SUPPLEMENTARY INFORMATION:

I. Background

Title XI of the Organized Crime Control Act of 1970 (“OCCA”), Public Law 91-452, 84 Stat. 922 (1970), added 18 U.S.C. chapter 40 (Importation, Manufacture, Distribution, and Storage of Explosive Materials).^[1] One of the stated purposes for title XI was to reduce the “hazard to persons and property arising from misuse and unsafe or insecure storage of explosive materials.” Public Law 91-452, sec. 1101, 84 Stat. at 952. The Attorney General is responsible for implementing title XI. See18 U.S.C. 847. The Attorney General has delegated that responsibility to the Director of ATF (“Director”), subject to the direction of the Attorney General and the Deputy Attorney General. ² See28 U.S.C. 599A(b)(1), (c)(1); 28 CFR 0.130(a)(1)-(2); Treas. Order No. 221(2)(a), (d), 37 FR 11696-97 (June 10, 1972). Regulations in 27 CFR part 555 implement title XI.

Federal law requires any person who stores explosive materials to do so in conformity with federal regulations. See18 U.S.C. 842(j). Currently, under the regulations at 27 CFR 555.212, smoking, matches, open flames, and spark-producing devices are prohibited in any explosives magazine,^[3] within 50 feet of an outdoor magazine, and in any room containing an indoor magazine. In addition, the regulation at § 555.213(b) prohibits licensees/permittees ^[4] from ( printed page 60921) storing detonators in the same magazine with other explosive materials, except in limited circumstances.

Similarly, under the regulations at § 555.214 licensees/permittees must not place containers of explosive materials directly against a wall or block ventilation; must store containers of explosive materials so that markings ^[5] are visible, easily counted, and easily checked during inspection; may not unpack or repack metal containers in the magazine or within 50 feet of the magazine or other explosive materials; must close containers of explosive materials while they are being stored; and must use non-sparking tools to open or close containers of explosive materials.

The requirement to store containers so that markings are visible has been the subject of particular discussion in the past. This requirement is beneficial in that it helps ensure that containers can be easily counted and checked, thus allowing efficient and reasonable inspections while minimizing the need to move explosive materials. This requirement, however, can also be difficult to implement, and some licensees/permittees have informed ATF that it is often impractical to store explosive materials in a way that allows the label on each container to be visible. For example, shippers often stack multiple containers of explosive materials on a pallet, but this arrangement does not lend itself to easy access to each container or the ability to see each one of its markings. Similarly, space limitations may compel licensees/permittees to arrange containers in consecutive rows, with little or no space between the rows. In both situations, the labels and markings on containers that are not in the front row are not visible, making it difficult for ATF to inspect them.

After considering these situations and industry input, ATF issued ATF Ruling 2010-2,^[6] which authorizes licensees/permittees to use a variance from § 555.214's visible-markings requirement, as long as the licensees/permittees meet other requirements. If the containers have identical markings on the labels, licensees/permittees may store them so that some of the containers or labels are not readily visible, as long as the stocks of explosive materials can be reasonably accessed, counted, and checked during an inspection. If the containers are of different explosive materials, or are of the same materials but with different dates or shift codes on the labels, licensees/permittees may store them so that the labels on some of the containers are not readily visible, as long as the licensee/permittee (1) maintains an accurate, complete, and updated list of all the explosive materials on the pallet or in the stacked group, including the markings for each container and the quantity and type of explosive materials, and (2) ensures they can be reasonably accessed, counted, and checked during inspection.

Additionally, under the regulations at § 555.215, licensees/permittees must keep the interior of explosive magazines clean; must clean floors contaminated by explosive materials; must destroy deteriorated explosive materials according to the manufacturer's instructions; must keep the area around the magazine clear of rubbish, brush, or dry grass; and must keep volatile materials more than 50 feet from an outdoor magazine.

II. Proposed Rule

ATF has embarked on an effort to modernize federal explosives regulations. This proposed rule would contribute to that ongoing effort by streamlining explosives storage requirements in 27 CFR 555.212, 555.213, 555.214, and 555.215 by combining the requirements into § 555.212. The proposed new § 555.212 would also incorporate guidance from ATF Ruling 2010-2, allowing licensees/permittees to store explosives containers in magazines so that markings on some of the containers are not visible, as long as the licensee/permittee maintains an accurate list of the explosive materials and containers. ATF Ruling 2010-2 would be rescinded when the final rule is effective.

Consolidating these regulations would make it easier for persons who store explosive materials to find all the magazine safety and maintenance requirements in one section. In addition to consolidating, ATF also proposes eliminating some requirements to better align with industry practices without compromising public safety, revising the requirements to be easier to read, removing extra detail, and grouping requirements for greater clarity.

The requirements in the current § 555.212, regarding the prohibition against smoking and open flames, would be consolidated into a single paragraph in the new § 555.212. That prohibition would be grouped with a new paragraph that would clarify that transportation vehicles may temporarily park near a magazine to load and unload explosive materials.

The requirements in § 555.214, regarding storing explosives within types 1,2, 3, and 4 magazines, would remain separate paragraphs in the new § 555.212. The regulation would still require explosive materials containers to be stored so that the markings are visible because doing so better facilitates accurate inventories, accounting, and inspections while minimizing movement of the explosive materials. However, the proposed rule would permit licensees/permittees to store explosives containers on a pallet or in a stacked group in which some of the labels and markings are not visible, as long as the licensee/permittee maintains an accurate, complete, and updated list of the explosive materials on the pallet or stacked group.

ATF would revise the general requirement in § 555.214(c) that persons be at least 50 feet from a magazine when unpacking or repacking explosive materials except when the materials are in fiberboard or other nonmetal containers. Rather than stating the exceptions to the requirement, which are extra details that have been confusing to members of the regulated public, ATF would clarify that the requirement applies only to explosives stored in metal containers, thereby changing it from an apparently broad restriction with two exceptions to a narrow restriction that clearly applies only when using metal containers. ATF also would eliminate the unnecessary requirement in § 555.214(c) that explosives containers must be closed while being stored, due to changes in modern explosives and storage options.

ATF would retain the requirement in § 555.214(d) that licensees/permittees may use only tools made of non-sparking materials to open or close explosives containers. However, this proposed rule would eliminate the additional specifications on which materials must be used to make these tools. In addition, licensees/permittees would no longer need to ensure that the containers of explosive materials are not placed against the magazine wall or do not interfere with the ventilation. These proposed changes align with current industry practices as well as ( printed page 60922) developments in technology and magazine construction that have addressed the concerns that first gave rise to the requirements. Thus, the proposed changes do not pose a threat to public safety.

The requirements in § 555.215, regarding storing explosives within relevant magazines, would become separate paragraphs in the new § 555.212. Licensees/permittees would still have to keep magazines clean, but the extra details about grit, paper, empty packages, and containers would be removed. This is because industry practices, independent of ATF's regulations, have evolved over the years as trade associations and other industry members have recognized the safety-related and financial benefits of maintaining magazines, thereby rendering these aspects of the regulations moot. In addition, ATF would eliminate the requirement to keep magazines dry because magazines that meet the construction requirements in subpart K will stay dry inside. All brooms and other cleaning utensils used in magazines would still have to be non-sparking. Floors contaminated by explosive materials and deteriorated explosive materials would still have to be cleaned or destroyed, respectively, in accordance with manufacturer instructions. Licensees/permittees would still have to maintain a 25-foot perimeter surrounding an outdoor magazine that would have to be kept free of rubbish, brush, or dry grass. However, trees of any height would be permitted within the 25-foot perimeter because of developments in industry practices that have rendered the existing regulatory tree restriction moot.

Finally, the requirement to keep volatile materials at least 50 feet from an outdoor magazine would be incorporated into the paragraph with smoking and open flames because the same general requirements apply to these hazards. However, ATF would include a new exception to the requirement not to store volatile materials in a magazine by permitting fuel to be stored in vehicular magazines.^[7]

III. Statutory and Executive Order Review

A. Executive Orders 12866 and 13563

Executive Order 12866 (Regulatory Planning and Review) directs agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits.

Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of agencies quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting public flexibility.

The Office of Management and Budget (“OMB”) has determined that this proposed rule would not be a “significant regulatory action” under Executive Order 12866. Therefore, it did not review this rule. ATF provides the following analysis to comply with Executive Orders 12866 and 13563.

1. Need Statement

This rule proposes several simplifying and deregulatory amendments to clarify conditions, expectations, and requirements related to explosives storage in order to reduce burdens on the regulated industry and increase understanding and compliance, while minimizing public safety implications. The maintenance requirements in existing regulations are split apart in an inefficient manner and include unnecessary requirements that can be confusing without adding safety benefits. Consolidating the provisions and removing or streamlining requirements as proposed would address these issues and reduce compliance burdens.

2. Benefits

The benefits of the proposed regulatory changes are mostly qualitative and de minimis. They include reducing inconvenience, aligning regulatory requirements more closely with certain industry practices—which make certain requirements unnecessary due to changes in materials and construction options—and avoiding potential confusion among industry partners. Both ATF and industry partners consider implementing precautions to safeguard explosives to be a key objective. In line with that perspective, most explosives industry members have, since the regulations were last updated, adopted policies and precautions within their own industry standards to avoid loss of life, serious bodily harm, and destructive consequences of accidental detonations on private facilities and public infrastructure. Streamlining and consolidating the regulatory requirements, eliminating extra details, and making the writing easier to understand would reduce potential confusion for industry newcomers and smaller operations and provide some relief from minor compliance burdens.

3. Costs

ATF does not expect any costs to result from the proposed rule. The proposed changes are deregulatory in nature and primarily modify storing and housekeeping regulations to simplify and streamline the protocols, while retaining key provisions that continue to substantially enhance public safety. To ATF's knowledge, none of the provisions ATF proposes removing has been essential to preventing any explosives incident involving a magazine. As a result, ATF proposes removing them from the regulations as unnecessary. It is ATF's informed view, based on decades of experience with the current regulations and frequent discussions with members of industry, that doing so will not require sacrificing safety. The qualitative benefits discussed above are therefore not counterbalanced by material costs or increased public safety risks.

4. Regulatory Alternatives

Alternative 1: The primary alternative considered to this proposed rule was to continue under the regulatory status quo. The current regulatory requirements are broad and repetitive, imposing inconveniences on regulated industry, requiring practices that are aligned less closely with industry developments, and causing potential confusion among industry partners. This alternative was deemed to pose a larger qualitative burden on the public than the approach adopted in this proposed rule without any countervailing increase in public safety.

Alternative 2: ATF considered the alternative of retaining Ruling 2010-2 as a variance while keeping the regulatory requirement for visible labels and markings intact. However, ATF believes that having two separate requirements within the ruling based on whether the markings are similar or different causes unnecessary confusion. ATF also believes that having one requirement, regardless of the markings on the packaged explosive materials, would provide industry with a single clear requirement.

Alternative 3: ATF considered rescinding the regulatory requirement for visible markings entirely. However, ATF believes that rescinding the requirement would increase the need to move explosive materials to verify the markings during ATF inspections and when industry members conduct their own inventories. Moving explosive materials more often would increase the risk of accidents because such materials ( printed page 60923) are often highly sensitive to motion triggers. Allowing industry members the option to instead provide ATF with a list of explosive materials when markings are not visible would decrease the need to move explosive materials to see markings on other stacks while still facilitating ATF inspections and industry inventories.

B. Executive Order 14192

Executive Order 14192 (Unleashing Prosperity through Deregulation) requires an agency, unless prohibited by law, to identify at least ten existing regulations to be repealed or revised when the agency publicly proposes for notice-and-comment or otherwise promulgates a new regulation that qualifies as an Executive Order 14192 regulatory action (defined in OMB Memorandum M-25-20 as a final significant regulatory action under section 3(f) of Executive Order 12866 that imposes total costs greater than zero). In furtherance of this requirement, section 3(c) of Executive Order 14192 requires that any new incremental costs associated with such new regulations must, to the extent permitted by law, also be offset by eliminating existing costs associated with at least ten prior regulations. However, this proposed rule would not be an Executive Order 14192 regulatory action because it is not a significant regulatory action as defined by Executive Order 12866 and would not impose total costs greater than zero. This proposed rule would simplify and reduce requirements for maintaining storage magazines to clarify conditions, expectations, and requirements; reduce burdens on regulated industry members; and increase understanding and compliance. It would result in qualitative benefits to the public without increasing costs or burdens. As a result, ATF expects this rule, if finalized as proposed, to qualify as an Executive Order 14192 deregulatory action (defined by OMB Memorandum M-25-20 as a final action that imposes total costs less than zero).

C. Executive Order 14294

Executive Order 14294 (Fighting Overcriminalization in Federal Regulations) requires agencies promulgating regulations with criminal regulatory offenses potentially subject to criminal enforcement to explicitly describe the conduct subject to criminal enforcement, the authorizing statutes, and the mens rea standard applicable to each element of those offenses. This proposed rule would not create a criminal regulatory offense and is thus exempt from Executive Order 14294 requirements.

D. Executive Order 13132

This proposed rule would not have substantial direct effects on the states, the relationship between the federal government and the states, or the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132 (Federalism), the Director has determined that this proposed rule would not impose substantial direct compliance costs on state and local governments, preempt state law, or meaningfully implicate federalism. It thus does not warrant preparing a federalism summary impact statement.

E. Executive Order 12988

This proposed rule meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Civil Justice Reform).

F. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, agencies are required to conduct a regulatory flexibility analysis of any proposed rule subject to notice-and-comment rulemaking requirements unless the agency head certifies, including a statement of the factual basis, that the proposed rule would not have a significant economic impact on a substantial number of small entities. Small entities include certain small businesses, small not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Director certifies, after consideration, that this proposed rule would not have a significant economic impact on a substantial number of small entities. This proposed rule is deregulatory because it proposes to reduce burdens on industry by streamlining magazine maintenance requirements, eliminating unnecessary requirements, and consolidating the remaining requirements in one section. It therefore would reduce time and compliance burdens for small businesses and would create no costs or barriers to entry.

G. Unfunded Mandates Reform Act of 1995

This proposed rule does not include a federal mandate that might result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it would not significantly or uniquely affect small governments. Therefore, the ATF has determined that no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

H. Paperwork Reduction Act of 1995

Under the Paperwork Reduction Act of 1995 (“PRA”), 44 U.S.C. 3501-3521, agencies are required to submit to OMB, for review and approval, any information collection requirements a rule creates or any impacts the rule has on existing information collections. An information collection includes any reporting, recordkeeping, monitoring, posting, labeling, or other similar actions an agency requires of the public. See5 CFR 1320.3(c). This proposed rule, if finalized, would require revising an existing information collection covered by the PRA under OMB control number 1140-0030, Records and Supporting Data: Importation, Receipt, Storage, and Disposition by Explosives Importers, Manufacturers, Dealers, and Users Licensed under Title 18 U.S.C. chapter 40 Explosives (the title of which would be revised to Records and Supporting Data Requirements for Explosives Licensees/Permittees). It would do so by incorporating into the new 27 CFR 555.212 the requirement currently found in Ruling 2010-2 that licensees/permittees must maintain an accurate, complete, and updated list of all the explosive materials in containers being stored on a pallet or in a stacked group if the containers and their labels are not all visible. There is no form associated with this information collection request (“ICR”).

Title: Records and Supporting Data Requirements for Explosives Licensees/Permittees.

OMB control number: 1140-0030.

ATF form number: None.

Summary of the information collection:18 U.S.C. 842(f) states that it is unlawful for any licensee/permittee willfully to manufacture, import, purchase, distribute, or receive explosive materials without making such records as are required by regulation, including, but not limited to, a statement of intended use, the name, birthdate, birthplace, social security number or taxpayer identification number, and residence address of any person to whom a licensee/permittee distributes explosive materials (or comparable information for any entity to which the licensee/permittee distributes the materials).

ATF regulations at §§ 555.121 through 129 set out the record-keeping requirements for all explosives licensees/permittees. The records cover daily importing, manufacturing, receiving, storing, and disposing activities for all explosive materials ( printed page 60924) covered under 18 U.S.C. chapter 40. In addition to the information specified in the statute, each licensee/permittee must maintain all records on acquiring or disposing of explosive materials, whether temporarily or permanently. These include records on importing, producing, shipping, receiving, selling, or other methods of acquiring or disposing of explosives.

Need for information and proposed use: Title XI of the Organized Crime Control Act of 1970 was enacted to reduce domestically perpetrated criminal acts involving explosives and today covers both domestic and foreign terrorism acts, and ATF's regulations in 27 CFR part 555 were developed to implement the statute and its safety goals. The regulations require licensees/permittees to maintain records to show where and to whom they transfer explosive materials and where those materials are located. This regime ensures that the licensee/permittee and ATF will be able to readily notice any diversions and that ATF will be immediately notified if such materials are lost or stolen. The records also serve to meet statutory requirements. Without these records, accounting for explosive materials would be negatively affected, which in turn would increase the threat to public safety.

Description of the respondents: Federal explosives licensees/permittees.

Number of respondents: 9,096 respondents.

Frequency of response: Annually.

Burden of response: 12.6 hours. This proposed rule would add 0.1667 additional burden hours per respondent to this ICR.

Annual burden of response: 114,610 hours. This proposed rule would add 1,516 industry burden hours to the existing burden for a total of 116,126 total hours.

I. Congressional Review Act

This proposed rule would not be a major rule as defined by the Congressional Review Act, 5 U.S.C. 804.

IV. Public Participation

A. Comments Sought

ATF requests comments on the proposed rule from all interested persons. ATF specifically requests comments on the clarity of this proposed rule and how it may be made easier to understand. In addition, ATF requests comments on the costs or benefits of the proposed rule and on the appropriate methodology and data for calculating those costs and benefits.

All comments must reference this document's RIN 1140-AA67 and, if handwritten, must be legible. If submitting by mail, you must also include your complete first and last name and contact information. If submitting a comment through the federal e-rulemaking portal, as described in section IV.C of this preamble, you should carefully review and follow the website's instructions on submitting comments. Whether you submit comments online or by mail, ATF will post them online. If submitting online as an individual, any information you provide in the online fields for city, state, zip code, and phone will not be publicly viewable when ATF publishes the comment on www.regulations.gov. However, if you include such personally identifying information (“PII”) in the body of your online comment, it may be posted and viewable online. Similarly, if you submit a written comment with PII in the body of the comment, it may be posted and viewable online. Therefore, all commenters should review section IV.B of this preamble, “Confidentiality,” regarding how to submit PII if you do not want it published online. ATF may not consider, or respond to, comments that do not meet these requirements or comments containing excessive profanity. ATF will retain comments containing excessive profanity as part of this rulemaking's administrative record but will not publish such documents on www.regulations.gov. ATF will treat all comments as originals and will not acknowledge receipt of comments. In addition, if ATF cannot read your comment due to handwriting or technical difficulties and cannot contact you for clarification, ATF may not be able to consider your comment.

ATF will carefully consider all comments, as appropriate, received on or before the closing date.

B. Confidentiality

ATF will make all comments meeting the requirements of this section, whether submitted electronically or on paper, and except as provided below, available for public viewing on the internet through the federal e-rulemaking portal, and subject to the Freedom of Information Act (5 U.S.C. 552). Commenters who submit by mail and who do not want their name or other PII posted on the internet should submit their comments with a separate cover sheet containing their PII. The separate cover sheet should be marked with “CUI//PRVCY” at the top to identify it as protected PII under the Privacy Act. Both the cover sheet and comment must reference this RIN 1140-AA67. For comments submitted by mail, information contained on the cover sheet will not appear when posted on the internet but any PII that appears within the body of a comment will not be redacted by ATF and may appear on the internet. Similarly, commenters who submit through the federal e-rulemaking portal and who do not want any of their PII posted on the internet should omit such PII from the body of their comment and in any uploaded attachments. However, PII entered into the online fields designated for name, email, and other contact information will not be posted or viewable online.

A commenter may submit to ATF information identified as proprietary or confidential business information by mail. To request that ATF handle this information as controlled unclassified information (“CUI”), the commenter must place any portion of a comment that is proprietary or confidential business information under law or regulation on pages separate from the balance of the comment, with each page prominently marked “CUI//PROPIN” at the top of the page.

ATF will not make proprietary or confidential business information submitted in compliance with these instructions available when disclosing the comments that it receives but will disclose that the commenter provided proprietary or confidential business information that ATF is holding in a separate file to which the public does not have access. If ATF receives a request to examine or copy this information, it will treat it as any other request under the Freedom of Information Act (5 U.S.C. 552). In addition, ATF will disclose such proprietary or confidential business information to the extent required by other legal process.

C. Submitting Comments

Submit comments using either of the two methods described below (but do not submit the same comment multiple times or by more than one method). Hand-delivered comments will not be accepted.

• Federal e-rulemaking portal: ATF recommends that you submit your comments to ATF via the federal e-rulemaking portal at www.regulations.gov and follow the instructions. Comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that is provided after you have successfully uploaded your comment.
• Mail: Send written comments to the address listed in the ADDRESSES section ( printed page 60925) of this document. Written comments must appear in minimum 12-point font size, include the commenter's first and last name and full mailing address, and may be of any length. See also section IV.B of this preamble, “Confidentiality.”

Disclosure

Copies of this proposed rule and the comments received in response to it are available through the federal e-rulemaking portal, at www.regulations.gov (search for RIN 1140-AA67).

For the reasons discussed in the preamble, ATF proposes to amend 27 CFR part 555 as set forth below:

1. The authority citation for 27 CFR Part 555 continues to read as follows:

Authority: 18 U.S.C. 847.

2. Revise § 555.212, including its heading, to read as follows:

3. Amend § 555.213 by removing the designation from paragraph (a) and removing all of paragraph (b).

4. Remove and reserve § 555.214.

5. Remove and reserve § 555.215.

91 FR 60920