Bar Bulletin

June, 2004

 BAR BULLETIN FOCUS
 June 15, 2004

Environmental Law  

GOVERNOR SIGNS HAZARDOUS MATERIAL SECURITY BILL
By Charles E. Wagner, Jr.

On May 26, 2004, Governor Ehrlich signed into law House Bill 493, which enacted new Subtitle 7 of the Environment Code covering Hazardous Material Security. The bill, requested by the Maryland Department of the Environment, was passed to address terrorist threats to Maryland facilities producing or handling hazardous materials.

In the wake of the terrorist attacks of September 11, 2001, federal, state and local authorities became increasingly concerned about the security of facilities that produce, store and transport chemicals and hazardous materials. Terrorists might attack these facilities intentionally releasing the hazardous materials with catastrophic consequences. A review of chemical facilities by the Environmental Protection Agency (EPA) identified 123 facilities where a release of hazardous chemicals could endanger more than one million people. Last fall, the CBS news program 60 Minutes produced a segment on chemical plant security in which a correspondent was able to walk through an open gate at a facility in Pittsburgh and roam around tanks of anhydrous ammonia and boron trifluoride for 10 minutes without being challenged by an employee, much less a security guard. In April, presidential candidate John Kerry criticized the Bush administration for supporting voluntary efforts by the chemical industry to secure chemical plants. A March 2003 report by the General Accounting Office concluded that voluntary efforts were inadequate and recommended that the Department of Homeland Security and the EPA jointly develop a national strategy for chemical facility security.

While the U.S. Coast Guard and the Department of Transportation have issued rules addressing the security of transportation of hazardous materials, there is no federal law explicitly requiring facilities that handle hazardous materials to address security. However, there is some existing federal statutory authority related to security at such facilities. Section 112(r) of the Clean Air Act requires owners or operators of stationary sources that have more than a threshold quantity of regulated substances to prepare risk management plans addressing potential releases. The Occupational Safety and Health Administration’s process safety management program requires facilities to take steps to prevent catastrophic releases of toxic, reactive, flammable and explosive substances. The Emergency Planning and Community Right-to-Know Act, enacted in response to the 1984 Bhopal tragedy, requires facilities handling hazardous substances to notify state and local authorities, which are required to prepare emergency plans to address chemical releases. Because there is no federal law aimed at preventing terrorist attacks at facilities handling hazardous chemicals, states like Maryland are enacting such laws of their own.

Maryland’s new Hazardous Materials Security Act (effective October 1, 2004) applies to facilities that store, dispense, use or handle hazardous materials. Retail facilities selling commercial fertilizer for agricultural use are excluded. Hazardous materials are toxic and flammable substances, in excess of threshold quantities, defined in 40 C.F.R. 68.130, which is the list of chemicals subject to 122(r) of the Clean Air Act. Owners or operators are required to conduct a security audit and submit it to the Maryland Department of the Environment (MDE) no later than October 1, 2005, along with a $2,500 fee. Audits must be performed at least every five years thereafter. These audits must address potential security threats, vulnerabilities and consequences of hazardous material releases.

By January 1, 2005, MDE must issue standards for analyzing threats and vulnerabilities, implementing security measures, documenting security management programs including training and drills, communicating with employees, communities and government officials, conducting audits and third-party verification. MDE, in consultation with the Maryland Department of State Police, must inspect and audit facilities to verify compliance with program standards and refer violations to the State Police for enforcement. The State Police must adopt regulations to enforce compliance. Any person who violates the Act or any regulations adopted under the Act is subject to a civil penalty not exceeding $1,000 for each violation (with each day a violation continues counted as a separate violation). The Act makes it a violation for a person to knowingly submit false information.

Where a local jurisdiction has adopted its own hazardous materials security program (which itself must be at least as stringent as MDE’s program), facilities within that jurisdiction are exempt from the state requirements. So far, Baltimore City is the only local jurisdiction to enact its own hazardous materials security ordinance. MDE estimates that 95 facilities would be subject to the Act. These include 40 facilities owned by counties and municipal corporations, which are exempt from the $2,500 fee.

While some state and local governments enact hazardous materials security legislation, two bills are winding their way through Congress. The Chemical Facilities Security Act of 2003, introduced by Senate Environment and Public Works Committee Chairman James Inhofe (R-OK) and Senator Zell Miller (D-CA), represents the Bush Administration’s chemical security proposal. It gives the Department of Homeland Security jurisdiction over chemical security issues and requires certain facilities to conduct vulnerability assessments and to prepare site security plans. The Chemical Security Act of 2003, introduced by Senator John Corzine (D-NJ), gives responsibility to EPA and would apply to a broader range of facilities and would require those facilities to conduct vulnerability assessments and to prepare prevention, preparedness and response plans. Neither bill is expected to be passed before this November’s election.

Charles E. Wagner, Jr., is an associate with the law firm of Blank Rome LLP. He concentrates his practice in environmental and hazardous materials transportation law.

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