[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]



 
                    H.R. 3197, SECURITY HANDLING OF
                            AMMONIUM NITRATE

=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON PREVENTION OF
                     NUCLEAR AND BIOLOGICAL ATTACK

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 14, 2005

                               __________

                           Serial No. 109-59

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
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                     Committee on Homeland Security



                   Peter T. King, New York, Chairman

Don Young, Alaska                    Bennie G. Thompson, Mississippi
Lamar S. Smith, Texas                Loretta Sanchez, California
Curt Weldon, Pennsylvania            Edward J. Markey, Massachusetts
Christopher Shays, Connecticut       Norman D. Dicks, Washington
John Linder, Georgia                 Jane Harman, California
Mark E. Souder, Indiana              Peter A. DeFazio, Oregon
Tom Davis, Virginia                  Nita M. Lowey, New York
Daniel E. Lungren, California        Eleanor Holmes Norton, District of 
Jim Gibbons, Nevada                  Columbia
Rob Simmons, Connecticut             Zoe Lofgren, California
Mike Rogers, Alabama                 Sheila Jackson-Lee, Texas
Stevan Pearce, New Mexico            Bill Pascrell, Jr., New Jersey
Katherine Harris, Florida            Donna M. Christensen, U.S. Virgin 
Bobby Jindal, Louisiana              Islands
Dave G. Reichert, Washington         Bob Etheridge, North Carolina
Michael McCaul, Texas                James R. Langevin, Rhode Island
Charlie Dent, Pennsylvania           Kendrick B. Meek, Florida
Ginny Brown-Waite, Florida

                                 ______

      SUBCOMMITTEE ON PREVENTION OF NUCLEAR AND BIOLOGICAL ATTACK

                     John Linder, Georgia, Chairman

Don Young, Alaska                    James R. Langevin, Rhode Island
Christopher Shays, Connecticut       EdwarD J. Markey, Massachusetts
Daniel E. Lungren, California        Norman D. Dicks, Washington
Jim Gibbons, Nevada                  Jane Harman, California
Rob Simmons, Connecticut             Eleanor Holmes Norton, District of 
Bobby Jindal, Louisiana              Columbia
Charlie Dent, Pennsylvania           Donna M. Christensen, U.S. Virgin 
Peter T. King, New York (Ex          Islands
Officio)                             Bennie G. Thompson, Mississippi 
                                     (Ex Officio)

                                  (II)
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               STATEMENTS

The Honorable John Linder, a Representative in Congress From the 
  State of Georgia, and Chairman, Subcommittee on Prevention of 
  Nuclear and Biological Attack..................................     1
The Honorable James R. Langevin, a Representative in Congress 
  From the State of Rhode Island, and Ranking Member, 
  Subcommittee on Prevention of Nuclear and Biological Attack....    13
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security..............................................    71
The Honorable Donna M. Christensen, a Delegate in Congress From 
  the Virgin Islands.............................................    70
The Honorable Charlie Dent, a Representative in Congress From the 
  State of Pennsylvania..........................................    69
The Honorable Eleanor Holmes Norton, a Delegate in Congress From 
  the District of Columbia.......................................    72
The Honorable Rob Simmons, a Representative in Congresss From the 
  State of Connecticut...........................................    70
The Honorable Curt Weldon, a Representative in Congress From the 
  State if Pennsylvania..........................................    38

                               Witnesses

Mr. Gary W. Black, President, Georgia Agribusiness Council, Inc.:
  Oral Statement.................................................    54
  Prepared Statement.............................................    56
Mr. James W. McMahon, Director, New York State Office of Homeland 
  Security:
  Oral Statement.................................................    51
  Prepared Statement.............................................    52
Mr. William Paul O'Neill, Jr., President, International Raw 
  Materials:
  Oral Statement.................................................    59
  Prepared Statement.............................................    61
Dr. Jimmie C. Oxley, Professor of Chemistry, University of Rhode 
  Island:
  Oral Statement.................................................    39
  Prepared Statement.............................................    40
Mr. Carl Wallace, Plant Manager, Terra Mississippi Nitrogen, 
  Inc.:
  Oral Statement.................................................    63
  Prepared Statement.............................................    65


      H.R. 3197, SECURITY HANDLING OF AMMONIUM NITRATE ACT OF 2005

                              ----------                              


                      Wednesday, December 14, 2005

             U.S. House of Representatives,
                    Committee on Homeland Security,
      Subcommittee on Prevention of Nuclear and Biological 
                                                    Attack,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 2237, Rayburn House Office Building, Hon. John Linder 
[chairman of the subcommittee] presiding.
    Present: Representatives Linder, Simmons, Dent, Weldon, 
Langevin, Norton, Christensen and Thompson (Ex Officio).
    Mr. Linder. The subcommittee will come to order.
    The Committee on Homeland Security Subcommittee on 
Prevention of Nuclear and Biological Attack is here today to 
hear testimony on H.R. 3197, the Secure Handling of Ammonium 
Nitrate Act of 2005.
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    Mr. Linder. I would like to thank and welcome our witnesses 
for appearing before the subcommittee today.
    On April 19th, 1995, the world looked in horror at the 
images of the Alfred P. Murrah Federal Building in Oklahoma 
City, which was destroyed when nearly 5,000 pounds of ammonium 
nitrate, mixed with motor fuel, was delivered in a rental truck 
and detonated in the building's parking lot. On that day, 167 
lives, including the lives of 19 children at the building's 
daycare facility, were lost in what was at the time the worst 
terrorist attack on American soil.
    The ammonium nitrate used in that attack is an inexpensive 
and easily accessible fertilizer used around the world and is 
very popular with farmers due to its high nitrogen content. In 
fact, 2.7 million tons of agricultural ammonium nitrate alone 
was traded internationally in 2001. It is also utilized as an 
explosive agent by miners looking to blast coal out of rock. 
Ammonium nitrate is also used, unfortunately, as a popular 
compound for terrorist bombings, including Oklahoma City, the 
1998 East African Embassy bombings, the November, 2003, 
bombings in Istanbul, Turkey, and was suspected in the October, 
2002, Bali bombing.
    Countries with histories of terrorism, including the 
Philippines, Colombia and Ireland, have banned the use of 
ammonium nitrate completely. A number of European Union 
countries have either banned or restricted its use. Turkey 
joined the EU in regulating sales of ammonium nitrate in 2004 
in the wake of ammonium nitrate bombings there.
    There appears to be no doubt as well in the minds of 
Australian officials in the wake of the Bali bombings and the 
bombing of the Australian embassy in Jakarta that if al-Qa'ida 
were able to acquire and deploy any weapon to cause mass 
devastation it would do so. Considering this, they have also 
agreed to place restrictions on ammonium nitrate fertilizers 
within Australian borders.
    Here at home, New York, New Jersey, Michigan, Oklahoma, 
South Carolina, California and Nevada have implemented their 
own regulations of ammonium nitrate.
    Ten years after Oklahoma City, however, the United States 
Government has done little to prevent the repeat of this 
horrific tragedy. It is still too easy to acquire ammonium 
nitrate for terrorist use in this country.
    Later today, the subcommittee will mark up H.R. 3197, the 
Secure Handling of Ammonium Nitrate Act of 2005, which 
authorizes the Secretary of Homeland Security to regulate the 
purchase of ammonium nitrate by registering sellers and buyers 
of this potentially dangerous material. This represent the 
first serious effort on the part of the Federal Government to 
prevent future attacks of this nature on the American people.
    I look forward to the testimony of our witnesses on the 
implications of this regulation, whether they agree that we 
should regulate ammonium nitrate fertilizer and whether this 
bill represents a positive step to our preventing future 
terrorist acts.
    I am hopeful that these and other questions will be 
answered as we review this important U.S. homeland security 
issue; and I yield to my friend from Rhode Island, the ranking 
member of the subcommittee, Mr. Langevin.
    Mr. Langevin. Thank you, Chairman Linder.
    I would like to take this opportunity to welcome our panel. 
I look forward to their input on the legislation that is before 
us today.
    In particular, I am pleased that Dr. Jimmie Oxley is among 
our distinguished witnesses this morning. Dr. Oxley is not only 
a world-renowned explosives expert but a very well regarded 
chemistry professor at the University of Rhode Island, an 
institution that I have the great privilege of representing in 
Congress. Welcome, Dr. Oxley.
    I have had the opportunity to visit Dr. Oxley in her lab to 
learn about the land mine detection technology research that 
she is undertaking through the URI forensic science 
partnership. Certainly she is an asset to URI, and I know that 
she is going to be a great asset to today's hearing as well.
    To many of us, the 1995 Oklahoma City bombing was our first 
introduction to the devastating impact ammonium nitrate can 
have in the hands of a terrorist. Since that time, fertilizer 
bombs have been used to deadly effect, in 2002, by the Islamic 
group linked to al-Qa'ida outside the nightclub in Bali, 
Indonesia, and in 2003 by an al-Qa'ida cell in Istanbul, 
Turkey.
    The risks that ammonium nitrate-based fertilizer, so 
critical to the agricultural operation of many of our Nation's 
farmers, will be used by a terrorist in an improvised explosive 
device must be confronted and reduced.
    A June, 2005, analysis conducted by Syracuse University's 
Institute for National Security and Counterterrorism makes 
clear why Federal leadership is so vital. The authors of this 
report, entitled Legal Controls on Explosive Materials, found 
that only four States--Nevada, Oklahoma, South Carolina, and 
New Jersey--had established security regulations for ammonium 
nitrate.
    Mr. Chairman, with your permission I would like to ask that 
we include that report in the record.
    Mr. Linder. Without objection.
    Mr. Langevin. Thank you.
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    Mr. Langevin. Since the time of the report, New York, 
California, and Michigan, have passed ammonium nitrate laws of 
their own.
    I look forward to hearing from Mr. McMahon, New York's 
homeland security director, how the rollout of New York's law 
is going; and I understand that it took effect on November 
30th.
    While I commend these States for taking the initiative, I 
cannot help but think that the job of securing ammonium nitrate 
should be a Federal concern. Specifically, I believe it could 
be a Department of Homeland Security concern. It is my 
understanding that the legislation that will soon be considered 
in the committee, H.R. 3197, puts the Department in charge of 
this effort to ensure that ammonium nitrate is still available 
to farmers, even as we try to keep it away from terrorists. I 
think that is important.
    I commend Ranking Member Thompson as well as Mr. Weldon for 
authoring this legislation. I certainly look forward to hearing 
the testimony of our witnesses.
    Thank you, Mr. Chairman. I yield back.
    Mr. Linder. Thank you.
    The Chair will now recognize the gentleman from 
Pennsylvania for an introduction.
    Mr. Weldon. I thank the distinguished chairman and ranking 
member for this hearing and mark-up.
    It gives me great pleasure to introduce a constituent of 
mine who actually brought this issue in legislative form to me. 
It is rare that an industry group brings an issue to Congress 
for regulation. In this case, it was an industry who did 
exactly that.
    I have a special interest in this issue, because a year 
after the Murrah Building bombing I chaired a hearing where the 
lead witness was Chief Morris. Chief morris is the fire chief 
of Oklahoma City and a personal friend of mine, and Chief 
Morris give us the lessons that he learned and the need for us 
to support people like the Oklahoma City Fire Department to 
respond to disasters like the one that occurred with the Murrah 
Building.
    So I was very happy when Tip O'Neill came to me and said, 
Curt, we have got an area that the industry will support, an 
issue that needs to be dealt with at the Federal level. Tip is 
a personal friend of mine. He is an international fertilizer 
business leader, a member of the Fertilizer Institute. He is a 
Wharton School grad from the University of Pennsylvania and is 
also a graduate and was an instructor for the U.S. Army 
Artillery Officers Candidate School, and he served as executive 
officer of an artillery battery in Vietnam.
    Tip is a distinguished American, in my opinion hero and 
role model. And so, Tip, I want to thank you personally and let 
you know that we are pleased that you brought this to our 
attention; and I know with John's leadership and Bennie's 
support and Jim's support, we will move this legislation 
quickly in the Congress.
    Thank you.
    Mr. Linder. Thank you.
    Our guests today are Dr. Jimmie Oxley, a professor of 
Chemistry at the University of Rhode Island and a recognized 
expert in explosives. She has worked with the FBI simulating 
the 1993 actions. I want to thank Professor Oxley.
    Mr. James McMahon is the Director of the New York State 
Office of Homeland Security, which was created after the 
attacks of September 11th and charged with coordinating and 
enhancing anti-terrorist efforts.
    Gary Black is President of Georgia Agribusiness Council, 
the State's trade association for the entire food and fiber 
industry. He also serves as the Chairman of the Economic 
Development Committee on the Governor's Rural Development 
Council. He is also a friend of too many years and hopefully 
will be the next commissioner of agriculture in Georgia a year 
from today.
    Mr. William O'Neill, Tip O'Neill, a name we well know, is a 
member of the Agriculture Retailers Association Board of 
Directors and President of International Raw Materials Limited 
in Pennsylvania.
    Carl Wallace is a Plant Manager of Terra Mississippi 
Nitrogen, Inc. He is testifying on behalf of The Fertilizer 
Institute. Thank you, Mr. Wallace.
    Mr. Linder. Dr. Oxley-- Ms. Oxley, please proceed.

                STATEMENT OF DR. JIMMIE C. OXLEY

    Ms. Oxley. Thank you for that kind introduction and for the 
opportunity to speak to you today. I am a Professor of 
Chemistry at the University of Rhode Island, and I have been 
working with explosives for almost 20 years, starting with 
ammonium nitrate, and that is one of the few that I have been 
able to study through detonations on the ton scale.
    Let me make a few remarks about explosives. One of the 
hardest problems I have is looking at a chemical and predicting 
whether it will be explosive or not. The requirements to be an 
explosive is that the material must release gas and heat very 
rapidly when initiated. It is that ``very rapidly'' that is 
hard to predict.
    DOT has regulations that say if a material has certain 
groups like NO2 in it and releases a certain amount of heat, 
then you must go through Series 1 testing. Series 1 testing is 
now codified in a U.N. book on how to do the testing. But 
because you cannot make tons of a new material safely, you test 
on a couple of pounds scale and therefore many materials pass 
on the pound scale that would not pass on the ton scale. That 
is simply a fact. The ammonium nitrate test is not a 
nonexplosive.
    Now in terms of this legislation, I think we need to 
consider availability. Terrorists use the material that is 
available. In the U.S. and in Ireland, ammonium nitrate is 
available. Many other parts of the world, for example, Israel, 
where solid ammonium nitrate is not allowed for sale, the 
terrorists use urea nitrate; and indeed in World Trade 1, in 
1993, you saw urea nitrate used. You saw the millennium bomber 
in 1999 attempt to use urea nitrate bombs. Shining Path in 
Peru, urea nitrate. Bali bomb, sodium chlorate. It depends on 
the availability in the region.
    So one of my recommendations to you is if you stop and 
restrict ammonium nitrate, think ahead to where the terrorists 
and criminals are going to be going next. By thinking ahead to 
that, I mean, think about materials that are available in large 
quantities. We are not worried about small bombs. Indeed, 
materials like ammonium nitrate for fuel oil or ammonium 
nitrate sugar, which is what the Irish Republican Army was 
using, are so insensitive that you really cannot make small 
bombs effectively with them.
    People do not make briefcase bombs with ANFO. They use 
military explosives for that. They make truck or car bombs. So 
you are interested in ton scale.
    I suggest that on the legislation you have a lower quantity 
limit simply to facilitate seeing the data of what you are 
really interested in, which is where thousands of pounds are 
going, or hundreds of pounds. But certainly you are not 
interested in the pound scale on this material. It would take 
an incredible effort to make any kind of effective bomb.
    The British in their legislation have written one ton. 
Their legislation governs one ton or more for straight ammonium 
nitrate and for the 28 percent of regulated materials, 50 ton. 
So that is how they are handling quantity.
    And while I mention that, I should suggest that consulting 
the international arena that is also dealing with this project 
would be worthwhile. I have been working with the British on 
their inerting project since 1995.
    In mentioning the problem with testing, I am certainly not 
suggesting that we have to test all materials on the one-ton 
scale, but what we need to do is to find some methodology that 
allows us to tell on the small scale what is happening on the 
large scale.
    One of the stories I like to tell comes from World War II 
where a famous chemist said, give me enough peanut butter, and 
I will blow up the world. And I like to add to that, but Skippy 
never funded that research. His point was, size matters. And 
that is important.
    The last comment I understand has been fixed in markup, is 
to make sure that your regulation is exempting explosive grade 
ammonium nitrate, because that is already more strictly 
regulated at the present time. Thank you.
    Mr. Linder. Thank you very much, Dr. Oxley.
    [The statement of Ms. Oxley follows:]

               Prepared Statement of Dr. Jimmie C. Oxley

    ABOUT THE AUTHOR
    Dr. Oxley is Professor of Chemistry at the University of Rhode 
Island. Her field of research is the study of explosives and other 
energetic materials. She has studied the behavior of most explosives, 
but ammonium nitrate (AN) she has examined from the milligram to the 
ton scale. Dr. Oxley has worked with various military laboratories and 
law enforcement agencies in the U.S. Over the last decade, she has 
worked with the British Forensic Explosive Laboratory (dstl) \1\ on 
projects ranging from attempts to inert ammonium nitrate to those 
examining ways to enhance its explosive potential.
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    \1\ dstl is a British government at Fort Halsed--Defense Science 
and Technology Laboratory.

    GENERAL COMMENTS ON CHEMICAL EXPLOSIVITY
    For a chemical to be an explosive it must undergo a rapid, self-
contained, chemical reaction that releases energy and heat. Most 
explosives achieve this by oxidation. Oxidation produces heat and gas, 
generally carbon dioxide or monoxide and water. The detonation gases do 
the work of an explosive. Explosive power comes from the rapidity of 
the reaction that supports the detonation wave. Although burning is 
also oxidation resulting in heat and gas, the reaction is too slow to 
create a detonation wave. Explosives can sustain rapid oxidation 
because they contain their own oxygen--either as part of the molecule, 
as in military explosives (TNT, RDX, PETN) \2\ or in intimate mixtures 
of oxidizers and fuels, as in composite explosives such as ammonium 
nitrate (AN) with fuel oil (FO).
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    \2\ TNT 2,4,6-trinitrotoluene; AN ammonium nitrate; PETN 
pentaerythritol tetranitrate; HMX octahydro-1,3,5,7,-tetranitro-
1,3,4,5-tetrazocine; RDX hexahydro-1,3,5-trinitro-s-triazine; HMTD 
hexamethylene triperoxide diamine; TATP triacetone triperoxide. RDX is 
the active ingredient in C4; PETN is the active ingredient in sheet 
explosive and most detonating cord.
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    The number of potential oxidizers for use in composite explosives 
is large, but practical considerations, i.e. availability, limit the 
potential threat. The number of potential fuels, however, is nearly 
limitless--combustible non-explosives, e.g. rosin, sulfur, charcoal, 
coal, flour, sugar, oil, paraffin as well as fuels that are explosive 
in their own right, e,g, nitromethane and hydrazine. To date terrorists 
have used fuel oil (ANFO) or icing sugar (AN/S) in combination with AN.
    While chemical make up is important, the configuration of the 
explosive device is also critical. Rapid energy release is necessary to 
``support'' the detonation front, much like a piston; therefore, the 
configuration of the chemical must be such that the wave is not 
quenched by dissipation at the edges of the device.\3\ The concept of 
``critical diameter'' addresses the limit where the explosive charge is 
too small to support a detonation wave. Thus, 200g of a military 
explosive in a cylindrical configuration is probably detonable; but the 
same amount of that material sprinkled across a table top is probably 
not.
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    \3\ A shock wave traveling through an explosive charge will be 
reflected at the edges of the charge where it hits a high-density 
region (much like water hitting the wall of a swimming pool). The 
reflected waves (rarefaction waves) degrade the shock wave, so that at 
such edges the wave is slowed and an overall curvature of the wave 
develops. If the diameter of the explosive is narrow, the rarefaction 
waves may be sufficient to kill the shock wave. The minimum diameter at 
which an explosive can support detonation is termed the ``critical 
diameter.''
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    Most military and composite explosives require a detonator, made of 
highly sensitive explosive, to initiate a detonation. In addition, 
composite explosives, being particularly insensitive, often require a 
booster and a detonator to initiate.\4\ In the past, these requirements 
restricted who could make explosive devices to those who could acquire 
detonators and boosters by theft or good black-market contacts. 
Nowadays, most terrorists and some teenagers are aware that the solid 
peroxide explosives can be readily used in this capacity.
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    \4\ To detonate an explosive charge, a detonator containing a 
``primary'' explosive, sensitive to mild stimulation (impact, friction, 
heat), is used to create a shock wave. This shock wave is directed into 
the ``secondary'' explosive, the main charge. In military devices the 
secondary explosive (e.g. TNT, RDX, HMX, PETN or formulations thereof) 
is sufficiently insensitive that it can be initiated only by such a 
shock wave. Most AN formulations are even more insensitive than 
military explosives. They require an amplification of the shock wave 
from the detonator; thus, a booster, a secondary explosive, is placed 
between the detonator and the AN charge.

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    CONCLUSIONS AND RECOMMENDATIONS

    1. Availability of a material is a major factor in its use by 
terrorists. Creating a bomb from military explosives requires theft of 
the explosive; black-market connections to purchase the explosive, or a 
skilled synthetic chemist and lab facility. Composite explosives 
require as little as stirring the oxidizer and fuel together. Either 
type of bomb requires acquisition of detonators, and composite 
explosives usually require boosters, as well. The availability of all 
these factors dictates the nature of the explosive device.
    Fuels are ubiquitous, and oxidizers are widely available, having 
major roles in purification and bleaching. It is likely that a number 
of oxidizers, on a sufficiently large-scale, could be formulated into 
composite explosives. The terrorist choice is, to a large degree, 
governed by regional availability.
    Terrorist use of ammonium nitrate (AN) began in the bombing 
campaign of the Provisional Irish Republican Army (PIRA) (1969 to 
1994). During that period there were 14,000 bombing incidents, most 
involving commercial explosives or sodium chlorate/nitrobenzene. At the 
peak of the campaign in the early 1970's, the British government issued 
a ban on the sale of chlorate, nitrobenzene, and pure AN in Northern 
Ireland. Nevertheless, large AN fertilizer bombs were used in the City 
of London. Approximately 1000 pounds were used at St Mary le Axe (April 
1992) and about 3000 pound at Bishops Gate (April 1993). In other 
countries, AN has been used less frequently in terrorist bombings; a 
notable exception were the African embassy bombings (Aug. 7, 1998). In 
the United States (U.S.) about 18 billion pounds of AN are produced 
annually. Of that, about 5 billion pounds are made and used for 
commercial explosives; the rest goes to the fertilizer market. Because 
the preparation of AN explosives is straightforward and well-known and 
because the bombing of the Murrah Federal building (Oklahoma City, 
April 1995) was devastating, the U.S. followed the British in funding 
research attempting to desensitize AN. No outstanding successes have 
been reported from that effort though, at a modest level, research 
continues.
    In Israel, where sales of solid AN are prohibited, rather than 
evaporate the water from commercially available AN solution, terrorists 
have chosen to use urea nitrate. For a number of years, urea nitrate 
has been a favorite of Arabic terrorists. It was used in the bombing of 
the World Trade Center (Feb. 1993). Urea intended to be made into urea 
nitrate was brought across the U.S.-Canadian border by the would-be 
millennium bomber Ahmed Ressam. The Shining Path used urea nitrate so 
frequently in bombings that in 1992 sales of urea were banned in Peru.
    Potassium chlorate, like AN, is one of the few oxidizers readily 
available in bulk. In the U.S. 1.2 billion pounds of chlorate salt are 
used annually by the pulp and paper industry and agriculture. Before AN 
became the oxidizer of choice in large charges, chlorate was used. 
Replaced by AN for large devices, it continued to be recommended in the 
``do-it-yourself'' literature for use in small, anti-personnel devices. 
The Bali bombing (Oct. 12, 2002) once again demonstrated its explosive 
potential on a large-scale.
    Dozens of peroxide compounds are used as free-radical initiators by 
the polymer industry or in bleaching processes. Although a degree of 
hazard is associated with the handling of most peroxides, TATP and HMTD 
are unusual in that their three peroxide functionalities give them 
explosive potential. TATP has about 88%, and HMTD, about 60% of TNT 
blast strength.\5\ The unusual danger in these peroxides is not their 
blast strength; it is their ease of initiation (due to the peroxide 
linkage) and the ease with which terrorists have acquired and used the 
materials for their synthesis. Richard Reid, the would-be shoe bomber, 
intended to use TATP to initiate a PETN charge (Dec. 2001). HMTD was 
prepared and carried into the U.S. by Ahmed Ressam with the intention 
of using it to initiate urea nitrate bombs (Dec. 1999). Peroxide 
explosives have also been used as the main charge (e.g. the London 
bombings of July 2005 and countless suicide vests and car bombs in 
Israel). These solid peroxides require a special degree of skill to 
synthesize successfully and safely. In contrast, concentrated hydrogen 
peroxide can be used without synthesis. The aborted bombing in Karachi 
(Mar. 15, 2004) suggest that terrorists are well aware of its 
potential.
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    \5\ ``TNT equivalence'' is a rough method of comparing explosive 
power. Often, it is obtained by comparing the blast pressure of an 
explosive charge to that of the same amount of TNT with all other 
factors being held equal.
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    Recommendation: There should be a worldwide survey of availability 
of oxidizers, and methods of tracking purchase and transport of large 
quantities of oxidizers should be developed. Such information would 
highlight unusual patterns of activity and aid in predicting and 
preventing incidents.

    2. Only large-quantities of oxidizer need be considered a threat.
    Because AN formulations tend to be insensitive a fair amount is 
required to support detonation.\3\ Briefcase bombs of ANFO have not 
been used, rather AN is formulated into effective car or truck bombs. 
To make an AN-based device, the formulator must have large quantities 
of AN and also means to initiate and boost it. It is wasted effort and 
masks the important data to track every small sale of AN. The British 
in their various regulations \6\ have addressed the quantity issue in 
terms of ``sufficient material to have an explosive effect'' or in 
quantities greater than ``1 tonne.''
---------------------------------------------------------------------------
    \6\ See documents at Internet site http://www.hse.gov.uk/
explosives/ammonium.
---------------------------------------------------------------------------
    Recommendation: There should be a lower limit on the amount of 
oxidizer of concern in this legislation. Not only does it require 
Herculean effort to detonate AN on a small-scale, but in the U.S. the 
widespread availability of smokeless and black powders makes them more 
likely candidates for small bomb construction.

    3. Tracking purchasers of bulk oxidizer is a modest step toward 
restricting illegitimate use. Countermeasures are obvious. Credit card 
companies already have a start on the problem of fraudulent use.
    Recommendation: Require credit card purchase for large quantities 
(e.g. 1 ton) of oxidizer. This makes use of some of the built-in checks 
and information found in credit cards.

    4. International collaboration should be sought.
    Recommendation: The British have faced a serious AN threat for over 
two decades. Open dialog between all levels working on this problem.

    5. Consider other potential threat materials. Once one material 
becomes harder to obtain, others may be substituted.
    Recommendation: Consider the explosive potential of large 
quantities of oxidizers and other energetic, non-explosives. Develop 
better methods to indicate potential explosivity of large quantities. 
The Department of Transportation (DOT) Test Series 1 is used to 
classify chemicals as explosive or non-explosive for purposes of 
transportation.\7\ However, the DOT test series uses no more than 2 
pounds of the candidate material. Tested on that scale, AN and other 
materials pass as non-explosives. Tested on a larger scale, some 
detonate. In general, materials which require ton-quantities to 
detonate do so at low (30-40%) TNT equivalencies.\5\ Nevertheless, many 
such chemicals with one third TNT equivalence of 3000 tons is 1 kiloton 
TNT equivalence.
---------------------------------------------------------------------------
    \7\ ``Recommendation on the Transport of Dangerous Goods: Manual of 
Tests and Criteria,'' 3rd ed. United Nations, N.Y. 1999.

    6. Exempt explosive-grade AN from this legislation. Some grades of 
AN are classified as explosives under DOT regulations because of their 
specific chemical and physical properties.
    Recommendation: The bill needs a clause to specify that any grades 
of AN that are classified as explosives under DOT regulations will 
continue to be controlled under the existing and stricter explosives 
regulations rather than this new law aimed at control of fertilizer-
grade AN.Folio
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    Mr. Linder. Mr. McMahon.

STATEMENT OF JAMES W. McMAHON, DIRECTOR, NEW YORK STATE OFFICE 
                      OF HOMELAND SECURITY

    Mr. McMahon. Thank you, Chairman Linder, and good morning, 
Ranking Member Langevin, members of the subcommittee. It is a 
pleasure for me to be able to speak to you today about what we 
have recently enacted in New York dealing with ammonium 
nitrate.
    As the chairman said, we are all well aware of the use by 
terrorists, both domestic and otherwise. Certainly Oklahoma 
City, that we are all aware of. But it goes back longer than 
that. I think my first introduction to it was when I was a 
young trooper in New York State. On August 24th, 1970, we 
remember seeing the pictures and the reports of a van filled 
with ammonium nitrate and fuel oil that was detonated next to a 
building on the University of Wisconsin-Madison campus that 
killed a physics researcher and caused massive damage to that 
facility.
    Then since then and then certainly now, subsequent to 9/11, 
where people are much more interested, we have seen many 
instances around the world in different countries, including 
Great Britain and France and other areas. We always know about 
the attacks and the damage caused, but there has been many 
foiled attacks, most recently earlier in the year in Britain, 
Great Britain. They foiled an attack with eight terrorists who 
had 1,320 pounds of ammonium nitrate stored in a self-storage 
warehouse in West London.
    Most recently, with Joel Henry Hinrichs, III, the Oklahoma 
University student who killed himself this year outside a 
stadium with 84,000 spectators in it, as publicly reported, he 
had unsuccessfully attempted to purchase ammonium nitrate in 
the days preceding the incident. So we can only think what he 
might have done with that.
    Ammonium nitrate, as has been said, is one of the most 
common commercially available ingredients traditionally 
exploited by terrorist makers. Unfortunately, instructions for 
producing ammonium nitrate explosive mixtures have been 
incorporated in the training manuals and produced both 
domestically and internationally by terrorists and widely 
disseminated over the Internet.
    In the aftermath of 9/11, New York's Governor, George 
Pataki, has made prevention of terrorism New York's number one 
priority. Our State legislature has enacted some of the most 
stringent antiterrorism laws in the Nation and has statutorily 
required the identification and reduction of vulnerabilities to 
terror attacks in our critical infrastructure, with specific 
emphasis in sectors like energy, toxic chemical sites and 
general aviation.
    This past year, we struck a balance between commerce and 
security to require that ammonium nitrate is properly secured 
by retailers in our State and buyers of this material are 
properly identified, yet at the same time ensure the continued 
proper commercial trade in fertilizer products.
    On August 28th, 2005, Governor Pataki signed into law 
certain measure that are now required surrounding the sale of 
ammonium nitrate fertilizer products. Under this law, effective 
only weeks ago, on November 28th, and accompanying regulations 
issued by our State Department of Agriculture and Markets, the 
latter promulgated in consultation with New York's Office of 
Homeland Security, retailers of ammonium nitrate fertilizer are 
now required to do five basic but important things.
    First, they must register with the Agriculture and Markets 
Department and publicly display their registration certificate. 
Second, ammonium nitrate retailers must comply with certain 
baseline security requirements that include providing 
reasonable protection against vandalism, theft or unauthorized 
access, ensuring that storage facilities are inspected daily 
for signs of attempted entry, vandalism and structural 
integrity and that they are fenced or otherwise enclosed and 
locked when unattended. In addition, retailers must also employ 
proper inventory controls for this sensitive material.
    Third, retailers must obtain required forms of 
governmental-issued picture identification from all purchasers.
    Fourth, retailers must record the name, address, and 
telephone number of the purchaser, along with the intended use 
and quantities of ammonium nitrate purchased.
    And, fifth, retailers must also maintain this retail sale 
information for a 2-year period and make it accessible on 
demand to the Office of Homeland Security and to the Department 
of Agriculture and Markets.
    A copy of the law, regulations and associated forms has 
been appended to my written testimony.
    We did not do this in a vacuum. With the support of the New 
York State Office of Homeland Security, the New York State 
Department of Agriculture and Markets conferred with the 
industry and their counterparts in other States to identify 
ammonium nitrate materials of concern and to ascertain what 
successful practices have been put in place.
    Input was also solicited by the Office of Homeland Security 
from a variety of law enforcement and explosives-related 
organizations in the United States and abroad, including the 
Federal Bureau of Investigation, the Bureau of Alcohol, 
Tobacco, Firearms and Explosives, the New York City Police 
Department, the Institute of Makers of Explosives, and members 
of the International Association of Bomb Technicians and 
Investigators from the United States, Canada and overseas. We 
received positive feedback on the measures we were planning and 
implementing.
    We believe these new common-sense measures are a valuable 
step to not only assist homeland security at home and in our 
communities but to prevent criminal use of ammonium nitrate 
fertilizer.
    I hope you will find the measures New York State has taken 
helpful in your deliberations in the mark-up session following 
this hearing which will consider H.R. 3197.
    Mr. Linder. Thank you.
    [The statement of Mr. McMahon follows:]

                 Prepared Statement of James W. McMahon

INTRODUCTION
    Good morning Chairman Linder and members of the Subcommittee on 
Nuclear and Biological Attack. My name is James McMahon and I am the 
Director of the New York State Office of Homeland Security. I applaud 
and thank you and other members of Congress for addressing this 
critical issue.

Use of Ammonium Nitrate As A Weapon
    The use of ammonium nitrate as a weapon by terrorists, 
unfortunately, is not new.
    In the early morning hours of August 24, 1970, a van filled with 
ammonium nitrate and fuel oil was detonated next to a building on the 
University of Wisconsin-Madison campus housing the Army Mathematics 
Research Center, killing a physics researcher and causing massive 
damage to the facility.
    We all know that on April 19, 1995, Timothy McVeigh detonated a 
Ryder truck containing a 4800 pound bomb of consisting of ammonium 
nitrate fertilizer, fuel oil and nitro-methane, in front of the Alfred 
P. Murrah Federal Building in Oklahoma City, killing 168 American men, 
women, and children.
    Internationally, the picture is just as troublesome.
    In October 2000, authorities in Singapore foiled an al-Qa'ida plan 
to drive trucks each loaded with a ton of ammonium nitrate, purchased 
by al-Qa'ida operatives through a Kuala Lumpur clinical pathology 
company, into the US, Australian, British and Israeli embassies in 
Singapore. On March 30, 2004, British anti-terrorism police arrested 
eight men suspected of planning a terrorist attack and confiscated 
1,320 pounds of ammonium nitrate from a self-storage warehouse in West 
London. For decades, the United Kingdom has experienced numerous high 
consequence Provisional Irish Republican Army (PIRA) bombings involving 
the conversion of ammonium nitrate fertilizer into deadly and damaging 
high explosives. Notable bombings include attacks at the Baltic 
Exchange, Bishopsgate, Canary Wharf and Omagh.
    Most recently, Joel Henry Hinrichs III, an Oklahoma University 
student, was killed in October of this year when an explosive device he 
built detonated as he sat on a bench 100 yards from a stadium filled 
more than 84,000 spectators. Of particular interest is the fact that 
the investigation into his apparent suicide shows Hinrichs had 
unsuccessfully attempted to purchase ammonium nitrate in the days 
preceding the incident. If he had been successful there is no telling 
what devastation he may have caused.
    Ammonium nitrate is, of course, one of the most common, 
commercially available ingredients traditionally exploited by terrorist 
bomb makers throughout the years and continuing in the new millennium. 
It can be mixed with common diesel fuel to create an extremely potent 
and deadly improvised explosive mixture. Instructions for producing 
ammonium nitrate explosive mixtures have been incorporated into 
training manuals produced by both domestic and international terrorists 
and widely disseminated over the Internet.
    There is considerable and heightened concern these prior attacks 
and plots will serve to inspire acutely isolated and unbalanced ``lone 
wolves'' to utilize relatively easy to get ammonium nitrate to carry 
out highly destructive attacks with virtually no indication, prior 
warning or affiliation to known terrorist organizations.

New York State Ammonium Nitrate Legislation
    In the aftermath of September 11th, Governor Pataki has made 
prevention of terrorism New York's number one priority. Our State 
Legislature has enacted some of the most stringent anti-terrorism laws 
in the nation and has statutorily required the identification and 
reduction of vulnerabilities to terror attack in our critical 
infrastructure with a specific emphasis in sectors like energy, toxic 
chemicals sites and general aviation security. This past year we struck 
a delicate balance between commerce and security to require that 
ammonium nitrate is properly secured by retailers in our state and 
buyers of this material are properly identified, yet at the same time 
ensure the continued proper commercial trade in fertilizer products.
    On August 28, 2005, Governor Pataki signed into law certain 
measures that are now required surrounding the sale of ammonium nitrate 
fertilizer products. These include the registration of ammonium nitrate 
fertilizer retailers, a requirement that certain records be created and 
maintained of all such retail sales, along with specific baseline 
security standards for ammonium nitrate retailers to safeguard this 
product from misuse.
    Under this law, effective only weeks ago on November 28th, and 
accompanying regulations issued by the State Department of Agriculture 
and Markets, the latter promulgated in consultation with New York's 
Office of Homeland Security, retailers of ammonium nitrate fertilizer 
are now required to do five basic but vitally important things:

         First, they must register with the Agriculture and 
        Markets Department and publicly display their registration 
        certificate.
         Second, ammonium nitrate retailers must comply with 
        certain baseline security requirements that include providing 
        reasonable protection against vandalism, theft or unauthorized 
        access, ensuring that storage facilities are inspected daily 
        for signs of attempted entry, vandalism and structural 
        integrity and that they are fenced or otherwise enclosed and 
        locked when unattended. In addition, retailers must also employ 
        proper inventory controls for this sensitive material.
         Third, retailers must obtain required forms of 
        governmental-issued picture identification from all purchasers.
         Fourth, retailers must record the name, address and 
        telephone number of the purchaser, along with the intended use 
        and quantities of ammonium nitrate purchased; and
         Fifth, retailers must also maintain this retail sale 
        information for a two-year period and make it accessible, on 
        demand to the Office of Homeland Security and Department of 
        Agriculture and Markets.
    A copy of the law, regulations and associated forms has been 
appended to my written testimony as previously submitted for your 
review.
    In the past, the ability to trace purchases of ammonium nitrate was 
a game of chance--now we have established a firm methodology for data 
collection and enabled an ability to develop patterns and thus 
``connect the dots.'' This system of verifying and recording identities 
and amounts of ammonium nitrate purchases will serve as an essential 
investigatory tool that did not exist before this law was signed.
    We did not do this in a vacuum.
    We used the pre-existing state statutory framework that already 
required the registration of ammonium nitrate wholesale distributors in 
New York with the state Department of Agriculture and Markets to 
enhance security with this new legislation at the point of obvious need 
and greatest potential exposure--where ammonium nitrate is sold on the 
open retail market.
    With the support of the New York State Office of Homeland Security, 
the New York State Department of Agriculture and Markets conferred with 
the industry and their counterparts in other states to identify 
ammonium nitrate materials of concern and to ascertain what successful 
practices have been put into place. Input was also solicited from a 
variety of law enforcement and explosives-related organizations in the 
United States and abroad, including the Federal Bureau of 
Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, 
the New York City Police Department, the Institute of Makers of 
Explosives (IME) and members of the International Association of Bomb 
Technicians and Investigators (IABTI) from the United States, Canada 
and overseas. We received positive feedback on the measures we were 
planning and implementing.
    We believe these new common-sense measures are a valuable first 
step to not only assist homeland security at home and in our 
communities to prevent the criminal use of ammonium nitrate fertilizer, 
but also in encouraging the implementation of best practices by the 
industry to more effectively deter the potential misuse of ammonium 
nitrate fertilizer and thus make us all more secure.

Conclusion
    I hope you will find the measures New York State has taken helpful 
in your deliberations in the markup session following this hearing, 
which will consider H.R. 3197, the Secure Handling of Ammonium Nitrate 
Act of 2005. I do however, leave you with this final thought--while New 
York State has recognized and begun to address the potential misuse of 
ammonium nitrate fertilizer--it is essential to keep in mind that 
evildoers, of course, do not recognize borders. National rules and 
standards across the board in all 50 states as a matter of federal law 
must be set in order to truly make this effort successful.
    Thank you again.

    Mr. Linder. Mr. Black.

  STATEMENT OF GARY W. BLACK PRESIDENT, GEORGIA AGRIBUSINESS 
                         COUNCIL, INC.

    Mr. Black. Good morning.
    Mr. Chairman, members of the subcommittee, I am Gary Black. 
I am President of the Georgia Agribusiness Council, located in 
Commerce, Georgia. I appreciate the opportunity to testify 
before your subcommittee this morning on the House Homeland 
Security Committee, Subcommittee on Prevention of Nuclear and 
Biological Attacks, regarding H.R. 3197, the Secure Handling of 
Ammonium Nitrate Act of 2005.
    The Georgia Agribusiness Council is a chamber-like 
organization with a 40-year history of promoting sound policy 
for the breadth of Georgia's agricultural industry.
    Mr. Chairman and members, today I find myself in a rare and 
unenviable policy dilemma. Mr. Chairman, as you know, I have 
met with you and your staff dozens of times over the course of 
our careers as a spokesman for Georgia farmers and food 
producers and rural business. Many of our meetings have focused 
on how we can work together to relieve Georgia farmers and 
agribusinesses of overreaching Federal regulations and the 
unnecessary bureaucracy and burdensome paperwork that usually 
follows it.
    The last thing that Georgia farmers need is another 
regulation. The last thing Georgia livestock and food producers 
need is a more burdensome bureaucracy and paperwork. However, 
today I am here to state my support for the basic tenets of 
H.R. 3197. It is obvious that regulation of this vital 
agricultural input is on the horizon. Further, I believe the 
best way to institute the most amicable solution to regulatory 
challenges, Mr. Chairman, is to come to the table early in the 
process. That is my purpose for being here today.
    As you may know, ammonium nitrate fertilizer is an 
excellent plant nutrient for Georgia's temperate climate and 
clay soils. More than 59,000 tons of ammonium nitrate is used 
annually in our State on a variety of row crop and livestock 
farms. Because this important plant nutrient is so effective on 
our crops and soils, Georgia is the tenth highest State 
regarding ammonium nitrate fertilizer consumption in the United 
States.
    I believe this important legislation establishes a 
framework for providing the Georgia Department of Agriculture 
and the Federal Department of Homeland Security the important 
security information they need. I believe the legislation sets 
important guidelines for improving our Nation's security. Yet, 
passage of a final version, Mr. Chairman, must accomplish these 
goals without placing unreasonable burdens on Georgia farmers 
and agricultural retailers.
    My greatest concern with the legislation--and I want to 
again commend your staff. I understand we have moved forward 
with different issues with the subcommittee's markup procedures 
here this morning, and my comments are going back to the 
original legislation. But I did want to point out some of those 
concerns that we did have.
    I do support maintaining the inspection authority at the 
State level, since State inspectors already perform duties 
designed to ensure the integrity and quality of fertilizer 
products. The bill seeks to register ammonium nitrate 
fertilizer producers, sellers, purchasers and users, with the 
objective of keeping this necessary agriculture plant nutrient 
in the hands of food producers, rather than in the hands of 
those with criminal intent.
    A totally new systemic registration plan may not be 
necessary. Many retailers already voluntarily record sales 
data, including the driver's license information of the 
purchaser. I believe simple actions to standardize forms and 
electronic reports throughout the existing system would 
sufficiently serve the public purpose.
    My members would rather not deal with a new set of Federal 
regulators visiting their facilities. Federal block funding for 
enforcement at the State level by State departments of 
agricultural would be my preference. While a subjective fine 
allows for situational judgments to take place, the $50,000 
maximum fine looms as a daunting threat over farmers and other 
small businesses. Well-meaning business owners will on occasion 
make mistakes, and zealous enforcers sometimes seek to gain an 
upper hand. Please consider a more reasonable fine structure 
based on frequency and severity of violations.
    Mr. Chairman, with amendments to accommodate the concerns I 
have outlined, I believe H.R. 3197 would meet the objectives of 
the Department of Homeland Security and help keep this valuable 
agricultural fertilizer in use for continued food production in 
Georgia and in this Nation. We in agriculture want to 
contribute to initiatives that continue State and Federal 
efforts to maintain and improve national security for the 
United States and its citizens.
    To conclude, allow me again, Mr. Chairman, to thank you and 
members of the subcommittee for your leadership in addressing 
this critically important issue of secure handling of ammonium 
nitrate agricultural fertilizers. Thank you for the opportunity 
to testify today.
    Mr. Linder. Thank you, Mr. Black. It is my understanding 
that there will be an amendment in the nature of a substitute 
that will deal with many of your issues.
    [The statement of Mr. Black follows:]

                  Prepared Statement of Gary W. Black

Introduction
    Mr. Chairman and members of the subcommittee, I am Gary Black, 
President of the Georgia Agribusiness Council located in Commerce 
Georgia. I appreciate the opportunity to testify before the House 
Homeland Security Committee, Subcommittee on Prevention of Nuclear and 
Biological Attacks regarding H.R. 3197, the ``Secure Handling of 
Ammonium Nitrate Act of 2005.''
    Furthermore, I would like to thank you Chairman Linder for 
scheduling this important hearing and for your leadership in addressing 
the critical issue of advancing ammonium nitrate security measures, 
which are so vital to the U.S. plant food industry, its many local 
retail agribusiness outlets and the farmers and livestock producers 
they serve.

Georgia Agribusiness Council
    The Georgia Agribusiness Council (GAC) is a Chamber-like 
organization with a 40-year history of promoting sound policy for the 
breadth of Georgia's agricultural industry. Our members range from 
farmers to input suppliers and from processors to those in 
transportation of food and fiber. Promoting environmental stewardship 
and educating the public about the importance of agriculture are the 
hallmark objectives of our organization.
    Mr. Chairman, today I find myself in a rare and unenviable policy 
dilemma. As you know I have met with you and your staff dozens of times 
over the years as a spokesman for Georgia farmers, food producers and 
rural businesses. Many of our meetings have focused on how we could 
work together to relieve Georgia farmers and agribusinesses of 
overreaching federal regulation and the unnecessary bureaucracy and 
burdensome paperwork that usually follows it.
    The last thing Georgia farmers need is another regulation. The last 
thing Georgia livestock and food producers need is more burdensome 
bureaucracy and paperwork. However, today I am here to state my support 
of the basic tenets of H.R. 3197, The Secure Handling of Ammonium 
Nitrate Act. I believe regulation of this vital agricultural input is 
on the horizon. Further, I believe the best way to institute the most 
amicable solution to regulatory challenges, Mr. Chairman, is to come to 
the table early in the process. That is my purpose for being here 
today.
    As you may know, ammonium nitrate fertilizer is an excellent plant 
nutrient for Georgia's temperate climate and clay soils. More than 
59,000 tons of ammonium nitrate is used annually in our state on a 
variety of row crop and livestock farms. The product is a premiere 
source of supplementary nitrogen when used alone. The product is also a 
key element in a host of prescriptive fertilizer blends. Because this 
important plant nutrient is so effective on our crops and soils, 
Georgia is the 10th highest state (see attached 2004 Commercial 
Fertilizer Report) regarding ammonium nitrate fertilizer consumption in 
the United States.
    I believe this important legislation establishes a framework for 
providing the Georgia Department of Agriculture and the federal 
Department of Homeland Security the important security information they 
need. I believe the legislation sets important guidelines for improving 
our nation's security. Yet, passage of a final version, Mr. Chairman, 
must accomplish these goals without placing an unreasonable burden on 
Georgia farmers.

H.R. 3197, The Secure Handling of Ammonium Nitrate Act
    On June 13, 2005, Representatives Curt Weldon (R-PA) and Bennie G. 
Thompson (D-Miss.), as well as other key members of congress, 
introduced H.R. 3197, the Secure Handling of Ammonium Nitrate Act of 
2005.
    The legislation before you gives the Department of Homeland 
Security the authority to create a regulatory system for ammonium 
nitrate-based fertilizers. The bill contains the following provisions:
    The ``Secure Handling of Ammonium Nitrate Act'' grants the 
Department of Homeland Security the power to regulate those who 
produce, sell, and store ammonium nitrate-based fertilizer. 
Specifically, this bill would allow the Department, in consultation 
with the Department of Agriculture, to develop regulations that do the 
following:

        1. Create a registry of facilities that handle ammonium nitrate 
        fertilizer;
        2. Limit the sale and storage of ammonium nitrate-based 
        fertilizer to facilities that register with the Department; and
        3. Condition the sale of ammonium nitrate-based fertilizer on 
        recording the name, address, telephone number, and registration 
        number of the purchaser.
    My greatest concern with the legislation centers on the proposed 
relationship between the Department of Homeland Security, state 
departments of agriculture and the regulated community. I would prefer 
that the states maintain the inspection authority since state 
inspectors already perform duties designed to ensure the integrity and 
quality of fertilizer products.
    The bill seeks to register ammonium nitrate fertilizer producers, 
sellers, purchasers and users, with the objective of keeping this 
necessary agriculture plant nutrient in the hands of food producers 
rather than in the hands of individuals with criminal intent. A totally 
new systemic registration plan may not be necessary. Many retailers 
already voluntarily record sales data including the driver's license 
information of the purchaser. I believe simple actions to standardize 
forms and electronic reports throughout the existing system would 
sufficiently serve the public purpose.
    My members would rather not deal with a new set of federal 
regulators visiting their facilities. Federal block funding for 
enforcement at the state level by state departments of agriculture 
would be my preference. While a subjective fine structure allows for 
situational judgments to take place, the $50,000 maximum fine looms as 
a daunting threat over farmers and other small businesses. Well-meaning 
business owners will on occasion make mistakes, and zealous enforcers 
sometimes seek to gain an upper hand. Please consider a more reasonable 
fine structure based on frequency and severity of the violation.

Conclusion
    Mr. Chairman, with amendments to accommodate the concerns I have 
outlined, I believe H.R. 3197 would meet the objectives of the 
Department of Homeland Security and help keep this valuable 
agricultural fertilizer in use for continued food production in Georgia 
and in this nation. We in agriculture want to contribute to initiatives 
that continue state and federal efforts to maintain and improve 
national security for the United States and its citizens.
    To conclude, allow me to again thank you Chairman Linder and 
members of the subcommittee for your leadership in addressing the 
critically important issue of secure handling of ammonium nitrate 
agricultural fertilizers. Thank you for the opportunity to testify 
today.

             Top 20 Ammonium Nitrate Consuming States--2004
 
 
 
                                Missouri                  292,934
                               Tennessee                  146,149
                                 Alabama                  105,100
                                   Texas                  103,555
                              California                   92,352
                                Kentucky                   74,361
                                Oklahoma                   62,640
                                   Idaho                   60,752
                                  Kansas                   60,460
                             Mississippi                   59,121
                                 Georgia                   47,842
                                        Louisiana          39,341
                                Arkansas                   36,767
                                  Oregon                   30,590
                                Nebraska                   30,138
                              Washington                   30,030
                          North Carolina                   29,733
                                 Wyoming                   24,605
                                 Florida                   21,943
                                    Iowa                   21,866
 

Source: 2004 Commercial Fertilizer Report

    Mr. Chairman and members of the subcommittee, I am Gary Black, 
President of the Georgia Agribusiness Council located in Commerce 
Georgia. I appreciate the opportunity to testify before the House 
Homeland Security Committee, Subcommittee on Prevention of Nuclear and 
Biological Attacks regarding H.R. 3197, the ``Secure Handling of 
Ammonium Nitrate Act of 2005.''
    The Georgia Agribusiness Council (GAC) is a Chamber-like 
organization with a 40-year history of promoting sound policy for the 
breadth of Georgia's agricultural industry.
    Mr. Chairman, today I find myself in a rare and unenviable policy 
dilemma. As you know I have met with you and your staff dozens of times 
over the years as a spokesman for Georgia farmers, food producers and 
rural businesses. Many of our meetings have focused on how we could 
work together to relieve Georgia farmers and agribusinesses of 
overreaching federal regulation and the unnecessary bureaucracy and 
burdensome paperwork that usually follows it.
    The last thing Georgia farmers need is another regulation. The last 
thing Georgia livestock and food producers need is more burdensome 
bureaucracy and paperwork. However, today I am here to state my support 
of the basic tenets of H.R. 3197, ``The Secure Handling of Ammonium 
Nitrate Act.'' I believe regulation of this vital agricultural input is 
on the horizon. Further, I believe the best way to institute the most 
amicable solution to regulatory challenges, Mr. Chairman, is to come to 
the table early in the process. That is my purpose for being here 
today.
    As you may know, ammonium nitrate fertilizer is an excellent plant 
nutrient for Georgia's temperate climate and clay soils. More than 
59,000 tons of ammonium nitrate is used annually in our state on a 
variety of row crop and livestock farms. Because this important plant 
nutrient is so effective on our crops and soils, Georgia is the 10th 
highest state regarding ammonium nitrate fertilizer consumption in the 
United States. (2004 Commercial Fertilizer Report attached)
    I believe this important legislation establishes a framework for 
providing the Georgia Department of Agriculture and the federal 
Department of Homeland Security the important security information they 
need. I believe the legislation sets important guidelines for improving 
our nation's security. Yet, passage of a final version, Mr. Chairman, 
must accomplish these goals without placing an unreasonable burden on 
Georgia farmers and agricultural retailers.
    My greatest concern with the legislation centers on the proposed 
relationship between the Department of Homeland Security, state 
departments of agriculture and the regulated community. I would prefer 
that the states maintain the inspection authority since state 
inspectors already perform duties designed to ensure the integrity and 
quality of fertilizer products. The bill seeks to register ammonium 
nitrate fertilizer producers, sellers, purchasers and users, with the 
objective of keeping this necessary agriculture plant nutrient in the 
hands of food producers rather than in the hands of individuals with 
criminal intent. A totally new systemic registration plan may not be 
necessary. Many retailers already voluntarily record sales data 
including the driver's license information of the purchaser. I believe 
simple actions to standardize forms and electronic reports throughout 
the existing system would sufficiently serve the public purpose.
    My members would rather not deal with a new set of federal 
regulators visiting their facilities. Federal block funding for 
enforcement at the state level by state departments of agriculture 
would be my preference. While a subjective fine structure allows for 
situational judgements to take place, the $50,000 maximum fine looms as 
a daunting threat over farmers and other small businesses. Well-meaning 
business owners will on occasion make mistakes, and zealous enforcers 
sometimes seek to gain an upper hand. Please consider a more reasonable 
fine structure based on frequency and severity of the violation.
    Mr. Chairman, with amendments to accommodate the concerns I have 
outlined, I believe H.R. 3197 would meet the objectives of the 
Department of Homeland Security and help keep this valuable 
agricultural fertilizer in use for continued food production in Georgia 
and in this nation. We in agriculture want to contribute to initiatives 
that continue state and federal efforts to maintain and improve 
national security for the United States and its citizens.
    To conclude, allow me to again thank you Chairman Linder and 
members of the subcommittee for your leadership in addressing the 
critically important issue of secure handling of ammonium nitrate 
agricultural fertilizers. Thank you for the opportunity to testify 
today.

    Mr. Linder. Mr. O'Neill.

      STATEMENT OF WILLIAM PAUL O'NEILL, JR., PRESIDENT, 
                  INTERNATIONAL RAW MATERIALS

    Mr. O'Neill. Chairman Linder and members of the 
subcommittee, thank you for inviting me to testify today on 
behalf of the Agricultural Retailers Association concerning 
H.R. 3197.
    I am Tip O'Neill, the President of International Raw 
Materials, which is headquartered in Philadelphia. Our company 
is an importer and domestic wholesale distributor of fertilizer 
products. The ARA represents a significant majority of 
America's agricultural retailers and distributors in 
Washington, D.C.
    Retail dealers provide essential crop input material to 
America's farmers. This is a responsibility of growing 
importance, because, as America develops new biosources of 
energy, America is going to be relying on its farmers not only 
to grow its crops but also to grow its fuels. We need, 
therefore, to make sure that we give our farmers an adequate 
and safe supply of agricultural inputs, including ammonium 
nitrate fertilizer, that they will need to accomplish these 
critical missions.
    I currently serve on the ARA's Board of Directors and the 
ARA's Public Policy Committee. I am a constituent of the 
sponsor of this legislation, U.S. Representative Curt Weldon. 
We appreciate the leadership that Representative Weldon and 
Representative Bernie Thompson have shown on this issue by 
sponsoring the legislation we are discussing here today.
    As we all know, plants need nutrients to grow, primarily 
nitrogen, phosphate and potash, each in some available form; 
hence the need for fertilizer in crop production agriculture. 
Variations in the crop, weather, temperature and soil help 
determine the amount and types of fertilizers utilized.
    As Mr. Black mentioned, ammonium nitrate is primarily used 
on pasture lands and specialty crops. The principal advantage 
of using this product as a fertilizer is that crops can 
immediately utilize part of its nitrogen content in the form of 
nitrate. While this formulation was discovered in 1659, it has 
only been in the last 60 years that it has significantly been 
used worldwide as an important plant nutrient.
    Its use as an explosive was not discovered until the end of 
World War I and reaffirmed with the tragic explosions in Texas 
City in 1947. As we all well know today, both domestic and 
foreign terrorists have illegally used ammonium nitrate in 
bombings such as those that took place on April 19th, 1995, the 
Federal Building in Oklahoma City, and October 12th, 2002, in 
Bali, Indonesia. These bombings took many innocent lives.
    As a personal aside, I should mention that my cousin's son, 
Joe Milligan, was one of the seven Americans killed in the Bali 
tragedy. He was a newly minted college graduate on one last 
surfing trip before pursuing a career.
    In response to these potential threats, agriculture 
retailers, distributors and manufacturers have and continue to 
be proactive in voluntarily addressing security concerns 
related to the storage, handling, transportation of 
agricultural fertilizers, such as ammonium nitrate.
    Our industry is working with the U.S. Department of 
Homeland Security on security related issues. Many within our 
industry, with the support of the ARA, the Fertilizer 
Institute, have utilized the security vulnerability assessment 
tool to obtain recommendations to improve overall security of 
their facilities.
    ARA and others within our Nation's agricultural industry 
are committed to working with Congress and the administration 
on effective measures such as H.R. 3197 that will help prevent 
terrorists and other criminals from gaining access to products 
like ammonium nitrate fertilizers. A number of States mentioned 
this morning, including New York, California, Oklahoma, Nevada, 
and South Carolina, have enacted registration and record-
keeping laws for ammonium nitrate fertilizer with the support 
of our industry. While these State programs are working well 
and to our knowledge have not placed too great a burden on 
retailers or their farmer customers, a national more unified 
approach is needed to address this matter.
    It is not easy for an industry to support traditional 
Federal regulations. However, in this case, we believe it is 
necessary to help maintain ammonium nitrate's continued 
availability for use on agricultural operations heavily 
dependent on this plant nutrient.
    The Weldon-Thompson bill as introduced would put in place 
fair and equitable Federal regulations that address security 
concerns related to the production, storage, sale and 
distribution of solid ammonium nitrate fertilizer. H.R. 3197 
authorizes DHS to enter into cooperative agreements with State 
departments of agriculture or other State agencies that 
regulate plant nutrients to ensure that any person who 
produces, stores, or sells or distributes solid ammonium 
nitrate registers their facility and maintains records of sale 
or distribution, including the names, addresses, telephone 
numbers and registration numbers of purchasers. Purchasers 
would also be required to register this proposal.
    ARA is working with the TFI in support of this important 
legislation, and we look forward to working on this bill with 
this committee and this bill's sponsors on securing its 
enactment.
    In this context, I would like to tell a short story. 
Fifteen years ago I attended a lecture series given by the late 
Peter Drucker. At the time he observed that America does not 
legislate social change, America litigates social change. I 
would hope that today we can all rise to the late professor's 
challenge.
    In conclusion, we would like to reiterate the Agriculture 
Retailers Association greatly appreciates this opportunity to 
testify on this important issue. We respectfully request your 
support for the enactment of H.R. 3197. Thank you.
    Mr. Linder. Thank you, Mr. O'Neill.
    [The statement of Mr. O'Neill follows:]

             Prepared Statement of William P. O'Neill, Jr.

    Chairman Linder, Ranking Member Langevin and other members of the 
Subcommittee, thank you for inviting me to testify today on behalf of 
the Agricultural Retailers Association (ARA) regarding the ``Securing 
Handling of Ammonium Nitrate Act of 2005'' (H.R. 3197). My name is Tip 
O'Neill. I am the President of International Raw Materials, 
headquartered in Philadelphia, Pennsylvania. Our company is an importer 
and wholesale distributor of fertilizer products. I am here today on 
behalf of the ARA, which represents the interests of agricultural 
retailers and distributors in Washington, D.C. I currently serve on the 
ARA Board of Directors and the association's Public Policy Committee. 
ARA represents a significant majority our nation's retail dealers who 
provide essential crop input materials to America's farmers, including 
ammonium nitrate fertilizer. In this capacity ARA is vitally interested 
in any federal laws or regulations affecting the sale and use of key 
agricultural fertilizer products such as ammonium nitrate.
    We appreciate the leadership shown by U.S. Representatives Curt 
Weldon (R-PA) and Bennie Thompson (D-MS) by sponsoring this important 
legislation. In this testimony, I will provide an overview of ARA, our 
industry, the use of ammonium nitrate as a fertilizer, how the illegal 
use of this product has impacted me personally, and in this context the 
strong need for enactment of the legislation we are discussing here 
today.

OVERVIEW OF ARA AND AG RETAILERS
    From the perspective of an overview, in 2002, there were an 
estimated 10,586 agricultural retail outlets in the United States.\1\ 
The overall number of retail outlets is lower today and has been 
declining due to a number of factors taking place within the industry 
including: consolidation, increased domestic and global competition, 
higher operating costs, and low profit margins. ARA members range in 
size from family or farmer cooperative owned businesses, to large 
companies with many outlets located in multiple states. Many of these 
facilities are located in small, rural communities.
---------------------------------------------------------------------------
    \1\ Doane's Ag Professional Magazine, Summer 2003, p. 40-41
---------------------------------------------------------------------------
    As we all know, plants need nutrients to grow, primarily nitrogen, 
phosphate and potash, each in some available form; hence the need for 
fertilizers in crop production agriculture. Soils do not retain 
nitrogen from year to year, therefore, nitrogen fertilizer must be 
added during each planting season to ensure optimum growth and yield 
conditions. Demand for fertilizers tends to be seasonal, depending on 
when crops are planted. Variations in the crop, weather, temperature 
and soil help determine the amount and types of fertilizers utilized. 
It is estimated that farmers in crop production ultimately use more 
than 85 percent of fertilizer consumed in the United States. The 
remaining fertilizer is used on golf courses, landscaping, nurseries or 
home use.
    Ammonium nitrate fertilizer is primarily used on pasturelands and 
specialty crops produced in the United States. The principal advantage 
of using this product as a fertilizer is that crops can immediately 
utilize part of its nitrogen content in the form of nitrate. Ammonium 
nitrate was first synthesized by Johann Glauber in 1659, when he 
combined ammonium carbonate and nitric acid, but it has really been 
only within the last 60 years that ammonium nitrate has been 
significantly used worldwide as a important plant nutrient. Its use as 
an explosive was not discovered until the end of World War I, and 
reaffirmed with the tragic ship explosions in Texas City in 1947. As we 
all well know today, both domestic and foreign terrorists have 
illegally used ammonium nitrate fertilizer in bombings such as those 
which took place on April 19 1995 at the Alfred P. Murrah Federal 
Building in Oklahoma City, Oklahoma and on October 12, 2002 in Bali, 
Indonesia. As a personal aside I should mention that my cousin's son 
Joe Milligan was one of the seven Americans killed in the Bali tragedy.

INDUSTRY WORKING TO ADDRESS SECURITY ISSUES
    In response to this potential threat, Ag retailers and distributors 
have and continue to be pro-active in addressing security concerns 
related to the storage, handling and transportation of agricultural 
fertilizers. It is important for Congress and the Administration to 
know that our nation's agricultural industry is committed to support 
effective measures that will prevent terrorists or other criminals from 
gaining access to ammonium nitrate fertilizer or other crop production 
materials. In fact, DHS has and continues to work with the private 
sector to identify risks, build systems to communicate those risks, and 
to prepare plans to keep those risks from becoming terrorist's targets. 
Our industry has taken a very proactive role in dealing with DHS and 
has participated in the development of the sector working groups.
    ARA is a supporter of Asmark's Security Vulnerability Assessment 
(SVA) program. The Asmark SVA tool is licensed to ARA and is currently 
being utilized by member and non-member companies. ARA is working with 
CropLife America (CLA) and The Fertilizer Institute (TFI) under the 
``Agri-Business Security Working Group'' and state associations to 
promote security measures and the SVA program. To date this SVA has 
been utilized by nearly 2,500 retailers. ARA and Asmark earlier this 
year reached agreement with Clemson University to make the SVA tool 
available to all Ag retail facilities in the state of South Carolina. 
This web-based software enables retail facilities to conduct a security 
vulnerability assessment of their facilities and receive 
recommendations to improve overall security.
    ARA and its members are committed to providing increased security 
for solid ammonium nitrate fertilizer. Several states such as New York, 
California, Oklahoma, Nevada and South Carolina have enacted 
registration and record keeping laws for this product with the support 
of the state agribusiness association. It is our understanding that 
these state ammonium nitrate fertilizer registration programs have 
worked very well and not placed too great a burden on retailers or 
their farmer customers. While as you might expect it is not easy for us 
as an industry to support additional regulations, in this case we 
believe it is necessary to help maintain Ammonium Nitrate's continued 
availability for use on agricultural operations heavily dependent on 
this plant nutrient product.
    ARA is therefore supportive of efforts by Congressmen Curt Weldon 
(R-PA) and Bennie Thompson (D-MS) to put in place fair and equitable 
federal regulations that address any security concerns related to the 
production, storage, sale and distribution of solid ammonium nitrate 
fertilizer. H.R. 3197 authorizes DHS to enter into cooperative 
agreements with state departments of agriculture or other state 
agencies that regulate plant nutrients to ensure that any person who 
produces, stores, sells or distributes solid ammonium nitrate 
fertilizer registers their facility and maintains records of sale or 
distribution including the name, address, telephone and registration 
numbers of purchasers. Also, purchasers would be required to register 
under this proposal. ARA is working closely with the TFI and sponsors 
of the Senate and House bills to ensure that the interests of 
agricultural retailers are represented and has a voice at the table 
with Congress and the Administration as this legislation moves forward 
in the House and Senate and any subsequent regulations that are 
implemented.
    ARA supports a common sense, fair and simplified federal 
registration system for ammonium nitrate fertilizer in order to ensure 
the product's continued availability for sale, purchase and use by 
America's agricultural industry. ARA believes it is important for 
retailers to maintain the ability to sell ammonium nitrate fertilizer 
if they so desire to their long standing and known farmer customers, as 
well as ensuring their customers maintain the ability to purchase the 
product for use on their farming operations. Over the past year many 
domestic manufacturers and distributors have publicly announced they 
will no longer be producing or selling ammonium nitrate due to security 
and liability concerns. There are now only two domestic manufacturers 
making this fertilizer product, with at least some of this shortfall, 
being replaced by imports. We believe that enactment of H.R. 3197 will 
help provide increased vigilance in the handling, sale and use of this 
product and provide some assurances for the industry against any 
potential liabilities that would otherwise exist without a federal 
registration system in place.
    We would also request support for the establishment of a security 
tax credit that would allow eligible agricultural businesses to use 
their own financial resources to take the necessary steps installing 
state of the art security measures that better protects ammonium 
nitrate and other crop production materials and the American public 
from the potential threat of terrorism or other illegal activities. 
Rep. Ron Lewis (R-KY) introduced the ``Agricultural Business Security 
Tax Credit Act of 2005'' (H.R. 713) with the support of ARA, TFI, CLA, 
Chemical Producers & Distributors Association (CPDA), and the National 
Agricultural Aviation Association (NAAA). ARA urges committee members 
to also support this important legislation by co-sponsoring H.R. 713.

CONCLUSION
    In conclusion, we would like to reiterate that the Agricultural 
Retailers Association greatly appreciates this opportunity to testify 
on this important issue. We respectfully urge this committee to pass 
H.R. 3197.

    Mr. Linder. The Chair would now like to recognize the 
gentleman from Mississippi for the purpose of introducing our 
final panelist.
    Mr. Thompson. Mr. Chairman, I appreciate the courtesy.
    I have, I guess, a dual distinction of introducing Mr. Carl 
Wallace. He is a constituent, but he is also a hunting buddy of 
mine. So we have real reason to have him here. He is the plant 
manager of one of the production facilities that we are talking 
about regulating, and I think he brings another perspective to 
the testimony here today.
    He operates a plant with 220-odd employees, who also have 
the distinction of being the highest paid employees in this 
county because of this facility; and it has been around for a 
good number of years. So we are happy to have Mr. Wallace here 
as a witness and look forward to his testimony.
    Mr. Linder. Mr. Wallace.

  STATEMENT OF CARL WALLACE, PLANT MANAGER, TERRA MISSISSIPPI 
                         NITROGEN, INC.

    Mr. Wallace. Mr. Chairman, on behalf of Terra and the 
Fertilizer Institute, TFI, of which Terra is a member, I 
appreciate the opportunity to testify before this group in 
support of H.R. 3197, the Secure Handling of Ammonium Nitrate 
Act of 2005. TFI is the leading voice of the Nation's 
fertilizer industry, representing the public policy, 
communication and statistical needs of fertilizer producers, 
retailers and transporters.
    Chairman Linder, I would like to thank you for scheduling 
this important hearing and for your leadership in addressing 
the critical issue of advancing ammonium nitrate security 
measures.
    I would like to thank my Representative, Congressman 
Thompson, whose district the plant is located in, for his 
leadership as the chief sponsor in this important legislation 
and for inviting me here today to testify.
    Terra Industries is a leading international producer of 
nitrogen products which we sell to industrial customers and 
agribusiness retailers for sale to farmers. Terra employs 
approximately 1,200 people in North America and the United 
Kingdom and is headquartered in Sioux, City, Iowa. Terra owns 
and operates seven nitrogen manufacturing facilities, four of 
which are in the midwestern and southern United States.
    Our Yazoo City ammonium nitrate plant has been in operation 
for more than 50 years. This facility provides a major boost to 
the local economy, providing good-paying and stable job 
opportunities.
    As the Congressman mentions, at our Yazoo facility, we 
employee 200 full-time employees with an annual payroll of 
$12.5 million. We have an additional 20 security-related 
contract employees associated with the facility. Terra 
Mississippi Nitrogen has an annual production capacity of 
500,000 tons of anhydrous ammonia, the basic ingredient for 
most nitrate fertilizers and many industrial products. We 
upgrade this ammonia to 775,000 tons of ammonium nitrate, 
600,000 tons of urea ammonium nitrate, commonly called UAN, 
7,000 tons of urea.
    Ammonium nitrate fertilizer, the focus of this hearing, is 
vital to the U.S. plant food industry and many local retail 
agribusiness outlets and the farmers and livestock producers 
they serve. Ammonium nitrate is valued by our Nation's farmers 
for its use on pasture lands, citrus and specialty crops and 
for its use in no-till farming. In 2004, Mississippi farmers, 
like Georgia farmers, consumed about 60,000 tops of ammonium 
nitrate. Nationwide during that same period agricultural 
consumption of ammonium nitrate totaled 1.5 million tons.
    After the Oklahoma City bombing in 1995, the fertilizer 
industry undertook several voluntary efforts to prevent 
ammonium nitrate from getting into the wrong hands. TFI 
partnered with the Bureau of Alcohol, Tobacco, Firearms and 
Explosives, its member companies, State fertilizer associations 
and the State fertilizer control officials within the State 
departments of agriculture to promote fertilizer security. The 
outreach program called Be Aware for America and Be Secure for 
America were aimed at securing our products, particularly 
ammonium nitrate, in our places of business. After the 
terrorist attacks on September 11th, 2001, the fertilizer 
industry launched America's Security Begins with You, a new 
program, which has been endorsed by ATF, the Department of 
Homeland Security and the Association of American Plant Food 
Control Officials who regulate fertilizer at the State level. 
The campaign urges retailers and producers to develop and 
implement security plans, record sales and alert law 
enforcement to any suspicious activity.
    After the tragic events of September 11, 2001, TFI's board 
of directors endorsed a voluntary security code of management 
practices, which Terra has made mandatory at all of our 
facilities. Accordingly, our Yazoo City plant has conducted a 
security vulnerable assessment and developed a security plan 
based on that assessment. To further strengthen our product 
security requirements, we also require proof of delivery for 
all shipments of ammonium nitrate within 24 hours. We have 
recently had our security plan audited by an independent third 
party auditor.
    We at Terra believe that the provisions contained in H.R. 
3197 further strengthen ammonium nitrate security by providing 
a uniform national system for registration and recordkeeping. 
We do not believe this legislation would be overly burdensome 
to handlers of ammonium nitrate or our farmer customers. By 
giving the Department of Homeland Security the authority to 
work with State departments of agriculture to create, maintain 
and enforce the program, this legislation uses an existing and 
effective State fertilizer regulatory system to further secure 
ammonium nitrate.
    Mr. Chairman, Terra Industries and TFI recommend that H.R. 
3197 be passed as introduced by the subcommittee and the full 
House Homeland Security Committee. Similar legislation is 
pending in the U.S. Senate, and we hope the Senate will follow 
with passage of their bill. We believe this is necessary to 
protect the continued use of ammonium nitrate for agricultural 
purposes.
    Thank you today for your time and for this opportunity to 
have our views heard.
    [The statement of Mr. Wallace follows:]

                   Prepared Statement of Carl Wallace

    Mr. Chairman and members of the subcommittee, I am Carl Wallace, 
plant manager at Terra Mississippi Nitrogen, Inc., doing business as 
Terra Industries, located in Yazoo City, Mississippi.
    On behalf of Terra and The Fertilizer Institute (TFI) of which 
Terra is a member, I appreciate the opportunity to testify before the 
House Homeland Security Committee, Subcommittee on Prevention of 
Nuclear and Biological Attacks in support of H.R. 3197, the ``Secure 
Handling of Ammonium Nitrate Act of 2005.'' TFI is the leading voice of 
the nation's fertilizer industry, representing the public policy, 
communication and statistical needs of fertilizer producers, retailers 
and transporters.
    Chairman Linder, I would like to thank you for scheduling this 
important hearing and for your leadership in addressing the critical 
issue of advancing ammonium nitrate security measures. And I would like 
to thank my representative, Congressman Thompson, in whose district the 
plant I manage is located, for his leadership as a chief sponsor of 
this important legislation and for inviting me here today to testify.
    Terra Industries is a leading international producer of nitrogen 
products which we sell to industrial customers and agribusiness 
retailers for sale to farmers. Terra employs approximately 1,200 people 
in North America and the United Kingdom and is headquartered in Sioux 
City, Iowa. Terra owns and operates seven nitrogen manufacturing 
facilities, four of which are in the midwestern and southern United 
States.
    Our Yazoo City ammonium nitrate plant has been in operation for 
more than 50 years. This facility provides a major boost to the local 
economy, providing good-paying and stable job opportunities. At our 
Yazoo City facility, we employ 201 fulltime employees with an annual 
payroll of $12.5 million. We have 19 additional security related 
contract employees. Terra Mississippi Nitrogen has an annual production 
capacity of 500,000 tons of anhydrous ammonia, the basic ingredient for 
most nitrogen fertilizers and many industrial products. We upgrade this 
ammonia to 775,000 tons of ammonium nitrate; 600,000 tons of urea 
ammonium nitrate (UAN), and 7,000 tons of urea.
    Ammonium nitrate fertilizer, the focus of this hearing, is vital to 
the U.S. plant food industry, its many local retail agribusiness 
outlets and the farmers and livestock producers they serve. Ammonium 
nitrate is valued by our nation's farmers for its uses on pasture 
lands, citrus and specialty crops and for its use in no-till farming. 
In 2004 Mississippi farmers consumed 59,000 tons of ammonium nitrate. 
Nationwide during the same period consumption of ammonium nitrate 
totaled 1.5 million tons.
    After the Oklahoma City bombing in 1995 the fertilizer industry 
undertook several voluntary efforts to prevent ammonium nitrate from 
getting into the wrong hands. TFI partnered with the Bureau of Alcohol, 
Tobacco, Firearms and Explosives; its member companies; state 
fertilizer associations and the state fertilizer control officials 
within the state departments of agriculture to promote the fertilizer 
security. The outreach programs called ``Be Aware for America'' and 
``Be Secure for America'' were aimed at securing our products, 
particularly ammonium nitrate, in our places of business. After the 
terrorist attack on Sept. 11, 2001, the fertilizer industry launched 
America's Security Begins with You, a new program, which has been 
endorsed by ATF, the Department of Homeland Security and the 
Association of American Plan Food Control Officials, who regulate 
fertilizer at the state level. The campaign urges retailers and 
producers to develop and implement security plans, record sales and 
alert law enforcement to any suspicious activity.
    After the tragic events of Sept. 11, 2001, TFI's Board of Directors 
endorsed a voluntary security code of management practices which Terra 
has made mandatory at all of our facilities. Accordingly, our Yazoo 
City plant has conducted a security vulnerability assessment and 
developed a security plan based on that assessment. To further 
strengthen our product security efforts, we also require proof of 
delivery for all shipments of ammonium nitrate within 24 hours. We have 
recently had our security plan audited by an independent third party 
auditor.
    We at Terra believe that the provisions contained in H.R. 3197 
further strengthen ammonium nitrate security by providing a uniform 
national system for registration and recordkeeping. We do not believe 
this legislation would be overly burdensome to handlers of ammonium 
nitrate or our farmer customers. By giving the Department of Homeland 
Security the authority to work with state departments of agriculture to 
create, maintain and enforce the program, this legislation uses an 
existing and effective state fertilizer regulatory system to further 
secure ammonium nitrate.
    Mr. Chairman, Terra Industries and TFI recommend that H.R. 3197 be 
passed as introduced by this subcommittee and the full House Homeland 
Security Committee. Similar legislation is pending in the U.S. Senate 
and we hope the Senate will follow with passage of their bill. We 
believe this is necessary to protect the continued use of ammonium 
nitrate fertilizer for agricultural purposes.
    Thank you for your time today and for providing this opportunity to 
have our views heard.

    Mr. Linder. Thank you all.
    Mr. Wallace, what is the typical purchase for a farmer in a 
year of ammonium nitrate in terms of tonnage?
    Mr. Wallace. It can vary greatly. Because we have some 
farmers that might have only 100 acres, up to large corporate 
facilities of 10,000 acres.
    Mr. Linder. What would 100 acres require?
    Mr. Wallace. How many units of nitrogen per acre? Again, 
that varies greatly by crop and personal preference and the 
economics of the year.
    Mr. Linder. Mr. Black, do you have a shot at that?
    Mr. Black. Well, yes, sir. If you look at a small producer, 
let us say a northeast Georgia producer up where we are from, 
70 acres, and they do 200 pounds to an acre, maybe as a late 
wintertime application, preparation for the spring, so that is 
70 acres times 200 pounds per acre.
    Mr. Linder. Dr. Oxley, educate us on the weight and the 
damage. You suggested that we should lower the quantity for 
reporting. How much damage does one ton do and how much damage 
does 10 pounds do?
    Ms. Oxley. Well, 10 pounds in this room, fragment, would 
probably blast a hole in that wall sitting here where I am. If 
we have a ton, we are going to severely damage the whole 
building.
    The reason I am suggesting that we put a lower limit is so 
that we do not have to worry about the small stuff, is that if 
all I want to do is kill a few people, there are lots of 
unregulated materials, and I am thinking smokeless powder, that 
I can do that.
    Mr. Linder. You are not saying that is fine. You are not 
saying that is acceptable, I know, to kill just a few people.
    Ms. Oxley. Yes. That's right. I am saying, what is the 
goal? We certainly want to stop the mass destruction.
    I remember after the Oklahoma City bombing that the press 
was being kind of quiet about reporting it, and they reported 
it as a fertilizer bomb. You maybe remember the Washington Post 
reported a fellow trying to kill his girlfriend with potting 
soil. That certainly was a fertilizer bomb. But with 
individual-type bombs, you have lots of other choices.
    Mr. Linder. If I, a passenger, brought five pounds strapped 
around his body on an airplane, would it do serious damage?
    Ms. Oxley. Certainly five pounds would do serious damage. 
The problem is that to initiate five pounds of ammonium nitrate 
ANFO is extremely difficult. You have to have a booster that is 
a commercial material. So you would probably want to have a 
half pound or so of a military explosive to initiate it, and 
you have to have a detonator.
    That would not be the choice. If you wanted to do that kind 
of damage, you would do something like Richard Reed, where you 
used a peroxide explosive or he had a military explosive, PETN.
    Mr. Linder. Mr. O'Neill, do you agree with Mr. Black that 
the best thing to do is to let the States continue to do the 
oversight, with standards set by the agencies?
    Mr. O'Neill. Yes, we do.
    Mr. Linder. And that would keep from having excess numbers 
of investigators coming out to each farm site?
    Mr. O'Neill. There is also the process established. What we 
are looking for is a minimum standard.
    Mr. Linder. Mr. McMahon, is it your judgment that this bill 
is sufficient to meet the tests that New York has passed on 
November 28th?
    Mr. McMahon. Yes, I believe so. The thing that is important 
is that it gives the Secretary, only on the application of the 
Governor, the right to allow people, law enforcement or whoever 
in the individual States, to have access to the records.
    Initially, most investigations or inquiries are going to be 
conducted by State or local law enforcement; and they have many 
more resources than the Federal. They deal with the fertilizer 
industry. They deal with the farmers in many ways. So I think 
that component would be critical.
    I do agree that they should be standardized. Because if one 
State has laws and another State does not, that does not make 
sense either. And that is what we have seen with the chemical 
bills, like we have the chemical bill in New York. Surrounding 
States, New Jersey finally just passed one. I think you are 
going to see that piecemeal approach for a lot of these 
vulnerabilities unless there is some Federal legislation like 
this.
    Mr. Linder. Thank you.
    The Chair would like to ask unanimous consent to allow Mr. 
Weldon to sit on the committee, give an opening statement if he 
chooses, and to question the panel.
    Now I recognize Mr. Langevin for 5 minutes.
    Mr. Langevin. Thank you, Mr. Chairman.
    I thank the panel again for your testimony today. It has 
been very enlightening and educational.
    My first question for Dr. Oxley, in your report, you 
discuss efforts to eliminate the explosive properties of 
ammonium nitrate. First, do you have Federal support for that 
research? And if you could just tell us the status of those 
efforts.
    Ms. Oxley. The Federal funding for that came immediately 
after Oklahoma City, and I believe ATF got $18 million to look 
at inerting ammonium nitrate. They established a National 
Research Council Committee, which a report has now been issued; 
and they funded various efforts. Their line of research 
followed very closely the British effort, because the British 
had already started a program some 10 years earlier and were 
doing testing here in the States, because they do not have that 
much real estate. I don't believe that program is funded at 
this time. We are certainly not funded over it, and I think I 
would hear if other folks are.
    Mr. Langevin. Can you elaborate for the committee? Do you 
see great promise in being able to remove the explosive effects 
of ammonium nitrate? Is this something we should redouble our 
effort to do, so that ammonium nitrate would be available to 
farmers for commercial use but obviously we have taken steps to 
protect ourselves and would no longer have the explosive 
effect?
    Ms. Oxley. To date, I have not seen a technology with great 
promise. However, I have had a new technology just presented to 
me, and I haven't had time to evaluate it. So I would hesitate 
to say. But we should try.
    Mr. Langevin. Since your report was released in 1998, have 
you been disappointed with the lack of Federal response to the 
risk posed by ammonium nitrate?
    Ms. Oxley. Well, I guess when you turn on those NRC 
committees you are not really expecting a response. So I wasn't 
disappointed.
    Mr. Langevin. Mr. McMahon, does New Yorkw give you the 
power to compel compliance, and what enforcement powers do you 
have?
    Mr. McMahon. There is no penalties involved with that. 
Permits could be revoked by the Commissioner of Agriculture, 
but there is no civil penalties or criminal penalties. We are 
relying on the industry's voluntary compliance, which I think 
we are going to have a very high rate of.
    Some of our other bills dealing with the chemical 
assessment, our general aviation bill that deals with general 
aviation facilities, had no penalties. There is over 500 of 
those. We have got compliance with that by almost 100 percent 
without penalties. So we are looking at partnership with the 
industry.
    Mr. Langevin. And can you elaborate on what the New York 
law envisions as reasonable protections against vandalism, 
theft and unauthorized access to ammonium nitrate?
    Mr. McMahon. Yes. It would be in a security area with a 
fence or secured building when it is unattended on it. And then 
we would also expect and it requires that there be a frequent 
inventory. Because there has been--in many instances, theft has 
been involved with ammonium nitrate by terrorists or criminals 
on that. So that is the main components of it.
    Mr. Langevin. Mr. O'Neill, if I could ask you, can you just 
walk us through the standard process for distribution of 
ammonium nitrate once it is produced or imported? Does it get 
delivered to retailers in large drums or is it in bags and bar 
coded for sale?
    Mr. O'Neill. I would say, Mr. Langevin, that the vast 
majority of this product is distributed in bulk from producers 
like Terra. On the domestic side, it would be delivered by rail 
car or by truck. Very little of it is distributed by bags. 
Farmers do not use bags in America. I think the industry as a 
whole, because of the security threat, has reduced the 
distribution of bags voluntarily.
    The other product stream is, the reason for this serious 
consideration of this bill, is as some manufacturers have gone 
out of the business and a number of people have stopped 
distributing the product, the demand has shifted to imports. 
The imports are coming from primarily the former Soviet Union 
and producers beyond the jurisdiction of the Congress, coming 
in by boatloads in the Mississippi River into our ports.
    To put it in context, the Texas City explosion, those ships 
that blew up were about 2,500 tons. The ships that are coming 
in today are 10 times that size. 25,000 tons, 20,000 tons would 
be a reasonable size shipload of the ammonium nitrate coming 
in.
    Now there is Coast Guard regulations, but those ships are 
soft targets to terrorists. So once the terrorists could 
commandeer or pirate one of these ships, then you have a whole 
different circumstance, because you have got a thousand tons of 
fuel oil on these vessels, and it is contained in their holds. 
So it is very quickly that we could have a very dangerous 
circumstance.
    So it is important that the committee, you know, looks at 
this carefully and realizes that we have domestic producers 
like Terra that is very responsible, but we have a shifting in 
the supply chain here that needs to be looked at regularly.
    Mr. Langevin. Good point. Thank you.
    Mr. Linder. Mr. Weldon.
    Mr. Weldon. Thank you, Mr. Chairman. I won't take the 
entire time.
    As a sponsor of the bill with Mr. Thompson, I appreciate 
again your leadership and that of Mr. Langevin for supporting 
Bennie Thompson and I on this important legislation. To me, it 
is a very vital issue, one I want to reiterate here publicly, 
is that we have industry coming forward to government saying 
help us regulate this product so that in fact we can keep it 
out of the hands of the bad guys.
    Too often, we criticize the private sector for not wanting 
to do the right thing; and this is probably the best example I 
can think of where the private sector came to Congress and 
said, look, we want to work with you. We do not want to harm 
our farmers, our distributors, our economy, but this is a 
problem that America has had to deal with, and we in fact want 
to be supportive.
    So I want to just publicly thank the industry groups who 
have come together on this initiative, and we look forward to 
working together.
    I would like to yield to my good friend and colleague from 
Pennsylvania, Mr. Dent.
    Mr. Dent. Thank you, Congressman Weldon.
    I, too, want to thank you gentlemen and lady for being here 
today; and Mr. O'Neill in particular, I want to thank you for 
taking such a leadership role on this very important 
initiative.
    I have asked to have my name added as a cosponsor to the 
legislation that is strongly supported by Mr. Weldon and Mr. 
Thompson of Mississippi.
    Again, I just commend you for your extraordinary 
leadership. It is--as Representative Weldon just said, it is 
not often that industry comes to us with an issue like this and 
is willing to work with us. For that, I thank you.
    Unfortunately, I cannot stay for the balance of the 
hearing. I just wanted to express my thanks and gratitude to 
all of you.
    Mr. Weldon. Mr. Chairman, reclaiming my time, you might 
want to consider doing something at your level or the full 
committee level to name this legislation perhaps in honor of 
some of the victims that paid the ultimate price for this 
disaster in Oklahoma City. That would be a fitting tribute, 
maybe, to their memory. But I leave that judgment to you.
    With that, I yield back.
    Mr. Linder. Mrs. Christensen.
    Mrs. Christensen. Thank you, Mr. Chairman; and thank you 
for this hearing.
    I do not have any questions at this point. I think many of 
mine have been asked by the prior members of the panel. But I 
want to thank you all for being here and thank you for the 
words of caution about the other explosives that we need to be 
aware of and concerned about as well and the recommendations 
that all of you have made in improving the legislation. I 
understand that many of those are incorporated in the 
substitute.
    Thank you.
    Mr. Linder. They are.
    Mr. Simmons.
    Mr. Simmons. Thank you, Mr. Chairman.
    I look forward to supporting this legislation, but I did 
have a couple of questions. I would like to focus a little bit 
on the expertise of Dr. Oxley, if you have a moment.
    Years ago, during what my mother referred to as my wasted 
youth, I worked for the Central Intelligence Agency. I was a 
paramilitary operative. As a consequence of that assignment, I 
spent a lot of time working with explosives.
    I remember on one occasion working with a bag of ammonium 
nitrate. We used some sort of commercially available fuel and 
generated a very nice explosion that did a lot of damage to a 
building. But we also took a bag of flour and sequenced the 
detonation of a bag of flour and blew out the windows in one 
side of a barn. The way it was done was the bag was exploded 
into a fine particulate material, and then the sequenced 
detonation came a few seconds later, ignited the flour and blew 
out the windows, the doors of this barn.
    I notice in reading through your materials here that 
composite explosives require as little as stirring and oxidizer 
and fuel together, such as sawdust and other materials.
    Clearly, ammonium nitrate works better. It combusts faster. 
It has got oxidizers within the material itself, which helps, 
but there are many other things that are commercially available 
that can be used for explosive purposes. So I guess what I am 
getting at here is, while I support this bill and I support 
regulation, I wonder if there are not some ways, using your 
expertise or the expertise of other people who are in the 
scientific community, of perhaps manufacturing ammonium 
nitrate, urea nitrate and other materials in a way that 
inhibits their use as an explosive from a chemical standpoint. 
Is that possible or is that just too complicated?
    Ms. Oxley. It is extremely difficult in terms of diluting 
it, which is the attempt in Ireland. That material is diluted 
with Dolomite, yet the Irish Republican Army continued to use 
it even after it was diluted. It was a matter of it was 
available in their hometowns so they could take it and import 
it to London and use it in Bishopsgate, which they had 30,000 
pounds. So the dilution has not proved a solution to the 
problem.
    There are some attempts now that I am aware of to make it a 
double salt. I do not if that is going to--it seems to make the 
material more stable.
    And if you alter the materials so that instead of having to 
have--I mentioned that setting off 5 pounds is very difficult. 
But if instead of having 100 pounds before you can get a decent 
detonation, if you had to have 1,000 pounds, that is one more 
hurdle.
    That is all we are doing really in our combating terrorism, 
is setting another hurdle. They can always figure out a way 
around it. I did not mean to be discouraging when I said they 
could figure out a way around it. I want to be ahead of them.
    Mr. Simmons. I think that's reality. Israel, I believe, 
outlaws ammonium nitrate. They use urea nitrate. But that also 
can be used for explosive purposes in some configurations.
    And so I agree with your basic premise that if we regulate 
one material successfully, I also agree that in my State of 
Connecticut I don't want a bunch of Federal regulators coming 
down. Set out the Federal standards; let the State enforce it.
    But I also agree that people who are determined to do these 
things will find other ways of getting materials, so we create 
a regulation regime for ammonium nitrate and we may have to add 
to that at some future date.
    Are there any agricultural countries around the world that 
have solved the problem?
    Ms. Oxley. The problem has not been solved, but I suggest 
that we do some more international dialogue. The problem that 
Mr. O'Neill brought up of the boatloads coming in is something 
I think that the United States needs to take a lead role in, 
tracking commodity chemicals. It is going to be a huge problem 
when the boatloads of ammonium nitrate change hands maybe six 
times while they are out in the ocean.
    But if we can track variations in our stock market, 
certainly we can track how these oxidizers are bought and sold 
worldwide, because basically we can't stop the use of 
oxidizers. People need them for purifying their water, for 
doing bleaching, in this case for fertilizer. What we can do is 
take a role in tracking where they are going for legitimate 
use.
    So if we control it here and we have got uncontrolled 
material coming in or going somewhere else, to go after U.S. 
interests, it is still a problem.
    Mr. Simmons. I thank you for those questions and I thank 
the witnesses for coming here today. I appreciate it. I yield 
back.
    Mr. Linder. Mr. Thompson.
    Mr. Thompson. Thank you very much, Mr. Chairman, ranking 
member. I appreciate the hearing. I have a written statement 
for the record.
    Mr. Linder. Without objection.
    Mr. Thompson. In light of what Mr. Simmons talked about, we 
have sent DHS a request earlier in the year asking them to work 
with some of the major companies who develop a potential, less 
dangerous ammonium nitrate possibility. But we have not been 
able to get much movement out of that, and from what I 
understand, the industry doesn't really have a lot of problem 
with it if it is a new technology that won't cost a lot, but we 
just have to prove it.
    I think it would make good sense for us to kind of go on 
record saying, Why not look at it. And I think this would be an 
opportunity. I think Honeywell is one of the companies that is 
kind of pioneering this effort. But anything to help us be 
safer would be encouraged.
    Two comments: Mr. McMahon, can you tell me whether or not 
the New York model has created any unnecessary burden on those 
users of the product?
    Mr. McMahon. The law was just passed on November 28th, so 
it is too early to tell, but I think in the outreach that was 
done by our Department of Agriculture and markets to the 
industry, I don't think it is. The purchaser form has, I think, 
21 categories on it; seven of those could be filled out by the 
distributor in advance. So--I think it would probably take 
about 2 minutes to fill out the form, so I am not sure that 
would be undue, but I think that is something, as you look at 
it, that you should consider in looking at those States that 
have forms in.
    Now Nevada and South Carolina have had theirs--and 
Oklahoma--have had their laws in place a lot longer. Ours is 
very close. We did outreach with those. Those laws are all very 
similar, so they might be able to say better than us because we 
are just rolling ours out now.
    Mr. Thompson. Did you do yours in consultation with 
industry?
    Mr. McMahon. Yes. Department of Agriculture and Markets 
with industry, we did with law enforcement agencies actually on 
an international level as the Office of Homeland Security; and 
the bill calls for the Department of Agriculture and Markets 
and the State office of homeland security to consult with each 
other, which we did throughout the process on that.
    Mr. Thompson. I think the intent of the legislation was to 
work with the industry, but also give us some accountability 
for the product and not to, if you please, add an additional 
layer. We are very sensitive to that. We made sure that this 
law did not preempt any existing State law, so that if there 
were States who wanted to do more, they could feel absolutely 
comfortable in doing that and not trying to contest that.
    But we just felt the need to have some accountability built 
into the existing system.
    Mr. Wallace, do you think the accountability that is 
proposed in this legislation is reasonable?
    Mr. Wallace. I do. And I think that it does not place an 
undue burden on the end consumer.
    We voluntarily put into place many security measures, 
including our delivery confirmation program which requires the 
customer to respond with a positive delivery note. We had some 
concern as to how that would be received in the farming 
industry and were pleasantly surprised that it was well 
received almost unanimously.
    Mr. Thompson. Yield back, Mr. Chair.
    Mr. Linder. Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman. I regret that I was 
not able to be here and hear the testimony.
    I would be interested to know whether you know if the 
present state of regulation has left the industry vital to 
liability of any kind. Were there any cases that indicate that 
exposure?
    Mr. Linder. Anybody want to take a shot at that?
    Mr. Wallace. Well, from our standpoint, again, we have put 
in place measures to track our product after it leaves our gate 
both on a truck and rail, which would be common transport for 
us. From a delivery confirmation, we have security measures in 
place to assure that the proper person is picking up the proper 
product; and then also, within the rail system, the proper 
tracking of product from source to destination.
    Mr. Black. I will comment just on a perceived liability.
    I manage also within our group a self-funded workers 
compensation insurance program for agribusiness. Some of the 
products, we are continuing to see pressure from excess 
insurance market just on the potential liability or potential 
exposure to some of these type things, so insurance markets and 
the excess--the potential liability that would come of that, we 
have seen a little pressure from that.
    Ms. Norton. Typically--and industry is a more even playing 
field for industry if there is some regulation. Some will be 
more--perhaps because of liability, perhaps because they are 
more safety conscious, because they want, indeed, to do the 
right thing--will be more inclined than others, and of course, 
there are costs associated with that.
    And to leave it to industry to decide whether to spend the 
money is one thing. When the government says, look, everybody 
ought to be accountable to a certain degree, some of that 
competitive pressure, at least it seems to me, is removed in 
what is responding to what is required of the industry by the 
Federal Government.
    Thank you very much, Mr. Chairman.
    Mr. Linder. Thank you, Ms. Norton.
    Thank you all for being here. We are grateful for your 
contributions. The hearing is adjourned.
    Members of the subcommittee, we are going to, in 5 minutes, 
reconvene and mark up this legislation rather than this 
afternoon.
    [Whereupon, at 11:10 a.m., the subcommittee was adjourned, 
to reconvene in approximately 5 minutes.]