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On April 9, 2007, the Department of Homeland Security (DHS) published its“Chemical Facility Anti-Terrorism Standards”. This standard develops asystem to require “self-assessment” all facilities in the US through a chemical storage screening process. Facilities that store specific chemicalsin quantities above screening thresholds must report to the DHS.

DHS will rank and prioritize facilities and will notify facilities that areclassified as “high priority”. These facilities will be required to conduct additional security assessments and prepare security plans.

This Briefing outlines the basic structure of the DHS Rule, highlighting theshort-term obligations all facilities have for self-assessment and reporting.

Overview

Yes–with the exception of a few types of facilities already addressed byDHS, this Rule applies to all facilities.

The extent that the rule applies will depend on whether or not yourfacility stores one of over 300 specific chemicals above specifiedthresholds (Screening Threshold Quantities, STQ) and whether or not yourfacility is ranked as a high priority site.

Some facilities that would not immediately consider themselves as“chemical facilities” may exceed STQs and will need to report to DHS. For example:

A warehouse/logistics facility with a 2,000 gal. liquid propane tank An R&D facility with a 1-oz. container of boron trichloride A meat processing facility using an ammonia refrigeration system A manufacturer with a 250-gal. tote of nitric acid

I N S I D E T H I SB R I E F I N G

1 Overview

2 Does This Apply To MyFacility?

3 Basic Format of Rule

4 Proposed Chemical Listand STQs

5 Compliance Schedule

6 What Should I Be Doing?

Many common-use

chemicals are proposed

For example:

Butane

Acetone

Ammonia

Chlorine dioxide

Ethylene dioxide

Hydrochloric acid

Nitric acid

Propane

Potassium nitrate

Does This Apply To My Facility?

Regulatory Briefing

New ChemicalSecurity Standards

May 2007

©Caltha LLP 2007

Page 2 Regulatory Briefing

Tier 2

Tier 3

Tier 4

Tier 1

ALL FACILITIES

Conduct “Top­Screen” (i.e., inventory of chemical storage related to chemicalsin Table A of the Rule)

Reviews submittalsPrioritizes risks

Notifies high priority facilitiesand assigns tier ranking

ALL FACILITIES THAT EXCEED SCREENING THRESHOLD QUANTITY (STQ) FORANY CHEMICAL

Submit “Top­Screen” information to DHS

ALL FACILITIES NOTIFIED BY DHS THATTHEY ARE “HIGH PRIORITY CHEMICAL FACILITIES”

Conduct Security VulnerabilityAssessmentPrepare Site Security Plan

Note: Specific requirements may differ between Tiers

Written NotificationFrom DHS

Submit to DHS

Basic Format for Rule

©Caltha LLP 2007

Regulatory Briefing Page 3

Once Table A is finalized and published in theFederal Register, facilities will have 60-days tocomplete their inventory and to submit their Top-Screen assessment to DHS, if they exceed any ofthe STQs.

Because the specific chemicals and thresholdslisted in the proposed Table A may change, it maynot be beneficial to conduct any specific chemicalassessments at this time. However, facilitiesshould be aware of the impending requirementsand could be planning on how this assessment willbe conducted to meet the 60 day schedule oncethe Table is published.

No specific dates for compliance were included in the final Rule. The schedule for compliance is contingenton DHS publishing its final Table A, which is the listing of chemicals and their respective STQs.

However, relative compliance dates were included in the Rule:

1. Facilities storing chemicals in excess of STQ must submit “Top-Screen” Report within 60-days of DHS publishing the finalTable A in the Federal Register.

2. Facilities that begin storing chemicals in excess of STQ must submit “Top-Screen” Report within 60-days of coming intopossession of chemicals.

3. Facilities receiving Notification from DHS that they are a high priority site must prepare and submit a Security VulnerabilityAssessment within 90-days of receiving notice.

4. Facilities receiving Notification from DHS that they are a high priority site must prepare and submit a Site Security Planwithin 120-days of receiving notice.

Regulatory Briefings are published periodically byCaltha to highlight new or proposed environmental,health & safety regulations.

Caltha LLP2125 Urbandale Lane NorthMinneapolis, MN 55447-2029

Phone:(763) 208-6430

Website:www.calthacompany.com

E-mail:info@calthacompany.com

Schedule for Compliance

What Should I Be Doing?

The Rule published by DHS on April 9th is a final Rule with the exception of Table A, which is the listof chemicals and their respective STQs. For many chemicals, the STQ is between 2,000 and 7,500lbs.; however, for a significant number of chemicals, the STQ is “any amount”. Storage of these chemicals in any amount at a facility will exceed the STQ and require the facility to submit their“Top-Screen” evaluation to DHS.

DHS is asking for comments on their proposed Table A, and will issue the Table in a final form at alater time.

Proposed Chemical List and STQs

Much of the Rule is final; however, DHS hassolicited comments on the Table A. The commentperiod was open for 30 days, which ended on May9, 2007.