so facility owners and operators can identify potential auditors before
there is a need to conduct a third-party compliance audit.
3. Incident Investigations and Root Cause Analysis
    Many commenters argued that the proposed four-year compliance date
is too long. Commenters offered alternative timeframes such as 12
months, 18 months, and three years. A local agency suggested a one-year
compliance date, arguing that many complex facilities are already
conducting root cause analyses. One commenter argued that provisions
that are triggered by an accident should be required in an accelerated
timeframe. Other commenters argued that the compliance date should be
required as soon as possible.
    EPA disagrees with the commenters and is finalizing a four-year
compliance date for incident investigations involving root cause
analyses. For any incident that occurs four years after the effective
date of the final rule and results in (e.g. an RMP reportable accident)
or could reasonably have resulted in a catastrophic release, the owner
or operator must investigate the incident and conduct a root cause
analysis. This will allow facility owners and operators sufficient time
to establish training and program development activities. EPA
encourages facility owner or operators that are already conducting root
cause analyses to continue to do so for any incident that resulted in
(e.g. an RMP reportable accident) or could reasonably have resulted in
a catastrophic release during the compliance timeframe.
4. STAA
    A local agency supported the four-year compliance timeframe but
numerous commenters argued that the proposed timeframe is too long.
Many commenters, including mass mail campaigns joined by approximately
14,000 commenters and multiple advocacy groups, requested that EPA
expedite compliance with STAA requirements. A mass mail campaign joined
by approximately 300 commenters stated that the proposed compliance
period is unlawful and arbitrarily long. The commenter argued that EPA
has no lawful legal basis to extend the STAA compliance date

beyond three years. Another commenter suggested that EPA should
consider following the NJ model to implement IST requirements and
require an initial review report within 120 days of the rule's
effective date.
    However, other commenters thought the proposed timeframe was too
short. One commenter cited the complexity of the IST/ISD analysis as a
reason to extend the compliance date into a second PHA cycle to allow
more time for engineering studies and design. Another commenter
supported the U.S. Small Business Administration (SBA) recommendation
to defer the STAA requirement for three years for small facilities so
that EPA can gather information on their experience and assess how
often safer alternatives were identified and at what cost.
    EPA disagrees with commenters and is establishing a four-year
compliance date for STAA. EPA believes that in many cases sources will
prefer to perform a full PHA update when implementing the STAA
requirements. Sources subject to this provision are among the largest
and most complex sources regulated under 40 CFR part 68, and therefore
PHAs and PHA updates at these sources typically require a significant
level of effort. Since PHA updates are normally done at five year
intervals, EPA believes it would be appropriate to allow most sources
to adopt these provisions in their normal PHA update cycle if they so
choose. Sources that performed their most recent PHA update immediately
prior to this rule's effective date will have up to four years to
perform their next PHA update and adopt the STAA provisions. Most
sources could schedule their PHA updates to incorporate the new STAA
provisions on their normal PHA update schedule. EPA also intends to
publish guidance on STAA and once complete, facility owners and
operators will need time to familiarize themselves with the new
materials and incorporate them into their risk management programs.
    EPA disagrees with the recommendation to defer the STAA requirement
for three years for small facilities in order to allow EPA to gather
information. STAA for a source is a site-specific determination and
would be difficult to compare among facilities. EPA believes it would
be impractical to gather/analyze information on STAA implementation to
determine the utility of the provision for small facilities.
5. Emergency Response Coordination
    EPA received comments supporting the proposed one-year compliance
date for emergency response coordination activities. One commenter
requested clarification on how to calculate the annual coordination
activities, recommending that it be based on a calendar year.
    EPA agrees with commenters and is finalizing a one-year compliance
date for emergency response coordination activities. EPA believes that
a flexible schedule is appropriate for scheduling annual coordination
and agrees with the recommendation to base the coordination on a
calendar year timeframe.
6. Emergency Response Program
    One commenter suggested that EPA should allow a minimum timeframe
of 12 months for a non-responding facility to transition to a
responding facility. The commenter further suggested incorporating an
extension request to local agencies in the event of compliance delays
that fall outside the owner/operator's control (such as budget
constraints or inability to procure response resources). Another
commenter expressed support for the timeframe to develop an emergency
response program; however, expressed concerns with the ongoing costs
associated with that requirement.
    EPA is finalizing a three-year compliance date for a facility owner
or operator to develop an emergency response program once he or she
determines a need for a program. EPA is not incorporating an extension
request to address compliance delays that may fall outside the owner or
operator's control. EPA notes that the two provisions from Sec.  68.90
of the proposed rule that would have made the owner or operator's
decision to develop an emergency response program contingent on the
outcome of local coordination activities, and required the owner or
operator to develop an emergency response program upon receiving a
written request to do so from the LEPC or local response authorities,
were not included in the final rule. EPA believes that by making these
changes, the regulatory provisions that would potentially have caused
many sources to convert from being non-responding sources to responding
sources have been removed from the final rule. However, as the
emergency coordination provisions of the final rule require regulated
sources to coordinate annually with local responders and to document
coordination activities, EPA acknowledges that it is possible that
these more frequent coordination activities may still prompt some
sources to implement an emergency response program (i.e., for a non-
responding source to become a responding source). In such cases, EPA
believes a three-year timeframe is appropriate to establish a program
that meets the requirements of Sec.  68.95.
7. Facility Exercises
    One commenter objected to the proposed four-year compliance date
for emergency response exercises arguing that exercises should be
required within one year of when coordination activities must begin.
    EPA disagrees with the commenter and is finalizing a four-year
compliance date for conducting emergency response exercises. This means
that the owner or operator has four years after the effective date of
this rule to conduct a notification exercise, consult with local
emergency response officials to establish a schedule for conducting
tabletop and field exercises, and complete at least one tabletop or
field exercise. EPA believes that this timeframe will allow owners and
operators to develop an exercise program that is appropriate for their
facility, train personnel, and coordinate with local emergency response
officials. EPA also expects to develop guidance on emergency response
exercises and facility owners and operators will require time to
familiarize themselves with the guidance.
8. Information Availability
    A professional organization stated that the proposed timeline for
information sharing should be shortened to three years for information
that is shared with the public. The commenter recommended that
information sharing with facility workers should begin immediately
after the implementation of the rule. Another commenter asserted that
the proposed rulemaking provisions and compliance dates are
inappropriate for the sharing of information, arguing that provisions
triggered by an accident should be required in an accelerated
timeframe.
    EPA disagrees with commenters and is finalizing a four-year
compliance date for information availability provisions. This means
that four years after the effective date of the rule, the facility
owner or operator must have notifications in place to inform the public
that information specified in Sec.  68.210(b) is available upon
request. For any RMP reportable accident occurring later than four
years after the effective date of the rule, the owner or operator of a
source must hold a public meeting within 90 days of the accident. EPA
believes that this timeframe is sufficient to allow facility staff an
opportunity to determine the best method for providing notifications to
the public and to assemble and format

information to prepare to respond to information requests.
9. Update and Resubmit RMP
    EPA received no comments on the proposed five-year compliance date
for owners or operators to update RMPs to reflect the new and revised
data elements in subpart G of the rule. EPA is finalizing a five-year
compliance date for this provision, as proposed. This timeframe will
allow owners and operators an opportunity to begin to comply with
revised rule provisions prior to certifying compliance in the RMP.
Additionally, the Agency will revise its online RMP submission system,
RMP*eSubmit, to include the additional data elements, and sources will
not be able to update RMPs with new or revised data elements until the
submission system is ready. Also, once it is ready, allowing an
additional year for sources to update RMPs will prevent potential
problems with thousands of sources submitting updated RMPs on the same
day.

D. Compliance Date Examples

    The following examples demonstrate the compliance dates for the
final rule as described in Table 6: Final Rule Provisions and
Corresponding Compliance Dates.

    Table 6--Final Rule Provisions and Corresponding Compliance Dates
------------------------------------------------------------------------
                                                      Initiated after an
         Rule provision             Compliance date     RMP reportable
                                                           accident?
------------------------------------------------------------------------
Third-party audit...............  March 15, 2021....  Yes.
Root cause analysis.............  March 15, 2021....  Yes (also required
                                                       after near
                                                       misses).
STAA............................  March 15, 2021....  No.
Emergency response coordination   March 14, 2018....  No.
 activities.
Owner/operator determines that    Within three years  No.
 the facility is subject to the    of the
 emergency response program        determination.
 requirements of Sec.   68.95.
Emergency response exercises....  March 15, 2021....  No.
Information sharing.............  March 15, 2021....  Partially-public
                                                       meeting within 90
                                                       days.
Update RMP......................  March 14, 2022....  No (but previously
                                                       existing
                                                       correction
                                                       requirements of
                                                       Sec.   68.195
                                                       still apply).
------------------------------------------------------------------------

Example 1: Provisions That Apply to a Non-Responding Stationary Source
    Source A (see Table 7) is a non-responding stationary source with a
regulated process subject to Program 2 requirements. Source A's owner
submitted the latest RMP update to EPA on January 20, 2015 and
completed its latest compliance audit on August 11, 2017. The source is
not in NAICS 322, 324, or 325, and therefore is not subject to the STAA
provisions. The source has not had any RMP reportable accidents since
the effective date of the final rule.

                      Table 7--Example 1, Source A
------------------------------------------------------------------------
          Source A--Program 2, non-responding stationary source
-------------------------------------------------------------------------
                                      Last compliance
     Date of last  RMP update              audit          Last  accident
------------------------------------------------------------------------
January 20, 2015.................  August 11, 2017.....  N/A.
------------------------------------------------------------------------

    In this example, the following provisions apply:
     Annual emergency response coordination activities in
accordance with Sec.  68.93;
     Notification exercises (Sec.  68.96(a)); and
     Information availability provisions (Sec.  68.210).
    The owner or operator must coordinate response needs with local
emergency planning and response organizations as described in Sec.
68.93 (i.e., to determine how the source is addressed in the community
emergency response plan and to ensure that local response organizations
are aware of the regulated substances at the source, their quantities,
the risks presented by covered processes, and the resources and
capabilities at the facility). Coordination activities must occur
annually and be documented.
    Source A is a non-responding facility, and the owner or operator is
required to conduct annual notification exercises. The owner or
operator is also required to provide ongoing public notification that
certain information is available to the public upon request.
    Finally, beginning five years after the rule effective date, the
owner or operator must update the RMP to include all revised data
elements specified in subpart G. In this case, the owner or operator
would update their RMP no later than January 20, 2020 (the source's
next scheduled five-year update), and again by March 14, 2022 (the
required resubmission date for the final rule).
    Table 8: Summary of provisions that apply to a non-responding
stationary source summarizes the provisions that apply to Source A.

Table 8--Summary of Provisions That Apply to a Non-Responding Stationary
                                 Source
------------------------------------------------------------------------
                                   Additional
    Applicable provisions          information       When to complete *
------------------------------------------------------------------------
Emergency response            Occurs annually.....  Complete
 coordination activities.                            coordination
                                                     activities before
                                                     March 14, 2018 and
                                                     document
                                                     coordination.
Notification exercise.......  Occurs annually.....  Complete first
                                                     notification
                                                     exercise by March
                                                     15, 2021.
------------------------------------------------------------------------
                   Information availability provisions
------------------------------------------------------------------------
Information to the public...  Ongoing. Includes     Complete first
                               notification that     calendar year
                               specifies the         notification by
                               information that is   March 15, 2021.
                               available and
                               provides
                               instructions on how
                               to obtain, and
                               links to community
                               preparedness
                               information.
Update RMP..................  Owner's next five-    Update RMP on
                               year resubmission     regular schedule
                               date occurs prior     (by January 20,
                               to effective date     2020) and again to
                               for provision, so     include new
                               owner must update     information by
                               RMP twice.            March 14, 2022.
------------------------------------------------------------------------

    If the Source A's owner or operator determines that the facility is
subject to the emergency response program requirements (i.e., the
facility has toxic substances and is not included in the community
emergency response plan or the facility has flammable substances and
has not coordinated response actions with the local fire department),
then he or she would have three years from the determination date to
develop and implement an emergency response plan, obtain equipment, and
train personnel in relevant procedures.
    Once the owner has developed an emergency response program, the
source is a responding facility and must also comply with tabletop and
field exercise requirements for responding facilities.
Example 2A: Provisions That Apply to a Responding Stationary Source
    Source B (see Table 9) is a responding stationary source with a
process subject to Program 3 requirements. Its latest RMP update was
submitted June 30, 2020. Its latest compliance audit was performed on
April 6, 2020. The source is not in NAICS 322, 324, or 325, and
therefore is not subject to the STAA provisions, and the source has not
had any RMP reportable accidents since the effective date of a final
rule.

                      Table 9--Example 2A, Source B
------------------------------------------------------------------------
            Source B--Program 3, responding stationary source
-------------------------------------------------------------------------
                                      Last compliance
     Date of last  RMP update              audit          Last  accident
------------------------------------------------------------------------
June 30, 2020....................  April 6, 2020.......  N/A.
------------------------------------------------------------------------

    In this example, the following provisions apply:
     Annual emergency response coordination activities in
accordance with Sec.  68.93;
     Emergency response exercises (Sec.  68.96); and
     Information availability provisions (Sec.  68.210).
    The owner or operator must coordinate response needs with local
emergency planning and response organizations as described in Sec.
68.93. Coordination activities must occur annually and be documented.
    Additionally, since Source B is a responding facility, the owner or
operator is required to conduct annual notification exercises and
tabletop and field exercises. The frequency of the tabletop and field
exercises will be determined in consultation with local emergency
response officials, but at a minimum, shall be every three years for
tabletop exercises and every ten years for field exercises. EPA expects
that within four years of the effective date of the final rule, that
the owner or operator will consult with local emergency response
officials to establish a schedule for conducting at least one tabletop
and/or field exercise.
    The owner or operator is also required to provide ongoing public
notification that certain information is available the public upon
request.
    Finally, by five years after the rule effective date, the owner or
operator must update the RMP to include all revised data elements
specified in subpart G. Table 10: Summary of provisions that apply to
Source B summarizes the provisions that apply in this example.

         Table 10--Summary of Provisions That Apply to Source B
------------------------------------------------------------------------
                                   Additional
    Applicable provisions          information       When to complete *
------------------------------------------------------------------------
Emergency response            Occurs annually.....  Complete
 coordination activities.                            coordination
                                                     activities before
                                                     March 14, 2018.
------------------------------------------------------------------------
               Emergency response exercises (Sec.   68.96)
------------------------------------------------------------------------
Notification exercise.......  Occurs annually.....  Complete first
                                                     notification
                                                     exercise by March
                                                     15, 2021.
Field and tabletop exercises  Tabletop exercise     Complete first
                               every three years,    tabletop or field
                               field exercise once   exercise by March
                               every ten years.      15, 2021.
------------------------------------------------------------------------
                   Information availability provisions
------------------------------------------------------------------------
Information to the public...  Ongoing. Includes     Complete first
                               notification that     calendar year
                               specifies the         notification by
                               information that is   March 15, 2021.
                               available, provides
                               instructions on how
                               to obtain, and
                               links to community
                               preparedness
                               information.
Update RMP..................  ....................  Update RMP to
                                                     include new
                                                     information by
                                                     March 15, 2021.
------------------------------------------------------------------------

Example 2B: Additional Provisions That Apply to a Responding Stationary
Following an RMP Reportable Accident.
    See Table 11.

                     Table 11--Example 2B, Source B
------------------------------------------------------------------------
            Source B--Program 3, responding stationary source
-------------------------------------------------------------------------
                                    Last compliance
     Date of last RMP update             audit           Last accident
------------------------------------------------------------------------
June 30, 2020...................  April 6, 2020......  July 5, 2021.
------------------------------------------------------------------------

    In this example, Source B has an accidental release on July 5, 2021
that meets the reporting requirements of Sec.  68.42. As a result of
the accident, Source B's owner is required to comply with the following
additional provisions:
     Third-party audit provisions of Sec.  68.80;
     Incident investigation and root cause analysis
requirements of Sec.  68.81; and
     Public meeting within 90 days of an RMP reportable
accident, pursuant to Sec.  68.210(e).
    Chronologically, the first provision that applies is the
requirement to host a public meeting. Section 68.210(e) requires the
owner or operator to hold a public meeting within 90 days after the
accident to inform the public about the accident, including information
required under Sec.  68.42, and other relevant information.
    An incident investigation must be initiated promptly, but no later
than 48 hours following the incident. The incident investigation
provisions require the owner or operator to complete an incident
investigation that includes a root cause analysis and other elements
specified in Sec.  68.81(d), and an incident investigation report,
within 12 months of the incident, unless the implementing agency
approves an extension of time.
    The third-party audit provisions require the owner or operator to
hire a third-party auditor to perform a third-

party compliance audit and complete an audit report within 12 months of
the accident (unless the implementing agency approves an extension).
The owner or operator must also complete an audit findings response
report within 90 days of receiving the audit report from the third-
party auditor. The owner or operator must also provide the audit
findings response report, as well as a schedule to address deficiencies
identified in the audit findings response report and documentation of
actions taken to address deficiencies, to the owner or operator's audit
committee of the Board of Directors, or other comparable committee or
individual, if applicable.
    By five years after the rule effective date, the owner or operator
must update the RMP to include all revised data elements specified in
subpart G and Sec.  68.42. Finally, if the owner or operator's response
to the incident utilizes the facility's emergency response plan, tested
the objectives of an exercise as described in Sec.  68.96(b)(1)(ii),
and documents response actions as described in Sec.  68.96(b)(3), then
the owner or operator may use the response to satisfy the field
exercise requirements of the final rule.
    Table 12 summarizes the additional provisions that apply to Source
B following an RMP reportable accident (in addition to complying with
new requirements triggered by an RMP reportable accident, the owner or
operator must annually coordinate response needs with local emergency
planning and response organizations, document coordination activities,
and comply with the other information disclosure provisions as
previously described).

     Table 12--Summary of Additional Provisions That Apply to Source B Following an RMP Reportable Accident
----------------------------------------------------------------------------------------------------------------
 Applicable provisions following
   an RMP reportable accident:          Compliance date        Additional information      When to complete *
----------------------------------------------------------------------------------------------------------------
Public meeting...................  March 15, 2021...........  The accident occurred     Hold public meeting by
                                                               after the compliance      October 3, 2021.
                                                               date for this
                                                               provision, therefore,
                                                               schedule a meeting
                                                               within 90 days after
                                                               the RMP reportable
                                                               accident.
Incident investigations..........  March 15, 2021...........  The accident occurred     Complete report by July
                                                               after the compliance      5, 2022.
                                                               date for this
                                                               provision, therefore,
                                                               initiate within 48
                                                               hours, complete
                                                               investigation and root
                                                               cause analysis within
                                                               12 months.
Third-party audit................  March 15, 2021...........  The accident occurred     Complete third-party
                                                               after the compliance      audit by July 5, 2022
                                                               date for this            Complete findings
                                                               provision, therefore,     response report within
                                                               complete within 12        90 days of completing
                                                               months of the RMP         audit.
                                                               reportable accident.
Field exercise...................  March 15, 2021...........  May use the response to   Document the response
                                                               satisfy the field         within 90 days of the
                                                               exercise requirements     incident (i.e., by
                                                               of the rule when all      October 3, 2021), if
                                                               objectives of the         using response to
                                                               exercise are tested and   satisfy field exercise
                                                               the response is           requirements.
                                                               documented.
Accident history information in    .........................  Correct RMP within 6      Correct RMP by January
 RMP.                                                          months of accident        5, 2022.
                                                               (existing requirement).
----------------------------------------------------------------------------------------------------------------

Example 3: Compliance Date Example for Sources Subject to STAA
Requirements
    Source C (see Table 13) is a petroleum refinery in NAICS 32411. Its
latest RMP update was submitted on March 31, 2018. Its latest PHA
revalidation was completed on March 7, 2017.

                      Table 13--Example 3, Source C
------------------------------------------------------------------------
                    Source C--Program 3, NAICS 32411
-------------------------------------------------------------------------
          Date of last RMP update               Last PHA revalidation
------------------------------------------------------------------------
March 31, 2018............................  March 7, 2017.
------------------------------------------------------------------------

    Because the source is in NAICS 32411, it is subject to the STAA
provisions of Sec.  68.67(c)(8). Therefore, March 15, 2021, the owner
or operator must complete a PHA revalidation that addresses safer
technology and alternative risk management measures, and determine the
practicability of the ISTs and ISDs considered.
    By March 14, 2018 the owner or operator of Source C must comply
with the emergency response coordination provisions, and by March 15,
2021, the owner or operator must also comply with other applicable rule
provisions including: Third-party audits; incident investigations;
emergency response exercises; and information availability (including
public meetings).
    By March 14, 2022, the owner or operator of Source C must update
the RMP to include all revised data elements specified in subpart G.
Table 14: Compliance date example for sources subject to STAA
requirements, summarizes the STAA provisions that apply to Source C.

      Table 14--Compliance Date Example for Sources Subject to STAA
                              Requirements
------------------------------------------------------------------------
                                                        When to complete
     Applicable provisions      Additional information          *
------------------------------------------------------------------------
STAA..........................  Occurs every five       By March 15,
                                 years as part of PHA    2021.
                                 revalidation.
Update RMP....................  ......................  By March 14,
                                                         2022.
------------------------------------------------------------------------

IX. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is an economically significant regulatory action that
was submitted to the Office of Management and Budget (OMB) for review.
Any changes made in response to OMB recommendations have been
documented in the docket. The EPA prepared a Regulatory Impact Analysis
(RIA) of the potential costs and benefits associated with this action.
This RIA is available in the docket and is summarized here (Docket ID
Number EPA-HQ-OEM-2015-0725).
1. Why EPA Is Considering This Action
    In response to catastrophic chemical facility incidents in the
United States, President Obama issued Executive Order 13650,
``Improving Chemical Facility Safety and Security,'' on August 1, 2013.
The Executive Order establishes the Chemical Facility Safety and
Security Working Group (Working Group), co-chaired by the Secretary of
Homeland Security, the Administrator of EPA, and the Secretary of Labor
or their designated representatives at the Assistant Secretary level or
higher, and comprised of senior representatives of other Federal
departments, agencies, and offices. The Executive Order requires the
Working Group to carry out a number of tasks whose overall goal is to
prevent chemical accidents.
    Section 6(a)(i) of Executive Order 13650 requires the Working Group
to develop options for improved chemical facility safety and security
that identify ``improvements to existing risk management practices
through agency programs, private sector initiatives, Government
guidance, outreach, standards, and regulations.'' Section 6(c) of
Executive Order 13650 requires the Administrator of EPA to review the
Risk Management Program. As part of this effort to solicit comments and
information from the public regarding potential changes to EPA's RMP
regulations (40 CFR part 68), on July 31, 2014, EPA published an RFI
(79 FR 44604).
    EPA believes that the RMP regulations have been effective in
preventing and mitigating chemical accidents in the United States;
however, EPA believes that revisions could further protect human health
and the environment from chemical hazards through advancement of PSM
based on lessons learned. These revisions are a result of a review of
the existing Risk Management Program and information gathered from the
comments on the proposed rulemaking, SBAR panel, public hearing, RFI,
and Executive Order listening sessions, and are finalized under the
statutory authority provided by CAA section 112(r) as amended (42
U.S.C. 7412(r)).
2. Description of Alternatives to the Final Rule
    EPA analyzed in the RIA the requirements finalized in this action
as well as several alternatives for each.
a. Third-Party Audits (Program 2 Sec. Sec.  68.58 and 68.59 and Program
3 Sec. Sec.  68.79 and 68.80)
    The existing rule requires Program 2 and Program 3 processes to
conduct a compliance audit at least once every three years. The revised
rule requires facilities to contract with an independent third-party,
or assemble an audit team led by an independent third-party, to conduct
the next scheduled compliance audit following an RMP reportable
accident or after an implementing agency determines that certain
circumstances exist that suggest a heightened risk for an accident. The
third-party would have to be someone with whom the facility does not
have an existing or recent relationship and who meets specific
qualification criteria. The low cost alternative applies only for
Program 2 and Program 3 processes after an RMP reportable accident or
at the request of the implementing agency. The medium cost alternative
applies every three years for all compliance audits conducted for all
Program 3 processes. The high cost alternative applies every three
years for all compliance audits conducted for Program 2 and Program 3
processes.
b. Incident Investigations/Root Cause Analysis (Sec. Sec.  68.60 and
68.81)
    The rule requires facilities to conduct a root cause analysis as
part of an incident investigation following an RMP reportable accident
or an incident that could reasonably have resulted in an RMP reportable
accident (i.e., ``near miss''). A root cause analysis is a formal
process to identify underlying reasons for failures that lead to
accidental releases. These analyses usually require someone trained in
the technique. The low cost alternative applies the provision only to
RMP reportable accidents or near misses in Program 3 processes. The
medium/high cost alternative applies to RMP reportable accidents or
near misses involving Program 2 and Program 3 processes.
c. STAA (Sec.  68.67)
    Under the final rule, facilities in NAICS codes 322 (paper
manufacturing), 324 (petroleum and coal products manufacturing), and
325 (chemical manufacturing) with Program 3 processes are required to
conduct a STAA for each process as part of their PHA, which occurs
every five years. The STAA includes two parts: The initial analysis to
identify alternatives, and a practicability study to determine the
costs and assess the reasonableness of implementing technology
alternatives. The final rule is the low cost alternative, which applies
to all facilities with Program 3 processes in NAICS codes 322, 324, and
325. The medium cost alternative applies the requirement to all Program
3 processes. The high cost alternative applies the requirement to all
Program 3 processes and require facilities to implement practicable
IST/ISD.
d. Emergency Response Program Coordination With Local Responders
(Sec. Sec.  68.90, New 68.93, and 68.95)
    Under the final rule, all facilities with Program 2 or Program 3
processes are required to coordinate with local response agencies
annually to determine how the source is addressed in the community
emergency response plan and to ensure that local response organizations
are aware of the regulated substances at the source, their quantities,
the risks presented by covered processes, and the resources and
capabilities at the facility to respond to an accidental release of a
regulated substance. The owner or operator must document coordination
activities.
    Alternatives to this provision are similar to the finalized
requirements. One alternative that imposes the same costs as the final
rule option includes an option for local officials to request that a
facility owner or operator comply with the emergency response program
requirements of Sec.  68.95. This would be analogous to the
requirements under the Oil Pollution Prevention regulation (40 CFR part
112) where all facilities subject to the FRP provisions at Sec.  112.20
are required to prepare and implement an emergency response plan for
oil discharges into navigable waters or adjoining shorelines.
e. Facility Exercises (Sec.  68.96)
    Notification exercises. All facilities with Program 2 or Program 3
processes are required to conduct a notification

exercise annually to ensure that the contact list to be used in an
emergency is complete, accurate, and up-to-date.
    Tabletop and field exercises. The rule requires responding
facilities to conduct exercises of their emergency response plans and
invite local emergency response officials to participate. Under the low
cost alternative, facilities would conduct tabletop exercises every
three years. Under the final rule, which is the medium cost
alternative, facilities will establish the frequency of exercises in
consultation with local emergency response officials, but at a minimum,
full field exercises will be conducted at least once every ten years
and tabletop exercises conducted at least once every three years.
Responding facilities that have an RMP reportable accident, and
document the response activities in an after-action report comparable
to the exercise evaluation reports may use that response to satisfy the
field exercise requirements. Furthermore, owner and operators of
responding facilities that conduct exercises to meet other Federal,
state or local exercise requirements may satisfy the RMP exercise
requirements provided that the scope of the exercise includes the
objectives of an RMP exercise. Under the high cost alternative,
facilities would conduct full field exercises annually.
f. Information Availability (Sec.  68.210)
    The rule requires all facilities to provide certain basic chemical
hazard information to the public, upon request. The owner or operator
of the facility shall provide ongoing notification of availability of
information elements on a company Web site, social media platforms, or
through some other publicly accessible means. The information to be
disclosed includes names of regulated substances at the facility; SDS;
accident history information; emergency response program information;
and LEPC or local response agency contact information.
    EPA proposed requirements for facilities to provide certain
information to the LEPC, Tribal Emergency Planning Committee (TEPC) or
other local emergency response agencies. However, rather than prescribe
information elements that must be provided upon request, EPA is
requiring the owner or operator of a stationary source to share
information that is relevant to emergency response planning as part of
the coordination activities that occur annually between facility
representatives and local emergency response agencies.
    Finally, the rule requires facilities to hold a public meeting for
the local community within 90 days of an RMP reportable accident. The
medium cost alternative would require Program 2 and Program 3
facilities to hold a public meeting at least once every five years and
within 90 days of an RMP reportable accident. The high cost alternative
would require all facilities (i.e., including Program 1 facilities) to
hold a public meeting at least once every five years and immediately
following an RMP reportable accident.
3. Summary of Costs
    Approximately 12,500 facilities have filed current RMPs with EPA
and are potentially affected by the revised rule. These facilities
range from petroleum refineries and large chemical manufacturers to
water and wastewater treatment systems; chemical and petroleum
wholesalers and terminals; food manufacturers, packing plants, and
other cold storage facilities with ammonia refrigeration systems;
agricultural chemical distributors; midstream gas plants; and a limited
number of other sources that use RMP-regulated substances.
    Table 15 presents the number of facilities according to the latest
RMP reporting as of February 2015 by industrial sector and chemical
use.

                                Table 15--Number of Affected Facilities by Sector
----------------------------------------------------------------------------------------------------------------
                                                                    Total
                  Sector                        NAICS codes      facilities             Chemical uses
----------------------------------------------------------------------------------------------------------------
Administration of environmental quality                     924       1,923  Use chlorine and other chemicals
 programs (i.e., governments).                                                for treatment.
Agricultural chemical distributors/        111, 112, 115, 42491       3,667  Store ammonia for sale; some in
 wholesalers.                                                                 NAICS 111 and 115 use ammonia as a
                                                                              refrigerant.
Chemical manufacturing...................                   325       1,466  Manufacture, process, store.
Chemical wholesalers.....................                  4246         333  Store for sale.
Food and beverage manufacturing..........              311, 312       1,476  Use mostly ammonia as a
                                                                              refrigerant.
Oil and gas extraction...................                   211         741  Intermediate processing (mostly
                                                                              regulated flammable substances and
                                                                              flammable mixtures).
Other....................................   44, 45, 48, 54, 56,         248  Use chemicals for wastewater
                                                         61, 72               treatment, refrigeration, store
                                                                              chemicals for sale.
Other manufacturing......................     313, 326, 327, 33         384  Use various chemicals in
                                                                              manufacturing process, waste
                                                                              treatment.
Other wholesale..........................              423, 424         302  Use (mostly ammonia as a
                                                                              refrigerant).
Paper manufacturing......................                   322          70  Use various chemicals in pulp and
                                                                              paper manufacturing.
Petroleum and coal products manufacturing                   324         156  Manufacture, process, store (mostly
                                                                              regulated flammable substances and
                                                                              flammable mixtures).
Petroleum wholesalers....................                  4247         276  Store for sale (mostly regulated
                                                                              flammable substances and flammable
                                                                              mixtures).
Utilities................................                   221         445  Use chlorine (mostly for water
                                                                              treatment) and other chemicals.
Warehousing and storage..................                   493       1,056  Use mostly ammonia as a
                                                                              refrigerant.
                                                                ------------
    Total................................  ....................      12,542
----------------------------------------------------------------------------------------------------------------

    Table 16 presents a summary of the annualized costs estimated in
the RIA. In total, EPA estimates annualized costs of $131.2 million at
a 3% discount rate and $131.8 million at a 7% discount rate.

                  Table 16--Summary of Annualized Costs
                        [Millions, 2015 dollars]
------------------------------------------------------------------------
                Provision                       3%              7%
------------------------------------------------------------------------
Third-party Audits......................            $9.8            $9.8
Incident Investigation/Root Cause.......             1.8             1.8
STAA....................................            70.0            70.0
Coordination............................            16.0            16.0
Notification Exercises..................             1.4             1.4
Facility Exercises......................            24.7            24.7
Information Sharing (Public)............             3.1             3.1
Public Meeting..........................             0.4             0.4
Rule Familiarization....................             3.9             4.6
Total Cost *............................           131.2           131.8
------------------------------------------------------------------------
* Totals may not sum due to rounding.

    The largest average annual cost of the final rule is the STAA costs
($70.0 million), followed by the exercise costs ($24.7 million),
coordination ($16 million), and third-party audits ($9.8 million). The
remaining provisions impose average annual costs under $5 million each,
including rule familiarization ($3.9 to 4.6 million), information
sharing (public) ($3.1 million), incident investigation/root cause
analysis ($1.8 million), notification exercises ($1.4 million), and
public meetings ($0.4 million).
    The rule includes three prevention program provisions--third-party
audits, root cause analysis, and STAA--involving information collection
and analysis activities that can lead to a wide range of outcomes, and
therefore costs, if and when the owner acts upon the findings and/or
recommendations generated by the audit, investigation, or analysis.
Although resolving audit and investigation findings is required under
the existing rule provisions, and the rule does not require
implementation of practicable IST alternatives, EPA believes it is
possible that there may be costs associated with resolving findings
from the third-party audit and root cause analysis provisions that go
beyond the costs of the existing provisions, and that some owners or
operators may have additional costs due to voluntary implementation of
IST. EPA acknowledged the wide range of outcomes from these provisions
and the significant uncertainties associated with their costs, and
requested information in the proposed rulemaking on whether these costs
should accrue to the rule. EPA did not receive any data from commenters
that illustrates the: Types of costs that result from independent
audits (other than the cost of the audit) that are different from self-
audit costs; the types of costs that result from root cause
investigations as compared to non-root-cause investigations; and for
the STAA provisions, information to project what changes facilities are
likely to voluntarily undertake (e.g., cost data or studies for
implementation of IST changes).
4. Summary of Potential Benefits
    EPA anticipates that implementation of this rule will result in a
reduction of the frequency and magnitude of damages from releases.
Accidents and releases from RMP facilities occur every year, resulting
in fires and explosions, property damage, acute and chronic exposures
of workers and nearby residents to hazardous materials, and resultant
damages to health. Although we are unable to quantify what specific
damage reductions may occur as a result of these revisions, we are able
to present data on the total damages that currently occur at RMP
facilities each year. The data presented are based on a 10-year
baseline period, summarizing RMP accident impacts and, when possible,
monetizing them. EPA expects that some portion of future damages would
be prevented through implementation of this rule. Table 17 presents a
summary of the quantified damages identified in the analysis.

                                     Table 17--Summary of Quantified Damages
                                            [Millions, 2015 dollars]
----------------------------------------------------------------------------------------------------------------
                                             Unit value       10-Year total     Average/year    Average/accident
----------------------------------------------------------------------------------------------------------------
                                                     On-site
----------------------------------------------------------------------------------------------------------------
Fatalities..............................              $8.6            $497.8             $49.8             $0.33
Injuries................................              0.05             105.2              10.5              0.69
Property Damage.........................  ................           2,054.9             205.5               1.4
                                         -----------------------------------------------------------------------
    On-site Total.......................  ................           2,657.9             265.8               1.8
----------------------------------------------------------------------------------------------------------------
                                                     Offsite
----------------------------------------------------------------------------------------------------------------
Fatalities..............................               8.6               8.6              0.86              0.01
Hospitalizations........................               0.4               6.8              0.68             0.004
Medical Treatment.......................             0.001              14.8               1.5              0.01
Evacuations *...........................               0.0               7.0              0.70             0.004
Sheltering in Place *...................               0.0              40.9               4.1              0.03
Property Damage.........................  ................              11.4               1.1             0.007
                                         -----------------------------------------------------------------------
    Offsite Total.......................  ................              89.5               8.9              0.06
                                         -----------------------------------------------------------------------
        Total...........................  ................           2,747.3             274.7               1.8
----------------------------------------------------------------------------------------------------------------
* The unit value for evacuations is less than two hundred dollars and for sheltering in place is less than one
  hundred dollars so when expressed in rounded millions the value represented in the table is zero.

    EPA monetized both on-site and offsite damages. EPA estimated total
average annual on-site damages of $265.8 million. The largest monetized
average annual on-site damage was on-site property damage, which
resulted in average annual damage of approximately $205.5 million. The
next largest impact was on-site fatalities ($49.8 million) and injuries
($10.5 million).
    EPA estimated total average annual offsite damages of $8.9 million.
The largest monetized average annual offsite damage was from sheltering
in place ($4.1 million), followed by medical treatment ($1.5 million),
property damage ($1.1 million), fatalities ($0.86 million), evacuations
($0.7 million), and hospitalizations ($0.68 million).
    In total, EPA estimated monetized damages from RMP facility
accidents of $274.7 million per year. However, the monetized impacts
omit many important categories of accident impacts including lost
productivity, the costs of emergency response, transaction costs,
property value impacts in the surrounding community (that overlap with
other benefit categories), and environmental impacts. Also not
reflected in the 10-year baseline costs are the impacts of non-RMP
accidents at RMP facilities and any potential impacts of rare high
consequence catastrophes. A final omission is related to the
information provision. Reducing the probability of chemical accidents
and the severity of their impacts, and improving information disclosure
by chemical facilities, as the provisions intend, would provide
benefits to potentially affected members of society.
    Table 18 summarizes four broad social benefit categories related to
accident prevention and mitigation including prevention of RMP
accidents, mitigation of RMP accidents, prevention and mitigation of
non-RMP accidents at RMP facilities, and prevention of major
catastrophes. The table explains each and identifies ten associated
specific benefit categories, ranging from avoided fatalities to avoided
emergency response costs. Table 18 also highlights and explains the
information disclosure benefit category and identifies two specific
benefits associated with it: Improved efficiency of property markets
and allocation of emergency resources.

      Table 18--Summary of Social Benefits of Final Rule Provisions
------------------------------------------------------------------------
                                                       Specific benefit
     Broad benefit category           Explanation         categories
------------------------------------------------------------------------
Accident Prevention.............  Prevention of        Reduced
                                   future RMP          Fatalities.
                                   facility
                                   accidents.
Accident Mitigation.............  Mitigation of        Reduced
                                   future RMP          Injuries.
                                   facility
                                   accidents.
Non-RMP accident prevention and   Prevention and       Reduced
 mitigation.                       mitigation of       Property Damage.
                                   future non-RMP      Fewer
                                   accidents at RMP    People Sheltered
                                   facilities.         in Place.
Avoided Catastrophes............  Prevention of rare   Fewer
                                   but extremely       Evacuations.
                                   high consequence    Avoided
                                   events.             Lost
                                                       Productivity.
                                                       Avoided
                                                       Emergency
                                                       Response Costs.
                                                       Avoided
                                                       Transaction
                                                       Costs.
                                                       Avoided
                                                       Property Value
                                                       Impacts.*
                                                       Avoided
                                                       Environmental
                                                       Impacts.
Information Disclosure..........  Provision of         Improved
                                   information to      efficiency of
                                   the public.         property markets.
                                                       Improved
                                                       emergency
                                                       response resource
                                                       allocation.
------------------------------------------------------------------------
* These impacts partially overlap with several other categories such as
  reduced health and environmental impacts.

5. Discussion of Comments on Estimated Costs and Benefits
a. General Comments
    EPA costs underestimated or based on outdated information. Several
commenters stated that EPA's cost estimates in the RIA for the proposed
rulemaking were generally inaccurate and underestimated the true costs
that facilities will face. Some commenters indicated that EPA's
estimated labor rates were based on outdated (2014) information.
Several commenters representing industry trade associations and
regulated facilities expressed specific concerns about the estimated
costs of each individual proposed rulemaking element, as well as EPA's
estimate of the costs of rule familiarization. Some of these commenters
provided specific cost information or estimates to support their
claims.
    EPA considered this information and made substantial adjustments to
the cost estimates for every rule provision, including rule
familiarization. In addition to adjusting the cost estimate for the
final rule to incorporate cost information submitted by commenters, EPA
also adjusted the estimate to delete costs associated with proposed
rulemaking provisions that were not included in the final rule (e.g.,
Information availability to LEPCs), and to account for structural
changes between proposed and final rule provisions for certain rule
elements (e.g., the final rule requires emergency field and tabletop
exercises to be conducted less frequently than EPA had proposed). EPA
also updated its estimated labor rates to the most recent (2015) values
available from the Bureau of Labor Statistics.
    Benefit concerns. Several commenters also addressed EPA's
assessment of benefits in their public comment submissions. While some
commenters indicated that the proposed requirements would improve
safety and prevent chemical releases, other commenters stated that the
proposed requirements would not provide any benefits, or that the costs
associated with the rule would severely outweigh any benefits. Other
commenters indicated that EPA had failed to quantify any benefits of
the rule, making a cost-benefit comparison impossible. Other commenters
stated that EPA overestimated benefits or inappropriately counted
benefits that actually accrue from OSHA's PSM standard as benefits of
the proposed rulemaking. One commenter also stated that EPA's benefit
categories would be offset by unstated additional costs, including
losses in reputation or brand value, higher insurance premiums, and
difficulty hiring and retaining workers that facilities may incur as a
result of an accident.
    EPA disagrees that the proposed rulemaking would not provide
benefits or that the costs of the rule would necessarily outweigh its
benefits. As EPA explains in the RIA for the final rule, the benefits
of the final rule include reductions in the number of people killed,
injured, and evacuated or otherwise inconvenienced by sheltering in
place; reductions in the damage caused to property on-site and offsite
including product, equipment, and buildings; reductions in damages to
the

environment and ecosystems; and reductions in resources diverted to
extinguish fires and clean up affected areas. The final rule also
provides other benefits, such as increased public information, which in
addition to helping to minimize the impacts of accidents on the offsite
public, may also lead to more efficient property markets in areas near
RMP facilities.
    EPA acknowledges that it is not possible to estimate quantitative
benefits for the final rule. EPA has no data to project the specific
impact on accidents made by each final rule provision. The accidents
themselves have highly variable impacts that are difficult to predict.
However, it is clear from the RMP accident data and other available
data that chemical accidents can impose substantial costs on firms,
employees, emergency responders, the community, and the broader
economy. Reducing the risk of such accidents and the severity of the
impacts when accidents occur, and improving information provision, as
the final rule intends, provides benefits to the potentially affected
members of society.
    EPA disagrees that the final rule takes credit for benefits that
should accrue to the OSHA PSM standard. None of the provisions
contained in the final rule are duplicated in the OSHA PSM standard.
EPA also disagrees that regulated facilities will suffer losses in
reputation or brand value, higher insurance premiums, or have
difficulty hiring and retaining workers as a result of the final rule.
If, as EPA expects, the final rule results in the prevention of
accidents, then it should have the opposite of these effects, to the
extent they relate to chemical accidents.
b. Estimate of Rule Familiarization Costs
    Several industry trade associations stated that EPA's estimate of
the costs of rule familiarization were too low. These commenters stated
that EPA's estimate only included time spent by management level
employees but should be expanded to include the cost of training all
relevant facility employees. Some of these commenters recommended
alternate approaches to estimating the costs of rule familiarization
that included estimates of time spent by additional labor categories
(e.g., attorneys, engineers, production staff, etc.). One commenter
also recommended that EPA consider adjusting its rule familiarization
estimate to better track with the estimate used by the NJ DEP for
revisions to the NJ TCPA regulations.
    EPA agrees with these comments, and adjusted its rule
familiarization estimate accordingly, resulting in an increase of the
estimated costs of rule familiarization.
c. Third-Party Audit Costs
    Many commenters including industry trade associations and
facilities stated that EPA's estimate of the costs of third-party
audits was too low. Many commenters also stated that third-party
auditor fees will be much higher than EPA's estimate, partially due to
the low availability of qualified auditors. Several commenters
submitted cost information from external audits to support their
estimates.
    EPA generally agrees with these comments. Shortly after the
proposed rulemaking was published, EPA received cost information
relating to a series of third-party audits conducted by a facility as a
result of an enforcement action taken by EPA under CAA section 112(r).
The average cost of these audits was approximately double EPA's
estimate in the proposed rulemaking, and comparable to cost estimates
submitted by commenters. Therefore, EPA adjusted its cost estimate for
this provision of the final rule accordingly, resulting in the
estimated costs of third-party audits under the final rule nearly
doubling. EPA notes that the third-party audit provisions of the final
rule also relaxed, to some extent, the independence and competency
criteria for third-party auditors. The Agency believes that these
changes will increase the availability of qualified auditors, and
therefore make such audits less costly than might otherwise have been
the case.
d. Incident Investigation/Root Cause Costs
    Several commenters stated that EPA's estimate of costs of incident
investigations and root cause analysis was inaccurately low. Some of
these commenters suggested that the required number of investigations
will increase significantly as a result of EPA's proposal to re-define
the term ``catastrophic release,'' and that this would cause the cost
of this rule element to increase substantially. Other commenters stated
that incident investigations require more labor hours than were
accounted for in EPA's cost estimate, and that the Agency needs to
significantly raise its estimate in order to account for these issues.
Some of these commenters submitted cost information to support their
estimates.
    Although EPA disagrees that its proposed changes to the definition
of ``catastrophic release'' would have increased the number of
investigations required under the rule, the Agency elected not to
finalize the proposed changes to that definition, so no increase in
incident investigation costs will result from it. Regarding commenters'
concerns that EPA had not accounted for enough labor hours for
investigations in the RIA for the proposed rulemaking, after
considering these comments, the Agency generally agrees that its
estimate was too low. EPA incorporated the cost information submitted
by commenters into its estimate for the final rule. EPA also notes that
unlike the estimate for the proposed rulemaking, the final rule
economic estimate did not assume that investigations of near misses
would require fewer labor hours than investigations of actual release
events. This change also accounted for some of the increase in the
estimated cost of this rule element. Overall, these changes resulted in
the estimated cost of this rule element approximately doubling for the
final rule.
e. STAA Costs
    STAA costs too low. EPA received several comments stating that the
Agency's estimate of costs for the proposed STAA provisions was too
low. Most of these comments addressed both EPA's estimate of the cost
of the initial study of safer technology options, as well as the
Agency's estimate of costs for the required evaluation of the
practicability of IST considered during the STAA.\121\ Some commenters
submitted alternate cost estimate information for both the initial
analysis of options and the practicability study.
---------------------------------------------------------------------------

    \121\ EPA used the term ``feasible'' rather than
``practicability'' in the proposed rulemaking.
---------------------------------------------------------------------------

    EPA notes that in general, commenter's cost estimates for the
initial analysis were higher than EPA's estimates, although not in
every case. EPA incorporated these estimates into the RIA as
appropriate--the Agency assumed that cost estimates for the STAA
initial analysis submitted by trade associations representing a
particular category of facilities (e.g., refineries, complex chemical
manufacturers, etc.) were the best representation of estimated costs
for those categories of facilities, and adjusted its own estimate
accordingly. In most cases, this cause the estimated costs for the STAA
initial analysis to increase.
    Practicability study costs. For the practicability study, several
commenters stated that EPA's estimate was far too low, and indicated
that EPA should adopt an alternate approach that estimated the cost of
the practicability study as a fixed fraction of the cost of the project
being considered.

    After reviewing these comments, EPA conducted additional research
on this subject which confirmed that these commenters were generally
correct on this point. EPA therefore adjusted its approach to
estimating the costs of practicability studies accordingly, which
resulted in a significant increase for the cost of this provision.
EPA's research on this topic and the resulting cost estimation approach
is explained in detail in Appendix D to the RIA for the final rule.
    STAA implementation. EPA also received several comments stating
that the Agency should assume that the STAA provision will result in
some facilities implementing safer technologies, and include the costs
associated with such implementation in its economic estimate.
    EPA disagrees with these comments. While the Agency agrees that
some facilities may elect to implement IST, the final rule does not
require facilities to do so. Therefore, the Agency believes that
implementation of IST will result from the owner or operator's own
judgement that it is beneficial for the source, after considering all
relevant factors. The STAA required under this rule may facilitate such
decision making, but does not require it.
f. Emergency Response Program Coordination With Local Responders' Costs
    Emergency response program costs. The Agency received several
comments relating to the proposed emergency coordination provisions.
Some of the comments on this topic related to the Agency's projected
estimate of the cost for some sources to develop an emergency response
program, stating that EPA's estimate of these costs was too low.
    EPA is not finalizing the proposed rulemaking provisions that it
believes would have resulted in many sources developing emergency
response programs. Therefore, these ``new responder'' costs were not
included in the RIA for the final rule.
    Annual coordination burden. EPA also received comments that stated
its estimate of burden for the annual coordination provision, a
modified form of which is included in the final rule, were too low. One
commenter provided emergency coordination cost information for large
complex facilities, which was substantially higher than EPA's estimate
for the category of facilities.
    EPA incorporated the emergency coordination cost information into
the revised economic estimate in the RIA for the final rule. EPA also
revised its estimate for this element to account for the fact that
changes to the annual coordination provision in the final rule, as well
as the Agency's decision not to finalize a portion of the information
availability provisions of the proposed rulemaking, may result in
greater information exchange occurring during annual coordination
meetings than was estimated under the proposed rulemaking. Under the
information availability provisions of the proposed rulemaking, the
owner or operator would have been required to annually provide certain
information to local emergency responders. The final rule does not
include this provision; however, the annual coordination provisions in
the final rule require the owner or operator to provide local response
officials with information relevant to emergency planning upon request.
The net effect of these changes was to more than double the estimated
costs of the annual emergency response coordination provision of the
final rule.
g. Facility Exercise Costs
    Several commenters disagreed with EPA's approach to estimating the
costs of emergency response exercises, and in general, characterized
EPA's estimate as too low. Two of these commenters submitted alternate
cost estimates for this provision. However, the cost estimate provided
by one commenter did not appear to apply to facilities represented by
the commenter's industry association. The information submitted by the
other commenter appeared credible, but projected costs for large
complex facilities that were lower than EPA's estimate.
    As a result of these comments EPA determined that its NPRM cost
estimate for large complex facilities was inflated, and lowered its
estimate to better reflect industry experience. The Agency also notes
that the final rule requires emergency exercises to be conducted less
frequently than was proposed in the NPRM. The net effect of the
structural changes to the final rule and EPA's adjustment of its cost
estimation approach resulting from public comments was to substantially
reduce the estimated costs of this rule provision.
h. Information Availability Costs
    EPA received some comments stating that EPA's estimate of costs for
the proposed rulemaking's information availability provisions was too
low. These commenters indicated that EPA underestimated the time
required for facilities to prepare information required to be disclosed
to the public, and that EPA underestimated the cost of holding public
meetings. One commenter indicated that renting space for a public
meeting would cost as much as $10,000 per day.
    Based on these comments, EPA increased its cost estimate for the
public information availability provision for large complex facilities.
EPA did not change its cost estimate for public meetings because
commenter's high estimates of the costs of public meeting space did not
comport with EPA's research and prior experience with the costs of
public meetings.

B. Paperwork Reduction Act (PRA)

    The information collection activities in this rule have been
submitted for approval to the OMB under the PRA. The Information
Collection Request (ICR) document that the EPA prepared has been
assigned EPA ICR number 2537.02 and OMB Control Number 2050-0216. You
can find a copy of the ICR in the docket for this rule, and it is
briefly summarized here.
    This ICR amends a previously approved ICR (1656.15), OMB Control
No. 2050-0144. That ICR covers the risk management program rule,
originally promulgated on June 20, 1996; the current rule, including
previous amendments, is codified as 40 CFR part 68. This ICR addresses
the following information requirements that are part of the revised
rule:
    (1) Make certain information related to the risk management program
available to the public, upon request;
    (2) Hold a public meeting within 90-days of an accident subject to
reporting under Sec.  68.42 (i.e., an RMP reportable accident);
    (3) Hire a third-party to perform or lead a compliance audit after
an RMP reportable accident or after an implementing agency determines
that conditions at the stationary source could lead to an accidental
release of a regulated substance or identifies problems with the prior
third-party audit;
    (4) Conduct and document a root cause analysis after an RMP
reportable accident or a near miss;
    (5) Conduct and document a STAA for a subset of Program 3
facilities in North American Industrial Classification System (NAICS)
codes 322 (paper manufacturing), 324 (petroleum and coal products
manufacturing), and 325 (chemical manufacturing);
    (6) Meet and coordinate with local responders annually to exchange
emergency response planning information;

    (7) Conduct an annual notification drill to verify emergency
contact information; and
    (8) Responding facilities conduct and document emergency response
exercises including:
     A field exercise at least every ten years, and
     A tabletop exercise at least every three years.
    EPA believes that the RMP regulations have been effective in
preventing and mitigating chemical accidents in the United States.
However, EPA is revising the rule to further protect human health and
the environment from chemical hazards through advancement of PSM based
on lessons learned--resulting in better coordination between
facilities, LEPC's, and the public. State and local authorities will
use the information in RMPs to modify and enhance their community
response plans. The agencies implementing the RMP rule will use RMPs to
evaluate compliance with part 68 and to identify sources for inspection
because they may pose significant risks to the community. Citizens may
use the information to assess and address chemical hazards in their
communities and to respond appropriately in the event of a release of a
regulated substance. These revisions are a result of a review of the
existing Risk Management Program and are finalized under the statutory
authority provided by section 112(r) of the CAA as amended (42 U.S.C.
7412(r)).
    Some of the elements mandated in the regulation for the RMP may
require the submittal of data viewed as proprietary, trade secret, or
confidential. As described previously, EPA has adopted procedures for
sources to claim certain information as confidential business
information. EPA encourages facilities that have CBI claims to submit
substantiation with the RMP.
    Respondents/affected entities: Manufacturers, utilities,
warehouses, wholesalers, food processors, ammonia retailers, and gas
processors.
    Respondent's obligation to respond: Mandatory (CAA sections
112(r)(7)(B)(i) and (ii), CAA section 112(r)(7)(B)(iii), 114(c), CAA
114(a)(1)).
    Estimated number of respondents: 14,280.
    Frequency of response: On occasion.
    Total estimated burden: 1,778,244 hours (per year). Burden is
defined at 5 CFR 1320.3(b).
    Total estimated cost: $130,578,842 (per year), includes $8,285,600
annualized capital or operation & maintenance costs.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for the
EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB
approves this ICR, the Agency will announce that approval in the
Federal Register and publish a technical amendment to 40 CFR part 9 to
display the OMB control number for the approved information collection
activities contained in this final rule.

C. Regulatory Flexibility Act (RFA)

    Pursuant to section 603 and 609(b) of the RFA the EPA prepared an
initial regulatory flexibility analysis (IRFA) for the proposed
rulemaking and convened a Small Business Advocacy Review (SBAR) Panel
to obtain advice and recommendations from small entity representatives
that potentially would be subject to the rule's requirements. Summaries
of the IRFA and Panel recommendations are presented in the proposed
rulemaking at 81 FR 13637, March 14, 2016.
    As required by section 604 of the RFA, the EPA prepared a final
regulatory flexibility analysis (FRFA) for this action. The FRFA
addresses the issues raised by public comments on the IRFA for the
proposed rulemaking. The complete FRFA is available for review in the
docket and is summarized here.
1. Statement of Need and Rule Objectives
    The purpose of this action is to improve safety at facilities that
use and distribute hazardous chemicals. In response to catastrophic
chemical facility incidents in the United States, including the
explosion that occurred at the West Fertilizer facility in West, Texas,
on April 17, 2013 that killed 15 people (on May 11, 2016, ATF ruled
that the fire was intentionally set),\122\ President Obama issued
Executive Order 13650, ``Improving Chemical Facility Safety and
Security,'' on August 1, 2013. Section 6(a)(i) of Executive Order 13650
requires that various Federal agencies develop options for improved
chemical facility safety and security, including modernizing
regulations. As a result, EPA is finalizing revisions to the Risk
Management Program (40 CFR part 68).\123\
---------------------------------------------------------------------------

    \122\ See ATF Announces $50,000 Reward in West, Texas Fatality
Fire, https://www.atf.gov/news/pr/atf-announces-50000-reward-west-texas-fatality-fire.
    \123\ For more information on the Executive Order see https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safety-and-security.
---------------------------------------------------------------------------

    EPA believes that the RMP regulations have been effective in
preventing and mitigating chemical accidents in the United States;
however, EPA believes that revisions could further protect human health
and the environment from chemical hazards through the advancement of
process safety based on lessons learned. These revisions are a result
of a review of the existing Risk Management Program and information
gathered from the comments on the proposed rulemaking, SBAR panel,
public hearing, RFI, and Executive Order listening sessions, and are
finalized under the statutory authority provided by CAA section 112(r)
as amended (42 U.S.C. 7412(r)). For more information on the proposed
rulemaking, SBAR panel and outreach efforts for this action, see the
docket for this rulemaking (Docket ID Number EPA-HQ-OEM-2015-0725).
2. Significant Comments on the IRFA
a. General Comments
    A Federal elected official, Federal agency, facility, and multiple
industry trade associations commented that EPA is not fulfilling its
obligations under the Regulatory Flexibility Act because the Agency did
not provide itself with enough time to consider the comments of either
the SBAR panel report or the SERs in the proposed rulemaking. Many of
these commenters asked that the SBAR panel recommendations be
incorporated in the final rule.
    A facility stated that the proposed rulemaking will be burdensome
to small facilities. An association of government agencies expressed
concern that the costs of a more prescriptive risk management program
will fall on small communities. An industry trade association and
Federal agency claimed that the proposed rulemaking imposes a
disproportionate burden on small facilities and asserted that EPA
should eliminate impractical, unjustifiable, or non-cost-effective
requirements. Several industry trade associations and a facility
commented that the proposed rulemaking will result in more facilities
being required to become responders, which will be costly and difficult
for small businesses.
    Multiple facilities commented that EPA should withdraw its proposed
rulemaking and coordinate more closely with OSHA's PSM rulemaking. An
industry trade association stated that OSHA's PSM program and EPA's RMP
proposal is creating confusion for small entities in the water sector.
The commenter asked that EPA update guidance documents and delay
further development of RMP revisions until OSHA'S PSM SBAR panel
process is complete.

    EPA disagrees that the Agency did not fulfill its obligations under
the Regulatory Flexibility Act or that the Agency did not consider the
comments of the SBAR panel and SERs in the proposed or final rules. In
many locations throughout the proposed rulemaking, EPA discussed SBAR
panel recommendations and requested public comments on regulatory
alternatives recommended by the SBAR panel. EPA also made numerous
adjustments to the final rule to incorporate regulatory alternatives
that were suggested by SERs where those alternatives were also
supported by public comments and were consistent with the Agency's
policy goals. For example, EPA incorporated SBAR panel recommendations
by relaxing the competency and independence criteria for third-party
auditors; reducing the frequency for conducting facility exercises; and
not finalizing the proposed revision to the definition of
``catastrophic release.''
    EPA also disagrees that the final rule is disproportionately
burdensome on small entities. In fact, the costliest final rule
provisions--STAA and facility exercises--affect relatively few small
entities. EPA minimized the effect of the STAA provisions on small
entities by applying these requirements to a narrowly-defined set of
facilities in three select industry sectors. EPA minimized the impact
of the exercise requirements on small entities by applying these
requirements only to responding facilities, which tend to more often be
large facilities. EPA also removed language from the final rule that
would potentially have required numerous small entities to become
responding facilities.
    Regarding comments requesting that EPA withdraw its rulemaking and
coordinate more closely with OSHA, EPA notes that it did coordinate
with OSHA in the development of the proposed and final rules, and that
OSHA has also completed a SBAR panel as an initial step toward
proposing potential changes to the PSM standard, which may include some
changes that are similar to those in this rule. However, EPA does not
believe it is necessary for the Agency to conduct its rulemaking on
exactly the same timeline as OSHA. The 1990 CAA Amendments contained
separate timelines for the initial OSHA and EPA rulemakings and has no
provisions restricting timeframes for either agency amending its rules.
b. Third-Party Audits
    A facility and an industry trade association stated that EPA's
assertion that the proposed requirements for third-party audits will
have ``fairly low impact on small businesses'' is false and the
requirement should be withdrawn entirely. Another industry trade
association commented that third-party audits will be especially costly
to small facilities. An industry trade association commented that the
requirement for third-party audits will lead to a lack of auditor
availability, a particularly difficult problem for small businesses.
    EPA disagrees that the final rule's third-party audit requirements
have a disproportionately high impact on small businesses. EPA notes
that the third-party audit provisions will only affect facilities that
experience an RMP reportable accident. Over the last ten years, RMP
facilities reported approximately 150 accidents per year, and over 75%
of these accidents occurred at large businesses.\124\ Based on comments
expressed by SERS and others, EPA also relaxed the final rule's
independence criteria to allow the owner or operator to use third-party
audit teams that include some non-independent members, including
employees of the stationary source being audited. Also, the final rule
allows a third-party audit team to include retired employees of the
facility being audited, if their sole continuing financial attachments
to the owner or operator are employer-financed or managed retirement
and/or health plans. The audit team can also include other persons who
previously provided consulting services as an employee or contractor of
the owner or operator, provided those services were not provided within
the last two years (whereas the proposed rulemaking would have required
a three-year prohibition on previous employment). EPA believes these
changes will increase the availability of auditors and therefore make
third-party audits more cost-effective for small business owners.
---------------------------------------------------------------------------

    \124\ EPA, 2016. Regulatory Impact Analysis--Accidental Release
Prevention Requirements: Risk Management Programs Under the Clean
Air Act, Section 112(r)(7). Exhibit 7-9.
---------------------------------------------------------------------------

c. Facility Exercises
    Multiple state agencies, facilities and a Federal agency commented
that the increase in mandatory field exercises for Program 2 and
Program 3 facilities would adversely affect small RMP facilities and
small communities. An industry trade association stated that the
proposed rulemaking for facility coordination with local responders
should be more flexible based on the size of the community and its
existing local response capabilities.
    A consultant/engineer stated that small utilities who lack a local
emergency agency with first responder capabilities will have difficulty
meeting the proposed requirements. The commenter requested that EPA
exempt small entities from the emergency response program requirement
and offer increased assistance to LEPCs in small communities.
    A Federal agency stated that LEPC concerns should be addressed in a
guidance document instead of a rulemaking.
    EPA notes that the final rule includes significant changes to the
exercise requirements to address concerns expressed by the SBAR panel,
individual SERs and other commenters. First, the final rule allows
owners and operators to work with local response officials to establish
an exercise schedule that works for both parties, provided the owner or
operator holds a field exercise at least once every ten years, and a
tabletop exercise at least once every three years. Second, the field
and tabletop exercise requirements only apply to responding facilities,
so non-responding facilities, which include the majority of small
businesses regulated under the RMP rule, are not required to comply
with them. Lastly, EPA did not finalize proposed rulemaking provisions
that would have required many small businesses to become responding
facilities.
d. Public Meetings and Information Disclosure
    A Federal agency stated that the public meeting requirement should
include small business flexibility, allowing small business to post the
required information to be disclosed instead of organizing a public
meeting.
    While EPA did not implement the recommendation to allow small
businesses to post required information in lieu of holding a public
meeting, EPA notes that the public meeting requirement, like the third-
party audit requirement, only applies to facilities after an RMP-
reportable accident, which minimizes its impact on small businesses.
Also, EPA revised the public meeting requirements to extend the
timeframe within which the meeting must be held (from 30 to 90 days
after an RMP reportable accident).
3. SBA Office of Advocacy Comments and EPA Response
    The SBA Office of Advocacy comments urged EPA to consider small
business concerns and provide flexibility to reduce the impact of the
proposed rulemaking on small businesses. The following sections

describe SBA recommendations and how EPA has revised the rule to
provide additional flexibility that benefits small businesses.
a. Third-Party Audits
    Duplicative of existing requirements. SBA suggested that third-
party audits are too burdensome for small businesses and should be
eliminated or reduced significantly in scope. SBA argued that the
requirements are duplicative of the existing requirements for self-
audits and incident investigations and suggested that EPA waive the
requirements if an implementing agency conducts an inspection as a
result of a reportable release or facility noncompliance.
    EPA disagrees that third-party audits are duplicative of existing
requirements. Following an accident, incident investigations often
reveal that facilities have deficiencies in some prevention program
requirements related to that process. Incident investigations generally
only evaluate the affected process, and do not necessarily address all
covered processes at a facility, or even all prevention program
elements for the affected process. However, compliance audits entail a
systematic evaluation of the full prevention program for all covered
processes, and EPA expects that third-party audits should identify
deficiencies in any other covered processes at such facilities.
    Additionally, EPA does not agree that third-party audits should be
waived if EPA conducts an inspection. Third-party audits do not
constitute enforcement, nor do they substitute for inspections by
implementing agencies. The audits are designed primarily to benefit
owners or operators by assisting them to identify both actual
noncompliance as well as operational or equipment deficiencies,
previously unidentified risk factors, and accident release and/or
regulatory noncompliance precursor conditions which, if uncorrected,
could lead to releases and/or enforcement actions. Proactively
addressing deficiencies, risk factors, and precursor conditions to
accidental releases and regulatory noncompliance will provide
financial, regulatory, and environmental benefits for facility owners
and operators, including small businesses, and communities.
    Finally, EPA has reasonably targeted third-party audit requirements
at facilities that have had RMP reportable incidents that may
demonstrate weaknesses in prior self-assessments and at facilities of
heightened concern for implementing agencies. Most small businesses do
not have RMP reportable releases and the implementing agency criterion
focuses on conditions with the potential to lead to accidental
releases, rather than authorizing implementing agencies to require
third-party audits under a potentially wide range of circumstances,
including minor noncompliance. Therefore, EPA does not expect that this
provision will be burdensome for small facilities.
    Applicability. SBA recommended that EPA limit the requirement to
Program 3 facilities with major accidents with offsite impacts.
    EPA disagrees with this approach. EPA based applicability of third-
party audits on whether a source had an RMP reportable accident or
whether conditions exist that could lead to an accidental release. EPA
believes that these criteria are potential indicators for noncompliance
with prevention program requirements and therefore warrant an
evaluation by a third-party.
    Auditor qualifications. SBA expressed concerns with the auditor
qualifications in the proposed rulemaking arguing that it would be
difficult to find auditors with no financial connection to the facility
(such as retirees). SBA recommended that EPA allow small businesses
with less than 250 employees to submit a waiver request of the
independence criteria based on limited availability of independent
auditors. SBA also expressed concern over the PE criterion for third-
party auditors and recommended that EPA consider other
accreditations\125\ to satisfy the competency criterion for third-party
auditors. SBA recommended EPA consider other criteria in place of the
PE criterion to allow additional flexibility such as years of
experience, number of audits conducted at a specific facility type, and
active involvement in developing industry standards.
---------------------------------------------------------------------------

    \125\ SERs suggested other accreditations including: degreed
chemists, degreed chemical engineers, Certified Safety Professionals
(CSP), Certified Industrial Hygienists (CIH), Certified Fire
Protection Specialists (CFPS), Certified Hazardous Materials
Managers (CHMM), Certified Professional Environmental Auditors
(CPEA) or Certified Process Safety Auditors (CPSA).
---------------------------------------------------------------------------

    In order to address concerns about the availability of auditors,
EPA modified the third-party auditor qualification criteria in the
final rule to enable more firms and individuals to qualify as third-
party auditors or third-party audit team leaders. The most significant
modification to the third-party auditor qualification criteria is that
only employees of the independent third-party audit firm must meet the
independence criteria of Sec.  68.59(c)(2) and/or Sec.  68.80(c)(2).
For third-party audit teams, the team leader must meet both the
competency and independence criteria of Sec.  68.59(c) and/or Sec.
68.80(c) and all other employees of the third-party auditor firm that
participate on the team need only meet the independence criteria.
Third-party audit teams may also include other personnel, such as
consultants or facility employees and these personnel are not subject
to the third-party qualification criteria of the final rule.
    EPA also revised the timeframe within which third-party auditors
cannot provide business or consulting services to two years. EPA added
language indicating that if a third-party-firm employs personnel who
have provided business or consulting services to the facility within
the prescribed timeframe (i.e. within two years of the audit) then the
third-party audit firm must ensure that these personnel do not
participate on the audit team. Additionally, EPA clarified in
regulatory language the circumstances in which a retired employee may
participate in a third-party audit and deleted the PE requirement from
the final rule. Viewed as a whole, these changes serve to increase the
types of personnel who may potentially serve as independent third-party
auditors. Therefore, EPA believes it will be unnecessary for facility
owners or operators to petition for a relaxation of auditor
qualifications.
b. Incident Investigations and Root Cause Analysis
    SBA recommended that EPA limit the scope of this requirement to
apply only to reportable releases in order to reduce the burden on
small businesses. SBA further recommended that EPA retain the existing
definition of ``catastrophic release.''
    EPA is finalizing the scope of the incident investigation
requirement to apply to an incident that resulted in a catastrophic
release or could reasonably have resulted in a catastrophic release
(i.e. a near miss). However, EPA is not finalizing the proposed
definition for catastrophic release and is instead maintaining the
existing definition. In the final rule, EPA is clarifying what we mean
by near miss to address uncertainty about the term.
c. STAA
    SBA recommended mandating an IST analysis only at the design stage
of new processes. Alternatively, to reduce the burden for small
entities, SBA recommended delaying the provision for small firms (with
less than 250 employees) until three years after the rule's compliance
date for larger firms in order to allow EPA a chance to review the
utility of the provision. SBA

also recommended that EPA exclude processes that are governed by
specifications established by a government agency or by a customer
through a contractual relationship.
    EPA is finalizing the STAA provision as proposed. EPA disagrees
that STAA analyses should only be required during the initial design
phase of a facility. While the greatest potential opportunities for
using IST occur early in process design and development, many IST
options may still be practicable after the initial design phase.
Furthermore, STAA involves more than just IST. Safer technology
alternatives also include passive measures, active measures, and
procedural measures, and these measures can be modified and improved
after the initial design of a facility. EPA notes that many RMP-
regulated facilities were originally constructed decades ago, yet major
enhancements have been reported in some plants that have been operating
for many years.\126\ CCPS explains that inherently safer strategies can
be evaluated throughout the lifecycle of a process, including
operations, maintenance and modification, and EPA agrees with this
approach.
---------------------------------------------------------------------------

    \126\ CCPS. 2009. Inherently Safer Chemical Processes: A Life
Cycle Approach, 2nd ed., American Institute of Chemical Engineers,
CCPS New York, Wiley, p. 25.
---------------------------------------------------------------------------

    EPA also disagrees with the suggestion to exempt certain groups
(such as batch toll manufacturers) from the STAA requirement. Safer
technology alternatives include many options beyond chemical
substitution or minimization. Therefore, even where a contractual
relationship or regulation requires a regulated batch toll
manufacturing facility to use a particular regulated substance in
specified quantities, owners and operators of batch toll manufacturing
facilities may still consider other potential safer alternatives, such
as passive, active, or procedural measures. Also, the final rule does
not require regulated sources to implement IST or ISD considered, so
there is no conflict between this final rule and other regulations that
may apply to RMP-regulated facilities subject to STAA requirements. For
example, an owner or operator would be in compliance with this rule if
he or she determines that a chemical substitution is not practicable if
the substitution is prohibited by another regulation.
    Finally, EPA is not delaying compliance dates for small businesses
to allow time for evaluating the provision at large facilities. STAA
for a source is a site-specific determination and would be difficult to
compare among facilities. EPA believes it would be impractical to
gather/analyze information on STAA implementation to determine the
utility of the provision for small facilities.
d. Emergency Response Program Coordination With Local Responders
    SBA recommended that EPA adopt compliance flexibility for small
businesses by limiting their responsibility to making good faith
efforts to coordinate with local responders. SBA further suggested that
EPA remove the provision to allow LEPCs to require sources to develop
emergency response programs. SBA also suggested that EPA provide
guidance to local responders, rather than expand existing regulations,
and focus on implementing and enforcing emergency planning requirements
for LEPCs. Finally, SBA recommended providing guidance on expectations
for coordination between a facility and local responders as well as
clarifying a facility's obligations for preparing an emergency response
program.
    EPA is not finalizing the provision that would have required the
source to develop an emergency response program following a written
request from the LEPCs or local response authorities. Furthermore, the
final rule clarifies requirements for coordination activities between
facility personnel and local responders. EPA understands some
communities do not have functional LEPCs, but has accounted for this
possibility by requiring coordination to be with ``local emergency
planning and response organizations.'' This term is intended to
encompass all manner of local public emergency planning and response
organizations. In many cases this will be the LEPC, but in other cases
it may be a local emergency management agency, a local fire department,
or another local response organization. These non-LEPC planning
entities can use this provision to obtain necessary planning
information even when they lack the authority granted LEPCs under EPCRA
303(d)(3). Regardless of whether or not their community has an active
LEPC, EPA expects owners and operators of regulated sources to make
good faith efforts to carry out the coordination activities required in
the final rule. If local emergency planning and response organizations
decline to participate in coordination activities, or the owner or
operator cannot identify any appropriate local emergency planning and
response organization with which to coordinate, the owner or operator
should document their coordination efforts, and continue to attempt to
perform coordination activities at least annually.
    The rule also clarifies requirements for facilities that must
develop an emergency response program in accordance with Sec.  68.95.
Responding facilities must comply with all of the provisions of Sec.
68.95, which include developing an emergency response plan, developing
procedures for the use, inspection, and testing of emergency response
equipment, conducting training for employees in relevant procedures,
and updating the emergency response plan to reflect changes at the
source. Any facility that plans to use its employees to take response
actions beyond those specified in its emergency action plan under 29
CFR 1910.38 as a result of an accidental release at the source--which
could include, for example, donning emergency air breathing apparatus
in order to enter an area where a toxic gas leak has occurred with the
intention of stopping or controlling the release--would be expected to
have obtained appropriate equipment and training, and to address these
activities in its emergency response program, even if the facility is
also relying on local responders to supplement its own response, or to
manage offsite response actions such as evacuations and sheltering-in-
place.
e. Exercises
    SBA recommends requiring small businesses to only conduct tabletop
exercises and eliminate the field exercises requirement of the proposed
rulemaking.
    EPA is requiring that responding facilities conduct both tabletop
and field exercises; however, we have revised the frequency to reduce
the burden on all facilities. The rule requires the owner or operator
to conduct both tabletop and field exercises involving a simulated
accidental release of a regulated substance. As part of the
coordination with local emergency response officials required by Sec.
68.93, the owner or operator is required to consult with these local
officials to establish an appropriate frequency for tabletop and field
exercises. However, in all cases, the owner or operator must conduct a
field exercise at least once every ten years and a tabletop exercises
at least once every three years. Additionally, EPA encourages several
nearby or adjacent facilities to conduct joint exercises, and this may
prompt small facilities to pool their response resources, thereby
reducing the exercise and emergency response burden on each facility.

f. Information Availability
    Availability of information for LEPCs. SBA suggests that EPA
require a one-page summary of information relevant for emergency
response to an accident at the facility. SBA also expressed concern
with the recordkeeping requirement of the proposed provision and
suggested that EPA require the information be provided within a
reasonable time period after receiving a request to allow the facility
time to develop the information.
    EPA maintains that it is very important to ensure that LEPCs or
local emergency response officials have the chemical information
necessary for developing local emergency response plans, however, EPA
believes it is unnecessary to specify in the RMP rule the types or
format of information that LEPCs or emergency response officials may
request. Therefore, EPA has eliminated this provision in the final
rule. EPCRA section 303(d)(3) already provides the necessary authority
to allow LEPCs to request information needed to develop the local
emergency response plan. Additionally, EPCRA requires facilities to
provide SDSs and inventory information to LEPCs to assist emergency
planners and responders. Under EPCRA section 312(f), fire departments
have the authority to inspect these facilities to better understand the
risk associated with these chemicals and how to deal with those risk in
the local emergency response plan.
    EPA added language to the emergency response coordination
provisions of Sec.  68.93, which requires the owner or operator to
provide ``any other information that local emergency planning and
response organizations identify as relevant to local emergency
planning.'' This approach will allow LEPCs and other local emergency
officials to obtain the information they require to meet their
emergency response planning needs. It will also allow local emergency
planners and response officials to ask questions of facility personnel
about the risks associated with the chemical hazards at the facility
and about appropriate mitigation and response techniques to use in the
event of a chemical release.
    Availability of information for the public. SBA recommends that EPA
improve public awareness of existing sources of information through its
own Web site or other public forums rather than requiring small
businesses to repackage existing information. Alternatively, SBA
suggests requiring facilities to indicate where this information can be
obtained.
    The final rule requires the owner or operator to make certain
chemical hazard information for all regulated processes at a stationary
source available to the public upon request. The facility must provide
ongoing notification to the public about what chemical hazard
information is available upon request, how the public may obtain such
information, and where to access any other available information on
community emergency preparedness. The facility owner or operator must
provide information to the requester within 45 days of receiving a
request.
    Public meetings. SBA recommends allowing small businesses to post
information that would be disclosed at a public meeting rather than
require them to host meetings. Furthermore, SBA suggests that EPA
should provide a longer time period for holding a public meeting to
allow the owner or operator more time to gather information and
adequately prepare for the meeting.
    In the final rule, EPA is requiring all facilities to hold a public
meeting after an RMP-reportable accident, but is extending the
timeframe for the public meeting to 90 days in response to comments.
EPA believes that small businesses should host public meetings
following an RMP reportable accident to allow community members an
opportunity to talk with facility personnel. EPA encourages small
businesses to find ways to reduce costs of public meetings such as by
hosting the meetings at inexpensive venues, such as local schools,
community centers, or churches.
4. Estimate of the Number of Small Entities to Which the Final Rule
Applies
    The RMP rule affects a broad range of sectors (296 separate NAICS
codes are listed in RMP filings; 240 of these are associated with small
entities). The RMP data include facility and parent company name, as
well as the number of full time equivalents (FTE) for the facility and
the NAICS codes. To develop an estimate of the number of small
entities, the analysis required a series of reviews of the data to
identify the large entities and the small entities that were part of
small firms owning multiple facilities. For more information on the
analysis to estimate the number of small entities, see section 7.2 of
the RIA.
5. Projected Reporting, Recordkeeping and Other Compliance Requirements
of the Final Rule
    Under the final rule, all facilities are required to make certain
information available to the public upon request. Program 2 and Program
3 facilities are also required to provide information upon request to
local response officials during annual coordination meetings. Program 1
facilities will likely not have to spend more than an hour per year on
this disclosure because the information disclosed to the public is
information every facility should have readily available and because
the additional information that will be provided, upon request, to
local responders relates to provisions that do not apply to Program 1
facilities. Therefore, the FRFA has not considered Program 1 small
facilities in the analysis of impacts.
    Program 2 and Program 3 facilities will incur the same costs for
the other provisions except for the STAA. Each facility will be
required to update information to be disclosed annually, coordinate
with the local responders, and conduct a notification drill annually.
If the facility is a responder, it will have to hold exercises every
three to ten years, including at least one full field exercise every
ten years. Program 3 facilities in NAICS codes 322, 324, and 325 will
have to conduct an STAA as part their PHA every five years.
    If a facility has an accident, it will incur costs to hold a public
meeting within 90 days of an RMP reportable accident. The facility will
also incur costs for obtaining an independent third-party to conduct
their next scheduled compliance audit and to conduct a root cause
analysis as part of the incident investigation. In the event of a near
miss, facilities will also be required to conduct a root cause
investigation. Section 7.3.1 of the RIA describes the costs of the
final rule for small entities.
6. Steps Taken To Minimize Economic Impact to Small Entities
    The RIA analyzed the proposed new requirements and revisions to
existing requirements as well as several alternatives for each. In most
cases, EPA chose regulatory alternatives that had reduced impacts on
small businesses relative to other alternatives that EPA considered. In
this section, we discuss each final rule provision and explain how the
provision minimizes impacts on small businesses and which of the SBAR
Panel recommendations were implemented.
a. Third-Party Audits (Program 2 Sec. Sec.  68.58 and 68.59 and Program
3 Sec. Sec.  68.79 and 68.80)
    EPA is finalizing a requirement for the owner or operator to engage
a third-party auditor to conduct a compliance audit when required by an
implementing agency due to conditions

at the stationary source that could lead to an accidental release of a
regulated substance or following an RMP reportable accident. Limiting
the applicability of this provision to sources that have had RMP
reportable accidents minimizes its impact to the overall universe of
RMP facilities, and particularly to small businesses. As indicated in
Exhibit 5-18 of the RIA, the estimated cost of the high option ($196
million annualized) is nearly 20 times higher than the estimated costs
of the preferred option ($9.9 million annualized). Furthermore, a
majority of the costs for the option would likely be borne by large
businesses as historically, most RMP accidents have occurred at
facilities that do not meet SBA small business criteria. Table 19 shows
the number of accidents from 2004--2013 that occurred at small and
large facilities.

                 Table 19--Percentage of Accidents at Small and Large RMP facilities, 2004-2013
----------------------------------------------------------------------------------------------------------------
                                                 Program 1           Program 2           Program 3
                  Sector                   ------------------------------------------------------------   Total
                                              Small     Large     Small     Large     Small     Large
----------------------------------------------------------------------------------------------------------------
NAICS 325--Chemical Manufacturing.........         0         6         1         5        53       465       530
NAICS 311, 312--Food/Beverage                      0         0         2         0        58       210       270
 Manufacturers............................
NAICS 322--Paper Manufacturing............         0         0         0         0         9        37        46
NAICS 331, 332, 333, 334, 336, 339--Other          0         0         4         0        12        27        43
 Manufacturing............................
NAICS 11, 12, 15, 42491--Agricultural              0         0         0         0        91        65       156
 Chemical Distributors....................
NAICS 4246, 4247--Chemical/petroleum               0         2         0         0         7        29        38
 wholesale................................
NAICS 4244, 4245--Other wholesale.........         0         0         0         0         7        13        20
NAICS 493--Warehouse......................         0         1         0         0        18        53        72
NAICS 324--Petroleum and Coal Products             2         6         0         0        15       146       169
 Manufacturing............................
NAICS 22131, 22132--Water/POTW............         0         0        14        20        17        24        75
NAICS 211--Oil/Gas exploration............         4         4         1         0        10        34        53
Other.....................................         3         7         7         4         7        17        45
                                           ---------------------------------------------------------------------
Total.....................................         9        26        29        29       304     1,120     1,517
----------------------------------------------------------------------------------------------------------------

    While the third-party audit provision should have a fairly low
impact on small businesses, the SBAR Panel made additional
recommendations to further minimize the impacts of this provision on
small businesses, which EPA considered for this final rule. Of the
suggested recommendations, EPA revised the provision to require that
only a third-party leading the audit team must meet the independence
and competency criteria of the rule, and also by allowing that a
retired employee of the source can participate in the audit. EPA also
did not finalize the competency criterion that required a PE to
participate in the audit.
b. Incident Investigation/Root Cause Analysis (Sec. Sec.  68.60 and
68.81)
    In the final rule, EPA is requiring a root cause investigation for
any P2 or P3 reportable accident or near miss. Although the Agency
chose the higher cost option, this provision is estimated to be one of
the least costly provisions of the final rule. In fact, the costs for
both options considered were nearly indistinguishable--as indicated in
Exhibit 5-18 of the RIA, both the low and preferred options are
estimated to cost approximately $1.8 million annually. Therefore, EPA
believes that the additional safety benefit of requiring owners and
operators of Program 2 processes to also conduct root cause analyses
after incidents and near misses is warranted. Of the suggested SBAR
recommendations, EPA clarified that near miss investigations are not
intended to cover minor accidents or minor near misses that could not
reasonably have resulted in a catastrophic release. EPA also chose not
to finalize the proposed definition of ``catastrophic release,'' which
some SERs had indicated could increase the number of investigations
required.
c. STAA (Sec.  68.67)
    For STAA, EPA is finalizing the least costly option. The final
rule, which applies the STAA requirement to P3 processes in NAICS 322
(paper manufacturing), 324 (petroleum and coal products manufacturing),
and 325 (chemical manufacturing), costs $80.0 million annually and is
approximately $40 million less costly than the medium option ($120.4
million annually), which would have applied the requirement to all P3
processes, and likely far less costly than the high option, which would
require implementation of practicable safer alternatives for all P3
processes. Although the SBAR panel provided recommendations, EPA
finalized this provision as proposed, and estimates that it will affect
relatively few small businesses given the narrow focus of the
provision's applicability.
d. Emergency Response Program Coordination With Local Responders
(Sec. Sec.  68.90, 68.93, and 68.95)
    The final rule requires all facilities with P2 or P3 processes to
coordinate with local response agencies annually and document
coordination activities. This provision does not have alternatives, but
the SBAR panel did provide recommendations on streamlining the
provision. In response to these and other recommendations, EPA modified
the extent of required coordination, removed the requirement for the
outcome of coordination to dictate whether a source must implement an
emergency response program, and eliminated the ability for LEPCs to
mandate sources' response capabilities.
e. Facility Exercises (Sec.  68.96)
    Notification Exercises. The final rule requires all facilities with
P2 or P3 processes to annually conduct an emergency notification
exercise to ensure that their emergency contact list is complete,
accurate, and up-to-date. This provision is expected to be one of the
least costly rule provisions at $1.4 million annually (only the public
meetings provision is estimated to cost less). Therefore, EPA did not
consider any alternatives to reduce the impact of this provision on
small businesses, nor did the SBAR panel make any such recommendations.
    Tabletop and Field Exercises. The final rule requires responding
facilities to conduct a full field exercise at least once every ten
years and tabletop exercises triennially. As this provision only
affects responding facilities, which tend to more often be large
facilities (see Exhibit 3-7 in the RIA), EPA has

implemented a rule that mitigates the impact on small entities. EPA
also considered a low option that would only require triennial tabletop
exercises. This option would have saved approximately $8 million
annually. EPA did not implement the low option because the Agency
believes that periodic field exercises are an important component of a
comprehensive emergency response program. In response to SBAR panel
recommendations, EPA reduced the required frequency of exercises to
minimize the impact of this provision on small businesses.
f. Information Availability (Sec.  68.210)
    Under the final rule requirements, all facilities are required to
make certain chemical hazard information available to the public, upon
request. The owner or operator must provide an ongoing notification to
the public that such information is available as well as instructions
on how to request the information. Facilities are also required to hold
public meetings within 90 days of any RMP reportable accident. Although
EPA has not identified specific alternatives to minimize the impact of
the information disclosure provisions on small businesses, the Agency
believes that in general, smaller facilities will bear lower costs to
comply with these provisions.
    In response to the SBAR recommendations, EPA eliminated the
proposed provision that would have had required specific information to
be disclosed to LEPCs and extended the timeline for public meetings
from 30 days to 90 days after an RMP reportable accident. In addition,
information to be provided to the public is only required to be
disclosed to the public upon request.
7. Small Business Compliance Guides
    EPA is preparing a Small Entity Compliance Guide to help small
entities comply with this rule. EPA expects that this guide will be
made available on the EPA Web site prior to March 15, 2021, when
facilities will have to comply with new and revised data elements for
the final rule.

D. Unfunded Mandates Reform Act (UMRA)

    This action contains a Federal mandate under UMRA, 2 U.S.C. 1531-
1538, that may result in expenditures of $100 million or more for
state, local, and tribal governments, in the aggregate, or the private
sector in any one year. Accordingly, the EPA has prepared a written
statement required under section 202 of UMRA. The statement is included
in the docket for this action and briefly summarized here.
    Over the 16 years of implementing the RMP program and, most
recently through Executive Order 13650 listening sessions, webinars,
consultations, and a public hearing, EPA has engaged states and local
communities to discuss chemical safety issues. In the nine Executive
Order 13650 Improving Chemical Facility Safety and Security listening
sessions and webinars, held between November 2013 and January 2014,
states and local communities identified lack of chemical facility
participation and coordination in local emergency contingency planning
as a key barrier to successful local community preparedness.
Additionally, EPA has had consultations with states and local
communities through participation in the National Association of SARA
Title III Program Officials (NASTTPO) annual meetings to discuss key
issues related to chemical facility and local community coordination
and what areas of the RMP regulations need to be modernized to
facilitate this coordination and improve local emergency preparedness
and prevention. Key priority options discussed with NASTTPO states and
local communities included: improving emergency response coordination
between RMP facilities and LEPCs/first responder and requiring
emergency response exercises of the RMP facility plan to involve LEPCs,
first responders and emergency response personnel.