementation of the Rule
    M. Other Issues
    1. Whistleblower Protection
    2. Inherently Safer Technology
    3. Delegation of Responsibility
    4. Interaction with Other Federal Rules and Programs
    5. Third-Party Actions
    6. Judicial Review
    7. Guidance and Technical Assistance
    8. Miscellaneous Comments
    N. Regulatory Evaluation
IV. Regulatory Analyses
    A. Executive Order 12866: Regulatory Planning and Review
    B. Regulatory Flexibility Act
    C. Executive Order 13132: Federalism
    1. Background
    2. Propriety of the Department's View on Preemption
    3. No Field Preemption
    4. Principles of Conflict Preemption
    D. Unfunded Mandates Reform Act
    E. Paperwork Reduction Act
    F. NEPA

I. Introduction and Background

A. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views, or arguments on Appendix A of this 
interim final rule. Comments that will provide the most assistance to 
DHS in finalizing the Appendix will reference specific chemicals and 
Screening Threshold Quantities on the list, explain the reason for any 
recommended change, and include data, information, or authority that 
support such recommended change.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided.
    Comments that include trade secrets, confidential commercial or 
financial information, Sensitive Security Information (SSI), or 
Protected Critical Infrastructure Information (PCII) should not be 
submitted to the public regulatory docket. Please submit such comments 
separately from other comments on the rule. Comments containing trade 
secrets, confidential commercial or financial information, Sensitive 
Security Information (SSI), or Protected Critical Infrastructure 
Information (PCII) should be appropriately marked as containing such 
information and submitted by mail

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to the individual(s) listed in the FOR FURTHER INFORMATION CONTACT 
section.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
by mail may also be inspected. To inspect comments, please call Dennis 
Deziel, 703-235-5263, to arrange for an appointment.

B. Statutory Regulatory Authority and History

    On October 4, 2006, the President signed the Department of Homeland 
Security Appropriations Act of 2007 (the Act), which provides the 
Department of Homeland Security with the authority to regulate the 
security of high-risk chemical facilities. See Pub. L. 109-295, sec. 
550. Section 550 requires the Secretary of Homeland Security to 
promulgate interim final regulations ``establishing risk-based 
performance standards for security of chemical facilities'' by April 4, 
2007. Id. Although interim final regulations are usually issued without 
prior notice and comment (and the Act requires neither), the Department 
issued an Advance Notice of Rulemaking (Advance Notice) seeking comment 
on the significant issues and regulatory text. See generally 71 FR 
78276 (Dec. 28, 2006).
    As discussed more fully in the Advance Notice, before the enactment 
of Section 550, the Federal government did not have authority to 
regulate the security of most chemical facilities. The Department has, 
however, worked closely with industry leaders in pursuit of voluntary 
enhancement of security at these facilities and provided both technical 
assistance and grant funding for security. In addition, through the 
Coast Guard's Maritime Security regulations, the Department has 
addressed security at certain maritime-related chemical facilities. See 
33 CFR Part 105. Recently, the Departments of Homeland Security and 
Transportation also proposed security regulations for the rail 
transportation of hazardous chemicals. See 71 FR 76834, 71 FR 76851 
(Dec. 21, 2006). Other Federal programs have addressed chemical 
facility safety, but not security: the Environmental Protection Agency 
(EPA) regulates chemical process safety through its Risk Management 
Plan (RMP) program; the Department of Labor's Occupational Safety and 
Health Administration (OSHA) regulates workplace safety and health at 
chemical facilities; the Department of Commerce oversees compliance 
with the Chemical Weapons Convention; and the Department of Justice's 
Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) regulates, 
through licenses and permits, the purchase, possession, storage, and 
transportation of explosives.
    With the authority under Section 550, the Department can now fill a 
significant security gap in the country's anti-terrorism efforts. 
Section 550 specifies that the regulations ``shall apply to chemical 
facilities that, in the discretion of the Secretary, present high 
levels of security risk.'' The statute requires that the regulations 
establish risk-based performance standards; requires Security 
Vulnerability Assessments and Site Security Plans; allows Alternative 
Security Programs; mandates audits and inspections to determine 
compliance with the regulations; provides for civil penalties for 
violation of an order issued under the statute; and allows the 
Secretary to order a facility to cease operations if the facility is 
not in compliance with the requirements. The statute also gives the 
Department the authority to protect from inappropriate public 
disclosure any information developed pursuant to Section 550, 
``including vulnerability assessments, site security plans, and other 
security related information, records, and documents.''
    As discussed in the Advance Notice, by directing the Secretary to 
issue ``interim final regulations,'' Congress authorized the Secretary 
to proceed without the traditional notice-and-comment required by the 
Administrative Procedure Act. See 71 FR 78276, 78277. The Department, 
however, saw great benefit in soliciting comments on as much of the 
program as was practicable in the short timeframe permitted under the 
statute. Accordingly, the Department voluntarily sought comment on a 
range of regulatory and implementation issues and responds to the 
comments below.

II. Interim Final Rule

A. Summary of Changes From Advance Notice of Rulemaking

    In this interim final rule, the Department has not changed the 
general, risk-based approach it proposed in the December 28, 2006, 
Advance Notice. See 71 FR 78276. As discussed in detail below, the 
Department plans to implement the regulation in phases, starting to 
work aggressively with chemical facilities presenting the very highest 
security risks first. The Department adopts a risk-based tiering 
structure in its regulatory approach, so that the Department's scrutiny 
of facilities under this regulation increases as the level of risk 
increases. Even though this approach remains the same, the Department 
provides further details below on a number of unresolved issues 
presented in the Advance Notice. For example, the Department provides 
further detail on the issues surrounding background checks for those 
with access to high-risk facilities, and the Department describes its 
approach on facilities possessing ammonium nitrate.
    On several important issues, the Department has reconsidered and 
modified the position it proposed in the Advance Notice. For example, 
in response to comments, the Department has restructured its provisions 
concerning objections, consultations, adjudications, and appeals. As 
discussed below, the Department's aim is to provide flexibility and 
assistance for facilities seeking to comply with the regulatory 
standards. The Department has decided, however, to incorporate a role 
for a neutral adjudicator where unresolved differences present 
themselves and result in significant fines or other penalties. In 
addition, the Department has modified a number of scheduling and timing 
requirements in response to comments, and the Department further 
explains its approach on preemption of state and local law after 
considering the numerous comments on that subject. Although the 
Department continues to view as important the opportunity for 
facilities to submit Alternative Security Programs, the Department 
modified the circumstances in which it will accept Alternative Security 
Programs.
    Finally, the Department will consider the issues surrounding the 
use of fees in this regulatory program. The Department is contemplating 
the assessment of different fees, including filing fees, fees for 
inspections and audits, and fees for the screening of individuals 
against the Terrorist Screening Database. The Department has not 
provided for fees in this interim final rule, but may, in the future, 
propose and seek comment on the issues surrounding fees for this 
regulatory program.

B. Rule Provisions

    This section summarizes the regulatory text changes that the 
Department has made to this interim final rule. In addition to the 
summary contained in this section, we have, in many cases, provided a 
more extensive discussion of the change, and the reason for the change, 
in the response to comments below. See Sec.  III ``Discussion of 
Comments.'' Finally, to the extent that the Department has made 
technical corrections or corrected typographical errors, we do not 
specifically discuss them.

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Subpart A

Section 27.100 Purpose

    The Department has added a Purpose section to the rule. It states 
the Department's purpose and intent in issuing this rule and enforcing 
this regulatory program.

Section 27.105 Definitions

    For purposes of clarity, DHS has added several definitions, 
including ``Chemical Security Assessment Tool,'' ``Chemical-terrorism 
Vulnerability Information,'' ``Deputy Secretary,'' ``Director of the 
Chemical Security Division'' and ``Screening Threshold Quantity.'' The 
Department has also revised a few definitions, including ``Assistant 
Secretary'' and ``Under Secretary.'' The Department revised ``Under 
Secretary'' as a result of organizational changes in the Department 
following the Post-Katrina Emergency Reform Act, which the President 
signed on October 4, 2006. See Public Law 109-295, Title VI. In several 
places, the Department indicated that the named official, or his 
designee, has the specified responsibility under the regulation. The 
Department also revised the definition of ``Alternate Security 
Program,'' to provide consistency with changes the Department has since 
made to Sec.  27.235, the Alternate Security Programs section. The 
Department expanded upon the definition of ``tier,'' adding that, for 
purposes of this part, there are four risk-based tiers.
    Finally, the Department made clarifying changes to ``Chemical 
Facility,'' ``Covered Chemical Facility,'' and ``Owner.'' With respect 
to the definition of ``Chemical Facility,'' the Department removed the 
circular nature of the definition in the Advance Notice (i.e., a 
chemical facility shall mean any facility) (emphasis added) and now 
provides that a chemical facility ``shall mean any establishment that 
possesses or plans to possess * * *.''

Section 27.120 Designation of a coordinating official; Consultations 
and technical assistance

    The language in revised Sec.  27.120(a) makes clear that the 
Assistant Secretary will designate a Coordinating Official responsible 
for ensuring the uniform, impartial, and fair implementation of these 
regulations. The language in revised Sec.  27.120(b) indicates that the 
Coordinating Official and his staff shall provide guidance to 
facilities, and while the Coordinating Official and his staff will be 
available for consultation and to provide technical assistance, they 
will be available only to the extent that resources permit.
    In Sec.  27.120(c), the Department has provided specific details as 
to how a facility requests the assistance of the Coordinating Official. 
In the second sentence of Sec.  27.120(c), the Department provides that 
requests for consultation or technical guidance do not serve to toll 
any of the applicable timelines set forth in this part. Accordingly, 
regardless of whether or when a facility submits a request for 
consultation or technical guidance, the Department will require the 
facility to comply with the regulatory requirements, such as completing 
the Top-Screen, identifying vulnerabilities in the Security 
Vulnerability Assessment, and developing and implementing a Site 
Security Plan.
    The Department has added a new provision in Sec.  27.120(d). This 
provision provides that a covered facility may request a consultation 
with the Coordinating Official if it modifies its facility, processes, 
or the types or quantities of materials that it possesses, and believes 
such changes may impact the covered facility's obligations under this 
part. The Department added this provision in response to commenters 
concerned about a facility's ability to ``exit'' the regulatory 
program. The Department recognizes that facilities that reduce risk to 
levels below those levels that the Department deems as that 
characterized for Tier 4 facilities (i.e., the lowest risk facilities 
of the ``high risk'' facilities) or that eliminate certain risks 
altogether may no longer need to be covered by this regulation. This 
provision allows the covered facility to request the initiation of the 
screening process (which determines whether or not the facility is 
high-risk and therefore whether the facility is or is not included in 
this regulatory program) prior to the facility's next scheduled CSAT 
Top-Screen submission pursuant to Sec.  27.210. Through this 
consultation process, the facility may initiate discussions with the 
Department and ultimately accelerate the process for determining 
whether it can ``exit'' the regulatory program.

Subpart B

Section 27.200 Information regarding security risk for a chemical 
facility

    The Department has added several new provisions to this section. 
The Department has revised paragraph (b), by incorporating language 
from proposed Sec.  27.200(a) of the Advance Notice and by also adding 
new provisions. The two sentences in paragraph (b)(1) come from the end 
of proposed Sec.  27.200(a). Paragraph (b)(1) provides that the 
Assistant Secretary may seek the information listed in paragraph (a) by 
contacting chemical facilities individually or by publishing a notice 
in the Federal Register. It also provides that the Assistant Secretary 
may instruct facilities to complete and submit a Top-Screen through a 
secure Department Web site or through any other means approved by the 
Assistant Secretary.
    Paragraph (b)(2) is a new provision. It provides that a facility 
must complete and submit a Top-Screen in accordance with the schedule 
provided in Sec.  27.210 if it possesses any of the chemicals listed in 
Appendix A: ``DHS Chemicals of Interest'' at the corresponding 
quantities. For a further discussion of Appendix A, see the discussion 
of Appendix A further below in the Rule Provisions section. The purpose 
of this provision is to give facilities direction as to whether or not 
they must complete and submit a Top-Screen.
    As noted in the discussion of Appendix A, the presence or amount of 
a particular chemical is not an indicator of a facility's coverage 
under this rule. The presence or amount of a chemical in the Appendix 
is merely a baseline threshold requiring a facility to complete and 
submit a Top-Screen. (Consistent with Sec.  27.200(b)(1), DHS will 
retain the ability to notify facilities, through direct notification or 
Federal Register notice, that they need to complete and submit a Top-
Screen.) The information that the Department will obtain through the 
Top-Screen process is only one of several factors that the Department 
will consider in determining whether a facility is ``high-risk'' and 
thus covered by this rule.
    Paragraph (b)(3) addresses the requirements for individuals who 
submit information to the Department through the CSAT system, which 
includes the Top-Screen process. Paragraph (b)(3) provides that, where 
the Department requests that a facility complete and submit a Top-
Screen, the facility must designate a person to be responsible for the 
submission of information through the CSAT system. (The CSAT system is 
comprised of three sequential parts: the Top-Screen, the SVA, and the 
SSP). The Department provides that any such submitter must be an 
officer of the corporation or other person designated by an officer of 
the corporation, and must be domiciled in the United States. The 
Department had contemplated such requirements in Appendix A to the 
Advance Notice and now finalizes them here.
    Consistent with the explanation in Appendix A to the Advance 
Notice, the

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Department notes that a facility may choose to have another individual, 
in addition to the above-discussed ``submitter,'' involved in the 
submission of information through the Top-Screen. That other individual 
is a ``provider.'' A provider would be a qualified individual who is 
familiar with the facility in question and who completes the 
information in the CSAT system. The provider, however, would not 
formally submit information to the Department. The individual 
responsible for sending information to the Department through the CSAT 
system (whether Top-Screen, SVA, or SSP) is always the submitter. And 
as indicated in paragraph (b)(3), the submitter is also responsible for 
attesting to the accuracy of the submitted information.
    Paragraphs (c)(1) and (2) address facilities that the Department 
deems as ``presumptively high risk.'' Both paragraphs were in the 
Advance Notice, though they were located in proposed Sec. Sec.  
27.200(b) and (c).

Section 27.205 Determination that a chemical facility ``presents a high 
level of security risk.''

    The Advance Notice, at the end of Sec.  27.205(a), contained a 
provision about Departmental notification to facilities of their 
preliminary placement in a risk-based tier. The Department has moved 
that language to Sec.  27.220 ``Tiering,'' so that it is located with 
the related tiering provisions.
    In addition, the Department has removed proposed Sec.  27.205(c), 
along with Sec. Sec.  27.220(b), and 27.240(c), all of which had 
contained a mechanism for objections. In the Advance Notice, the 
Department had provided facilities with the opportunity to object to 
the following three Departmental actions: determination that a facility 
``presents a high level of risk,'' placement in a high-risk tier, and 
disapproval of a facility's Site Security Plan. The intention behind 
those provisions was to provide facilities with an informal opportunity 
to consult with the Department. The Department believes that the rule 
(including existing provisions from the Advance Notice as well as new 
provisions in this interim final rule) provides facilities with several 
opportunities for consultation when they disagree with an initial 
decision on these matters. Specifically, revised Sec.  27.120(b) 
provides that the Coordinating Official and his staff shall be 
available to consult and to provide technical assistance to a facility 
owner or operator, revised Sec.  27.120(c) provides the details for how 
a facility should initiate consultations or assistance, and revised 
Sec.  27.120(d) provides that a covered facility may request a 
consultation if it modifies its facility, processes, or the types or 
quantities of materials that it possesses and believes such changes may 
impact the covered facility's obligations under this part. In addition, 
Sec. Sec.  27.240(b) and 27.245(b) provide that a facility shall enter 
further consultations following Departmental written notification that 
a Security Vulnerability Assessment or Site Security Plan is 
unsatisfactory. Given that the rule already provides consultation 
opportunities, coupled with the fact that the Department has greatly 
modified its adjudication and appeal provisions, the Department 
believes it is unnecessary to retain these objections provisions and 
has thus removed them from the interim final rule.

Section 27.210 Submissions Schedule

    In Sec.  27.210, the Department clarifies the submission schedule 
for the Top-Screen, Security Vulnerability Assessment, and Site 
Security Plan. In Sec.  27.210(a) of the Advance Notice, the Department 
included a sentence indicating that the presumptive time frames were 60 
days for the Security Vulnerability Assessment and 120 days for the 
Site Security Plan. In this interim final rule, the Department has 
added presumptive timeframes for the submission of the Top-Screen and 
revised the presumptive timeframes for SVAs and SSPs. See Sec.  
27.210(a) and (b). The presumptive timeframes for initial submissions 
are 60 calendar days for the Top-Screen, 90 calendar days for the SVA, 
and 120 calendar days for the SSP. The presumptive timeframes for 
resubmission vary depending on a facility's tier. As a general matter, 
the Department will require facilities in Tiers 1 and 2 to update their 
Top-Screen, SVA, and SSP every two years, and facilities in Tiers 3 and 
4 to update their Top-Screen, SVA, and SSP every three years.
    In addition, the Department added a new paragraph (c), which 
addresses the Department's authority to modify schedules as necessary. 
The Department removed Sec.  27.210(c) as it appeared in the Advance 
Notice, because the provision was unnecessary in light of the new 
provisions in Sec.  27.120(b) and (c), ``Designation of a coordinating 
official; consultations and technical assistance.''
    Finally, the Department added a new paragraph (d), which addresses 
material modifications. In Sec. Sec.  27.215(c)(3) and 27.225(b)(3) of 
the Advance Notice, the Department provided that a covered facility had 
to notify the Department of material modifications to the SVA or SSP 
and that the Department would notify the facility within 60 days of 
whether the Department disapproved the revised SVA or SSP. The 
Department has re-located a new but similar requirement in Sec.  
27.210(d). The regulation now provides that if a covered facility makes 
material modifications to its operations or site, the covered facility 
must complete and submit a revised Top-Screen to the Department within 
60 days of completion of the material modification. In accordance with 
the resubmission requirements in Sec.  27.210(b)(2) and (3), the 
Department will notify the covered facility as to whether the covered 
facility must submit a revised Security Vulnerability Assessment, Site 
Security Plan, or both. As a result of this new paragraph (d), the 
Department removed the provisions that appeared in Sec. Sec.  
27.215(c)(3) and 27.225(b)(3) of the Advance Notice.

Section 27.215 Security Vulnerability Assessments and Section 27.225 
Site Security Plans

    The Department has revised several of the corresponding provisions 
in both Sec.  27.215 and Sec.  27.225. First, the Department has 
revised the corresponding provisions regarding methodologies. 
Specifically, the Department has revised the language in Sec.  
27.215(b) and added a new paragraph (b) in Sec.  27.225. In both 
places, the Department explains that, except as provided in Sec.  
27.235, a covered facility must submit either the SVA/SSP through the 
CSAT process or any other methodology or process identified by the 
Assistant Secretary.
    By this change, the Department is making more explicit its 
intention to use the CSAT process at this time. The CSAT process 
includes completion of the Top-Screen process and, depending on the 
results of the Top-Screen process, may also include the development of 
a Security Vulnerability Assessment and the development of a Site 
Security Plan. Thus, for facilities that are determined to be high-
risk, the CSAT process will consist of three sequential parts (i.e., 
the Top-Screen, SVA, and SSP). The Department also notes that 
facilities will have to obtain access to the CSAT system by submitting 
a user registration request. Section 27.200(b)(1) contains the 
requirements for individuals (i.e., submitters) who will be submitting 
information through the CSAT system and attesting to the accuracy of 
that information.
    Second, in paragraph (c) of both sections, the Department provides 
that a covered facility must submit an SVA or SSP to the Department in 
accordance

[[Page 17692]]

with the schedule provided in Sec.  27.210. This captures the 
requirement that had been located in proposed Sec.  27.240(a)(1) of the 
Advance Notice.
    Third, in paragraph (d) of both sections, the Department revised 
the update/revision provisions for submitting SVAs and SSPs. In the 
Advance Notice, the Department indicated that covered facilities must 
update or revise their SVAs or SSPs based on a schedule set by the 
Assistant Secretary. Because the Department has established a 
submission schedule in Sec.  27.210, the Department now includes cross-
references in Sec.  27.215(d)(1) and Sec.  27.225(d)(2) to that 
schedule. As a related matter, in Sec.  27.215(d), the Department moved 
the general submissions schedule requirement to Sec.  27.215(d)(1), 
thereby re-locating the provision formerly in Sec.  27.215(d)(1) to 
Sec.  27.215(d)(2).
    Fourth, the Department has removed the language about material 
modifications from proposed Sec.  27.215(c)(3) and Sec.  27.225(b)(3). 
As discussed in the summary of Sec.  27.210, the Department added a 
new, but similar, provision to Sec.  27.210(d). The new provision now 
captures the concept contemplated in proposed Sec.  27.215(c)(3) and 
Sec.  27.225(b)(3).
    With respect to changes to Sec.  27.225 only, the Department has 
added a provision that requires facilities to conduct annual audits of 
their Site Security Plans. See Sec.  27.225(e). This provision had been 
implied in the recordkeeping requirement in the Advance Notice (see 
Sec.  27.255(a)(6)) and is now explicit. DHS made some additional 
revisions to the corresponding recordkeeping provision, in which DHS 
more clearly specifies the audit-related records that covered 
facilities should maintain.
    Finally, throughout this document, the Department now uses the term 
``Security Vulnerability Assessment'' (or SVA) instead of the term 
``Vulnerability Assessment'' or (VA), which the Department had used in 
the Advance Notice. The Department intends no change in meaning with 
this revision.

Section 27.220 Tiering

    The Department has added several paragraphs to this section. 
Section 27.220(a) addresses the Department's preliminary determination 
as to a facility's risk-based tier. Paragraph (a) is based on language 
that had been in the Advance Notice at the end of Sec.  27.205(a). The 
Department has elaborated on the Preliminary Tiering provision. 
Notably, the Department has indicated that it shall notify a facility 
of the Department's preliminary tiering decision. This contrasts with 
the Advance Notice, which had merely indicated that the Department may 
notify a facility of the Department's preliminary tiering decision.
    Section 27.220(b) is not a new subsection; rather, it contains the 
language that was previously located in Sec.  27.220(a). Note that the 
Department has removed paragraph (b) as proposed in the Advance Notice. 
Paragraph (b) had contained an objections provision. For a discussion 
of the Department's decision to remove the objections provisions from 
this rule (in Sec. Sec.  27.205(c), 27.220(b), and 27.240(c)), see the 
summary under Sec.  27.205(c).
    Section 27.220(c) is a new subsection. The Department is 
reiterating, in part, what it provides in the definitions section. The 
Department will place facilities in one of four risk-based tiers. Tiers 
will range from Tier 1, which contains the highest-risk covered 
facilities, to Tier 4, which contains the lowest-risk covered 
facilities. Finally, the Department separated the sentence located at 
the end of proposed Sec.  27.220(a) into its own section, Sec.  
27.220(d).

Section 27.230 Risk-Based Performance Standards

    This section contains the risk-based performance standards that 
covered facilities must satisfy. The Department has added a sentence to 
Sec.  27.230(a), noting that the ``acceptable layering of measures used 
to meet the standards will vary by risk-based tier.'' While all 
facilities must satisfy the performance standards, the measures 
sufficient to meet those standards will be more robust for those 
facilities that present higher levels of risk. In other words, the 
manner in which the standards are applied will require a higher level 
of security (and so provide for greater reduction in risk) for those 
facilities that present higher levels of risk. The Department will 
provide details about the application of these standards in guidance.
    In addition, for each of the performance standards, the Department 
has added a short descriptor at the beginning of the subparagraph 
(e.g., paragraph (a)(1) begins with ``Restricted Area Perimeter,'' 
paragraph (a)(2) begins with ``Securing Site Assets,'' and so forth).
    The Department has also revised some of the language related to 
specific performance standards. Section 27.230(a)(4) now provides that 
facilities must select, develop, and implement measures designed to 
``[d]eter, detect, and delay an attack, creating sufficient time 
between detection of an attack and the point at which the attack 
becomes successful.'' This revised language more adequately captures 
the concept that the Department had intended in the language in 
paragraph (a)(4) of the Advance Notice and is more complete. Section 
27.230(a)(5) now requires facilities to secure and monitor the storage 
of hazardous materials, in addition to the shipping and receipt of 
hazardous materials. Section 27.230(a)(8) now contains a broader 
description of critical process systems. In the Advance Notice, the 
Department had used the acronym ``SCADA'' (Supervisory Control and Data 
Acquisition) to refer to instrumented control systems in general. In 
this interim final rule, the Department has provided more descriptive 
terminology to refer to critical process systems. For a further 
discussion of SCADA, see the Department responses to ``Comments on 
Specific Performance Standards.'' Section 27.230(a)(12) contains an 
expanded standard for background checks. For a further discussion of 
background checks, see the Department response to comments about 
``Background Checks.'' Section 27.230(a)(15) now provides that 
facilities should report significant security incidents to local law 
enforcement in addition to the Department. Finally, the Department has 
removed the paragraph that was paragraph 27.230(a)(19) in the Advance 
Notice, because that standard was already addressed in paragraph 
(a)(14).

Section 27.235 Alternative security program

    The Department has revised this section to provide more detail 
about the process for Alternate Security Programs (ASPs). The basic 
requirement remains the same, in that certain covered facilities may 
submit ASPs, and the Assistant Secretary may approve those ASPs. See 
Sec.  27.235(a). To accept an ASP, the Assistant Secretary must find 
that the program ``provides an equivalent level of security to the 
level of security established by this part.'' This language, which 
clarifies the standard for accepting ASPs, comes from the preamble of 
the Advance Notice and is consistent with the terms of Section 550. See 
71 FR 78276, 78285.
    In Sec.  27.235(a)(1)-(2), the Department specifies, by tier, which 
facilities may submit ASPs in lieu of Security Vulnerability 
Assessments (SVAs) and which facilities may submit ASPs in lieu of Site 
Security Plans (SSPs). A Tier 4 facility may submit an ASP in lieu of a 
Security Vulnerability Assessment, Site Security Plan, or both. Tier 1, 
Tier 2, and Tier 3 facilities may submit an

[[Page 17693]]

ASP in lieu of a Site Security Plan. Tier 1, Tier 2, and Tier 3 
facilities may not submit an ASP in lieu of a Security Vulnerability 
Assessment. Accordingly, Tier 1, Tier 2, and Tier 3 facilities will 
have to submit their SVA through the CSAT system.
    With respect to Tier 4 facilities, the Department clarifies the 
following point: Given that the Department notifies a facility of its 
final placement in a risk-based tier following the Department's review 
of a covered facility's SVA (see Sec.  27.220(b)), a facility will not 
know its final tier placement at the time it might decide to submit an 
ASP in lieu of a SVA. Because of that, the Department understands that 
facilities will rely on the Department's preliminary tiering 
determination made pursuant to Sec.  27.220(a).
    There are various reasons underlying the Department's decision not 
to accept ASPs as SVAs for Tier 1, Tier 2, and Tier 3 facilities. The 
Department needs a consistent baseline against which to compare risks 
and vulnerabilities across chemical facilities. (For a further 
discussion of this issue, see the Department's response to comments in 
Sec.  III(B)(1)). As well, the Chemical Security Assessment Tool (CSAT) 
system uses an integrated approach to chemical facility security, and 
by considering SVAs that use the methodology in the CSAT system, the 
Department can take full advantage of that integrated approach. 
Furthermore, by using this electronic, integrated CSAT approach, the 
Department can more efficiently review and assess a greater number 
SVAs, and that is of importance considering the Department's phased 
implementation scheme to address the highest risk facilities first.
    The Department acknowledges that many facilities have expended 
substantial resources and incurred significant expense to identify 
vulnerabilities and to develop security plans. The Department commends 
facilities for such efforts. The work performed on these efforts is 
valuable, and DHS is committed to capitalizing on these investments. 
The information developed in these efforts will be relevant to 
facilities as they complete the CSAT SVA. Facilities will be able to 
use the information from existing vulnerability assessments, and in 
many cases, the practical impact of requiring Tiers 1, 2, and 3 
facilities use the CSAT SVA system will be one of formatting, i.e., 
facilities will have to enter their information from their existing 
vulnerability assessments into the format established by the CSAT 
system. While some additional analytical effort will be required, even 
where the facility has produced a strong SVA, the effort will be 
considerably less than that at facilities that are starting without a 
pre-existing SVA.
    In addition, Sec.  27.235(b) provides that the notice requirements 
for submitting ASPs correspond with the notice requirements (including 
the approval and disapproval process) for SVAs and SSPs. In other 
words, if a facility is submitting an ASP in lieu of an SVA, the 
process in Sec.  27.240 applies, and if a facility is submitting an ASP 
in lieu of an SSP, the process in Sec.  27.245 applies.

Section 27.240 Review and Approval of Security Vulnerability Assessment 
and Section 27.245 Review and Approval of Site Security Plans

    In this interim final rule, the Department has separated the review 
and approval of SVAs and SSPs into two separate sections. In the 
Advance Notice, both sets of requirements were located in Sec.  27.240. 
In this interim final rule, the provisions related to Security 
Vulnerability Assessments are located in Sec.  27.240, and the 
provisions related to Site Security Plans are located in Sec.  27.245.
    In addition, the Department made some changes to the corresponding 
provisions in the two separate sections. In both sections, the 
Department has removed the language (from proposed Sec.  27.240(a)(1)) 
about time periods for submitting SVAs and SSPs. The Department has 
already addressed this issue in Sec. Sec.  27.215(c)-(d) and Sec. Sec.  
27.225(c)-(d) (by providing that a facility must provide, update, and 
revise its SVA and SSP consistent with the schedule in Sec.  27.210), 
so it was unnecessary to also include this language here. Also, in both 
sections, the Department has added new language about the disapproval 
of SVAs or SSPs. The Department added a new sentence, which provides 
that ``[i]f the resubmitted [SVA or SSP] does not satisfy the 
requirements of [Sec.  27.215 or Sec.  27.225], the Department will 
provide the facility with written notification (including a clear 
explanation of deficiencies in the [SVA or SSP]) of the Department's 
disapproval of the [SVA or SSP].'' See Sec.  27.240(b) and Sec.  
27.245(b).
    Finally, the Department has added a provision in Sec.  
27.245(a)(1)(iii), indicating that the Department issues a Letter of 
Approval if it approves a facility's Site Security Plan in accordance 
with Sec.  27.250. While this provision appears elsewhere in the rule 
(see Sec.  27.245(b)), the Department thought it was appropriate to 
include it here as well.
    The Department has removed 27.240(c) as proposed in the Advance 
Notice. Paragraph (c) had contained an objections provision. For a 
discussion of the Department's decision to remove the objections 
provisions from this rule (in Sec. Sec.  27.205(c), 27.220(b), and 
27.240(c)), see the summary under Sec.  27.205(c).

Section 27.250 Inspections and Audits

    The Department has added additional provisions to the inspection 
and audit section. In Sec.  27.250(c), the Department discusses the 
time and manner requirements for inspections. While the Department will 
generally provide facilities with 24-hour advance notice of 
inspections, the Department recognizes two exceptions where an 
unannounced inspection might occur. The Department included the first 
exception in the Advance Notice, and the Department has added the 
second exception in this interim final rule. For a further discussion, 
see the Discussion of Comments in Sec.  III(F) on ``Inspections and 
Audits.''
    In Sec.  27.250(d), the Department addresses various details 
related to the inspectors who will conduct inspections and audits. This 
is a new paragraph that was not in the Advance Notice. Although 
Congress has not provided the Department with administrative subpoena 
authority, this paragraph explains that inspectors will have 
credentials and may administer oaths and receive affirmations upon 
consent. It also provides details about the means by which inspectors 
may gather information and the access that inspectors will have to 
records. The Department has also added a paragraph (e), which addresses 
confidentiality. Finally, the guidance paragraph, which had been 
located in paragraph (d) has been moved to paragraph (f).

Section 27.255 Recordkeeping Requirements

    The Department revised various provisions related to recordkeeping. 
With respect to Sec.  27.255(a)(1), the Department added a few 
additional record requirements regarding training. In addition to 
keeping records of the date and location of each training session, time 
of day and duration of each session, the name and qualifications of the 
instructor, and a clear, legible list of the attendees including 
attendees' signatures, the facility must also keep at least one other 
unique identifier for each attendee receiving training and the results 
of any evaluation or training. The Department also added a requirement 
to Sec.  27.255(b), requiring facilities to keep submitted Top-Screens 
in addition to submitted

[[Page 17694]]

SVAs and SSPs. In addition, as discussed above in the summary for Sec.  
27.225(e), the Department revised the recordkeeping provision related 
to internal audits. See Sec.  27.255(a)(6).
    The Department also added a new paragraph (c), allowing the 
Department to request that covered facilities make available records 
kept pursuant to other Federal programs or regulations. The Department 
would make such requests for records to the extent that any such 
records were necessary for security purposes. As a result of adding new 
paragraph (c), the Department had to re-designate proposed paragraph 
(c) as paragraph (d).

Subpart C

    The Department has substantially revised Subpart C, which contains 
the provisions for Orders, Adjudications, and Appeals.

Section 27.300 Orders

    The Department has restructured the Orders provisions. Whereas the 
Advance Notice contained four separate sections (see Sec. Sec.  27.300, 
27.305, 27.310, and 27.315), the Department has now consolidated all of 
the Order provisions into one section, Sec.  27.300. The main substance 
of the Orders provisions, however, remains the same. Pursuant to Sec.  
27.300(a), the Assistant Secretary can issue an Order for any instance 
of noncompliance. For example, the Assistant Secretary may issue an 
Order for a facility's refusal to complete a Top-Screen, failure to 
allow an inspection, or failure to update a Site Security Plan.
    Beyond a basic Order, the Assistant Secretary may issue an Order 
Assessing Civil Penalty, an Order to Cease Operations, or both, where 
it determines that a facility is in violation of any Order issued 
pursuant to paragraph (a). See Sec.  27.300(b). Orders Assessing Civil 
Penalty are for a continual noncompliance, a repeated pattern of 
noncompliance or egregious instances of noncompliance. Orders to Cease 
Operations are the most serious Orders that the Assistant Secretary 
might choose to issue under this regulatory scheme. The Assistant 
Secretary will use such a measure cautiously and judiciously and will 
balance the immediate security needs with the possible impact (e.g., 
economic impact or national security effect) of such an Order on the 
chemical industry and the Nation as a whole. As the Department wrote in 
the Advance Notice, ``This authority would be utilized when no other 
options will achieve the required result.'' See 71 FR 78276, 78287.
    Paragraphs (c) through (f) of Sec.  27.300 address the process and 
procedures for Orders. Section 27.300(c) lists the information, at a 
minimum, that the Assistant Secretary must include in an Order and also 
notes that the Assistant Secretary may establish further procedures for 
the issuance of Orders. Section 27.300(d) notes that a facility must 
comply with the terms of the Order by the date specified in the Order. 
Section 27.300(e) indicates that a facility has the right to seek an 
adjudication to review the decision of the Assistant Secretary to issue 
an Order, and Sec.  27.300(f) addresses final agency action.
    With respect to the staying of Orders, the Department addresses 
this issue in the new adjudications sections. Specifically, Sec.  
27.310(b)(4) provides that an Order is stayed from the timely filing of 
a Notice of Application for Review until the Presiding Officer issues 
an Initial Decision, unless the Secretary lifts the stay due to exigent 
circumstances pursuant to Sec.  27.310(d). The new adjudications 
section is discussed in more depth below.

Section 27.305 through 27.340 Adjudications

    Most significantly with respect to adjudications, the Department 
has provided facilities with the opportunity to seek review of 
specified decisions before a neutral adjudications officer. A facility 
or other person may seek review of the following Department (i.e., 
Assistant Secretary) determinations: (1) A finding, pursuant to Sec.  
27.230(a)(12)(iv) that an individual is a potential security threat; 
(2) The disapproval of a Site Security Plan pursuant to Sec.  
27.245(b); or (3) The issuance of an Order pursuant to Sec.  27.300(a) 
or (b). See Sec.  27.310(a).
    The procedures for Applications are found in Sec.  27.310(b). To 
institute Adjudication Proceedings, the facility or other person 
(``Applicant'') must file a Notice of Application for Review within 
seven calendar days of notification of the Assistant Secretary's 
determination. See Sec.  27.310(b)(1)-(2). Then, in an Application for 
Review, the Applicant must explain his or her position (i.e., explain 
why the Assistant Secretary's determination should be set aside). The 
Applicant has 14 calendar days from the date of notification of the 
Assistant Secretary's determination to file and serve an Application 
for Review. See Sec.  27.310(b)(5). The Assistant Secretary, through 
the Office of the General Counsel, shall file and serve a Response 
within 14 calendar days of the filing and service of the Application 
for Review. See Sec.  27.310(c). Finally, the Secretary may make 
certain procedural modifications in exigent circumstances. See Sec.  
27.310(d).
    A Presiding Officer is the neutral adjudications officer who 
handles these proceedings. The Secretary shall appoint a Presiding 
Officer, consistent with the requirements in Sec.  27.315. A Presiding 
Officer shall immediately consider whether a summary adjudication of an 
Application for Review is appropriate, and if the Presiding Officer 
finds that there is no genuine issue of material fact and that one 
party or the other is entitled to decision as a matter of law, then the 
record shall be closed and the Presiding Officer shall issue an Initial 
Decision on the Application for Review. See Sec.  27.330(b). Such 
summary decisions are governed by the procedures in Sec.  27.330.
    Where there is no summary decision, the Presiding Officer may 
conduct a hearing using the procedures specified in Sec.  27.335. The 
Presiding Officer shall close and certify the record upon the 
completion of one of the following: a summary judgment proceeding, a 
hearing, the submission of post-hearing briefs, or the conclusion of 
oral arguments. See Sec.  27.340(a). Based on the certified record, the 
Presiding Officer shall issue an Initial Decision, and the decision 
shall be subject to appeal pursuant to Sec.  27.345.
    In addition to the sections mentioned above, there are a few other 
sections that address provisions related to adjudications. Section 
27.320 specifies the prohibition on ex parte communications during 
Proceedings. And Sec.  27.325 provides that the Assistant Secretary 
bears the initial burden of proving the facts necessary to support the 
challenged administrative action at every proceeding instituted under 
this subpart.
    Finally, as related to the Appeals section below, a Presiding 
Officer's Initial Decision is stayed from the timely filing of a Notice 
of Appeal until the Under Secretary issues a Final Decision, unless the 
Under Secretary lifts the stay due to exigent circumstances. See Sec.  
27.345(b)(4).

Section 27.345 Appeals

    The interim final rule contains a revised appeals section. There 
are several differences. First, a facility or other person may appeal 
the Initial Decision of the Presiding Officer made pursuant to Sec.  
27.340(b). This differs from the Advance Notice, in which a facility 
could appeal a Departmental final determination regarding disapproval 
of a Site Security Plan and the Departmental issuance of an Order. See 
Sec.  27.320 in the Advance Notice.

[[Page 17695]]

Second, the Advance Notice provided that the Under Secretary would make 
decisions for most categories of appeals, and the Deputy Secretary 
would make decisions for one category of appeal. This interim final 
rule provides that all appeals go to the Under Secretary or his 
designee acting as a neutral appeals officer. Third, as is discussed in 
more depth below, the procedures for an appeal have changed.
    The Assistant Secretary, a facility, or other person 
(``Appellant'') may institute an Appeal by filing a Notice of Appeal 
within seven calendar days of notification of the Presiding Officer's 
Initial Decision. See Sec.  27.345(b)(1)-(3). The Appellant shall then 
file and serve a Brief within 28 calendar days of the notification of 
the Presiding Officer's Initial Decision. See Sec.  27.345(b)(5). The 
Appellee shall file and serve its Opposition Brief within 28 days of 
the filing of Appellant's Brief. See Sec.  27.345(b)(6). The Under 
Secretary shall issue a Final Decision and serve it on the parties. A 
Final Decision by the Under Secretary constitutes final agency action. 
See Sec.  27.345(f).
    In addition to the provisions mentioned above, the Department notes 
the following: Pursuant to Sec.  27.345(b), the Under Secretary may 
provide for an expedited appeal; pursuant to Sec.  27.345(c), ex parte 
communications are prohibited; and pursuant to Sec.  27.345(c), a 
facility or other person may elect to have the Under Secretary 
participate in any mediation or other resolution process by expressly 
waiving, in writing, any argument that such participation has 
compromised the Appeals process. In addition, pursuant to Sec.  
27.345(g), the Secretary may establish procedures for the conduct of 
appeals.

Subpart D

Section 27.400 Chemical-Terrorism Vulnerability Information

    The Department has made numerous clarifying changes to the 
chemical-terrorism vulnerability information (CVI) section. Some of 
these changes corrected typographical errors, while several others 
clarified existing provisions. With respect to a minor change, note 
that, in Sec.  27.400 of the Advance Notice, the Department referred to 
CVI as ``Chemical-terrorism Security and Vulnerability Information'' 
and in this interim final rule, the Department now refers to CVI as 
``Chemical-terrorism Vulnerability Information.'' The Department 
intends no change in meaning with this revision.
    The Department has highlighted below the more substantive changes 
to Sec.  27.400. With respect to paragraph (c), the Department has 
removed paragraph (c)(2), because that concept is already covered in 
paragraph (e)(1)(v). In paragraph (d)(1), the Department provides that 
covered persons must protect all CVI in their possession or control, 
including electronic data. In paragraph (e)(1), the Department added 
language providing that a person who might have a ``need to know'' 
includes ``state or local officials, law enforcement officials, and 
first responders.'' In paragraph (e)(1)(ii), the Department clarified 
that a person in training will only have access to CVI that he needs as 
part of his training, and in paragraph (e)(1)(iv), the Department 
clarified that a the person in a fiduciary relationship with a covered 
person who is representing or providing advice to that covered person 
will also have a need to know CVI. In paragraph (e)(2)(iii), the 
Department provides that it may require non-Federal persons seeking 
access to CVI to complete a non-disclosure agreement before such access 
is granted. In paragraph (f)(3), the Department shortened the 
distribution limitation statement and added a new sentence at the end, 
which provides: ``[i]n any administrative or judicial proceedings, this 
information shall be treated as classified information in accordance 
with 6 CFR Sec. Sec.  27.400(h) and (i).'' And in paragraphs (h)(1), 
(i)(1), and (i)(2), the Department made it clear that these sections 
apply to the disclosure of CVI in the context of administrative or 
judicial enforcement proceedings of section 550 only, not any other 
kind of enforcement proceeding. Similarly, in paragraph (i)(7)(iii), 
the Department made it clear that this section applies only to judicial 
enforcement proceedings and not any other judicial proceeding.

Section 27.405 Review and Preemption of State Laws and Regulations

    The Department has made several changes to Sec.  27.405, including 
various regulatory text changes. Among those changes, the Department 
has added paragraph (a)(1). The Department wishes to avoid any 
unintended consequences in the program's interaction with other Federal 
requirements. For this reason, Sec.  27.405(a)(1) provides that 
``[n]othing in this regulation is intended to displace other federal 
requirements administered by the Environmental Protection Agency, U.S. 
Department of Justice, U.S. Department of Labor, U.S. Department of 
Transportation, or other federal agencies.'' For a further discussion 
of these changes and preemption in general, see the section below 
entitled ``Executive Order: 13132: Federalism.''

Proposed Appendix A: DHS Chemicals of Interest

    In the Advance Notice, the Department sought comment on appropriate 
sources of information or methodologies for evaluating and categorizing 
chemical facilities.'' See 71 FR 78276, 78282. The Department responds 
to those comments below in the ``Discussion of Comments.'' In this 
interim final rule, the Department has decided to evaluate chemical 
facility risks by, in part, classifying facilities by particular 
chemicals. In proposed Appendix A, the Department has included a list 
of ``DHS Chemicals of Interest'' along with Screening Threshold 
Quantities, or STQs, for each chemical. The Department has established 
STQs to trigger preliminary screening requirements. The STQ is not the 
threshold quantity for establishing whether a given facility is a high-
risk facility, but only sets a threshold to require a facility to 
complete and submit a CSAT Top-Screen. As noted in the ``Public 
Participation'' section above, the Department is accepting public 
comment on proposed Appendix A for 30 days. Following the close of the 
comment period, the Department will review the comments and publish a 
final Appendix A. The requirements related to Appendix A, which are 
found in Sec. Sec.  27.200(b)(2) and 27.210, will become operative on 
the date that the Department publishes a final Appendix A.
    Pursuant to Sec.  27.200(b)(2), if a facility possesses any 
chemicals identified in Appendix A at the corresponding quantities, the 
facility must complete and submit a Top-Screen. Consistent with the 
submission requirements in Sec.  27.210(a)(1), the facility must 
complete the Top-Screen within 60 calendar days of the effective date 
of a final Appendix A or within 60 calendar days of coming into 
possession of any such chemical at the corresponding quantity. (As 
indicated in the regulatory text, this submission requirement is not 
operative until the Department publishes a final Appendix A.) Note that 
this provision does not affect the Department's ability to contact 
facilities independently of this list. Pursuant to Sec.  27.200(b)(1), 
DHS may notify facilities, on an individual basis or through an 
additional Federal Register notice, that they need to complete and 
submit the Top-Screen. The Department notes that, where a facility has 
a question as to whether it should complete a Top-Screen, the facility 
can contact the

[[Page 17696]]

Department and seek a consultation pursuant to Sec.  27.120.
    The Department reiterates that the presence or amount of a 
particular chemical listed in Appendix A is not the sole factor in 
determining whether a facility presents a high-level of security risk 
and is not an indicator of a facility's coverage under this rule. The 
DHS Chemicals of Interest list merely directs certain facilities to 
complete and submit the Top-Screen. This list serves as a tool to aid 
the Department in gathering information needed to administer the 
program under Section 550. In order for the Department to assess 
compliance by particular chemical facilities with the regulation (see 
Section 550(e)), the Department must first obtain information to 
determine whether the particular chemical facilities qualify for 
coverage under Section 550. The list set out in Appendix A serves as a 
procedural tool designed to aid the Department in determining which 
facilities must comply with the substantive standards. Only after the 
Department gathers additional information through the Top-Screen 
process will the Department make a determination as to whether a 
facility presents a high risk and therefore must comply with the 
regulatory requirements to ensure adequate security. Under Section 550, 
the Department has the authority to use its best judgment and all 
available information in determining whether a facility presents a high 
level of security risk.
    In developing the ``DHS Chemicals of Interest'' list, the 
Department has looked to existing sources of information and has then 
drawn on many of those sources of information, including some of the 
sources that commenters suggested. Those sources include the following: 
(1) The chemicals contained on the EPA's RMP list. Pursuant to the 
Clean Air Act (42 U.S.C. 7401, et seq.), which provides that the EPA 
shall promulgate a list of substances that ``in the case of accidental 
release, are known to cause or may reasonably be anticipated to cause 
death, injury, or serious adverse effects to human health or the 
environment (see 42 U.S.C. 7412(r)(3)), the EPA promulgated two lists. 
Table 1 is titled ``List of Regulated Toxic Substances and Threshold 
Quantities for Accidental Release Prevention,'' and Table 3 is titled 
``List of Regulated Flammable Substances and Threshold Quantities for 
Accidental Release Prevention'' (see 40 CFR 68.130); (2) The chemicals 
from the Chemical Weapons Convention (CWC). Section 6701, et seq. of 
Title 22 of the United States Code implements the Convention on the 
Prohibition of the Development, Production, Stockpiling and Use of 
Chemical Weapons and on Their Destruction. The CWC covers three lists, 
or ``schedules'' of chemicals. Schedule 1 chemicals are provided in 
Supplement No. 1 to 15 CFR part 712, Schedule 2 chemicals are provided 
in Supplement No. 2 to 15 CFR part 713, and Schedule 3 chemicals are 
provided in Supplement No. 3 to 15 CFR part 714; and (3) Hazardous 
materials, including gases poisonous by inhalation (PIH) and explosive 
materials, which the Department of Transportation regulates. See 49 CFR 
173.115(c), 49 CFR 173.50(b), and 49 CFR 172.101. The Department has 
also considered other categories of chemicals, such as chemicals that 
can be used as precursors for Improvised Explosive Devices (IEDs) and 
certain water-reactive materials that produce toxic gases.
    The Department makes a few points with respect to the list in 
Appendix A. First, DHS is not using any existing list (e.g., the EPA 
RMP list) as its sole source, and DHS is not classifying all facilities 
on a list in one particular way (i.e., classifying all RMP facilities 
as high-risk). By using multiple sources at this initial phase, DHS 
believes it is obtaining a more complete picture of the universe of 
facilities that may qualify as high-risk. Second, in identifying the 
types and STQs of chemicals for Appendix A, the Department has sought 
to be sufficiently inclusive of chemicals and quantities that might 
present a high level of risk under the statute without being overly 
inclusive and therefore capturing facilities which are unlikely to 
present a high level of risk.
    In addition to drawing on information from existing sources, the 
Department has identified chemicals by considering three security 
issues. These three security issues, which are explained below, address 
multiple risk areas.
    1. Release--DHS believes that certain quantities of toxic, 
flammable, or explosive chemicals or materials, if released from a 
facility, have the potential for significant adverse consequences for 
human life or health.
    2. Theft or Diversion--DHS believes that certain chemicals or 
materials, if stolen or diverted, have the potential to be used as 
weapons or easily converted into weapons using simple chemistry, 
equipment or techniques in order to create significant adverse 
consequences for human life or health.
    3. Sabotage or Contamination--DHS believes that certain chemicals 
or materials, if mixed with readily-available materials, have the 
potential to create significant adverse consequences for human life or 
health.
    In proposed Appendix A, the Department lists the DHS Chemicals of 
Interest and identifies a Standard Threshold Quantity (STQ) for each 
chemical. To clearly identify each chemical, the Department includes 
the Chemical Abstract Service (CAS) number for each chemical. These 
chemicals listed in proposed Appendix A fall into the three categories 
identified above: chemicals with a release hazard, chemicals with a 
theft or diversion hazard, and chemicals with a sabotage or 
contamination hazard.
    The Department acknowledges that there are two additional security 
issues that it is considering at this time, although it is not 
including any such chemicals that would trigger a Top-Screen 
submission. They include the following two issues:
    1. Critical Relationship to Government Mission--DHS believes that 
the loss of certain chemicals, materials, or facilities could create 
significant adverse consequences for national security or the ability 
of the government to deliver essential services.
    2. Critical Relationship to National Economy--DHS believes that the 
loss of certain chemicals, materials or facilities could create 
significant adverse consequences for the national or regional economy.
    The Department is continuing to assess currently-available 
information about these chemicals critical to government mission and 
the national economy. The Department will use the information it 
collects through the Top-Screen process, as well as currently-available 
information, as a means of identifying facilities responsible for 
economically critical and mission-critical chemicals.

III. Discussion of Comments

    In the Advance Notice, DHS sought comment on proposed text for the 
interim final rule as well as on various implementation and policy 
issues concerning the chemical security program. DHS received a total 
of 106 public comments totaling more than 1,300 pages, including 
comments from thirty-two trade associations, thirty companies, thirteen 
private citizens, ten state agencies and associations, seven advocacy 
and safety groups, eight U.S. Representatives, five U.S. Senators, four 
unions, one Local Emergency Planning Committee, one professional 
association, one international standards committee, and the U.S. Small 
Business Administration.
    Commenters generally applauded this effort from the Department and 
commended the general approach that the Department is taking. However,

[[Page 17697]]

commenters also raised some specific concerns. In the sections below, 
DHS provides a topical summary of the comments and responses to those 
comments.

A. Applicability of the Rule

1. Definition of ``Chemical Facility or Facility''
    The Advance Notice defined ``Chemical Facility or facility'' to 
mean ``any facility that possesses or plans to possess, at any relevant 
point in time, a quantity of a chemical substance determined by the 
Secretary to be potentially dangerous or that meets other risk-related 
criterion identified by the Department. * * *'' See proposed Sec.  
27.100.
    Comment: While a few industry and State agency commenters supported 
this definition, commenters generally thought that the proposed 
definition was broad. In particular, several industry commenters, an 
industry association, a labor union, and a State agency thought the 
proposed definition was overly broad and consequently did not inform 
facilities about whether they would be regulated. They noted that the 
definition did not name the regulated chemical substances or the 
threshold quantities. One commenter argued that DHS's failure to 
release to the public its proposed list of ``potentially dangerous 
chemicals'' and threshold amounts for those chemicals denies the public 
the opportunity to comment on key provisions of the rule that depend on 
whether the facility possess specified quantities of chemicals 
determined by DHS to be potentially dangerous. The commenter explained 
that it is difficult to comment on that aspect of the rule without 
knowing what the chemicals and thresholds are. An industry group 
cautioned that threshold quantities should be set high enough that 
retail establishments are not covered merely because they stock 
commercially acceptable quantities of commonly used chemicals. A few 
industry commenters and a member of Congress added that the definition 
of chemical facility should include the concepts of national security 
and economic criticality.
    Several industry commenters supported the use of EPA's Risk 
Management Plan (RMP) program to help identify the initial group of 
regulated facilities. Commenters supported use of the RMP list of toxic 
substances as a basis for selecting chemical facilities. Likewise, one 
association felt that DHS should link its definition of chemical 
facility to those facilities covered by EPA's RMP, because it is a 
clear and defined list. The industry commenters noted, however, that 
not all RMP facilities should be considered high-risk. One commenter 
pointed out that RMP does not take into account facilities that may 
cause substantial impacts from multiple tanks. A few commenters also 
recommended that DHS should consider facilities in EPA's Toxic Release 
Inventory program or facilities that handle DOT hazardous materials.
    One commenter emphasized that the rule could focus on toxic gases 
at RMP threshold quantities, but warned that the RMP program has a 
different purpose. The commenter indicated that worst-case scenarios 
under RMP may be based on unrealistic assumptions. Another commenter 
indicated that DHS should consider certain substances from the Chemical 
Weapons Convention list when assessing overall risk. Finally, some 
industry commenters objected to the phrase ``possesses or plans to 
possess,'' because the term implies legal title or ownership rather 
than simple presence at the facility.
    Response: Aside from the minor modification noted above, DHS is 
retaining the definition of chemical facility that it proposed in the 
Advance Notice. And while DHS is not defining ``chemical facility'' by 
listing specific chemicals, DHS is making available, with the issuance 
of this rule, a list of those chemicals and Screening Threshold 
Quantities (STQs) that it proposes to use to determine whether to 
further assess whether a chemical facility presents a high risk. 
Specifically, if a facility possesses any of the chemicals, at the 
corresponding quantities, in Appendix A (when finalized), the facility 
must complete and submit a Top-Screen within 60 calendar days. See 
Sec.  27.200(b)(2) and Sec.  27.210(a). The Department will continue to 
contact facilities individually and through additional Federal Register 
notices, as necessary. See Sec.  27.200(b)(1). To the extent the 
Department notifies facilities through an additional Federal Register 
notice, the Department will engage in outreach activities with the 
chemical sector.
    Finally, in response to specific comments above, the Department 
makes two additional points. The Department has retained the phrase 
``possesses or plans to possess.'' DHS believes that phrase adequately 
captures the Department's intent. The plain meaning of those terms is 
not limited to ownership. Also, with respect to the commenter who 
cautioned that any types of threshold quantities should be high enough 
so that DHS does not cover all retail establishments that stock 
commercially acceptable quantities of commonly used chemicals, DHS 
notes that it is aware of that issue. While DHS believes these STQs are 
set at levels that normally will not cover such retail establishments, 
DHS believes that, if a retail establishment does exceed any of these 
STQs, the retail establishment will have to complete the Top-Screen.
2. Multiple Owners and Operators
    The second half of the definition of ``Chemical Facility or 
facility'' provides that the terms ``shall also refer to the owner or 
operator of the chemical facility. Where multiple owners and/or 
operators function within a common infrastructure or within a single 
fenced area, the Assistant Secretary may determine that such owners and 
operators constitute multiple chemical facilities depending on the 
circumstances.'' See Sec.  27.105.
    Comment: Comments were varied on the issue of multiple owners and 
operators. One industry commenter suggested that DHS should combine 
adjacent facilities under common ownership into a single facility, and 
other industry commenters thought that DHS should define certain 
adjacent facilities as less than the entire property. One industry 
commenter thought that DHS should allow facilities with multiple owners 
or operators to agree among themselves how to meet the requirements of 
this rule. A trade association noted that some large chemical 
facilities have third-party warehouses and leasing agreements and that 
the owners of the chemical facility should be responsible for security.
    Response: DHS believes that it will generally be fairly 
straightforward for facilities to define their boundaries and identify 
the party (at their facility) that is responsible for compliance with 
the regulation. However, DHS acknowledges that, in some circumstances, 
the issue might be more complex. The Department will address these 
situations on a case-by-case basis. Both owners and operators of 
facilities, however, bear responsibility under the regulations for 
implementing measures that meet the regulatory standards.
3. Classifying Facilities Based on Hazard Class
    Comment: In the preamble to the Advance Notice, DHS requested 
comment on whether it should use an approach based on hazard class, 
rather than use an approach where classifications are based on 
particular chemicals. Responses were mixed.
    Several commenters favored the hazard class approach, noting that 
facilities are familiar with the DOT hazard classes, that the hazard 
classes

[[Page 17698]]

may be harmonized with international requirements, and that the number 
of chemicals (in a non-hazard class approach) might otherwise be very 
large. Some of the commenters who favored the hazard class approach 
also noted some caveats to its use. Industry commenters and a State 
agency warned that the hazard class approach could result in the 
inclusion of chemicals that do not pose a security risk. Conversely, 
others noted that the hazard classes may not include chemicals of 
concern from a terrorism perspective. Commenters noted that other 
agencies may regulate the hazard classes under other programs. Also, 
one State agency association pointed out that a combination of 
chemicals might be more dangerous than any one chemical. One firm 
suggested that the DHS approach should include both the hazard class 
approach and the classification of chemicals approach.
    A few industry commenters indicated that basing the applicability 
of the rule on hazard classes would be inappropriate and that they 
favored a list of security-sensitive chemicals with threshold 
quantities. One trade association supported the use of lists of 
particular chemicals, explaining that they thought it would lead to 
more accurate assessments of likelihood and consequence and therefore 
risk. They also argued that DHS publish the list in the final rule.
    Response: As explained above, DHS is publishing a list of 
``Chemicals of Interest'' in Appendix A to this interim final rule. The 
list contains specific chemicals and STQs. That list is a baseline 
screening threshold against which facilities will know whether they 
need to complete and submit a Top-Screen. While DHS's primary approach 
will be through the classification of chemicals, DHS will not preclude 
the use of the hazard classes for certain purposes in the performance 
standard guidelines.
4. Applicability to Specific Chemicals or Quantities of Chemicals
    Comment: Several commenters discussed specific chemicals and 
whether or not the regulation should cover facilities that possess 
those chemicals. Several commenters thought that DHS should not cover 
anhydrous ammonia or ammonium nitrate, both of which are discussed in 
more depth below. A local government agency urged DHS to cover 
facilities that store propane, while other commenters indicated that 
DHS should not cover flammable fuels such as propane. A few commenters 
noted that some facilities may have only small amounts of chemicals or 
may handle them only intermittently. A trade association suggested that 
DHS should allow such facilities to adjust their level of security to 
the level of risk. Another commenter urged DHS to consider the nature 
of batch production facilities, which make a continually changing mix 
of products using a continually changing, and often unpredictable, mix 
of ingredients.
    With respect to anhydrous ammonia, commenters noted that the 
chemical is in the EPA RMP list but indicated that it should not be a 
chemical that DHS regulates. They explained that ammonia refrigeration 
is used for dairy and food processing facilities and that those 
facilities do not pose a significant risk to human health, national 
security, or the economy, because an attack on such a facility would 
not result in a catastrophic release of ammonia. In addition, the 
commenters stated that the food industry (which uses anhydrous ammonia 
for refrigeration) should not have to spend its resources enhancing 
security for refrigeration systems.
    With respect to ammonium nitrate (AN), some industry commenters 
noted that AN is an important part of the economy in both the 
explosives and the fertilizer industries. They noted that the threat 
posed by AN is not that of a direct attack but of theft or diversion 
for later criminal misuse. While they said that DHS should focus not 
only on the possibility of a direct attack at facilities with 
``weaponizable'' chemicals, but on facilities with risks of theft or 
diversion, they suggested that DHS place those facilities (i.e., those 
with risk of theft or diversion) in lower-risk tiers.
    One commenter recommended requirements for chain-of-custody control 
and suggested that the ATF could assist in enforcement at AN sites with 
commercial explosives; other commenters favored regulation by DHS, not 
ATF. Another commenter believed that DHS should work with the U.S. 
Department of Agriculture and producer groups in deciding whether to 
regulate an agriculture operator or supplier. An industry commenter 
noted that the mere presence of AN at a site should not trigger 
application of DHS's screening process. Two members of Congress argued 
that the rule should apply to AN manufacturing facilities, but they 
agreed with DHS and other commenters that DHS should subject AN 
facilities to regulatory requirements based on the nature of the 
facility and risk assessment results. The commenters thought that by 
including AN facilities in the regulatory program, DHS would make it 
more difficult for terrorists to acquire this product.
    Response: The Department's regulatory scheme will cover chemical 
facilities that present a high risk because they possess or plan to 
possess chemicals that terrorists may use or target in the furtherance 
of acts of terrorism. Facilities that possess chemicals that are 
hazardous and can be used as weapons, such as anhydrous ammonia or 
ammonium nitrate, will be regulated if they present a high risk. 
However, a facility that possesses a chemical substance that does not 
cause it to present a high risk (taking into account all relevant 
factors), or possesses an otherwise hazardous chemical in an amount 
that is below what would cause the facility to present a high risk 
(again, taking into consideration all relevant factors), will not be 
regulated.
    Accordingly, with this interim final rule, DHS plans to regulate 
high-risk facilities with ammonium nitrate and anhydrous ammonia using 
the same risk-based approach under which it plans to regulate all other 
high-risk facilities. If DHS later decides that any individual 
chemicals warrant specialized attention in regulatory provisions, DHS 
will address such chemicals through future rulemakings.
5. Applicability to Types of Facilities
    Comment: A few commenters suggested that the rule should not apply 
to railroad facilities, because such facilities are covered by current 
and proposed requirements from the Department of Transportation's (DOT) 
Federal Railroad Administration and Pipeline and Hazardous Materials 
Safety Administration and DHS's Transportation Security Administration 
(TSA). Those commenters asserted that railroads should be treated 
separately from fixed facilities and that the proposed requirements are 
inappropriate for railroad facilities. One commenter requested 
exemptions for motor vehicles and rail cars that are ``in transit.'' 
Another commenter asked DHS to take a system-wide approach and 
recognize the interdependence of chemical facility and rail security.
    Response: Regulating chemicals in the railroad system is a complex 
issue, and DHS continues to evaluate it. TSA is the lead component 
within DHS for the security of transportation facilities and has 
initiated some recent efforts to address rail security, including 
Voluntary Agreements with the rail industry and a Notice of Proposed 
Rulemaking on Rail Transportation Security. See 71 FR 76852 (December 
21, 2006). With respect to chemical security, certain aspects of 
Section 550 and TSA's authorities are concurrent

[[Page 17699]]

and overlapping. DHS is working, and will continue to work, with its 
components, including TSA, to determine whether DHS will include 
railroad facilities in its chemical security program. DHS presently 
does not plan to screen railroad facilities for inclusion in the 
Section 550 regulatory program, and therefore DHS will not request that 
railroads complete the Top-Screen risk assessment methodology. DHS may 
in the future, however, re-evaluate the coverage of railroads, and 
would issue a rulemaking to consider the matter.
    Comment: Commenters asked about the applicability of the rule to 
natural gas pipelines and facilities, with some noting that DHS should 
not regulate pipelines because DOT/PHMSA and DHS/TSA already regulate 
safety and security of pipelines. Other commenters asked about DHS's 
plans to address other large facilities, such as mines. One engineer 
pointed out that mining facilities can be very large and can cover 
thousands or tens of thousands acres but that the security-sensitive 
portions of those mines may be very small (e.g., a single tank).
    Response: Whether a facility is covered under this regulation is 
driven by a number of factors, including the specific types and 
quantities of chemicals at a given facility. Whether the Department 
will apply the requirements of this regulation to a facility depends, 
in part, on the chemicals present at that facility. In the case of 
natural gas pipelines, DHS has no intention at this time of requiring 
long-haul pipelines to complete the Top-Screen (or prepare Security 
Vulnerability Assessments and develop Site Security Plans). But 
chemical facilities otherwise covered by this regulation and with 
pipelines within their boundaries must treat those pipelines like any 
other asset, i.e., include measures in their Site Security Plan 
addressing the security of those pipelines.
    Related to this, DHS makes a clarifying point about facility assets 
in general. DHS expects that facilities will address all facility 
assets in their Security Vulnerability Assessments and Site Security 
Plans, as any given facility asset has the potential to have an effect 
on the consequence and/or vulnerabilities of the facility. Facility 
assets include any items or structures (such as buildings, vehicles, 
laboratories, or test facilities) located on an area owned, operated, 
or used by the facility. Such assets may exist inside or outside of 
perimeter structures.
    Similarly, the extent of coverage of mines in this regulation will 
depend in part on the type and amount of chemicals present at any given 
mine facility. The Department expects that mines will comply with the 
requirements of Sec.  27.200(b) and complete and submit the Top-Screen 
as required in that section. With respect to large mines that may only 
possess a concentrated amount of a given chemical in one discrete 
location, if the given chemical (and quantity) is one that the 
Department believes presents a security risk, the Department will 
expect that the facility will go through the screening process. While 
the facility may have to develop a Site Security Plan, the SSP would be 
tailored to the specific circumstances at the mine. The SSP for a large 
mine with a concentrated amount of one chemical in one location would 
surely look dramatically different than that of mine company with 
different circumstances (e.g., a large mine with larger quantities of 
different types of chemicals spread throughout the mine or a smaller 
mine with moderate quantities of very hazardous chemicals in several 
different locations).
6. Statutory Exemptions
    Comment: Some commenters asked why Sec.  27.105(b) excluded certain 
facilities from the rule, and another commenter suggested that the 
exempted facilities should be reviewed to determine if they would be 
considered high-risk but for the exemption.
    Other commenters suggested additional exemptions. One commenter 
suggested that the rule should not apply to most facilities that 
manufacture, sell, or reclaim lead-acid batteries, and another 
commenter believed DHS should exclude pesticide facilities. Yet another 
commenter thought that most facilities storing petroleum products, some 
of which are exempted under proposed Sec.  27.105(b), are not high-risk 
facilities.
    Response: In the authorizing legislation for this regulation, 
Congress exempted various facilities from this rule. See Section 
550(a). DHS has included those exemptions in Sec.  27.110(b) of the 
rule. The statute provides for the following exemptions: facilities 
regulated pursuant to the Maritime Transportation Security Act of 2002, 
Public Law 107-295, as amended; public water systems (as defined by 
Section 1401 of the Safe Drinking Water Act); water treatment works 
facilities (as defined by Section 212 of the Federal Water Pollution 
Control Act); any facilities owned or operated by the Departments of 
Defense and Energy; and any facilities subject to regulation by the 
Nuclear Regulatory Commission. The Department has considered the 
exemptions requested by commenters, and, at this time, the Department 
does not intend to provide any additional regulatory text exemptions.
    Comment: Some industry commenters supported the exemptions in Sec.  
27.110, such as the exemption for facilities regulated under the 
Maritime Transportation Security Act (MTSA). In addition, one 
association wanted to exclude from the Top-Screen requirements any 
facilities covered under MTSA. Other commenters asked for clarifying 
information about the exemptions.
    Response: In the Advance Notice, the Department discussed the 
applicability of this rule to maritime facilities. See 71 FR 78276, 
78290. In this interim final rule, the Department clarifies that it 
will apply the statutory exemption only to facilities regulated under 
33 CFR part 105, Maritime Facility Security regulations. Part 105 of 
Title 33 of the Code of Federal Regulations is the only regulation that 
imposes the security plan requirements of 46 U.S.C. 70103 on maritime 
facilities.
    Comment: A State agency believed that the Nuclear Regulatory 
Commission (NRC) exemption should apply only to facilities holding an 
NRC power reactor license and disagreed with the exemptions for public 
water systems and treatment works.
    Response: The Department agrees with the commenter and will apply 
the statutory exemption to facilities where NRC already imposes 
significant security requirements and regulates the safety and security 
of most of the facility, not just a few radioactive sources. For 
example, a power reactor holding a license under 10 CFR part 50, a 
special nuclear material fuel cycle holding a license under 10 CFR part 
70, and facilities licensed under 10 CFR parts 30 and 40 that have 
received security orders requiring increased protection, will all be 
exempt from 6 CFR part 27. A facility that only possesses small 
radioactive sources for chemical process control equipment, gauges, and 
dials, will not be exempt.

B. Determining Which Facilities Present a High-Level of Security Risk

1. Use of the Top-Screen Approach
    Comment: In general, many industry associations and chemical 
companies supported the use of a tiered approach that narrows DHS's 
focus to high-risk facilities. Several commenters pointed out as a 
problem the fact that they had been unable to review the details of the 
approach and associated criteria; several commenters suggested that 
knowledgeable parties should have an

[[Page 17700]]

opportunity to review the details. Many of the commenters wanted to 
make sure that the final group of high-risk facilities was determined 
based on risk (not just on potential consequence or limited pieces of 
threat data) and that the number of facilities in this group was small.
    Associations differed in their views on how inclusive the Top-
Screen process should be--one association wanted DHS to screen out 
certain low-risk facilities in the first few questions while other 
associations and a chemical company wanted DHS to make sure that as 
many facilities as possible submitted Top-Screen data, including some 
facilities that might not traditionally be considered chemical 
facilities. Several associations urged DHS not to presumptively 
classify facilities as high-risk without perfect information; they felt 
that doing so would go beyond the authority that Congress granted DHS 
and would not match the intended focus on high-risk facilities. A local 
agency took the opposite view on that question.
    Several commenters provided input on the data that facilities will 
need to enter into the Top-Screen. One association suggested that DHS 
allow facilities to enter chemical volumes in ranges and asked that DHS 
provide guidance on handling mixtures and blends. That association also 
questioned how facilities should address chemicals that are stored 
offsite. Another association encouraged DHS to include reactive 
chemicals and propane in the Top-Screen. One advocacy group encouraged 
DHS to incorporate chemical transportation in the rule and the Top-
Screen.
    Commenters also provided input on how DHS should process the 
information that it receives through the Top-Screen. One industry 
association suggested that facilities should be allowed to explain 
``yes'' responses before DHS drives the facility to a full Security 
Vulnerability Assessment. The association suggested that facilities 
should not be the ones to estimate consequences, particularly injuries, 
and that DHS should refine the definition of injuries. The association 
stated that DHS should have different requirements for facilities that 
only periodically have certain materials onsite. One association 
cautioned about using RMP data and advocated for DHS to use conversion 
factors to make estimates of casualties.
    Several commenters were concerned about the questions in the Top-
Screen that related to economic impacts. Several associations indicated 
that DHS should use a sufficiently high threshold for economic impacts 
that captures the full extent of economic impacts. They noted that a 
facility should consider all impacts, not just the impacts to one 
facility. One association commented that most facilities will not be 
able to provide answers to the questions in the Top-Screen that ask 
about a facility's market share for given chemicals. That association 
suggested that DHS re-phrase those questions to support yes/no answers 
or to allow facilities to use broad ranges.
    Several associations commented that the submitting company, not 
DHS, should determine the most appropriate person to submit data. A 
number of parties commented on DHS's subsequent use of the data that is 
collected through the Top-Screen. One association commented that any 
information must have demonstrated utility before it is shared with 
anyone.
    As for timing, commenters, including State agencies, requested that 
DHS provide facilities with the specific timing requirements for 
completing the Top-Screen. One industry association recommended that 
DHS use phased-in timing for having facilities complete the Top-Screen. 
A number of commenters from State agencies and industry associations 
suggested the need for DHS to provide active, written notification that 
a facility is not high risk--and for telling facilities that they need 
to comply with the regulation. One association suggested that DHS 
provide this notification immediately upon the facility's submission of 
data.
    Finally, a number of company and industry association commenters 
wanted to make sure that facilities have the opportunity to conduct 
independent evaluations (or meet with DHS) to verify or deny DHS's 
initial classification of a facility's risk.
    Response: In this regulatory program, DHS will employ a modified 
version of the Risk Analysis and Management for Critical Asset 
Protection (RAMCAP) risk assessment methodology known as the Chemical 
Security Assessment Tool, or CSAT. The RAMCAP Sector Specific Guidance 
was developed under contract to DHS by the ASME Innovative Technologies 
Institute (ASME-ITI) and leveraged the knowledge and insight of leading 
experts from across the industry and Federal Government. The DHS Risk 
Assessment Methodology is composed of two separate parts. The first 
part is a screening tool known as the Top-Screen, which is used to 
perform a preliminary ``consequence'' analysis. The second part 
provides the tools to conduct a thorough facility Security 
Vulnerability Assessment.
    DHS is using a standard vulnerability tool, the CSAT system, 
because it is not practical for DHS to accept a broad spectrum of 
methodologies. Even where certain ``equivalencies'' exist between 
methodologies, the equivalencies can only be extracted and employed in 
a comparative risk analysis at very great cost and over a very long 
period of time. In order to effectively manage risk at the national 
level, the Department must be able to develop and understand the 
relative risk of different facilities. A comparative risk capability is 
essential to regulation and can be achieved only through the collection 
of comparative data. Thus, a standard vulnerability tool is necessary.
    The Department has vetted the CSAT system with the engineering 
profession, the National Laboratories, and academia. The Top-Screen 
component, as well as the individual algorithms employed in the Top-
Screen, have been subject to extensive peer review and have been found 
acceptable. While the Top-Screen is consequence-specific, DHS uses the 
Top-Screen only to determine a preliminary tier ranking. DHS bases a 
facility's final tier ranking upon the complete Security Vulnerability 
Assessment, as well as the application of threat information--and thus 
it is risk-based.
    Insofar as the range of facilities possessing dangerous or 
potentially dangerous chemicals is large, there is no good alternative 
to a fairly broad range of facilities being included in the screening 
process. DHS anticipates that the vast majority of screened facilities 
will be found not to have a level of potential consequences that would 
result in a ``high risk'' designation. However, the facilities that do 
achieve that level of consequence are expected to come from a fairly 
broad swath of the Nation's economy. DHS has no intention of 
classifying facilities as presumptively high risk until and unless DHS 
is unable to acquire sufficient data.
    The Top-Screen will enable DHS to determine a preliminary tier 
based on consequence. That ranking will determine the need for (and 
timeline for) a Security Vulnerability Assessment, and where the Top-
Screen indicates the need for a follow-on Security Vulnerability 
Assessment, DHS will expect that the owner-operator will comply. The 
Department will require facilities to submit the Top-Screen within the 
timeframes now specified in Sec.  27.210. The Department notes that the 
Top-Screen is designed to preclude a large number of ``false 
negatives.''
    DHS is establishing the entire CSAT system as an on-line suite of 
tools, which will allow notification of results to the owner or 
operator. As provided in Sec.  27.205, the Department ``shall notify

[[Page 17701]]

the facility in writing [of a determination that the facility presents 
a high level of security risk].'' While the online feature of the CSAT 
system will allow rapid results, it will not allow the Department to 
respond instantaneously, as some commenters requested. Finally, the 
Top-Screen tool does require the owner-operator to provide certain data 
similar to an RMP analysis; however, casualty estimates and consequence 
ranking are performed by DHS using well-vetted formulae.
    Regarding economic criticality, DHS recognizes the complexity of 
estimating potential economic or mission impact stemming from the loss 
of certain manufacturing (or other) capacity. Accordingly, DHS will 
focus early efforts on developing a sufficiently clear picture of the 
chemical industry as a system in order to allow a reasonable analysis 
of economic and mission criticality, which will be enhanced as the 
Department moves forward.
2. Assessment Methodologies
    Comment: Many commenters provided input on methodologies that DHS 
should use for determining which facilities present a high level of 
risk, and several commenters had suggestions as to how DHS should 
determine which facilities are high-risk. One association asserted that 
DHS needed to clearly define the ``risk of interest'' before DHS could 
determine which methodology to use. One (non-chemical) company 
suggested that DHS use other Federal programs such as the EPA's Toxics 
Release Inventory or the Superfund Amendments and Reauthorization Act 
(SARA) Tier II annual reports to determine high risk facilities. 
Commenters addressed the suitability of both asset- and scenario-based 
approaches, with the majority favoring an asset-based approach. 
Commenters suggested that DHS consider specific methodologies developed 
by associations, national laboratories, or State and Federal agencies. 
One association suggested that DHS use other methodologies while RAMCAP 
continues to develop and mature. State agency commenters warned that 
the question of which facilities pose a high risk is a community-
specific issue.
    Many comments were very specific as to how DHS should proceed, and 
what tools DHS should employ. For example, an engineering firm focused 
on the need for process-based assessments. A chemical company noted the 
need for any approved methodology to also consider the criticality of 
surrounding and supporting infrastructure in a reasonable manner--that 
is, one that is within the expertise of the facility personnel.
    Many commenters also focused on various aspects related to RAMCAP. 
One commenter asserted that RAMCAP might not adequately identify high-
risk facilities. Another commenter asked who owns RAMCAP. Several 
commenters noted that the RAMCAP approach was not designed to address 
control system cyber security. Another commenter felt that DHS provided 
inadequate detail on the RAMCAP methodology and noted that DHS should 
define the method before DHS solicits comment. Several commenters also 
pointed out that RAMCAP's lack of details on vulnerability team 
composition and experience could be a limitation. Some of RAMCAP's 
developers took issue with deviations from the original RAMCAP design. 
Another commenter pointed out the need for DHS to include proper 
references to the RAMCAP and its genesis.
    Also related to RAMCAP, some commenters expressed concern with the 
details in Appendix B, ``Background: Risk Analysis and Management 
Critical Asset Protection (RAMCAP) Vulnerability Assessment 
Methodology.'' In particular, some expressed concern about expectations 
that the noted threat scenarios would be analyzed as design basis 
threats. The commenters noted that many of the scenarios require 
military support to defeat, and that appears to be beyond the 
capability of a chemical facility to address. Associations noted that 
scenarios can be useful in a comparative top-screen, but that they 
should not guide all facility-specific assessments. One company opined 
that the threats needed to be more realistic before they were used in 
any assessments.
    Finally, one chemical company commented that DHS needs to list in 
the rule the specific threats that facilities need to address in their 
SSP. Also, the company indicated that DHS, not individual companies, 
should determine deaths and injuries.
    Response: In the Advance Notice, DHS sought to provide an overview 
of RAMCAP and the DHS Methodology Assessment in the preamble (see, 
e.g., pp. 78277-78288) and in Appendix B. As there seemed to be 
confusion about the nature and purpose of RAMCAP and the DHS Assessment 
Methodology (or CSAT) and its purpose, DHS provides further explanation 
here.
    The CSAT vulnerability assessment tool, part of the CSAT system 
owned by DHS, is an asset-based vulnerability assessment tool very 
similar to the Chemical Sector RAMCAP module. The CSAT system employs a 
set of defined attack vectors, used to both ``produce'' consequences 
(for the measurement of criticality) and to measure vulnerability. 
These are not ``Design Basis'' threats and in no way reflect the type 
of actual threats against which owner-operators will be expected to 
``defend.'' They are measurement devices, supporting the DHS need to 
conduct comparative risk analysis. The CSAT tool does include basic 
assessments of certain types of cyber systems, and certain features 
thereof. However, the CSAT tool is not intended to be a full-scope, 
detailed analysis of all possible areas of vulnerability. It is a 
measurement tool that will allow general categorization of a facility 
as vulnerable or not, critical or not, and thus, at risk or not. DHS 
will undertake detailed evaluations of specific security issues as part 
of the ongoing relationship between the facility owner-operator and 
DHS. The assessment tool that DHS uses to conduct comparative risk 
assessments must be uniform and consistent in order for DHS to use it, 
and so a ``menu'' of different methodologies is simply not practical.
    Finally, DHS notes that there were several comments from companies, 
encouraging the Department to adopt or require their own methodology or 
technique. DHS is unaware of the extent of peer review or scientific 
evaluation of these other methodologies or techniques. In addition, DHS 
does not believe it is appropriate to identify a single commercial 
product or endorse particular commercial products for purposes of 
complying with this rule.
3. Risk-Based Tiers
    In the Advance Notice, the Department asked for comment on the 
notion of risk-based tiering of high-risk facilities. Specifically, the 
Department asked how many risk-based tiers should the Department 
create, what the criteria should be for differentiating among tiers, 
what the types of risk should be most critical in the tiering, how 
should performance standards differ among risk-based tiers, what 
additional levels of regulatory scrutiny should DHS apply to each tier. 
71 FR 78276, 78283.
    Comment: Most commenters supported the establishment of risk tiers 
and agreed that three or four tiers would be sufficient. Several 
comments, including industry commenters, State agencies, and a member 
of Congress believed that DHS should base tiering on the attractiveness 
of the facility as a target or the consequences of a terrorist attack, 
such as adverse impacts on public health and welfare, the potential for 
mass casualties, and disruption of

[[Page 17702]]

essential services. The commenter indicated that the creation of tiers 
would allow facilities to maintain security measures commensurate with 
risk.
    A few commenters suggested that DHS did not provide enough 
information in the Advance Notice on the number of tiers or on how a 
tier classification would affect a facility's security requirements. 
Two industry commenters were concerned that DHS might apply the rule 
requirements to facilities other than those that pose the highest 
security risk. Two other commenters believed that the tiering approach 
is not appropriate for cyber security of control systems. One commenter 
argued that tiers should include consideration of the transportation of 
chemicals outside the facility property. Another commenter recommended 
that DHS should modify the tiers after it receives data from regulated 
facilities. Another commenter thought that DHS should define ``present 
high levels of security risk'' and ``high risk'' at the end of the 
RAMCAP process and not at the discretion of the Secretary.
    Commenters suggested that tiers should be objective and transparent 
and should provide flexibility. One industry commenter pointed out that 
tiering allows DHS to focus on the most important facilities first and 
believed that DHS should establish a de minimis tier that sets 
thresholds below which a facility does not have to complete the Top-
Screen tool. Two commenters noted that tiering provides an incentive 
for facilities to eliminate risk.
    Some industry commenters and State and local agencies suggested 
that facilities in higher risk tiers should have more contact with DHS, 
and that lower-risk facilities should have fewer security layers 
implemented over a longer period of time, greater discretion, or fewer 
inspections. One commenter, however, believed there should be no 
difference in regulatory scrutiny or performance standards between 
tiers.
    Response: The Department agrees with many of the commenters that 
the risk-based tiering structure will allow DHS to focus its efforts on 
the highest risk facilities first. To that end, the Department intends 
to retain the model proposed in the Advance Notice. See, e.g., 71 FR 
78276, 78283. In sum, the Department's framework for risk-based tiering 
will consist of four risk-based tiers of high-risk facilities, ranging 
from high (Tier 1) to low (Tier 4). The Department will use a variety 
of factors in determining which tier facilities will be placed, 
including information about the public health and safety risk, economic 
impact, and mission critical aspects of the given chemicals and 
Threshold Quantities (TQ) of the chemicals. The Department considers 
the methods for determining these tiers to be sensitive anti-terrorism 
information that may be protected from further disclosure. The types 
and intensity of security measures (necessary to satisfy the risk-based 
performance standards in the facility's Site Security Plan) will depend 
on the facility's tier. The Department will mandate the most rigorous 
levels of protection and regulatory scrutiny for facilities that 
present the greatest degree of risk. Finally, pursuant to Section 
550(a), it is in the discretion of the Secretary to apply regulatory 
requirements to those facilities that present high levels of security 
risk; accordingly, the Department believes it is most appropriate for 
the Secretary to determine which facilities present high-risk (and not, 
for example, rely solely on output from the CSAT process).
    The Department incorporates the concept of ``target 
attractiveness'' into its risk equation. Insofar as it is a fairly 
subjective element, and that it requires considerable analysis to 
develop, DHS will not incorporate it into the initial tier assignment 
process. However, insofar as ``target attractiveness'' is included in 
the more detailed Security Vulnerability Assessment component of the 
regulatory process, and insofar as the final determination of tier 
placement will be based upon the complete analysis of risk, ``target 
attractiveness'' will, in fact, be an important element in tier 
assignment and subsequent risk management efforts.

C. Security Vulnerability Assessments and Site Security Plans

1. General Comments
    Comment: One association requested that DHS encourage, but not 
require, facilities that are not high-risk to conduct vulnerability 
assessments as a best practice.
    Response: The Department has always encouraged the chemical sector 
to analyze security vulnerabilities and will continue to do so through 
voluntary sector efforts even if the site has not been designated as 
high risk under this rule.
    Comment: One commenter requested that DHS define ``material 
modifications,'' as used in Sec. Sec.  27.215(c)(3) and 27.225(b)(3), 
or at least provide examples of circumstances or events that rise to 
the level of ``material modifications.''
    Response: Material modifications can include a whole host of 
changes, and for that reason, the Department cannot provide an 
exhaustive list of material modifications. In general, though, DHS 
expects that material modifications would likely include changes at a 
facility to chemical holdings (including the presence of a new 
chemical, increased amount of an existing chemical, or the modified use 
of a given chemical) or to site physical configuration, which may (1) 
substantially increase the level of consequence should a terrorist 
attack or incident occur; (2) substantially increase a facility's 
vulnerabilities from those identified in the facility's Security 
Vulnerability Assessment; (3) substantially effect the information 
already provided in the facility's Top-Screen submission; or (4) 
substantially effect the measures contained in the facility's Site 
Security Plan.
2. Submitting a Site Security Plan
    Comment: Several industry commenters recommended changes to the 
proposed process for notifying facilities to submit SSPs and the timing 
for submitting the SSPs. A number of commenters believed that the most 
appropriate person to submit an SSP is a corporate representative with 
first-hand knowledge of security matters at the facility, rather than 
an officer of the corporation, as proposed. The comments recommended 
allowing a corporate security contact, a security manager, or a 
consultant with delegated authority to submit information on behalf of 
the corporation. The commenters indicated that, in most instances, 
members of senior management teams do not have day-to-day detailed 
knowledge on security issues and, thus, cannot meet the proposed 
qualifications. One of the commenters added that the proposed 
regulations appear to limit an organization's flexibility to assign 
internal responsibilities for various aspects of the regulations. 
Another commenter suggested that, in addition to notifying a covered 
facility, the Department should notify the facility's corporate 
ownership (and/or parent corporation) allowing a multi-facility 
corporation to prepare and submit a response in an efficient and timely 
manner.
    Response: The goal of this rule is to increase flexibility while 
embracing security for covered facilities, not to unnecessarily 
decrease flexibility. The rule obligates the chemical facility to 
submit the Site Security Plan; however, as used herein, the term 
chemical facility or facility shall also refer to the owner or operator 
of the chemical facility. While the owner or operator of

[[Page 17703]]

a chemical facility may designate someone to submit the Site Security 
Plan, the owner or operator is responsible for satisfying all the 
requirements under this part. Note that the Department has added 
requirements for submitters in the rule (see Sec.  27.200(b)(3)) and 
that the Department discusses those new requirements in the Rule 
Provisions discussion of Sec.  27.200. See Sec.  II(B). Finally, it is 
presumed that the covered facility is the most appropriate party to 
notify its parent corporation or other related corporate entities as 
necessary.
3. Content of Site Security Plans
    Comment: One commenter stated that, until some of the initial 
regulatory elements regarding definition of risk and the establishment 
of tiers is in place, it would be premature for DHS to publish details 
on Site Security Plans. Another commenter stated that, based on the 
consequence assessment, every site should be required to have specific 
security elements in place that prudently deter, detect, delay, and 
respond based on their assigned tier level. The commenter also stated 
that, without some degree of access control and physical security 
specificity based on tier levels, there will be considerable confusion 
as to the exact considerations needed to meet Department requirements. 
Another commenter encouraged DHS to abide by the congressional mandate 
of Public Law 104-113, as described in OMB Circular A119, and ensure 
that voluntary consensus codes and standards are used when they are 
applicable under the rule.
    Response: The Department has developed a means of assessing risk 
and a tiering process as described in Sec. Sec.  27.205 and 27.220. 
These methods anticipate, on a risk basis, a certain level of 
vulnerability for a given tier level. A facility's SSP will describe 
the appropriate levels of security measures that a facility must 
implement to address the vulnerabilities identified in their SVA and 
the risk-based performance standards for their tier. The Department has 
included risk-based performance standards in this interim final rule 
and will publish further guidance on the risk-based performance 
standards. The risk-based standards address, among other things, 
vulnerabilities under the security concepts of detection, deterrence, 
delay, and response. Finally, the Department notes that covered 
facilities may use and cite voluntary consensus codes and standards in 
their SVAs and SSPs to the extent they are appropriate.
4. Approval of Site Security Plans
    Comment: In general, commenters supported the proposed submission 
and approval processes for SSPs. While one commenter endorsed proposed 
Sec.  27.240(a)(3) stating that the Department will not disapprove an 
SSP based on the presence or absence of a particular security measure, 
another commenter believed that the Department should have the 
authority to disapprove an SSP if a facility has refused to include a 
widely-practiced and cost-efficient procedure that can severely reduce 
the risk posed by a chemical facility. Two commenters requested that 
the Department inform local law enforcement and first responders when 
the Department is reviewing an SSP in their community and then inform 
them whether that plan was accepted or rejected. The commenters stated 
that the health and safety of responders may well depend upon whether 
the chemical facility has an adequate SSP.
    Response: The Department may not disapprove a Site Security Plan 
submitted under this Part based on the presence or absence of a 
particular security measure, as provided in Section 550 of the Homeland 
Security Appropriations Act of 2007. The Department may disapprove a 
Site Security Plan that fails to satisfy the risk-based performance 
standards established in Sec.  27.230.
    The Department intends to work closely with local law enforcement 
and first responders to provide adequate homeland security information 
to them under this rule.
    Comment: One commenter recommended that the Department first 
complete the SSP review and approval process for Tier 1 facilities, 
then, after soliciting feedback from the Tier 1 facilities on the 
process, then proceed in a step-wise fashion to subsequent tiers.
    Response: The Department will implement the rule in a phased 
approach but will not necessarily complete all Tier 1 sites prior to 
undertaking plan review and approvals with lower-tier chemical 
facilities as the need arises. This is necessary to make sufficient 
progress with higher-tier chemical facilities and not only the highest 
tier.
5. Timing
    Comment: One concern raised by an industry association related to 
DHS's resources for reviewing Security Vulnerability Assessments and 
providing responses in 20 days. Changes to control systems were 
suggested for reviews and updates within 7 days or sooner. One 
commenter agreed with updating SSPs annually, but not Security 
Vulnerability Assessments. Several commenters suggested the following 
for updates: every 2-5 years for Tier 1 facilities, 3-5 years for Tier 
2, and 3-7 years for Tier 3 and beyond.
    Numerous reviewers recommended that the reviews be limited to 
approximately every three years. Two companies and one industry 
association wanted reviews to follow major changes and not follow a set 
schedule. Many reviewers wanted periodic replaced with a suggested 
frequency.
    Several commenters stated that the requirement to submit SVAs 
within 60 calendar days, and SSPs within 120 calendar days, starting on 
the date that the facility is notified that it is considered high-risk, 
is too short, and therefore inadequate. One commenter noted that 
managing change in a safe fashion requires significant thought and 
careful planning to ensure that the change itself does not create 
another hazard to the community, the environment, or employees. The 
commenter also noted that developing and implementing an SSP that 
properly mitigates risk requires the security manager to make 
appropriate revisions to existing facility procedures and to train 
employees and other affected parties on these new procedures. Another 
commenter expressed concern that there is no specific date or time by 
which DHS must notify high-risk chemical facilities of their status. 
Likewise, there is no firm time by which the Secretary will send out a 
notice approving or disapproving an SSP.
    With regard to the time needed to review an SSP, one commenter 
stated that DHS should issue a decision approving or disapproving them 
within 30 days of receipt of a completed plan. This timeframe would 
bring at least most priority facilities into compliance within seven 
months of the effective date. The commenter also stated that, given the 
urgency, any ``objections'' or ``appeals'' should be processed after 
the seven-month schedule is completed. Because of concern that DHS 
staffing levels might delay the processing of SSPs, another commenter 
requested a provision be included in the interim final rule indicating 
that facilities are deemed in compliance after 30 days of submission of 
SVAs and SSPs until such time that the Department reviews and responds 
to the submission.
    A few commenters recommended that the deadline for Tier 1 
facilities to submit SSPs be extended from 120 days to 180 days. The 
commenters believe that this extension would assure facilities adequate 
time to assemble the

[[Page 17704]]

best teams, prepare thorough SVAs, deal with budget planning for 
potentially large capital expenditures, and ensure the on-site work is 
properly conducted. Another commenter agreed that the proposed 
submission schedule for submitting SSPs was unrealistic in light of the 
tasks involved. The commenter also thought that, if DHS found fault 
with a provision of the SVA, it would be unreasonable to begin 
development of an SSP based upon a potentially flawed assessment. 
Consequently, the commenter argued that the submission time of 120 days 
should be started only after the Department's approval of the SVA is 
formally received. Yet another commenter believed that submission of 
SSPs should be timed according to the tier assigned to the facility and 
that the time clock should begin when the facility receives word back 
from the Department on its preliminary tier assignment.
    Response: The Department has established a schedule for activities 
under this part that considers the need to generally address the risks 
associated with higher tier facilities before that of lower tiers, but 
staggers the submittals and review and inspection activities. The 
Department has developed the Chemical Security Assessment Tool (CSAT) 
to assist chemical facilities with all of the program requirements 
(registration, screening, SVA, and SSP). In addition, because 
information from the CSAT applications will be in electronic form, DHS 
will be able to expedite its review of the information that chemical 
facilities submit. These deadlines are both prudent and achievable. DHS 
expects that it will complete its review of the Top-Screen, SVA, and 
SSP within 60 days of the facility's submission of the Top-Screen, SVA, 
or SSP.
6. Alternate Security Programs
    Comment: The use of alternate security programs was supported by 
several chemical companies and associations as well as companies and 
associations in related industries. A chemical company agreed with the 
concept of initially allowing multiple methodologies and then switching 
to a common methodology for at least the Tier 1 facilities; they 
encouraged DHS to still allow alternate approaches for other tiers. 
This viewpoint was echoed by at least one association. Several 
companies wanted to ensure that existing plans could be used and one 
association noted that more methodologies than just those approved by 
the Center for Chemical Process Safety (CCPS) would be appropriate. 
Commenters also noted that CCPS should not be the sole arbiter unless 
DHS periodically reviews its resources and expertise.
    A number of industry associations offered their own approaches and 
a food industry association commented on the need to keep their current 
programs in place and to not unduly focus on ammonia refrigeration 
risks. MTSA-, Sandia-, and NFPA-approved programs were among those 
mentioned by the commenters, as were those allowed under other 
regulations. Some commenters found the specific process for approval of 
alternative programs to be lacking in detail. One association requested 
that submitters just send in a form saying they have an alternate 
security plan, and not require any other document be submitted for 
approval.
    An advocacy group commented that alternate approaches needed to be 
equivalent to the DHS approach, not just sufficiently similar, and that 
DHS should approve equivalent State and local programs. Another 
advocacy group suggested that DHS should only determine equivalency 
based on reviews of individual SSPs, not in any blanket or broad way. A 
third advocacy group supported a single, consistent approach set out by 
DHS with private sector programs being modified to conform to the DHS 
approach. One commenter noted that the specification of RAMCAP may have 
created an unfair playing field for other firms wanting to visit the 
source company for RAMCAP.
    Response: The Assistant Secretary will review and may approve an 
ASP upon a determination that it meets the requirements of this 
regulation and provides an equivalent level of security to the level of 
security established by this part. In its ASP submission, a facility 
will have to provide sufficient information about the proposed ASP to 
ensure that the Department can adequately perform a review and make an 
equivalency determination.
    As described below, certain facilities may submit an ASP in lieu of 
an SVA, an ASP in lieu of a SSP, or both. Accordingly, the ASP option 
will only be available following the facility's submission, and 
Department's review, of the Top-Screen. An ASP for an SVA will need to 
satisfy the requirements provided in Sec.  27.215, and an ASP for an 
SSP will need to satisfy the requirements provided in Sec.  27.225. The 
ASP for the SSP will need to describe specific security measures, or 
metrics for measures, that will allow the ASP to be considered 
equivalent to an individually-developed SSP, and facilities 
implementing an ASP will be subject to DHS inspection against the terms 
of the ASP.
    At this time, the Department will only permit Tier 4 facilities 
(found to be Tier 4 facilities following the Department's preliminary 
tiering decision pursuant to Sec.  27.220(a)) to submit an ASP in lieu 
of an SVA. Tier 4 facilities may submit for review and approval the 
Sandia RAM for chemical facilities, the CCPS Methodology for fixed 
chemical facilities, or any methodology certified by CCPS as equivalent 
to CCPS and has equivalent steps, assumptions, and outputs and 
sufficiently addresses the risk-based performance standards and CSAT 
SVA potential terrorist attack scenarios. The Department is requiring 
Tier 1, Tier 2, and Tier 3 chemical facilities to use the CSAT SVA 
methodology for preliminary and final tiering. As discussed above in 
the summary of changes to Rule Provisions, this will provide a common 
platform for the analysis of vulnerabilities and will ensure that the 
Department has a consistent measure of risk across the industry. With 
respect to SSPs, the Department will permit facilities of all tiers to 
submit ASPs to satisfy the requirements of this rule.
    The Department modified Sec.  27.235 to reflect these requirements. 
The Department also amended the regulation to link the review and 
approval procedures for ASPs to the review and approval procedures for 
SVAs and SSPs.

D. Risk-Based Performance Standards

    In the Advance Notice, DHS sought comment on the use of risk-based 
performance standards to address facility-identified vulnerabilities. 
The Advance Notice proposed that DHS require covered facilities to 
select, develop, and implement security measures to satisfy the risk-
based performance standards in Sec.  27.230. The measures sufficient to 
meet these standards would vary depending on the covered facility's 
risk-based tier. Facilities would address the performance standards in 
the facility's Site Security Plan, and DHS would verify and validate 
the facility's implementation of the Site Security Plan during an on-
site inspection.
1. General Approach to Performance Standards
    Comment: The majority of the commenters supported the proposed 
regulatory approach due to the flexibility that the risk-based 
performance standards provide to the regulated community in choosing 
security measures for their respective facilities. The proposed 
approach acknowledges the fact that each of the facilities faces 
different security challenges. A few commenters noted

[[Page 17705]]

that the goal of the performance standards should be to reduce 
vulnerabilities identified in the SVA, not necessarily reduce all 
potential consequences or mandate the use of specific countermeasures.
    By contrast, some other commenters opposed the Department's 
proposed regulatory approach, noting various reasons: that the Advance 
Notice was too prescriptive in certain areas; that performance 
standards are open to interpretation and thus can become discretionary, 
interpretive, and sometimes arbitrary; that chemical companies may be 
allowed under the rule to make risk reduction determinations based on 
their available risk reduction budget, rather than on the actual 
elimination or reduction of the most serious risks; that the rule 
allows enormous flexibility and variability in the documents that 
facilities can submit to the Department, which could make program 
review difficult and hinder any comparative analysis of risk reduction 
efforts among similar sites.
    Response: The Department's statutory authority mandates the 
issuance of performance standards. Section 550 requires the Department 
to issue interim final regulations ``establishing risk-based 
performance standards for security chemical facilities.'' See Sec.  
550(a). Also, as noted in the Advance Notice, Executive Order 12866 
also directs federal agencies to use performance standards. See 71 FR 
78276, 78283. Performance standards avoid prescriptive requirements, 
and although they provide flexibility, they still establish and 
maintain a non-arbitrary threshold standard that facilities will have 
to reach in order to gain DHS approval under the regulation. The 
ultimate purpose of the performance standards is to reduce 
vulnerabilities, and that is regardless of risk reduction budgets.
    With respect to documentation, except as provided in Sec.  27.235 
for Alternative Security Programs, DHS is requiring facilities to 
electronically submit all documentation required for analysis and 
approval. Facilities will complete the Top-Screen, Security 
Vulnerability Assessment, and Site Security Plans through the online, 
Web-based CSAT system. This electronic submission will minimize the 
variability concerns and allow DHS to manage and protect information.
    Comment: Regarding the application of the performance standards, 
some commenters thought that facilities should not have to address all 
performance standards (listed in Sec.  27.230) in their Site Security 
Plan and should only have to address those performance standards that 
directly apply to its facility and its risk-based tier. One commenter 
thought that, in certain circumstances, a covered facility should be 
able provide adequate chemical security without implementing every one 
of the risk-based performance standards. The commenter stated that the 
regulations should allow for situations where the facility can 
demonstrate that, under its particular circumstances, one or more of 
the risk-based performance standards is unnecessary or redundant.
    Response: Congress intended for the performance standards to 
provide facilities with a degree of flexibility in the selection of 
security measures, and the Department has tried to provide that 
flexibility throughout the rule. DHS expects that a facility will need 
to address only those performance standards that apply directly to 
their facility. In addition, DHS notes that there may be circumstances 
in which a facility needs not implement one or more of the risk-based 
performance standards and will still be able to provide adequate 
chemical security; the Department will work with these facilities on a 
case-by-case basis in these specific situations.
    Comment: Several commenters stated that the proposed standards do 
not include clear security goals, outcomes, or results to measure 
increased security. They also asserted that DHS should develop a 
measurement of vulnerability or risk reduction. One commenter suggested 
that chemical facilities should identify operational and protection 
goals and that the protection system should be evaluated with respect 
to meeting these goals. Another commenter suggested that DHS express 
the performance standards in terms of overall vulnerability scores as 
measures via a common Security Vulnerability Assessment methodology. 
This alternative would allow facilities to devote their security 
expenses to those measures that would produce the greatest 
vulnerability reductions and would result, nationally, in the greatest 
amount of overall vulnerability reduction per dollar spent.
    Response: DHS intends for the risk-based performance standards to 
provide facility owners with the flexibility to choose security 
measures in their Site Security Plan that will reduce the facility's 
level of risk. The Security Vulnerability Assessment process, and DHS's 
resulting placement of the facility within the tier structure, will 
provide facility owner-operators with an indication of their level of 
risk.
    Comment: Many commenters supported DHS's intention to issue 
guidance to assist the regulated community in the interpretation and 
application of the proposed performance standards. They encouraged the 
Department to work with the regulated community on the development of 
such guidance. However, some of these same commenters also emphasized 
that, to effectuate Congress' intention that the chemical security 
requirements be risk-based performance standards rather than 
prescriptive requirements, DHS must explicitly make the guidance non-
binding. Consistent with the comments about CVI, one commenter 
discussed the importance of limiting public access to the completed 
guidance since it could serve as a roadmap for terrorists.
    Response: DHS intends to release non-binding guidance on the 
application of the performance standards in Sec.  27.230 to the risk-
based tiers of covered facilities. This guidance will contain sensitive 
information concerning anti-terrorism measures, and DHS will make that 
guidance available to those individuals and entities with an 
appropriate need for the document. DHS will provide the guidance to the 
House of Representatives Committee on Homeland Security and the Senate 
Committee on Homeland Security and Governmental Affairs.
2. Comments About Specific Performance Standards
    Comment: Several commenters requested clarification about the 
performance standards in proposed Sec.  27.230(a). A few asked whether 
paragraph (a)(5) is intended to cover all Department of Transportation 
hazardous materials and whether it is intended to cover transportation 
and storage of hazardous materials. One suggested that paragraph (a)(5) 
should include a provision for securing and monitoring the storage of 
hazardous materials, in addition to securing and monitoring the 
shipping and receipt of hazardous materials. Commenters also requested 
that DHS have facilities report significant security incidents to local 
law enforcement in addition to the Department. Another commenter 
indicated that the Department should require the following additional 
elements in the performance standards: written job descriptions for 
security personnel, adequate response teams and resources, safe 
shutdown procedures, evacuation procedures, and decontamination 
facilities. In addition, another commenter asked that DHS define 
``dangerous substances and devices'' as used in Sec.  27.230(a)(3)(i), 
``potentially dangerous chemicals'' as used in Sec.  27.230(a)(6), and 
``significant

[[Page 17706]]

security incidents'' and ``suspicious activities'' as used in 
Sec. Sec.  27.230(a)(15) and 27.230(a)(16). Another commenter asked to 
whom facilities should report ``significant security incidents.''
    Response: These comments relate to the measures that facilities 
must select, develop, and implement in their Site Security Plans. The 
Department will provide information in guidance to facilities on these 
measures. That might include information on the meaning of these terms, 
details on the parties to whom facilities should report security 
incidents and suspicious activities, and explanations about the role of 
local law enforcement (e.g., the Department's recognition that some 
investigations of potentially illegal conduct may be the role of local 
law enforcement).
    In addition, DHS also notes that it has made a few changes to the 
regulatory context based on these comments. As discussed in the summary 
of regulatory text changes, the Department has revised paragraphs 
(a)(5), (8), (12), and (15).
    Comment: Several comments discussed the need for approaches that 
address cyber security risks, with several asserting that it is not 
sufficient for DHS to consider security only from a physical 
perspective. Commenters opined that there were very few specific 
references to cyber security in the Advance Notice, even though it is 
important. Some commenters suggested that DHS should address cyber 
security in more detail in its own performance standard (i.e., a 
performance standard that only addresses cyber security), while others 
suggested that DHS should integrate cyber considerations into other 
performance standards. Other commenters asked DHS to identify the scope 
of ``cyber'' security and ``other sensitive computerized systems'' in 
paragraph (a)(8).
    Commenters also raised other issues related to cyber security. One 
commenter mentioned that cyber or joint physical/cyber intrusions could 
create dangerous chemicals that did not previously exist. Consequently, 
commenters thought that DHS should address these contingencies in the 
screening process and/or issue an expansive list of chemicals. Other 
commenters noted that the RAMCAP approach was not designed to address 
control system cyber security. A few other commenters believed that the 
tiering approach is not appropriate for cyber security of control 
systems. Additionally, commenters mentioned that it is important to 
consider that facilities with interconnecting electronic systems could 
face additional threats as one site's vulnerability poses a risk to 
other connected sites.
    Response: The Department recognizes that cyber security is an issue 
and has included cyber security as one of the performance standards 
that facilities must address in their Site Security Plans. Paragraph 
(c)(8) requires facilities to select, develop, and implement measures 
that ``deter cyber sabotage.'' In addition, the Department notes that 
it has implemented an assessment of cyber vulnerabilities for 
industrial control systems within the CSAT Security Vulnerability 
Assessment. The Department has accomplished this through the assistance 
of DHS's National Cyber Security Division (NCSD). DHS appreciates the 
complexity and uniqueness of addressing cyber security with chemical 
facilities and anticipates that the CSAT will mature over time, 
especially with the constructive feedback from interested and 
knowledgeable parties.
    Comment: The Department received numerous comments on its use of 
the acronym ``SCADA'' in Sec.  27.230(a)(8). Commenters asserted that 
SCADA refers to a central control system that monitors and controls a 
complete site or a system spread out over a long distance. They noted 
that using the term SCADA to represent cyber systems at chemical 
facilities is too narrow and suggested that the Department should 
replace the term SCADA with ``Industrial Control Systems.''
    Response: While the Department had used the acronym ``SCADA'' 
(Supervisory Control and Data Acquisition) in the Advance Notice as 
shorthand for instrumented control systems in general, the Department 
agrees with the comments and has incorporated broader, more descriptive 
terminology into this performance standard. The Department has revised 
Sec.  27.230(a)(8), so that it reads as follows: ``Each covered 
facility must select, develop, and implement measures designed to: * * 
* [d]eter cyber sabotage, including by preventing unauthorized onsite 
or remote access to critical process controls, such as Supervisory 
Control and Data Acquisition (SCADA) systems, Distributed Control 
Systems (DCS), Process Control Systems (PCS), Industrial Control 
Systems (ICS), critical business systems, and other sensitive 
computerized systems.''
3. Variations in Performance Standards for Risk Tiers
    Comment: Several commenters supported the use of risk-based tiers, 
with several recommending that DHS consult with industry in the 
development of specific performance standards for each tier. Various 
commenters favored the Department's proposal to place high-risk 
facilities in risk-based tiers and to prioritize the implementation 
phase-in and the level of regulatory scrutiny (i.e., frequency of 
regulatory reviews, inspections and SVA/SSP updates) based on the 
facility's risk and associated tier. Commenters noted that DHS should 
require facilities in higher risk tiers to develop more robust measures 
to meet the performance standards.
    In contrast, a few other commenters had differing opinions. A small 
number of comments cautioned that performance standards should be 
consistent across all tiers, regardless of the level of risk. These 
commenters noted that DHS should adjust the specific measures, not the 
performance standards, to match the level of risk. In addition, one 
commenter stated that DHS should not establish risk-based tiers and 
should instead identify the criteria for those facilities that will be 
regulated and those that will not. If DHS were to establish tiers, that 
commenter thought DHS should limit the tiers to high or low risk.
    Response: As discussed above in Section III(B)(3), DHS is creating 
four risk-based tiers, with the highest risk facilities in the top tier 
(i.e., Tier 1). The types and intensity of security measures 
(sufficient to satisfy the risk-based performance standards in the 
facility's Site Security Plan) will depend on the facility's tier. For 
facilities that present the greatest degree of risk, more rigorous 
security measures will be needed to satisfy the performance standards. 
The Department will use a higher level of regulatory scrutiny for 
facilities that present the highest risk.
    DHS consulted with the chemical industry in developing the tier 
system and performance standards. In adopting the four tier system and 
applicable risk-based performance standards, DHS intends to employ a 
scalable performance standard across the tiers, i.e., within the same 
performance standard, a more robust set of security measures will be 
needed for a Tier 1 facility than for a Tier 2 facility, for a Tier 2 
facility than for a Tier 3 facility, and so on. DHS will ensure that 
risk-based performance standards are applied consistently across each 
tier, but guidelines for each tier will vary.
    Comment: A few commenters also supported the idea that a facility, 
which the Department has previously determined is ``high risk,'' can 
request that the Department move it to a lower tier if it has 
materially altered its operations in a way that significantly

[[Page 17707]]

lowers its potential vulnerabilities and consequences.
    Response: Pursuant to Sec.  27.205(b), ``if a covered facility 
previously determined to present a high level of security risk has 
materially altered its operations, it may seek a redetermination by 
filing a Request for Redetermination with the Assistant Secretary, and 
may request a meeting regarding the request.'' DHS has retained that 
provision in this interim final rule. This provision allows DHS to re-
evaluate risk based upon changes at the facility in process, chemistry, 
or other factors. DHS, through the Assistant Secretary, intends to 
evaluate such proposed measures on a case-by-case basis.
    In evaluating the redetermination, DHS will consider whether the 
planned action actually reduces risk (as opposed to simply ``moving'' 
the risk into the community around the facility) and does so without 
compromising security. Where these parameters are met, DHS will approve 
the plan and re-evaluate the tier placement for the facility in 
question. Pursuant to Sec.  27.205(b), the Assistant Secretary will 
notify the facility of the Department's decision on the Request for 
Redetermination within 45 calendar days of receipt of such a Request or 
within 45 calendar days of a meeting regarding the Request.
    Comment: One commenter noted that how performance standards vary 
across tiers would depend on the criteria used to establish the tiers.
    Response: DHS will assess all facilities based upon worst plausible 
case scenarios as applicable to each facility.
4. Adoption of MTSA Provisions
    The Advance Notice solicited comment on whether DHS should adopt 
various provisions from MTSA as elements of the chemical security 
program. In particular, DHS asked whether it should adopt the following 
performance standards in addition to the standards already listed in 6 
CFR 27.230: 33 CFR 105.250 (Security systems and equipment 
maintenance), 33 CFR 105.255 (Security measures for access control); 33 
CFR 105.260 (Security measures for restricted areas); 33 CFR 105.275 
(Security measures for monitoring); 33 CFR 105.280 (Security incident 
procedures). See 71 FR 78276, 78284.
    Comment: Of the several comments received on the request, the 
majority opposed adopting the standards, characterizing them as highly 
detailed and prescriptive and, as such, incompatible with the risk-
based performance standards proposed for chemical facilities. A 
chemical industry association presented an analysis of the four MTSA 
standards and concluded that they were largely duplicative of, or 
potentially inconsistent with, existing categories of performance 
standards presented in the Advance Notice. The commenter stated that 
the MTSA standards were not performance standards, but mandatory 
particular security measures, in direct conflict with Section 550. 
Through a similar section-by-section analysis of the MTSA provisions, a 
chemical manufacturer found several provisions to be compatible with 
performance standards, but others too prescriptive or incompatible with 
activities in chemical facilities.
    Another association representing chemical distributors stated that 
only a tiny fraction of its members relied on waterways to distribute 
chemicals and, accordingly, recommended against adoption of the 
standards.
    Response: The Department agrees with the commenters who recommended 
against adopting the MTSA provisions referred to in the preamble of the 
Advance Notice. As the commenters noted, these provisions either 
duplicate current standards, conflict with current standards, or 
mandate particular security measures in conflict with the statute.
    Comment: One association noted that, because many of its members 
had facilities on waterways, member companies often developed MTSA-type 
approaches to Security Vulnerability Assessments and Site Security 
Plans to establish some uniformity across facilities. Another commenter 
suggested that when an owner of multiple facilities has some covered by 
MTSA and others by the chemical security rules, MTSA could be an ASP if 
applied to non-MTSA facilities.
    Response: Where the application of MTSA practices is sufficient, it 
may be considered a valid ASP. DHS will review and consider adoption of 
MTSA plans to non-MTSA facilities on a case-by-case basis. The 
Department does not intend to require duplication of effort where 
responsible facilities have implemented adequate security measures.

E. Background Checks

    Under the Advance Notice, covered facilities would be required to 
perform appropriate background checks on and ensure appropriate 
credentials for facility personnel and, as appropriate, for unescorted 
visitors with access to restricted areas or critical assets.
    Comment: Numerous commenters stated that chemical facilities 
already screen their employees for their own interests and in response 
to government programs. The commenters urged that the level of 
screening for existing employees and contractors should be commensurate 
with the access provided. While some commenters wanted existing 
employees who had undergone employee screening before hire to be 
``grandfathered'' from any new requirements, other commenters thought 
that existing employees should be subject to screening when they are 
assigned to secure areas or have the potential to be reassigned. An 
association recommended checking current employees with less than five 
years seniority within six months of the effective date of the program 
and more senior employees within one year.
    Several commenters argued that, extending the proposed requirements 
to contractors, subcontractors, truck drivers, and delivery and repair 
personnel, and others who are frequently on site, would create serious 
difficulties because of the large numbers of individuals in these 
categories, the need to have them available on short notice, redundancy 
of existing credentials, cost of new credentialing, and delay while 
screening is completed. Chemical companies explained that they rely 
heavily on contractors and expect the contracting company to be 
responsible for assuring that their employees meet security 
requirements. Commenters suggested that officers hired by the facility 
supervise contractors and sub-contractors without background checks.
    The commenters also addressed the types of background checks that 
DHS is considering, including the personal information required, and 
whether name checks against the Terrorist Screening Database and 
fingerprint-based checks for terrorism, criminal history, or 
immigration status would be required. A number of commenters urged DHS 
to tailor the degree of scrutiny to the degree of employee access to 
sensitive locations. Private screening firms described systems that 
collect more detailed information and enhanced verification depending 
on the applicant's access. Operators of private screening systems state 
that they typically rely on the database screens for candidates with 
potential terrorist connections. A chemical industry association 
supported screening of chemical facility employees for terrorism, 
criminal records, and immigration status.
    One commenter explained that biometric testing in a chemical 
environment can fail because of smudging and deterioration of 
fingerprints over time, while another

[[Page 17708]]

believed that adequate field testing had not been completed. Another 
commenter explained that biometrics and other verification techniques 
will not foil a person who has stolen an identity to pass the screen. 
The commenter recommended that authentication techniques, in addition 
to validation and verification, be applied to applicants with access to 
secure locations. In response to the proposed use of a list of 
disqualifying crimes to reject applications for clearance, a number of 
commenters urged DHS to restrict the crimes to those that were most 
clearly linked to potential for terrorism. The commenters, both unions 
and chemical companies, argued that loyal employees can lose their jobs 
or fail to qualify for hire because of misdemeanors, such as missing a 
few months of child support, or crimes that are not good predictors of 
the potential for terrorism. One commenter recommended adoption of an 
appeal process that allows a disqualified person to explain why he or 
she is no longer at risk, similar to the process under MTSA 
regulations.
    The preamble also requested comment on whether the access 
provisions of the Transportation Worker Identification Credential 
(TWIC) Program, Hazardous Materials Endorsement (HME), ATF 
requirements, or other structured programs should apply to chemical 
facility security programs. A few commenters supported the concept that 
the screening required for the TWIC program should be acceptable for 
the chemical security program. Indeed, many chemical facilities are on 
bodies of water and employees were already compliant with the TWIC 
program. Another commenter took the opposite position that the TWIC 
program did not provide the customization available in existing 
screening systems to grade the level of screening based on employment 
and assignment decision. Numerous comments maintained that an employee 
or contractor who was credentialed under the TWIC, HME, ATF, or similar 
programs should not need additional security screening under the 
chemical security program. Related comments requested portability of 
security checks for employees or contractors cleared by another 
chemical facility. One commenter recommended that DHS establish a 
national repository of cleared personnel to minimize redundancy and 
expense.
    With respect to the question of whether the government should 
conduct background checks or whether the industry could use authorized 
third parties to conduct the checks, three commenters stated that third 
parties were already providing background checks for thousands of 
employees of chemical facilities. Other commenters, including 
organizations that provided screening services, maintained that 
existing programs for screening applicants and employees for chemical 
facilities were reliable, effective, and inexpensive. Another commenter 
wrote that one program operated through safety councils might be 
eligible as an alternate security program, although a chemical company 
suggested not using safety councils, because their standards were too 
lax.
    A few commenters favored the government's undertaking background 
checks because, unlike private companies, the government has access to 
terrorist databases and FBI databases, and because the government, 
unlike employers, would be immune from legal challenges from a rejected 
employee. Opposition to government responsibility came from several 
commenters who were concerned about slow completion of background 
checks, and that the backlog might be exacerbated by a new chemical 
security program.
    A few commenters, including three unions, strongly urged that the 
system provide an appeals process for affected applicants whose 
employment prospects in the chemical industry and elsewhere could be 
seriously affected by an erroneous determination. Private services 
noted that they notified applicants of adverse decisions and allowed 
them to contest the decisions.
    Response: DHS believes that personnel surety is a key component of 
a successful chemical facility security program. This component of the 
performance standards will enhance security in what would otherwise be 
a significant potential vulnerability. In the Advance Notice, the 
Department requested comment on these components of a background check 
program: (1) What individuals should have a background check? (2) When 
should the check be required? (3) What type of background check should 
be conducted? And (4) Should the federal government conduct the check? 
We address each of these four issues below.
    First, DHS agrees that the level of screening for employees and 
contractors should be commensurate with the access provided. As part of 
this approach, the facility shall identify critical assets and 
restricted areas and establish which employees and contactors may need 
unescorted access to those areas or assets, and thus must undergo a 
background check. A facility's approach to personnel surety, including 
its defined restricted areas, its critical assets, and a list of the 
employees requiring background checks, shall be detailed in the Site 
Security Plan that the facility submits to the Department for approval. 
The rule does not include a provision that would exempt certain 
employees from the personnel surety performance standard based on 
length of employment at the facility. Merely because an individual has 
worked in a chemical facility for a period of time without incident 
does not automatically mean that they do not pose a terrorism risk and 
should be given free access to restricted areas and critical assets 
without a background check. Allowing such access without a background 
check presents an unacceptable security risk, and is contrary to the 
performance standard on personnel surety. This is not to say, however, 
that employers may not consider an employee's prior history of 
employment and service in making personnel decisions. It should also be 
noted that nothing in this regulation prohibits a person that has been 
convicted of a misdemeanor offense from being employed at a high risk 
chemical facility.
    Second, DHS views the background check process as one of the many 
pieces of the Site Security Plan, and as such, will require that it be 
completed and submitted with the Site Security Plan. Once the facility 
receives the Letter of Authorization under Sec.  27.245 denoting 
preliminary approval of the Site Security Plan, the facility may then 
proceed with all necessary background checks, if it has not done so 
already. All employees required in the SSP to have a background check 
should be included in the initial submission and must be duly vetted in 
accordance with the plan. This should not cause any interruption in 
work.
    Third, the Department understands that many covered facilities 
already perform background checks on employees and certain contractor 
employees, and with some modifications, will allow that process to 
continue. In order to perform an appropriate background check for the 
purpose of protecting critical assets and restricted areas of high risk 
chemical facilities from persons who pose a terrorist threat, the 
Department has made some modifications to the personnel surety 
performance standard in the regulation. The Department will consider 
appropriate open source background checks as an acceptable response to 
the background check performance standard. Specifically, the Department 
will consider as appropriate a background check process that verifies 
and validates identity; includes a

[[Page 17709]]

criminal history check of publicly or commercially available databases; 
verifies and validates legal authorization to work through the I-9 
process; and includes measures designed to identify people with 
terrorist ties. This last standard can be achieved by checking against 
the consolidated Terrorist Screening Database (TSDB). The Department 
modified the performance standard at 6 CFR Sec.  27.230(a)(12) to 
reflect these changes.
    Fourth, while much of the background check process can be 
accomplished by commercial methods, the check of the Terrorist 
Screening Database is an inherently governmental function that 
necessarily includes a check of classified databases that are not 
commercially available. The Department will augment the background 
check in the SSP with a TSDB check. The Department has determined a 
TSDB check is necessary for the purpose of protecting critical assets 
and restricted areas of high risk chemical facilities from persons who 
pose a terrorist threat.
    DHS will designate a secure portal or other method for the 
submission of application data for each employee or contractor for whom 
a TSDB check is required in the SSP. The Application data will be the 
name, date of birth, address, and citizenship, and if applicable, the 
passport number, DHS redress number,\1\ and information concerning 
whether the person has a DHS credential or has previously applied for a 
DHS credential.
---------------------------------------------------------------------------

    \1\ A DHS redress number is issued by DHS to an individual who 
has successfully completed a redress inquiry, in which the inquiry 
resolved a previous false-positive match to a watch list record. 
Redress inquiries can be submitted directly to DHS as part of the 
DHS Traveler Redress Inquiry Program (DHS-TRIP).
---------------------------------------------------------------------------

    To minimize redundant background checks of workers, DHS agrees that 
a person who has successfully undergone a security threat assessment 
conducted by DHS and is in possession of a valid DHS credential such as 
a TWIC, HME, NEXUS, or FAST, will not need to undergo additional 
vetting by DHS. Even so, the facility shall submit the name and 
credential information for these persons along with the application 
data for other employees. Facilities shall not allow unescorted access 
to a critical asset or restricted area to a person in possession of a 
DHS credential unless information on that person has been submitted as 
discussed above.
    DHS will screen each applicant and determine whether the applicant 
poses a security threat. Where appropriate, DHS will notify the 
facility and applicant via U.S. mail, with information concerning the 
nature of the finding and how the applicant may contest the finding. 
Applicants will have the opportunity to seek an adjudication proceeding 
and appeal under Subpart C.

F. Inspections and Audits

    Numerous comments addressed the proposed provisions for auditing 
and inspecting chemical facilities to determine compliance and allowing 
certified third-party auditors to supplement DHS personnel at lower 
tier facilities. While DHS has responded, to the extent that it is 
able, to the comments below, DHS also notes that it will issue guidance 
that identifies appropriate processes for inspections and provides 
specifics about the records that must be made available to DHS upon 
request. See Sec. Sec.  27.250(d) and 27.255. That guidance will 
provide further detail.
1. Inspections
    Comment: Section 27.245(a) in the Advance Notice provided that DHS 
may ``enter, inspect, and audit the property, equipment, operations, 
and records of covered facilities.'' One commenter asserted that DHS 
should inspect and audit using an approved or preliminarily approved 
Site Security Plan and not on other criteria outside the scope of the 
Site Security Plan. In addition, commenters indicated that DHS need not 
inspect equipment and records related to operations outside the 
vulnerabilities identified in the facility's Security Vulnerability 
Assessment and protected in the Site Security Plan; the commenter 
thought that such inspections would go beyond what is required to 
ensure that high-risk chemical facilities are secure. In addition, one 
commenter requested that DHS revise the scope of inspection to 
property, equipment, operation, and records covered in a facility's 
Site Security Plan.
    Response: During inspections, authorized DHS officials may inspect 
equipment, view and/or copy records, and audit records and/or 
operations. This section imposes an affirmative obligation on 
facilities to cooperate with authorized DHS officials, including 
inspectors, and allow inspections and audits. DHS will inspect a 
covered facility following DHS's preliminary approval of the facility's 
Site Security Plan. DHS may also inspect facilities outside of the Site 
Security Plan approval cycle if there are exigent circumstances or 
special security concerns. During the course of inspections, an 
inspector may ask a facility to demonstrate the effectiveness of a 
given security measure found in the facility's Site Security Plan. This 
will help the inspector to determine whether the facility has 
adequately implemented the risk-based performance standards in its Site 
Security Plan. With respect to requests for records, the Department 
expects that facilities will produce the records--whether located 
onsite at the facility, at corporate headquarters, or in any other 
location--that are relevant to the security of the facility. The 
Department has added some additional language in the rule about the 
production of records. See Sec.  27.250(d)(4).
    With respect to scope of inspections, DHS is not narrowing its 
scope to cover only those items covered in the facility's Security 
Vulnerability Assessment and Site Security Plan; DHS needs the 
appropriate discretion to inspect those items and areas that are 
related to the security of the facility. However, DHS has no intention 
of inspecting areas that are unrelated to security.
    Comment: One industry association noted that Sec.  27.245(b)(1) of 
the Advance Notice suggested that security measures (which DHS requires 
for final approval of the Site Security Plan) should be in place at the 
time that DHS inspects a facility. The commenter stated that, if 
facilities address vulnerabilities through capital improvements, 
facilities are unlikely to have these security measures in place within 
the stated time frame. In such cases, the commenter recommended that 
DHS use a timeline approach, detailing an implementation schedule of 
prioritized security measures, and include that timeline in a 
facility's Site Security Plan.
    Response: The commenter is correct in noting that DHS expects that 
facilities will have met the requirements of Sec.  27.225 (i.e., the 
facility will have developed and submitted a Site Security Plan, which 
the Department will have preliminarily approved) when the Department 
visits the facility for an inspection or audit. See Sec.  27.250(b)(l). 
One of the purposes of the inspection is for the Department to 
determine whether facilities have adequately implemented their Site 
Security Plans.
    However, the Department realizes that there may be circumstances 
where facilities will have to implement security measures through 
capital improvements, and that can take time. Based on the Department's 
assessment of risk at a given facility and the realities of getting 
security measures into place, the Department will work with facilities 
on a case-by-case basis. Where the Department believes that extra time 
is warranted, the Department will work with facilities to incorporate 
that time into the facility's Site Security

[[Page 17710]]

Plan and into the Department's timeline for inspecting the facility.
    Comment: Various commenters requested clarification about the time 
and manner provisions found in Sec.  27.245(c) of the Advance Notice. 
Several commenters noted that the proposed regulations did not define 
the terms ``reasonable times'' or ``reasonable manner'' and asked the 
Department to define those terms. In addition, some commenters noted 
that the preamble provided a timeframe for inspections (``during 
regular business hours of 9 a.m. to 5 p.m.'') but that the Advance 
Notice text did not specify that timeframe. Other commenters indicated 
that DHS should clearly outline the regularity of audits and 
inspections that the Department will require for each tier.
    Several other comments discussed the notice provisions in the rule. 
The Advance Notice provided that ``DHS will provide covered facility 
owners and operators with 24-hour advance notice before inspections, 
except where the Under Secretary or Assistant Secretary determines that 
an inspection without such notice is warranted by exigent circumstances 
and approves such inspection.'' See Sec.  27.250(c). Several industry 
associations believe that 24-hour advance notice would not be a 
sufficient amount of time for facilities to arrange for the appropriate 
personnel to be available for the inspection. Commenters suggested that 
DHS provide more notice to facilities; requests ranged from three to 
seven days. Other commenters requested that, in addition to notifying 
the facility, DHS also provide local emergency responders and local 
agencies tasked with regulating hazardous materials facilities with a 
24-hour advance notice as a courtesy.
    Others commented on the concept of unannounced inspections. A 
member of Congress objected to the restrictions on unannounced 
inspections, asserting that the provision was a near-preclusion of 
random audits, because approval by senior officials (i.e., the Under 
Secretary for Preparedness or Assistant Secretary for Infrastructure 
Protection) would make unannounced audits exceedingly rare. Moreover, 
focusing such unannounced audits exclusively on facilities (or 
geographic regions) where agency officials determine that ``exigent 
circumstances preclude notice'' presupposes that the agency is already 
in a position to know where exigent circumstances exist. As a result it 
would be far harder for the Department to determine actual rates of 
compliance with regulatory requirements. An industry commenter would 
support unannounced inspections for facilities that had significant 
deficiencies in the prior inspection or that have had an unusual number 
of breaches.
    Response: DHS has retained the language that it used in the Advance 
Notice. Authorized DHS officials will conduct audits and inspections 
during reasonable times and in a reasonable manner. The nature of any 
given inspection will depend on the specific circumstances surrounding 
a particular facility's operations at a given point in time and will be 
considered in conjunction with available threat information.
    Commenters asked for clarification on the times that DHS plans to 
conduct inspections. While DHS expects that it will conduct many of its 
inspections during the regular business hours of 9 a.m. to 5 p.m., DHS 
will not limit its inspections to regular business hours only. DHS must 
have the flexibility to respond to information, operations, and 
circumstances whenever they exist or develop, and so DHS may have to 
conduct inspections in the evening, at night, or during weekends. 
Security concerns are different at different times of the day and on 
different days of the week, and so DHS must be able to assess the 
different security measures that facilities put into place, pursuant to 
their Site Security Plans.
    DHS has maintained the Advance Notice provision that gives 
facilities 24-hour advance notice before an inspection. In some 
circumstances, DHS may provide facilities with additional time. As a 
general matter, DHS believes that 24 hours is an appropriate and 
reasonable notice period, striking a balance between providing the 
Department with flexibility to determine compliance with this 
regulation and providing regulated entities with sufficient notice to 
prepare for an inspection. Some commenters suggested that DHS also 
provide advance notice about inspections to local emergency responders 
and local agencies. While DHS may choose to notify local emergency 
responders or other agencies on a case-by-case basis, DHS does not 
believe it is necessary to include a mandatory requirement in the rule.
    Many commenters expressed concern that DHS is not able to conduct 
unannounced inspections. These concerns are unfounded: DHS will be able 
to conduct unannounced inspections when it complies with internal 
policy. While DHS has a general requirement for advance notice, DHS 
recognizes that there may be circumstances where advance notice is not 
possible.
    To accommodate those circumstances, DHS has identified two 
exceptions. See Sec.  27.250(c). DHS had identified one exception in 
the Advance Notice: If the Under Secretary determines that an 
inspection without notice is warranted by exigent circumstances, the 
Under Secretary or Assistant Secretary may approve such an inspection. 
The exigent circumstances may include threat information warranting 
immediate action. DHS adds a second exception in this interim final 
rule: If any delay in conducting an inspection might be seriously 
detrimental to security, and the Director of the Chemical Security 
Division, Office of Infrastructure Protection determines that an 
inspection without notice is warranted, the Field Operations supervisor 
may permit an inspector to conduct such inspection. This additional 
exception addresses the concerns of commenters who claimed the 
exception in the Advance Notice was too restrictive.
    Comment: Some commenters noted that facilities may choose to 
validate any government-issued credential for the purpose of inspectors 
gaining entry onto a chemical facility. One commenter requested that, 
as part of the guidance, DHS include information on the security 
measures that will allow a facility to determine that the DHS officials 
or third party auditors are legitimate.
    Response: DHS will handle this issue like other Federal agencies 
handle their respective inspectors and auditors. Individuals performing 
these inspections will carry Federal government credentials identifying 
themselves as having official authority to inspect. In addition, any 
chemical facility wishing to authenticate the identity of an individual 
purporting to represent DHS may contact the appropriate DHS Chemical 
Security Division official within the Office of Infrastructure 
Protection at DHS headquarters. In addition, the Department has 
provided some additional regulation text on the issue of inspector 
credentials. See Sec.  27.250(d)(1).
    Comment: Several commenters addressed the issue of training for 
inspectors. One commenter stated that it is DHS's role to ensure that 
inspectors and auditors are qualified in both physical security and 
chemical processes. Others noted that, if inspectors and auditors do 
not have a background in chemical manufacturing, then DHS must 
adequately train inspectors. Furthermore, that commenter encouraged DHS 
to utilize a cross functional team consisting of individuals with 
chemical process knowledge and physical security

[[Page 17711]]

background and include a local area first responder on each inspection 
team for each facility. The commenter noted that many facilities 
maintain a close relationship with local emergency responders. One 
commenter indicated that DHS inspectors should expect that chemical 
facilities may require them to complete a safety overview before being 
granted access to a facility; this is regardless of the training that 
DHS provides to its inspectors.
    Response: DHS will use properly trained personnel to conduct 
inspections. During inspections, DHS intends to use teams consisting of 
Federal inspectors, many with backgrounds in law enforcement and 
physical security, and experts in chemical manufacturing. DHS will put 
inspectors through a rigorous training program, incorporating both 
classroom training and on-site visits, so that inspectors are informed 
on all aspects related to this regulatory program as well as on safety 
issues. These individuals will receive training on specific safety 
procedures, including OSHA's Hazardous Waste Operations and Emergency 
Response Standard (HAZWOPER), that they should use while visiting 
chemical facilities. If chemical facilities request that inspectors 
receive facility-specific safety briefings or training, the Department 
will work with facilities to accommodate those concerns, provided that 
the additional safety training is reasonable given the nature of the 
expected inspection.
2. Third-Party Auditors and Inspectors
    Comment: Numerous chemical companies, industry associations, and 
State and local agencies requested clarification on the roles and 
responsibilities of third-party auditors. Several commenters pointed 
out that there is currently a lack of standards for third-party 
auditors, and some commenters noted that if DHS does not provide 
specific criteria for compliance, such audits will be very subjective. 
Several commenters asserted that there is a need for DHS to develop 
standards and requirements for third-party auditors, including 
requirements for certification, qualifications, independence, 
objectivity, training and re-training, confidentiality, ethical 
obligations, conflicts of interests, discipline procedures, and 
liability insurance.
    Several commenters discussed the third-party auditor certification 
or approval process in detail. One commenter pointed out that DHS would 
have to develop either a professional registration or licensing for 
third-party auditors in order to establish a minimum level of 
competency for third-party auditors. Other commenters stated that 
training should include, among other things, information on physical 
security, chemical processes, and safety operations. One commenter 
recommended Sandia National Laboratory's Risk Assessment Methodology 
for Chemical Facilities (RAM-CF) training as an excellent review in all 
aspects of chemical facility operation and security. One pointed out 
that there is currently no certification for control system cyber 
security auditors. Another commenter added that any DHS third-party 
inspectors should have a strong background and experience with the 
agricultural retail/distribution segment of the chemical industry. The 
commenter encouraged DHS to work with industry associations and 
industry experts on establishing the proper criteria to select 
certified third-party auditors that will be used to inspect 
agricultural retail or distribution facilities determined to be covered 
by these regulations.
    One commenter was concerned that DHS had not effectively addressed 
auditor independence and objectivity in the Advance Notice. To remedy 
this concern, the commenter suggested that DHS define third-party 
auditor and address auditor concepts such as due diligence, due 
professional care, auditor certification, auditor training, auditor 
indemnification, conformity assessment, audit/inspection methodology, 
etc.
    Other commenters raised questions about third-party auditors and 
information protection. One commenter stated that all third-party 
auditors must be held to the same requirements and standards as applied 
to DHS officers and employees regarding the protection of confidential 
information; this includes information protected by law, such as PCII, 
Sensitive Security Information (SSI), or other applicable requirements. 
DHS should develop requirements and procedures, including the use of 
non-disclosure agreements, to prohibit disclosure or use of 
confidential information developed or obtained during the auditing 
process. One association, whose member companies already use third 
party audits, wanted confirmation that the use of third-party auditors 
would be in compliance with the CVI framework.
    Three State agency commenters urged the Department to clarify that 
the third-party auditor provision includes qualified state and local 
assets to conduct audit inspections and assist with Security 
Vulnerability Assessments and Site Security Plans. One commenter would 
limit third-party auditors to appropriate state and local government 
officials with familiarity of the chemical process safety and security 
systems currently in place at the chemical facility in question to 
ensure the credibility and effectiveness of the inspection and auditing 
program. Some other commenters suggested that State and local entities 
could be a resource base for audits and site visits, including those of 
higher tier facilities.
    Commenters asked several other specific questions about DHS's use 
of third-party auditors. A chemical company requested clarification on 
how DHS could delegate its authorities to third-parties. Another 
commenter wanted the ability to seek legal remedies against third-party 
auditors. Other commenters raised the question of who would pay for 
third-party auditors, suggesting that DHS should.
    Some commenters argued for the use of third-party audits at any 
chemical facility regardless of its tier ranking. One commenter noted 
that the eventual requirements for certification should be stringent, 
creating confidence that the auditor will be just as capable as DHS 
inspectors of auditing or inspecting a high-risk facility. The 
commenter suggested that, as a result, a certified third-party auditor 
should also be allowed to conduct inspections at ``high'' or ``higher'' 
risk facilities. Other commenters noted that allowing third-party 
auditors to perform work at any chemical facility, regardless of its 
tier, will increase the ability of DHS to rapidly and effectively 
review security plans at chemical facilities by making sure sufficient 
numbers of inspectors are available at any given time.
    Other commenters opposed DHS's use of third-party auditors 
altogether. A chemical industry commenter opposed DHS's use of 
consultants, contractors, or vendors to perform audits and inspections 
of facilities based on concerns about confidentiality and conflicts of 
interest. The commenter asserted that DHS-trained personnel are best 
suited to understand the complexities of security in affected 
facilities and to understand the importance of sensitive business 
information provided to DHS. Consequently, the commenter urged DHS not 
to initiate the proposed program without the appropriate level of 
staff, training, and resources necessary to implement enforcement. One 
commenter preferred that DHS officials, not officials from other 
government agencies or non-governmental organizations, conduct third-
party inspections or audits to assess compliance; the commenter 
asserted that consistency of audits can

[[Page 17712]]

only be maintained if one agency, using the same inspection and/or 
audit procedures, performs the work. Several other commenters disagreed 
with the concept of third-party auditors unless they were under 
contract to DHS and met DHS hiring standards and training 
certifications. They felt that if such an activity is important, then 
DHS should carry out the activity itself.
    Response: The Department recognizes that there are many important 
and complex issues surrounding the use of third-party auditors. Those 
issues include questions about whether it is appropriate for DHS to use 
third-party auditors and if so, for which tiers of facilities; what the 
standards and requirements would be for those third-party auditors; and 
who would pay for third-party auditors. DHS continues to take these 
issues under advisement. DHS intends to issue a future rulemaking 
providing the details about its plans to use third-party auditors. In 
developing its proposed rule, DHS will consider these comments about 
third-party auditors. Until that time, DHS will use its own inspectors 
for conducting inspections and audits.

G. Recordkeeping

    Comment: One commenter suggested that the recordkeeping and 
reporting requirements be strengthened for process malfunctions or any 
attempted terrorist attack; the need for emergency response, safe shut 
down, evacuation and decontamination procedures in case of an attack or 
malfunction be defined; and effective training requirements for workers 
in covered facilities be required.
    Response: Recordkeeping requirements under this new authority focus 
on security and will capture many of the issues identified by the 
commenter. Recordkeeping requirements regarding incidents under process 
safety, including shut down/start up, are outside of the scope of this 
regulation.
    Comment: One commenter asked for guidance regarding what would 
constitute a reportable ``security incident'' or ``suspicious 
incident.'' The commenter noted that DOT has provided helpful guidance 
for reporting and recordkeeping under HM-232.
    Response: The Department will provide facility owners with guidance 
on these and other terms used in the recordkeeping section.
    Comment: Another commenter suggested that Sec.  27.250(a)(4) 
include a reference to NFPA 731, Standard for the Installation of 
Electronic Premises Security Systems (2006 edition), Chapter 9, Testing 
and Inspections. The commenter supported the recommendation by pointing 
out that all NFPA codes and standards are developed through the 
voluntary consensus process and are accredited by the American National 
Standards Institute (ANSI); that Congress, in several cases has 
mandated the adoption of NFPA codes and standards and that Public Law 
104-113, as described in OMB Circular A119, mandated that voluntary 
consensus codes and standards be used when they are applicable and to 
ensure that chemical facility safety be the primary concern.
    Response: Voluntary consensus approaches to chemical facility 
security will be addressed in guidance. However, the Department cannot 
mandate specific security measures under this authority.
    Comment: One chemical association found the requirements for 
recordkeeping to be excessive. Concerning training, the commenter 
stated that the location of the session and the name and qualifications 
of the trainer were not important, and the requirement for attendees' 
signatures would cause headaches if attendees leave without signing. 
Also, many of these requirements seem to prevent the use of web-based 
training. With respect to the drill and exercise provision, the 
commenter believed that a comprehensive list of participants is more 
challenging than it might appear, since drills and exercises frequently 
involve persons in multiple locations. Finally, recording the name and 
qualifications of every maintenance technician is overly burdensome and 
extremely difficult to document. According to the commenter, this 
proposed requirement would lead to inadvertent non-compliance due to 
its inherent complexity. The commenter urged that the recordkeeping 
requirements, at most, track the MTSA requirements (33 CFR Sec.  
105.225), which are less detailed and only require records to be 
maintained for two years.
    Response: Memorializing minimal information about training, drills, 
exercise, and maintenance is important for a facility to assist in the 
analysis and review of its security efforts, and DHS does not agree 
that these requirements are overly burdensome or excessive given the 
potential risks in this sector. The recordkeeping requirements address 
specific issues that arise in chemical facilities, and a three year 
period is consistent with the anticipated audit and review cycle under 
this rule.
    Comment: An industry association argued that, in light of existing 
DOT requirements, no additional training and recordkeeping requirements 
are needed for battery transportation. Further, any training and 
recordkeeping requirements that are made applicable to drivers hauling 
covered chemicals should be the responsibility of the transportation 
firms, not the facilities they service.
    Response: There are no specific requirements for recordkeeping of 
transportation activities in this rule.

H. Orders

    Comment: Various commenters mentioned the remedies in proposed 
Sec. Sec.  27.300, 27.305, 27.310, and 27.315. An industry group 
indicated that the rule should provide adequate protection for 
recipients of penalty and cessation orders, including the opportunity 
for an adjudicatory hearing before a neutral hearing officer. The 
commenter suggested that the rule make clear that the burden of proof 
lies with DHS, not the facility; that facilities may be represented by 
counsel; that the facility is entitled to present evidence on its 
behalf; that there be an orderly process for the hearing officer to 
make a decision on the basis of the record presented, including a 
record of decision and for intra-agency appeal of the hearing officer's 
decision before it becomes final. Finally, a trade association pointed 
out a typographical error in proposed Sec. Sec.  27.305(b) and 
27.310(a).
    Response: The Department has substantially revised the regulatory 
text in Subpart C, which includes Orders, adjudications, and appeals. 
The Department directs commenters to the revised regulatory text in 
Subpart C, as well as summary of those changes in Sec.  II(B) Rule 
Provisions. In sum, the Department has included adjudicatory procedures 
for a proceeding before a neutral hearing officer whereby facilities 
and others may be represented by counsel and may present evidence. The 
procedures provide that the burden of proof rests with the Assistant 
Secretary and that a record will be compiled for an appeal within DHS.
    Comment: Several others provided input on cessation orders. A local 
government agency indicated that an Order to Cease Operations likely 
would be litigated immediately after issuance, and questioned how non-
compliance during the lengthy litigation period would be remedied. 
Another commenter recommended that DHS add a provision stating that it 
would not enforce an order to cease operations within 30 days of a 
final action, which would allow the facility time to seek judicial 
review. An industry commenter stated that DHS's professional assessment 
that a chemical facility was in total violation of the security 
requirements should result in

[[Page 17713]]

an initial audit of what is required at that particular site to be in 
compliance. If, after a reasonable time, the facility does not come 
into compliance, then DHS should consider temporary closure until 
compliance is attained. An association expressed concern that DHS 
should consider whether a facility's products are critical to the 
economy, chemical industry, or national security before imposing fines 
or issuing a notice to cease operations.
    Response: As noted above, the Department has substantially revised 
the regulatory text in Subpart C, which includes the provisions on 
Orders, adjudications, and appeals. Consistent with the statement in 
the Advance Notice, the Department realizes that an Order to Cease 
Operations would likely be litigated immediately after issuance. See 71 
FR 78276, 78287.

I. Adjudications and Appeals

    Comment: While commenters generally supported the processes 
proposed for objections and appeals, some thought that DHS should 
strengthen and expand the objections and appeals provisions. Several 
commenters suggested that DHS include additional provisions to the 
objections and appeals sections. One commenter recommended that DHS 
revise the rule to include a full description of the administrative 
review process, including the procedures to which all parties and the 
adjudicating official must adhere. Another commenter recommended that 
the Under Secretary and the Deputy Secretary have the authority to 
delegate their responsibilities as adjudicating officials.
    One commenter stated that the burden of proof should lie with DHS, 
not the order recipient, that recipients may be represented by counsel, 
that the recipient is entitled to present evidence on its behalf, that 
there be an orderly process for the hearing officer to make a decision 
on the basis of the record presented, including a record of decision, 
and for intra-agency appeal of the hearing officer's decision before it 
becomes final.
    Response: DHS has reorganized the adjudications and appeals 
procedures, as discussed in the summary of rule provision changes to 
Subpart C. See Sec.  II(B). Given that the rule already provides 
consultation opportunities, coupled with the fact that the Department 
has greatly modified its adjudications provisions, the Department 
believes it is unnecessary to retain the objections provisions from the 
Advance Notice (proposed Sec. Sec.  27.205(c), 27.220(b), and 27.240(c) 
and has thus removed them from the interim final rule. Of course, 
consultations are still available pursuant to various provisions in the 
rule including Sec.  27.120(b).
    In addition, DHS now expressly spells out new procedures for 
adjudications and appeals. In particular, DHS has added adjudicatory 
procedures for a proceeding before a neutral hearing officer whereby 
facilities and others may be represented by counsel and may present 
evidence. The procedures provide that the burden of proof rests with 
the Assistant Secretary and that a record will be compiled for an 
appeal within DHS. The Secretary is expressly authorized to appoint 
individuals to serve as a neutral hearing officer. The Secretary and 
others retain their existing authority to delegate duties and 
responsibilities.
    Comment: Another commenter suggested that DHS revise the rule to 
provide some guidance and limitation on the number of requests that a 
facility will be permitted to make for additional information and on 
the maximum extent to which DHS will toll timeframes. One commenter 
noted that although there is authority for the Assistant Secretary to 
ask the facility for more information, there is no mechanism for the 
facility to seek further explanation that is needed for purposes of 
arguing its objection.
    Response: The revisions of the procedures substantially address 
these comments. The adjudications provisions empower a hearing officer 
to make decisions on the information to be accepted into each hearing 
record.
    Comment: Another commenter stated that, under the Advance Notice, a 
facility had the option of using the appeal procedure (instead of the 
objection procedure) for challenging the disapproval of its SSP. The 
Advance Notice stated that orders are stayed until the administrative 
appeal is completed, but the Advance Notice did not provide 
specifically for the disapproval of a SSP to be stayed pending the 
administrative appeal. The commenter suggested that DHS should make 
such a stay explicit.
    Another commenter argued that, because timelines are short, 
facilities will be forced to complete the SVA and SSP regardless of the 
outcome of the appeal, thus rendering the appeals process moot. If a 
facility objects to a determination, whether it is opposing either the 
overall assessment of ``high risk'' or the specific tier assignment, 
one commenter recommended that DHS should issue a decision on objection 
before the facility is required to implement any additional measures--
including both the SVA and SSP.
    Response: The addition of the factual adjudication procedure, with 
provisions on the effectiveness of administrative actions during 
adjudications and appeals, substantially address these comments. The 
adjudications and appeals sections provide that, absent exigent 
circumstances, Orders are stayed pending the completion of proceedings.
    Comment: Another commenter indicated that Sec. Sec.  27.205(c)(1), 
27.220(b)(1), and 27.240(c)(1) (of the Advance Notice) cite ``within 20 
calendar days'' as the deadline for filing objections regarding the 
high risk determination, risk-based tiering, and disapproval of site 
security plans. In contrast, Sec. Sec.  27.215(c), 27.305(d), and 
27.320(b)-(d) (of the Advance Notice) cite ``within 30 calendar days'' 
for certain deadlines regarding notification, appeals, and payments of 
civil penalties. The commenter believed that having two different 
deadlines for various actions under the regulatory program is 
burdensome to both DHS and the regulated facilities, and requested that 
all ``within 20 calendar days'' be amended to ``within 30 calendar 
days'' to provide more consistency within the Department's regulatory 
program. Another commenter urged that an appeal must be filed within 30 
calendar days of when the order is issued should be changed to within 
30 calendar days of when the order is served. See Sec.  27.320(b) of 
the Advance Notice.
    Response: The Department's revisions to the adjudications and 
appeals provisions substantially address these comments. The rule 
continues to permit consultations but does not set hard and fast time 
periods for such consultations. See, e.g., Sec.  27.120(b), Sec.  
27.240(b), and Sec.  27.245(b). With respect to the time periods for 
adjudications and appeals, the revised procedures provide that 
adjudications and appeals must be commenced with stated time periods 
after ``notification.'' See, e.g., Sec.  27.310(b)(2) or Sec.  
27.345(b)(2).
    Comment: One commenter recommended that the regulations provide 
specifically that DHS would make available to the public non-
confidential summaries of determinations on appeals. The commenter also 
recommended that the regulations contain specific statements that 
objections and appeals may be submitted as CVI.
    Response: The adjudication and appeal sections contemplate that the 
hearing officer or appeal officer will make the necessary decisions 
concerning the handling of CVI. There is nothing in the procedure to 
prevent a facility or other person from relying on CVI.

[[Page 17714]]

    J. Information Protection: Chemical-terrorism Vulnerability 
Information (CVI)
    The Advance Notice identified a category of Chemical-terrorism 
Vulnerability Information (CVI) and set forth rules governing the 
maintenance, safeguarding, and disclosure of information and records 
that constitute CVI.

1. General

    Comment: Several commenters maintained that the proposed rule 
undermined enforcement, accountability, and the credibility of the 
program through excessive secrecy. One of these commenters thought that 
the proposed regulations pose a threat to existing right-to-know laws, 
while another stated that people might be well aware of security gaps 
and vulnerabilities at specific facilities, and yet would have no 
official channel to communicate concerns to DHS.
    Response: As Congress recognized in section 550(c), protecting CVI 
from public disclosure is crucial to DHS's ability to ensure that 
chemical facilities are as secure as possible against a terrorist 
attack. CVI information may reveal, among other things, current 
vulnerabilities or other details of a chemical facility's security 
capabilities that could be exploited by terrorists. In addition, 
limited and controlled public disclosure of CVI is essential to 
fostering the necessary relationship and information flow between the 
government and private sector. Indeed, because the chemical security 
regime relies to an extent in the first instance on the veracity and 
completeness of the information provided by chemical facilities, it is 
of the utmost importance that those facilities are comfortable that 
such information--which may include proprietary information--will not 
be unduly exposed to public view.
    In crafting the Advance Notice, DHS attempted to balance these 
concerns with the desire to enhance information sharing, as 
appropriate. We believe that the rule adequately does this by ensuring 
that any entities or individuals with a ``need to know,'' including 
appropriate State and local officials, will have access to the 
necessary CVI, while, at the same time, and consistent with 
congressional intent, protecting CVI from public disclosure that would 
undermine the government's ability to ensure the security of chemical 
facilities.
    To the extent that this approach conflicts with existing state 
``right to know'' or ``sunshine'' laws, we believe that such laws are 
preempted by this IFR. At this time, we do not intend to displace or 
otherwise affect any provisions of Federal statutes, including the 
Emergency Planning and Community Right to Know Act, 42 U.S.C. 11001 et 
seq., or section 112(r) and 114 of the Clean Air Act of 1990, as 
amended, 42 U.S.C. 7412(r), 7414, sections 308 and 402 of the Clean 
Water Act, 33 U.S.C. 1318, 1342, and section 104(e)(7) of the 
Comprehensive Environmental Response, Compensation, and Liability Act, 
42 U.S.C. 9604.
    We also believe that any potential gaps in a facility's security 
will be addressed through the government's close involvement with 
chemical facilities as a result of this rule.
2. Disclosure of CVI
    Comment: While some of the commenters found the provisions to be 
inadequately protective of chemical industry information, others found 
the disclosure rules to be too restrictive. A few commenters urged the 
Department to include language requiring notifications to facilities in 
cases of CVI disclosure to unauthorized parties. The commenters noted 
that a facility has a need to know if sensitive information pertaining 
to its site has been or might have been disclosed. A commenter, 
concerned over how the CVI rules may affect third-party audits of 
security measures and documents that may be submitted to the Department 
as Alternative Security Plans, requested an interpretation of DHS's 
approach. Taking the point further, another commenter did not believe 
it was in a company's best interest to provide copies of CVI to outside 
parties, as currently allowed under the proposed rule. The commenter 
would prefer the proposed rule be amended to require CVI be made 
readily available to authorized Department representatives only when 
they conduct on-site visits. One commenter encouraged the Department to 
adopt non-disclosure protections for verbally transmitted or obtained 
CVI. The commenter noted that information sharing among a covered 
facility and authorized individuals may require verbal communication as 
much as it will require written communication. To further protect 
against disclosure, some commenters believed that proposed Sec.  
27.400(j) should be enhanced so that it has a meaningful deterrent 
effect and establishes consequences that reflect the seriousness of the 
violation. The commenter suggested that the Department adopt 
administrative penalties similar to those outlined by 6 CFR 29.9(d).
    In addition, some commenters requested provisions to protect 
whistleblowers by stating that no criminal charges be associated with 
disclosing information marked as CVI in manner complying with 
whistleblower protections.
    Response: Under Sec.  27.400(c)(3) of the Advance Notice, ``any 
person who * * * receives or gains access to what they know or should 
reasonably know constitutes CVI'' is a ``covered person'' and therefore 
has a duty to protect that CVI in the manner provided in Sec.  
27.400(d). This includes the duty to promptly inform the Assistant 
Secretary ``when a covered person becomes aware that CVI has been 
released to persons without a need to know * * *.'' See Sec.  
27.400(d)(7). We expect that in the event DHS is so notified, it will 
notify the affected chemical facility.
    To the extent DHS determines that it is appropriate to use third-
party auditors in the future for certain chemical facilities, the 
auditors will have a ``need to know'' under Sec.  27.400(e)(1)(i) as 
persons who ``require[ ] access to specific CVI to carry out chemical 
security activities * * * directed by the Department.'' Moreover, under 
Sec.  27.400(e)(3), DHS retains the discretion to require that any 
individuals with a need to know, including third-party auditors, 
complete appropriate background checks before obtaining access to CVI. 
We believe that these safeguards are sufficient to ensure that CVI is 
adequately protected from improper disclosure, even if it may be 
handled by third-party auditors.
    Section 27.400(b) of the Advance Notice, which defines CVI, 
currently is ambiguous as to whether it includes information conveyed 
verbally as well as in written form. DHS believes that concerns over 
public disclosure of CVI are the same regardless of the manner in which 
the information is conveyed. Accordingly, we have amended this section 
to read as follows: ``In accordance with section 550(c) of the 
Department of Homeland Security Appropriations Act of 2007, the 
following information, whether transmitted verbally, electronically, or 
in written form, shall constitute CVI.''
    We believe that Sec.  27.400(j) gives the Department broad latitude 
to craft a civil remedy sufficient to deter the unauthorized disclosure 
of CVI. The IFR does not provide for any criminal penalties for 
disclosure of CVI.
3. Scope of CVI
    Comment: A number of commenters expressed concern regarding the 
scope of CVI. The commenters wanted the interim final rule to declare 
that

[[Page 17715]]

information developed under other requirements of law or regulation 
cannot be designated as CVI under this program. Similarly, a commenter 
suggested that DHS narrow the scope of CVI by removing from the rule 
Sec.  27.400(b)(9), which defines CVI to include ``[a]ny other 
information that the Secretary, in his discretion, determines warrants 
the protections set forth in this part.''
    Response: As outlined in the Advance Notice, the Department intends 
CVI to include only that information developed and/or submitted 
pursuant to Section 550(c). Accordingly, any information resulting from 
other statutory regimes is not considered CVI. The Department believes, 
however, that the Secretary must retain the discretion provided in 
Sec.  27.400(b)(9). As the Department and private sector gain more 
experience with the chemical security regime set forth herein, the 
Department may determine that other types of information, not covered 
in the current definition of CVI, require similar protection. Section 
27.400(b)(9) is also necessary to cover any unique or novel information 
that the Department may deem, on a case-by-case basis, requires 
protection from public disclosure.
4. Relation of CVI to Other Categories of Protected Information and 
FOIA
    Comment: Some commenters were confused by the different categories 
of protected information. One commenter stated that the proposed 
regulations are not sufficiently clear on the relationship of CVI to 
SSI and other relevant methods of information protection. The commenter 
indicated that the interim final rule should clarify how these 
information protection regimes will relate to each other. A few 
commenters believed that the creation of the new CVI category of 
information protection is redundant and unnecessary given that current 
protections, such as SSI, are adequate options for the Department to 
implement the statutory restrictions. One commenter noted that the 
``Safeguards'' classification for the Nuclear Sector seems to parallel 
the proposed ``CVI'' classification for the Chemical Sector. The 
commenter questioned whether the Department is considering inventing 
new security classifications for each of the 15 Critical Infrastructure 
Protection Sectors. The commenter would prefer that the Department 
develop a new Category of Information Classification for all 17 sectors 
for security-specific or security-related information that are, at a 
minimum, the same as those for the current ``Safeguards'' 
classification program.
    Two commenters recommended that the interim final rule clarify that 
CVI protections would be in addition to any other applicable bases for 
nondisclosure of information under the Freedom of Information Act 
(FOIA), such as the Trade Secrets Act and its protections are for 
confidential business information. Another commenter noted the 
provision gives the Department discretion to refuse release of part of 
a record under FOIA that contains no CVI, when another part of the same 
document contains CVI. The commenter suggests that this proposal is at 
odds with longstanding FOIA mandates and practice. Furthermore, the 
commenter noted that, if a portion of a requested record contains no 
CVI and is reasonably segregable from other parts of the record that 
do, there is no authority or justification for withholding that CVI-
free portion unless some other FOIA exemption or exclusion applies.
    Response: It is the Department's view that the language of Section 
550(c) calls for a unique information protection regime. As stated in 
the preamble of the Advance Notice, in creating CVI, the Department 
looked to and drew on various aspects of those information protection 
regimes currently in existence, including, SSI, PCII and SGI. Moreover, 
as the Advance notice makes clear, the Department intended CVI to track 
the existing SSI regime in certain respects and indeed, borrowed 
somewhat from that regime's structure and provisions (e.g., requiring a 
``need to know,'' storage in a secure container, etc.) None of these 
regimes, however, is sufficient to accommodate the protections Congress 
called for in Section 550(c), most notably, that any information 
developed pursuant to Section 550(c) be treated as classified 
information in the course of enforcement proceedings. For this and 
other reasons, the Department developed CVI, which is separate and 
distinct from SSI, PCII, SGI or any other pre-existing information 
protection regime.
    Section 550(c) pertains only to chemical facilities and thus this 
rule does not speak to the handling of other critical infrastructure 
sectors. That said, the Department does not take the creation of a new 
information protection regime lightly, especially in light of the 
President's Memorandum for Heads of Executive Departments and Agencies 
of December 16, 2005, entitled ``Guidelines and Requirements in Support 
of the Information Sharing Environment.'' Absent express direction from 
Congress, as in Section 550(c), the Department is reluctant to create 
additional regimes.
    In drafting the rule, the Department did not intend for its 
restrictions on public disclosure to displace separate and additional 
statutory restrictions on the public disclosure of confidential 
business information.
    The terms and structure of Section 550 clearly preclude public 
disclosure of CVI. For this reason, it is the Department's view that 
CVI, like SSI and PCII, is exempt from FOIA disclosure under Exemption 
3 of FOIA. See 5 U.S.C. 552(b)(3). Exemption 3 provides, in part, that 
information is exempt from disclosure by operation of another statute, 
provided that such statute either: ``(A) requires that the matters be 
withheld from the public in such a manner as to leave no discretion on 
the issue; or (B) * * * provided that such statute refers to particular 
types of matters to be withheld.'' Id. Section 550(c) provides in 
relevant part that ``information developed under this section, 
including vulnerability assessments, site security plans, and other 
security related information, records, and documents, shall be given 
protections from public disclosure consistent with similar information 
developed by chemical facilities subject to regulation under section 
70103 of title 46 [the Maritime Transportation Security Act (MTSA)] * * 
*.'' MTSA states that ``information developed under this chapter is not 
required to be disclosed to the public.'' 46 U.S.C. 70103. Under this 
language, it is conceivable that the government has discretion to 
release information to the public. See Church of Scientology of Calif. 
v. U.S. Postal Serv., 633 F.2d 1327, 1330 (9th Cir. 1980). As stated in 
the Advance Notice, however, ``information developed'' under MTSA is 
treated as SSI and, unlike MTSA, the statute governing SSI (49 U.S.C. 
114(s)) states that the government ``shall prescribe regulations 
prohibiting the disclosure of information * * *.'' (Emphasis added.) 
This language has been interpreted as constituting the ``absolute'' 
prohibition required to invoke the exception of Subsection (A). See 
Chowdhury v. Northwest Airlines Corp., 226 F.R.D. 608, 611 (N.D. Cal. 
2004).
    To the extent that there is some ambiguity as to which statute 
should govern for purposes of an Exemption 3 analysis, it is our view 
that the SSI statute most accurately reflects Congress's intent in 
section 550(c) and that, therefore, CVI should be exempt from FOIA 
disclosure under subsection (A) of Exemption 3. Nevertheless, we need 
not resolve the issue at this time because it is also our view that the 
language of section 550(c), which

[[Page 17716]]

provides meaningful limits on the universe of information subject to 
withholding, is sufficient to justify withholding CVI from FOIA 
disclosure under subsection (B) of Exemption 3. Cf. Fin. Corp. v. 
Donovan, 830 F.2d 1132, 1138 (D.C. Cir. 1989) (holding provision of 
Trade Secrets Act failed to qualify for subsection (B) exemption 
because of ``exceedingly broad,'' ``oceanic,'' and ``encyclopedic'' 
quality of the Act). The Department believes that it adequately 
expresses this conclusion in Sec.  27.400(g)(1), which states that: 
``Except as otherwise provided in this section, and notwithstanding the 
Freedom of Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 
552a), and other laws, records containing CVI are not available for 
public inspection or copying, nor does DHS release such records without 
a need to know.'' (Emphasis added.) Moreover, even if FOIA did apply to 
CVI, we believe that it would be exempt from disclosure, inter alia, as 
``homeland security information'' under FOIA Exemption 2. See 5 U.S.C. 
552(b)(2).
    The commenters' concern that, if a document is portion marked to 
signify both CVI and non-CVI, the Department intends to withhold the 
entire document under FOIA, is not supported by the Advance Notice. 
Section 27.400(g)(2) states to the contrary that: ``If a record is 
marked to signify both CVI and information that is not CVI, DHS, on a 
proper Freedom of Information Act request, may disclose the record with 
the CVI redacted, provided the record is not otherwise exempt under the 
Freedom of Information Act or Privacy Act.'' The use of ``may'' in this 
context was intended as permissive, assuming such disclosure is 
otherwise appropriate.
5. Sharing CVI With State and Local Officials, the Public, and Congress
    Comment: Several comments sought greater access to CVI. Commenters 
stated that the Department should share CVI with State and local 
officials. Others noted that the definitions of ``covered persons'' and 
``need-to-know'' were overly narrow and heightened their concern that 
the Department would not provide information to State and local 
officials. One commenter noted that, to the extent information is 
shared directly with State or local officials, DHS should enter into 
agreements with them to ensure that CVI is sufficiently protected. 
Other commenters agreed that the Department should impose strict 
controls for the use of any facility-specific information by States and 
local governments. A commenter stated that information that is provided 
to California local agencies may be subject to the California Public 
Records Act, which if true, means that CVI in California may not be 
protected.
    A commenter recommended that the Department develop a method to 
share certain information with the public, such as whether a facility 
is in compliance with the security program, because the people who live 
in close proximity to a chemical facility deserve to know. The 
commenter recommended the disclosure of the Letters of Approval issued 
upon completion of a site inspection and audit. The Letters of Approval 
could be stripped of any sensitive information, but still provide some 
assurance that facilities are complying with security requirements. 
Finally, other commenters stated that the interim final rule should 
make clear that DHS is not authorized to withhold information from 
either House of Congress, or, to the extent of matter within its 
jurisdiction, any committee or subcommittee of Congress.
    Response: Congress clearly intended that CVI would be shared with 
State and local officials, including law enforcement officials and 
first responders, in appropriate cases. Section 550(c) states that 
``this subsection does not prohibit the sharing of such information, as 
the Secretary deems appropriate, with State and local government 
officials possessing the necessary security clearances, including law 
enforcement officials and first responders, for the purpose of carrying 
out this section, provided that such information may not be disclosed 
pursuant to any State or local law.'' And the Department made clear in 
the preamble to the Advance Notice that ``[t]he Secretary shall 
administer this Section consistent with section 550, including 
appropriate sharing with State and local officials, law enforcement 
officials, and first responders.'' See 71 FR 78276, 78289. Furthermore, 
the importance of sharing CVI with appropriate State and local 
officials is reflected in the structure of the rule. For example, it is 
expected that chemical facilities will coordinate extensively with 
state and local officials--including the sharing of relevant CVI--in 
the course of completing the SSPs required under Sec.  27.225. It is 
the Department's view, therefore, that the language in the rule is 
sufficiently broad to accomplish this task. For example, we believe 
that State and local officials, including law enforcement officials and 
emergency responders, fall within Sec.  27.400(e)(1)(i)'s definition of 
those with a need to know because they will require access to CVI to 
``carry out chemical facility security activities approved, accepted, 
funded, recommended, or directed by the Department.'' Yet because many 
commenters have requested clarification on this point, the Department 
amends the Sec.  27.400(e)(1) to read as follows: ``A person, including 
a State or local official, has a need to know CVI in each of the 
following circumstances. * * * ''
    As stated above, to the extent any state law requires the public 
disclosure of information that is deemed CVI, it is the Department's 
view that such laws are preempted by this rule.
    At this time the Department does not intend to provide a means of 
notifying the public about local chemical facilities. We will continue 
to consider this issue as the program progresses, however, and issue a 
subsequent notice if necessary.
    This rule does not attempt to displace or create any new law 
concerning the Department's ability to withhold information from 
Congress.
6. Litigation
    Comment: With respect to availability of CVI during litigation, 
some commenters supported the preamble statement that, in enforcement 
cases, the defendant and its counsel would have access to relevant CVI 
to enable them to prepare a full defense. Another commenter supported 
the Department's proposal to prohibit the disclosure of CVI in civil 
litigation unrelated to Section 550 enforcement. Yet another commenter 
stated that, according to the proposed rule, information on routine 
chemicals used and produced in processes would be treated as CVI, and 
thus disclosed in litigation only in extraordinary circumstances. The 
commenter noted that, because personal injury and workers' compensation 
claims are the consequences of handling many toxic substances, this 
provision would appear to bring these actions to an absolute halt, 
since these cases cannot be prosecuted without precise knowledge of the 
toxic substances at issue. Finally, a commenter cautioned the 
Department to limit those provisions governing disclosure in civil or 
criminal litigation to the authority delegated to the Department. The 
commenter saw nothing in the statute delegating the authority to issue 
binding regulations to govern a judicial proceeding. The commenter did 
think it helpful for the Department to publish regulations that express 
its own policies and interpretations, thereby affording others guidance 
as to what the Department's preferred practices will be when litigation 
arises.
    Response: As stated above, Section 550(c) requires CVI to be 
treated as classified information in the context of

[[Page 17717]]

any enforcement proceedings. This novel mandate reflects the 
seriousness with which Congress viewed the protection of CVI from 
unnecessary disclosure in administrative or judicial enforcement 
proceedings and, by extension, any civil litigation unrelated to 
Section 550. The Department approach balances this concern with the 
need for individuals to have access to certain CVI, as appropriate, to 
defend themselves in enforcement proceedings.
    That said, it is not clear that the type of information involved in 
a worker's compensation or tort claim would necessarily constitute CVI. 
The mere reference to a type of chemical may not readily fit into one 
of the categories of information under Sec. Sec.  27.400(b)(1)-(9). 
However, even if it did, under Sec.  27.400(i)(6), the Secretary 
retains the discretion to release CVI in such proceedings.
    As explained in the preamble to the Advance Notice, Section 550(c) 
states generally that CVI shall be treated as ``classified material'' 
in the context of any enforcement proceedings. Congress did not 
specify, though, whether the Department should look to the rules 
governing classified material in civil litigation or criminal 
litigation. The Department chose to mirror in large part the handling 
of classified material in civil litigation under 18 U.S.C. 2339B. It 
remains the Department's view that this is a reasoned approach to 
effectuating Congress's intent.
7. Protection of CVI
    Comment: Other comments sought technical changes to make the rule 
more secure or user-friendly including: Prohibiting the transmission of 
CVI using electronic systems unless DHS is able to provide Military 
Grade/Quality Encryption Devices/Systems to the private sector or 
provide access to government locations where this equipment is 
available for private sector use; extending the safeguards that the CVI 
provisions require in proposed Sec.  27.400(d)(1) concerning ``secure 
container[s], such as a safe,'' to establishing secure databases; 
modifying requirements for marking every page of a CVI document with 
the words ``CHEMICAL-TERRORISM VULNERABILITY INFORMATION'' and a 
lengthy warning statement; allowing facilities to mark only those pages 
of a document containing the CVI and the warning statement only be 
provided once per record, with per page reference to it as needed; 
indicating DHS's intention to destroy, return, or permit 
reclassification of Top-Screen data pursuant to proposed Sec.  
27.400(k).
    Response: The Department believes that the protective measures 
required by Sec. Sec.  27.400(d) and (f) are sufficient to adequately 
protect CVI.

K. Preemption

    Comment: Section 27.405(a) of the Advance Notice proposed to 
preempt State and local laws, rules, and court decisions that conflict 
with, hinder, pose an obstacle to, or frustrate the regulation. Several 
chemical companies and associations endorsed the proposed preemption of 
State and local regulations because they believe that national risk-
based, performance standards could be undercut by specification 
standards imposed by the States. These commenters expressed the concern 
that companies with multi-state operations could be subject to a 
confusing array of State programs. One commenter argued that varying 
State regulations also provide varying levels of protection, which the 
commenter did not think was Congress's intent. Other commenters noted 
that Maritime Transportation Security Act (MTSA), which applies to 
facilities located on waterways, including chemical facilities, 
contains an express preemption provision.
    An equal number of comments from advocacy groups, State agencies, 
and Members of Congress opposed the Department's position on 
preemption. These commenters cited the lack of express language in 
Section 550 and the legislative history to support their position that 
Congress did not intend to grant DHS express or implied authority to 
preempt State laws and regulations. A few commenters referred to a body 
of case law indicating a ``presumption against preemption.'' Other 
commenters, including Members of Congress, suggested Congress intended 
to resolve the issue of preemption in future chemical facility security 
legislation. Commenters also urged DHS to delete Sec.  27.405 and allow 
the courts to determine the preemptive effect of the Department's 
chemical facility regulations.
    A few commenters were concerned that the language in Sec.  27.405 
was so broad that it might be construed to preempt State health, 
safety, and environmental regulations. Similarly, one State requested 
that DHS modify the final provision to avoid any inadvertent preemption 
of Federal, State, or local health, safety, and environmental 
regulations.
    A few comments were directed at the appeals procedures for 
preemption decisions. One commenter disagreed with the lack of 
benchmarks that DHS would use to determine if preemption was called for 
and another added that the interim final rule should specify a 
reasonable time period for a decision to be rendered and for the 
decision to constitute a final administrative decision so that judicial 
relief could be sought. One association stated that the preemption 
decision process and appeals procedures did not include State 
government, thereby excluding the parties whose laws, rules, and public 
interests are most affected. The commenter proposed including a 
mandatory consultation process between the State and the facility 
before the DHS appeal, a joint hearing opportunity with the facility 
and State before DHS, a written decision, and State access to a 
judicial appeal for an adverse decision.
    Response: Please see the section below entitled ``Executive Order: 
13132: Federalism'' for a response to these comments and a discussion 
of preemption.

L. Implementation of the Rule

    Comment: The preamble stated that DHS is considering a phased 
implementation of the program. Several industry commenters and a State 
agency supported phased implementation because they agreed that DHS 
should take action on the most critical facilities first. One commenter 
warned that problems and issues should be addressed prior to 
implementation, and another commenter requested that DHS define what 
tiers apply to which phases. Two members of Congress asked DHS to 
clarify implementation for high-risk facilities beyond Phase I.
    Response: The Department will immediately and quickly address the 
highest risk facilities. At the same time, the Department will reach 
out to a broader class of facilities, (numbering in the many 
thousands), to gather information necessary for the Department to make 
risk-based tiering decisions.

M. Other Issues

1. Whistleblower Protection
    Comment: Many commenters thought that this regulation should 
provide ``whistleblower protection.'' They explained that the 
regulation should protect employees that provide information on a 
facility's security and safety from employer retaliation. Commenters 
suggested that workers are on the front lines, and therefore in the 
best position to participate in the development of Security 
Vulnerability Assessments and Site Security Plans. Commenters suggested 
that DHS create a system which would allow

[[Page 17718]]

individuals to report vulnerabilities, shortcomings, and failures 
without the fear of retaliation from the company. Commenters requested 
that DHS change regulatory text to provide whistleblower protection to 
employees, with some suggesting that DHS should include the protections 
found in H.R. 5695 and S. 2145.
    Response: Section 550 did not give DHS authority to provide 
whistleblower protection, and so DHS has not incorporated specific 
whistleblower protections into this regulation. The Department does, 
however, value frank information concerning security vulnerabilities. 
Employees with daily involvement at high-risk facilities can certainly 
be a valuable source of information. In the interest of providing some 
mechanism for employees to alert the Department about information at 
their employer's chemical facility, the Department intends to establish 
a telephone line through which individuals can submit security concerns 
to the Department. The Department will provide callers with the option 
of remaining anonymous.
2. Inherently Safer Technology
    Comment: The Department received numerous comments on the issue of 
inherently safer technologies (IST) options. Several commenters, 
including advocacy groups, unions, academics, State agencies, and other 
officials, strongly encouraged DHS to consider safer technologies as 
well as physical countermeasures. A few commenters, including members 
of Congress, suggested that the Department should address the use of 
ISTs, even though Section 550 was silent on the issue. Many of these 
commenters urged DHS to include provisions in the rule that would 
encourage chemical facilities to consider implementing safer processes 
and using safer chemicals as a method to improve site security through 
the reduction of risk. They suggested that DHS require chemical 
companies to analyze and report on safer technologies in their Site 
Security Plans. These commenters asserted that substituting safer 
chemicals, processes, practices, or technologies not only contributes 
to severity (i.e., can minimize the consequences associated with an 
accident at or attack on a chemical facility), but has the potential to 
greatly minimize the physical security costs a chemical facility would 
otherwise have to assume. Other commenters pointed out that ISTs are 
the best tools available to completely mitigate facility 
vulnerabilities and safeguard communities.
    In contrast, other commenters rejected the use of any IST 
requirements. Some argued that inherently safer technologies are an 
environmental construct and should not be implicitly or explicitly 
required for security. One association expressed concern that 
requirements for safer technologies could shift rather than reduce risk 
and/or limit the production of certain chemicals. In addition, some 
commenters urged DHS to avoid including any ``pseudo-IST mandates'' in 
the rule; the commenter thought that DHS had inadvertently done so.
    Response: Section 550 prohibits the Department from disapproving a 
site security plan ``based on the presence or absence of a particular 
security measure,'' including inherently safer technologies. See 
Section 550(a). Even so, covered chemical facilities are certainly free 
to consider IST options, and their use may reduce risk and regulatory 
burdens.
3. Delegation of Responsibility
    Comment: Another commenter strongly recommended that DHS consider 
delegating oversight responsibility to State governments, along with 
appropriate levels of Federal funding to support homeland security 
efforts. Interested states could petition DHS, and DHS would grant 
delegated authority on a discretionary basis. The commenter suggested 
that DHS could retain oversight authority, but would delegate 
programmatic responsibility and commit resources to authorized States. 
The commenter likened the arrangement to the one that the EPA uses to 
handle air and water regulations and the one that the Nuclear 
Regulatory Commission runs with its ``Agreement State'' program. 
Another State agency commenter noted that California has promulgated a 
successful chemical safety program built on partnering State and local 
regulatory interests with chemical industry hazard mitigation 
activities.
    Response: The Department has contemplated the issue of delegating 
authority to State governments, and has decided not to do so. If the 
Department reconsiders the issue in the future, it will provide notice 
of any such decision.
4. Interaction With Other Federal Rules and Programs
    Comment: Many commenters pointed out potential overlap between this 
rule and other Federal agency rules. As one commenter stated, many 
Federal agencies have some involvement in chemical facility security, 
including DHS (including the U.S. Coast Guard and TSA), the Federal 
Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, 
Firearms, & Explosives (ATF), the Departments of State, Commerce, and 
Transportation (including its modal administrations), EPA, and OSHA. 
Other commenters encouraged DHS to build upon the existing EPCRA and 
the Risk Management Program (RMP) regulatory programs, because of their 
proven records of success and the important health, safety, and 
environmental purposes that they serve.
    One commenter noted that DOT has security plan requirements in 49 
CFR Part 172, Subpart I and that several of the DHS performance 
standards overlap with the DOT security plan requirements. One 
commenter asserted that the proposal in the Advance Notice attempted to 
cover up knowledge of toxic dangers by potentially ``gutting the worker 
and public right-to-know provisions'' of existing Federal and State 
laws, including the Occupational Safety and Health Act and the 
Emergency Planning and Community Right-to-Know Act (EPCRA). In 
addition, some of these commenters were concerned that preemption and 
CVI classification will restrict information flow and access currently 
available through these Federal regulatory programs.
    Several commenters expressed concern that, although DHS intends 
that this rule not affect other laws regulating manufacture, sale, use, 
and disposal of chemicals, it is unclear how the DHS security planning 
and enforcement can avoid impacting the environmental, occupational, 
trade, and other rules already regulating the same facilities. 
Potential conflicts also affect first responders. Since past conflicts 
over authority have tended to diminish program effectiveness, the 
commenter wonders how such conflicts can be avoided. Solutions offered 
by commenters include a more explicit statement on conflict resolution 
in the final rules, an inter-agency coordination process to resolve 
conflicts, or memoranda of agreement with agencies having concurrent 
authority.
    Response: The Department is aware that potential overlap exists 
between this rule and existing Federal rules and programs. In the 
Advance Notice, the Department acknowledged that overlap and included 
an extensive discussion of existing and proposed Federal programs that 
are related to chemical security. See Sec.  I of the Advance Notice, 
``Brief History of Federal Pre-Existing Chemical Security Tools and 
Programs.''
    Section 550 provides that ``[n]othing in this section shall be 
construed to

[[Page 17719]]

supersede, amend, alter, or affect any Federal law that regulates the 
manufacture, distribution in commerce, use, sale, other treatment, or 
disposal of chemical substances or mixtures.'' In the Advance Notice, 
after acknowledging that the ATF regulates the purchase, possession, 
storage, and transportation of explosives, the Department indicated 
that it did not intend for these regulations to interfere with ATF's 
current authorities. See 71 FR 78276, 78290. Likewise, the Department 
does not intend for these regulations to impede the authorities of 
other Federal agencies. With respect to this regulatory program, DHS 
will work closely with the Department of Energy, EPA, OSHA, ATF and 
other federal agencies. Where there is concurrent jurisdiction, the 
Department will work closely with other Federal agencies to ensure that 
regulated facilities can comply with applicable regulations while 
minimizing any duplication. As the program develops, the Department 
will consider the necessity of various formalized arrangements, such as 
an inter-agency coordination process, to resolve jurisdictional 
questions or conflicts.
5. Third-Party Actions
    Comment: Several commenters supported the Advance Notice discussion 
of the statutory prohibition against third party actions to enforce any 
provision of the chemical security rules. See Sec.  27.410 and Section 
550(d). A State commenter wrote that the prohibition might be construed 
to prevent State actions against the Department to enforce the 
regulations, a position that the commenter believed to be contrary to 
congressional intent. The commenter agreed that the statutory language 
would bar a State from taking enforcement action against an owner or 
operator for violation of these regulations, but it saw no support in 
the statute to bar State action against the Department (or other non-
owners or non-operators). According to the commenter, this 
interpretation exceeds the scope of Section 550 and is therefore an 
unnecessary limitation on private rights of action. Commenters asserted 
that a plain reading of Section 550 indicates that Congress limited 
judicial review in only two ways: (1) By prohibiting Section 550 from 
being asserted as a jurisdictional basis for a cause of action; and (2) 
by providing that only the Secretary of Homeland Security has the right 
to bring enforcement actions against ``owners and operators.'' The 
commenters said they do not believe that Congress intended to prohibit 
other statutory causes of actions (such as review pursuant to the 
Administrative Procedure Act).
    Members of Congress also challenged the broad scope of DHS's 
position on third-party suits, because it would block basic challenges 
to DHS under the Administrative Procedure Act. The commenters believed 
that Sec.  27.410(a) was an unnecessary limitation on private rights of 
action. One Member of Congress explained that Congress intended to 
limit the provision to citizen suits against chemical facilities for 
failure to comply with the Department's chemical security rules.
    One commenter strongly supported the Department's discussion of the 
prohibition of private rights of action to enforce the provisions of 
Section 550. The commenter believed that the availability of 
enforcement actions should be limited to avoid unnecessary and 
potentially frivolous lawsuits that attempt to enforce chemical 
facility security requirements that are outside the reach of the 
government's authority. Some commenters supported the DHS provision 
because they believed that third party actions should be limited and 
that the Department should have the sole discretion of when and how to 
enforce these regulations. One commenter stated that neither DHS nor 
regulated chemical facilities should be distracted from their purpose 
of minimizing the possibility of a catastrophic terrorist incident by 
concerns about how their actions implementing Section 550 might be used 
in private tort litigation. One industry organization supported Sec.  
27.410(b), which allows a chemical facility to petition DHS to provide 
``the Department's view in any litigation involving any issues or 
matters regarding this Part.'' The commenter noted that DHS is in a 
unique position, in light of its Section 550 authorities and expertise, 
to provide its views regarding a chemical facility's security efforts.
    A labor union expressed concern that Sec.  27.410(a) grants 
immunity to chemical facilities from actions by third parties to 
enforce any provisions of the rule. The labor union thought that it may 
act as an open invitation to chemical facilities to disregard 
provisions in the rules or in security plans that are meant to protect 
maritime activities from unduly burdensome or improper application of 
security procedures. The labor union explained that ``[w]here damages 
are incurred by maritime-related businesses or mariners as a result of 
improper action of chemical facilities under color of enforcing their 
security plans, the injured parties should not be denied the normal 
recourse of the U.S. legal system.''
    Response: In Sec.  27.410 of the Advance Notice, the Department set 
out two principles: (1) the chemical security regulations did not on 
their own terms create any additional rights of action for any person 
other than the Secretary; and (2) relevant parties may seek a statement 
from the Department of its views in any litigation involving the 
chemical security regulatory program. The Department has decided to 
adopt these provisions as proposed in the Advance Notice.
    In the preamble to the Advance Notice, the Department also stated 
its view that Section 550(d) prohibits any party other than the 
Secretary from enforcing the provisions of Section 550. The Department 
also stated its view that Section 550(d) prohibits actions brought to 
compel the Department to take a specific action to enforce Section 550. 
Although the Department does not find it necessary to codify these 
views in the Code of Federal Regulations, they remain the views of the 
Department after considering the comments received. In Section 550(d), 
Congress provided in clear terms its intent to prevent parties other 
than the Secretary from making enforcement decisions under Section 550. 
This intent would be thwarted if parties could seek indirectly to have 
particular enforcement measures taken by bringing suit against the 
Department. Such suits would also pose difficulties involving the 
information protections of Section 550 and its implementing 
regulations. In short, the terms and structure of Section 550 provide 
the Secretary with critical discretion in implementing the chemical 
security program. It would be inappropriate to curtail that discretion 
through lawsuits. See generally Norton v. Southern Utah Wilderness 
Alliance, 542 U.S. 55 (2004).
6. Judicial Review
    Comment: Several commenters, including Members of Congress, urged 
DHS to incorporate the right to judicial review in the interim final 
rule and clarify the judicial remedies available. One commenter 
mentioned that the right to judicial review was expressly stated in 
prior legislative proposals. Another commenter believed that the 
District Courts have jurisdiction to consider whether a facility 
presents a ``high level of security risk.'' Other commenters discussed 
judicial review in the context of preemption, urging the Department to 
provide facilities with the opportunity for judicial review of 
Departmental decisions pursuant to Sec.  27.405. Finally, one commenter

[[Page 17720]]

recommended that the rule provide that if the adjudicating official 
fails to reach a decision within the timeframes provided by the 
proposed rule, then the administrative review process is deemed 
completed and all administrative remedies exhausted, so as to afford 
the facility the ability to challenge the Department's decision in a 
District Court.
    Response: The Department does not have authority to create 
jurisdiction in the district courts for review of Department decisions. 
Jurisdiction is created by provisions of law other than these 
regulations. Nor does the Department have authority to create specific 
judicial remedies through rulemaking. Decision-making authority with 
respect to preemption is discussed below in the portion of this 
preamble related to Federalism. As discussed there, courts have the 
ability in appropriate contexts to review the Department's opinions as 
they relate to preemption. This interim final rule does not augment the 
administrative law default principles that govern appropriate action if 
the Department does not make decisions in the timeframes specified in 
this interim final rule.
7. Guidance and Technical Assistance
    Comment: Some industry commenters noted that guidance, information, 
and education were essential for the success of the program. A chemical 
company commented that facilities should have the opportunity to review 
and comment on any guidance provided to them by DHS. Several industry 
associations made the same comment and stated the need for guidance to 
provide direction and advice but not to become either enforceable or 
limiting in the security measures that a facility may employ.
    One commenter suggested that there be sufficient time to respond to 
the guidance prior to developing a security plan. Commenters suggested 
that DHS draft guidance on aspects of the regulation and that such 
guidance be as detailed and specific as possible.
    One commenter believed that, while agency guidance is procedurally 
easier to issue because agencies typically issue it without notice and 
comment, due process, or other protections afforded by rulemaking under 
the Administrative Procedure Act, this ``pseudo-rulemaking'' can be 
referenced in enforcement actions, imposing cost burdens, or creating 
other compliance liabilities. Another commenter appreciated the fact 
that the guidance would specify the security measures that facilities 
could take to meet the proposed standards while not mandating any 
particular measures that facilities should use. Commenters recommended 
that DHS follow the OMB Bulletin entitled ``Agency Good Guidance 
Practices,'' which establishes policies and procedures for the 
development, issuance, and use of significant guidance documents by 
Executive Branch departments and agencies.
    Response: DHS believes that guidance will play an important role in 
this regulatory program. The Department's guidance will provide 
examples of specific measures that facilities may use to address the 
performance standards in the rule. Because this rule is based on 
performance standards and not on prescriptive measures, guidance is 
particularly important. The guidance will aid in informing the 
regulated community of ways to satisfy the performance standards 
without imposing additional requirements not found in these 
regulations.
    The Department will designate the guidance document as CVI. The 
guidance document will contain specific anti-terrorism measures 
designed to mitigate or prevent terrorist attacks, as well as other 
sensitive information. This type of information is not appropriate for 
public disclosure under Section 550 and the regulations issued 
hereunder.
    With respect to comments regarding OMB's Bulletin on Agency Good 
Guidance Practices, the Department notes that it will apply the 
Bulletin as appropriate.
    Comment: The availability of technical assistance to facilities not 
placed in the top tier was requested by an industry association.
    Response: Technical assistance will be available for all covered 
facilities as resources permit. Section 27.120 establishes requirements 
for a Coordinating Official who will provide guidance to facilities in 
all tiers, as necessary and to the extent that resources permit.
8. Miscellaneous Comments
    Comment: One commenter recommended that DHS engage and work with 
Congress to enact a more comprehensive and meaningful chemical security 
law as soon as possible, and under no circumstances beyond the three 
year expiration of interim authority.
    Response: The Department has aggressively sought this authority, 
and on October 4, 2006, Congress provided that authority. The 
Department will continue to work with Congress on chemical security 
matters.
    Comment: One commenter supported the position that continued 
funding of this program would, in effect, reauthorize the program 
beyond the three years noted in the statute and that DHS may amend the 
interim final rule if necessary. Another commenter did not support this 
position and stated that the statute was clear that the regulatory 
authority expires after three years. That commenter also urged the 
Department to engage in notice and comment rulemaking for any future 
modifications to the interim final rule.
    Response: The Department will, to the extent required by law, 
engage in notice and comment rulemaking in the event that changes are 
made to this interim final rule.
    Comment: Commenters suggested a process by which facilities can 
exit the program if they make sufficient changes to their operations. 
In addition, a chemical company and an industry association questioned 
how the results from vulnerability assessments could be used to allow a 
facility to exit the program.
    Response: To address the issue of exiting the program, the 
Department added Sec.  27.120(d). It provides that covered facilities 
may request a consultation with the Department if their facility, 
processes, or types or quantities of chemicals change in such a way 
that they believe their obligations under this part may be impacted. 
For a discussion of this provision, see Sec.  II(B) above.
    Comment: Various commenters raised issues related to data security, 
specifically in the context of the Department's web-based CSAT 
applications. One commenter thought that DHS should be able to provide 
Military Grade/Quality Encryption Devices/Systems for the private 
sector to use to submit information. Until that time, the commenter 
requested that DHS receive information only in paper form or discs 
produced on stand-alone computers.
    Response: DHS recognizes the data security issues that commenters 
have raised. DHS realizes that there is a risk, both on the sending of 
information and the receiving of information, when transmitting data 
over the Internet. DHS has weighed the risk to the data collection 
approach against the risk of collecting the data through paper 
submissions and concluded that the web-based approach was the best.
    DHS is concerned about data security and has taken a number of 
steps to protect both the data that will be collected through the CSAT 
program and the process of collection. The security of the data has 
been the system

[[Page 17721]]

designers' number one priority. The site that the Department will use 
to collect submissions is equipped with hardware encryption that 
requires Transport Layer Security (TLS), as mandated by the latest 
Federal Information Processing Standard (FIPS). The encryption devices 
have full Common Criteria Evaluation and Validation Scheme (CCEVS) 
certifications. CCEVS is the implementation of the partnership between 
the National Security Agency and the National Institute of Standards 
(NIST) to certify security hardware and software.
    Upon completing any part of the CSAT (whether the Top-Screen, 
Security Vulnerability Assessment, or Site Security Plan), the facility 
will click a ``submit'' button, which calls a routine to encrypt the 
data on the server using a one way key. Properly-executed public key 
encrypted data is very secure, and the implementation that DHS has used 
complies with the NIST 800-57 requirements for security. The key to 
decrypt the data does not exist outside of facilities that are isolated 
from the public internet. The key is connected only through a 
dedicated, restricted, government network that cannot connect to the 
public internet. Once a facility submits a Top-Screen (or SVA or SSP), 
the data is no longer available unencrypted.
    Comment: A few commenters indicated that the Advance Notice lacked 
meaningful worker involvement. According to some of the commenters, the 
rule does not ensure meaningful front line worker and union 
participation during risk assessments, during the development of the 
Site Security Plans, in the inspection process, or as part of ongoing 
consideration of safety and security concerns. One commenter felt that 
this omission occurred despite the fact that it is the front line 
employee whose life is on the line first if there is a catastrophic 
release.
    Response: There is nothing in the rule that prohibits chemical 
facilities from involving employees in their security efforts. Many 
facilities may find it beneficial to include employees in their 
respective efforts to comply with this regulation (e.g., identifying 
security vulnerabilities, developing Site Security Plans). However, the 
Department is not mandating participation by any particular type of 
employee, and the Department does not think it is wise to specify any 
employees that must be involved. The Department will leave those 
decisions to facilities, as they will best understand the types and 
functions of employees at their facility and the extent to which any 
given type of employee may be able to contribute.
    Comment: A commenter noted that a strong enforcement program is 
essential.
    Response: The Department agrees with the commenter and will 
vigorously enforce these regulations.
    Comment: A few commenters sought immediate phased-in implementation 
of a national re-routing and a ban on toxic by inhalation (TIH) storage 
wherever feasible. Although the commenters stated that re-routing is 
the first and fastest step in eliminating catastrophic vulnerabilities 
in the chemical sector, the commenters thought it should ideally be 
done in tandem with the use of safe technology, which could in turn 
eliminate ultra-hazardous substances in our rail system.
    Response: These comments are beyond the scope of this rulemaking, 
which addresses chemical facility anti-terrorism standards. However, 
DHS points out that there are current DHS and other Federal initiatives 
to address materials that are toxic by inhalation. On December 21, 
2006, TSA issued a Notice of Proposed Rulemaking on Rail Transportation 
Security. See 71 FR 76852. The rule applies, in part, to tank cars 
containing materials that are poisonous by inhalation (PIH) as defined 
in 49 CFR Sec.  171.8. (Note that the PIH is synonymous with TIH). See 
proposed 49 CFR Sec.  1580.100(b). Also, on December 21, 2006, one of 
the Department of Transportation's modal administrations, the Pipelines 
and Hazardous Materials Administration (PHMSA), issued a Notice of 
Proposed Rulemaking titled ``Hazardous Materials: Enhancing Rail 
Transportation Safety and Security for Hazardous Material Shipments.'' 
See 71 FR 76834. PHMSA's proposed regulation would include requirements 
for rail carriers to use data to analyze safety and security risks 
along rail transportation routes where certain hazardous materials 
(including PIH materials) are used.
    Comment: Some commenters raised questions regarding specific 
funding for programs such as the BZPP Webcam Pilot Program.
    Response: Those comments are beyond of the scope of this 
rulemaking, which addresses chemical facility anti-terrorism standards.

N. Regulatory Evaluation

    Comment: Commenters believe that DHS has underestimated this cost 
to the chemical sector and that DHS should consider other costs beyond 
capital costs, such as additional physical security.
    Response: In the Advance Notice, DHS did not attempt to estimate 
the full cost of complying with the regulation. Instead, DHS placed in 
the docket a stand-alone document titled ``Capital Cost Information for 
Public Comment,'' which provides specific cost estimates for a 
potential suite of capital security investments, such as fences and 
perimeter lighting. DHS fully understands that, in addition to capital 
costs, facilities may also incur non-capital costs, including the costs 
of additional personnel (e.g., security guards) and the costs of 
preparing assessments and plans. The costs that DHS has estimated for 
compliance with the interim final rule do indeed include both the 
capital costs and non-capital costs.
    DHS also notes that while a few commenters thought the costs DHS 
presented were too low, commenters did not generally provide specific 
information regarding which costs may have been too low or additional 
information that would have assisted the Department in reconsidering 
the costs presented with the Advance Notice. Consequently, while DHS 
did re-evaluate the costs presented with the Advance Notice in response 
to these comments, DHS believes that the costs presented in the Advance 
Notice are reasonable approximations, and they remain unchanged in the 
interim final rule.
    Some commenters indicated that cost recovery for implementation can 
be difficult under certain government contracts. Such comments are 
outside of the scope of this rulemaking.
    Comment: Commenters also expressed concern that the high costs will 
give an unfair advantage to larger companies, because these associated 
costs will be harder for smaller companies (like local farmers) to 
absorb.
    Response: The Department notes, in general, that it may be more 
difficult for smaller companies to absorb increased costs than larger 
companies. However, the security measures required by this interim 
final rule are not ``command and control'' type measures. Instead, they 
are risk-based performance measures that will allow a high degree of 
flexibility for small entities that own high-risk chemical facilities. 
These risk-based performance measures will allow high-risk chemical 
facilities to tailor a specific regulatory compliance regime that could 
minimize the compliance costs to their respective facilities. DHS also 
notes that certain chemical facilities have already voluntarily spent a 
significant amount of financial resources to increase their security. 
This interim final rule, by establishing a

[[Page 17722]]

baseline level of security across tiers, will serve to minimize any 
competitive advantage that may be currently enjoyed by those companies 
that are under-investing in security.
    Comment: One commenter noted that in order to quantify the benefits 
of the rule, DHS must make assumptions about the threats to the public, 
which injects uncertainty into the calculation of actual benefits.
    Response: The Department agrees that it is difficult to quantify 
the ``actual benefits'' of this interim final rule. DHS has included a 
qualitative discussion of the benefits of this rule in the regulatory 
analysis of Executive Order 12886, which is located in Section IV of 
the preamble to this rule.
    Comment: Commenters noted that the idea of a model facility is 
indeed a good proposal but worried that there is insufficient time to 
implement the changes this proposal would entail.
    Response: DHS agrees that the idea of model facilities is a good 
proposal. The cost estimate of the interim final rule is based on the 
concept of the ``model facility'' as it was used by the Coast Guard to 
estimate the cost of their Maritime Transportation Security Act of 2002 
Facility Security final rule. See 68 FR 60515 (Oct. 22, 2003).
    Comment: The Small Business Administration (SBA), Office of 
Advocacy, commented that DHS should prepare an Initial Regulatory 
Flexibility Analysis (IRFA) under the Regulatory Flexibility Act (RFA), 
5 U.S.C. 603, after issuing the interim final rule or if DHS makes 
subsequent changes to the rule once it is promulgated. SBA explained 
that the RFA process is an extremely valuable tool for agencies to use 
when assessing the impact of a rule on small businesses and other small 
entities.
    Response: The RFA mandates that an agency conduct an analysis when 
an agency is required to publish a notice of proposed rulemaking. See 5 
U.S.C. 603(a). In this case, the Department is not required to publish 
a notice of proposed rulemaking: By directing the Secretary to issue 
``interim final regulations'', Congress authorized the Secretary to 
proceed without the traditional notice-and-comment required by the 
Administrative Procedure Act. See 71 FR 78276, 78277, and 78292 (Dec. 
28, 2006).
    DHS did, however, consider the impacts of this rule on small 
entities. The Regulatory Assessment, which is available in the public 
docket, contains our analysis of the impacts of this rule on small 
entities. After consideration of the percentage of small entities that 
may have to comply with the risk-based performance standards required 
by this rule and the compliance costs explained in the Regulatory 
Assessment, we have determined that this rule may have a significant 
economic impact on a substantial number of small entities. See 
``Regulatory Flexibility Act'' section below.

IV. Regulatory Analyses

A. Executive Order 12866: Regulatory Planning and Review

    This rule is considered to be an economically significant 
regulatory action under Executive Order 12866, because it will result 
in the expenditure of over $100 million in any one year. Accordingly, 
this rule has been reviewed by the Office of Management and Budget 
(OMB). A Regulatory Assessment which more thoroughly explains the 
assumptions used to generate the cost of this interim final rule is 
available in the docket as indicated under ADDRESSES. A summary of the 
Regulatory Assessment follows:
Cost Assessment Summary
    Section 550 requires the Secretary of Homeland Security to 
promulgate ``interim final regulations establishing risk-based 
performance standards for security of chemical facilities * * *.'' He 
must do so ``[n]o later than six months'' from the date of enactment of 
this new authority, i.e. by April 4, 2007. Consequently, the 
methodology chosen to analyze the cost of the interim final rule was 
chosen with the six month congressional deadline in mind. In order to 
quickly analyze the cost of the interim final rule, DHS relied on 
readily available information and drew upon the knowledge of 
professionals employed by DHS who have extensive knowledge of the 
chemical industry. In addition, on December 28, 2006, DHS published an 
Advance Notice, which outlined our costing methodology and also placed 
in the docket our estimates of capital costs for potential security 
investments in order to seek meaningful public comment.
    We have reviewed the methodology used by the U.S. Coast Guard to 
analyze the cost of the MTSA Facility Security final rule at 68 FR 
60515 (Oct. 22, 2003), and, due to the similarities between the MTSA 
Facility final rule and this interim final rule, we believe that this 
methodology has merit and should be used in this rulemaking. The MTSA 
Facility Security final rule estimated the cost of performance 
standards on several thousand unique facilities. Similarly, the interim 
final rule will estimate the costs of risk-based performance standards 
to several thousand unique facilities. The Coast Guard found it 
impractical to attempt to estimate compliance costs for each individual 
facility and instead developed costs based on 16 ``model facilities.'' 
Each of the several thousand facilities was placed into one of the 16 
different subgroups for which compliance costs were then estimated. 
Once the compliance costs for the 16 ``model facilities'' were 
calculated, estimating the cost of the regulation was relatively 
straightforward.
    As this regulation is not a ``command and control'' regulation, 
owners and/or operators will have considerable flexibility in how they 
choose to comply with its requirements. As owners and/or operators will 
have discretion on how to best meet the risk-based performance 
objectives, the cost assessment makes broad assumptions regarding the 
percentage of facilities that will choose to implement or continue 
certain security measures and the costs of those security measures. For 
example, many facility owners and/or operators will choose such 
measures as building fences, enhancing perimeter lighting, and hiring 
additional security guards in order to comply with the risk-based 
performance standards. In order to estimate the cost of the interim 
final regulation, we made assumptions regarding the specific percentage 
of facilities that will choose to implement certain security measures, 
such as fences and perimeter lighting.
    We expect that chemical facility owners and/or operators will take 
full advantage of the flexibility that these risk-based performance 
standards will provide and will conduct facility-specific and company-
specific analyses to determine the most cost-effective method to comply 
with the requirements of this interim final regulation. As a result of 
these internal analyses, facilities are likely to identify various 
means of meeting the risk-based performance standards applicable to 
their facility and tier. It is possible that some percentage of 
facilities will find the most-cost effective method to comply with the 
requirements will be to implement business and related production, 
processing or equipment changes such as to no longer make certain 
chemicals or to change their process to use a less concentrated or less 
hazardous form of a listed chemical. Such process changes, however, are 
very facility-, business- and process-specific. Those that involve 
changes in chemistry or processes may take several years of design, 
testing and re-permitting before they can become operational. Others 
may be easily and immediately implemented. However, because process 
changes are so facility-

[[Page 17723]]

and business-specific, DHS has no way of estimating how many facilities 
may ultimately implement such measures for the purpose of estimating 
compliance costs. Consequently, DHS is basing its estimate of 
compliance costs on commonly used security measures that are broadly 
applicable to a wide range of high risk chemical facilities, such as 
the purchase of fences, the purchase of perimeter lighting, and the 
employment of security guards.
    For the purposes of good practices or regulations promulgated by 
other Federal or State agencies, many chemical facility owners and/or 
operators have already spent a substantial amount of money and 
resources to upgrade and improve security. The costs shown below do not 
include the costs of security measures already implemented to enhance 
security. The costs shown here are intended to represent the marginal 
cost incurred by owner and/or operators as a result of the interim 
final rule.
    DHS's preliminary estimate of the number of high risk chemical 
facilities that will be covered by the risk-based performance measures 
required by the interim final rule ranges from 1,500 to 6,500 chemical 
facilities. It is important to stress that this estimate is simply 
DHS's best guess based on currently available information. Within this 
range of 1,500 to 6,500 potentially covered chemical facilities, DHS is 
estimating 5,000 facilities as its best guess of covered facilities for 
the purpose of generating the cost estimate required by Executive Order 
12866.
    Using the point estimate of 5,000 facilities, the estimated present 
value cost of this interim final rule is $3.6 billion dollars over the 
period 2006-2009 \2\ (7 percent discount rate). For the purposes of 
illustration, we also have calculated the cost of the interim final 
rule over the ten year period 2006-2015. Over the period 2006-2015, DHS 
estimates the present value cost of this interim final rule would be 
$8.5 billion assuming 5,000 covered facilities.
---------------------------------------------------------------------------

    \2\ Section 550(b) of the Act states: ``Interim regulations 
issued under this section shall apply until the effective date of 
interim or final regulations promulgated under other laws that 
establish requirements and standards referred to in subsection (a) 
and expressly supersede this section: Provided, That the authority 
provided by this section shall terminate three years after the date 
of enactment of this Act.''
---------------------------------------------------------------------------

Benefits Assessment
    This interim final rule allows DHS to implement Section 550 of the 
Homeland Security Appropriations Act of 2007. The first sentence of 
Section 550 mandates the Secretary to issue interim final regulations 
establishing risk-based performance standards requiring the performance 
of vulnerability assessments and the development and implementation of 
site security plans. Section 550 establishes the parameters of the 
Federal government's first regulatory program to secure chemical 
facilities against possible terrorist attack.
    The threat of a terrorist attack against high-risk chemical 
facilities is real. However, due to the economics of externalities, the 
free market may not provide adequate incentives for chemical facilities 
to make a socially optimal investment in the full range of measures 
that would reduce the probability of a successful terrorist attack. 
Externalities are a cost or benefit from an economic transaction 
experienced by parties ``external'' to the transaction. In the case of 
chemical facilities, since the consequences of an attack or other 
security incident may be significantly larger than what would be 
suffered by the owner of the facility itself, the private market may 
not generally provide the incentive for profit-maximizing firms to 
unilaterally spend the socially optimal amount of resources to prevent 
or mitigate a terrorist attack. Since companies nevertheless will 
likely suffer serious consequences in the case of a terrorist attack, 
many certainly have invested significant resources in implementing 
security measures, and this analysis recognizes those resource 
expenditures. In a competitive marketplace, however, a firm will not 
normally choose to make some additional investment in security over 
their privately optimal amount, since they would consequently be 
choosing to increase its cost of production and would be at a 
disadvantage when competing with companies that have chosen not to make 
a similar investment in security. As this interim final rule will 
require high-risk chemical facilities to be held to the same risk-based 
performance standards according to their risk-based tier, the 
competitive advantage that may be currently enjoyed by those companies 
that are under-investing in security measures would be expected to 
disappear.
Need for Increased Security at High-Risk Chemical Facilities
    There is much publicly-available information that indicates an 
attack on a chemical facility is a credible threat with dire 
consequences:
    <bullet> According to the Government Accountability Office, experts 
agree that the Nation's chemical facilities present an attractive 
target for terrorists who are intent on causing massive damage. Many 
facilities house toxic chemicals that could become airborne and drift 
to surrounding communities if released or could be stolen and used to 
create a weapon capable of causing harm. Terrorist attacks involving 
the theft or release of certain chemicals could have a significant 
impact on the health and safety of millions of Americans. The disaster 
at Bhopal, India in 1984, when methyl isocyanate gas--a highly toxic 
chemical--leaked from a tank, reportedly killing about 3,800 people and 
injuring anywhere from 150,000 to 600,000 others, illustrates the 
potential threat to public health from a chemical release.\3\
---------------------------------------------------------------------------

    \3\ GAO, Homeland Security: Federal and Industry Efforts Are 
Addressing Security Issues at Chemical Facilities, but Additional 
Action is Needed, GAO-05-631T (Washington, DC: April 2005).
---------------------------------------------------------------------------

    <bullet> The Department of Justice has concluded that the risk of 
terrorists attempting in the foreseeable future to cause an industrial 
chemical release is both real and credible. Terrorists or other 
criminals are likely to view the potential of a chemical release from 
an industrial facility as a relatively attractive means to cause mass 
casualties to the populace and/or large scale damage to property. DOJ 
notes that there have been successful efforts by foreign militaries and 
certain terrorist groups indigenous to other countries to cause 
releases from industrial facilities using bombs. Those efforts have in 
effect converted the facilities into makeshift WMD. Some of these 
releases have inflicted damage on the surrounding communities. 
Moreover, the evacuations that were triggered by the attempted and 
successful releases of industrial chemicals produced panic and 
disruption among the targeted population. These are precisely the goals 
of a terrorist.\4\
---------------------------------------------------------------------------

    \4\ Department of Justice Assessment of the Increased Risk of 
Terrorist or Other Criminal Activity Associated With Posting Off-
Site Consequence Analysis Information on the Internet, April 18, 
2000.
---------------------------------------------------------------------------

    <bullet> In April 27, 2005, testimony before the Senate Committee 
on Homeland Security and Governmental Affairs regarding the 
vulnerability of America to a chemical attack, a Brookings Institution 
Visiting Fellow testified. The testimony stated that ``of all the 
various remaining civilian vulnerabilities in America today, one stands 
alone as uniquely deadly, pervasive, and susceptible to a terrorist 
attack: toxic-inhalation-hazard (TIH) industrial chemicals, such as 
chlorine, ammonia, phosgene, methyl bromide, hydrochloric and various 
other acids.'' In addition, the testimony indicated,

[[Page 17724]]

``the casualty potential of a terrorist attack against a large TIH 
chemical container near a population center is comparable to that of a 
fully successful terrorist employment of an improvised nuclear device 
or effective biological weapon. The key difference is that TIH chemical 
containers are substantially easier to attack than improvised nuclear 
devices or effective biological weapons are to acquire or fabricate.'' 
\5\
---------------------------------------------------------------------------

    \5\ Statement of Richard A. Falkenrath, Visiting Fellow, The 
Brookings Institution, before the United States Committee on 
Homeland Security and Governmental Affairs (April 27, 2005).
---------------------------------------------------------------------------

    <bullet> In April 27, 2005, testimony before the Senate Committee 
on Homeland Security and Governmental Affairs regarding the 
vulnerability of America to a chemical attack, a Senior Fellow for 
National Security Studies at the Council on Foreign Relations 
testified. The testimony stated ``Of the carefully selected potential 
targets that al Qaeda or its imitators might seek to attack, the 
chemical industry should be at the top of the list. There are hundreds 
of chemical facilities within the United States that represent the 
military equivalent of a poorly guarded arsenal of weapons of mass 
destruction.'' \6\
---------------------------------------------------------------------------

    \6\ Statement of Stephen E. Flynn, PhD, Jeane J. Kirkpatrick 
Senior Fellow for National Security Studies, Council on Foreign 
Relations, before the United States Committee on Homeland Security 
and Governmental Affairs (April 27, 2005).
---------------------------------------------------------------------------

    <bullet> A recent Congressional Research Service Report discussed 
trends in chemical terrorism and discussed evidence that U.S. chemical 
facilities may be used by terrorists to gain access to chemicals. One 
of the 1993 World Trade Center bombers, Nidal Ayyad, became a 
naturalized U.S. citizen and worked as a chemical engineer in the 
chemical industry, from which he used company stationery to order 
chemical ingredients to make the bomb.'' \7\
---------------------------------------------------------------------------

    \7\ CRS Report for Congress, Chemical Facility Security, Updated 
August 2, 2006.
---------------------------------------------------------------------------

    <bullet> Information contained in the Congressional Record states 
that U.S. chemical trade publications were found in one of the caves 
where Osama bin Laden had hidden.\8\
---------------------------------------------------------------------------

    \8\ Bond, Christopher. Statement on S.2579. Congressional 
Record, Daily Edition, June 5, 2002, p. S5044.
---------------------------------------------------------------------------

Qualitative Benefits of the Risk-Based Performance Standards
    As explained previously, Section 550 requires the Secretary of 
Homeland Security to promulgate ``interim final regulations 
establishing risk-based performance standards for security of chemical 
facilities * * *.'' Section 27.230 establishes these standards. Below 
is a discussion of the qualitative benefits of these risk-based 
performance standards:
    <bullet> By securing and monitoring the perimeter of the facility, 
site personnel are better able to detect, delay, and respond to 
individuals or groups who seek unauthorized access to the site or its 
restricted areas. A well-secured perimeter deters intruders from 
seeking to gain access. By limiting acce3ss through control points, the 
facility can more easily and effectively control who enters and leaves 
the site. Additionally, securing and monitoring restricted areas or 
potentially critical targets within the facility reduces the likelihood 
of theft of chemicals because adversaries risk observation arriving and 
leaving the premises. Control of gates by guards or observation of the 
perimeter allows facility personnel to know who is entering and leaving 
the site and in what vehicles. Access control points permit the 
facility to check persons and vehicles seeking entrance to the site and 
confirm their legitimate business.
    <bullet> Controlling access to the site including the screening 
and/or inspection of individuals and vehicles as they enter and exit 
the facility serves to deter and detect unauthorized introduction or 
removal of substances and devices that may cause a dangerous chemical 
reaction, explosion, or other release to harm facility personnel or the 
surrounding community. A regular system of identification checks will 
help guards and other facility personnel recognize those personnel 
authorized to be on the site and identify those individuals who should 
not be granted access.
    <bullet> Deterring vehicles from entering the facility or 
restricted access areas will reduce the likelihood that an adversary 
will detonate a vehicle-borne improvised explosive device inside the 
facility. Appropriate methods of deterring vehicles form unauthorized 
entry provide additional time for local law enforcement response or 
otherwise delay or prevent the vehicle from entering the site to cause 
harm.
    <bullet> Securing and monitoring the shipping and receiving of 
hazardous chemicals will improve inventory control, product stewardship 
and security against theft, diversion and tampering. In addition, 
improved inventory control and control of transportation containers on 
site decreases the likelihood that a foreign substance could be 
introduced into feedstock, incidental chemicals, or products leaving 
the site that could later react with the chemical to cause a 
significant on- or off-site reaction to damage process equipment or 
cause a release of a hazardous material to harm onsite personnel or the 
community.
    <bullet> Deterring the theft or possible diversion of potentially 
hazardous chemicals will prevent loss of chemicals from the site. Such 
measures provide security benefits as well as improving inventory 
controls especially for chemicals that can be used directly as a 
chemical weapon or can be used to produce such a weapon.
    <bullet> Deterring insider sabotage prevents the facility's own 
property and activities from being used by a potential terrorist 
against the facility. Examining the background of employees or 
contractors who may be planning acts of sabotage assists in preventing 
an in situ release of hazardous chemicals, damage to process units 
manufacturing chemicals or tampering with chemicals that could cause an 
offsite impact. Ascertaining that visitors and contractors have 
legitimate business onsite and are escorted when necessary increases 
the control of the site in general and reduces the likelihood of 
sabotage or theft.
    <bullet> The deterrence of cyber sabotage will benefit the facility 
by preventing unauthorized onsite or remote access to critical process 
controls, site security, business systems, or SCADA systems (if 
significant consequences can be generated by the manipulation of the 
process controls/systems). Appropriate controls will allow the 
detection of unauthorized access and unauthorized modification of 
information (hacking).
    <bullet> Developing and exercising an emergency plan to respond to 
security incidents internally and with local law enforcement and first 
responders (i.e., emergency medical technicians (EMTs), fire, police) 
benefits the facility by preparing it to take quick and decisive action 
in the event of an attack or other breach of security. Establishing 
relationships with local law enforcement improves responder 
understanding of the layout and of hazards associated with the facility 
and strengthens relationships with the community.
    <bullet> Maintaining effective monitoring, communications and 
warning systems allows the facility to notify internal personnel and 
local responders in a timely manner about security incidents. Regular 
tests, repairs and improvements to the warning and communications 
system increase the reliability of such systems and will improve 
response time.
    <bullet> When the facility provides proper security training, 
exercises and drills, facility personnel are better able to respond to 
suspicious behavior, attempts to enter or attack a facility, or

[[Page 17725]]

other malevolent acts by insiders or intruders. Well trained personnel 
who practice how to react can more effectively detect and delay 
intruders and provide increased measures of deterrence against 
unauthorized acts. Establishing relationships with local law 
enforcement improves responder understanding of the layout and hazard 
associated with the facility and strengthens relationships with the 
community.
    <bullet> The ability to escalate the levels of security measures 
for periods of elevated threat will provide the facility with the 
capacity to increase security measures to better protect against known 
increased threats or generalized increased threat levels declared by 
the federal government. By maintaining the ability to increase security 
measures, the facility does not have to expend time and resources on 
more robust security measures unless and until warranted.
    <bullet> A facility addressing specific threats, vulnerabilities or 
risks identified by the Assistant Secretary will decrease the 
likelihood of a successful attack on its facility, personnel, products 
or community. Any additional performance standards specified by the 
Secretary will increase the facilities ability to deter, detect, delay 
and respond to specific and general threats against its security.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) mandates that an agency 
conduct an RFA analysis when an agency is required to publish a notice 
of proposed rulemaking. See 5 U.S.C. 603(a). An RFA analysis, however, 
is not required when an agency is not required to publish a notice of 
proposed rulemaking, as is the case here. By directing the Secretary to 
issue ``interim final regulations'' Congress authorized the Secretary 
to proceed without the traditional notice-and-comment required by the 
Administrative Procedure Act. See 71 FR 78276, 78277, and 78292.
    Even though a Regulatory Flexibility Analysis is not required for 
this rule, DHS did consider the impacts of this rule on small entities. 
The Regulatory Assessment, which is available in the public docket, 
contains this analysis of the impacts of this rule on small entities. A 
portion of the analysis is summarized below.
    At this time, DHS's preliminary estimate of the number of high risk 
chemical facilities that will be covered by the risk-based performance 
measures required by the rule ranges from 1,500 to 6,500. This estimate 
is based on currently available information. After chemical facilities 
with certain risk profiles complete the Top-Screen, DHS will have a 
better understanding of how many and which specific chemical facilities 
will be deemed to be ``high-risk'' for the purposes of the rule. Also, 
in meeting the risk-based performance standards required by this rule, 
facilities will have a large degree of flexibility in choosing specific 
security enhancements. We expect that chemical facility owners and/or 
operators will use this flexibility to minimize the cost of this rule 
to their operations. These uncertainties make it very difficult to 
estimate the extent of the economic impact of this rule on small 
entities.
    Even so, strictly for the purposes of analyzing the impact of this 
rule on small entities, DHS has selected from the EPA RMP database a 
sample of 350 facilities that may be required to comply with the risk-
based performance standards required by the rule. We researched these 
350 facilities using Reference USA and LexisNexis and found detailed 
information (i.e., annual revenue, number of employees, and parent 
company information) for 326 (93%) of them. Of the 326 facilities for 
which we were able to find detailed information, our analysis of the 
data indicates that 118 (36%) fit the Small Business Administration's 
definition of a small entity. If we assume that the 24 companies for 
which we could find no information are also small entities, the 
percentage of these facilities which are owned by small entities could 
be 41 percent. Table 1 below provides revenue ranges of the118 small 
entities.

            Table 1.--Percentage of Small Entities by Revenue
------------------------------------------------------------------------
                                             Number of      Percent of
                 Revenue                  small entities  small entities
------------------------------------------------------------------------
$0-$999,999.............................              11             9.3
$1,000,000-$4,999,999...................              14            11.9
$5,000,000-$9,999,999...................              12            10.2
$10,000,000-$19,999,999.................              15            12.7
$20,000,000-$49,999,999.................              23            19.5
$50,000,000-$99,999,999.................               9             7.6
$100,000,000-$999,999,999...............              31            26.3
> $1Billion.............................               3             2.5
                                         -------------------------------
    Total...............................             118           100.0
------------------------------------------------------------------------

After consideration of the percentage of small entities that may have 
to comply with the risk-based performance standards required by this 
rule and the compliance costs explained in the Regulatory Assessment, 
we have determined that this rule may have a significant economic 
impact on a substantial number of small entities.

C. Executive Order 13132: Federalism

1. Background
    Executive Order 13132 requires DHS to develop a process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
Between the publication of the Advance Notice and this Interim Final 
Rule, the Department has complied with this instruction in two ways. 
The Department specifically sought public comment on issues involving 
preemption. Additionally, after issuing its proposal, the Department 
specifically invited a number of groups representing the interests of 
States and their legislators to meet with the Department to discuss the 
proposed regulations. These groups were: the National League of Cities, 
the National Association of Counties, the National Conference of State 
Legislators, the County Executives of America, the International City/
County Management Association, the American Legislative Exchange 
Council, the National Emergency Management Association/CSG Council of 
State Governments, the International Association of Emergency Managers, 
the National Governors

[[Page 17726]]

Association, and the United States Conference of Mayors.
    The Department received numerous comments in response to its 
invitations. States, the private sector, academia, various interest 
groups, and individual members of Congress submitted comments. The 
commenters were divided in their views of the proposed approach on 
preemption. A number of commenters favored the Department's proposal, 
while others opposed it. Some commenters misunderstood the Department's 
position on preemption or the current state of the case law on 
preemption. As discussed below, the Department is clarifying its 
approach on preemption in certain respects. Specifically, we confirm: 
the propriety of discussing the Department's view on preemption, though 
Congress was silent on the question; that the type of preemption called 
for by Section 550 is not field preemption, but conflict preemption; 
and that the Department will further assist in the process of 
determining whether a non-Federal regulation is preempted by providing 
opinions regarding the impact of that regulation on the Federal scheme.
2. Propriety of Department's Views on Preemption
    As an initial matter, some commenters, including Members of 
Congress, suggested that, since Congress was silent on preemption, the 
Department's rulemaking should be silent as well. The comments on this 
subject touch on two important subtopics: who (i.e., which government 
structure) should determine the preemptive effect of Section 550 and 
the regulatory program promulgated under its authority; and what law, 
if any, the regulatory program under Section 550 might preempt.
    In Section 550, Congress did not expressly speak to the issue of 
preemption. Preemption questions following statutory silence on 
preemption are not novel. Courts and agencies have previously faced and 
dealt with who decides preemption issues in the face of congressional 
silence. It is helpful to recall that, as a general matter, Congress 
often provides the Executive Branch with authority to administer a 
regulatory program while leaving gaps or ambiguities in the authorizing 
law. When this happens, the Supreme Court has long recognized that 
agencies have the responsibility, within the general delegation, to 
formulate policy and make rules to fill those gaps and interpret the 
ambiguities. See Chevron U.S.A., Inc. v. Natural Resources Defense 
Council, Inc., 467 U.S. 837, 843 (1984) (``The power of an 
administrative agency to administer a congressionally created * * * 
program necessarily requires the formulation of policy and the making 
of rules to fill any gap left, implicitly or explicitly by Congress.'') 
(ellipses in original; citation omitted). Agencies, not only the 
courts, exercise their expertise to fill in the gaps and interpret the 
ambiguities. See id. at 843 & n.11 (``If, however, the court determines 
that Congress has not directly addressed the precise question at issue, 
the court does not simply impose its own construction on the statute * 
* * Rather, if the statute is silent or ambiguous with respect to the 
specific issue, the question for the court is whether the agency's 
answer is based on a permissible construction of the statute. The court 
need not conclude that the agency construction was the only one it 
permissibly could have adopted to uphold the construction, or even the 
reading the court would have reached if the question initially had 
arisen in a judicial proceeding.''). And even if a court interprets an 
ambiguous statute before an agency promulgates rules to fill the gaps 
or interpret the ambiguities, the court's interpretation does not 
necessarily restrict the agency's ability to adopt a different 
interpretation in the future. See National Cable & Telecomm. Ass'n v. 
Brand X Internet Servs., 545 U.S. 967, 982 (2005).
    This does not mean to slight the courts' role in the interpretive 
process. As the Supreme Court has stated, ``The judiciary is the final 
authority on issues of statutory construction and must reject 
administrative constructions which are contrary to clear congressional 
intent.'' Chevron, 467 U.S. at 843 n.9.
    With respect to the issue of preemption in particular, the Supreme 
Court has applied these same principles regarding Congress, the courts 
and the agencies. See, e.g., Fidelity Fed. Sav. and Loan Ass'n v. de la 
Cuesta, 458 U.S. 141, 151-54 (1982). ``Federal regulations have no less 
pre-emptive effect than federal statutes * * * A pre-emptive 
regulation's force does not depend on express congressional 
authorization to displace state law.'' Id. at 153-54. The Supreme 
Court, and lower courts, have given deference to agencies that define, 
through regulation, the scope of preemption. See, e.g., id.; Wachovia 
Bank, N.A. v. Burke, 414 F.3d 305 (2d Cir. 2005).
    So although some commenters claimed that the Department lacks the 
authority to address the issue of preemption in its regulations or 
later-issued opinions, this assertion is simply not consistent with 
current law. Federal agencies have historically published their views 
on the preemptive effect of federal law in a number of contexts. See, 
e.g., In re Wireless Consumers Alliance, Inc., 15 F.C.C.R. 17,021 (Aug. 
14, 2000) (administrative agency opinion on preemptive effect of 
federal law); 1999 WL 303948 (April 20, 1999) (U.S. Department of Labor 
Release discussing views on preemption of state laws). We anticipate 
that the courts will ultimately resolve any preemption question, with 
an appropriate level of deference to the position of the agency.
    Some comments urged the Department to avoid preemption after 
looking to a canon of interpretation involving a presumption against 
preemption. This presumption, however, typically exists ``in areas of 
regulation that are traditionally allocated to states and are of 
particular local concern.'' Wachovia Bank, N.A., 414 F.3d at 314; see 
also United States v. Locke, 529 U.S. 89 (2000). As noted in the 
Advance Notice, measures to prevent terrorist attacks against the 
Nation's critical infrastructure do not involve an area traditionally 
regulated by the States. Very few state and local jurisdictions 
currently regulate security at chemical facilities.
    The Department recognizes that courts sometimes look to legislative 
intent with respect to the issue of preemption--decisions in this area 
are replete with such references. See, e.g., Medtronic, Inc. v. Lohr, 
518 U.S. 470, 485 (1996). In the context of Section 550, however, it is 
very difficult to discern that intent. The legislative history on the 
point is mixed, with various Members of Congress making floor 
statements that are not consistent with each other. See, e.g., Cong. 
Rec. H7967 (daily ed. Sept. 29, 2006) (statement of Rep. King) (``the 
intention is not to preempt the ability of the States'') and Cong. Rec. 
S10619 (daily ed. Sept. 29, 2006) (statement of Sen. Voinovich) (``I 
feel strongly that this provision sets that uniform set of rules and in 
so doing, impliedly preempts further regulation by State rules or 
laws.'') In addition, it is particularly difficult to gauge 
congressional intent on one relatively short, page-and-a half 
authorizing provision in a lengthy appropriations act that runs over 
100 pages. To be sure, individual members of Congress--including some 
members substantially involved in homeland security issues--have 
expressed strong views on preemption. But can it really be said that 
legislative intent may be discerned on the silent aspect of one 
authorizing section of a lengthy appropriations act? Cf. Chrysler Corp. 
v. Brown, 441 U.S. 281, 311-12 (1979); Castaneda-Gonzalez v. INS, 564 
F.2d 417, 424 (D.C. Cir. 1977).

[[Page 17727]]

    As an additional consideration, the Department notes that if it 
were to disclaim any preemptive effect of the regulatory program under 
Section 550, it would create an inconsistency with the Department's own 
regime for regulating chemical facilities under the MTSA. In its 
regulations under MTSA, the Department has stated its view that the 
principles of conflict preemption apply. See 68 FR 60468 (Oct. 22, 
2003). Congress has charged the Department with implementing the 
security programs under both MTSA and Section 550, and the Department 
seeks to implement these programs in a consistent and logical manner.
3. No Field Preemption
    Some commenters feared--and others hoped--that the Department's 
approach to preemption would wholly displace state and local laws. This 
is incorrect. The Department does not in this interim final rule claim 
that the ``field preemption'' doctrine applies in this regulatory 
context. The Department does not view its regulatory scheme as one 
which so fully occupies the field as to pre-empt any state law touching 
the same subject.
    This is clear from the statutory text. For example, the authority 
granted in Section 550 calls for the federal regulations to apply to 
facilities that present ``high levels of security risk'' as determined 
by the Secretary. The Department does not, therefore, have authority 
under Section 550 to regulate facilities that may, in the Secretary's 
view, present other than high levels of security risk. Some facilities 
may not be deemed by the Department as presenting a high risk. These 
facilities may be regulated by States provided such regulation is not 
otherwise in conflict with the federal program. In addition, as 
mentioned in the comments, Section 550 specifically allows the 
Secretary to approve alternative security programs that may have been 
submitted in response to State or local authorities.
4. Principles of Conflict Preemption
    Even for high risk facilities, the approach outlined in the Advance 
Notice, and further developed here, is one of conflict preemption. 
Conflict preemption is established in the Constitution and has been 
developed in case law (see, e.g., Geier v. American Honda Motor Co., 
529 U.S. 861, 873 (2000); Fidelity Fed. Sav. and Loan Ass'n v. de la 
Cuesta, 458 U.S. 141, 152 (1982); Surrick v. Killion, 449 F.3d 520, 
530-31 (3d Cir. 2006)), and the well-known standards of conflict 
preemption--which are captured in the regulatory text at Sec.  27.405--
apply to Section 550 and this regulation.
    After considering comments, however, the Department has modified 
certain of its prior statements on preemption as potentially too broad. 
In the Advance Notice, the Department noted that Section 550 compels 
the Department to preserve chemical facilities' flexibility to choose 
security measures to reach the appropriate security outcome. The 
Department went on to say that a State measure frustrating this balance 
``will be preempted.'' The Department has decided, however, that 
clarification is in order, as this regulation is not intended to be the 
equivalent of ``field preemption'' for facilities determined to be high 
risk. Instead, it is only meant to indicate that the regulation is not 
to be conflicted by, interfered with, hindered by or frustrated by 
State measures, under long-standing legal principles.
    Only a few jurisdictions have developed security regulations 
(rather than health, safety, and environmental regulations) governing 
chemical sites. While we have not canvassed all existing state laws and 
regulations, currently we have no reason to conclude that any such non-
Federal measure is being applied in a way that would impede the 
performance standards or other provisions of Section 550 and this 
Interim Final Rule. However, concrete conclusions about the effect of 
state laws and the application of preemption principles will require an 
understanding of future, factual contexts in which those laws are 
applied. The Department will consider any problems that arise in this 
regard in a more particularized manner.
    Consistent with the approach outlined in the Advance Notice, the 
Department will entertain requests for its views on particular state or 
local laws, which will be issued by way of an opinion. In addition to 
the approach described in the Advanced Notice, the Department will seek 
the input and views of a State before finalizing the Department's view 
of preemption with respect to such State's laws. See Sec.  
27.405(d)(3). It will be helpful for the Department to seek the views 
of the relevant States if an opinion on preemption is requested under 
these regulations. Additionally, the Department would, time permitting, 
seek public notice and comment before formulating its views on a 
particular preemption question, consistent, of course, with the 
congressional mandate to protect from public disclosure information 
submitted under Section 550. The Department, however, declines to add 
additional procedural formalities to the regulation as it relates to 
preemption.
    Certain commenters asked that the Advance Notice be more clear in 
delineating what state laws are not to be preempted. The Department 
does not intend to preempt existing health, safety and environmental 
regulations. In the future, however, if state or local governments 
enact security laws or promulgate security regulations under the rubric 
of health, safety, or environmental protections, those laws and 
regulations will be measured against the standard described in Sec.  
27.405. Of course, non-Federal regulations that fall below federal 
performance standards will not diminish the federal requirements that 
covered facilities must meet.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 
enacted as Pub. L. 104-4 on March 22, 1995, requires each Federal 
agency, to the extent permitted by law, to prepare a written assessment 
of the effects of any Federal mandate in a proposed or final agency 
rule that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more (adjusted annually for inflation) in any one year. 
Section 204(a) of UMRA, 2 U.S.C. 1534(a), requires the Federal agency 
to develop an effective process to permit timely input by elected 
officers (or their designees) of State, local, and tribal governments 
on a proposed ``significant intergovernmental mandate.'' A 
``significant intergovernmental mandate'' under the UMRA is any 
provision in a Federal agency regulation that will impose an 
enforceable duty upon State, local, and tribal governments, in the 
aggregate, of $100 million (adjusted annually for inflation) in any one 
year. Section 203 of UMRA, 2 U.S.C. 1533, which supplements section 
204(a), provides that before establishing any regulatory requirements 
that might significantly or uniquely affect small governments, the 
agency shall have developed a plan that, among other things, provides 
for notice to potentially affected small governments, if any, and for a 
meaningful and timely opportunity to provide input in the development 
of regulatory proposals. The Department sought input from state and 
local governments during the comment period and hosted a meeting with 
state and local representatives on February 6, 2007. A list of 
participants and short description of the meeting is in the docket.

[[Page 17728]]

    This interim final rule would result in expenditure by the private 
sector of $100 million (adjusted annually for inflation) or more in any 
one year. At this time, however, we do not have enough information 
regarding the specific facilities that will be required to comply with 
the rule's risk-based performance standards in order to know if this 
interim final rule will impose an enforceable duty upon State, local, 
and tribal governments of $100 million (adjusted annually for 
inflation) or more in any one year. DHS has conducted a ``Regulatory 
Assessment,'' which explains the economic effects of the rule. The 
``Regulatory Assessment'' is summarized in the section entitled 
``Executive Order 12866,'' and a copy may be found in the public docket 
for this IFR.
    As explained in the ``Regulatory Assessment,'' DHS's preliminary 
estimate of the total number of high-risk chemical facilities that will 
be covered by the risk-based performance measures required by this rule 
ranges from 1,500 to 6,500 chemical facilities. This estimate is based 
on currently available information. After chemical facilities fitting 
certain risk profiles complete the Top-Screen risk assessment 
methodology (which will be accessible through a secure Department 
website), DHS will better understand how many and which specific 
chemical facilities will be deemed to be ``high-risk'' for the purposes 
of this rule. For the purposes of this discussion, we believe this rule 
may require certain municipalities that own and/or operate power 
generating facilities to purchase security enhancements, but at this 
time we do not know the extent of the financial impact.

E. Paperwork Reduction Act

    This interim final rule contains collection of information 
requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3520). ``Collection of information,'' as defined in 5 CFR 1320.3(c), 
includes reporting, record keeping, monitoring, posting, labeling, and 
other similar actions.
    Under Section 550 of the DHS Appropriations Act, the Department 
will use the Chemical Security Assessment Tool (CSAT) system to collect 
and analyze key data from chemical facilities to: (1) Identify 
facilities that present a high level of risk, (2) Support the facility-
specific judgment for preliminary and final tier high risk 
determinations, (3) Specify the facility-specific security concerns 
that facilities must address in their SVAs and SSPs, and (4) Collect 
the facility-specific security measures, activities, and systems for 
judging compliance against the risk based performance standards. DHS 
will submit the collections for SVAs and the SSPs during the summer 
months.
    This rule introduces a new collection, 1670-NEW, with two new 
forms: User Registration (DHS 9002 (1/07)) and Top Screen (DHS 9007 (2/
07)). As such, DHS has submitted the following information requirements 
to OMB for its review:
    Title: Chemical Security Assessment Tool (CSAT): User Registration.
    OMB Control Number: 1670--NEW
    Summary of Collection of Information: Section 550 provided the 
Department with the authority to regulate high risk chemical 
facilities. Further, it requires that the Secretary of the Department 
of Homeland Security identify high risk facilities and provide for the 
protection of the information regarding and provided by those 
facilities. DHS has identified the CSAT system as the Information 
Technology (IT) system it will use to obtain and quantify this key risk 
data from facilities. The Department will begin collecting information 
upon the effective date of this interim final rule.
    Use of: The Department will use the registration information as a 
basis for providing chemical facilities access to the CSAT system.
    Need for Information: The Department needs the information from the 
User Registration form to identify and vet requests to access the CSAT 
system.
    Description of the Respondents: DHS anticipates that there will be 
40,000 respondents in the first year. The respondents will be the 
owners and operators of the chemical facilities that will need to 
submit information through the CSAT system.
    Frequency of Response: On Occasion.
    Annual Burden Estimate: Each facility is estimated to have a burden 
of 44.5 minutes to complete DHS Form 9002 (1/07). The annual hour 
burden is estimated to be 22,250.
    Title: Chemical Security Assessment Tool (CSAT): Top Screen.
    Summary of Collection of Information: Section 550 provided the 
Department with the authority to regulate high risk chemical 
facilities. Further, it requires that the Secretary of the Department 
of Homeland Security identify high risk facilities and provide for the 
protection of the information regarding and provided by those 
facilities. DHS has identified the CSAT system as the Information 
Technology (IT) system it will use to obtain and quantify this key risk 
data from facilities. The Department will begin collecting information 
upon the effective date of this interim final rule.
    Use of: The CSAT is the Department's system for collecting and 
analyzing key data from chemical facilities to: (1) Identify facilities 
that present a high level of risk, (2) Support the facility-specific 
judgment for preliminary and final tier determinations, and (3) Specify 
the facility-specific security concerns that facilities must address in 
their SVAs and SSPs.
    Respondents (including number of): DHS anticipates there will be 
40,000 respondents in the first year. The respondents will be chemical 
facilities that possess, or plan to possess, a quantity of a chemical 
substance determined by the Secretary to be potentially dangerous or 
that meets other risk-related criteria identified by the Department.
    Frequency: Most facilities will complete the Top-Screen once. The 
Department will require facilities that are determined to be high risk 
to periodically resubmit the Top-Screen.
    Burden of Response: Depending upon the size of the facility, the 
burden rates will vary. The estimated burden hours for the different 
facility types are detailed in the table below. The combined hour 
burden for all facilities completing the Top-Screen is estimated to be 
1,230,550. The combined annual cost burden for the User Registration 
and the Top-Screen is $110,003,900.

  Table 2.--Summary of Burden Hours for Conducting User Registration (DHS Form 9002 (1/07)) and Top Screen (DHS
                                                Form 9007 (2/07))
----------------------------------------------------------------------------------------------------------------
                                                                     Number of      Hour burden     Total hour
                        Type of facility                            facilities     per facility       burden
----------------------------------------------------------------------------------------------------------------
Open Large......................................................           9,327            39.5         368,400
Merchant Wholesalers............................................             432              30          13,000
Facilities with only 1-2 chemicals..............................           7,968            25.5         203,200

[[Page 17729]]

 
Other...........................................................          22,273              30         668,200
                                                                 -----------------------------------------------
    Total.......................................................  ..............  ..............       1,252,800
----------------------------------------------------------------------------------------------------------------

    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507 
(d)), we have submitted a copy of the interim final rule to OMB for its 
review of the collections of information. Due to the circumstances 
surrounding this final rule, we ask for emergency processing.
    DHS is soliciting comments to:
    (1) Evaluate whether the proposed information requirement is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including using appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    Individuals and organizations may submit comments on the 
information collection requirements by July 9, 2007. Direct the 
comments to the address listed in the ADDRESSES section of this 
document. Also, fax a copy of the comments to the Office of Information 
and Regulatory Affairs, Office of Management and Budget at 202-395-
6974, Attention: Nathan Lesser, DHS Desk Officer; and send via 
electronic mail to <a href="/cdn-cgi/l/email-protection#107f7962714f6365727d796363797f7e507f7d723e757f603e777f66"><span class="__cf_email__" data-cfemail="f19e988390ae8284939c988282989e9fb19e9c93df949e81df969e87">[email protected]</span></a>.
    A comment to OMB is most effective if OMB receives it within 30 
days of publication. DHS will publish the OMB control number for this 
information collection in the Federal Register after OMB approves it.
    Under the protections provided by the PRA, as amended, an agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a currently valid OMB 
control number.

F. National Environmental Policy Act

    In the Advance Notice, the Department reviewed the rulemaking 
process with regard to the National Environmental Policy Act (NEPA). 
See 71 FR 78276, 78294 (Dec. 28, 2006). Specifically, the Department 
considered the short timeframe to issue these interim final regulations 
and the statutory mandate, which directed that each chemical facility 
develop and implement site security plans, with the proviso that the 
facility could select layered security measures to appropriately 
address the vulnerability assessment and the risk-based performance 
standards for security of the facility. Additionally, Congress mandated 
that the Secretary could not disapprove a site security plan based on 
the presence or absence of a particular security measure, but only on 
the failure to satisfy a risk-based performance standard.
    Chemical facilities are of a wide variety of designs and sizes, and 
are located in a wide range of geographic settings, communities, and 
natural environments. The Department is not funding or directing 
specific measures under these regulations, but issuing performance 
standards. Consequently, the Department currently has no way to 
determine the action the chemical facility will take to meet the 
standards, and what effect any action might have on the environment. 
Even if the Department could predict the actions the facilities would 
take in response to the standards, it is likely facilities would take 
widely varying actions to comply, based upon type of facility, 
geographic location, existing infrastructure, etc.
    We received no comments objecting to this conclusion during the 
comment period, and further, no comments on this matter were raised 
during the Environmental Organizations Forum the Department hosted on 
January 17, 2007. Accordingly, the information needed to conduct an 
Environmental Impact Statement is not available at this time and, in 
any event, the Department could not reasonably conduct an Environmental 
Impact Statement within the six months time allotted for issuance of 
the interim final regulations.

List of Subjects in 6 CFR Part 27

    Chemical security, Facilities, Reporting and recordkeeping, 
Security measures.

The Interim Final Rule

0
For the reasons set forth in the preamble, the Department of Homeland 
Security adds Part 27 to Title 6, Code of Federal Regulations, to read 
as follows:

Title 6--Department of Homeland Security

Chapter 1--Department of Homeland Security, Office of the Secretary

PART 27--CHEMICAL FACILITY ANTI-TERRORISM STANDARDS

Subpart A--General
Sec.
27.100 Purpose.
27.105 Definitions.
27.110 Applicability.
27.115 Implementation.
27.120 Designation of a coordinating official; Consultations and 
technical assistance.
27.125 Severability.
Subpart B--Chemical Facility Security Program
27.200 Information regarding security risk for a chemical facility.
27.205 Determination that a chemical facility ``presents a high 
level of security risk.''
27.210 Submissions schedule.
27.215 Security vulnerability assessments.
27.220 Tiering.
27.225 Site security plans.
27.230 Risk-based performance standards.
27.235 Alternative security program.
27.240 Review and approval of security vulnerability assessments.
27.245 Review and approval of site security plans.
27.250 Inspections and audits.
27.255 Recordkeeping requirements.
Subpart C--Orders and Adjudications
27.300 Orders.
27.305 Neutral adjudications.
27.310 Commencement of adjudication proceedings.
27.315 Presiding officers for proceedings.
27.320 Prohibition on ex parte communications during proceedings.
27.325 Burden of proof.
27.330 Summary decision procedures.
27.335 Hearing procedures.
27.340 Completion of adjudication proceedings.
27.345 Appeals.
Subpart D--Other
27.400 Chemical-terrorism vulnerability information.

[[Page 17730]]

27.405 Review and preemption of State laws and regulations.
27.410 Third party actions.

Appendix A to Part 27--DHS Chemicals of Interest

     Authority: Pub. L. 109-295, sec. 550.

Subpart A--General


Sec.  27.100  Purpose.

    The purpose of this Part is to enhance the security of our Nation 
by furthering the mission of the Department as provided in 6 U.S.C. 
Sec.  111(b)(1) and by lowering the risk posed by certain chemical 
facilities.


Sec.  27.105  Definitions.

    As used in this part:
    Alternative Security Program or ASP shall mean a third-party or 
industry organization program, a local authority, state or Federal 
government program or any element or aspect thereof, that the Assistant 
Secretary has determined meets the requirements of this Part and 
provides for an equivalent level of security to that established by 
this Part.
    Assistant Secretary shall mean the Assistant Secretary for 
Infrastructure Protection, Department of Homeland Security or his 
designee.
    Chemical Facility or facility shall mean any establishment that 
possesses or plans to possess, at any relevant point in time, a 
quantity of a chemical substance determined by the Secretary to be 
potentially dangerous or that meets other risk-related criteria 
identified by the Department. As used herein, the term chemical 
facility or facility shall also refer to the owner or operator of the 
chemical facility. Where multiple owners and/or operators function 
within a common infrastructure or within a single fenced area, the 
Assistant Secretary may determine that such owners and/or operators 
constitute a single chemical facility or multiple chemical facilities 
depending on the circumstances.
    Chemical Security Assessment Tool or CSAT shall mean a suite of 
four applications, including User Registration, Top-Screen, Security 
Vulnerability Assessment, and Site Security Plan, through which the 
Department will collect and analyze key data from chemical facilities.
    Chemical-terrorism Vulnerability Information or CVI shall mean the 
information listed in Sec.  27.400(b).
    Coordinating Official shall mean the person (or his designee(s)) 
selected by the Assistant Secretary to ensure that the regulations are 
implemented in a uniform, impartial, and fair manner.
    Covered Facility or Covered Chemical Facility shall mean a chemical 
facility determined by the Assistant Secretary to present high levels 
of security risk, or a facility that the Assistant Secretary has 
determined is presumptively high risk under Sec.  27.200.
    Department shall mean the Department of Homeland Security.
    Deputy Secretary shall mean the Deputy Secretary of the Department 
of Homeland Security or his designee.
    Director of the Chemical Security Division or Director shall mean 
the Director of the Chemical Security Division, Office of 
Infrastructure Protection, Department of Homeland Security or any 
successors to that position within the Department or his designee.
    General Counsel shall mean the General Counsel of the Department of 
Homeland Security or his designee.
    Operator shall mean a person who has responsibility for the daily 
operations of a facility or facilities subject to this Part.
    Owner shall mean the person or entity that owns any facility 
subject to this Part.
    Present high levels of security risk and high risk shall refer to a 
chemical facility that, in the discretion of the Secretary of Homeland 
Security, presents a high risk of significant adverse consequences for 
human life or health, national security and/or critical economic assets 
if subjected to terrorist attack, compromise, infiltration, or 
exploitation.
    Risk profiles shall mean criteria identified by the Assistant 
Secretary for determining which chemical facilities will complete the 
Top-Screen or provide other risk assessment information.
    Screening Threshold Quantity or STQ shall mean the quantity of a 
chemical of interest, upon which the facility's obligation to complete 
and submit the CSAT Top-Screen is based.
    Secretary or Secretary of Homeland Security shall mean the 
Secretary of the Department of Homeland Security or any person, officer 
or entity within the Department to whom the Secretary's authority under 
Section 550 is delegated.
    Terrorist attack or terrorist incident shall mean any incident or 
attempt that constitutes terrorism or terrorist activity under 6 U.S.C. 
101(15) or 18 U.S.C. 2331(5) or 8 U.S.C. 1182(a)(3)(B)(iii), including 
any incident or attempt that involves or would involve sabotage of 
chemical facilities or theft, misappropriation or misuse of a dangerous 
quantity of chemicals.
    Tier shall mean the risk level associated with a covered chemical 
facility and which is assigned to a facility by the Department. For 
purposes of this part, there are four risk-based tiers, ranging from 
highest risk at Tier 1 to lowest risk at Tier 4.
    Top-Screen shall mean an initial screening process designed by the 
Assistant Secretary through which chemical facilities provide 
information to the Department for use pursuant to Sec.  27.200 of these 
regulations.
    Under Secretary shall mean the Under Secretary for National 
Protection and Programs, Department of Homeland Security or any 
successors to that position within the Department or his designee.


Sec.  27.110  Applicability.

    (a) This Part applies to chemical facilities and to covered 
facilities as set out herein.
    (b) This Part does not apply to facilities regulated pursuant to 
the Maritime Transportation Security Act of 2002, Pub. L. 107-295, as 
amended; Public Water Systems, as defined by Section 1401 of the Safe 
Drinking Water Act, Pub. L. 93-523, as amended; Treatment Works as 
defined in Section 212 of the Federal Water Pollution Control Act, Pub. 
L. 92-500, as amended; any facility owned or operated by the Department 
of Defense or the Department of Energy, or any facility subject to 
regulation by the Nuclear Regulatory Commission.


Sec.  27.115  Implementation.

    The Assistant Secretary may implement the Section 550 program in a 
phased manner, selecting certain chemical facilities for expedited 
initial processes under these regulations and identifying other 
chemical facilities or types or classes of chemical facilities for 
other phases of program implementation. The Assistant Secretary has 
flexibility to designate particular chemical facilities for specific 
phases of program implementation based on potential risk or any other 
factor consistent with this Part.


Sec.  27.120  Designation of a coordinating official; Consultations and 
technical assistance.

    (a) The Assistant Secretary will designate a Coordinating Official 
who will be responsible for ensuring that these regulations are 
implemented in a uniform, impartial, and fair manner.
    (b) The Coordinating Official and his staff shall provide guidance 
to covered facilities regarding compliance with this Part and shall, as 
necessary and to the extent that resources permit, be available to 
consult and to provide technical assistance to an owner or operator who 
seeks such consultation or assistance.
    (c) In order to initiate consultations or seek technical 
assistance, a covered

[[Page 17731]]

facility shall submit a written request for consultation or technical 
assistance to the Coordinating Official or contact the Department in 
any other manner specified in any subsequent guidance. Requests for 
consultation or technical guidance do not serve to toll any of the 
applicable timelines set forth in this Part.
    (d) If a covered facility modifies its facility, processes, or the 
types or quantities of materials that it possesses, and believes that 
such changes may impact the covered facility's obligations under this 
Part, the covered facility may request a consultation with the 
Coordinating Official as specified in paragraph (c).


Sec.  27.125  Severability.

    If a court finds any portion of this Part to have been promulgated 
without proper authority, the remainder of this Part will remain in 
full effect.

Subpart B--Chemical Facility Security Program


Sec.  27.200  Information regarding security risk for a chemical 
facility.

    (a) Information to determine security risk. In order to determine 
the security risk posed by chemical facilities, the Secretary may, at 
any time, request information from chemical facilities that may reflect 
potential consequences of or vulnerabilities to a terrorist attack or 
incident, including questions specifically related to the nature of the 
business and activities conducted at the facility; information 
concerning the names, nature, conditions of storage, quantities, 
volumes, properties, customers, major uses, and other pertinent 
information about specific chemicals or chemicals meeting a specific 
criterion; information concerning facilities' security, safety, and 
emergency response practices, operations, and procedures; information 
regarding incidents, history, funding, and other matters bearing on the 
effectiveness of the security, safety and emergency response programs, 
and other information as necessary.
    (b) Obtaining information from facilities. (1) The Assistant 
Secretary may seek the information provided in paragraph (a) of this 
section by contacting chemical facilities individually or by publishing 
a notice in the Federal Register seeking information from chemical 
facilities that meet certain criteria, which the Department will use to 
determine risk profiles. Through any such individual or Federal 
Register notification, the Assistant Secretary may instruct such 
facilities to complete and submit a Top-Screen process, which may be 
completed through a secure Department Web site or through other means 
approved by the Assistant Secretary.
    (2) A facility must complete and submit a Top-Screen in accordance 
with the schedule provided in Sec.  27.210 if it possesses any of the 
chemicals listed in Appendix A to this part at the corresponding 
Screening Threshold Quantities.
    (3) Where the Department requests that a facility complete and 
submit a Top-Screen, the facility must designate a person who is 
responsible for the submission of information through the CSAT system 
and who attests to the accuracy of the information contained in any 
CSAT submissions. Such submitter must be an officer of the corporation 
or other person designated by an officer of the corporation and must be 
domiciled in the United States.
    (c) Presumptively High Risk Facilities. (1) If a chemical facility 
subject to paragraph (a) or (b) of this section fails to provide 
information requested or complete the Top-Screen within the timeframe 
provided in Sec.  27.210, the Assistant Secretary may, after attempting 
to consult with the facility, reach a preliminary determination, based 
on the information then available, that the facility presumptively 
presents a high level of security risk. The Assistant Secretary shall 
then issue a notice to the entity of this determination and, if 
necessary, order the facility to provide information or complete the 
Top-Screen pursuant to these rules. If the facility then fails to do 
so, it may be subject to civil penalties pursuant to Sec.  27.300, 
audit and inspection under Sec.  27.250 or, if appropriate, an order to 
cease operations under Sec.  27.300.
    (2) If the facility deemed ``presumptively high risk'' pursuant to 
paragraph (c)(1) of this section completes the Top-Screen, and the 
Department determines that it does not present a high level of security 
risk under Sec.  27.205, its status as ``presumptively high risk'' will 
terminate, and the Department will issue a notice to the facility to 
that effect.


Sec.  27.205  Determination that a chemical facility ``presents a high 
level of security risk.''

    (a) Initial Determination. The Assistant Secretary may determine at 
any time that a chemical facility presents a high level of security 
risk based on any information available (including any information 
submitted to the Department under Sec.  27.200) that, in the 
Secretary's discretion, indicates the potential that a terrorist attack 
involving the facility could result in significant adverse consequences 
for human life or health, national security or critical economic 
assets. Upon determining that a facility presents a high level of 
security risk, the Department shall notify the facility in writing of 
such initial determination and may also notify the facility of the 
Department's preliminary determination of the facility's placement in a 
risk-based tier pursuant to Sec.  27.220(a).
    (b) Redetermination. If a covered facility previously determined to 
present a high level of security risk has materially altered its 
operations, it may seek a redetermination by filing a Request for 
Redetermination with the Assistant Secretary, and may request a meeting 
regarding the Request. Within 45 calendar days of receipt of such a 
Request, or within 45 calendar days of a meeting under this paragraph, 
the Assistant Secretary shall notify the covered facility in writing of 
the Department's decision on the Request for Redetermination.


Sec.  27.210  Submissions schedule.

    (a) Initial Submission. The timeframes in paragraphs (a)(2) and 
(a)(3) of this section also apply to covered facilities that submit an 
Alternative Security Program pursuant to Sec.  27.235.
    (1) Top-Screen. Facilities shall complete and submit a Top-Screen 
within the following time frames:
    (i) This paragraph is operative on the date that the Department 
publishes a final Appendix A. Unless otherwise notified, within 60 
calendar days of the effective date of Appendix A for facilities that 
possess any of the chemicals listed in Appendix A at the corresponding 
STQs, or within 60 calendar days for facilities that come into 
possession of any of the chemicals listed in Appendix A at the 
corresponding STQs; or
    (ii) Within the time frame provided in any written notification 
from the Department or specified in any subsequent Federal Register 
notice.
    (2) Security Vulnerability Assessment. Unless otherwise notified, a 
covered facility must complete and submit a Security Vulnerability 
Assessment within 90 calendar days of written notification from the 
Department or within the time frame specified in any subsequent Federal 
Register notice.
    (3) Site Security Plan. Unless otherwise notified, a covered 
facility must complete and submit a Site Security Plan within 120 
calendar days of written notification from the Department or within the 
time frame specified in any subsequent Federal Register notice.

[[Page 17732]]

    (b) Resubmission Schedule for Covered Facilities. The timeframes in 
this subsection also apply to covered facilities who submit an 
Alternative Security Program pursuant to Sec.  27.235.
    (1) Top-Screen. Unless otherwise notified, Tier 1 and Tier 2 
covered facilities must complete and submit a new Top-Screen no less 
than two years, and no more than two years and 60 calendar days, from 
the date of the Department's approval of the facility's Site Security 
Plan; and Tier 3 and Tier 4 covered facilities must complete and submit 
a Top-Screen no less than 3 years, and no more than 3 years and 60 
calendar days, from the date of the Department's approval of the 
facility's Site Security Plan.
    (2) Security Vulnerability Assessment. Unless otherwise notified 
and following a Top-Screen resubmission pursuant to paragraph (b)(1) of 
this section, a covered facility must complete and submit a new 
Security Vulnerability Assessment within 90 calendar days of written 
notification from the Department or within the time frame specified in 
any subsequent Federal Register notice.
    (3) Site Security Plan. Unless otherwise notified and following a 
Security Vulnerability Assessment resubmission pursuant to paragraph 
(b)(2) of this section , a covered facility must complete and submit a 
new Site Security Plan within 120 calendar days of written notification 
from the Department or within the time frame specified in any 
subsequent Federal Register notice.
    (c) The Assistant Secretary retains the authority to modify the 
schedule in this Part as needed. The Assistant Secretary may shorten or 
extend these time periods based on the operations at the facility, the 
nature of the covered facility's vulnerabilities, the level and 
immediacy of security risk, or for other reasons. If the Department 
alters the time periods for a specific facility, the Department will do 
so in written notice to the facility.
    (d) If a covered facility makes material modifications to its 
operations or site, the covered facility must complete and submit a 
revised Top-Screen to the Department within 60 days of the material 
modification. In accordance with the resubmission requirements in Sec.  
27.210(b)(2) and (3), the Department will notify the covered facility 
as to whether the covered facility must submit a revised Security 
Vulnerability Assessment, Site Security Plan, or both.


Sec.  27.215  Security vulnerability assessments.

    (a) Initial Assessment. If the Assistant Secretary determines that 
a chemical facility is high-risk, the facility must complete a Security 
Vulnerability Assessment. A Security Vulnerability Assessment shall 
include:
    (1) Asset Characterization, which includes the identification and 
characterization of potential critical assets; identification of 
hazards and consequences of concern for the facility, its surroundings, 
its identified critical asset(s), and its supporting infrastructure; 
and identification of existing layers of protection;
    (2) Threat Assessment, which includes a description of possible 
internal threats, external threats, and internally-assisted threats;
    (3) Security Vulnerability Analysis, which includes the 
identification of potential security vulnerabilities and the 
identification of existing countermeasures and their level of 
effectiveness in both reducing identified vulnerabilities and in 
meeting the applicable Risk-Based Performance Standards;
    (4) Risk Assessment, including a determination of the relative 
degree of risk to the facility in terms of the expected effect on each 
critical asset and the likelihood of a success of an attack; and
    (5) Countermeasures Analysis, including strategies that reduce the 
probability of a successful attack or reduce the probable degree of 
success, strategies that enhance the degree of risk reduction, the 
reliability and maintainability of the options, the capabilities and 
effectiveness of mitigation options, and the feasibility of the 
options.
    (b) Except as provided in Sec.  27.235, a covered facility must 
complete the Security Vulnerability Assessment through the CSAT 
process, or through any other methodology or process identified or 
issued by the Assistant Secretary.
    (c) Covered facilities must submit a Security Vulnerability 
Assessment to the Department in accordance with the schedule provided 
in Sec.  27.210.
    (d) Updates and Revisions. (1) A covered facility must update and 
revise its Security Vulnerability Assessment in accordance with the 
schedule provided in Sec.  27.210.
    (2) Notwithstanding paragraph (d)(1) of this section, a covered 
facility must update, revise or otherwise alter its Security 
Vulnerability Assessment to account for new or differing modes of 
potential terrorist attack or for other security-related reasons, if 
requested by the Assistant Secretary.


Sec.  27.220  Tiering.

    (a) Preliminary Determination of Risk-Based Tiering. Based on the 
information the Department receives in accordance with Sec. Sec.  
27.200 and 27.205 (including information submitted through the Top-
Screen process) and following its initial determination in Sec.  
27.205(a) that a facility presents a high level of security risk, the 
Department shall notify a facility of the Department's preliminary 
determination of the facility's placement in a risk-based tier.
    (b) Confirmation or Alteration of Risk-Based Tiering. Following 
review of a covered facility's Security Vulnerability Assessment, the 
Assistant Secretary shall notify the covered facility of its final 
placement within a risk-based tier, or for covered facilities 
previously notified of a preliminary tiering, confirm or alter such 
tiering.
    (c) The Department shall place covered facilities in one of four 
risk-based tiers, ranging from highest risk facilities in Tier 1 to 
lowest risk facilities in Tier 4.
    (d) The Assistant Secretary may provide the facility with guidance 
regarding the risk-based performance standards and any other necessary 
guidance materials applicable to its assigned tier.


Sec.  27.225  Site security plans.

    (a) The Site Security Plan must meet the following standards:
    (1) Address each vulnerability identified in the facility's 
Security Vulnerability Assessment, and identify and describe the 
security measures to address each such vulnerability;
    (2) Identify and describe how security measures selected by the 
facility will address the applicable risk-based performance standards 
and potential modes of terrorist attack including, as applicable, 
vehicle-borne explosive devices, water-borne explosive devices, ground 
assault, or other modes or potential modes identified by the 
Department;
    (3) Identify and describe how security measures selected and 
utilized by the facility will meet or exceed each applicable 
performance standard for the appropriate risk-based tier for the 
facility; and
    (4) Specify other information the Assistant Secretary deems 
necessary regarding chemical facility security.
    (b) Except as provided in Sec.  27.235, a covered facility must 
complete the Site Security Plan through the CSAT process, or through 
any other

[[Page 17733]]

methodology or process identified or issued by the Assistant Secretary.
    (c) Covered facilities must submit a Site Security Plan to the 
Department in accordance with the schedule provided in Sec.  27.210.
    (d) Updates and Revisions. (1) When a covered facility updates, 
revises or otherwise alters its Security Vulnerability Assessment 
pursuant to Sec.  27.215(d), the covered facility shall make 
corresponding changes to its Site Security Plan.
    (2) A covered facility must also update and revise its Site 
Security Plan in accordance with the schedule in Sec.  27.210.
    (e) A covered facility must conduct an annual audit of its 
compliance with its Site Security Plan.


Sec.  27.230  Risk-based performance standards.

    (a) Covered facilities must satisfy the performance standards 
identified in this section. The Assistant Secretary will issue guidance 
on the application of these standards to risk-based tiers of covered 
facilities, and the acceptable layering of measures used to meet these 
standards will vary by risk-based tier. Each covered facility must 
select, develop in their Site Security Plan, and implement 
appropriately risk-based measures designed to satisfy the following 
performance standards:
    (1) Restrict Area Perimeter. Secure and monitor the perimeter of 
the facility;
    (2) Secure Site Assets. Secure and monitor restricted areas or 
potentially critical targets within the facility;
    (3) Screen and Control Access. Control access to the facility and 
to restricted areas within the facility by screening and/or inspecting 
individuals and vehicles as they enter, including,
    (i) Measures to deter the unauthorized introduction of dangerous 
substances and devices that may facilitate an attack or actions having 
serious negative consequences for the population surrounding the 
facility; and
    (ii) Measures implementing a regularly updated identification 
system that checks the identification of facility personnel and other 
persons seeking access to the facility and that discourages abuse 
through established disciplinary measures;
    (4) Deter, Detect, and Delay. Deter, detect, and delay an attack, 
creating sufficient time between detection of an attack and the point 
at which the attack becomes successful, including measures to:
    (i) Deter vehicles from penetrating the facility perimeter, gaining 
unauthorized access to restricted areas or otherwise presenting a 
hazard to potentially critical targets;
    (ii) Deter attacks through visible, professional, well maintained 
security measures and systems, including security personnel, detection 
systems, barriers and barricades, and hardened or reduced value 
targets;
    (iii) Detect attacks at early stages, through countersurveillance, 
frustration of opportunity to observe potential targets, surveillance 
and sensing systems, and barriers and barricades; and
    (iv) Delay an attack for a sufficient period of time so to allow 
appropriate response through on-site security response, barriers and 
barricades, hardened targets, and well-coordinated response planning;
    (5) Shipping, Receipt, and Storage. Secure and monitor the 
shipping, receipt, and storage of hazardous materials for the facility;
    (6) Theft and Diversion. Deter theft or diversion of potentially 
dangerous chemicals;
    (7) Sabotage. Deter insider sabotage;
    (8) Cyber. Deter cyber sabotage, including by preventing 
unauthorized onsite or remote access to critical process controls, such 
as Supervisory Control and Data Acquisition (SCADA) systems, 
Distributed Control Systems (DCS), Process Control Systems (PCS), 
Industrial Control Systems (ICS), critical business system, and other 
sensitive computerized systems;
    (9) Response. Develop and exercise an emergency plan to respond to 
security incidents internally and with assistance of local law 
enforcement and first responders;
    (10) Monitoring. Maintain effective monitoring, communications and 
warning systems, including,
    (i) Measures designed to ensure that security systems and equipment 
are in good working order and inspected, tested, calibrated, and 
otherwise maintained;
    (ii) Measures designed to regularly test security systems, note 
deficiencies, correct for detected deficiencies, and record results so 
that they are available for inspection by the Department; and
    (iii) Measures to allow the facility to promptly identify and 
respond to security system and equipment failures or malfunctions;
    (11) Training. Ensure proper security training, exercises, and 
drills of facility personnel;
    (12) Personnel Surety. Perform appropriate background checks on and 
ensure appropriate credentials for facility personnel, and as 
appropriate, for unescorted visitors with access to restricted areas or 
critical assets, including,
    (i) Measures designed to verify and validate identity;
    (ii) Measures designed to check criminal history;
    (iii) Measures designed to verify and validate legal authorization 
to work; and
    (iv) Measures designed to identify people with terrorist ties;
    (13) Elevated Threats. Escalate the level of protective measures 
for periods of elevated threat;
    (14) Specific Threats, Vulnerabilities, or Risks. Address specific 
threats, vulnerabilities or risks identified by the Assistant Secretary 
for the particular facility at issue;
    (15) Reporting of Significant Security Incidents. Report 
significant security incidents to the Department and to local law 
enforcement officials;
    (16) Significant Security Incidents and Suspicious Activities. 
Identify, investigate, report, and maintain records of significant 
security incidents and suspicious activities in or near the site;
    (17) Officials and Organization. Establish official(s) and an 
organization responsible for security and for compliance with these 
standards;
    (18) Records. Maintain appropriate records; and
    (19) Address any additional performance standards the Assistant 
Secretary may specify.
    (b) [Reserved]


Sec.  27.235  Alternative security program.

    (a) Covered facilities may submit an Alternate Security Program 
(ASP) pursuant to the requirements of this section. The Assistant 
Secretary may approve an Alternate Security Program, in whole, in part, 
or subject to revisions or supplements, upon a determination that the 
Alternate Security Program meets the requirements of this Part and 
provides for an equivalent level of security to that established by 
this Part.
    (1) A Tier 4 facility may submit an ASP in lieu of a Security 
Vulnerability Assessment, Site Security Plan, or both.
    (2) Tier 1, Tier 2, or Tier 3 facilities may submit an ASP in lieu 
of a Site Security Plan. Tier 1, Tier 2, and Tier 3 facilities may not 
submit an ASP in lieu of a Security Vulnerability Assessment.
    (b) The Department will provide notice to a covered facility about 
the approval or disapproval, in whole or in part, of an ASP, using the 
procedure specified in Sec.  27.240 if the ASP is intended to take the 
place of a Security Vulnerability Assessment or using the procedure 
specified in Sec.  27.245 if the ASP is intended to take the place of a 
Site Security Plan.

[[Page 17734]]

Sec.  27.240  Review and approval of security vulnerability 
assessments.

    (a) Review and Approval. The Department will review and approve in 
writing all Security Vulnerability Assessments that satisfy the 
requirements of Sec.  27.215, including Alternative Security Programs 
submitted pursuant to Sec.  27.235.
    (b) If a Security Vulnerability Assessment does not satisfy the 
requirements of Sec.  27.215, the Department will provide the facility 
with a written notification that includes a clear explanation of 
deficiencies in the Security Vulnerability Assessment. The facility 
shall then enter further consultations with the Department and resubmit 
a sufficient Security Vulnerability Assessment by the time specified in 
the written notification provided by the Department under this section. 
If the resubmitted Security Vulnerability Assessment does not satisfy 
the requirements of Sec.  27.215, the Department will provide the 
facility with written notification (including a clear explanation of 
deficiencies in the SVA) of the Department's disapproval of the SVA.


Sec.  27.245  Review and approval of site security plans.

    (a) Review and Approval. (1) The Department will review and approve 
or disapprove all Site Security Plans that satisfy the requirements of 
Sec.  27.225, including Alternative Security Programs submitted 
pursuant to Sec.  27.235.
    (i) The Department will review Site Security Plans through a two-
step process. Upon receipt of Site Security Plan from the covered 
facility, the Department will review the documentation and make a 
preliminary determination as to whether it satisfies the requirements 
of Sec.  27.225. If the Department finds that the requirements are 
satisfied, the Department will issue a Letter of Authorization to the 
covered facility.
    (ii) Following issuance of the Letter of Authorization, the 
Department will inspect the covered facility in accordance with Sec.  
27.250 for purposes of determining compliance with the requirements of 
this Part.
    (iii) If the Department approves the Site Security Plan in 
accordance with Sec.  27.250, the Department will issue a Letter of 
Approval to the facility, and the facility shall implement the approved 
Site Security Plan.
    (2) The Department will not disapprove a Site Security Plan 
submitted under this Part based on the presence or absence of a 
particular security measure. The Department may disapprove a Site 
Security Plan that fails to satisfy the risk-based performance 
standards established in Sec.  27.230.
    (b) When the Department disapproves a preliminary Site Security 
Plan issued prior to inspection or a Site Security Plan following 
inspection, the Department will provide the facility with a written 
notification that includes a clear explanation of deficiencies in the 
Site Security Plan. The facility shall then enter further consultations 
with the Department and resubmit a sufficient Site Security Plan by the 
time specified in the written notification provided by the Department 
under this section. If the resubmitted Site Security Plan does not 
satisfy the requirements of Sec.  27.225, the Department will provide 
the facility with written notification (including a clear explanation 
of deficiencies in the SSP) of the Department's disapproval of the SSP.


Sec.  27.250  Inspections and audits.

    (a) Authority. In order to assess compliance with the requirements 
of this Part, authorized Department officials may enter, inspect, and 
audit the property, equipment, operations, and records of covered 
facilities.
    (b) Following preliminary approval of a Site Security Plan in 
accordance with Sec.  27.245, the Department will inspect the covered 
facility for purposes of determining compliance with the requirements 
of this Part.
    (1) If after the inspection, the Department determines that the 
requirements of Sec.  27.225 have been met, the Department will issue a 
Letter of Approval to the covered facility.
    (2) If after the inspection, the Department determines that the 
requirements of Sec.  27.225 have not been met, the Department will 
proceed as directed by Sec.  27.245(b) in ``Review and Approval of Site 
Security Plans.''
    (c) Time and Manner. Authorized Department officials will conduct 
audits and inspections at reasonable times and in a reasonable manner. 
The Department will provide covered facility owners and/or operators 
with 24-hour advance notice before inspections, except
    (1) If the Under Secretary or Assistant Secretary determines that 
an inspection without such notice is warranted by exigent circumstances 
and approves such inspection; or
    (2) If any delay in conducting an inspection might be seriously 
detrimental to security, and the Director of the Chemical Security 
Division determines that an inspection without notice is warranted, and 
approves an inspector to conduct such inspection.
    (d) Inspectors. Inspections and audits are conducted by personnel 
duly authorized and designated for that purpose as ``inspectors'' by 
the Secretary or the Secretary's designee.
    (1) An inspector will, on request, present his or her credentials 
for examination, but the credentials may not be reproduced by the 
facility.
    (2) An inspector may administer oaths and receive affirmations, 
with the consent of any witness, in any matter.
    (3) An inspector may gather information by reasonable means 
including, but not limited to, interviews, statements, photocopying, 
photography, and video- and audio-recording. All documents, objects and 
electronically stored information collected by each inspector during 
the performance of that inspector's duties shall be maintained for a 
reasonable period of time in the files of the Department of Homeland 
Security maintained for that facility or matter.
    (4) An inspector may request forthwith access to all records 
required to be kept pursuant to Sec.  27.255. An inspector shall be 
provided with the immediate use of any photocopier or other equipment 
necessary to copy any such record. If copies can not be provided 
immediately upon request, the inspector shall be permitted immediately 
to take the original records for duplication and prompt return.
    (e) Confidentiality. In addition to the protections provided under 
CVI in Sec.  27.400, information received in an audit or inspection 
under this section, including the identity of the persons involved in 
the inspection or who provide information during the inspection, shall 
remain confidential under the investigatory file exception, or other 
appropriate exception, to the public disclosure requirements of 5 
U.S.C. 552.
    (f) Guidance. The Assistant Secretary shall issue guidance 
identifying appropriate processes for such inspections, and specifying 
the type and nature of documentation that must be made available for 
review during inspections and audits.


Sec.  27.255  Recordkeeping requirements.

    (a) Except as provided in Sec.  27.255(b), the covered facility 
must keep records of the activities as set out below for at least three 
years and make them available to the Department upon request. A covered 
facility must keep the following records:
    (1) Training. For training, the date and location of each session, 
time of day and duration of session, a description of the training, the 
name and qualifications of the instructor, a clear, legible list of 
attendees to include the attendee signature, at least one other unique 
identifier of each attendee receiving the

[[Page 17735]]

training, and the results of any evaluation or testing.
    (2) Drills and exercises. For each drill or exercise, the date 
held, a description of the drill or exercise, a list of participants, a 
list of equipment (other than personal equipment) tested or employed in 
the exercise, the name(s) and qualifications of the exercise director, 
and any best practices or lessons learned which may improve the Site 
Security Plan;
    (3) Incidents and breaches of security. Date and time of 
occurrence, location within the facility, a description of the incident 
or breach, the identity of the individual to whom it was reported, and 
a description of the response;
    (4) Maintenance, calibration, and testing of security equipment. 
The date and time, name and qualifications of the technician(s) doing 
the work, and the specific security equipment involved for each 
occurrence of maintenance, calibration, and testing;
    (5) Security threats. Date and time of occurrence, how the threat 
was communicated, who received or identified the threat, a description 
of the threat, to whom it was reported, and a description of the 
response;
    (6) Audits. For each audit of a covered facility's Site Security 
Plan (including each audit required under Sec.  27.225(e)) or Security 
Vulnerability Assessment, a record of the audit, including the date of 
the audit, results of the audit, name(s) of the person(s) who conducted 
the audit, and a letter certified by the covered facility stating the 
date the audit was conducted.
    (7) Letters of Authorization and Approval. All Letters of 
Authorization and Approval from the Department, and documentation 
identifying the results of audits and inspections conducted pursuant to 
Sec.  27.250.
    (b) A covered facility must retain records of submitted Top-
Screens, Security Vulnerability Assessments, Site Security Plans, and 
all related correspondence with the Department for at least six years 
and make them available to the Department upon request.
    (c) To the extent necessary for security purposes, the Department 
may request that a covered facility make available records kept 
pursuant to other Federal programs or regulations.
    (d) Records required by this section may be kept in electronic 
format. If kept in an electronic format, they must be protected against 
unauthorized access, deletion, destruction, amendment, and disclosure.

Subpart C--Orders and Adjudications


Sec.  27.300  Orders.

    (a) Orders Generally. When the Assistant Secretary determines that 
a facility is in violation of any of the requirements of this Part, the 
Assistant Secretary may take appropriate action including the issuance 
of an appropriate Order.
    (b) Orders Assessing Civil Penalty and Orders to Cease Operations. 
(1) Where the Assistant Secretary determines that a facility is in 
violation of an Order issued pursuant to paragraph (a) of this section, 
the Assistant may enter an Order Assessing Civil Penalty, Order to 
Cease Operations, or both.
    (2) Following the issuance of an Order by the Assistant Secretary 
pursuant to paragraph (b)(1) of this section, the facility may enter 
further consultations with Department.
    (3) Where the Assistant Secretary determines that a facility is in 
violation of an Order issued pursuant to paragraph (a) of this section 
and issues an Order Assessing Civil Penalty pursuant to paragraph 
(b)(1) of this section, a chemical facility is liable to the United 
States for a civil penalty of not more than $25,000 for each day during 
which the violation continues.
    (c) Procedures for Orders. (1) At a minimum, an Order shall be 
signed by the Assistant Secretary, shall be dated, and shall include:
    (i) The name and address of the facility in question;
    (ii) A listing of the provision(s) that the facility is alleged to 
have violated;
    (iii) A statement of facts upon which the alleged instances of 
noncompliance are based;
    (iv) A clear explanation of deficiencies in the facility's chemical 
security program, including, if applicable, any deficiencies in the 
facility's Security Vulnerability Assessment, Site Security Plan, or 
both; and
    (v) A statement, indicating what action(s) the chemical must take 
to remedy the instance(s) of noncompliance; and
    (vi) The date by which the facility must comply with the terms of 
the Order.
    (2) The Assistant Secretary may establish procedures for the 
issuance of Orders.
    (d) A facility must comply with the terms of the Order by the date 
specified in the Order unless the facility has filed a timely Notice 
for Application for Review under Sec.  27.310.
    (e) Where a facility or other person contests the determination of 
the Assistant Secretary to issue an Order, a chemical facility may seek 
an adjudication pursuant to Sec.  27.310.
    (f) An Order issued under this section becomes final agency action 
when the time to file a Notice of Application of Review under Sec.  
27.310 has passed without such a filing or upon the conclusion of 
adjudication or appeal proceedings under this subpart.


Sec.  27.305  Neutral adjudications.

    (a) Any facility or other person who has received a Finding 
pursuant to Sec.  27.230(a)(12)(iv), a Determination pursuant to Sec.  
27.245(b), or an Order pursuant to Sec.  27.300 is entitled to an 
adjudication, by a neutral adjudications officer, of any issue of 
material fact relevant to any administrative action which deprives that 
person of a cognizable interest in liberty or property.
    (b) A neutral adjudications officer appointed pursuant to Sec.  
27.315 shall issue an Initial Decision on any material factual issue 
related to a Finding pursuant to Sec.  27.230(a)(12)(iv), a 
Determination pursuant to Sec.  27.245, or an Order pursuant to Sec.  
27.300 before any such administrative action is reviewed on appeal 
pursuant to Sec.  27.345.


Sec.  27.310  Commencement of adjudication proceedings.

    (a) Proceedings Instituted by Facilities or other Persons. A 
facility or other person may institute proceedings to review a 
determination by the Assistant Secretary:
    (1) Finding, pursuant to the Sec.  27.230(a)(12)(iv), that an 
individual is a potential security threat;
    (2) Disapproving a Site Security Plan pursuant to Sec.  27.245(b); 
or
    (3) Issuing an Order pursuant to Sec.  27.300(a) or (b).
    (b) Procedure for Applications by Facilities or other Persons. A 
facility or other person may institute Proceedings by filing a Notice 
of Application for Review specifying that the facility or other person 
requests a Proceeding to review a determination specified in paragraph 
(a) of this section.
    (1) An Applicant institutes a Proceeding by filing a Notice of 
Application for Review with the office of the Department hereinafter 
designated by the Secretary.
    (2) An Applicant must file a Notice of Application for Review 
within seven calendar days of notification to the facility or other 
person of the Assistant Secretary's Finding, Determination, or Order.
    (3) The Applicant shall file and simultaneously serve each Notice 
of Application for Review and all

[[Page 17736]]

subsequent filings on the Assistant Secretary and the General Counsel.
    (4) An Order is stayed from the timely filing of a Notice of 
Application for Review until the Presiding Officer issues an Initial 
Decision, unless the Secretary has lifted the stay due to exigent 
circumstances pursuant to paragraph (d) of this section.
    (5) The Applicant shall file and serve an Application for Review 
within fourteen calendar days of the notification to the facility or 
other person of the Assistant Secretary's Finding, Determination, or 
Order.
    (6) Each Application for Review shall be accompanied by all legal 
memoranda, other documents, declarations, affidavits, and other 
evidence supporting the position asserted by the Applicant.
    (c) Response. The Assistant Secretary, through the Office of 
General Counsel, shall file and serve a Response, accompanied by all 
legal memoranda, other documents, declarations, affidavits and other 
evidence supporting the position asserted by the Assistant Secretary 
within fourteen calendar days of the filing and service of the 
Application for Review and all supporting papers.
    (d) Procedural Modifications. The Secretary may, in exigent 
circumstances (as determined in his sole discretion):
    (1) Lift any stay applicable to any Order under Sec.  27.300;
    (2) Modify the time for a response;
    (3) Rule on the sufficiency of Applications for Review; or
    (4) Otherwise modify these procedures with respect to particular 
matters.


Sec.  27.315  Presiding officers for proceedings.

    (a) Immediately upon the filing of any Application for Review, the 
Secretary shall appoint an attorney, who is employed by the Department 
and who has not performed any investigative or prosecutorial function 
with respect to the matter, to act as a neutral adjudications officer 
or Presiding Officer for the compilation of a factual record and the 
recommendation of an Initial Decision for each Proceeding.
    (b) Notwithstanding paragraph (a) of this section, the Secretary 
may appoint one or more attorneys who are employed by the Department 
and who do not perform any investigative or prosecutorial function with 
respect to this subpart, to serve generally in the capacity as 
Presiding Officer(s) for such matters pursuant to such procedures as 
the Secretary may hereafter establish.


Sec.  27.320  Prohibition on ex parte communications during 
proceedings.

    (a) At no time after the designation of a Presiding Officer for a 
Proceeding and prior to the issuance of a Final Decision pursuant to 
Sec.  27.345 with respect to a facility or other person, shall the 
appointed Presiding Officer, or any person who will advise that 
official in the decision on the matter, discuss ex parte the merits of 
the proceeding with any interested person outside the Department, with 
any Department official who performs a prosecutorial or investigative 
function in such proceeding or a factually related proceeding, or with 
any representative of such person.
    (b) If, after appointment of a Presiding Officer and prior to the 
issuance of a Final Decision pursuant to Sec.  27.345 with respect to a 
facility or other person, the appointed Presiding Officer, or any 
person who will advise that official in the decision on the matter, 
receives from or on behalf of any party, by means of an ex parte 
communication, information which is relevant to the decision of the 
matter and to which other parties have not had an opportunity to 
respond, a summary of such information shall be served on all other 
parties, who shall have an opportunity to reply to the ex parte 
communication within a time set by the Presiding Officer.
    (c) The consideration of classified information or CVI pursuant to 
an in camera procedure does not constitute a prohibited ex parte 
communication for purposes of this subpart.


Sec.  27.325  Burden of proof.

    The Assistant Secretary bears the initial burden of proving the 
facts necessary to support the challenged administrative action at 
every proceeding instituted under this subpart.


Sec.  27.330  Summary decision procedures.

    (a) The Presiding Officer appointed for each Proceeding shall 
immediately consider whether the summary adjudication of the 
Application for Review is appropriate based on the Application for 
Review, the Response, and all the supporting filings of the parties 
pursuant to Sec. Sec.  27.310(b)(5) and 27.310(c).
    (1) The Presiding Officer shall promptly issue any necessary 
scheduling order for any additional briefing of the issue of summary 
adjudication on the Application for Review and Response.
    (2) The Presiding Officer may conduct scheduling conferences and 
other proceedings that the Presiding Officer determines to be 
appropriate.
    (b) If the Presiding Officer determines that there is no genuine 
issue of material fact and that one party or the other is entitled to 
decision as a matter of law, then the record shall be closed and the 
Presiding Officer shall issue an Initial Decision on the Application 
for Review pursuant to Sec.  27.340.
    (c) If a Presiding Officer determines that any factual issues 
require the cross-examination of one or more witnesses or other 
proceedings at a hearing, the Presiding Officer, in consultation with 
the parties, shall promptly schedule a hearing to be conducted pursuant 
to Sec.  27.335.


Sec.  27.335  Hearing procedures.

    (a) Any hearing shall be held as expeditiously as possible at the 
location most conducive to a prompt presentation of any necessary 
testimony or other proceedings.
    (1) Videoconferencing and teleconferencing may be used where 
appropriate at the discretion of the Presiding Officer.
    (2) Each party offering the affirmative testimony of a witness 
shall present that testimony by declaration, affidavit, or other sworn 
statement submitted in advance as ordered by the Presiding Officer.
    (3) Any witness presented for further examination shall be asked to 
testify under an oath or affirmation.
    (4) The hearing shall be recorded verbatim.
    (b)(1) A facility or other person may appear and be heard on his 
own behalf or through any counsel of his choice who is qualified to 
possess CVI.
    (2) A facility of other person individually, or through counsel, 
may offer relevant and material information including written direct 
testimony which he believes should be considered in opposition to the 
administrative action or which may bear on the sanction being sought.
    (3) The facility or other person individually, or through counsel, 
may conduct such cross-examination as may be specifically allowed by 
the Presiding Officer for a full determination of the facts.


Sec.  27.340  Completion of adjudication proceedings.

    (a) The Presiding Officer shall close and certify the record of the 
adjudication promptly upon the completion of:
    (1) Summary judgment proceedings,
    (2) A hearing, if necessary,
    (3) The submission of post hearing briefs, if any are ordered by 
the Presiding Officer, and

[[Page 17737]]

    (4) The conclusion of oral arguments, if any are permitted by the 
Presiding Officer.
    (b) The Presiding Officer shall issue an Initial Decision based on 
the certified record, and the decision shall be subject to appeal 
pursuant to Sec.  27.345.
    (c) An Initial Decision shall become a final agency action on the 
expiration of the time for an Appeal pursuant to Sec.  27.345.


Sec.  27.345  Appeals.

    (a) Right to Appeal. A facility or any person who has received an 
Initial Decision under Sec.  27.340(b) has the right to appeal to the 
Under Secretary acting as a neutral appeals officer.
    (b) Procedure for Appeals. (1) The Assistant Secretary, a facility 
or other person, or a representative on behalf of a facility or person, 
may institute an Appeal by filing a Notice of Appeal with the office of 
the Department hereinafter designated by the Secretary.
    (2) The Assistant Secretary, a facility, or other person must file 
a Notice of Appeal within seven calendar days of the service of the 
Presiding Officer's Initial Decision.
    (3) The Appellant shall file with the designated office and 
simultaneously serve each Notice of Appeal and all subsequent filings 
on the General Counsel.
    (4) An Initial Decision is stayed from the timely filing of a 
Notice of Appeal until the Under Secretary issues a Final Decision, 
unless the Secretary lifts the stay due to exigent circumstances 
pursuant to Sec.  27.310(d).
    (5) The Appellant shall file and serve a Brief within 28 calendar 
days of the notification of the service of the Presiding Officer's 
Initial Decision.
    (6) The Appellee shall file and serve its Opposition Brief within 
28 calendar days of the service of the Appellant's Brief.
    (c) The Under Secretary may provide for an expedited appeal for 
appropriate matters.
    (d) Ex Parte Communications. (1) At no time after the filing of a 
Notice of Appeal pursuant to paragraph (b)(1) of this section and prior 
to the issuance of a Final Decision on an Appeal pursuant to paragraph 
(f) of this section with respect to a facility or other person shall 
the Under Secretary, his designee, or any person who will advise that 
official in the decision on the matter, discuss ex parte the merits of 
the proceeding with any interested person outside the Department, with 
any Department official who performs a prosecutorial or investigative 
function in such proceeding or a factually related proceeding, or with 
any representative of such person.
    (2) If, after the filing of a Notice of Appeal pursuant to 
paragraph (b)(1) of this section and prior to the issuance of a Final 
Decision on an Appeal pursuant to paragraph (f) of this section with 
respect to a facility or other person, the Under Secretary, his 
designee, or any person who will advise that official in the decision 
on the matter, receives from or on behalf of any party, by means of an 
ex parte communication, information which is relevant to the decision 
of the matter and to which other parties have not had an opportunity to 
respond, a summary of such information shall be served on all other 
parties, who shall have an opportunity to reply to the ex parte 
communication within a time set by the Under Secretary or his designee.
    (3) The consideration of classified information or CVI pursuant to 
an in camera procedure does not constitute a prohibited ex parte 
communication for purposes of this subpart.
    (e) A facility or other person may elect to have the Under 
Secretary participate in any mediation or other resolution process by 
expressly waiving, in writing, any argument that such participation has 
compromised the Appeal process.
    (f) The Under Secretary shall issue a Final Decision and serve it 
upon the parties. A Final Decision made by the Under Secretary 
constitutes final agency action.
    (g) The Secretary may establish procedures for the conduct of 
Appeals pursuant to this section.

Subpart D--Other


Sec.  27.400  Chemical-terrorism vulnerability information.

    (a) Applicability. This section governs the maintenance, 
safeguarding, and disclosure of information and records that constitute 
Chemical-terrorism Vulnerability Information (CVI), as defined in Sec.  
27.400(b). The Secretary shall administer this section consistent with 
Section 550(c) of the Homeland Security Appropriations Act of 2007, 
including appropriate sharing with Federal, State and local officials.
    (b) Chemical-terrorism Vulnerability Information. In accordance 
with Section 550(c) of the Department of Homeland Security 
Appropriations Act of 2007, the following information, whether 
transmitted verbally, electronically, or in written form, shall 
constitute CVI:
    (1) Security Vulnerability Assessments under Sec.  27.215;
    (2) Site Security Plans under Sec.  27.225;
    (3) Documents relating to the Department's review and approval of 
Security Vulnerability Assessments and Site Security Plans, including 
Letters of Authorization, Letters of Approval and responses thereto; 
written notices; and other documents developed pursuant to Sec. Sec.  
27.240 or 27.245;
    (4) Alternate Security Programs under Sec.  27.235;
    (5) Documents relating to inspection or audits under Sec.  27.250;
    (6) Any records required to be created or retained under Sec.  
27.255;
    (7) Sensitive portions of orders, notices or letters under Sec.  
27.300;
    (8) Information developed pursuant to Sec. Sec.  27.200 and 27.205; 
and
    (9) Other information developed for chemical facility security 
purposes that the Secretary, in his discretion, determines is similar 
to the information protected in Sec.  27.400(b)(1) through (8) and thus 
warrants protection as CVI.
    (c) Covered Persons. Persons subject to the requirements of this 
section are:
    (1) Each person who has a need to know CVI, as specified in Sec.  
27.400(e);
    (2) Each person who otherwise receives or gains access to what they 
know or should reasonably know constitutes CVI.
    (d) Duty to protect information. A covered person must--
    (1) Take reasonable steps to safeguard CVI in that person's 
possession or control, including electronic data, from unauthorized 
disclosure. When a person is not in physical possession of CVI, the 
person must store it in a secure container, such as a safe, that limits 
access only to covered persons with a need to know;
    (2) Disclose, or otherwise provide access to, CVI only to persons 
who have a need to know;
    (3) Refer requests for CVI by persons without a need to know to the 
Assistant Secretary;
    (4) Mark CVI as specified in Sec.  27.400(f);
    (5) Dispose of CVI as specified in Sec.  27.400(k);
    (6) If a covered person receives a record or verbal transmission 
containing CVI that is not marked as specified in Sec.  27.400(f), the 
covered person must--
    (i) Mark the record as specified in Sec.  27.400(f) of this 
section; and
    (ii) Inform the sender of the record that the record must be marked 
as specified in Sec.  27.400(f); or
    (iii) If received verbally, make reasonable efforts to memorialize 
such information and mark the memorialized record as specified in Sec.  
27.400(f) of this section, and inform the speaker of any determination 
that such information warrants CVI protection.
    (7) When a covered person becomes aware that CVI has been released 
to

[[Page 17738]]

persons without a need to know (including a covered person under Sec.  
27.400(c)(2)), the covered person must promptly inform the Assistant 
Secretary.
    (8) In the case of information that is CVI and also has been 
designated as critical infrastructure information under Section 214 of 
the Homeland Security Act, any covered person in possession of such 
information must comply with the disclosure restrictions and other 
requirements applicable to such information under Section 214 and any 
implementing regulations.
    (e) Need to know. (1) A person, including a State or local 
official, has a need to know CVI in each of the following 
circumstances:
    (i) When the person requires access to specific CVI to carry out 
chemical facility security activities approved, accepted, funded, 
recommended, or directed by the Department.
    (ii) When the person needs the information to receive training to 
carry out chemical facility security activities approved, accepted, 
funded, recommended, or directed by the Department.
    (iii) When the information is necessary for the person to supervise 
or otherwise manage individuals carrying out chemical facility security 
activities approved, accepted, funded, recommended, or directed by the 
Department.
    (iv) When the person needs the information to provide technical or 
legal advice to a covered person, who has a need to know the 
information, regarding chemical facility security requirements of 
Federal law.
    (v) When the Department determines that access is required under 
Sec. Sec.  27.400(h) or 27.400(i) in the course of a judicial or 
administrative proceeding.
    (2) Federal employees, contractors, and grantees. (i) A Federal 
employee has a need to know CVI if access to the information is 
necessary for performance of the employee's official duties.
    (ii) A person acting in the performance of a contract with or grant 
from the Department has a need to know CVI if access to the information 
is necessary to performance of the contract or grant. Contractors or 
grantees may not further disclose CVI without the consent of the 
Assistant Secretary.
    (iii) The Department may require that non-Federal persons seeking 
access to CVI complete a non-disclosure agreement before such access is 
granted.
    (3) Background check. The Department may make an individual's 
access to the CVI contingent upon satisfactory completion of a security 
background check or other procedures and requirements for safeguarding 
CVI that are satisfactory to the Department.
    (4) Need to know further limited by the Department. For some 
specific CVI, the Department may make a finding that only specific 
persons or classes of persons have a need to know.
    (5) Nothing in Sec.  27.400(e) shall prevent the Department from 
determining, in its discretion, that a person not otherwise listed in 
Sec.  27.400(e) has a need to know CVI in a particular circumstance.
    (f) Marking of paper records. (1) In the case of paper records 
containing CVI, a covered person must mark the record by placing the 
protective marking conspicuously on the top, and the distribution 
limitation statement on the bottom, of--
    (i) The outside of any front and back cover, including a binder 
cover or folder, if the document has a front and back cover;
    (ii) Any title page; and
    (iii) Each page of the document.
    (2) Protective marking. The protective marking is: CHEMICAL-
TERRORISM VULNERABILITY INFORMATION.
    (3) Distribution limitation statement. The distribution limitation 
statement is: WARNING: This record contains Chemical-terrorism 
Vulnerability Information controlled by 6 CFR 27.400. Do not disclose 
to persons without a ``need to know'' in accordance with 6 CFR 
27.400(e). Unauthorized release may result in civil penalties or other 
action. In any administrative or judicial proceeding, this information 
shall be treated as classified information in accordance with 6 CFR 
27.400(h) and (i).
    (4) Other types of records. In the case of non-paper records that 
contain CVI, including motion picture films, videotape recordings, 
audio recording, and electronic and magnetic records, a covered person 
must clearly and conspicuously mark the records with the protective 
marking and the distribution limitation statement such that the viewer 
or listener is reasonably likely to see or hear them when obtaining 
access to the contents of the record.
    (g) Disclosure by the Department--In general. (1) Except as 
otherwise provided in this section, and notwithstanding the Freedom of 
Information Act (5 U.S.C. 552), the Privacy Act (5 U.S.C. 552a), and 
other laws, records containing CVI are not available for public 
inspection or copying, nor does the Department release such records to 
persons without a need to know.
    (2) Disclosure of Segregatable Information under the Freedom of 
Information Act and the Privacy Act. If a record is marked to signify 
both CVI and information that is not CVI, the Department, on a proper 
Freedom of Information Act or Privacy Act request, may disclose the 
record with the CVI redacted, provided the record is not otherwise 
exempt from disclosure under the Freedom of Information Act or Privacy 
Act.
    (h) Disclosure in administrative enforcement proceedings. (1) The 
Department may provide CVI to a person governed by Section 550, and his 
counsel, in the context of an administrative enforcement proceeding of 
Section 550 when, in the sole discretion of the Department, as 
appropriate, access to the CVI is necessary for the person to prepare a 
response to allegations contained in a legal enforcement action 
document issued by the Department.
    (2) Security background check. Prior to providing CVI to a person 
under Sec.  27.400(h)(1), the Department may require the individual or, 
in the case of an entity, the individuals representing the entity, and 
their counsel, to undergo and satisfy, in the judgment of the 
Department, a security background check.
    (i) Disclosure in judicial proceedings. (1) In any judicial 
enforcement proceeding of Section 550, the Secretary, in his sole 
discretion, may, subject to Sec.  27.400(i)(1)(i), authorize access to 
CVI for persons necessary for the conduct of such proceedings, 
including such persons' counsel, provided that no other persons not so 
authorized shall have access to or be present for the disclosure of 
such information.
    (i) Security background check. Prior to providing CVI to a person 
under Sec.  27.400(i)(1), the Department may require the individual to 
undergo and satisfy, in the judgment of the Department, a security 
background check.
    (ii) [Reserved]
    (2) In any judicial enforcement proceeding of Section 550 where a 
person seeks to disclose CVI to a person not authorized to receive it 
under paragraph (i)(1) of this section, or where a person not 
authorized to receive CVI under paragraph (i)(1) of this section seeks 
to compel its disclosure through discovery, the United States may make 
an ex parte application in writing to the court seeking authorization 
to--
    (i) Redact specified items of CVI from documents to be introduced 
into evidence or made available to the

[[Page 17739]]

defendant through discovery under the Federal Rules of Civil Procedure;
    (ii) Substitute a summary of the information for such CVI; or
    (iii) Substitute a statement admitting relevant facts that the CVI 
would tend to prove.
    (3) The court shall grant a request under paragraph (i)(2) of this 
section if, after in camera review, the court finds that the redacted 
item, stipulation, or summary is sufficient to allow the defendant to 
prepare a defense.
    (4) If the court enters an order granting a request under paragraph 
(i)(2) of this section, the entire text of the documents to which the 
request relates shall be sealed and preserved in the records of the 
court to be made available to the appellate court in the event of an 
appeal.
    (5) If the court enters an order denying a request of the United 
States under paragraph (i)(2) of this section, the United States may 
take an immediate, interlocutory appeal of the court's order in 
accordance with 18 U.S.C. 2339B(f)(4), (5). For purposes of such an 
appeal, the entire text of the documents to which the request relates, 
together with any transcripts of arguments made ex parte to the court 
in connection therewith, shall be maintained under seal and delivered 
to the appellate court.
    (6) Except as provided otherwise at the sole discretion of the 
Secretary, access to CVI shall not be available in any civil or 
criminal litigation unrelated to the enforcement of Section 550.
    (7) Taking of trial testimony--
    (i) Objection--During the examination of a witness in any judicial 
proceeding, the United States may object to any question or line of 
inquiry that may require the witness to disclose CVI not previously 
found to be admissible.
    (ii) Action by court--In determining whether a response is 
admissible, the court shall take precautions to guard against the 
compromise of any CVI, including--
    (A) Permitting the United States to provide the court, ex parte, 
with a proffer of the witness's response to the question or line of 
inquiry; and
    (B) Requiring the defendant to provide the court with a proffer of 
the nature of the information that the defendant seeks to elicit.
    (iii) Obligation of defendant--In any judicial enforcement 
proceeding, it shall be the defendant's obligation to establish the 
relevance and materiality of any CVI sought to be introduced.
    (8) Construction. Nothing in this subsection shall prevent the 
United States from seeking protective orders or asserting privileges 
ordinarily available to the United States to protect against the 
disclosure of classified information, including the invocation of the 
military and State secrets privilege.
    (j) Consequences of Violation. Violation of this section is grounds 
for a civil penalty and other enforcement or corrective action by the 
Department, and appropriate personnel actions for Federal employees. 
Corrective action may include issuance of an order requiring retrieval 
of CVI to remedy unauthorized disclosure or an order to cease future 
unauthorized disclosure.
    (k) Destruction of CVI. (1) The Department of Homeland Security. 
Subject to the requirements of the Federal Records Act (5 U.S.C. 105), 
including the duty to preserve records containing documentation of a 
Federal agency's policies, decisions, and essential transactions, the 
Department destroys CVI when no longer needed to carry out the agency's 
function.
    (2) Other covered persons--(i) In general. A covered person must 
destroy CVI completely to preclude recognition or reconstruction of the 
information when the covered person no longer needs the CVI to carry 
out security measures under paragraph (e) of this section.
    (ii) Exception. Section 27.400(k)(2) does not require a State or 
local government agency to destroy information that the agency is 
required to preserve under State or local law.


Sec.  27.405  Review and preemption of State laws and regulations.

    (a) As per current law, no law, regulation, or administrative 
action of a State or political subdivision thereof, or any decision or 
order rendered by a court under state law, shall have any effect if 
such law, regulation, or decision conflicts with, hinders, poses an 
obstacle to or frustrates the purposes of this regulation or of any 
approval, disapproval or order issued there under.
    (1) Nothing in this part is intended to displace other federal 
requirements administered by the Environmental Protection Agency, U.S. 
Department of Justice, U.S. Department of Labor, U.S. Department of 
Transportation, or other federal agencies.
    (2) [Reserved]
    (b) State law, regulation or administrative action defined. For 
purposes of this section, the phrase ``State law, regulation or 
administrative action'' means any enacted law, promulgated regulation, 
ordinance, administrative action, order or decision, or common law 
standard of a State or any of its political subdivisions.
    (c) Submission for review. Any chemical facility covered by these 
regulations and any State may petition the Department by submitting a 
copy of a State law, regulation, or administrative action, or decision 
or order of a court for review under this section.
    (d) Review and opinion--(1) Review. The Department may review State 
laws, administrative actions, or opinions or orders of a court under 
State law and regulations submitted under this section, and may offer 
an opinion whether the application or enforcement of the State law or 
regulation would conflict with, hinder, pose an obstacle to or 
frustrate the purposes of this Part.
    (2) Opinion. The Department may issue a written opinion on any 
question regarding preemption. If the question was submitted under 
subsection (c) of this part, the Assistant Secretary will notify the 
affected chemical facility and the Attorney General of the subject 
State of any opinion under this section.
    (3) Consultation with States. In conducting a review under this 
section, the Department will seek the views of the State or local 
jurisdiction whose laws may be affected by the Department's review.


Sec.  27.410  Third party actions.

    (a) Nothing in this Part shall confer upon any person except the 
Secretary a right of action, in law or equity, for any remedy 
including, but not limited to, injunctions or damages to enforce any 
provision of this Part.
    (b) An owner or operator of a chemical facility may petition the 
Assistant Secretary to provide the Department's view in any litigation 
involving any issues or matters regarding this Part.

            Appendix A to Part 27.--DHS Chemicals of Interest
------------------------------------------------------------------------
                                        Chemical
                                        Abstract     Screening threshold
       Chemical of interest          Service (CAS)     quantity  (STQ)
                                         number             (lbs)
------------------------------------------------------------------------
1,1,3,3,3-pentafluoro-2-                   382-21-8  Any Amount.
 (trifluoromethyl)-1-propene.
1,1-Dimethylhydrazine.............          57-14-7  11,250.

[[Page 17740]]

 
1,2-bis(2-chloroethylthio)ethane..        3563-36-8  Any Amount.
1,3-bis(2-chloroethylthio)-n-            63905-10-2  Any Amount.
 propane.
1,3-Butadiene.....................         106-99-0  7,500.
1,3-Pentadiene....................         504-60-9  7,500.
1,4-bis(2-chloroethylthio)-n-           142868-93-7  Any Amount.
 butane.
1,5-bis(2-chloroethylthio)-n-           142868-94-8  Any Amount.
 pentane.
1-Butene..........................         106-98-9  7,500.
1-Chloropropylene.................         590-21-6  7,500.
1H-Tetrazole......................       16681-77-9  2,000.
1-Pentane.........................         109-67-1  7,500.
2,2-Dimethylpropane...............         463-82-1  7,500.
2-Butene..........................         107-01-7  7,500.
2-Butene-cis......................         590-18-1  7,500.
2-Butene-trans....................         624-64-6  7,500.
2-chloroethylchloromethylsulfide..        2625-76-5  Any Amount.
2-Chloropropylene.................         557-98-2  7,500.
2-Chlorovinyldichloroarsine.......         541-25-3  Any Amount.
2-Methyl-1-butene.................         563-46-2  7,500.
2-Methylpropene...................         115-11-7  7,500.
2-Pentene, (Z)-...................         627-20-3  7,500.
2-Pentene,(E)-....................         646-04-8  7,500.
3,3-dimethyl-2-butanol............         464-07-3  Any Amount.
3-Methyl-1-butene.................         563-45-1  7,500.
3-Quinuclidinyl benzilate (BZ)....       62869-69-6  Any Amount.
5-Nitrobenzotriazol...............        2338-12-7  2,000.
Acetaldehyde......................          75-07-0  7,500.
Acetone...........................          67-64-1  2,000.
Acetone cyanohydrin, stabilized...          75-86-5  2,000.
Acetyl bromide....................         506-96-7  2,000.
Acetyl chloride...................          75-36-5  2,000.
Acetyl iodide.....................         507-02-8  2,000.
Acetylene.........................          74-86-2  7,500.
Acrolein..........................         107-02-8  3,750.
Acrylonitrile.....................         107-13-1  15,000.
Acrylyl chloride..................         814-68-6  3,750.
Allyl alcohol.....................         107-18-6  11,250.
Allylamine........................         107-11-9  7,500.
Allyltrichlorosilane, stabilized..         107-37-9  2,000.
Aluminum bromide, anhydrous.......        7727-15-3  2,000.
Aluminum chloride, anhydrous......        7446-70-0  2,000.
Aluminum phosphide................       20859-73-8  2,000.
Ammonia (anhydrous)...............        7664-41-7  7,500.
Ammonia (conc. 20% or greater)....        7664-41-7  15,000.
Ammonium nitrate (nitrogen                6484-52-2  2,000.
 concentration of 28%-34%).
Ammonium perchlorate..............        7790-98-9  2,000.
Ammonium picrate..................         131-74-8  2,000.
Amyltrichlorosilane...............         107-72-2  2,000.
Antimony pentafluoride............        7783-70-2  2,000.
Arsenous trichloride..............        7784-34-1  Any Amount.
Arsine............................        7784-42-1  Any Amount.
Barium azide......................       18810-58-7  2,000.
bis(2-chloroethyl)ethylamine......         538-07-8  Any Amount.
bis(2-chloroethyl)methylamine.....          51-75-2  Any Amount.
bis(2-chloroethyl)sulfide.........         505-60-2  Any Amount.
bis(2-chloroethylthio)methane.....       63869-13-6  Any Amount.
bis(2-chloroethylthioethyl)ether..       63918-89-8  Any Amount.
bis(2-chloroethylthiomethyl)ether.       63918-90-1  Any Amount.
bis(2-chlorovinyl)chloroarsine....       40334-69-8  Any Amount.
Boron tribromide..................       10294-33-4  2,000.
Boron trichloride.................       10294-34-5  Any Amount.
Boron triflouride.................        7637-07-2  Any Amount.
Boron triflouride compound with            353-42-4  11,250.
 methyl ether (1:1).
Bromine...........................        7726-95-6  7,500.
Bromine chloride..................       13863-41-7  Any Amount.
Bromine pentafluoride.............        7789-30-2  2,000.
Bromine trifluoride...............        7787-71-5  2,000.
Bromotrifluorethylene.............         598-73-2  7,500.
Butane............................         106-97-8  7,500.
Butene............................       25167-67-3  7,500.
Butyltrichlorosilane..............        7521-80-4  2,000.

[[Page 17741]]

 
Calcium dithionite................       15512-36-4  2,000.
Calcium hydrosulfite..............       15512-36-4  2,000.
Calcium phosphide.................        1305-99-3  2,000.
Carbon disulfide..................          75-15-0  15,000.
Carbon monoxide...................         630-08-0  Any Amount.
Carbon oxysulfide.................         463-58-1  7,500.
Carbonyl fluoride.................         353-50-4  Any Amount.
Carbonyl sulfide..................         463-58-1  Any Amount.
Chlorine..........................        7782-50-5  1,875.
Chlorine dioxide..................       10049-04-4  2,000.
Chlorine monoxide.................        7791-21-1  7,500.
Chlorine pentafluoride............       13637-63-3  Any Amount.
Chlorine trifluoride..............        7790-91-2  Any Amount.
Chloroacetyl chloride.............          79-04-9  2,000.
Chloroform........................          67-66-3  15,000.
Chloromethyl ether................         542-88-1  750.
Chloromethyl methyl ether.........         107-30-2  3,750.
Chloropicrin......................          76-06-2  Any Amount.
Chlorosulfonic acid...............        7790-94-5  2,000.
Chromium oxychloride..............        7803-51-2  2,000.
Crotonaldehyde....................        4170-30-3  15,000.
Crotonaldehyde, (E)-..............         123-73-9  15,000.
Cyanogen..........................         460-19-5  Any Amount.
Cyanogen chloride.................         506-77-4  Any Amount.
Cyclohexylamine...................         108-91-8  11,250.
Cyclohexyltrichlorosilane.........          98-12-4  2,000.
Cyclopropane......................          75-19-4  7,500.
Cyclotetramethylenetetranitramine.        2691-41-0  2,000.
Diazodinitrophenol................          87-31-0  2,000.
Diborane..........................       19287-45-7  Any Amount.
Dichlorosilane....................        4109-96-0  Any Amount.
Diethyl ethylphosphonate..........          78-38-6  Any Amount.
Diethyl N,N-                              2404-03-7  Any Amount.
 dimethylphosphoramidate.
Diethyl phosphate.................         762-04-9  Any Amount.
Diethyldichlorosilane.............        1719-53-5  2,000.
Diethyleneglycol dinitrate........         693-21-0  2,000.
Difluoroethane....................          75-37-6  7,500.
Dimethyl ethylphosphonate.........        6163-75-3  Any Amount.
Dimethyl methylphosphonate........         756-79-6  Any Amount.
Dimethyl phosphate................         868-85-9  Any Amount.
Dimethylamine.....................         124-40-3  7,500.
Dimethyldichlorosilane............          75-78-5  2,000.
Dimethylphosphoramidodichloridate.         677-43-0  Any Amount.
Dinitrogen tetroxide..............       10544-72-6  Any Amount.
Dinitroglycoluril.................       55510-04-8  2,000.
Dinitrophenol.....................       25550-58-7  2,000.
Dinitroresorcinol.................       35860-51-6  2,000.
Dinitrosobenzene..................       25550-55-4  2,000.
Diphenyl-2-hydroxyacetic acid (aka          76-93-7  Any Amount.
 benzilic acid).
Diphenyldichlorosilane............          80-10-4  2,000.
Dipicryl sulfide..................        2217-06-3  2,000.
Dodecyltrichlorosilane............        4484-72-4  2,000.
Epichlorohydrin...................         106-89-8  15,000.
Ethane............................          74-84-0  7,500.
Ethyl acetylene...................         107-00-6  7,500.
Ethyl chloride....................          75-00-3  7,500.
Ethyl ether.......................          60-29-7  7,500.
Ethyl mercaptan...................          75-08-1  7,500.
Ethyl nitrite.....................         109-95-5  7,500.
Ethyl phosphonyl dichloride.......        1066-50-8  Any Amount.
Ethyl phosphonyl difluoride.......         753-98-0  Any Amount.
Ethylamine........................          75-04-7  7,500.
Ethyldiethanolamine...............         139-87-7  Any Amount.
Ethylene..........................          74-85-1  7,500.
Ethylene oxide....................          75-21-8  Any Amount.
Ethylenediamine...................         107-15-3  15,000.
Ethyleneimine.....................         151-56-4  7,500.
Ethyltrichlorosilane..............         115-21-9  2,000.
Fluorine..........................        7782-41-4  Any Amount.
Fluorosulfonic acid...............        7789-21-1  2,000.

[[Page 17742]]

 
Formaldehyde (solution)...........          50-00-0  11,250.
Furan.............................         110-00-9  3,750.
Germane...........................        7782-65-2  Any Amount.
Germanium tetrafluoride...........        7783-58-6  Any Amount.
Guanyl nitrosaminoguanylidene       ...............  2,000.
 hydrazine.
Guanyl nitrosaminoguanyltetrazene.         109-27-3  2,000.
Hexaethyl tetraphosphate and               757-58-4  Any Amount.
 compressed gas mixtures.
Hexafluoroacetone.................         684-16-2  Any Amount.
Hexanitrodiphenylamine............       35860-31-2  2,000.
Hexanitrostilbene.................       20062-22-0  2,000.
Hexolite..........................         121-82-4  2,000.
Hexotonal.........................         107-15-3  2,000.
Hexyltrichlorosilane..............       928-89-2 6  2,000.
Hydrazine.........................         302-01-2  11,250.
Hydrochloric acid (conc. 37% or           7647-01-0  11,250.
 greater).
Hydrocyanic acid..................          74-90-8  1,875.
Hydrogen..........................        1333-74-0  7,500.
Hydrogen bromide, anhydrous.......       10035-10-6  Any Amount.
Hydrogen chloride (anhydrous).....        7647-01-0  Any Amount.
Hydrogen cyanide..................          74-90-8  Any Amount.
Hydrogen fluoride/Hydrofluoric            7664-39-3  750.
 acid (conc. 50% or greater).
Hydrogen iodide, anhydrous........       10034-85-2  Any Amount.
Hydrogen peroxide (concentration          7722-84-1  2,000.
 of at least 30%).
Hydrogen selenide.................        7783-07-5  Any Amount.
Hydrogen sulfide..................        7783-06-4  Any Amount.
Iodine pentafluoride..............        7783-66-6  2,000.
Iron, pentacarbonyl-..............       13463-40-6  1,875.
Isobutane.........................          75-28-5  7,500.
Isobutyronitrile..................          78-82-0  15,000.
Isopentane........................          78-78-4  7,500.
Isoprene..........................          78-79-5  7,500.
Isopropyl chloride................          75-29-6  7,500.
Isopropyl chloroformate...........         108-23-6  11,250.
Isopropylamine....................          75-31-0  7,500.
Lead azide........................       13424-46-9  2,000.
Lead styphnate....................       15245-44-0  2,000.
Lithium amide.....................        7782-89-0  2,000.
Lithium nitride...................       26134-62-3  2,000.
Magnesium aluminum phosphide......  ...............  2,000.
Magnesium diamide.................        7803-54-5  2,000.
Magnesium phosphide...............       12057-74-8  2,000.
Mannitol hexanitrate, wetted......       15825-70-4  2,000.
Mercury fulminate.................         628-86-4  2,000.
Methacrylonitrile.................         126-98-7  7,500.
Methane...........................          74-82-8  7,500.
Methyl bromide....................          74-83-9  Any Amount.
Methyl chloride...................          74-87-3  7,500.
Methyl chloroformate..............          79-22-1  3,750.
Methyl ether......................         115-10-6  7,500.
Methyl formate....................         107-31-3  7,500.
Methyl hydrazine..................          60-34-4  11,250.
Methyl isocyanate.................         624-83-9  11,250.
Methyl mercaptan..................          74-93-1  Any Amount.
Methyl phosphonyl dichloride......         676-97-1  Any Amount.
Methyl phosphonyl difluoride......         676-99-3  Any Amount.
Methyl thiocyanate................         556-64-9  15,000.
Methylamine.......................          74-89-5  7,500.
Methylchlorosilane................         993-00-0  Any Amount.
Methyldichlorosilane..............          75-54-7  2,000.
Methyldiethanolamine..............         105-59-9  Any Amount.
Methylphenyldichlorosilane........         149-74-6  2,000.
Methyltrichlorosilane.............          75-79-6  2,000.
N,N-diisopropyl-2-aminoethyl              4261-68-1  Any Amount.
 chloride hydrochloride.
N,N-diisopropyl-[beta]-                     96-80-0  Any Amount.
 aminoethanol.
N,N-diisopropyl-[beta]-aminoethyl           96-79-7  Any Amount.
 chloride.
Nickel Carbonyl...................       13463-39-3  750.
Nitric acid.......................        7697-37-2  2,000.
Nitric oxide......................       10102-43-9  Any Amount.
Nitro urea........................         556-89-8  2,000.
Nitrocellulose....................        9004-70-0  2,000.

[[Page 17743]]

 
Nitrogen trioxide.................       10544-73-7  Any Amount.
Nitroglycerine....................          55-63-0  2,000.
Nitroguanidine....................         556-88-7  2,000.
Nitromethane......................          75-52-5  2,000.
Nitrostarch.......................        9056-38-6  2,000.
Nitrosyl chloride.................        2696-92-6  Any Amount.
Nitrotriazolone...................         932-64-9  2,000.
Nonyltrichlorosilane..............        5283-67-0  2,000.
o,o-diethyl S-[2-                           78-53-5  Any Amount.
 (diethylamino)ethyl]
 phosphorothiolate.
Octadecyltrichlorosilane..........         112-04-9  2,000.
Octolite..........................       68610-51-5  2,000.
Octonal...........................         124-13-0  2,000.
Octyltrichlorosilane..............        5283-66-9  2,000.
o-ethyl-N,N-dimethylphosphoramido-          77-81-6  Any Amount.
 cyanidate.
o-ethyl-o-2-diisopropylaminoethyl        57856-11-8  Any Amount.
 methylphosphonite.
o-ethyl-S-2-diisopropylaminoethyl        50782-69-9  Any Amount.
 methyl phosphonothiolate.
o-isopropyl                               1445-76-7  Any Amount.
 methylphosphonochloridate.
o-isopropyl                                107-44-8  Any Amount.
 methylphosphonofluoridate.
Oleum (Fuming Sulfuric acid)......        8014-95-7  7,500.
o-pinacolyl                               7040-57-5  Any Amount.
 methylphosphonochloridate.
o-pinacolyl                                 96-64-0  Any Amount.
 methylphosphonofluoridate.
Oxygen difluoride.................        7783-41-7  Any Amount.
Pentaerythrite tetranitrate or              78-11-5  2,000.
 PETN.
Pentane...........................         109-66-0  7,500.
Pentolite.........................        8066-33-9  2,000.
Peracetic acid....................          79-21-0  7,500.
Perchloromethylmercaptan..........         594-42-3  7,500.
Perchloryl fluoride...............        7616-94-6  Any Amount.
Phenyltrichlorosilane.............          98-13-5  2,000.
Phosgene..........................          75-44-5  Any Amount.
Phosphine.........................        7803-51-2  Any Amount.
Phosphorus........................        7723-14-0  Any Amount.
Phosphorus oxychloride............       10025-87-3  Any Amount.
Phosphorus oxychloride............       10025-87-3  2,000.
Phosphorus pentachloride..........       10026-13-8  Any Amount.
Phosphorus pentachloride..........       10026-13-8  2,000.
Phosphorus pentasulfide...........        1314-80-3  2,000.
Phosphorus trichloride............        7719-12-2  Any Amount.
Phosphorus trichloride............        7719-12-2  2,000.
Piperidine........................         110-89-4  11,250.
Potassium chlorate................        3811-04-9  2,000.
Potassium cyanide.................         151-50-8  2,000.
Potassium nitrate.................        7757-79-1  2,000.
Potassium perchlorate.............        7778-74-7  2,000.
Potassium phosphide...............       20770-41-6  2,000.
Propadiene........................         463-49-0  7,500.
Propane...........................          74-98-6  7,500.
Propionitrile.....................         107-12-0  7,500.
Propyl chlorofromate..............         109-61-5  11,250.
Propylene.........................         115-07-1  7,500.
Propylene oxide...................          75-56-9  7,500.
Propyleneimine....................          75-55-8  7,500.
Propyltrichlorosilane.............         141-57-1  2,000.
Propyne...........................          74-99-7  7,500.
Quinuclidine-3-ol.................        1619-34-7  Any Amount.
RDX and HMX mixtures..............         121-82-4  2,000.
Selenium hexafluoride.............        7783-79-1  Any Amount.
Silane............................        7803-62-5  7,500.
Silicon tetrachloride.............       10026-04-7  2,000.
Silicon tetrafluoride.............        7783-61-1  Any Amount.
Sodium chlorate...................        7775-09-9  2,000.
Sodium cyanide....................         143-33-9  2,000.
Sodium dinitro-o-cresolate........       25641-53-6  2,000.
Sodium dithionite.................        7775-14-6  2,000.
Sodium hydrosulfite...............        7775-14-6  2,000.
Sodium nitrate....................        7631-99-4  2,000.
Sodium phosphide..................        7558-80-7  2,000.
Sodium picramate..................         831-52-7  2,000.
Stibine...........................        7803-52-3  Any Amount.
Strontium phosphide...............       13450-99-2  2,000.

[[Page 17744]]

 
Sulfur dichloride.................       10545-99-0  Any Amount.
Sulfur dioxide (anhydrous)........        7446-09-5  Any Amount.
Sulfur monochloride...............       10025-67-9  Any Amount.
Sulfur tetraflouride..............        7783-60-0  Any Amount.
Sulfur trioxide...................        7446-11-9  7,500.
Sulfuryl chloride.................        7791-25-5  2,000.
Sulfuryl fluoride.................        2699-79-8  Any Amount.
Tellurium hexafluoride............        7783-80-4  Any Amount.
Tetrafluoroethylene...............         116-14-3  7,500.
Tetramethyllead...................          75-74-1  7,500.
Tetramethylsilane.................          75-76-3  7,500.
Tetranitroaniline.................       53014-37-2  2,000.
Tetranitromethane.................         509-14-8  7,500.
Tetrazol-1-acetic acid............       21732-17-2  2,000.
Thiodiglycol......................         111-48-8  Any Amount.
Thionyl chloride..................        7719-09-7  Any Amount.
Thionyl chloride..................        7719-09-7  2,000.
Titanium tetrachloride............        7550-45-0  2,000.
Toluene 2,4-diisocyanate..........         584-84-9  7,500.
Toluene 2,6-diisocyanate..........          91-08-7  7,500.
Toluene diisocyanate (unspecified        26471-62-5  7,500.
 isomer).
Trichlorosilane...................       10025-78-2  2,000.
Triethanolamine...................         102-71-6  Any Amount.
Triethanolamine hydrochloride.....         637-39-8  Any Amount.
Triethyl phosphite................         122-52-1  Any Amount.
Trifluoroacetyl chloride..........         354-32-5  Any Amount.
Trifluorochloroethylene...........          79-38-9  Any Amount.
Trimethyl phosphite...............         121-45-9  Any Amount.
Trimethylamine....................          75-50-3  Any Amount.
Trimethylchlorosilane.............          75-77-4  2,000.
Trinitroaniline...................       26952-42-1  2,000.
Trinitroanisole...................         606-35-9  2,000.
Trinitrobenzene...................          99-35-4  2,000.
Trinitrobenzenesulfonic acid......        2508-19-2  2,000.
Trinitrobenzoic acid..............         129-66-8  2,000.
Trinitrochlorobenzene.............          88-88-0  2,000.
Trinitrofluorenone................         129-79-3  2,000.
Trinitro-meta-cresol..............         602-99-3  2,000.
Trinitronaphthalene...............      558101-17-8  2,000.
Trinitrophenetole.................        4732-14-3  2,000.
Trinitrophenol....................          88-89-1  2,000.
Trinitroresorcinol................          82-71-3  2,000.
Trinitrotoluene...................         118-96-7  2,000.
Tris(2-chloroethyl)amine..........         555-77-1  Any Amount.
Tris(2-chlorovinyl)arsine.........       40334-70-1  Any Amount.
Tritonal..........................       54413-15-9  2,000.
Tungsten hexafluoride.............        7783-82-6  Any Amount.
Uranium hexafluoride..............        7783-81-5  2,000.
Urea..............................          57-13-6  2,000.
Urea nitrate......................         124-47-0  2,000.
Vinyl acetate monomer.............         108-05-4  11,250.
Vinyl actylene....................         689-97-4  7,500.
Vinyl chloride....................          75-01-4  7,500.
Vinyl ethyl ether.................         109-92-2  7,500.
Vinyl fluoride....................          75-02-5  7,500.
Vinyl methyl ether................         107-25-5  7,500.
Vinylidene chloride...............          75-35-4  7,500.
Vinylidene fluoride...............          75-38-7  7,500.
Vinyltrichlorosilane..............          75-94-5  2,000.
Zinc dithionite...................        7779-86-4  2,000.
Zinc hydrosulfite.................        7779-86-4  2,000.
Zirconium picramate...............       63868-82-6  2,000.
------------------------------------------------------------------------



[[Page 17745]]

    Dated: April 2, 2007.
Michael Chertoff,
Secretary of Homeland Security, Department of Homeland Security.
[FR Doc. E7-6363 Filed 4-6-07; 8:45 am]
BILLING CODE 4410-10-P


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