ML19251A676

Recommends That Commission Approve for Publication,Final Rule & Conforming Amends Re Protection of Unclassified Safeguards Info

ML19251A676
Person / Time
Issue date:	09/16/1981
From:	Dircks W NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
Shared Package
ML19251A677	List: ML19251A676 ML19251A681 ML20010J397
References
REF-10CFR9.7, TASK-RIA, TASK-SE SECY-81-464A, NUDOCS 8109280784
Download: ML19251A676 (63)

Text

,

L' j"b

(* "%

(N ' ;

/

n4 m

e

~

i,

(

E

.[

{[ ic %

2 %.

.E i.:

c~ to %

5 t6 e

E6

.N.,__-

./

1 igs k t-ea RULEMAKING ISSUE r

~v September 16, 1981 SECY-81-464A (Aff.irmat. ion)

FOR:

The Comissioners FROM:

William J. Dircks Executive Director for Operations

SUBJECT:

PROTECTION OF UNCLASSIFIED SAFEGUARDS INFORMATICN PURPOSE:

To obtain Comission approval t) publish a final rule and conformi,ng amendments in compi sance with new Sec.2 ion 147 of the Atomic Energy Act (PL 96 '!95). This paper revises SECY-81-464 in response to Conmission comments. Changes are indicated by a vertical line in the margin.

CATEGOR Y:

A minor policy matter requiring Comission approval.

Resource estimates. Category I.

ISSUE:

Should the Comission approve the final rule and conforming amendments for publication in the Federal Register.

DISCUSSION:

On December 29, 1980. a proposed rule for the protection of un-classified Safeguards Information was published in the Federal Register for public coment.

This action was taken in response to tne provisions of a new Section 147. SAFEGUARDS INFORMATION.

that was added to the Atomic Energy Act by PL 96-295. Section 147 directs the Comission to prescribe such regulations after notice and oppornai ty for public coment. or issue such orders, as necEssary tr prohibit the unauthorized disclosure of Certain information rc)ating to the protection of nuclear materials and facilities by licensees.

Forty-five commenters responded to the notice.

In general, com-menters were supportive of the basic intent of the rule but raised objections to certain prescriptive provisions and to the scope of activities covered by the rule. Based on these comments, ex-tensive revisions have been made to the rule as originally pro-posed.

The most significant revisions include:

- Excluding from the scope of the rule activities involving less I

than a formula quantity of strategic special nuclear material.

l

- Deleting imit of error of inventory difference (LEID) infor-mation from the rule.

Contact:

a109280784 e10916 D. J. Kasun. NMSS CF SUBJ CF X74010 R. L. Fonner. DELD

o The Comissioners - Adding guard qualification and training plans as items con-sidered to be Safeguards Information (those portions that dis-

' N se facility safeguards features).

- Deeming information protection programs used by State and local police forces adequate to meet regulatory requirements.

- Rephrasing 12.790(d)(1 ).

- Nut requiring the marking of documents more than one year old stored by licensee contractors.

Such documents would La marked if and when taken from security storage containers for use.

In regard to the reduction in activities covered by the rule, the staff notes that the original determination of scope was based on the assumption that appropriate information pertinent to a'el facilities and special nuclear materials required to be protected under 10 CFR Part 73 should be incit.ded in the rule.

Upon fur-ther review the staff has concluded that applicability should be more closely related to the 'significant adverse effect on the health and safety" standard contained in Section 147 of the Atomic Energy Act. Accordingly, the scope of the rule has been reduced to apply only to those facilities, nuclear materials or transport activities for which there exists a significant potential for harm to the public health and safety if the nuclear material or facility is intentionally misused or damaged. Therefore, Safeguards Information is limited to information regarding physical protection of:

- All activities involving formula quantities of strategic special nuclear material, both irra-diated and unirradiated or combinations thereof,*

- Operating power reactors, and

- Spent fuel shipments (but not routes and quantities).

In regard to licensee physical security and material control and accounting information not covered by either this rule or Part 95, the staff believes that such information is a legitimate example of confidential commercial or financial information for

• Most of the physical protection information for activities involving a formula quantity of unirradiated strategic special nuclear material would be classitted as National Security Information under 10 CFR Part 95.

The Comissioners purposes of Freedom of Ir/ormation Act (F0IA) requests.

In order to reduce both the 1.'censee's and the NRC's burden assoc-iated with licensees applyics for a withholding determination for each item of such informat on submitted to the NRC.10 CFR i

2.790(d1(1) is being amended to generically deem such information to fall within the provisions of exemption (4) of the FOIA.

In this regard, it is noted that et the time the proposed rule was before the Comission, the General Counsel ind the Executive Legal Director advised the Comission of their differing legal views on whether 10 CFR 2.790(d)(1) should be retained in the codified regulations.

(Their several memoranda to the Comission are collected in Enclosure D). The Comission particularly requested public coment on this matter.

Nine responders com-mented each stating that it would be desirable to retain 10 CFR 2.790(d)(1) in some form.

None of the responders provided any legal analysis.

A draft report to the Congress required to be submitted concur-rently with the issuance of final regulations is attached as Enclosure B.

NRC Resource Requirements (Enclosure C)

The impact of the proposed rule on staff operations is not sig-nificant. The estimated resource requirements are (other than IE) $9,000 for storage containers, one man year for initial review and marking of documents, and about one and one third man years per year for document control and distribution.

In regard to the inspection and enforcement program, the resource requirements are estimated to be one-half man year for initial setup and about one and one-half man year per year and $40.000 per year for bi-annual inspections.

Impact on Licensees and States (Enclosure C)

Licensee and nuclear service company initial costs are estimated to be (for equipment and initial marking) $4000 per location av-erage for a total of $986.500.

Annual costs (labor only) are estimated at $2200 pe-location average or $531.000 total.

The costs for States relative to the protection of spent fuel shipment notices is estimated to be about $24.000 initially and

$126.000 per year through 1984.

t 4

The Commissioners Recommendations:

That the Commission:

1.

Approve the publication of the rule and conforming amendments of Enclosure A in the Federal Register.

2.

Approve the proposed report to the Congress attached as Enclosure B.

3.

Note:

_ That the rule will become effective upon publication in the Feder.1 Register except that sections that prescribe physical re-quirements will become effective 90 days after publication, b.

that a public announcement will be issued when the amendments are filed with the Office of the Federal Register; c.

that neither an Environmental Impact State-ment nor a Negative Declaration is required in accordance with 10 CFR 51.5(d) because the proposed amendments are not significant from the standpoint of environmental impact; d.

that guidance document NUREG-0794 will be published concurrently with the final rule; e.

that a quarterly report to the Congress ident-ifying any information withheld from public disclosure pursuant to this rule will be pre-pared by the Division of Rules and Records; f.

that the final rule contains no new or amended requirements for recordkeeping, reporting, plans, applications, or any other types of information collection subject to the Paper-work Reduc?. ion Act of 1980. PL 96-511; and g.

that copies of the Federal Register notice will be sent by TIDC, ADM to affected licensees and other interested pacties.

In addition, licensees will be encoura9'd to notify their contractors and local polict response forces concerning the final rule.

4 The Comissioners Scheduling:

It is recomended that this paper be scheduled for affirmation at an Open meeting.

William J. Dircks Executive Director for Operations

Enclosures:

A.

Federal Register Notice B.

Proposed report to the Congress C.

Value Impact Analysis D.

Memoranda to the Comission-Note:

Comissioner's coments or consent should be provided directly to the Office of the Secretary by C.0.B.

Tuesday, September 22, 1981.

Commission Staff Office comments, if any, should be submitted to the Comissioners NLT Friday, September 18, 1981, with an information-copy to the Office of the Secretary.

If the paper is of such a nature that it requie. additional time for analytical review and comment, the Commie,sioners and the Secretariat should be apprised of when comments may be expected.

This paper is tentatively scheduled for affirmation at an open meeting during the week of September 21, 1981.

Please refer to the appropriate Weekly Commission schedule, when published, for a specific date and time.

DISTRIBUTION Commissioners Commission Staff Offices Exec Dir for Operations Exec Legal Director ACRS ASLBP ASLAP Secretariat

4.

ENCLOSURE A P,evisions on pages - 4 19 21 25 27 29 30 32

NUCLEAR REGULATORY COMMISSION 10 CFR PARTS 2, 50, 70. AND 73 Protection of Unclassified Safeguards Information AGENCY: duelear Regulatory Commission.

ACTION: Final Rule.

SUMMARY

The Nuclear Regulatory Commission is amending its regulations to require NRC licensees and other persons to protect unclassified safeguards information against unauthorized disclosure. The rule establishes require-ments and sets forth conditions to be applied by NRC licensees and other persons for the protection of unclassified Safeguards Information for oper-ating power reactors, spent fuel shipments, and activities involving formula quantities of strategic special nuclear material.

EFFECTIVE DATE:

(Insert date of publicaticn) for sections 2.744(e). 2.790(d)(1).

73.2jj and 11. and 73.21(a). (b) and (c)(1).

All remaining sections will be effective (Insert 90 days after date of publication.).

FOR FURTHER INFORMATION CONTACT: Mr. Donald J. Kasun. Physical Security Licen-sing Cranch. Division of Safeguards. Office of Nuclear Material Safety and Safeguards. O, S. Nuclear Regulatory Commission. Washington, D.C.

20555. Phone -

301-427-4010. ENCLOSURE A

SUPPLEMENTARY INFORKATION:

BACKGROUND:

On December 29, 1980 THE Nuclear Regulatory Commission published for comment a proposed rule that would prohibit the unauthorized disclosure of certain safeguards information by NRC licensees or other persons (45 FR 85459). The proposed rule was published in response to the pro-visions of a new Section 147. SAFEGUARDS INFORMATION of the Atomic Energy Act, as amended.

Public comment on the proposed rule was received from forty-five groups and organizations a:s follows:

Power Reactor Licensees 19 Fuel cycle licensees 6

Nuclear service companies 7

States 5

Law firms 3

Associations 2

Other government agencies 2

Private citizens 1

There were no comments received from public interest groups or organizations.

Extensive revisisas have been made to the rule as a result of the connents received. The most significant revisions include:

- Excluding from the scope of the rule activities involving less than a formula quantity of strategic special nuclear material (except for spent fuel shipments).

- Deleting limit of error of inventory difference (LEID) information from the rule.

- Adding guard qualification and training plans as items considered to 2-

be Safeguards Information (those portions that disclose facility safeguards features).

- Deeming information protection systems used by State and local police force adequate to meet regulatory requirements.

- Rephrasing 2.790(d)(1 ).

- Not requiring the marking of documents more than one year old stored by licensee contractors. Such documents would be marked if and when taken from storage for use.

A.

Discussion of Comments Resulting in Changes to Proposed Rule (1) Reduction in the Scope of Application - A number of commenters sug-gested that physical protection information for facilities that possess only special nuclear material of low strategic significance (Category III) be deleted from the rule considering the small potential hazard of such materials. Comenters also suggested that this type of information when in the hands of the NRC be withheld from public disclosure as commer-cially valuable (proprietary) information.

The Commission agrees with both points. The original determination of scope was based on the assumption that appropriate information pertinent to all facil-ities and special nuclear materials required to be protected under 10 CFR Part 73 should be included in the proposed rule. Upon further review the Commission has concluded that applicability should be more closely related to the "signifi-cant adverse effect on the health and safety" standard contained in Section 147 of the Atomic Energy Act. as amended.

Accordingly, the scope of the rule has been reduced to apply only to those facilities. nuclear materials, or transport activities for which there exists significant potential for harm to the pub-lic health and safety if the nuclear materials or facilities involved are intentionally misused or damaged. Therefore. Safeguards Information is limited to information regarding the physical protection of:

- All activities involving formula quantities of strategic special nuclear material, both irradiated and unirradiated (most of the physical protection information for activities involving a formula quantity of unirradiated strategic special nuclear material would be classified as National Security Information under 10 CFR Part 95).

- Operating power reactors, and 1

- Spent fuel shipments (but not routes and quantities).

This separation is generally consistent with the overall NRC Policy of graded safeguards. The activities that remain under the rule (with certain minor exceptions such as non-power eactors) require protection by armed guards, whereas the activities deleted do not.

Appropriate paragrapas of 573.21 have been modified to reflect this scope change.

In regard to the second poin';.

the Comission has determined generically that information concerning a li-censee's or applicant's material control and accounting or physical security program for special nuclear material, not otherwise covered by specific statu-tory exemptions. is comercial or financial information for purposes of Freedom of Information Act (5 U.S.C. 552) (FOIA) requests.

In order to reduce both the licensee's and the Comission's administrative burden associated with licensees applying for a withholding determination for each item of such information sub-mitted to the NRC under 10 CFR 2.790(b)(1).10 CFR 2.790(d)(1) has been amended to deem such information confidential comerr.ial information under exemption (4) of the F0IA. This continues in effect present procedures for such information.

Nine comenters supported the retention and/or expansion of 52.790(d)(1) as an appropriate method for withholding material control and accounting and physical security information not considered to be Safeguards Infor-mation. There were no comments to the contrary.

(2) Deletion of Limit of Error of Inventory Difference (LEID) Information -

A large number of commenters recommended the deletion of LEID information for low enriched uranium fabrication facilities on the basis that this infor-mation would not be very valuable to a diverter attempting to steal material within the limits of a statistical alarm threshold.

The Commission agrees and LEID information has been deleted from the rule (LEID information for activities involving formula quantities of strategic special nuclear material would still be classified under Part 95.)

(3) Addition of Guard Oualification and Training Plans to the Rule - Ten comments were received on this matter, the most for any item. Commenters stated that guard qualification and training plans contained, among other things, site specific response procedures and descriptions of facility safeguards features. A review of several such plans received by the NRC disclosed that while some plans were so general that they could not be considered Safeguards Information, others contained specific information that should be protected. The rule has been amended to include those portions of guard qualification and training plans that disclose site specific features of the physical protection system.

(4) Grandfathering - Comments pointed out that certain organizations (e.g.

architect /e;igineering firns) may have very large quantities of old documents that qualify as Safeguards Information but are rarely removed from storage.

They suggested that this information be exempted or at least be given special consideration. The Commission agrees with this suggestion in part and has amended the rule to require marking of documents more than one year old only when they are removed from storage.

Storage, protection and access requirements however, would still apply. Documents containing Safeguards Information located at the operating f acility would have to be marked re-gardless of age.

( 5)

"n:: 'duilt" Drawings - Some commenters suggested that all revisions of drawings, not just the final, be considered as Safeguards Information.

Other commenters suggested that preliminary design and construction draw-ings be specifically excluded from the rule. The Comission believes there is some merit in both suggestions. Accordingly, the rule has been changed to indicate that any drawing or document that substantially repre-sents the final design of the physical security system would have to be protected. This change eliminates the need to control much of the initial information, such as requests for bids, but still requires protection of documents that are only slightly different from the final version.

(6)

Vital Area Identification and Location - Several comenters noted that the proposed rule might be interpreted as requiring protection of infor-mation alreacty in public documents, such as in the FSAR, specifically in regard to drawings that show locations of safety related equipment. The rule was therefore revised to indicate that only drawings or documents that explicitly identify items of safety-related equipment as vital for purposes of physical protection are required to be protected. (Note that the content of Appendix E has now been incorporated into the text of the rule at paraoraph 73.21(b)).

Other than as above, engineering and construc-i tion drawings that show the locations of safety-related equipment are not considered Safeguards Information.

(7) Acceptablilty of Present Protection Systems - Several commenters suggested that specific physical protection requirements not be included in the existing rule but that licensee or State standard procedures be accepted instead. The Commission has concluded, based on frequent NRC staff contacts, that State and local police forces protect information in a way that is equivalent to the rule requirements.

Accordingly, the rule has been revised to deem State and local police information protec-tion procedures acceptable. In regard to NRC licensees that fall into the scope of the rule, the Commission has concluded that without formal re-quirements there would be no assurance of uniformity, consistency or an ade-quate level of protection across the industry. As evidenced by the comments received, there is considerable divergence of opinion as to what constitutes a minimum acceptable level.

(8) Other Minor Changes - Based primarily on comments received, additional rule changes have been made to:

Permit Safeguards Information to be transported by any individual authorized access under the rule.

Show that matter other than documents may conta n Safeguards i

Information.

Allow use of ADP systems by contractors of licensees.

Indicate that non-security related orders and procedures for guards need not be protected.

- Limit off-site comunicatien information that needs to be protected to comunications used for security purposes.

- Show that portions of any correspondence that contains Safeguards Information would have to be protected.

- Remove from the rule and place in guidance documents many of the detaMed requirements relative to marking, transmission, and de-struction of documents that contain Safeguards Informat don.

- Note in 5 2.744'e) the applicability of criminal sanctions, as well as civil penalties, for violations of Board orders pertaining to Safeguards Information.

B.

Discussion of Coments Not Accepted By the Comission (1)

Protection During Agency Proceedings - The adequacy of proposed 10 CFR 2.744(e) was questioned by law firm comenters representing licen-sees. The amendment as proposed would confirm a presiding officer's authority to issue appropriate protective orders whenever protected Safeguards Information is required in an adjudicatory hearing. The amer.f.;aent was seen by the Comission as the minimum restriction needed to protect the health and safety of the public or the common defense and security in the context of adjudicatory hearings pursuant to Section 147a of the Atomic Energy Act of 1954, as amended (the Act), and to impose the minimum impairment of procedural rights, as required by Section 181 of the Act. The amendment makes it clear that the physical protective measures and need to know standards of proposed 573.21 would apply to Safeguards Information in adjudicatory hearings.

First, the comenters note correctly, but as a shortcoming, that 5 2.744(e) applies only to agency records and not to Safeguards Information possessed only by an applicant, licensee, or contractor. A second objection was that the proposed 5 2.774(e) gives relatively weak authority to the licensing boards to prevent disclosure by intervenors and their lawyers. The commenter asserted that some showing of reliability should be required of such persons before Safeguards Information is disclosed. Third, the comenters stated that the proposed regulation gives inadequate guidance to the licensing boards on the kind of protection intervenors should be required to give to Safeguards Information. The commenters suggest that the restrictions used in the Diablo Canyon case be adopted.

See Pacific Gas and Electric Co. (Diablo Canyon Nu-clear Power Plant Units 1 and 2) ALAB-600,12 NRC 3 (1980).

Finally, the commenters suggest that the possibility of criminal sanctions, as well as of civil penalties, be noted for violations of Board orders pertaining to Safe-guards Information.

In response to these comments the Comission has made one change to proposed 52.744(e). That change notes the applicability of criminal sanctions by stat-ing, for the purpose of Section 223 of the Act, that any order issued pur-suant to 5 2.744(e) with respect to Safeguards Information be considered an order issued pursuant to Section 161b. of the AE Act. This is in accord with Section 147b. of the Act.

The Comission believes the other comments should not be adopted.

It was not the intention of the Comission to place any restrictions on discovery by intervenors, or to write any special rules chilling intervenors' rights, such as a screening requirement not applicable to all parties.

Not only would such rules be discriminatory, but also would be contrary to Sections 181 and 147a of the Act. This Commission cannot presume beforehand that intervenors and their counsel are any-the-less trustworthy than the staff or applicant and their counsel.

The minimum protection required for Safeguards Information is stated in pro-posed 573.21. The requirements there apply to intervenors and their counsel as well as to the applicant or licensee.

Section 2.744(e) allows a Board to go further, if, in its judgment after hearing all relevant arguments, the circum-stances warrant it. This Commission, needless to say, has confidence in the ability of its Boards to exercise sound judgment in the exercise of their dis-cretion under S 2.744(e), and therefore at this time declines to write any special rules for the guidance of the Boards as to the extra measures they may require for the protection of Safeguards Information in adjudicatory hearings.

With respect to the protective measures used by the Boards in the Diablo Canycn case and their potential general applicability, the Commission notes that those conditions are involved in a review of the Diablo Canyon hearing by an Atomic Safety and Licensing Appeal Board. The Appeal Panel has inf ormed the Commission that it would like to make some suggestions regarding the hand-ling of Safeguards Information in adjudicatory hearings but feels constrained not to do so until the Diablo Canyon adjudication is finished.

The Commission believes that the suggestions of the Appeal Panel will be most useful in deter-mining if restrictions on intervenor's rights of discovery of Safeguards Infor-mation should be inserted into the agency's rules as the commenters request.

For this reason also, the Commission will defer to a later time the decision whether it should stipulate any further guidance or rules for how the licensing boards should write protective orders to protect Safeguards Information. At this time the Commission believes that its opinion and those of the Boards provide ade-quate guidance. See, Pact.ic Gas and Electric Co. (Diablo Canyon Nuclear Power Plan. Units 1 and 2), CLI 80-24,11 NRC 775 (1980), ALAB 410, 5 NRC 1398. (1977),;

ALAB 580, 11 NRC 227 (1980); ALAB 592, 11 NRC 744 (1980); and ALAB 600, 12 NRC 3 (1980).

One commenter also took the position that proposed 52.744(e) did not provide adequate protection against undesirable disclosure of physical security plans for nuclear power plants.

In his view a protective order and affidavit of nondisclosure would not eliminato the risn of unauthorized disclosure by inter-venors who had an ulterior motive of securing the plans for use in sabotaging the plant. This commenter recommended (i) inclusion of rules of decision based upon Diablo Canyon for presiding officers to apply in hearings, and (ii) security clearances or a screenirg program for persons with access to Safeguards Informa-tion in hearings, in order to assure trustworthiness and reliability. Both of these reconimendations have been discussed above and rejected. In addition, the Commission does not propose to write rules affecting rights of intervenors in adjudicatory hearings based upon a suspicion of ulterier motives in intervening.

To do so would be tantsmount to writing rules base 6 upon speculation rather than on fact and law. The hearing process already contains screens to separate the

' genuine intervenor from the spurious. The intervenor must validate both his standing under judicial rules and the merit of his contentions. He is a known and readily identifiable person who openly participates at considerable,

expense.

Intervenors generally make no effort to conceal their opposition to nuclear power, but this does not supply an adequate basis to consider them as potential co-conspirators in plots to sabotage operating power reactors.

In contrast to the above, a third commenter stated that proposed 5 2.744(e) was potentially too restrictive of intervenors' rights in that it gave too much authority to the presiding of ficer. The commenter suggested modification of pro-posed 5 2.744(e) to allow disclosure of Safeguards Information to a party upon a showing by the party of reasonable necessity for disclosure.

10 CFR 2.744(e) as draf ted requires a finding by the presiding officer that disclosure is nec-essary to a proper decision. The presiding officer, as usual, will exercise a rule of reason in applying the standard.

The language used accomplishes the same result and is generally consistent with the terminology in 5 2.744.

(2) Trustworthiness Determinations - A number of comenters disagreed with the absence of a personnel clearance or screening program as a necessary condition for access to Safeguards Infctmation, noting that the traditional requirements f or access to sensitive information include both "need-to-know" and trustworthi-ness determinations.

One comenter suggested that persons having access be sub-jected to the screening program which the Comission has directed be establisheo for power reactor personnel. Another commenter suggested that individuals be re-quired to show sufficient evidence of trustworthiness before being granted access.

The Comission's position on this matter has not changed.

In the first place, Section 147 of the Atomic Ener3y Act contains no provisions regarding trustworthi-ness determinations on which to base a federal personnel security program (as is set forth in Section 145 for access to Restricted Data).

Secondly, the Comission does not believe that there is any reasonable regulatory framework that can be used to establish a licensee administered screening program, considering the wide distribution efforded some Safeguards Information.

Whi~ie the power reac-tor access authorization program mentioned by one comenter might be used for

" clearing" licensee employees and other persons granted unescorted access to the reactor facility, it would not be applicable to engineering firm employees who are never on the site (but who in some cases have total access to the phys-ical protection system oesign information). Thirdly, the Comission believes that the proper administration of the need-to-know requirement combined with the rule's occupational restrictions will. provide an effective information pro-tection progrcm and still satisfy the " minimum restrictions" provisions of Section 147a of the Act.

(3)

Unrestricted Use of Telecomunications - Several commenters suggested that the restrictions v.. the use of telephone circuits for transmission of Safeguards Information be deleted. Various reasons were given for this change. One cot:menter stated that the rule would prevent the licensee from calling for help in a ssfeguards emergency. This is not so since the regu-1ations make an exception for extraordinary or emergency circumstances.

Another commenter contended that the resources needed to intercept un-secured comunications exceeded the technical capabilities of the design basis threat. The Comission disagrees with this position and believes that relatively little skill is needed to tap phone lines or eavesdrop on radio conversations.

A third comenter noted that the telephone is normally used to transmit shipping information ar.d it would be burdensome to use another method.

In this regard, the only thipments covered by the final rule are spent fuel and formula quantities of strategic special nuclear material. (Category I).

Notifications regarding spent fuel shipments are required to be by mail (3ee 10 CFR 73.72) except that reporting schedule changes are permitted to be made by phone in the form of time deviations from the original schedule.

Information regarding Category I shipments is classified National Security Information under Part 95 and use of unsecured telephone for such information is prohibited.

Another commenter stated that the rule conflicts with the requirements of 573.71 regarding the telephonic reporting of physical security events. The events for which reporting is required are considered to be extraordinary conditions in themselves and therefore exempt from the restrictions. An ex-plicit statement was added to the rule in this regard. The Commission, af ter careful consideration, concluded that the restrictions on the use of unsecured telecommunication circuits needs to be retained in the rule to assure that Safeguards Information is not lost or comprom1;ed without the knowledge of the person responsible for its protection. There is no indication that these restrictions will unduly burden the licensee or the NRC staff during routine licensing matter or transport activities. For example, periodic call-ins re-quired during shipments can be made using prearranged signals or an operating code.

(4)

Restrictions on Use of ADP Systems - Commenters Etated that the meaning of an "ADP system" was not clear, that facilities without on-site capabilities woald be excessively burdened, and that the restrictions should be removed.

The Commission disagrees noting that the problem regarding unauthorizad access to Safeguards Information stored in ADP systems is more severe than with tele-phone ustge. ADP systems located at engineering firms may have in memory large amounts of information on the design of a physical security system. Without restrictions, access to such information potentially could be gained by anyone, authorized o, not, who is f amiliar with the operation and has access to a terminal. Remote terminalc could provide ar. cspecially easy and unobtrusive means for obtaining selected Safeguards Information. Access to unprotected data lines between facilities could also be used to compromise a physical security system.

( 5)

Physical Protection Reouirements - Several commenters stcted that the storage requirements were too restrictive.

Suggested alternatives (to locked security storage containers) included storage in desks, file cabinets, locked roons, undesignated or non-GSA approved storage respositories, or anywhere in a controlled access or protected area.

The Commission does not agree with the suggested alternatives. The basic objective of the security container is to make more difficult undiscovered compromise cf Safeguards Information.

A steel filing cabinet secured with a locking bar and a GSA approved combina-tion lock, or a GSA approved security container both satisfy this objective.

On the other hand, locked file cabinets, desks, and ordinary doors can be en-tered with little difficulty and without leaving any indication that compromise has occurred. The objection to storing anywhere in a (i,.crolled =ccess or pro-tected area is based on the free access this would allow to anyone in these areas. However, the rule has been changed to delete the requirement that the security storage container be in a locked room when inside a controlled access or protected area.

Other commentors objected to the requirement for control of Safeguards Infor-mation by an individual while in use within a controlled access or protected area. The Commission agrees that some relaxation is warranted on this matter; however, the basic requirement he: been lef t in the rule and gJidance Has been provided to indicate that under certain conditions the general control exercised over contro';1ed access and protected areas would satisfy the re-qui rement.

Ono commenter noted that the requirements to keen Ca:~eguards Information in locked security containers wou'd have an adverse impact on the availability of the security force to respond to a threat or a safeguards incident. The Commission does not acree.

Documents 1.:cated within alarm stations and guard houses need not be in locked security containers since they are under direct control of security personnel.

Sinilarly, guard Order:, and procedures nay be posted at access control points provided that the pc:t is continuous'ly manned ano nie information is lo:cted so es to prevent observation by visitors.

Addition of Other Types of Inform,r+'

- Several commenters disagreed with de'etien of generic safap;ards st..es and reports (such as the Sandia caooratories' lidndbooks on Barrier Technology and Entry Cone.; Systems) ' rom the scope of the rule and noted that no justification was given for the omis-sion. On this matter the Commission notes that the original legislative pro-posal prepared by '.he NRC, and interim versions of the legislation, contained explicit language regarding the protection of " studies, reports, and analyses

---

which concern the safeguarding of nuclear materials or facilities."l[

This provision was deleted from the final version of Section 147.

In view of this deliberate ac' ion by the Congress, the Commission has no choice but to delete these items from the rule.

,If Congressional Record - House, H 11334, November 29, 1979.

One commenter suggested that information developed during the course of prob-abilistic risk assessments be protected under this rule. The Commission, while agreeing that such information might have value to antial saboteur, has concluded that on balance the public interest is me served if ali safety-related studies are available for scrutiny. The question also aris's con-cerning the legality of witbhciding information under Section 147 that is neither related to a licensee's physical protection program nor produced in response to security considerations.

(7) Deletions of Certain Types of Information - One commenter suggested that it would be unlawful to include information regarding off-site response forces, shipment schedules and locations of safehavens in that these items are not

" security measures" as set forth in Section 147. The Commission oisagrees on this point. NRC regulations require licensees to make arrangements with State or local police forces f]r response to safeguards emergencies. For fixed sites these arrangements are documented and become part of the facility physical security plan. For transport of spent fuel and Category I quantities of highly anriched uranium and plutonium, route surveys are conducted by the NRC staff in order to determire what police response could be expected in an emergency, the location of safe havens, and zones of weak radio-telepone communications.

The information gathered is documented and transmitted to the licensee for inclusion in his physical protection plan. In this regard, the U.S. District Court for the District of Columbia has recently upheid the Commission's posi-tion that police response capabilities and telephone shortcomings are legiti-mate items for withholding under Section 147 of the Act.lf 1/ Virginia Sunsnine Alliance vs NRC, Civil Action No. 80-2099, February 26, 1981 (Presently under appeal).

Another commenter stated that it might be impossible to prevent disclosure of certain inf ormation regarding local polica forces. The Comission agrees in part and the rule has been modified to more accurately reflect the original intent that only details of the forces comitted to respond to a facility safe-guards emergency need be protected.

(8) Withholding Spent Fuel Rcute Information - Two comenters recomended that routes used for spent fuel shipments be withheld until the shipments have been completed. This is not a matter for Comission deliberation.

Section 147 con-tains a.1 explicit statament that "Nothing in this Act shall authorize the Comission to prohibit the puolic disclosure of information pertaining to the routes and quantities of shipments of - - - - - irradiated nuclear reactor fuel."

(9)

Limit Regulations to Parts 2 and 9 - One commenter suggested that the licensed industry be allowed to devise its own methods of protection, that specific requirements be deleted from Part 73, and that Partr 2 and 9 contain directives that Safeguards Information be protected. As is stated elsewhere, the Comission believes that without formal requirements (which are considered to be the minimum restrictions that provide an acceptable level of protection) there would be no assurance of uniformity or consistency. Coments received indicate there is no general agreement in the licensed industry concerning what constitutes a minimum level of protection.

(10) Other Coments - Following is a list of other comments on minor matters that were not incorporated into the final rule on the basis of no demonstrat-able need or benefit:

Show that the licensees are not responsible for compliance by other persons that receive Safeguards Information.

Require records to be kept for any Safeguards Information transmitted off-site.

Require that a list be kept of persons who have a need-to-know.

Note that distribution reproduction. and destruction of Safeguards Infor-mation need not be documented.

Include a document exclusion list in the rule.

Add attorneys to the occupation list contained in 5 73.21(c); (not necessary in that attorneys are already included in (c)(1) & (vil).

Amend the definition of Safeguards Information to add " controlled" before Safeguards Information.

Add a definition for " composite plan."

Limit withholding of information on security system weaknesses to those items severe in nature.

(11) Comments Regarding Guidance - A number of comments were received regarding guidance needed to implement the rule. The specific items mentioned by commenters were taken into consideration during the development of the guidance document.

(12) Cost - Several commenters stated that the estimated costs for implementing the rule were too low, particularly in regards to storage during the construc-tion phase. protection at licensee contractor facilities. and recurring labor.

The Commission has revised its estimates as follows.

(A value-impact analyses is available in the Public Document Room.)

Licensees and Nuclear Service Companies (245 locations)

Initial Costs Recurring (annusl)

$4000 per location (avg)

$2200 per _ location (avg) x245 locations x245 locat'lons

$986.500 Total

$531.000 Total State Governments (40 states)

Initial Costs Recurring Annual

$24,000 Total

$126,000 Total (13) Public Announcement - One commenter noted that some firms who may have Safeguards Information are not part of an information network that would inform them of the existence of this new rule. The Commission agrees that special effort is needed regarding public dissemination of the rule.

In at Jition to the normal practice of publication in the Fed-eral_ Register and distribution of NRC public announcements the Commission ir.tends to (i) encourage licensees to notify their contractors, suppliers, and local police response forces, (ii) send out a special mailing to nuclear service firms that do business with power reactor licensees, and (iii) in-vite certain associations to notify their members.

C.

Petition For Rulemaking On June 7,1977, the Northern States Power Company and Wisconsin Electric Power Company petitioned the Nuclear Regulatory Commission to amend 10 CFR 50.34(c) so as to include plant security information within the definit 7en of Restricted Data, or alternatively within the definition of National Security Information, to amend 10 CFR 2.905 so as to assure that discovery of plant security information is subject to the protections of Subpart I to 10 CFR,

Part 2, to amend Subpart I to 10 CFR Part 2 to explicitly recognfie that if.s protections extend to information not under Commission control, and to delete 10 CFR 2.790(d)(1).

The Commission's decision on the petition, in light of the issuance of this rule, will be set forth in a separate Federal Register Notice.

D.

Effective Dates The Commission has decided to make sections 2.744(e). 2.790(d)(1). 73.2jj and 11. and 73.21(a), (b) and (c)(1) effective immediately for good cause purruant to the exception provided by 5 U.S.C. 553(d)(3). The enumerated sections define the scope of Safeguards Information protected by the rules, identify those persons who are permitted access. set forth certain protections afforded by the Commission to such information, and prr vide certain protections for physical protection and material control and accounting information not otherwise designated as Safeguards Information or classified as National Security Information or Restricted Data. These sections alone impose no new requirements on licensees or other persons outside the agency.

Immediate effectiveness of these sections is warranted to avoid further delay in implementing the Congressional intent in enacting Section 147 of the Atomic Energy Act to provide protection from public disclosure for certain specified types of Safeguards Information.

Since the rule also codifies current Commission procedure as to what types of informa-tion are protected, immediate effectiveness of those provisions will not adversely affect Commission licensees or others in possession of Safeguards Information.

The remaining provisions of the rule will be effective 90 days from [date of publication in Federal Register].

E.

Paperwork Reduction Statement There are no reporting er recordkeeping requirements contained in this regulation and therefore it is not subject to Office of Management and Budget clearance as required by P.L.96-511.

The promulgation of these amendments would not result in any activity that affects the environment. Accordingly, the Commission has determined under the National Enviromental Quality guidelines and the criteria of 10 CFR 51.5(d) that neither an enviromental impact statement nor en-viromental impact appraisal to support a negative declaration for the proposed amendments to Title 10 is requirea.

Pursuant to the Atomic Energy Act of 1954, as amended, the Energy Re-organization Act of 1974, as amended, and Sections 552 and 553 of Title 5 of the United States Code, the following amendments to Title 10, Chapter I, Code of Federal Regulations, Parts 2, 50, 70, and 73, are published as a document subject to codification.

PART 2 - RULES OF PRACTICE FOR DOMESTIC LICENSING PROCEEDINGS 1.

The authority citation. for Part 2 is revised to read as follows:

AUTHORITY:

Secs. 161p and 181, Pub. L.83-703, 68 Stat. 950 and 953 (42 U.S.C. 2201(p) and 2231); Sec. 191, as amended, Pub. L.87-615, 76 Stat. 409 (42 U.S.C. 2241); Sec. 201, as amended, Pub. L.93-438, 88 Stat.1242 (42 U.S.C. 5841); 5 U.S.C. 552; unless otherwise noted.

Sections 2.200-2.206 also issued under Sec.186, Pub. L.83-703, 68 Stat. 955 (42 U.S.C. 2236) and Sec. 206, Pub. L.93-438, 88 Stat.

1246 (42 U.S.C. 5846).

Sections 2.800-2.808 also issued under 5 U.S.C. 553.

2.

Section 2.744 is amended by adding a new paragraph 2.744(e) to read as follows:

52.744 Production of NRC records and documents.

(e)

In the case of requested documents and records (including Safe-guards Information referred to in Sections 147 and 181 of the Atomic Energy Act, as amended) exempt from disclosure under $2.790. but whose disclosure is found by the presiding officer to be necessary to a proper decision in the proceeding, any order to the Executive Director for Operations to produce the document or records (or any other order issued ordering pro-duction of the document or records) nay contain such protective terms and conditions (including affidavits of non-disclosure) as may be necessary and appropriate to limit the disclosure to parties in the pro-ceeding. to interested States and other governmental entities participat-ing pursuant to 5.2.715(c). and to their qualified witnesses and counsel.

When Safeguards Information protected from disclosure under Section 147 of the Atomic Energy Act, as amended is received and possessed by a party other than the Commission staff. it shall also be protected accord-ing to the requirements of 573.21 of this Chapter. The presiding officer may also prescribe such additional procedures as will effectively safeguard and prevent disclosure of Safeguards Information to unauthorized persons with minimum impairment of the procedural rights which would be avail-able if Safeguards Information were not involved.

In addition to any other sanction that may be inposed by the presiding officer for violation of an order issued pursuant to this paragraph. violation of an order pertaining to the disclosure of Safeguards Information protected from disclosure under Section 147 of the Atomic Energy Act, as amended, may be subject to a civil penalty imposed pursuant to 52.205. For the purpose of imposing the criminal penalties contained in Section 223 of the Atomic Energy Act, as amended, any order issued pursuant to this paragraph with respect to Safeguards Information shall be deemed an order issued under Saction 161b. of the Atomic Energy Act.

3.

Section 2.790 is amended by revising paragraph (d)(1) as follows:

52.790 Public inspections, exemptions, requests for withholding.

(d) *

(1) Correspondence and reports to or from the NRC which contain infor-mation or records concerning a licensee's or applicant's physical protection or material control and accounting program for special nuclear material not otherwise designated as Safeguards Information or classified as National Se-curity Information or Restricted Data.

PART 50 LICENSING OF PRODUCTION AND UTILIZATION FACILITIES 4.

The authority citation for Part 50 is revised to read as follows:

AUTHORITY:

Secs.103.104.161.182.183.189. 68 Stat. 936. 937, 948.

953, 954. 955. 956, as amended (42 U.S.C. 2133, 2134. 2201. 2232. 2233, 2239); Secs. 201, 202, 206, 88 Stat.1243,1244.1246 (42 U.S.C. 5841.

5842. 5846), unless otherwise noted.

Section 50.78 a'so issued under Sec.122, 68 Stat. 939 (42 U.S.L. 2152).

Sections 50.80-50.81 al so issued under Sec.184. 68 Stat. 954, as amended; (42 U.S.C. 2234).

Sec-tions 50.100-50.102 issued under Sec.186. 68 Stat. 955; (42 U.S.C. 2236).

For the purposes of Sec. 223, 68 Stat. 958 as amended; (42 U.S.C. 2273).

550.54 (i) issued under Sec. 1611, 68 Stat. 949; (42 U.S.C. 2201(i)),

5150.70, 50.71, and 50.78 issued under Sec.161o, 68 Stat. 950, as amended; (42 U.S.C. 2201(o)) and the Laws referred to in Appendices.

5.

Section 50.34 is amended by adding a new paragraph (e) to read as follows:

550.34 Contents of applications; technical information.

(e) Each applicant for a license to operate a production or uti-lization facility. who prepares a [ee-] physical security plan. a safeguards contingency plan, or a guard qualification and training plan.

[puesvant 49 tM s-sec44+nr3 shall protect the plan _s_ and other related Safeguards Information against unauthorized disclosure in accordance with the requirements of 573.21 of this chapter. as appropriate.

6.

Section 50.54 is amended by adding a new paragraph (v) to read as follows:

550.54 Conditions of licenses (v) Each licensee subject to the requirements of Part 73 of this chapter shall ensure that physical security. safeguards contingency and guard cualification and training plans and cther related Safeguards Infor-mation are protected against unauthorizeo disclosure in accordance with the requirements of 573.21 of this chapter, as appropriate.

PART 70 - DOMESTIC LICENSING OF SPECI AL NUCLEAR MATERIAL 7.

The authority citation for Part 70 is revised to read as follows:

AUTHORITY:

Secs. 51, 53,161,182,183, 68 Stat. 929, 930, as amended, 948, as amended, 953, as amended. 954 (42 U.S.C. 2071, 2073. 2201, 2232, 2233); Secs. 202, 206. 88 Stat.1244,1246 (42 U.S.C. 5842, 5846) unless otherwise noted.

For the purposes of Sec. 223, 68 Stat. 958. as amended (42 U.S.C. 2273),

55 70.3. 70.19(c), 70.21(c), 70.22(a), (b). (d)-(k). 70.24(a) and (b),

70.32(a)(3), (5), and (1), 70.36, 70.39(b) and (c), 70.41(a), 70.42(a) and (c). 70.56, are issued under Sec.161b, 68 Stat. 948, as amended (42 U.S.C. 2201(b));

5570.20a(d), 70.32(a)(6). (c), (d)

(e), and (g),

70.36, 70.51(c)-(g), 70.56, 70.57(b) and (d), 70.58(a)-(g)(3) and (h)-

(j); and 55 70.32(h), 70.51(b) and (1), 70.52, 70.53, 5570.54, 70.55, 70.58(g)(4), (k) and (1). 70.59, are issced under Sec. 1610. 68 Stat.

950, as amended (42 U.S.C. 2201(o)).

8.

Section 70.22 is amended by adding a new paragraph (1) after para-graph (k) to read as follows:

570.22 Contents of applications.

(1) Each applicant for a license to possess. use, transport. or deliver to a carrier for transport formula cuantities of strategic special nuclear material. who prepares a physical security. [er-] safeguards contingency.

or guard qualification and training plan shall protect these plans and other related Safeguards information against unauthorized disclosure in accord-ance with the requirements of 5 73.21 of this chapter.

9.

Section 70.32 is amended by adding a new paragraph (j) to read as follows:

5 70.32 Conditions of licenses (j) Each licensee who possesses a formula quantity of strategic special nuclear material or who transports. or delivers to a carrier for transport. a formula cuantity of strategic special nuclear material or more than 100 grams of irradiated reactor fuel shall ensure that l

physical security. [and3 safeguards contingency, and guard qualification and training plans and other related Safeguards information are protected against unauthorized disclosure in accordance with the requirements of 5 73.21 of this chapter.

Part 73-PHYSICAL PROTECTION OF PLANTS AND MATERIALS

10. The authority citation for Part 73 is revised to read as fo11cws:

AUTHORITY: Secs. 53,161b,1611,161o. Pub. L.85-703, 68 Stat. 930.

948-950, as amended, Pub. L.85-507, 72 Stat. 327, Pub. L.88-489.

Stat. 602, Pub. L.93-377, 88 Stat. 475 (42 U.S.C. 2073, 2201); Sec. 201. Pub. L.93-438, 88 Stat.1242,1243 as amended, Pub. L. 94-79, 89 Stat. 413 (42 U.S.C. 5841).

For the purposes of Sec. 223, 68 Stat.

958, as amended, 42 U.S.C. 2273, 573.55 is issued under Sec.161b.

68 Stat. 948, as amended. 42 U.S.C. 2201(b);

5573.20, 73.24, 73.25.

73.26. 73.27, 73.37, 73.40, 73.45, 73.46. 73.50. 73.55. and 73.67 are issued under Sec. 1611, 68 Stat. 949, as amended. 42 U.S.C. 22bl {i);

and 5!73.20(c)(1). 73.24(b)(1), 73.26(b)(3), (h)(6). (i)(6), and (k)(4), 73.27(a) and (b). 73,40(b) and (d). 73.46(g)(6) and (h)(2).

73.50(g)(2), (3)(iii)(B) and (h). 73.55(h)(2), and (4)(iii)(B) 73.70, 73.71, and 73.72 are issued under Sec.161o. 68 Stat. 950. as amended.

42 U.S.C. 2201(o).

11. Section 73.1 is amended by adding a new paragraph (b)(7) to read as follows:

573.1 Purpose and scope.

(b)

(7) This part prescribes requirements for the protection of Safeguards Information in the hands of any person, whether or not a licensee of the Commission, who produces, receives, or acquires Safeguards Information.

12. Section 73.2 is amended by adding new paragraphs (jj). (kk). (11) and (mm) to read as follows:

573.2 Definitions (jj)

" Safeguards Information" mesns information not otherwise classified as National Security Information or Cestricted Data which specifically identifies a licensee'. Jr applican',s detailed. (1) se-curity measures for the physical protection of special nuclear material, or (2) security measures for the physical protection and location of certain plant equipment vital to the safety of production or utilization facili-ties. [-er-(4)-14n4ts ef-eeror-astosiated -w$4h-kventery-414ferenees-(LE14 fw-spee41-nucleaw materick]

(kk)

"Need to Know" means a determination by a person having respon-sibility for protecting Safeguards Information that a proposed recipient's access to Safeguards Information is necessary in the performance of official, contractual, or licensee duties of employment.

(11)

"Ftrson" means (1) any individual, corporation, partnership, firm.

3ssociation, trust, estate, public or private institution, group, government agency other than the Commission or the Department of Energy (D0E),(except that the DOE shall be considered a person to the extent that its facilities are subject to the licensing and related regulatory authority of the Commission pursuant to Section 202 of the Energy Reorganization Act of 1974 and Section 104,105, and 202 of the Uranium Mill Tailings Radiation Control Act of 1978).

any state or political subdivision of a state, or any political subdivision of any government or nation, or other entity; and (2) any legal successor, repre-sentative, agent, or agency of the foregoing.

(mm)

" Security Storage Container" includes any of the following reposi-tories:

(1) For storage in a building located within a protected or controlled access area, a steel filing cabinet equipped with a steel locking bar and a three position, changeable combination. GSA approved padlock; (2) A security filing cabinet that bears a Test Certification Label on the side of the locking drawer, or interior plate, and is marked, " General Services Administration Approvec Security Container" on the exterior of the top drawer or door; (3)

A bank safe-deposit box; and (4) Other repositories which in the judgement of the NRC. would provide comparable physical protection.

13.

A new 573.21 is added to read as follows:

573.21 Requirements for the Protection of Safeguards Information.

(a)

General performance requirement - Each licensee who (1) possesses a formula quantity of strategic special nuclear material, or (2) is authorized to operate a nuclear power reactor. or (3) transports. or delivers to a carrier for transport, a formula quantity of strategic special nuclear material or more than 100 grams of irradiated reactor fuel. and each person who produces, receives.

or acquires Safeguards Information shall ensure that Safeguards Information is protected against unauthorized disclosure. To meet this general perfor-mance requirment, licensees and persons subject to this section shall es-tablish and maintain an information protection system that includes the measures specified in paragraphs (b) through (i) of this section.

Infor-

_mation protection procedures employed by State and local police forces are deemed to meet these requirements.

(b)

Information to be protected - The specific types of infor-mation, documents, and reports that shall be protected are as follows:

(1)

Physical Protection at Fixed Sites Information not otherwise classified as Restricted Data or National Security Information relating to the protection of facilities that possess formula quantities of strategic special nuclear material, and power [end-nen-pewer] reactors. [4114 faci-li-ties -4 hat pewew-spesial-nucleae mater 4 al-ef-moderate-and-low st-eategic-s4gr4ficance,-]

Specifically:

(1) The composite physical security plan for the nuclear fa:111ty or site.

(ii) Site specific ["-es-be4k"] drawings, diagrams, sketches, or maps that substantially represent the final design features of the physical protection system. [+be*4 ag 4he-14ent4 ty,-barr4ee eenstruc+1on,-internal-1+youtv aed-locatien -ef 4eo4Mty sefegeards-features +nchd49-elarm-stat 4ons.duerd-postfr.

defensive-pesitiens,-and patto& coutesv]

(iii) [As-4nstalle4] Details of alarm system layouts showing location of intrusion detection devices, alarm assessment equipment, alar.a 1

system wiring, [ normal-and-] emergency power sources, and duress alarms.

(iv) Written physical security orders and procedures for members of the security organization [suerds -eM+ther-secer4tf peesenne4-] duress codes, and patrol schedules.

(v)

Details of the on-site and off-site communications systems that are used for security purposes.

(vi) Lock cotbinations and mechanical key design (vii) Documents and other matter that contain lists or locations of certain safety-related equipment explicitly identified in the documents as vital for purposes of physical protection, as contained in physical security plans. safeguards contingency plans. or plant specific safeguardr analyses for production or utilization facilities.

[(7) Eelent-spee4 f4c-eomposke-aistiegs-en4 4ecetions ef v4taa +afet-y-eekted equ4pment-at-peedestien +e eti442+44on fecil4t-4 err as eonteked-i+-phy94ce4 secerMy-phwr, +afegeaeds-conti+genct-p4aas-end-p1 ant-spes4 Mc +af-eguecds-anelyses-3 (viii) The composite safeguards contingency plan for the facility or si te.

(ix) Those portions of the facility guard qualification and training plan whicn disclose features of the physical security system or response procedures.

(x) Respons2 plans to specific threats detailing size, disposition, response times, and armament of responding forces.

(xi) Size, armament, and disposition of on-site reserve forces.

(xii) ' Size, identity, armament. and arrival [ response] times of off-site

[tesponse] forces committed to respond to safeguards emergencies.

(2) Physical protection in transit Information not otherwise classified as Restricted Data or National Security Information relative to the protection of shipments of formula quantitics of strategic special nuclear material and spent fuel, [4-14F

+pec41-nuskaw-mater 4a4 e.f moderate and-l o+ s.trategis 94 gai-f-isancer]

]

and [-(H4f. Specifically:

(1) The composite transportation physical s,ecurity plan.

(ii) Schedules and itineraries for specific shipments. (Routes and quantities for shipments c* spent fuel are not withheld from public disclosure.

Schedules fcr spent fuel shipments may be released 10 days after the last shipment of a current series.) [-2/-]

(iii)

Details of vehicle immobilization features, intrusion alarm devices, and communication systems.

(iv) Arrangements with and capabilities of local police response forces, and locations of safe havens.

(v )

Details regarding limitations of radio-telephone communi-cations.

(vi) Procedures for response to safeguards emergencies.

[-U 4cheduks -and 4t4*er+r4es -Sor-sh4pments-o%er-thm those-kvekkg spe%.

he4-oe-f+rmla-quanti +ies-of-st+ategic-spes4 a4-nuclee* material aay-be-eekesed 44 4 becomes -eec+ssary te-d4-sc4ese-sash -4nf+ema-t-ion-te-c+mma ccrri ^rs-or--othee-peesons-net--subjec-t-to-the ge*ere4-14 cease erov4s4 ens.

+f 40-GFR-7Gr2H a4 c]

[A -Lim 4ts-ef Geree-of-Irwenteey Gif4erenee-

'efemetien eet Rheew4+e-e4assi-fied-err-Reete4ct+d-Bate er-Rattonet r

Gecee4-ty-4 nf+emni on--rele t4e g-to -e aleulere d-l 4ei te-o f-e reo M seoe-iste4-w4-th-irwerwory-444ferenses f4EID} at feciMt4es-that-pessess-

+ne-ef feet 4*e-k-ilegram oe mere-+f speci+1 eucleer-eatee4 a1 c3-(3)

Inspections, audits and evaluations Information not otherwise classified as National Security Infor-mation or Restricted Data relating to safeguards inspections and reports.

Specifically:

(i) Portions of safeguards inspection reports, evaluations, audits, or investigations that contain details of a licensee's or ap-plicant's physical security system or that disclose uncorrected defects, weaknesses, or vulnerabilities in the system. Infor-mation regarding defects, weaknesses or vulnerabilities [40-3 may be released after corrections have been made. Reports cf investigations [te-] may be released after the investigation has been completed, unless withheld pursuant to other author-ities, e.g., the Freedom of Information Act (5 U.S.C. 552).

E-f2)

Poetrions-ef +efewaree i*speetio+ reports;-eva4ue+ionst end4-tw w-inveM4ga44cne-thet centa4*-lie 4-ts +f-errer ateciated w4th-kventoey -44 f4erenees-(LEB).-or-+ hat-dhcl+9e uneerrected de-fec+s--er-weakeesses-4n + licenseeis aceount4ng -systee that ceuM 44-reet-ly-e f4ect-the-LE40.+f3 (4) Correspondence Efe end-Frem t4re NRC3 Portions of correspondence [40-and-fr+m-the-NE] insofar as they contain Safeguards Information specifically defined in paragraphs (b)(1) through (b)(3) of this paragraph.

(c) Access to Safeguards Information - (1) Except as the Ccmission may otherwise authorize, no person may have access to Safeguards Information unless the person has an established "need to know" for the information and is:

(i) An employee. agent, or contractor of an applicant, a licensee, the Comission, or the United States Government; (ii) A member of a duly authorized committee of the Congress; (iii) The Governor of a State or designated representatives;

~

(iv) A representative of the International Atomic Enerf;f Agency (IAEA) engaged in activities associated with the U.S./IAEA Safeguards Agreement who has been certified by the NRC; (v) A member of a state or local law enforcement authority that is responsible for responding to requests for assistance during safeguards emergencies; or (vi) An individual to whom disclosure is ordered pursuant to 12.744 (e) of this chapter.

(2)

Except as the Comission may otherwise authorize, no person may disclose Safeguards Information to any other person except as set forth in paragraph (c)(1) of this section.

(d) Protection while in use or storage - (1) While in use, matter containing Safeguards Information shall be under the control of an author-ized individual. [te peeckde-access +/- peesens who-de net-have a-ceed-te-

-k*ow-osre-otherw4+e net aethop4-zed aecess-(n -eccordance-with-thts sectiom-3 (2) While unattended [er-eet-4n-ac-t-uakuse,] Safeguards Information shall be stored in a locked security storage container. [*4 thin-a-locked esom-op-bui4d&ng] Knowledge of lock combinations protecting Safeguards Information shall he limited to a minimum number of personnel for oper-ating purposes who ave a "need to know" and are otherwise authorized access to Safeguacds Information in accordance with the provisions of this section.

(e) Preparation and marking of documents - Each document o_r_

other matter that contains Safeguards Information as defined in paragraph

_ _ (b) in this section shall be marked " Safeguards Information" in a con-cpicuous manner to indicate the presence of protected information (portion marking is not required for the specific items of information set forth in paragraph 73.21(b) other than guard qualification and training plans and correspondence to and from the NRC.)

Documents and other matter con-taining Safeguards Information in the hands of contractors and agents of licensees that were produced more than_ one year prior to the effec-tive date of this amendment need not be marked unless they are removed from storage containers for use.[senta-iwn 44e -54ce -r4 the desument-(4-) -the-name. -ti th. -and-ergani aatien ef-the-indi v4due4 aetherieed-te make a-Safegthwds-Infermation-de4erminat4+9. and who has detee-m4ned that-the-40cemen4-cata4es 4afegeards-Inf*ma+ ions -(444-the.

4 ate-the-doceent-wa s-eri 9 nated -se-the-detemi ntiewade r-an4-4 (411-}-an 4ndica44oe-4 hat-the-document 4enta4r4-SaSeguar-4s In5arma44+n.

Eech-page-she&1 -he ma+4ed-4n + conspices-& ash &an a4-the-top-and bettem v4th-the-legeed-S/GEGWA%-INFGR&TIGN r-(2) 44 the 4ccument contair4 any Jorm-of F,osts4ct44 Data w #ational Secuf4-ty-4nfermatien, $4 shall-+1se-be marked-in-ascordance-with-the-pee-v+s+ ens-ef M CFR Par 4-95.

(4). Tr-ansm&ttal-letters-or amoranda-whish do-not in-themsel-ves son-taiwSafeguer4s-IMormation-shall-be-marked -te i+44cate-tha-t attashments e enels+vres-cont +1n-Saf+gua*ds-inf+ematien.

(+) -In-eddM4on-to the i+4cnnetion-rege4 red-en the f+ee ef--the-doc-cment n::h-itee-of--c+erespendenee-to-eed f+een the-wig-thet eenta4es-Sefe-guards 4* format 4en &nd which-do-not (f) Reproduction and destruction of matter containing Safeguards Information - (1)

Safeguards Information may be reproduced to the minimum extent necessary consistent with need without permission of the originator.

(2)

Documents or other matter containing Safeguards Information may be destroyed by [burniegr-pu4pieg,-or-other9 any method that assures complete de-struction of the Safeguards Information they contain.

(g) External transmission of documents and material - (1)

Documents or other matter containing Safeguards Information, when transmitted outside an authorized place of use or storage, shall be [ene%ee63 packaged to pre-clude disclosure of the presence of protected information [$n& Healed -

savelopes-on wr4ppersMhe-4nne+-enve4 ope-er weeppee-sham centain -the-name ed addrets c' 4Ae 4 tended wcip4ent,-be-marked bon sides, top-and-bottom w+th-4he-words GAFEGWARBS IGORMAT40N.-The-eutee-envehpe -er weappee-shalb sent&4 4he &ntende4-. recipient's-name-and-+ddras with no-hdicat44n that-the 4ecument-4-nt4deenta4 ns-Saf+gaasds-In40rst4n -]

(2) Safeguards Information may be transported by messenger-courie?,Eee]

United States first class, registered, express, or certified mail, or by any individual authorized access pursuant to 573.21(c).

(3) Except under emergency or extraordinary conditions, Safeguards Information shall be transmitted only by protected telecommunications cir-cuits (including facsimile) approved by the NRC.

Physcial security events required to be reported pursuant to 573.71 are considered to be extraordinary conditions.

(h) Use of sutomatic data processing ( ADP) systems - Safeguards Informatica may be processed or produced on an ADP system provided that the system is self-contained within the licensee's or his contractor's facility and requires the use of an [40sess-] entry code for access to stored information. Other systems may be used if approved for security by the NRC.

(i) Removal from Safeguards Information category - Documents originally containing Safeguards Information shall be removed from the Safeguards Information category whenever the information no longer meets the criteria contained in this section.

14. Section 73.80 is revised to read as follows:

373.80 Violattons An injunction or other court order may be obtained prohibiting any violaticn of any provision of the Atomic Energy Act of 1954, as amended, or argy regulation or order issued thereunder.

A court order may be obtained for the payment of a civil penalty imposed pursuant to section 234 of the Act for violation of section 53, 57, 62, 63, 81, 82,101,103,104,107,109, or 147

[4843 of the Act or section 206 of the Energy Reorganization Act of 1974, or any rule, regulation, or order issued thereunder, or any term, condition, or limitation of any licerse issued thereunder, or for any violation for which a license may be revoked under section 186 of the Act.

Any person who will-fully violates any provision of the Act or any regulation or order issued there-under may be guilty of a crime and, ;pon conviction, may be punished by fine or imprisonment or both, as provided by law.

Dated at Washirgton, D.C. this day of For the U. S. Nuclear Regalatory Commission Samuel J. Chilk Secretary of the Commission ENCLOSURE B Revision on - Proposed Letter

- Pages 2 3

4

PROPOSED LETTER **

The Honorable George Bush President of the Senate Washington, D.C.

20510

Dear Mr. President:

I am forwarding to you a copy of a (inal rule prepared in response to the provisions of the new Section 147 that was added to the Atomic Energy Act of 1954, as amended, hy P.L.96-295. The rule establishes requirements for the cer. trol of unclassified Safeguards Information associated with the physical protection of nuclear materials and facilities by NRC licensees.

The report to the Congress required by Subsection d. of Section 147 is also attached.

Sincerely, Nunzio J. Palladino Chairman

Enclosures:

Final Rule Report to the Congress

• Identical letters to be sent to: The Honorable Alan Simpson The Honorable Morris K. Udall The Honorable Richard L. Ottinger The Honorable Toby Moffett The Honorable Clement Zablocki The Honorable Larry Pressler The Honorable Charles Percy ENCLOSURE B

O I*

DRAFT REPORT TO THE CONGRESS OF THE UNITED STATES BY THE NUCLEAR REGULATORY COMMISSION REGARDING PROTECTION OF UNCLASSIFIED SAFEGUARDS INFORMATION ENCLOSURE B

Report To The Congress 1.

Introduction The NRC Authorization of Appropriations Bill for 1980 (PL 96-295) amended the Atomic Energy Act of 1954, as amended, by adding a new Section 147, SAFEGUARDS INFORMATION. This Section directs the Com-mission to prescribe such regulations, after notice and apportunity for public comment, or issue such orders, as necissary to prohibit the unauthorized disclosure of safeguards information which specif-ically identifies a licensee's or applicant's detailed control and accounting procedures or security measures for certain activities licensed by the Commission.The amendment compels the Cocmission to limit the scope of any regulation or order to information which if disclosed in an unauthorized manner could reasonably be expected to have a significant adverse effect on the health and safety of the public or the common defense and security by significantly increas-ing the likelihood of theft, diversion, or sabotage. The amendment further directs the Commission to exercise the authority contained therein so as to tpply only the minimum restrictions needed.

On December 29, 1980, the Commission published for comment a pro-posed rule implementing the provisions of Section 147.

In response to comments received, the rule was extensively modified particularly in regard to a reduction in the scope of activities covered. The Commission has now approved the final rule for publica* ion in the Federal Register.

9tbsection a. of Section 147 requires the Commission, upon prescribing or issuing any regulation or order, to submit to Congress a report that:

(1) specifically identifies the type of information the Commission in-tends to protect from disclosure, (2) specifically states the Commission's justification for determining that unauthorized disclosure of the information meets the "signifi-cant adverse effect" standard, and (3) provides justification, including proposed alternatives, that only minimum restrictions have been applied.

2.

Type of Information to be Protected The sccpe of the rule is limited to information regarding the physical protection of (herein after referred to as Safeguards Informatior):

- All activities involving formula quantities of strategic speciai nuclear material (for information not otherwise classified as National Security Information or Restricted Data).

- Operating nuclear power reactors, and

- Spent fuel shipments (but not routes and quantities).

The rule does not cover (1) control and accounting procedures, (ii) security measures for source material or byproduct material, or (iiij 3ecurity measures for activities involving less tnan a formula quantity of strategic special nuclear material. These types of information nave been excluded from the rule on the basis that they do not satisfy the "significant adverse effect" standard contained in subsection a.

For the three activities covered by the rule the types of Safeguards Information to be protected include:

- The overall physical security and safeguards contingency plan

- Drawings, sketches and' diagrams that show locations of site safeguards features

- Details of the intrusion alarm system

- Guard orders and procedures

- Details of on-site and off-site response forces

- Drawings that explicitly identify certain areas or equipment at power reactors as being vital for purposes of physical pro-tection

- Portions of guard training and qualification plans that dis-close specific safeguards features or response procedures

- Schedules for spent fuel shipments

- Correspondence, inspection reports and audits that contain any of the above or that disclose uncorrected weaknesses in the protection system.

Section 73.21(b) of the rule precisely defines these items (Attachment 1) 3.

Justification for Protecting This Information (1) Sign.r? cant Adverse Effect The final rule applies only to those facilities, nuclear materials or transport activities for which there exist significant potential for harm to the public health and safety if the nuclear materials or faci-lities are intentionally misused or damaged. For nuclear power reactors there are several reports prepared by Sandia Laboratories (Secret National Security Information) that describe the sabotage potential of such facilities.

In this regard these reports note that the worst case health effects that might be produced through an act of sabotage are the same as for a worst case accident.

For spent fuel shipments a Sandia Laboratories report (NUREG/CR-0743 July 1980) estimates that significcnt radiological consequences might result if a spent fuel cask were to be attacked by high explosives in a heavily populated area.

In regard to the theft of significant quantities of strategic special nuclear material, there is general agreement that terrorist groups might have the skills and resources to fabricate a clandestine fission explosive with kiloton yields.

(Note that much of the information re-garding the physical protection of this type of nuclear material is classified National Security Information under NRC regulations in 10 CFR Part 95. Certain items such as response arrangements made with local police and protection measures for irradiated fuel remain unclassi'ied and therefore have been placed within the scope of the new rule).

(ii)

Increasing the Likelihood of Theft or Sabotage The Safeguards Information being protected under this rule if disclosed in an unauthorized manner would significantly increase the likelihood of theft or sabotage by:

- Reducir g deterrence value. A good example is the passenger search efstem at airports which worked extremely well for years because

' the performance characteristics of the system were not known.

(The FAA has protected their security information under specific legislative authority since the early 197C's.) Once it was found that the systems could not detect certain items, some of the deterrence was lost.

- Allowing for possible compromise of the intrusion detection system and successful covert intrusion. Most alarm systems used to protect nuclear facilities are tamper resistant and tamper indicating, making compromise all but impossible for even sophisticated adversaries. However, with knowledge of the electrical details and performance characteristics of alarm equipment, defeat becomes possible.

- Providing an opportunity for advance planning.

In this re-gard the Generic Adversary Characteristics Report (NUREG-0459) states: " Professional criminals, many terrorists groups, some extremist protest groups, and certain disoriented persons plan carefully and thoughtfully before initiating a given criminal mi ssion.

Me,y of these adversaries will abort planned encoun-ters when security or other interruptions occur." Opportunity to plan is a key element in target selection, and an essential element in a successful operation.

- Pinpointing target areas for power reactors - As part of a security plan review, Los Alamos National Laboratory provides to the NRC a detailed list of vital areas for a specific power reactor, a rank ordering of the importance of each vital area and sets or combinations that if sabotaged as a group would cause an offsite release. This information would be protected under this rule. Obviously, such information would be valuable to an adversary planning an attack for without it the probability of successful sabotage would be small.

- Allowing an adversary to plan for and pick the time and place to ambush a spent fuel shipment, thereby placing the driver and escorts at a significant disadvantage.

- Providing a blueprint for the defeat of the physical protection system. Disclosing details of an uncorrected weakness or vulner-ability in a safeguards system might be more harmful than the release of the security program itself.

4.

Justification that Minimum Restrictions Have Been Applied The Commission considered several courses of action before adopting the provisions of the final rule.

Included were the following procedural alternatives:

a.

Maintain the Status Quo At the present time the e are rg[ NRC regulations requiring licensees or other persons to protect unclassified safeguards information against unauthorized disclosure.

Persons who have such information are not sub-ject to sanctions if the information is inadvertently or intentionally di sclos cid. Within the NRC, unclassified safeguards information is pre-sently withheld from public disclosure under 10 CFR Parts 2 and 9 and protected in accordance with NRC Manual Chapters.

Clearly, Section 147 requires the Commission to place som? restrictions on persons 9:ho have access to Safeguards Information.

Paragraph a. of Section 147 states "...;he Commission shall prescribe such regulations to prohibit the unauthorized disclosure of...", and in regard to sanctions notes that "Any person...who violates any regulation adapted under this section...".

Accordingly, maintaining the status quo would not satisfy the legislative provisions, at least in regard to licensees and other persons, b.

Issue Regulations Without Specific Requirements A regulation could be issued that would merely direct licensees and other persons to protect Safeguards Information against unauthorized disclosure without specifying what is to be protected and how it is to be done. This course of action would result in the greatest degree of flexibility and possibly (but not necessarily) the least cost to the industry (since prctection systems would vary greatly there is no way to estimate the costs of this option). The main problem with this method is non-uniformity of application.

Comments received on the proposed rule indicate that there is a wide divergence of opinion across the industry in regard to what constitutes a minimum level of protection, and to what should be considered Safeguards Information.

In addition, inspection and enforcement of such a rule would be very difficult.

A sub-set to this alternative would be to specifically define what types of information are to be protected. This would tend to imprcve the uniformity of application and remove some of the uncertainty in regard to the intent of the rule.

c.

Issue Specific Regulations That Define Types of Information To Be Protected, Level of Protection and Access Criteria This action would assure consistency of application and a level of protection generally agreed to be adequate (at the expense of flexibility).

It would remove the uncertainty regarding acceptability and inspectability of information protection systems and provide reasonable assurance that Safeguards Information could not be compromised without detection.

The Commission, after concluding only that option C satisfied the provi-sions of Section 147, considered several technical alternatives in regard to level of physical protection to be applied and access criteria.

Con-cerning physical protection requirements the options considered were:

- Adopting the system used for the protection of Limited Official Use information

- Adopting the system used for the lowest category of classified National Security Information.

The first method is the least the NRC Safeguards staff could conceive that provides some protection against forced entry or clandestine acquistion of Safeguards Information. The second option would satisfy Section 147 but would apply more restrictions than the Commission considers necessary.

The specific requirements in regard to marking storage and trans-mission of Safeguards Information are contained in Section 73.21 paragraphs (d) through (1).

It is noted that information protec-tion procedures used by State and local police units are deemed in the rule to be adequate, i.e. specific requirements would not apply to these organizations.

Concerning the criteria for granting access to Safeguards Information, the Commission considered:

- a formal federal personnel clearance program

- a licensee administered clearance program

- need-to-know only

- need-to-know with limitations on occupation groups who would be granted access

- no access requirements The first option was rejected in that Section 147 contains no authority for a federal clearance program. A licensee administered program would not sover perseas who have access to Safeguards Information but are not under license to the NRC. A need-to-know only criteria might permit a wider distribution than the Commission believes to be necessary. An information protection system that had no access restrictions could hardly be considered an effective program. The Commission therefore adopted the need-to-know with the additional requirement that access be limited to certain employment groups.

(See section 73.21 C of Attachment 1).

Accordingly, access to Safeguards Information would be granted, among others, to members of Congressional Committees and to parties in agency proceedings..

ENCL 0SURE C Revisions on Pages 6 7

8

>=

a VALUE IMPACT ANALYSIS ENCLOSURE C

Yalue-Impact Analysis Protection of Unclassified Safeguards Information 1.

Objective The Objective of this rule and conforming amendments is to prevent the unauthorized disclosure of certain information relating to the protection of nuclear materials and facilities by licensees.

===2.

Background===

In November 1978, the Comission approved a plan to classify under Executive Order 12065 sensitive safeguards information for activities involving formula quantities of strategic special nuclear material (Memorandum f rom the Secretary to the EDO dated November 9,1978).

Implementing regulations for the classification program,10 CFR Parts 25 and 95, were published in the Federal Register on March 5,1980 (45 FR 14476) with an effective date of October 1,1980.

In regard to the protection of other sensitive safeguards information not classifiable under the Executive Order, (i.e., information worthy of protection in the interest of public health and safety but with no direct connection to the national security) the Comission supported legislation to amend the Atomic Energy Act of 1954, as amended, to provide for explicit authority in this area.

Such legislation was recently enacted as an amendment to the NRC Authorization of Appropriatior.s Bill for 1980 (PL 96-295). A new Section 147, SAFEGUARDS INFORMATION, was added to the Atomic Energy Act which directs the Comission to prescribe such regulations or issue such orders, af ter notice and opportunity for public comment, as necessary to prohibit the unauthorized disclosure of saf eguards information which specifically identifies:

(1) a licensee's or applicant's control and accounting procedures or security measures for the physical protection of special nuclear material, or (ii) security measures for the physical protection of source material or byproduct material, or (iii) security measures for the physical protection of and the location of certain plant equipment vital to the safety of production or utilization facilities, provided that the unauthorized disclosure of such information could reasonably be expected to have a significant adverse effect on the health and safety of the public by significantly increasing the likelibcod of thef t or sabotage of such material or f acility. Only minimum. restrictions needed to protect the health and safety may be applied under this Section.

3.

Alternative Courses of Action 3.1 Procedural Alternatives a.

Maintain the Status Quo At the present time there are no NRC regulations requiring licensees or ethers persons to Erotect unclassified safe-

-~

guards information against unauthorized disclosure.

Persons who have such information are not subject to sanctions if the information is inadvertently or intentionally disclosed.

Within the NRC, unclassified safeguards information is presently withheld from public disclosure under 10 CFR Parts 2 and 9 and protected in accordance with NRC Manual Chapters.

Clearly, Section 147 requires the Comission to place some restrictions on persons who have access to Safeguards Information.

Paragraph a. of Section 147 states "...the Comission shall prescribe such regulations...to prohibit the unauthorized disclosure of...", and in regard to sanc-tions notes that "Any person.. who violates any regulation adopted under this section...".

Accordingly, maintaining the status quo would not satisfy the legislative provisions, at least in regard to licensees and other persons.

b.

Issue Regulations Without Specific Requirements A regulation could be issued that would merely direct licensecs and other persons to protect Safeguards Information against unauthorized disclosure without specifying what is to be protected and how it is to be done.

This course of action would resuit in the greatest degree of flexibility and possibly (but not necessarily) the least cost to the industry (since protection systems would vary greatly there is no way to estimate the costs of this option). The main problem with this method is non-unif ormity of application.

Conments received on the proposed rule indicate that there is a wide divergence of opinion across the industry in regard to what constitutes a minimum level of protection, and to what should be considered Safeguards Information.

In addition, inspection and enforcement of such a rule would be very difficult. A sub-set to this alternative would be to specifically define what types of information are to be protected. This would tend to improve the uniformity of application and remove some of the uncertainty in regard to the intent of the rule.

d c.

Issue Specific Regulations That Define Types of Information To Be Protected, Level of Protection and Access Criteria This action would assure consistency of application and a level of protection generally agreed to be adequate (at the expense of flexibility).

It would remove the uncertainty regarding acceptability and inspectability of information protection systems and provide reasonable assurance that Safeguards Information could not be compromised without detection.

It is not certain that this alternative would cost more than Alternative b.

Experience has shown that when implementing general performance requirements licen-sees often go further than the NRC considered necessary to meet the intent.

3.2 Technical Alternatives For Alternatives 5. and c. of Section 3.1, several technical alternatives are available within the framework of Section 147 in regard to the scope of any rule issued and the nature of the prescriptive requirements. These can be characterized as:

(1) Types of materials anc facilities covered.

(ii) Types of information to be included.

(iii) Level of protection to be afforded.

(iv) Access requirements.

For item (i) the possibilities include information concerning physical protection or accounting of

- all materials and f acilities licensed by the NRC

- activities and materials required to be protected under 10 CFR 73

- activities and materials for which reports or studies indicate a significant potential for harm if intentionally misused.

Only the last grouping qualifies under the Section 147 "significant adverse effect" standard.

For item (ii) the pessibilities are

- licensee physical security, safeguards contingency and guard qualification and training pl.ans

- licensee fundamental nuclear naterial control plans

- licensee probability risk analyses

- generic studies and reports

- engineering and construction drawings that'show the location of safety-related equipment Only the first grouping is considered to meet the "significant adverse effect" standard of Section 147.

For item (iii) the various possibilities are

- no protection

- lef t to the discretion of licensees, States or other persons

- system used fot the protection of Limited Of ficial.use information

- system used for the lowest category of classified information The first method does not satisfy Section 147 requirements. The second presents severe procedural and enforcement problems. The third method is considered to be the minimum restriction that satisfies Section 147. The last does not satisfy the minimum restriction provisions (in regard tc personnel clearances).

For item (iv) the options are

- no access requirements

- need-to-know only

- licensee administered " clearance" program

- federal personnel clearance program

- employment categories There is no authority in Section 147 f or a formal federal personnel clearance program.

A licensee administered program would not cover persons not under license to NRC.

A no-access-requirem:nts program would f ail to satisfy Section 147 requirements.

A need-to-know only criteria would result in a great deal of uncertainty in some instances and might permit a wider distribution than the NRC believes i

d I

to be in the public interest.

A combination of need-to-know plus limiting access to certain occupational groups would provide both an effective system and one that meets the " mini-rum restriction" provision of Section 147.

It is also generally agreed that for the type of information included in the rule (i.e., information that is not related to the national security) a personnel clearance program is neither necessary nor desirable.

4.

Value-Impact Estimates 4.1 Yalue Statement The implementation of the requirements of this rule will signifi-cantly increase the protection afforded licensee sensitive safeguards information both in the private sector and within the NRC. This in turn will make it much more difficult for an adversary to compromise a licensee's physical protection system since advance planning and detailed knowledge of a target are essential elements to any successful operation.

4.2 Impact Estimates The selection of alternatives discussed in Section 3 is based on the standards contained in Section 147, i.e.,

- necessary to prohibit disclosure,

- the information, if released, could have a "significant adverse effect", and

- only minimum restrictions applied.

4.2.1 NRC Resources Recuired (Other than IE)

Storage Containers NMSS 12 Filing Cabinet Modifications (MODS) X S100

= $1,200 2,000 2 5-Drawer GSA Containers X $1,000

=

2,400 4 2-Drawer GSA Containers X $600

=

300 NRR 3 Filing Cabinet Mods X $100

=

2,000 ACRS 2 5-Drawer GSA Containers X $1,000

=

100 ADM 1 Filing Cabinet Mod X S100

=

1,000 15-Drawer GSA Container X $1,000

=

TOTAL

= 59,000 Initial Review & Marking of Decuments (DOS)

.5 my Develop Internal NRC Control Procedures (DOS)

.5 my TOTAL 1.0 my Recurring Document Control & Distribution (TIDC) 1.0 my Review, Marking, F0IA, etc. (DOS)

.3 my TOTAL 1.3 my IMPACT ON INSPECTION AND ENFORCEMENT TOTAL 3

TWE OF SITE NO.

MAN HOURS MAN HOURS TRAVEL COST 1

Nuclear Power Reactors 90 2

180 0

Non-Power Reactors &

1 Storage Sites 20 2

40 0

2 Corporate Oflices 65 6

390 19.5K 2

A/E Firms 20 6

120 6K 2

Guard Contractors 15 6

90 4.5K 2

Consultants 25 6

150 7.5K 2

Si.curity Fabricators 8

6 48 OK 1

Transport Companies 2

2 4

OK TOTALS 245 1022

$39.9K 1.

If performed in conjunction with other inspection effort.

2.

These are new types of sites (133 Total) that require inspection.

3.

Travel cost estimated to be $300 per site visit.

Development of an inspection program would require 0.5 manyear of initial effort.

In addition, an administrative burden of approximately 0.5 manyears would be added to cover such things as processing of 133 additional inspection reports for the new types of sites, subsequent follow up action, and additional travel authorizations.

4.2.2.

Estimate of Costs for Industry Locations No_

Nuclear power plants

• 90 15 Non-power reactors Spent fuel storage & labs 5

Corporate offices 65 A/E firms 20 Guard contractors 15 Consultants 25 Security fabricators 8

Transport companies

• 2 Equipment Costs (initial)

Reactor sites, spent fuel storage and labs and corporate headquarters 1

map cabinet with lock bar ($500) 2 lock bars for file cabinets ($200) 5700 A/E firms 4 GSA security cabinets ($4000) 10 lock bars for existing file cabinets ($1000) 1 large shreder ($1000)

$6000 Note that nuclear power reactors and their service companies, and spent fuel shipments are the only activities for which there is a cost impact.

Guard contractors, consultants, fabricators 2 lock bars for existing file cabinets ($200)

$200 Total Equipment Costs (initial) 110 X $700 = $77,000 65 X $700 45,500

=

20 X $6000 = 120,000 15 X S200 3000

=

25 X $200 5000

=

8 X $200 1600

=

2X

=

Labor Costs Initial (M/ Hrs)

Recurring (M/ Hrs)

Power reactors 80 40 Corporate offices 100 40 A/E firms 500 500 Guard service 40 40 Consultants 40 40 Fabricators 40 40 Transport companies 40 Total Labor Costs Initial Recurring i

110 X 80 X $20 = $176,000 110 X 40 X $20 = $88,000 65 X 100 X $30 = 195,000 65 X 40 X $30 = 78,000 20 X 500 X $30 = 300,000 20 X 500 X $30 = 300,000 15 X 40 X $20 =

12,000 15 X 40 X $20 = 12,000 25 X 40 X $45 =

45,000 24 X 40 X $45 = 45,000 8X 40 X $20 =

6400 8X 40 X $20 =

6400 2X

- X $20 =

2X 40 X $20 =

1600 Summary Totals Initial Recurring

$252,100

+ 734.400 5966,500

~5d31,000

$4000 per location

$2200 per location

,c 4.2.3 Estimated Costs for States For States costs are for handling spent fuel shipping schedule notices.

No. of States - 40 No. of Shipments /yr - 300 No. of States notified per shipment - 7 No. of notifications per shipment - 2 Processing time - I hour Equipment Costs 6 locking bars for existing files

$600 40 States X 5600 =

$24,000 Labor Costs (recurring)

Shipments States Notices per shipment 54200 per year 300 X

7 X

2

=

4200 X 1 br. X $30 per hr. = $126,000 5.

Summary and Conclusion The NRC has studied the various alternatives available to satisfy the provisions of Section 147, taking into account the public coments received on the proposed rule.

On balance tne rule is considered to rovide an effective information protection system yet satisfy the p' minimum restriction" provision of the Atomic Energy Act.

-g_

g4 4

ENCLOSURE D NOT REPRODUCED - NO CHANGES

.