January 26, 2001

J.D. Varn III, Vice-President
Varnco, Inc.
P.O. Box 97
Ehrhardt, South Carolina 29081

Dear Mr. Varn:

Thank you for your November 16, 2000 letter to the Occupational Safety and Health Administrations's (OSHA's) [Directorate of Enforcement Programs (DEP)]. This letter constitutes OSHA's interpretation only of the requirements discussed and may not be applicable to any question not delineated within your original correspondence. You had a question regarding OSHA's Process Safety Management of Highly Hazardous Chemicals, Explosives and Blasting Agents Standard (PSM), 29 CFR 1910.119. Your specific question is related to the PSM retail exemption, 29 CFR 1910.119(a)(2)(i).

Background: You buy fertilizer, including anhydrous ammonia (NH3), and sell directly to your customers, who are farmers. Approximately 75% of your sales are directly to these farmers and the other 25% is to wholesalers who then sell to farmers. You have never had an on-site accident.

Question: Based on the above, is our facility excluded from employer compliance with PSM standards?

Response: Your covered process is exempt from PSM requirements based on the PSM retail exemption, 29 CFR 1910.119(a)(2)(i), as follows:

1. a highly hazardous chemical (HHC), NH3, exists in your facility;
    
2. an assumed threshold quantity (TQ) of NH3 exists in a process at your facility (if this is not true, your facility does not contain an NH3 PSM-covered process);
    
3. as a HHC is contained in a process at greater than a TQ, you have a PSM-covered process; and
    
4. you meet OSHA's retail exemption standard because you obtain more than half (>50%) of your income, i.e., 75%, from sales of NH3 to direct end users - farmers.
    

For further information, please refer to a previous OSHA interpretation letter on this matter to Mr. Gary Myers, dated June 19, 1992. You may access this letter through OSHA's website at [http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=20712].

Please note, you stated, "We have never had an on-site accident." While I certainly applaud your accident record, the fact a facility has not had a release of an HHC is not a criteria which is used to determine PSM coverage.

The State of South Carolina administers its own occupational safety and health program under a plan approved by Federal OSHA. States are required to enforce standards which are at least as effective as the Federal standards, but some specific requirements and their interpretations may vary. To determine the State requirements applicable to your facility, I suggest that you contact:

South Carolina Department of Labor, Licensing, and Regulation
Koger Office Park, Kingstree Building
110 Centerview Drive
PO Box 11329
Columbia, South Carolina 29210

Thank you for your interest in occupational safety and health. We hope you find this information helpful. OSHA requirements are set by statute, standards and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at http://www.osha.gov. If you have any further questions, please feel free to contact the [Office of General Industry Enforcement at (202) 693-1850].

Sincerely,


Richard E. Fairfax, Director
[Directorate of Enforcement Programs]

[Corrected 7/16/2004]