Federal Register/Vol. 76, No.
149/Wednesday, August 3, ZOn/Proposed Rules
services, and lab supply wholesalers. Individuals or firms that provide transportation services within the distribution chain may be categorized as sellers, agents, or facilities depending upon their business relationship with the other parties to the transaction, The total number of potentially regulated farms and other businesses ranges from 64,986 to 106,236 (including overlap between the categories), The cost of the Ammonium Nitrate Security Program ranges from $300 million to $1.041 billion over 10 years at a 7% discount rate, The primary estimate is the mean, which is $670,6 million. For comparison, at a 3% discount rate, the cost of the program ranges from $364,2 million to $1.3 billion with a primary (mean) estimate of $814 million. The average annualized cost for the program ranges from $43 million to $148 million (with a mean of $96 million), also employing a 7% discount rate, The largest cost component of the proposed rule is related to the point of sale, The point of sale activities account for approximately 55% to 80% of the total program cost, This is followed by registration activities, recordkeeping, inspections/ audits, and reporting theft/loss, 2. Benefits of the Ammonium Nitrate Security Program This rule will help secure the nation's supply of ammonium nitrate, According to a U.S. Department of Justice report, "[tlhe April 19, 1995, bombing of the Alfred P. Murrah Federal Building (Murrah Building) in Oklahoma City sent shock waves throughout America. The bombing took its toll in human life and property damage and changed the community's and the Nation's general sense of safety and security, The explosion rocked downtown Oklahoma City, reduced the north face of the Murrah Building to rubble, and dealt extensive damage to each of the nine floors as they collapsed into the center, pancaking one on top of the other, When the dust cleared, one-third of the building lay in ruins, The force of the blast damaged 324 surrounding buildings, overturned automobiles, touched off car fires, and blew out windows and doors in a 50-block area, News reports indicated the explosion was felt 55 miles from the site and registered 6,0 on the Richter scale." See "Responding to Terrorism Victims: Oklahoma City and Beyond," U.S, Department of Justice, Office of Justice Programs, Office for Victims of Crime, October 2000, available at http:// www.ojp,usdoj.govlove/publicationsl inforeslrespterrorismlexecutive,html and http://www,ojp.usdoj.gov/ove/
publications/inforeslrespterrorisml chop t.html. The attack, which occurred 16 years ago, killed 168 people (167 individuals were killed by the explosion and 1 additional death of an emergency worker occurred during the rescue and recovery operation) and an additional 592 people suffered non-fatal injuries, See "Physical Injuries and Fatalities Resulting From the Oklahoma City Bombing." JAMA, August 7, 1996 Sue Mallonee, RN, MPH; Sheryll Shariat, MPH; Gail Stennies, MD, MPH; Rick Waxweiler, PhD; David Hogan, DO; Fred Jordan, MD, pp 382-387available at: http://jama.ama-assn, orglcgilreprint/ 276151382; http://jama,ama-assn,org/ cgilcontentlabstractl276151382 (estimates of injuries differ by source; DHS used the detailed JAMA article as it was based on survey and interview data and has thorough documentation). There are several key benefits of the Ammonium Nitrate Security Program proposed rule: • The Ammonium Nitrate Security Program will standardize and build upon successful industry "know your customer" initiatives and state regulations to prevent the misappropriation of ammonium nitrate, • The Ammonium Nitrate Security Program will provide timely, accurate vetting of persons wishing to possess and transfer ammonium nitrate. By requiring individuals to be vetted against the TSDB, known bad actors may be stopped from legally purchasing ammonium nitrate, • The Ammonium Nitrate Security Program will allow AN Sellers to identify non-authorized persons and requires them to deny sale of ammonium nitrate to these persons. By complying with the point of sale requirements to verify the accuracy and currency of a potential AN Purchaser's AN Registered User Number and an inspection of his/her photo identification document, AN Sellers will have the knowledge to allow or deny sale of ammonium nitrate, • The Ammonium Nitrate Security Program will eliminate gaps in Federal oversight of ammonium nitrate supplies used in explosives manufacturing, To better inform the comparison of the costs of implementing the ammonium nitrate program in the proposed rule with the benefits to homeland security it will afford due to reduced risk of successful terror attack involving ammonium nitrate, DHS performed a break-even analysis. In this break-even analysis, DHS compared the annualized costs of the proposed rule to the expected benefits of preventing an ammonium nitrate based terrorist attack, such as the attack on the Murrah federal
building, In order to estimate the impact of this attack in dollar terms, DHS must assume a value per statistical life (VSL), The Department emphasizes this VSL is not an estimate of what a particular life may be worth, but is only an estimate what one would be willing to pay to receive a reduction in mortality risk. The Department is assuming a VSL of $6 million, which is equivalent to saying someone is willing to pay $6 to receive a one-in-a-million reduction in the risk of death or $60 to receive a one-in-aone-hundred-thousand reduction in the risk of death, Applying the $6 million VSL to the 168 deaths from the Murrah attack plus the cost of other expenditures that are directly related to the attack (such as the cost of replacing the Murrah Building), DHS estimates the cost to society of the Murrah attack to be approximately of $1.35 billion (2010 dollars), As this proposed rule is expected to cost society approximately $95,5 million annually, this proposed rule would be cost effective if it prevented one terrorist attack similar to the Murrah building attack every 14.1 years ($1.35 billion attack cosr/sss.» million annual rulemaking cost), See the Regulatory Assessment in the public docket for more information on this break-even analysis, In addition to reducing the possibility of an ammonium nitrate-based terrorist attack, promulgating this rulemaking provides the benefit of allowing DHS to comply with the law, Subtitle J states the "Secretary shall regulate the sale and transfer of ammonium nitrate by an ammonium nitrate facility." to prevent the misappropriation or use of ammonium nitrate in an act of terrorism," Section II.A of this preamble provides a more detailed background discussion of the regulatory requirements expressly contained in Subtitle J, such as the registration requirement for certain ammonium nitrate sellers and purchasers, DHS believes this rulemaking allows the Department to comply with the regulatory requirements of Subtitle J,
B. Regulatory Flexibility Act The Regulatory Flexibility Act of 1980 (RFA) establishes "as a principle of regulatory issuance that agencies shall endeavor, consistent with the objective of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the business, organizations, and governmental jurisdictions subject to regulation." To achieve that principle, the RFA requires agencies to consider the potential impacts of their rules on small entities, The RFA covers a wide