Text

Requests Commission Approval for Rev to Rules of Practice (10CFR Part 2,Subpart B) to Provide for Expedited Hearings in Connection W/Immediately Effective Enforcement Orders & Delays in Conduct of Expedited Hearings When Necessary
	ML20055D541
Person / Time
Issue date:	03/06/1990
From:	Parler W; NRC OFFICE OF THE GENERAL COUNSEL (OGC)
To:	;
References
	FRN-55FR27645, TASK-PINV, TASK-SE AD60-1-13, SECY-90-074, SECY-90-74, NUDOCS 9007090074
	Download: ML20055D541 (29)
	v • d • e

%-

i t

000000000 00000000000000 RELEASED TOTHE PDR

,/" "'NA i

shego e:

w we.

(,,,,,j RULEMAKING ISSUE SEcy-90-o74 March 6, 1990 (Notation Vote)

F,o r :

The Commissioners From:

William C. Parler

~~

General Counsel

~j~ ~Sub ect:

REVISION TO RULES OF PRAC*ilCE (10 C.F.R.

PART 2 SUBPART B) TO PROVIDE FOR (1)

EXPEDITED HEARIllGS WHEN REQUESTED IN CONNECTION WITH IMMEDIATELY EFFECTIVE ENFORCEMENT ORDERS AND, (2) DELAYS lil EXPEDITED HEARINGS IN CERTAIN CIRCUMSTANCES (FINLAY SITUATION); INFORMAT10fl CONCERNING PROPOSED CHANGES TO PART 110, SUBPART G.

~~ p~~Pur ose:

To obtain Commission approval for changes to the Rules of Practice to provide expressly for (1) expedited hearings in connection with immediately ef fective enf orcement orders, (2) challenges to the immediate effectiveness of an order, and (3) delays in the conduct of the expedited hearings when necessary, e.g. to allow the Department of Justice to complete its criminal investigation of the order; and (4)giving rise to the enforcement circumstances to advise the Commission as to whether Subpart G of 10 C.F.R. Part 110, pertaining to enforcement actions for export / import licensees, can be eliminated.

Back

-~2 r o u n d :

In the case of Finle L Testing Laboratories Inc.

theliceniiilassuspecii337vi3IIIing IIs m,aterials license by improper shipments of a radiographic device.

During the course of the staff's investigation into the matter, the Deputy EDO issued an immediately effective order suspending all activities under the license.

Finlay requested a hearino on NOTE:

TO BE MADE 90BLICLY on x 21585 AVAILABLE WHEN THE FINAL SRM 20 MDE AVAILABLE Jack R. Goldberg x 21601

[lk70'

/

~07 @ 4 900306

hpt, PDC

r 4

whether the suspeasion1should be sustained.

While the matter was still'in a prehearing stage, the Department of-Justice decided to undertake a criminal investigation of the matter and requested that' the adjudicatory proceedings be stayed until it-completed its-investigation.

The protraction of the proceeding prompted as the request and by Licensing Board discovery orders raised a concern with the Commission over the Commission's responsibilities vis a'vis the due process _ rights of the licehiliT~~~~

Accordingly, it asked that procedures be established for future' handling of such cases..

Subsequent-to Finlag, the need for additional procedural rule ~cEinges relating to immediately effective orders became evident.

In the SafetL L1 ht case, an immediately 2

effective order riquiring the licensee, inter-i alia, to establish;and make payments into I~~~

Irust fund ~for use in disposing of wastes at-j the site was~ challenged by the licensee as to i

the need for immediate effectiveness.

A 1

resultant motion by the' licensee-to stay the immediate effectiveness of'the-order raised.

-questions as to the most efficient way to' allow the challenge and-atLthe.same time

)rovide.for the protection'of-the public lealth and safety.

1 Discussion:

The-rule proposed herein deals with-both

~~~~~~~~~~

situations.

The rule recognizes that where an immediately ef fective orders is involved, the a

subject of-the order is entitled.to a1 prompt i

and expedited hearing on the merits inasmuch j

as it is being required to obey the order before having the opportunityrto be heard.

The rule recognizes,7however, that even though the case'is heard on an~expeditet basis, there may be situations in w'hich the subject of the order or others adverse'ly affected-may be-irreparablyidamaged-by the~ time the proceeding

j is concluded.

.Accorcingly, the proposed rule specifically allows the immediate effectiveness of the. order to be challenged at-the outset where an adversely affected party.

believes that inadequate justification exists

=

l for its immediate effectiveness.

Where-such a challenge is made, the Licensing Board is i

required to hear the11ssue of immediate l

i 2

.s.

C,,

a effectiveness, separately..without delay, and 7

on an expedited basis at-a mini-hearing at which the only issue for determination is whether adequate evidence exists to-support the need for the order to be made immediately effective.

This mini-hearing is essentially an informal one, generally without_any right of discovery and cross-examination.

Adequate evidence for this purpose does not mean the same. degree of proof that is required for a merits determination..

Rather, it is something less, akin to the evidence that is necessary to support.an_ arrest, a' search warrant, or a-preliminary hearing on a criminal' matter.

c This procedure, we believe, provides a party adversely affected by an immediately: effective enforcement: order with due process while i

allowing the Commission suf.ficient latitude-to protect the public health-and safety when immediate action is necessary.

The proposed rule also allows the Commission or any other interested party to obtain a-reasonable delay-(the Finlay situation) either in the initiation or.in~tWe completion of.the hearing on an immediately effective order.

Any delay must be b'ased=on a balance of the competing interests involved.

This proposed rule has been drafted.as an amendment to the recently-approved 'ommission C

rulemaking revising.10cc.F.R. Part'2, Subpart B (SECY-89-321).-

The combined rule would'be submitted for publication in the Federal =

Register as a single proposed rule on March 22, 1990, the1date established by Staff Requirements Memorandum dated ~ February.21, 1990, assuming Commission approval of this rule in time to meet that target date.- 'In the 3

event, however,LCommission' approval of-the l

rule proposed herein is.not obtainediin' time to meetLthat date,'our preference 11s-that-the rule proposed in SECY-89-321 be published 1as-e schedu. led.

In that circumstance,-the. rule.

proposed herein can be publ.ished later 1

following Commission, approval.

.In-any event,

= '

whether the twoLproposed rulesoare p9blished-~

separately or not,.they will be publ.ishedLas a single rule when published-in final form.

In approving a proposed comprehensive revision' of the NRC's rules of practice for-issuing i

3 i'

v

i orders, SECY-89-321, the Commission also asked whether the provisions contained.in Subpart'G to Part 110 for issuing orders can be eliminated--(see Staff Re 21, 1990)quirements Memorandum dated February ~

The answer 11s that Subpart G to Part 110 can be eliminated.

However, when Part 110 was initially promulgated..it was designed to codify in one place export and import regulations, including provisions for. enforcement a'ctions concerning exrt.~t and import licenses.

This codification-of. export and import regulations in one place

.was based, in part,Lon.the fact that the Administrative Procedure Act exempts foreign af. fairs functions from its adjudicatory provisions (see 5 U.S.C. $ 554(a)(4)).-

Retaining Subpart G of Part 110 would continue to serve the-purpose of. keeping all export and import provisions in one place and would.

assist in preserving the distinction between-proceedings-to which-the APA applies and proceedings to.which the APA'does not apply.

-The Office of-International Programs is currently engaged in drafting proposed major revisions to Subparts:D'through.L of Part 110, including changes--to'Subpart G..

The proposed changes; are intended to shorten: considerably and clarify.the_affected Subparts, while'at-the same timecreconfirming the Commission's-earlier decision to consolidate essentially all of the Commission's export / import

' licensing regulations in a separate-Part of

-Title 10.

International ProgramsLanticipates submitting its proposed.-revisions-to the Commission over the next several~ weeks and' months.. Thus, any decision to change or eliminate Subpart G of Part 110 should take 1

into. account the comprehensive-review of Part 110 regulations-now underway _by International Programs.

If.it is decided to eliminate Subpart G to Part 110, minor changes to:Part'2

.(including its title'and Subpart13, for example) will be needed.

Recommendation:

That the Commission:

1.

Approve incorporation of the changes prop 3se3 Eerein in'the rule proposed by SECY-89-321 and approved by the Commission.

4-

^

l 2.

Note, a.-

The rule proposed in SECY!Ei!321 and the-rule' proposed herein:will be published as a-single rule.if_that can'be done-without causing-delay in the publication of the SECY-89-321 rule changes.

Otherwise, the SECY-89-321 proposed rule will be published as scheduled.with publication of the rule proposed herein to follow.

In any event, when~ published in final form.-both rules will i

be published as a single. rule'.

b.

If the rule proposed herein is published separately, the same steps noted-in SECY-89-321 will-be taken to the extent _

applicable.-

c.

The. drafting of propose'd changes'to'Part-110, Subpart 2, pertaining to enforcement of import / export regulations, is being undertaken by~the Office-of International rograms.

}

'f.

h w

3

( 111am C.'Parler 6

General Counsel

Enclosure:

Draft rule (52.202) r I

and explanatory statement Commissioners' comments or' consent should be provided.directly l

to the Office of the Secretary by COB Monday, March 19, 1990.

Commission Staff office comments, if any,.should be submitted to the Commissioners NLT Monday, March 12, 1990,;with.an infor--

.mation copy to the Office of the Secretary.: If.the paper is of' such a nature that it requires additional time for analytical l

review and comment,-the Commissioners and the~ Secretariat should-L be apprised of when comments may be expected.

DISTRIBUTION:

Commissioners OGC OIG-t LSS GPA REGIONAL OFFICES EDO ASLBP ASIAP SECY 5

s

4 i

r Enclosure A 1

NUCLEAR REGULATORY. COMMISSION l

10 C.F.R. Part 2-Revisions to Procedures to Issue Orders AGENCY:

Nuclear Regulatory Commission.

ACTION:

Proposed rule.

s

SUMMARY

The Nuclear Regulatory Commission'(NRC) proposes to revise the

. Commission's procedures-for issuing orders to: include persons not-licensed by the Commission but who are otherwise subject'to the Commission's jurisdiction.-

The proposed revisions would more accurately _ reflect the Commission's' existing statutory authority to issue orders than is presently the case. ~The revision I

also identifies the types of Commission orders to which hearing rights ' attach;.

L DATES: The comment _ period expires on (75 days after publication'in'the FederalRegister).

Comments received after this date will be considered if it is1 practical to do so, but assurance of consideration cannot be given except, as to comments received on-orJbefore.this-date.

ADDRESSES:

Send written comments to the Secretary of Lthe. Commission, U.S.

Nuclear Regulatory Commission, Washington, DC 20555, Attention:

Docketing and Service Branch. Comments may also be delivered to the Office of the i

e 2-Secretary, U.S. Nuclear Regulatory Comission, One White Flint North,11555 Rockville Pike, Rockville, Maryland, between 7:30 a.m. and 4:15 p.m. weekdays.

Copies of any comments received may be examined 'and-copied for a fee at the NRC Public Document Room, 2120 L Street, NW, Washington, DC between the hours L

of 7:45 a.m. and 4: 15 p.m. weekdays.-

FOR FURTHER INFORMATION CONTACT: Mary E. Wagner, Office of the General Counsel, U.S. Nuclear Regulatory Comi'ssion, Washington, D.C. 20555, Telephone:

301-492-1683.

SUPPLEMENTARY INFORMATION:

Background

The procedures to be followed by the Comission to initiate formal enforcement action are found in the Comission's Rules of Practice set forth in 10 C.F.R. Part 2, Subpart'B. These actions include notices of violation, described in 6 2.201, show cause orders,. described in 6 2.202, orders to modify licenses, described in i 2.204, and. civil penalties, described in-5 2.205.

Until 1983, with the exception of the civil penalty procedures in

. 5 2.205, the language in these procedures referred solely to licensees. At that time, it was; recognized that the Comission's regulations did not provide a procedural-mechanism to issue a formal notice of violation to an unlicensed I

person (corporate or individual) who had violated Comission requirements.

For example, by referring only to licensees, the-procedures in 6 2.201 did not address. issuing a notice of violation to a person who possessed radioactive f

, 1 material without a license in violation of Connission requirements or an-unlicensed person who violated provisions of 10 C.F.R. Part 21, which l

implements Section 206 of the Energy Reorganization Action of 1974 Consequently, the Comission amended its regulations to permit the issuance of notices of violations to unlicensed persons who violated Comission requirements.

Changes were published in the-Federal ~ Register on September 28,

- 1983-(48 Fed. Reg. 44170) to amend i 2.'200 (Scope of subpart) and i 2.201 (Notice'of violation) to add the phrase "or other person subject to the I

jurisdiction of.the Comission."-

l-As stated above, the provisions for issuing show cause ord,ers only u

address licensees.

In practice, the Comission has fashioned-orders to non-licensees where necessary to compel a person to cease unauthorized.

activities that would require a license'or to compel actions by a former licensee with respect to its activities previously'under license.

See.

e.g., Hichael F. Dimun, 54 Fed. Reg.12704 -(March 28,1989); Pacific Armatechnica Corp., 48 Fed. Reg. 38356 (Aug. 23, 1983).

The Comission's.

statutory authority to issue orders, which is found in.Section 161 of the Atomic Energy Act of 1954, as amended, 42-U.S.C. I 2201, is not limited solely to licensees.

In fact, the Comission's Atomic Energy Act authority to issue orders is extremely broad, extending to any person (defined in Section 11s to j

include, e.g., any individual, corporation, federal, state and local agency) l who engages in conduct within the Comission's' subject matter jurisdiction.

The few court cases which deal with the scope of the general authority

- Congress has granted the Comission usually do so in a general discussion or in passing and conclude that Section 161 confers uniquely broad and flexible 4

~

l i

authority on the Comission. See Power Reactor Dev. Co. v. International Union of-Elec. Radio and Mach. Workers, AFL-CIO, 367 U.S. 396 (1961);

Connecticut Light and Power Co. v. Nuclear Regulatory Com'n, 673 F.2d 525, 527, n. 3 (D.C. Cir.1982); New Hampshire v. Atomic Energy-Com'n, 406 F.2d t

170,173-74 (1st Cir.1969); Siegel v. Atomic Energy Com'n, 400 F.2d 779, 783 1

(D.C. Cir. 1968); but ef. Reynolds v. United States, 286 F.2d.433 (9th Cir.

1960) (interpreting Section 1611 in' detail and holding, in the context of the AEC's bomb testing activities, that Section 1611(3) authorized the AEC to take action to govern the activities of private licensees'and not the activities of the Comission itself; the court's use of.the word " licensee" is dictum with regard to the term in the context of this notice).

Cases analyzing the Federal.Comunications Comission's (FCC) enabling statute, which, in many ways, is analogous to the'1954 Act, also support the principle that the Comission's authority is broad in scope. The federal l

Comunications Act 'of 1934 (the 1934 Act) broadly authorizes the FCC to "make such rules and regulations, and issue such orders, not inconsistent'with [the-1934 Act], as may be necessary in the execution of its functions",.47 U.S.C.

61541(1982). This provisioa is similar to Section 1611(3) of the Atomic Energy Act of 1954, which authorizes the Comission to " prescribe such rules, regulations, and orders-as it may deem necessary-to govern = any activity authorized pursuant to the [ Atomic Energy Act of,1954]... in order to E

l protect health and to minimize danger to life or property...." 42 U.S.C.

L 1

5'2201(i)(3)(1982). A number of cases have analyzed Section 1541 in detai1-1 5

l and determined that the FCC's ordering authority is necessarily broad.

I f

e v,.---

+

5 l

See Federal Comunications Com'n-v. National Citizens Comittee for Broadcasting, 436 U.S. 775 at 793 (1978); United States v. Storer Broadcasting Co., 351 U.S. 192 at 203.(1955); National Broadcasting Co. v.

United States, 319 U.Si 190 at 196 (1943);-Lincoln Telephone and-Telegraph Co.

l

v. Federal Comunications com'n, 659 F.2d 1092 (D.C. Cir.1981); American Telephone and Telegraph v. Federal Comunications-Com'n, 487 F.2d 865 (2d -

Cir.1973); GTE-Service Corp. v. Federal Comunications Com'n, 474 F.2d' 724 (2d Cir. 1973); and Western Union Telegraph Co. v. United States, 267 F.2d-715, 722 (2nd Cir. 1959).

It has been held that the FCC has authority to issue orders under Section 1541 to persons whether licensed or not.

Onited l

States v. Southwestern Cable, 392 U.S. 157,.180-81 (1968).

Section 1611 provides broad authority to issue orders as the Comission deems necessary to govern any activi.ty authorized pursuant to the Atomic-1 Energy Act in order to protect the public health and safety.

Section 161b-similarly authorizes the Comission to issue orders to establish standards and 1

instructions to govern the possession and use of~special nuclear material, 1

source material, and byproduct mate' rial.

As relevant here, Section 161o authorizes the Comission to order reports as may be necessary to effectuate the purposes of the Act.

Given this broad statutory authority, 'it is appropriate to amend 10 C.F.R. 6 2.202 to have the procedural mechanism in place to issue orders, t

as necessary, to unlicensed persons when such persons have demonstrated that future control over their activities subject to the NRC's-jurisdiction is

'i deemed to be necessary or desirable to protect public health and-safety'or to minimize danger to life or property or to protect the co' mon defense and 1

j 6-security.

This amendment would revise 9 2.202 to establish that mechanism both as to a licensee, as the current 5 2.202 provides, and to any person subject to the jurisdiction of,the Consnission., Such a person includes, but is not limited to, a person who held a license or who was otherwise engaged in-licensed activities at the-time of the conduct in question, but who no longer holds a license or is so engaged.

o In addition, the procedural ~ mechanism for issuing orders to show cause,

' renamed demands to show cause byL this rulemaking, to licensees and other persons would be set forth in a separate section in order to make'it clear t

that the-right to a hearing does not attach at the time of issuance of a mere i

demand for information; i.e., a demand that a person or licensee "show cause" why it should not be compelled to take or refrain from certain action.

Orders, including orders to show cause, currently are issued under Section 161-of the Atomic Energy Act of 1954, as amended, which are implemented by j

552.202(ordertoshowcause),and2.204.(orderformodificationoflicense).

I In addition, civil penalty orders are issued under Section 234, implemented by

$ 2.205 (civil penalties). NRC practice commonly has 'been to issue a single order, an order to.show cause, which requires that certain information be provided to demonstrato why either a proposed or'insnediately effective action modifying, suspending, or revoking a: license should not be taken. The order affords a hearing with regard to these actions. While Section 189 of the-

. Atomic Energy Act provides for the granting of.a hearing in connection with proceedings to modify, suspend, or revoke a license,. neither the Act nor the i

Administrative Procedure Act would require a hearing in connection with an

+

7-order to show cause.which requires only the submission of information, but

~

does not by its terms modify, suspend or revoke a license.

The Act does not explicitly set out the form :)r requirements.for an order to show cause. The Act does, however, authorize the Commission to collect information pursuant to Sections 161c and o and the Commission may issue show cause orders to implement this authority.

Section 182 of the Act authorizes 4

-the Commission to request information from licensees and the Commission has implemented this authority by promulgating regulations such as '10 C.F.R.

I50.54(f).

Licensees subject to Commission requests under 10 C.F.R. 9 50.54(f) or.its equ1 valent in other' parts of the NRC's regulations have no i

hearing rights under the Act regarding these information requests.

Accordingly, to clarify that hearing rights do not attach to mere "show-l cause" demands for information, the Commission proposes.to separate its t

current provisions on orders to show cause from the Commission's general-ordering authority contained in 5 2.202.

To. avoid-any-confusion with orders under revised 5 2.202, such actions will be called " demands to show cause" and provisions concerning. demands to show cause are set'forth in a new 5 2.204.

Under.the proposed rule changes, a demand to show cause will be issued only1to l

l require the submission of information.

If a demand to show cause is issued as j

part of an order requiring _ action pursuant to l'2.202, hearing rights will be offered but only with respect to the provisions of the order requiring action.

This revision to the. regulations governing orders changes the rule in-Dairyland Power Cooperative, LBP-80-26, 12 NRC 367, 370-72 (1980) and Consumers Power Company, CLI-73-38, 6 AEC.1082 (1973),'by setting the point at which a." proceeding" begins for purposes of triggering the adjudicatory rights

.i

under Section 189 of the Atomic Energy Act to the point of issuance of an order compelling a licensee or other person to take or refrain from certain actions rather than the point where the agency merely demands information to show why no action should be taken.. The change in practice is consistent with the Comission's power to define the scope of its proceedings. See Bellot'i v. NRC, 725 F.2d<1380 (D.C. Cir. 1983).

The proposed 5 2.202 adds new features not present in the current 6 2.202 or 6 2.204; Section 2.202 now provides that the action proposed by a show cause order issued pursuant to that section may be made temporarily effective in two circumstances:

(1) where the public health, safety or interest requires it; or (2) where the violation being charged or conduct causing the violation is? willful. Similarly, current 6 2.204 provides that an order directing' modification of a license issued pursuant to that section may be made immediately

)

effective when required by:the public health, safety or interest.

Where such an order is involved and a hearing'is demanded, there is no existing provision that specifically calls for an expeditious hearing on the order. An expeditious hearing is essential due to actions required of the recipient of the order prior to conducting a hearing on.the merits of the order.

Nor is there a. provision that specifically allows for a' delay in=the start or'in the' completion of such hearing where good cause for such' delay exists.

Section 2.202, as proposed, is intended to fill those gaps.

Proposed 6 2.202 authorizes the Commission to institute enforcement proceedings by the issuance of enforcement orders against licensees or other persons subject to the Commission's jurisdiction =for violations of law,-

regulation or license.

As in the current 9 2.202, the order may be made

+

it 9

immediatily effective pending further order where the Commission finds that the public health, safety or interest so requires or that the violations or conduct causing the~ violations are willful.

The licensee or other person to whom the i

Commission has issued the order must answer the order.

If a hearing is-demanded, the Commission will issue an order designating the time and place of h~ earing.-

l L

Further, proposed 6 2.202 contains additional language, not contained in current 6 2.202, providing that if the orderLis effective-immediately and-any adversely affected party believes the 'immediate effectiveness-to be unjustified, that party may 'recuest that the immediate effectiveness of the e

order be set aside. Such a motion must be filed contemporaneously with the i

l

('

demand for hearing or separately on or before the latest date-set forth in the order for the filing of the demand for hearing, but in any event may not be filed before the filing of such. demand.

In order-to expedite consideration of a motion to set aside, such a motion, and a demand'for hearing, may be filed separately from any answer reouired under 6 2.202(b).

l Where such a motion is made,'the Atomic Safety and Licensing Board or Presiding Officer will decide the matter of immediate effectiveness expeditiously; that is, oromptly, efficiently, and on an accelerated basis.

It is expected that such a motion will normally be acted upon within 15 days of 'its filing.

Under proposed 6 2.202, thelonly meanscto challenge the immediate effectiveness of an order is by a motion to set aside the order's.immediate i

4 l

I m

a-.*

e e

e w-

yvg-w y

l j

effectiveness. The Atomic Safety and Licensing Board or Presiding Officer shall-not sua sponte set aside an order's imediate effectiveness provision.

In deciding a motion to set aside the immediate effectiveness of an order, the' Atomic Safety and Licensing Board or Presiding Officer will consider the answers to the motion filed by the NRC staff and 6ny other party to the proceeding.

A~ motion to set aside shall not be determined prior to a determination on the standing of the party filing the motion.

The only ground on which the imediate effectiveness of the-order may be set aside is that adequate evidence does not exist to support the finding in the order that the public health, safety or interest requires immediate effectiveness or that the violation was willful.

For-this purpose, adequate evidence is akin to the -

probable cause necessary for an arrest, a search warrant, or a preliminary l

hearing on a criminal matter.

This is less than must be shown at'the hearing, but it must be more than uncorroborated suspicion or accusation.

See Horne Brothers, Inc. v. Laird, 463 F.2d 1268, 1271 (D.C. Cir. 1972). See also, Transco Security, Inc. v. Freeman, 639 F.2d 318 (6th Cir. 1981.), cert denied, 454 U.S. 820 (1981). Admissible evidence by persons with first hand knowledge

' of the facts of the sort that would be required at the' full-adjudicatory hearing is not essential.

In this regard, 6 2.202 contemplates ~that any controversy over t

whether adequate evidence exists to support the immediate effectiveness will be resolved through informal hearing proceoures, 'normally without discovery and without rights to cross-examination.

l-The Commission's authority-under 6 2.202 to issue immediately effective enforcement orders also includes the authority to issue amendatory or i

l l-supplemental orders that are immediately effective.

If such an order is issued-l-

1 l

- 11.-

-by the Commission after a hearing has been ordered, the licensee or other party'affected may, by motion pursuant to 9 2.730, request that the immediate effectiveness of the amendatory or supplemental order in question be set aside pending resolution of the immediate effectiveness question.

Such a motion will-

- be given expedited. consideration by the Board or Presiding Officer and decided on the basis described above.

Under 6 2.202, as proposed, a licensee or other person adversely affected by an'immediately effective order who'reouests a hearing is entitled to an expeditious resolution of the issues' properly raised consistent with the requirements of due process.

There may be certain circumstances'that constitute good cause for reasonable delays in the conduct of the hearing.

As an example, at times, there may be possible criminal violations involved in connection with a particular violation that is'the' subject of the Commission's-immediately effective order.

In such instances, to allow the U.S. Department-of Justice to undertake the necessary criminal investigation without prejudice l

10 possible prosecution of any discovered-crime, it may be necessary to hold -

_tfehearingontheimmediatelyeffectiveorderinabeyanceforareasonable period'of' time, pending completion of the criminal investigation and decision on crimina'l prosecution.

Revised 5 2.202 allows the Comission, either on motion by the staff or any other party, to delay the hearing in such cases, for such periods as may be appropriate in the circumstances.

The length of a delay should be based on a balance of the competing interests involved. See Logan v.

Zimmerman Brush Co., 455 U.S. 422, 434 (1982).

In order to. avoid unnecessary duplication in the regulations, it is proposed that the current 5 2.204, " Order for modification of license," be i

]

deleted from Part 2, since procedures for modification of a license are included in proposed 9 2.202. Proposed 6 2.202(f) provides that if the action ordered by the Commission consti.tutes a backfit of a Part 50 licensee, the procedures described in 10 C.F.R. I 50.109 must be followed.

This provision currently appears in the las,t sentence of 5 2.204.

-Section 2.202 is also revised to provide that if the licensee or other person-to whom an order is issued consents to its issuance, or the order 1

confirms actions agreed to by the licensee or such other person, such consent or agreement constitutes a waiver by the. licensee or such other person of a right to a hearing and any associated rights.

Such orders will be immediately

- 1 effective.

This is not a departure from current Commission practice, but

{

merely conforms the Commission's regulations to such practice.. Section.

2.202(d) also provides that the licensee's or other person's agreement to an order must=be in writing. The: addition of this' provision-is intended:to-minimize the possibility of issuance of a-confirmatory order (i.e., an order I

i L

intended to confirm and bind a licensee to its commitments to certain actions) a which does not accurately reflect the agreement reached by-the parties.

Whether or not the licensee or other. person consents to ady order,-a-person adversely affected by an order issued under.6 '2.202 to: modify, suspend or revoke a license will be offered an opportunity for a hearing pursuant to 5189 of the Atomic Energy Act, consistent with current' practice and the 1

e authority of the Commission to define the scope of the. proceeding on an j

enforcement' order.

See Bellotti v._NRC, 725 F.2d 1380 (D.C. Cir. 1983)..

l-The Commission will continue to publish orders-in the Federal Register in accordance with current-practice.

l{

i I

)

The existing 5 2.202 vests authority _ to issue orders in the Executive j

--DirectorforOperations(ED0),andvarious_staffofficedirectors.

Currently, therulelimitsthe'ED0'sauthor'itytoissueorderstciemergencysituations.

t Existing i 2.204 vests authority to' issue orders in the Commission, though this authority has been delegated to staff officers.

The revised rules l

consistently vest such authority in the Comission, leaving it to the Comission's internal delegation authority to delegate such authority.to-others. This change will avoid the need to amend the regulations each-time the-title of one'of the currently enumerated officials is changed, and it will also remove the unnecessary limitation on the ED0's authority.

The Comission is retaining, in new i 2.202(e), a provision that, upon a finding that the public health, safety or interest so requires or that.the.

violation is willful, the proposed action may be made imediately effective, pending further proceedings on the order. A similiar provision appears in current i 2.202(f) and 5 2.204.

Relief from the requirements of.an imediately effective order, on the other hand, may be sought under_ the 1

relaxation provisions contained.in that order, or by motion to the Atomic Safety and Licensing Board or the Presiding Officer,if a hearing has been requested.

4

'The proposed rule also continues, in_$ 2.202(f), the backfitting..

requirements of 5 50.109, including the provision therein that when immediately effective action is required, the documented evaluation may.

follow, rather than precede, the regulatory action.

Finally, consistent with the changes to 55 2.202 and 2.204, 9 2.1 is amended to specify that the scope of Part 2 includes the issuance of orders

.9 and demands to show cause to unlicensed persons, and 6 2.700 is amended to specify that Subpart G (Rules of General Applicability) applies to all adjudications initiated by an order.

The proposed amendments are procedural in nature. They do not establish-i the substantive standards or conditions under which the NRC would issue an order-to a licensed or an unlicensed person.

The Commission is proposing, in a separate rulemaking published simultaneously with this rulemaking, a substantive addition to its regulations in order to put unlicensed persons on notice that they may be held accountable for willful misconduct which-undermines, or calls into question, adequate protection of the public health and safety. Once the proposed rules are in-effect, consistent with the i

Comission's statutory authority,- there' will be procedural rules governing the e

issuance of an order or show cause order not only to a licensee, as currently

~

provided..but also to an unlicensed person who willfully causes a licensee-to i

be in violation of Commission requirements or whose willful misconduct

'I undermines, or calls into question, the adequate protection of the public health and safety in connection with activities regulated by the NRC under the I

Atomic Energy Act of 1954, as amended.

l An example of a situation in which it might be appropriate to~ issue an j

order to an unlicensed person is where an. employee of a corporate licensee-might willfully cause that licensee to be in violation of Commission requirements such that the Commission does not have reasonable assurance that requirements to protect the public health and safety will be followed if-that person continues to engage in activities licensed by the Commission.

Depending on the circumstances in such cases, it might be appropriate to issue

~

4 gg

p.

i ',,

l l l.

an order to such a person to either prohibit the person from being involved ~in 1

activities-licensed by the Commission or require the person to provide prior notice to the Comission before engaging in licensed activities. -These types of conditions have been used by the Comission in settlement of litigation in.

accordance with 10 C.F.R. 2.203.

See Edward Hines. Jr. Medical Center, ALJ-88-2,27NRC477(1988), and Finlay Testing Laboratories. Inc., LBP_-88-17, l

27NRC586(1988).

This rulemaking establishes the procedures to be used.in. issuing orders to licensed and unlicensed p_ersons.

The procedures establish the mechanism to provide notice of the issuance of an order and to resolve, through adjudica-tion, whether a particular order is appropriate under the circumstances.

l 1

Environmental Impact:

Categorical Exclusion

. The NRC has deterinined that this _ proposed rule is the type of. action described in categorical exclusion 10 C F.R. 51.22(c)(1).

Therefore neither m

an environmental impact statement nor an environmental assessment-ha: been prepared for this proposed rule.

Paperwork Reduction Act Statement 1

This proposed rule contains no information collection requirements and therefore is not subject to the requirements -of the Paperwork Reduction Act.of:

j l

1980 (44 U.S.C. 3501 et seq.).

[

h

-w-

Regulatory Analysis The existing regulations in 10 C.F.R. 2.202 authorize the NRC, through its designated officials, to institute a proceeding to modify, suspend, or revoke a license by service of an order to show cause on a licensee. The regulations, as currently written, do not provide procedures for the NRC to take direct action against unlicensed persons whose willful misconduct causes-a licensee to violate Commission requirements or places in question reasonable assurance of adequate protection of the public health and safety, although such action is authorized by the Atomic Energy Act of 1954, as amended = The i

amendments will make the Commission's-Rules of Practice more consistent with the Commission's existing statutory authority and provide the appropriate procedural framework to take' action, in appropriate cases, in order to protect the public health and safety. The amendments also will make clear that hearing rights do not'rctach to orders to show cause,_ consistent with-$ 189 of I

the Atomic Energy 1.et of 1954, as. amended and the Administrative Procedure' j

Act.

1 The proposed rule constitutes the preferred course of action and the cost

~

involved in its promulgation and application is necessary and appropriate.

i The foregoing discussion constitutes.the regulatory analysis for this proposed q

rule, l

Regulatory Flexibility Certification As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)),

I the Commission certifies that this rule,-if adopted, will not have a signif-icant economic impact on a substantial number of small entitfes. The proposed j

rule establishes the proc ~edural mechanism to issue orders to show cause to 1

D i c. -

4 '

unlicensed persons in addition to licensed persons, who were previously covered. The proposed rule, by itself, does not impose any obligations on entities including any regulated entities that may fall:within the; definition of "small entities" as set forth in i 601(3) of the Regulatory Flexibility -

- Act, or within 'the definition of "small business" as found in i 3 of the Small -

Business Act, 15 U.S.C. $ 632, or within the Small Business Size Standards found in-13 C.F.R. Part 121.

Such obligations would not be created until an order is-issued, at which time the person subject to the order would have a--

right to a hearing in accordance with-the regulations.

Backfit Analysis This proposed rule does not involve any new provisions which would impose backfits as defined in 10 C.F.R. 50.109(a)(1). Accordingly no backfit analysis pursuant to~10.C.F.R. 50.109(c) is, required.for this proposed rule.

. List of Su'bjects in 10 C.F.R. Part 2-Administrative practice and procedure, Antitrust, Byproduct material, Classified information, Environmental protection, Nuclear materials, Nuclear power plants and reactors, Penalty, Sex discrimination, Source material; Special nuclear material, Waste treatment and disposal.

For the reasons set out in the preamble and under the authority of-the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974,,

as amended, and 5 U.S.C. 552 and 553, the NRC is proposing to adopt the following amendments to 10 C.F.R. Part 2.

((

~

~~~

~ ~

^ ~~- -

^'- -~

4 Part 2 -- Rules of Practice for Domestic Licensing Proceedings 1.

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

Authority:- Secs. 161, 181, 68 Stat. 948, 953, as amended (42 U.S.C.

'2201, 2231); sec. 191,.as amended, Pub. L.87-615, 76 Stat. 409 (42 U.S.C.

~

2241); sec 201, 88 Stat. 1242, as amended-(42 U.S.C. 5841); 5 U.S.C. 552.

Sec. 2.101 also issued under secs.. 53, 62, 63, 81, 103, 104, 105, 68 Stat. 930, 932, 933, 935, 936, 937, 938, asamended(42-U.S.C.2073,2092, 2093, 2111, 2133, 2134, 2135); sec.102, Pub. L.91-190, 83 Stat. 853, as amended (42 U.S.C. 4332); sec. 301, 88 Stat.1248 (42 U.S;C. 5871).

Sections.

2.102,~2.103, 2.104, 2.105, 2.721 also issued under secs. 102, 103, 104,,105, 183,.189, 68 Stat. 936, 937, 938, 954, 955, as amended (42 U.S.C. 2132, 2133, 2134,2135',2233,2239).

Section 2.105'~also issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239). Sections 2.200-2.206-also-issued under secs..

161b,.1,.0, 182,186, 234, 68 Stat. 948-951,.955, 83' Stat. 444, as amended (42 U.S.C. 2201!b), (1),: (o), 2236,-'2282); sec. 206,- 88 -Stat.1246L(42.U.S.C.

5846).

Sections 2.600-2.606 also issued under sec. 102, Pub.'L.91-190, 83 l

. Stat..'853, as amended (42 U.S.C. 4332).

Sections 2.700a, 2.710 also issued-under 5 U.S.C. 554. Sections 2.754,.2.760,-2.770, 2.780 also issued under 5-1 U.S.C. 557. Section 2.764 and Table 1A of Appendix C are also' issued under secs. 135, 141, Pub. L.97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155,~10161')'..

Section 2.790.also issued under sec. 103,.68 Stat. 936,.as amended (42 U.S.C.

'2133)'and 5 U.S.C. 552. Sections'2.800 and 2.808 also issued under 5 U.S.C.

553. Section 2.809'also issued under.5 U.S.C. 553 andisec. 29, Pub. L.85-256,71 Stat.579,'asamended(42U.S.C.2039). Subpart K also issued

'0 ", c

- 19'-

I under sec.189, 68 Stat. 955'(42 U.S.C. 2239); sec.134, Pub. L.97-425, 96 Stat. 2230 (42 U.S.C.10154). Appendix A also issued under sec. 6, Pub. L.91-560, 84 Stat. 1473 (42 U.S.C. 2135).

Appendix B also issued under sec. 10, l

r Pub. L.99-240, 99 Stat. 1842 (42 U.S.C. 2021b et seq.).

2.

$ 2.1 is revised to read as follows:

i 2.1 Scope.

This part governs the conduct of all proceedings, other than export and-import licensing proceedings described in'Part 110,-under the Atomic Energy Act of 1954, as amended, and the Energy Reorganization Act of 1974, for:

(a) granting, suspending, revoking, amending, or taking other action with. respect toanylicense,constructionpermit,orapplicationtotransferalicense;(b) issuing orders and demands to show cause to persons subject to'the J

Comission's jurisdiction, including licensces~ and persons not licused by the Comission; (c) imposing civil penalties under section 234 of the Act;t and.

(d) public rulemaking.

3.

5 2.202 is revised to-read as follows:

9 2.202 Order.

(a) The Commission may institute a proceeding to' modify, suspend, or revoke a license or to take such other action as may be proper by serving on the licensee or other person subject to the jurisdiction of the Comission an order that will:

(1) Allege the violations with which the licensee or other person subject to the Comission's jurisdiction is charged, or the potentially -

i

l;,'*

i]

hazardous conditions or.other facts deemed to be sufficient ground for the t

proposed action, and specify the action proposed; l

(2) Provide that the licensee or other person must file a written answer to the order under oath or affirmation within twenty (20) days of its date, or such other time as may be specified in the order; (3)

Inform the licensee or any other person adversely affected by the order of his right, within twenty (20) days of the date of the or' der, or such'

,other time as may be specified in the order, to demand a hearing on all or.

l part of the order, except in a case where the licensee or other person has-l consented in writing to the order; (4) Specify the issues for hearing; (5) State the effective date of the order 1 and (6) Provide,"for stated reasons, that the proposed action =be immediately' effective pending further order where the Connission finds that the' public health, safety or-interest so reouires or that the violation or conduct causing

+

l the violation is willful.

(b) A licensee or other person to whom the Connission'has issued an-order under subsection (a) must respond to the order by filing a written.

answer under oath or affirmation. The answer shall.specifically admit or deny-each. allegation or charge made in the order, and'shall set forth the matters

(

of fact and law on which the licensee or other person relies, and, if the-order is not consented to, the reasons as to why the order should not have.

been issued.

Except as provided-in (d) below, the answer may include the' j

demand for a hearing.

i L

4

(+

o

.,.d>-

s 1

l

\\

- 1 l_

(c)

(1).If[ne-answer-demands]ahearingisdemanded,theCommission j

will 6,ue an order designating the time and place of hearing.

If a hearing is demanded with respect to an immediately effective order, the hearing will be conducted expeditiously, giving due consideration to the rights of the e

parties.

(2) Any party to the proceeding may, in his demand for a hearing, or, separately thereafter but within the time set forth in the' order for the 1

filing of a hearing demand, move to set-aside the imediate effectiveness of the order. Suchamotion'willbeboardanddecidedexpeditiousif,beforeany

?

ML20055D541

Contents

Text

Enclosure:

SUMMARY

Background

Navigation menu

ML20055D541

Text

Enclosure:

SUMMARY

Background

Navigation menu

Search