ML19312E908
| ML19312E908 | |
| Person / Time | |
|---|---|
| Issue date: | 01/18/1980 |
| From: | Shapar H NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Bickwit L NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| Shared Package | |
| ML19312E906 | List: |
| References | |
| SECY-80-219, NUDOCS 8006180123 | |
| Download: ML19312E908 (3) | |
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UNITED STATES yQ 3 g NUCLEAR REGULATORY COMMISSION 7,i.*A g/[y:
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JAN 191980 MEMORANDUM FOR:
Leonard Bickwit, Jr.
General Counsel FROM:
Howard K. Shapar Executive Legal Director
SUBJECT:
CHAIRMAN AHEARNE'S REQUEST FOR STAFF VIEWS ON INCREASED COMMISSION INVOLVEMENT IN SIGNIFICANT REGULATORY ACTIONS In a memorandum of December 26, 1979, Chaiman Ahearne expressed interest in more direct Commission involvement in certain significant regulatory decision-making.
In response to your memorandum of January 10, 1980 requesting our views on the Chaiman's suggestion, we have prepared the following analysis.
We assume that the responses of the other staff offices will address the impacts of the Chaiman's proposal on regulatory detenninations currently within their purview and will outline procedures presently used to make such de temina tions.
Accordingly, we have limited our analysis to the potential impacts of the Chaiman's suggestions on communications between the staff and the Commission in light of e_x_ parte and separation of function restric-tions.
If, however, the proposal is implemented, we would be pleased to provide legal assistance as may be needed to amend present procedures to provide more direct Commission involvement in significant regulatory deteminations.
Because g parte and separation of functions prohibitions generally apply only to adjudications and fomal rulemakings, direct Commission involvement in certain decisonmaking, such as uncontested reactor operating licenses or the uranium milling licenses for which no adjudicatory proceedings are provided, should not inhibit free communications between the Commission and the staff.
On the other hand, Chairman Ahearne's proposal would necessarily i
involve the Commission as the ultimate agency decisionmaker in a variety of licensing and regulatory actions that will be of an adjudicatory nature.
Greater Commission involvement in the agency's adjudicatory decisionmaking (in tems of both quantity and detail of caseloads) would in turn portend increased opportunities to run afoul of e_x_ oarte and separation of functions restrictions.
Indeed, the Chaiman's memorandum raised this issue in the context of the Commission's interest in liberalizing the ex parte rules governing contacts between the Commissioners and staff (as requested by the President in his conclusions regarding the Kemeny Commission report).
The separation of functions provision of the Administrative Procedure Act, 5 U.S.C. 554(d), generally prohibits g carte cmmunications on the merits between agency staff taking an advocatory role and agency decisionmakers in B 00618 0
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Leonard Bickwit, 'Jr. adjudicatory settings.
This prohibition appears in section 2.719 of the Commission's regulations, which with certain narrow exceptions prohibits an agency decisionmaker in an adjudication from consulting "any person other than a member of his staff on any fact in issue unless on notice and oppor-tunity for all parties to participate...."
The amendments to the ex, parte and separation of functions regulations pro-posed by the Office of General Counsel in a memorandum of October 15, 1979 to the Comission will not eliminate such separation of functions consider-a tions. Although the proposed final amendments would clarify the Commission's options to conduct investigations and other informal proceedings while undertaking related adjudications, the proposed Federal Register notice to accompany the amendments states that they "cannot be used to circumvent the protections provided by the adjudicatory process." Moreover, the proposed final amendments to section 2.719 leave intact the general prohibition against private consultations between agency adjudicators and staff advocates on the facts in issue.
As the Commission takes a more active role as the agency's ultimate decision-maker in adjudications, questions regarding application of the separation of functions provision of the APA and section 2.719 of NRC's regulations to communications between the staff and the Comission on what might be argued to be " facts in issue" are bound to increase.
Thus, if the Commission becomes more involved in significant regulatory decisionmaking as Chairman Ahearne suggests, the APA requirement that agency " judges" remain isolated from the agency's " staff advocates" may thwart attempts to facilitate com-munication between the Commission and its staff, contrary to the desires of the Comission and the President.
Liberalization of the statutory and regulatory provisions governing separation of functions within NRC could help reconcile the goals of increased Commission accountability for significant regulatory decisions and improved communication between the Comission and the staff.
In the absence of the statutory pro-hibition against commingling of agency functions in 5 U.S.C. 554, case law generally rejects the idea that combination of judging and investigating functions within an agency (which would include off-the-record discussions between agency adjudicators and interested staff) is a per se denial of constitutional due process requirements.
Davis, Administrative Law of the Seventies 6 13.02 (1976). E. Withrow v. Larkin, 421 U.S. 35, 55 (1975).
The Commission should be aware, however, that a residual due process issue of bias may continue even if the separation of functions prohibition is remov ed.
If off-the-record communications between staff advocates and the Comission result in prejudgment of the matter the Comission is to decide in an adjudicatory proceeding, questions of bias in violation of constitu-tional due process may be raised.
In such a case, the courts will disqualify a decisionmaker if "'a disinterested observer may conclude that [the decision-maker] has in some measure adjudged the facts as well as the law of a particular
" Leonard Bickwit, Jr..
case in advance of hearing it.'"
Cinderella Career & Finishina Schools, Inc. v. FTC 425 F.2d 583, 591 (D.C. Cir.1970), quoting Gilliaan, Will &
Co. v. STG,267 F.2d 461, 469 (2d Cir.), cert. denied, 361 U.S. 896 (1959).
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Howard K. Shapar Executive Legal Director we& ' #
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MEMORANDUti FOR: Leonard Bickwit, Jr.
General Counsel FROM:
Harold R. Denton, Director Office of Nuclear Reactor Regulation
SUBJECT:
CHAIRMAN AHEARNE'S REQUEST FOR STAFF VIEWS ON INCREASED COMMISSION INVOLVEMENT IN SIGNIFICANT REGULATORY ACTIONS This is in response to your memorandum of January 10, 1980, as modified by telephone discussions between Mr. Case and Mr. Shields of your staff, in which you requested a discussion of the procedures normally followed by NRR in issuing construction permits, operating licenses and orders for power reactors.
In this discussion we have identified stages in the licensing and regulatory processes for power reactors at which the Director, NRR, or his designee normally makes substantive findings or decisions. These identify the points at which the Commission could become formally or informally in-volved in substantive staff-level decisionmaking for such facilities.
It should be recognized, however, that under the Commission's Interim State-ment of Policy and Procedure of October 10, 1979 (44 Fed. Reg. 58,559) new construction permits, limited work authorizations, and operating licenses for nuclear power reactors may be issued only upon order of the Commission.
Thus, the Commission has, for the present, assumed direct responsibility for many of the significant regulatory actions falling within NRR's licensing responsibilities.
Construction Permits Upon receipt of an application for a construction permit, the NRR staff per-forms safety and environmental reviews in order to take a position whether the application should be granted, and, if so, under what conditions.
In the course of such reviews, the staff may question certain aspects of the application. These discussions between the staff and the applicant usually l
result in changes to accommodate staff concerns.
Because a hearing is j
mandatory for construction permits, however, the ultimate decisionmaking is done by the Boards--not the Office of Nuclear Reactor Regulation.
Board findings regarding protection of the public health and safety and the environment, compliance with water quality permit requirements, and other matters define the scope of NRR's authority to issue the construction permit and are incorporated as conditions in the license.
Accordingly, aside from initial NRR staff positions based on a review of the CP applications, the l
major ultimate decisionmaking at the CP stage is performed by the Boards rather than by the Director, NRR, or his designee.
NRR is directed by the Board'to issue a construction permit and has no discretion to do otherwise.
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Similarly, the Boards perform the ultimate decisionmaking at the CP stage regarding antitrust matters when there is an antitrust hearing.
If, how-ever, the Attorney General advises that no antitrust hearing is necessary, NRR's Antitrust and Indemnity Group, in consultation with the Office of Executive Legal Director, will evaluate the case independently to determine whether there might be a situation inconsistent with the antitrust laws.
Based on these evaluations, the Director, NRR, or his designee decides whether or not an antitrust hearing should be held.
Operating Licenses NRR initiates the operating license proceedings by making a detennination that construction of the power reactor has been substantially completed, docketing the OL application, and issuing a notice of opportunity for hear-in'g on the license. The NRR staff reviews the application and develops a position as to whether the operating license should issue, and, if so, under what conditions.
If there is a hearing at the OL stage, the Boards will perform the ultimate decisionmaking on contested issues in much the same manner as described above for the construction permits.
In a contested OL proceeding, the adjudicatory Boards are responsible for the final decisions on matters under adjudication.
The Board decides, with respect to contested issues, whether issuance of the operating license is consistent with protection of the public health and safety and the environ-ment. The Director, NRR, or his designee, retains the authority to make such additional findings on matters not under adjudication as may be neces-sary to the issuance of an operating license. Thus, in implementing the Board's authorization to issue an OL, NRR exercises some discretion in identifying and addressing areas of concern in the plant's proposed operations.
The Director, NRR, or his designee makes the final decisions on the remaining (uncontested) issues in OL proceedings and on all issues for uncontested OL applications. This decisionmaking involves NRR staff review of the application to insure compliance with the standard technical specifi-cations, regulatory guides, and regulations so that a determination can be made whether the public health and safety and the environment will be ade-quately protected if the operating license is issued.
During such a review, the staff may question an applicant about certain aspects of the proposed operation, and the resulting interchange (known as "Q's and A's") usually results in modifications addressing staff concerns.
The Director, NRR, or his designee must make an additional finding before a plant with an operating license may actually go into operation.
He must make a finding based upon a memorandum from the Office of Inspection and Enforcement that the plant is ready for fuel loading before operations may begin. This is the case for both contested and uncontested OLs.
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Leonard Bickwit, Jr. '
At the OL stage, NRR (in consultation with OELD) is also charged with deciding whether significant changes in the applicant's antitrust situation would require a referral to the Department of Justice for a determination by the Attorney General whether an antitrust hearing is necessary. This, in turn, may trigger the same procedural steps and determinations as described above for the CP stage.
If the Attorney General advises that no antitrust hearing is necessary, the NRR/0 ELD staff evaluates the situation and the Director, NRR, or his designee decides whether to follow that advice.
The NRR/0 ELD staff would also review any license conditions pertaining to anti-trust matters in the absence of an adjudicatory hearing.
Orders to Reactors Present procedures call for NRR to notify the Commissioners before issuing any orders to operating reactors or reactors under construction.
Under these procedures, NRR consults the Commissioners (either informally or at public meetings) to obtain guidance prior to the issuance of orders by the Director, NRR, or his designee to operating reactors or to reactors under construction.
Conclusion In sum, we have identified various stages of power reactor licensing in which the Director, NRR, or his designee exercises discretion which the Commission may wish to assume. At the CP stage, NRR decisionmaking in which the Commission might become more directly involved includes the decision whether to follow an Attorney General opinion that no adjudicatory hearing on antitrust matters is required.
At the OL stage, NRR decisionmaking responsibilities that the Commission might wish to assume include:
in contested Ols, additional findings on matters not under adjudication as may be necessary to the issuance of an operating license; in uncontested Ols, the determination whether the public health and safety will be adequately protected if the operating license is issued; and in both contested and uncontested Ols, the decision whether significant changes in the applicant's antitrust situation requires further examination of antitrust matters and the finding that a plant with an operating license is in fact ready for fuel loading so that actual operation may begin.
It would appear that the opportunities for increased Commission involvement in significant decisionmaking at the staff level in NRR are limited by the fact that many of the ultimate decisions are made by Boards in an adjudica-tory setting. While NRR staff positions as to whether a'n application should be granted and, if so, under what conditions, provide an important technical foundation for the Board's final decision, they do not represent the ultimate determination of the agency in an adjudication.
Harold R. Denton, Director Office of Nucl.ar Reactor Regulation cc:
See Next Page
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Leonard Bickwit, Jr. cc:
W. Dircks, NMSS V. Stello, IE H. Shapar, ELD 4
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FEB S iMO MEMORANDUM FOR:
Leonard Bickwit, General Counsel Office of the General Counsel FROM:
Victor Stello, Jr., Director Office of Inspection and Enforcement
SUBJECT:
COMMISSION INVOLVEMENT IN ESCALATED ENFORCEMENT ACTION This is in response to your memorandum of January 10, 1980, in which you requested a review of the procedures by which the Inspection and Enforcement Staff take major actions, such as decisions that construction or operation of a fuel facility or a reactor should be stopped or restarted and whether other major enforcement actions should be taken in particular cases.
CIVIL PENALTIES, ORDERS, HQ NOTICES OF VIOLATION Enclosad is a flow chart depicting the process by which escalated enforcement action is taken. The sequence of events in the IE inspection-enforcement process begins with a routine inspection, a special inspection or investigation of an allegation or incident, requests under 10 CFR 2.206, licensee event reports or other matters that might trigger an inspection or investigation.
The findings in the various types of cases are then evaluated by the Regional Office involved and in the event that elevated enforcement action is deemed appropriate, the enforcement " package" is forwarded to IE Headquarters with regional recommendations. The Headquarters Staff in concert with OELD and other NRC Headquarters Staffs, as appropriate, determine the validity of the proposed action and make a decision as to the enforcement action to take, whether it be a HQ Notice of Violation, a Civil Penalty or an appropriate type of Order.
Due to the significance of these higher sanctions involving Civil Penalties and/or Orders, a thorough administrative-legal process is required.
Throughout the process there is interaction among the Region, IE technical divisions, X005, OELO and other interested NRC Offices.
Following completion of the Headquarters staff work the enforcement package is forwarded to the IE Director for final review, approval and signature.
In i
the case of a HQ Notice of Violation, the Director of the appropriate HQ technical division usually signs the letter, although the specifics of a given case may lead to a decision to have the transmittal letter signed by the Office i
Director.
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. FEB 6 1980 ENFORCEMENT CRITERIA As you know, the Atomic Energy Act was amended in December 1969 to give the Commission authority to impose Civil Penalties.
Prior to the enactment of this amendment, the Commission authorization was limited to Notices of Violation and Orders to Cease and Desist and to Modify, Suspend or Revoke a license. The AEC issued the " Criteria for Determining Enforcement Actions and Guidance for Assessment of Civil Penalties" in 1972.
In December 1974, the criteria was modified and renoticed in the Federal Register. The procedures for enforcement action are set forth in IE Manual Chapter 0800, copies of which are in the Public Document Room.
This Manual Chapter and our enforcement policies and criteria are currently under revision and it is anticipated that these revised criteria will be finalized in the near future.
COMMISSION INVOLVEMENT Since July 1975, it has been the policy of IE to send a brief " Notification of Significant Enforcement Action" to the Commission when elevated action such as Civil Penalties and/or Orders are being carried out.
Until January 1979, these " Notifications" were sent to the Commission at least five days before the action was to be taken.
However, to speed up these actions, the time lag between notification to the Commission and dispatch was decreased to two days.
l In the case of most Orders there has been no time delay between the Commission
" Notification" and the dispatch of the package.
It is my understanding that members of your staff intend to discuss this subject further in consultations with the line offico staff. With respect to the development of new procedures to implement possible direct Commission involvement in the listed actions, it is my view that this matter involves legal, more than technical issues, and should be handled on that basis.
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and Enfc cement Enclosure a
Flow Chart of Enforcement Actions I
cc: OPE SECY OELD W. Shields,04C
GENERAL PilOCESS PLOW OF ES_CALATED ENFORCEMENT ACTIONS INITIATION POINT SOURCES CASE EVAL.UATION/ ANALYSIS DIllECTOR'S SIONATURE PACKAGE FINALI7.ATION
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