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Chemical Plant Security Legislation - On the Move

Beveridge & Diamond, P.C. - Client Alert, July 2, 2009

The House Homeland Security Committee has reported out a chemical plant security bill and sent it on to the House Energy and Commerce Committee.  Two controversial provisions are attracting most of the attention:  inherently safer technology (“IST”) and a citizen suit provision.  This client alert reports on the bill and the hearing on the bill held June 16, 2009.

Background

Following September 11, 2001, and concerned about the threat of terrorist attacks, Congress began debating legislation to strengthen security at chemical plants across the nation.  Despite broad consensus over the need to address this vulnerability, Congress repeatedly failed to pass a free-standing bill.[1]  Instead, in a 2007 appropriations bill for the Department of Homeland Security (“DHS”), Congress gave DHS temporary authority to implement what have become known as the Chemical Facility Anti-Terrorism Standards (“CFATS”).[2]  This legislative authority is set to expire in October.  For more information, click here to see our previous client alert, Chemical Plant Security Legislation: Where We’ve Been, Where We Are, Where We’re Going (Beveridge & Diamond, P.C., April 29, 2009).[3]

2009 Legislation

Congress is now considering H.R. 2868, “The Chemical Facility Antiterrorism Act of 2009,” to codify DHS authority for CFATS and to include additional provisions.[4]  The House Committee on Homeland Security held a hearing on June 19, 2009, to discuss the bill, introduced by Rep. Bennie Thompson (D-MS) with Reps. Henry Waxman (D-CA) and Sheila Jackson-Lee (D-TX) as co-sponsors.  The hearing focused on the continuing need for chemical regulation and the content of the proposed bill.[5]

Although Congress, the Administration, and the chemical industry are all in agreement that chemical plant security regulation should continue, there are issues of contention.  First, some members of the Committee are pressing for a free-standing bill by October, but the Administration is urging a one-year extension of the previous legislative authority so that DHS can fully implement CFATS as adopted before making decisions about new regulatory requirements.  Second, there is vigorous debate over the inclusion of provisions for citizen suits and mandatory IST rules.  IST refers to technological and procedural steps to reduce the potential for a hazardous chemical release and conflict exists over whether government should mandate these operational processes.[6]  In spite of the disagreement, the proposed bill as amended retains these provisions.

Provisions of the “Chemical Facility Antiterrorism Act of 2009”

The Secretary of DHS was first given authority to regulate chemical facilities in regard to security under section 550 of the Department of Homeland Security Appropriations Act, 2007 (P.L. 109-295).  H.R. 2868 would give permanent status to CFATS and include additional provisions.  The most significant additions provide for mandatory IST at the highest-risk facilities if certain conditions are met,[7] citizen suits by any person to order performance and assess civil penalties,[8] and regulation over wastewater treatment plants[9].  Additionally, the proposed legislation requires compliance with CFATS by facilities already covered under the Maritime Transportation Safety Act (“MTSA”),[10] protection of whistleblowers,[11] broad sharing of information between DHS and covered facilities,[12] provision of security vulnerability assessments (“SVAs”) and site security plans (“SSPs”) to “employee representatives,”[13] and personnel clearances for individuals with access to restricted areas.[14]

The IST provision would specifically require that all covered facilities assess “methods to reduce the consequences of a terrorist attack” as part of their SSPs.  This assessment would include substitution of chemicals, changes in processes, storage or use of less of a designated substance, and improvements in inventory control and handling.  The Secretary of DHS could require implementation of IST at Tier 1 or 2 facilities upon a determination that IST:  (1) would significantly reduce the risk of serious adverse effects to human health from an attack; (2) would not result in another facility being placed into a high-risk tier (risk-shifting); (3) is technically and economically feasible; and (4) would not significantly impair the ability of the facility to sustain operations at its current location. 

Although there are numerous new provisions beyond what is now in the CFATS regulations, the bill maintains the basic structure of the CFATS program.  Covered facilities and tier placement would still be determined through a risk-based tiering process that accounts for the presence of threshold quantities of designated “substances of concern.”[15]  DHS would then have to develop risk-based standards, protocols, and procedures for mandatory SVAs and SSPs that are increasingly stringent for each tier.[16]  DHS would have to approve all SVAs and SSPs, but facilities would have flexibility to choose a combination of measures and to develop alternate security plans (“ASPs”) that meet security performance standards.[17]  Enforcement would occur through security verifications and inspections[18] with authority to DHS to assess civil penalties for noncompliance, commence a civil suit to force compliance, or issue a cease and desist order.[19]  Finally, state and local governments would be able to establish standards that are more stringent than the federal statute.[20]

June 16, 2009 Hearing

On June 16, 2009, the Homeland Security Committee held a hearing entitled “The Chemical Facility Antiterrorism Act of 2009” and heard testimony from federal and state officials, and industry representatives.[21]

Opening Statements

House Homeland Security Committee Chairman Bennie G. Thompson opened by stating that this legislation was the product of collaboration between the Committee, key stakeholders, and the House Energy and Commerce Committee.  He stated his belief that new legislation needed to focus on averting threats, provide for citizen suits, and ensure whistleblower protection.  He further expressed hope for a Republican sponsor and bipartisan support as the bill moves forward.

Ranking Member Peter T. King (R-NY) expressed his belief that the committee was rushing to pass legislation, and instead urged his fellow members to abide by the wishes of the Administration and extend CFATS for one year before passing a free-standing bill.  He further asserted that the inclusion of a citizen suit provision is improper in legislation dealing with security issues. 

Witness Statements

Initial testimony came from two DHS officials responsible for implementation of the current and future legislation.  Philip Reitinger, Deputy Under Secretary for National Protection and Programs Directorate, urged the Committee to provide adequate time and resources to DHS in implementing any new legislation.  He stated that enacting permanent legislation by October is premature because DHS has not yet completed all of the steps under the original CFATS regulations.  Mr. Reitinger suggested that future legislation should extend CFATS to drinking water and wastewater facilities, harmonize efforts between CFATS and MTSA, improve the enforcement process, and continue the collaborative relationship between DHS, Congress, and the chemical industry.  Finally, he stated his concern that the citizen suit provision could result in disclosure of sensitive information.

Sue Armstrong, National Protection and Programs Infrastructure Protection Security Division Director, echoed the sentiments of her DHS colleague, answered questions about the specifics of CFATS implementation, and reiterated that CFATS is primarily about safety in relation to terrorism. 

Further testimony consisted of representatives of state and industry interests.  Mr. Paul Baldauf, the Assistant Director for Radiation Protection and Release Prevention at New Jersey’s Department of Environmental Protection, testified on the experience of chemical regulation in New Jersey.  His testimony provided an important comparison between New Jersey’s program and the proposed legislation.  Mr. Baldauf explained that New Jersey’s Toxic Catastrophe Prevention Act requires an IST analysis from high-risk facilities, but does not mandate implementation of identified IST measures.[22]  Overall, he said, the chemical industry has collaborated with New Jersey and has not found regulation to be overly burdensome.    

Marty Durbin, Vice President of Federal Affairs at the American Chemistry Council, stated that CFATS encourages facilities to consider all possible risk reduction options and therefore IST is an unnecessary infringement on flexibility. He added that CFATS, unlike the environmental statutes, does not mandate prescriptive standards that are readily ascertainable to a citizen or judge, and therefore citizen suits are an improper form of enforcement.

Dr. Neal Langerman, Principal Scientist and CEO at Advanced Chemical Safety (a safety, health, and environmental protection consulting firm) testified that industry already seeks to optimize safety of its products and operations and implements IST when appropriate.  Mandatory IST rules, he argued, would result in improper micromanaging of facilities by the government.  He instead encouraged other measures to promote IST, such as grants and tax incentives, instead of a mandate.  Martin Jeppeson, Director of Regulatory Affairs at California Ammonia Company, testified that many sectors will potentially be subject to CFATS.  He noted that IST would have a significant impact on farmers and that there is no proper substitute for the substances that farmers must keep on site.

Questions and Observations

Chairman Thompson, supported by Rep. Jackson-Lee, questioned whether a one-year extension was truly necessary, given that legislation this year would cause no apparent disruption to the CFATS program.  Ranking Member King, Rep. Michael T. McCaul (R-TX), and Rep. Daniel E. Lungren (R-CA), on the other hand, commented that an extension would provide DHS time to fully implement the current CFATS regulations and determine necessary improvements. 

The issue of citizen suits also divided the members of the Committee.  Ranking Member King , along with Rep. Christopher P. Carney (D-PA), Rep. Pete Olson (R-TX), and Rep. Mark E. Souder (R-IN), asserted that citizen suits may disproportionately divert the scarce resources of DHS and add costs to already struggling industries.  Rep. Lungren and Rep. McCaul  added that allowing these suits may upset the collaborative relationship between the chemical industry and DHS, especially in light of the potential for disclosure of protected information.  Chairman Thompson, with support from Rep. Yvette D. Clarke (D-NY), responded that the language of the bill prevents frivolous suits and there is no basis for believing that DHS will be flooded with unfounded citizen suits.  Chairman Thompson further emphasized the importance of citizen suits as a method for public participation.

The final point of contention was the provision to require IST in certain circumstances.  Many members, including Rep. Charles W. Dent (R-PA), Rep. Mark E. Souder, and Rep. Lungren pointed to the potentially staggering costs to industry if product substitution were required and the danger of unintended consequences when the federal government engages in micromanaging industry.  Rep. Paul C. Broun (R-GA) further lamented that these measures would severely impact small businesses and shift the risk from chemical facilities to other sectors (e.g., the transportation sector because smaller amounts of a chemical would have to be shipped more frequently to reduce storage onsite).  Finally, Rep. McCaul stated that the collaborative approach over the past few years has been successful and should be allowed to continue. 

Rep. Laura Richardson (D-CA) countered that the federal government is responsible for preventing terrorism and that IST is only required at facilities in limited circumstances.  Rep. Emmanuel Cleaver (D-MO) added that the federal government would also bear most of the blame should an attack occur as a result of the failure to regulate chemical plants adequately.  Rep. Bill Pascrell (D-NJ) stated that chemical regulation in New Jersey has actually benefited the industry by encouraging efficiency. Chairman Thompson continually reminded the Committee that specific methodologies are not imposed in the bill and that industry would have flexibility to meet the safety standards.

The Chairman’s prepared statement and the witness testimony are available at the Committee’s website at http://homeland.house.gov/hearings/index.asp?ID=199.

Amendments

The Committee considered various amendments and held final markup on June 23, 2009.  The most notable amendments adopted in the markup were:  the inclusion of an IST appeals process before an administrative law judge (Rep. Lungren); a modification to the IST provision to require consideration of effects on employment levels (Rep. Dent) and surface transportation (Rep. Souder) when making an implementation decision; and a requirement that DHS analyze and report on the security issues surrounding an exemption for small businesses (Rep. Pascrell, perfecting an amendment by Rep. Austria).  The other amendments include:  an increase for citizen suit action time to 120 days; a requirement that DHS hire additional CFATS inspectors and establish a tip line; and a requirement that facilities fire employees found to be illegal aliens during background checks.

A video recording of the markup, a prepared statement by Chairman Thompson, and the outcome of each amendment are available at the Committee’s website at http://homeland.house.gov/hearings/index.asp?ID=200.

For a printable PDF of this article, please click here.


[1] S. 1602, 107th Cong. (2001) (introduced shortly after Sept. 11, 2001, by Sen. Jon Corzine (D-NJ)); H.R. 5300, 107th Cong. (2002) (introduced by Reps. Frank Pallone (D-NJ) and Marge Roukema (R-NJ)); H.R. 1861, 108th Cong. (2003) (introduced by Reps. Frank Pallone (D-NJ) and Marge Roukema (R-NJ)); S. 994, 108th Cong. (2003) (introduced by Sen. Inhofe (R-OK); H.R. 2901, 108th Cong. (2003) (introduced by Rep. Vito Fosella (R-NY) as the companion to Sen. Inhofe’s bill).  In spite of these numerous bills, stand-alone chemical plant safety regulation did not pass.

[2] Department of Homeland Security Appropriations Act, 2007, § 550, Pub. L. No. 109-295, 120 Stat. 1355, 6 U.S.C. § 121 note (enacted Oct. 4, 2006).

[3]  Also available at http://www.bdlaw.com/news-559.html. 

[4] The Chemical Facility Antiterrorism Act of 2009, H.R. 2868, 111th Cong. (2009), available at http://homeland.house.gov/press/index.asp?ID=460&SubSection=5&Issue=0&DocumentType=0&PublishDate=0.

[5]  A video recording of the entire hearing is available at the Committee’s website at http://homeland.house.gov/hearings/index.asp?ID=199.

[6] For a brief history of IST, see Center for Chemical Process Safety (“CPSS”), Inherently Safer Chemical Process: A Life Cycle Approach (2d ed. 2008), § 1.4, available at http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471778923.htmlSee also testimony by Dennis C. Hendershot and Scott Berger, CCPS, before the Senate Environment and Public Works Committee, 109th Cong. (June 21, 2006), available at http://epw.senate.gov/109th/Hendershot_Testimony.pdf.

[7] The Chemical Facility Antiterrorism Act of 2009, H.R. 2868, § 2111, 111th Cong. (2009).

[8] Id. § 2116.

[9] Id. § 2112 (removing wastewater treatment plant exemption).

[10] Id. § 2103.

[11] Id. § 2108.

[12] Id. § 2106.

[13] Id. § 2015.

[14] Id. § 2115.

[15] Id. § 2102.

[16] Id. § 2103.

[17] Id.

[18] Id. § 2104.

[19] Id. § 2107.

[20] Id. § 2109.

[21] A video recording of the entire hearing is available at the Committee’s website at http://homeland.house.gov/hearings/index.asp?ID=199.

[22] See Toxic Catastrophe Prevention Act, N.J. Stat. Ann. § 13:1K-19 et seq. (1985).  The IST rules are under the Toxic Catastrophe Prevention Act Program, N.J. Admin. Code § 7:31-1.1 et seq. (2003).

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