December 12, 2005

Mr. Jay W. Schwall
Stephen B. Ogle & Associates
823 North Street
P. O. Box 275
Caldwell, OH 43274

Dear Mr. Schwall:

This is in response to your letter dated June 21, 2005, addressed to the Philadelphia Regional Office of the Occupational Safety and Health Administration (OSHA). Your letter was forwarded to the Directorate of Enforcement Programs for response. You indicated in your letter that you deal with a company that warehouses chlorine and sulfur dioxide gases in compressed gas cylinders, and you wanted clarification with respect to the retail facility exemption under the Process Safety Management (PSM) standard at 29 CFR 1910.119. 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. We apologize for the delay in our response. Your paraphrased question and our response are provided below.

Question: I understand that a retail facility is defined as an establishment which obtains more than half (>50%) of their income from direct sales to end users. Does the income referenced above mean the income from all sales, or income from sales of just the chemical covered under the PSM standard?

Response: OSHA considers an establishment to be qualified under the PSM "retail facilities" exemption, if that establishment receives more than half of its income from the direct sales of the PSM-covered highly hazardous chemical (HHC) to end users. The income referenced above applies to the income obtained from the sales of PSM-covered HHCs, and not the total sales of the establishment. For example, establishment A distributes and sells HHC X to a chain of supply stores and to homeowners (end users). Establishment A obtains 60% of its income from the sale of HHC X to the chain of supply stores - these supply stores are not the direct end users or consumers. The other 40% of the income obtained from the sale of HHC X is from sales to homeowners. Since establishment A's income from homeowners (end users) is less than 50%, establishment A does not qualify for the PSM retail exemption. In addition, if establishment A sells other products besides PSM-covered chemicals, the income derived from the sale of the other products is not part of the determination of whether establishment A qualifies for the retail exemption.

Thank you for your interest in occupational safety and health. 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 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