Coleman & Horowitt Assists Client With CFATS Compliance.

Attorneys at Coleman & Horowitt recently assisted a client in discussions with the Department of Homeland Security (DHS) regarding compliance with the Chemical Facility Anti-Terrorism Standards (CFATS) program. Specifically, they assisted the client in explaining how certain chemicals, including chemicals of interest (COI), were being used to grow crops and therefore subject to the extension from CFATS for agricultural activities (Ag Extension). The practical aspect of this outcome is that the client will not be subject to potentially cost prohibitive security measures for fertilizers used in crop production. Please continue reading for a brief discussion of CFATS and the Ag Extension. If you have received correspondence from an analyst or investigator with DHS regarding CFATS, Lee N. Smith and Craig A. Tristao of our office are experienced in discussions and can help you navigate compliance.

The CFATS Program.

To protect the nation from the exploitation of hazardous chemicals, Congress authorized the Department of Homeland Security (DHS) to create the Chemical Facility Anti-Terrorism Standards (CFATS) program (6 CFR Part 27) in order to identify and regulate high-risk chemical facilities to ensure they have security measures in place to reduce the risk of a terrorist attack associated with certain chemicals of interest (COI) that can be used to create explosive devices or otherwise cause us harm.

The CFATS regulation lists more than 300 COIs, which if held in specified quantities or concentrations known as standard threshold quantities (STQ), trigger reporting requirements to DHS via an online questionnaire called a Top-Screen. Facilities are required to report their chemical holdings within 60 days of coming into possession of a COI. However, DHS has given certain agricultural facilities a time extension for that reporting requirement.

The Ag Extension.

In January 2008, the Department published in the Federal Register a December 2007 letter granting a time extension for certain farmers and other agricultural users who are otherwise required to report their COI holdings and submit a Top-Screen survey under CFATS (see 73 Fed. Reg. 1640 January 9, 2008).

The Ag Extension provides in pertinent part:

(1)        Until further notice, or unless otherwise specifically notified in writing by DHS, the Top-Screens will not be required for any facility that is required to submit a Top- Screen solely because it possesses any Chemical of Interest, at or above the applicable screening threshold quantity, for use—

(a) in preparation for the treatment of crops, feed, land, livestock (including poultry) or other areas of an agricultural production facility; or

(b) during application to or treatment of crops, feed, land, livestock (including poultry) or other areas of an agricultural production facility; This extension applies to facilities such as farms (e.g., crop, fruit, nut, and vegetable); ranches and rangeland; poultry, dairy, and equine facilities; turfgrass growers; golf courses; nurseries; floricultural operations; and public and private parks.

(2)        This extension does not apply to chemical distribution facilities, or commercial chemical application services.

(3)        This extension does not apply to chemical distribution facilities, or commercial chemical application services.

DHS Fact Sheet on the Ag Extension that Potentially Misinterprets the Extension.

Although the Ag Extension appears straightforward, agricultural businesses that utilize COIs may receive inquiries about how the COI’s are being utilized. This is because of a lack of understanding by DHS staff as to how COI’s are used in agricultural operations, and a DHS Fact Sheet which purports to exclude storage from the extension.

In November 2017, DHS issued a “Fact Sheet” on the Ag Extension. The Fact Sheet purports to identify situations when the Ag Extension does not apply. It provides:

“When the   Extension Does Not Apply.

The extension does not apply to agricultural production facilities that use a COI at or above the applicable STQ for purposes other than those listed above. For example…● If an agricultural facility stores and/or distributes a COI…...

These facilities must submit a Top-Screen within 60 days of coming into possession of a COI.”

The intention of DHS is logical, they want to know what security measures are in place at an agricultural facility that possesses a COI. However, you maybe contacted because DHS’ Fact Sheet is overbroad with regard to storage of chemicals, and in addition it may not be obvious that the chemicals at issue are being used to grow crops, as staff are likely not be as familiar with agricultural operations as they are with industrial operations.

Notwithstanding the language in the Fact Sheet, the Ag Extension, by its terms, applies to “farms…; ranches…”  Moreover, it appears the intent of the letter was only to exclude “chemical distribution facilities, or commercial chemical application services” from the Ag Extension and to not exclude the Ag Extension to locations used by farming operations as part of their crop production activities – see the Ag Extensions reference in (1)(a) “in preparation for the treatment of crops…”.

Further, although the language “store” is not used in the Ag Extension, the word “possess” is used frequently (see, i.e., section (1)”…will not be required for any facility that is required to submit a Top- Screen solely because it possesses any Chemical of Interest...”) and certainly implies that “storage” at least for an interim basis, is included.

Additionally, in reviewing whether storage or possession is actually allowed under the Ag Extension letter, it is useful to compare the Ag Extension letter, which identifies operations subject to the letter as CFAT facilities, to the actual CFATs regulations.  The definition of a facility under the regulations also contains the language “possess.”

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.

            6 CFR Chapter I, Part 27.

As such, the Fact Sheets’ use of “store” is overbroad if it is applied to facilities that hold a COI as part of crop production activities– the exception would swallow the exemption, and your farm should not be required to provide a “Top-Screen” for the COI.

What to do When You Receive an Inquiry?

If you receive an inquiry from DHS, you should contact counsel to discuss how to best respond. Counsel can assist you in communications with the agency, analyze whether any extensions apply to your use of a COI, and help you comply with the CFATS program if necessary.

CAFO and Farms May Have to Comply with Additional Emissions Reporting Requirements

By Lee N. Smith/Craig A. Tristao

Under the Waterkeeper case the D.C. Circuit held that a 2008 rulemaking that exempted certain CAFO’s and farms from emission reporting requirements under certain statutes was improper. Large animal farms and dairies will now be required to report more air pollution from animal waste after the D.C. Circuit April 11 vacated the Environmental Protection Agency rule (Waterkeeper Alliance v. EPA , 2017 BL 117866, D.C. Cir., No. 09-1017, 4/11/17 ).

There are several reporting requirements for the release of certain defined hazardous chemicals, including ammonia.  The two statutes at issue are overlapping. For instance if there were a release from a covered  facility of ammonia, there would have to be reporting under both statutes.

 On December 18, 2008, the US EPA published a final rule that clarified which livestock facilities must report air emissions from their facilities. The two regulations covered by that publication include the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and EPCRA (Emergency Planning and Community Right to Know Act).

Animal agriculture was granted an administrative exemption from reporting air emissions that normally occur from raising farm animals under CERCLA. EPCRA Reporting exemption applied to dairies and Farms that are not large Concentrated Animal Feeding Operations (CAFOs) according to NPDES permitting rules. Without this exemption, much more wide-spread and rigorous reporting would be required.

Passage of the 2008 final rule provided a legal exemption that applies to most livestock operations and clarifies where the exemption does not apply – essentially for large CAFOs under EPCRA. EPCRA requires that, whenever there is a known release of a hazardous substance, the person in charge of a facility must notify state and local emergency responders.

The decision could affect the 15,500 CAFOs operating in the U.S., according to numbers from the EPA. A CAFO under the NPDES definition is a farm that confines more than a certain number of animals—for example, over 1,000 cattle, 2,500 hogs, or 125,000 chickens.

The EPA based its exemption on its view that reports of air releases from CAFOs and farms was unnecessary because a federal response to the releases is generally impractical and speculative. Environmental groups including the Waterkeeper Alliance challenged the rule as a violation of the Comprehensive Environmental Response, Compensation and Liability Act and the Emergency Planning and Community Right-to-Know Act.

Judge Williams, for the D.C. Circuit, found that the EPA did not have the statutory authority to grant the reporting exemptions under CERCLA and EPCRA. Although the EPA argued its exemptions were appropriate because CERCLA and EPCRA already contained other exemptions the Court held that it does not “give the agency carte blanche to ignore the statute whenever it decides the reporting requirements aren’t worth the trouble,”  

The court pointed to examples where people have been injured by animal waste air releases and measures farms can take to reduce injuries. “The record therefore suggests the potentiality of some real benefits” from reporting hazardous substance releases, the court concluded. Regulation of CAFO reporting is to be based upon ‘good faith emissions estimates’.Thus dairies and other farming operations that have emissions over the reporting thresholds must report under both CERCLA and EPCRA. A limited number of approaches for obtaining estimates are available. For most types of animal feeding operations, ammonia emissions are likely to trigger a reporting requirement, with reporting of hydrogen sulfide being much less likely.