ML20132G965

Requests Commission Approval of Direct Final Rule to Amend 10CFR2,40,70 & 76 to Bring Regulations Into Conformance W/New Statutory Requirements of Usec Privatization Act

ML20132G965
Person / Time
Issue date:	12/19/1996
From:	Taylor J NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
References
SECY-96-258, SECY-96-258-R, NUDOCS 9612270097
Download: ML20132G965 (138)

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%gp.Ef RULEMAKING ISSUE (Affirmation)

December 19, 1996 SECY-96-258 FOR: The Commissioners l FROM: James M. Taylor, Executive Director for Operations

SUBJECT:

DIRECT FINAL RULEMAKING: USEC PRIVATIZATION ACT -

CONFORMING CHANGES AND REVISION TO THE NRC ENFORCEMENT POLICY (NUREG-1600)

PURPOSE:

To obtain Commission approval of a direct final rule to amend 10 CFR Parts 2, 40, 70, and 76 to bring these regulations into conformance with the new statutory requirements of the USEC Privatization Act and the associated revision to the Enforcement Policy (NUREG-1600 " General Statement of Policy and Procedures for NRC Enforcement Action").

ISSUE:

The USEC Privatization Act changes the way uranium enrichment facilities are licensed / certified and adds different procedural requirements. The Commission's regulations must conform to these changes. A direct final rule providing the necessary amendments to the Commission's regulations should be published for public information and codified through the rulemaking process.

BACKGROUND:

On April 26, 1996, President Clinton signed into law H.R. 3019 (Public Law No.

104-134), legislation which provides FY 1996 appropriations to a number of Federal agencies. Included within the legislation is a subchapter entitled the "USEC Privatization Act," which directs the Board of Directors of the O I United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation that purchases the CONTACT: NOTE: TO BE MADE PUBLICLY AVAILABLE WHEN THE Charles W. Nilsen, RES FINAL SRM IS MADE AVAILABLE (301) 415-6209 .,

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The Commissioners l assets of USEC will be responsible for the operation of the two gaseous diffusion plants and the development of the atomic vapor laser isotope separatior (AVLIS) technology. In addition, this legislation amended the l Atomic En,rgy Act of 1954 (the Act) with respect to the licensing of AVLIS and certific. tion of Part 76 gaseous diffusion plants (GDPs). To implement these amendments to the Act, several conforming changes to 10 CFR Parts 2, 40, 70, and 76 are~needed.

DISCUSSION:

l The enclosed direct final rule, and associated proposed rule (Enclosure 1),

l will amend 10 CFR Parts 2, 40, 70, and 76 as required to implement Section 3116 of Public Law 104-134. To conform with the changes in the legislation (Enclosure 2), several new and revised licensing / certification requirements specific to USEC and its successor's operation of gaseous diffusion plants are required.

The legislation (1) requires that AVLIS uranium enrichment facilitim be licensed subject to the provisions of the Act pertaining to source material and special nuclear material rather than under the provisions pertaining to a production facility; (2) prohibits issuance of a license / certificate to USEC or its successor if it is owned, controlled, or dominated by an alien, a l foreign corporation, or a foreign government, or if issuance would be inimical I

to the common defense and security of the United States or to the maintenance of a reliable and economical domestic source of enrichment services; (3) eliminates the requirement that the Commission certify that USEC or its successor is in compliance with NRC regulations each year; and (4) provides for issuing civil penalties to USEC or its successor for failure to comply l with regulatory requirements governing the operation of gaseous diffusion l plants.

l e Concerning AVLIS, a principal effect of Pub. L. 104-134 is that the referenced AVLIS uranium enrichment facilities will be licensed under a single-step licensing process with the license issued pursuant to 10 CFR Parts 40 and 70, rather than a two-step licensing process under 10 CFR Part 50. The regulations previously were amended to provide a process for licensing uranium enrichment facilities using a single-step license as amended to conform with the " Solar, Wind, Waste, and Geothermal Power Production Incentives Act of 1990," Pub. L. 101-575 (57 FR 18388, April 30, 1992). Part 70 was made the basic regulation for licensing a uranium enrichment facility. That legislation specifically excluded AVLIS uranium enrichment facilities, then under development by the Department of Energy, from the one-step licensing process. However, Pub. L. 104-134 makes the development of AVLIS a responsibility of USEC (which will become a private entity as a result of this legislation) and removes the exclusion of AVLIS from one-step licensing. Therefore, the licensing of AVLIS, as with other licensed uranium enrichment facilities, will require an environmental review, adjudicatory hearing, inspection before operation, and third party liability insurance. It is also noted that, in addition to the regulations of Part 70, the licensing process for Louisiana Enrichment Services (LES) was l

l b

A The Commissioners l supplemented by Commission Notice and Order which established procedures and criteria for granting a license to LES. Procedures and criteria included in the LES notice and order are: (1) notice of receipt of application and availability of documents; (2) notice of hearing; l

(3) criteria for issuance of a license; (4) applicable rules and regulations; and (5) notice of intent regarding classified information.

A similar action may be required for the review and licensing of AVLIS.

e The legislation includes specific language restricting issuance of a certificate or a license to the USEC or its successor if the issuance would be inimical to the maintenance of a reliable and economical domestic source of enrichment services. Heretofore, the Commission has not been asked in its regulatory decisions to evaluate whether a proposed action is inimical to the viability of the domestic industries subject to NRC's regulation. Information about the intent of the language, which is contained in a Senate Committee report on an earlier

! version of the legislation (S. Rpt. No. 104-173 on S.755, November 17, 1995), states that the provision is to " guard against the possibility of a foreign uraniurn enrichment company acquiring the Corporation with the intent of operating it in such a manner inconsistent with its maintenance as an ongoing uranium enrichment concern." The report further states that no certificate or license should be issued "if in the opinion of the NRC the issuance of such a license or certificate of compliance would be inimical to the common defense and security of the United States or would be inimical to the maintenance of a reliable and economical domestic source of enrichment services because of the nature and extent of the ownership, control, or domination of the Corporation l by a foreign corporation or a foreign government or any other relevant l factors or circumstances." This is a new finding for which the staff 1 has no experience. However, at present the staff plans to consider the  !

following in evaluating this restriction on certification of the GDPs I and licensing of AVLIS: l Information required under 55 70.22 and 76.33 "information known to the applicant concerning the control or ownership, if any, exercised over the applicant by any alien, foreign corporation, or j foreign government." l

! Information required under 55 70.25 and 76.35 concerning funding

) plans for decommissioning and waste removal.

I

Information to be obtained under a proposed rule (61 FR 40555) l j amending the provisions of 10 CFR Parts 25 and 95 that deal with ,

j requirements for access to and protection of classified l l information. (The proposed rule should become fina' in January of 1997). These amendments were proposed to conforr * !!RC's l regulations with the nationally applicable requirments for the I protectic:. of and access to classified National Security Information, which have been revised through the issuance of the l National Industrial Security Program Operating Manual (NISP0M),

published January 1995; Executive Order 12958, " Classified

i 4

The Commissioners l National Security Information," dated April 17, 1995; and Executive Order 12968, " Access to Classified Information," dated August 4, 1995. Specifically, as related to foreign ownership,

- control, or domination, the NISP0M provides criteria for determining whether U.S. companies handling classified material are under foreign ownership, control, or influence (FOCI). FOCI l requirements established in proposed revisions to 10 CFR Part 95 are more detailed and restrictive than the "0wned, Controlled, or Dominated" requirements in 10 CFR 50.38 that were previously used j by the NRC, and are considered applicable to the subject finding i the Commission must make under the provisions of the 1996 legislation.

Further, the existing regulations (il 40.31(b), 70.22(d), and 76.33(d))

reflect NRC authority under the Atomic Energy Act to require that an applicant, licensee, or certificate holder submit additional information concerning issuance of a license or certificate. Therefore, under these provisions USEC also may be required to submit additional information addressing whether issuance would be inimical to the maintenance of a reliable and economical domestic source of enrichment services. The staff is considering whether there are specific additional information needs and will recommend to the Commission whether further amendments to  ;

the regulations are warranted. In addition, the staff is preparing  !

procedures for developing the required annual report to Congress and I guidance for recertification, and developing procedures to consider the issues of foreign ownership and control, and inimicalness to the common defense and security and to a reliable and economical supply of domestic (

enrichments services.

e An amendment of Section 1701(c)(2) eliminates the requirement that the Commission certify that USEC or its successor is in compliance with NRC regulations each year. Instead, the Commission can determine how frequently USEC or its successor must submit a recertification application to the NRC, provided that the NRC recertifies compliance with its regulations not less than every 5 years. It is the NRC staff's intent that the initial certification will be for 2 years to permit most items of the compliance plan to be completed. Subsequent recertifications will be based on a number of considerations, including implementation status of compliance plans and certification regulatory experience as datermined by the NRC's inspection progyam. The exact term will be specified in the certificate. Congress, however, did not eliminate the requirement found in Section 1701 (a) of the Act that the NRC shall report at least annually to the Congress on the status of health, safety, and environmental conditions at the gaseous diffusion plants.

e Section 3116 also modifies Section 234a of the Act to provide the Commission with the authority to issue civil penalties to the USEC or its successor for violation of the provisions of the Act, regulations, orders, and the terms of the certificate and compliance plan.

Therefore, the staff proposes that the " General Statement of Policy and

L The Commissioners Procedures for NRC Enforcement Action," NUREG-1600, be amended to provide examplos of violations in each of the four severity levels as guidance in determining the appropriate teverity level for violations in the area of gaseous diffusion plant operttions. In addition, Table 1A of the policy, which establishes base cNil penalties for different types of licensees, is being modified to add a new category. The amended table will provide that the case civil penalty for a Severity Level I violation of the Commission's requirements by GDPs will be at the statutory limit of $110,000. In accordance with Table 18, civil penalties for Severity Levels II and III violations would have lesser amounts. In determining the proper civil penalty amount, the staff considered the structures of these tables, which generally take into account the gravity of the violation as a primary consideration and the ability to pay as a secondary consideration.

Generally, operations involving greater nuclear material inventories and greater potential consequences to the public and the worker receive higher civil penalties. In the case of GDPs, the staff notes that there are a large number of workers at the sites, significant source terms present (i.e., inventory of licensed material), and various chemical and tcxic substances used as part of the GDPs operations. Therefore, in the event of an accident, there is significant potential from both radiological and non-radiological hazards to members of the public, including workers, and the environment.

With regard to the secondary factor of ability to pay, it is not the NRC's intention that the economic impact of a civil penalty be so severe that it puts the licensee out of business' or adversely affects a licensee's ability to safely conduct licensed activities. The deterrent effect of civil penalties is best served when the amount of penalties take into account a licensee's ability to pay. In this case, the staff believes that issuing a civil penalty of less than $110,000 to the Corporation for a significant violation would be disproportionate to the Corporation's significant revenues. In other words, a civil penalty of

$110,000 for a Severity Level I violation would be financially ,

appropriate, but not financially crippling. In addition, a penalty  ;

based on this amount should get more attention from the Corporation and  !

should create a greater deterrent effect.

Given the financial resources of GDPs, it is appropriate to utilize significant civil penalties to provide an effective deterrence from violating the Commission's requirements such that the likelihood of performance necessitating a shutdown order would be minimal.

Accordingly, the staff believes that a base civil penalty at the I proposed amount is appropriate in view of the potential consequences during an accident and the ability to pay. In addition, establishing the base civil penalty at the statutory limit would provide, at the outset, a clear message concerning the cost of noncompliance and Orders, rather than civii penalties, are used when the intent is to suspend or terminate licensed activities.

! i

, i i

l*

The Commissioners ]

J

!' additional motivation to maintain safety and compliance. A number of  !

l the above points may argue for higher civil penalties for fuel cycle )

facilities.- In a separate action the staff is'considering whether higher penalties for such facilities should be so'ught. The proposed  ;

! revisions for GDPs are described in the enclosed Federal Register notice ,

(Enclosure 3). The revision would be effective concurrently with the i i amendments to 10 CFR Parts 2, 40, 70, and 76. They will be reflected in

the next revision to NUREG-1600. -

! i

, In addition, in response to the "Rulemaking Plan - USEC Privatization Act," ,

. which was made available to the public on the NRC electronic bulletin board, '

1 USEC by letter dated November 13, 1996 provided comment concerning the rulemaking action (Enclosure 4). In their letter USEC provided proposed i revisions to CFR Parts 76, 70, and 40 for the purposes of implementing the  :

i USEC Privatization Act, and proposed language to 5 76.45 to clarify the ,

4 agency's intention concerning Director's decision on applications for

amendments to the Certificate. USEC also proposed deleting certain sections which they view as immaterial now that the Director's decision on the initial i certification has been issued. With respect to the first item, no new ,

i information was provided beyond that which the staff had already considered in this direct final rulemaking. The other USEC proposed revisions are not

included as a part of this limited scope direct final rulemaking as they are ,

i not revisions to the Commission's regulations which are required by the 1 l legislative amendments to the Act being here codified.

4 i RESOURCES: l l '

, Resources to complete and implement this rulemaking are included in the j' current budget.

! COORDINATION:

I The Office of the General Counsel has reviewed this direct final rule and has

no legal objection.

. RECOMMENDATIONS: l That the Commission:

1

1. Aoorove the Notice of Direct Final Rule and associated Proposed Rule

(Enclosure 1), and the revision to the NRC Enforcement Policy

{ (Enclosure 3) for publication.

i l l 2. Certify that, if promulgated, this rulemaking will not have a l

significant economic impact on a substantial number of small entities in  ;

order to satisfy requirements of the Regulatory Flexibility Act, 1 5 U.S.C. 605(b). l

. 1 3 J

~

l l

l 1

+ l The Comissioners 3. Hgig:

a. This direct final rule action is noncontroversial and routine; therefore, the NRC is not seeking public comments and this action will become effective 60 days after publication in the Federal Reaister unless significant adverse coments are received;

b. This direct final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) because it only affects a single operator, USEC or its successor;

c. In accordance with normal Commission practice, changes to the Enforcement Policy have not been subject to prior notice and coment. However, comments will be considered, as warranted, following publication.

d. A public announcement will be issued (Enclosure 5);

e. The appropriate Congressional Comittees will be informed (Enclosures 6); and

f. This rule is not a " Major rule" as defined by 5 U.S.C. 804(2)

(Enclosure 7).

/

W mes M. T or

[

xecutive Director for Operations i

Enclosures:

DISTRIBUTION: I

1) FRN - Direct Final (1-a) and Proposed Rule (1-b) Commissioners  !

Line In/Out Attached (1-c) OGC  !

1 2) Public Law 104-134 OCAA l

3) Supplement to NUREG-1600 01c  ;

4) USEC Letter OPA I

5) Public Announcement OCA

6) Congressional Committee letters EDO ,

7) Major Rule SECY Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB Tuesday. January 7. 1997.

Commission Staff Office comments, if any, should be submitted to the Commissioners l NLT Monday. December 30. 1996, with an information copy to the Office of the l Secretary. If the paper is of such a nature that it requires additional review )

and comment, the Commissioners and the Secretariat should be apprised of when ,

comments may be expected. l l

l This paper is tentatively scheduled for affirmation at an Open Meeting during  :

the Week of January 6. 1997. Please refer to the appropriate Weekly Commission l Schedule, when published, for a specific date and time.

l

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- 4 ENCLOSURE 1-A FRN - DIRECT FINAL s

k l

[7590-01-P]

NUCLEAR REGULATORY COMMISSION 10 CFR Parts 2, 40, 70, and 76 .

RIN: 3150-AF56

USEC Privatization Act AGENCY

Nuclear Regulatory Commission.

4 ACTION: Direct final rule.

SUMMARY

The Nuclear Regulatory Commission (NRC) is amending its regulations concerning the certification and licensing of uranium enrichment i facilities to conform to changes made to the Atomic Energy Act of 1954, as amended (the Act), by the USEC Privatization Act legislation. Although the

principal effect of this legislation is to direct the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity, this legislation also amended +:.e Act with respect to NRC certification of gaseous diffusion plants leased by USEC and the licensing of atomic vapor laser isotope separation (AVLIS) technology. USEC is responsible for the operation of the two gaseous diffusion plants and the development of the AVLIS technology.

The legislation requires that AVLIS uranium enrichment facilities be licensed subject to the provisions of the Act pertaining to source material and special nuclear material rather than under the provisions pertaining to a production facility; provides for the issuance of civil penalties to USEC or its successor for failure to comply with regulatory requirements governing the operation of gaseous diffusion plants; prohibits issuance of a m

I

• I license / certificate to the Corporation or its successor if it is owned, )

controlled, or dominated by an alien, a foreign corporation, or a foreign government, or if its issuance would be inimical to the common defense and security of the United States or to the maintenance of a reliable and economical domestic source of enrichment services; and eliminates the annual requirement that the Commission certify that USEC or its successor is in compliance with NRC regulations. The Commission may determine how frequently USEC or its successor must submit a recertification application to the NRC, provided that the NRC recertify USEC's or its successor's compliance with its regulations r.ot less frequently than every five years. The adopted rule changes bring the current regulations into conformance with these provisions.

DATE: The final rule is effective on [ insert date 60 days after publication]

unless significant adverse comments are received by [ insert date 30 days after publication]. If the effective date is delayed, timely notice will be published in the Federal Reaister.

ADDRESSES: Mail written comments to: The Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. ATTN: Docketing and Service Branch.

Hand deliver comments to: 11555 Rockville Pike, Rockville, MD, between 7:30 am and 4:15 pm on Federal workdays.

For information on submitting comments electronically, see the discussion under Electronic Access in the Supplementary Information Section.

Copies of comments received may be examined or copied for a fee at the NRC Public Document Room, 2120 L Street NW. (Lower Level), Washington, DC.

2

FOR FURTHER INFORMATION CONTACT: Mr. C. W. Nilsen, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-6209.

SUPPLEMENTARY INFORMATION:

4

Background

On April 26, 1996, President Clinton signed legislation that provides for fiscal year (FY) 1996 appropriations to a number of Federal agencies (H.R.

3019 (Pub. L. 104-134)). Included within the legislation is Title III,

Chapter 1, entitled "USEC Privatization Act," which directs the Board of

. Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation

that purchases the assets of USEC will be responsible for the operation of the gaseous diffusion plants known as the Portsmouth Plant and the Paducah Plant, i

located at Piketon, Ohio, and Paducah, Kentucky, respectively, ar.d the development of the atomic vapor laser isotope separation (AVLIS) technology.

In addition, the legislation amended the Atomic Energy Act of 1954, as amended (the Act), with respect to the certification of gaseous diffusion plants and licensing of an AVLIS uranium enrichment facility. The gaseous diffusion

plants are regulated under 10 CFR Part 76, " Certification of Gaseous Diffusion Pl ants . " Operation of an AVLIS uranium enrichment facility will be licensed under 10 CFR Parts 40, " Domestic Licensing of Source material" and 70,

" Domestic Licensing of Special Nuclear Material." l l

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. _.._ - _ _. .__ _ . . . _ _ _ . ~ . _ ._ _ _ _ _ . _ - . _ _ . _

j i

Discussion i A principal effect of Pub. L. 104-134 on NRC licensing actions is that the referenced AVLIS uranium enrichment facilities will be licensed pursuant f ,

to the provisions of the Act pertaining to source material and special nuclear i

j material rather than the provisions pertaining to a production facility.

1 5

Under this legislation, AVLIS licensing will be a single-step licensing process with one license issued pursuant to 10 CFR Parts 40 and 70, rather than a two-step licensing process under 10 CFR Part 50. The regulations 1

.previously were amended on April 30, 1992 (57 FR 18388) to conform with the  ;

" Solar, Wind, Waste, and Geothermal Power Production Incentives Act of 1990,"

l (Pub. L. 101-575) by providing a single-step process for licensing uranium l

enrichment. The April 30, 1992 amendments also made 10 CFR Part 70 the basic regulation for licensing a uranium enrichment facility. Although the 1990 i legislation specifically excluded AVLIS uranium enrichment, then under development by the Department of Energy, from the one-step licensing process,

! Pub. L. 104-134 made the development of AVLIS a responsibility of USEC (which will become a private entity as a result of this legislation) and removed the t j exclusion of AVLIS from one-step licensing. Therefore, licensing of AVLIS, as with other licensed uranium enrichment facilities, w ,1 r be a one-step process requiring an environmental review, adjudicatory hearing, inspection before operatie:, and third party liability insurance. However, for other purposes

) of the Act, such as controlling the export of specially designed or prepared l uranium enrichment equipment and preservation of Federal authority in Agreement States, all uranium enrichment facilities regulated by the NRC 4

E remain under the Atomic Energy Act provisions for production facilities.

Specific implementing amendments are as follows:

In 10 CFR 70.1, " Purpose" is revised to indicate that all uranium enrichment facilities requiring a license will be licensed under 10 CFR Part 70, " Domestic Licensing of Special Nuclear Material."

In 10 CFR 40.4 and 70.4, " Definitions" the term Corporation is added to refer appropriately to the licensing of the Corporation or its successor for-operation of an AVLIS facility.

In 10 CFR 76.4, "Definftfons" the term Corporation is amended to include the successor to USEC.

In addition, in conformance with the 1996 legislation, provisions are made in 10 CFR Parts 2 and 76 to allow the NRC to impose civil penalties on the USEC or its successor for failure to comply with regulatory requirements i ,

. governing the operation of the gaseous diffusion plants regulated under 10 CFR Part 76. Civil penalty authority presently contained in 10 CFR Part 70 would apply to AVLIS licensing. Furthermore, the " General Statement of Policy and Procedures for NRC Enforcement Action" NUREG-1600, is being supplemented to I

provide examples of violations in each of the four severity levels as guidance

! in determining the appropriate severity level for violations in the area of gaseous diffusion plant operations. Specific implementing amendments are as follows:

In 10 CFR 2.200(a) concerning the scope of Subpart B of Part 2, a new sentence is added to read as follows: "However, with regard to the holder of i

a Part 76 Certificate of Compliance or Compliance Plan, except for civil penalty procedures in this subpart, the applicable procedures are set forth in f 76.70." This will clarify that the provisions governing the issuance of an 5

.- - . - . - . - . . ~ . - - - . . . . .- .. - - - . . - - . . - _.. - -

5

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order or notice of violation to the holder of a certificate of compliance or compliance plan under 10 CFR Part 76 are contained in f 76.70 bLt the civil penalty procedures in subpart B of Part 2 are applicable to these entities.

In 10 CFR 2.205(a), a reference to the f 76.70(d), " notice of violation," and a reference to the provisions of a 10 CFR Part 76, ,

" certificate of compliance or compliance plan," are added because the Commission now has authority to issue civil penalties to the Corporation for violation of its regulations. ,

Similarly, in 10 CFR 76.10(b), the last phrase, "except, that the '

l Corporation is not subject to the authority of Section 234 of the Act," is eliminated because the Corporation is naw subject to Section 234 of the Act.

10 CFR 76.60 (c)(1) and (d)(1) are removed. These paragraph designations are' reserved and the last phrase of f 76.60(i), "provided, t

however, that civil penalties shall not be imposed on the Corporation pursuant i to 6 95.61 of this chapter except for violations of Section 206 of the Energy e Reorganization Act" is also eliminated. These pro &oitions on issuing civil 4

penalties are removed to permit the imposition of civil penalties. In 10 CFR 76.72(d), a reference to the new Section 234 civil penalty authority is added.

The 10 CFR 76.131(a)(3) reference to Title XI of the Energy Policy Act i

of 1992, is eliminated because this act's applicable provisions were amendments to the Atomic Energy Act of 1954. Reference to Section 206 of the Energy Reorganization Act has been relocated from & 76.131(b) to paragraph (b)(2). References to violations under Section 234 of the Atomic Energy Act  ;

r of 1954, as amended, and specific references to sections of the Act are added as paragraphs (b)(1), (b)(3), and (b)(4) to describe the new civil penalty l authority.

1 6

i

A provision is also added stating that the Commission will not issue a license or certificate to the Corporation or its successor if the Commission finds that the Corporation is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government, or that issuance would be inimical to the common defense and security of the United States or to the maintenance of a reliable and economical domestic source of enrichment services. This provision is added to conform with the legislation which includes specific language that restricts issuance of a certificate or a license to the USEC or its successor if the issuance would be inimical to the maintenance of a reliable and economical domestic source of enrichment services. Heretofore, the Commission has not been asked in its regulatory decisions to evaluate whether a proposed action is inimical to the viability of the domestic industries subject to NRC's regulation. Information about the intent of the language is contained in a Senate Committee report on an earlier 1 version of the legislation (S. Rpt. No. 104-173 on S.755, November 17,1995),

which states that the provision is to " guard against the possibility of a foreign uranium enrichment company acquiring the Corporation with the intent l of operating it in such a manner inconsistent with its maintenance as an ongoing uranium enrichment concern." The report further states that no certificate or license should be issued "if in the opinion of the NRC the issuance of such a license or certificate of compliancs would be inimical to the common defense and security of the United States or would be inimical to the maintenance of a reliable and economical domestic source of enrichment I services because of the nature and extent of the ownership, control, or

- domination of the Corporation by a foreign corporation or a foreign government or any other relevant factors or circumstances."

l 7

l

To comply with this provision of the 1996 legislation, the NRC staff will evaluate this restriction on certification and licensing based, in part, on the following:

Information required under 69 70.22 and'76.33 "information known to the applicant concerning the control or ownership, if any, exercised over the applicant by any alien, foreign corporation, or foreign government."

Information to be obtained under a proposed rule (61 FR 40555; August 5, 1996) amending the provisions of 10 CFR Parts 25 and 95 that deal with requirements for access to and protection of classified information. (The Commission expects to adopt this proposed rule as a final rule in January of 1997.) These amendments were proposed to conform the NRC's regulations with 1 the nationally applicable requirements for the protection of and access to 1

classified National Security Information, which have been revised through the '

issuance of the National Industrial Security Program Operating Manual (NISPOM), published January 1995; Executive Order 12958, " Classified National Security Information," dated April 17, 1995; and Executive Order 12558,

" Access to Classified Information," dated August 4, 1995. Specifically, as related to foreign ownership, control, or domination, the NISP0M provides criteria for determining whether U.S. companies handling classified material are under foreign ownership, control, or influence (FOCI). FOCI requirements established in proposed revisions to 10 CFR Part 95 are considered useful to the subject finding the Commission must make under the provisions of the 1996 legislation. This is especially so based upon the sensitive nature of the facilities and USEC's role, and the fact that USEC will have access to classified information and equipment.

8

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. i Further, the existing regulations (if 40.31(b), 70.22(d), 'and 76.33(d))

reflect NRC authority under the Atomic Energy Act to require that an applicant, licensee, or certificate holder submit additional information

! concerning issuance of a license or certificate. Therefore, under these provisions USEC also may be required to submit additional information i addressing whether issuance would be inimical to the maintenance of a reliable and economical domestic source of enrichment services. The staff is i

j considering whether there are specific additional information needs and will recommend to the Commission whether further amendments to the regulations are warranted. In addition the staff is preparing procedures for developing the

{

required annual report to Congress and guidance for recertification, and i

j developing procedures to consider the issues of foreign ownership and control, and inimicainess to the common defense and security and to a reliable and l

economical supply of domestic enrichments services. Specific implementing 3 amendments are as follows:

New sections 10 CFR 40.38 and 70.40 entitled "Ine7fgfbfifty of certain i

l appifcants," are added to state that the NRC will not issue a license to operate an AVLIS enrichment facility to the Corporation if:

) '

(1) It is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government; (2) Issuance would be inimical to the common defense and security of the j United States; or (3) Issuance would be inimical to the maintenance of a reliable and economical domestic source of enrichment services.

9 i'

1 l

l A new section 10 CFR 76.22 entitled "Ineifgfbfif ty of certain ,

l applicants," is added that states that the NRC will not. issue a certificate of  !

l compliance to the Corporation under these parts if: )

(1) It is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government; (2) Issuance would be inimical to the common defense and security of the l United States; or )

i (3) Issuance would be inimical to the maintenance of a reliable and

economical domestic source of enrichment services.

Another provision in the legislation iliminates the requirement that the

)

i NRC must certify that USEC or its successor's operation of the gaseous i

diffusion plants is in compliance with NRC regulations each year. Instead, the Commission may determine how frequently the USEC or its successor must j submit a recertification application to the NRC. However, NRC must recertify I the Corporation's compliance at least every 5 years. The initial certification, granted in a September 19, 1996 Director's decision, was made

{

4 effective for 2 years to permit most items of USEC's compliance plan to be completed. As part of the certification process, the compliance plan details how the Corporation will achieve compliance with NRC regulations in transition from the operation of the gaseous diffusion plants under the requirements of the Department of Energy to operation under the regulatory authority of the NRC. Subsequent recertification will be based on a number of considerations, including implementation status of compliance plans and certification regulatory experience as determined by the NRC's inspection program. The exact. term of cach certification will be specified in the certificate. As noted in a Senate Committee report on a previous version of the legislation 10

~

1 l

' (S. Rpt. No. 104-173 on S.755, November 17, 1995, page 31), "With periodic 4 certification, the NRC would have the flexibility to determine the appropriate length of certification, not to exceed five years." Specific implementing amendments are as follows:

10 CFR 76.31 is revised to provide for periodic application for recertification of compliance on or before April 15 of the year specified in an existing certificate of compliance as determined by the Commission, but not less frequently than every 5 years.

Accordingly, in 10 CFR 76.35, 76.36, 76.43, 76.45, 76.55, and 76.66 references to annual recertification are removed.

10 CFR 76.68 is revised to provide that the Corporation or its successor will continue to submit revised change pages to their approved application and safety analysis report annually to ensure current plant documentation, even though the requirement for an annual application has been removed.

In addition, in response to the "Rulemaking Plan - USEC Privatization Act," which was made available to the public on the NRC electronic bulletin board, USEC by letter dated November 13, 1996, provided comment concerning the rulemaking action (enclosure 3). In their letter USEC provided proposed revisions to CFR Parts 76, 70, and 40 for the purposes of implementing the USEC Privatization Act, and proposed language to 9 76.45 to clarify the I agency's intention concerning Director's decision on applications for amendments to the Certificate. USEC also proposed deleting certain sections which in their view are imaterial now that the Director's decision on the initial certification has been issued. With respect to the first item, no new information was provided beyond that which the staff had already considered in this direct final rulemaking. The other USEC proposed revisions are not 11

i included as a part of this limited scope direct final rulemaking as they are not revisions to the Commission's regulations which are required by the legislative amendments to the Act being here codified.

The Commission is proceeding with this rulemaking to amend 10 CFR Parts 2, 40, 70, and 76 as required to implement section 3116 of Pub L. 104-134. To conform with these changes to the Act, the amendments in this rule contain several new and revised AVLIS licensing and gaseous diffusion plant certification requirements specific to the Corporation's and its successor's operation of uranium enrichment facilities.

In summary, the amendments to 10 CFR Chapter I are being made to:

(a) Provide that uranium enrichment facilities will be licensed under 10 CFR Part 70, Domestic Licensing of Special Nuclear Material (See 5 70.1);

b) Add and amend where needed the definition of " Corporation" to include i

the USEC privatized entity (See SS 40.4, 70.4 and 76.4);

c) Note that the Commission will not issue a license / certificate if the Commission finds that USEC or its successor is under foreign ownership or control or that issuance would be inimical to the common defense and security or to the maintenance of a reliable and economical source of domestic enrichment services (See SS 40.38, 70.40, and 76.22);

d) Amend the provision concerning periodic recertification for operation (See SS 76.31, 76.35(n), 76.36(a), 76.43, 76.45(a), 76.55, 76.66 and 76.68(b)); and e) Note and clarify the authority to issue civil penalties to USEC or its successor for regulatory violations (See SS 2.200(a), 2.205(a), 76.10(b),

76.60, 76.72(d) and 76.131).

12

i The NRC is also amending the regulations in 10 CFR Part 76 to correct several miscellaneous errors in the regulatory text. These errors in the Code of Federal Regulations text occurred in the process of preparing and printing the final rule published on September 23, 1994 (59 FR 48944). Specifically:

in f 76.21(b) the reference to 9 40.41 should be to 6 40.51; in 69 76.111 and 76.113 " uncontrolled classified" should be " Unclassified Controlled" Nuclear Information, and in f 76.76(a)(2) the "(c)" should be "(b)." In addition, the definition of " Uranium enrichment plant" is removed from 6 76.4 because it is neither needed nor used in Part 76, which is specific to gaseous diffusion plants.

Electronic Access Comments may be submitted electronically, in either ASCII text or Wordperfect format (version 5.1 or later), by calling the NRC Electronic Bulletin Board (BBS) on FedWorld. The Bulic:in Board may be accessed using a personal computer, a modem, and one of the commonly available communications 4 software packages, or directly via Internet. Background documents on the rulemaking are also available, as practical, for downloading and viewing on the Bulletin Board.

If using a personal computer and modem, the NRC rulemaking subsystem on FedWorld can be accessed directly by dialing the toll free number (800) 303-9672. Communication software parameters should be set as follows:

parity to none, data bits to 8, and stop bits to 1 (N,8,1). Using ANSI or VT-100 terminal emulation, the NRC rulemaking subsystem can then be accessed by 13 l

selecting the " Rules Menu" option from the "NRC Main Menu." Users will find the "FedWorld Online User's Guides" particularly helpful. Many NRC subsystems and data bases also have a " Help /Information Center" option that is tailored.

to the particular subsystem.

The NRC subsystem on FedWorld can also be accessed by a direct dial  ;

phone number for the main FedWorld BBS, (703) 321-3339, or by using Telnet via Internet: fedworld. gov. If using (703) 321-3339 to contact FedWorld, the NRC subsystem will be accessed from the main FedWorld menu by selecting the

" Regulatory, Government Administration and State Systems," then selecting i l

" Regulatory Information Mall ." At that point, a menu will be displayed that has an option "U.S. Nuclear Regulatory Commission" that will take you to the NRC Online main menu. The NRC Online area also can be accessed directly by typing "/go nrc" at a FedWorld command line. If you access NRC from FedWorld's main menu, you may return to FedWorld by selecting the " Return to FedWorld" option from the NRC Online Main Menu. However, if you access NRC at FedWorld by using NRC's toll-free number, you will have full access to all NRC systems, but you will not have access to the main FedWorld system.

If you contact FedWorld using Telnet, you will see the NRC area and menus, including the Rules Menu. Although you will be able to download documents and leave messages, you will not be able to write comments or upload files (comments). If you contact FedWorld using FTP, all files can be accessed and downloaded but uploads are not allowed; all you will see is a i l

list of files without descriptions (normal Gopher look). An index file listing all files within a subdirectory, with descriptions, is available.

There is a 15-minute time limit for FTP access.

I I4 I

l

l l'

I Although FedWorld also can be accessed through the World Wide Web, like i FTP, that mode only provides access for downloading files and does not display the NRC Rules Menu.

For more information on NRC bulletin boards call Mr. Arthur Davis, Systems Integration and Development Branch, NRC, Washington, DC 20555-0001, telephone (301) 415-5780; e-mail AXD30nrc. gov.

Procedural Background 1

The NRC considers this action noncontroversial and routine because it implements specific statutory requirements (Pub. L. 104-134). Therefore, the Commission is approving it without seeking public comments on proposed amendments. This action will become effective on (60 days after publication in the Federal Register]. However, if the NRC receives significant adverse comments by [30 days after publication in the F.eJ e Lral Reaister), the NRC will withdraw this action and address the significant adverse comments received in response to the revisions published in this Federal Register notice before a final rule becomes effective. The NRC will not initiate a second comment  !

period on this action.

Revision to NUREG-1600

" General Statement of Policy and Procedures for NRC Enforcement Actions" ,

1 Concurrently with this Direct Final Rule the Commission is publishing a document elsewhere in this issue of the Federal Reaister that amends NUREG-  ;

i 15 1

J

1600, " General Statement of Policy and Procedures for NRC Enforcement Action" which provides examples of violations in each of the four severity levels as guidance in determining the appropriate severity level for violations in the 4

areas of fuel cycle and gaseous diffusion plant operations. The amendment is to Supplement VI, " Fuel Cycle and Materials Operations," which provides  !

additional examples of violations that should be categorized at Severity Levels I, II, III, and IV. In addition, the Enforcement Policy is being amended to establish base civil penalties for GDPs. The policy recognizes that regulatory requirements have varying degrees of safety, safeguards, or 4

environmental significance. Therefore, the relative importance of each  !

violation, including both the technical significance and the regulatory significance, is evaluated as the first step in the enforcement process. In considering the significance of a violation, the staff considers the technical significance (i.e., actual and potential consequences) and regulatory significance.

l Environmental Impact: Categorical Exclusion l

The NRC has determined that this regulation is the type of action described as a categorical exclusion in 10 CFR 51.22(c)(1) and (3).

Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this direct final rule.

16

4

~

Paperwork Reduction Act Statement.'for Direct Final Rule 4

This direct final rule dc,es not contain a new or amended 'information

! collection requirement subject to the Paperwork Reduction Act of 1995 (44 i

j U.S.C. 3501 et seq.). Existing requirements were approved by the Office of' Management and Budget, approval numbers 3150-0020, -0021, -0009, -0039.

t

! Public Protection Notification 1

I The NRC may not conduct or sponsor, and a person is not required to respond to,- a collection of information unless it displays a currently valid OMB control number.

Regulatory Analysis Changes to 10 CFR Parts 2, 40, 70, and 76 must be made to bring these regulations into conformance with the Act as amended.by the "USEC Privatization Act" (Public Law 104-134). The chief benefit to the public, industry, and NRC will be derived from codification of NRC regulations to conform to the changes to the Act. Codification should result in a better understanding of the procedures and requirements for licensing and/or certification of enrichment facilities, and thereby facilitate the process for review of a license application for uranium enrichment facility, and possibly reduce the litigative risk that might result from not having the regulatory basis for health and safety review of the application codified by regulation.

.The principal cost will be the expenditure of NRC staff resources in codifying 17

the requirements. This constitutes the regulatory analysis for the direct

' final rule.

Regulatory Flexibility Certification In accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Commission certifies that this rulemaking will not have a significant economic impact on a substantial number of small entities because it only addres:es the Corporation or its successor. The Corporation does not fall within the scope of the definition of "small entities" set forth in 10 CFR 2.810 or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR Part 121.

Small Business Regulatory Enforcement Act In accordance with the Small Business Regulatory Enforcement Fairness Act of 1996, the NRC has determined that this action is not a." major rule" and i has verified this determination with the Office of Information and Regulatory l Affairs, Office of Management and Budget.

Backfit Analysis The NRC has determined that the backfit rules, 10 CFR 50.109 and 76.76,

, do not apply to this rule. Thus, a backfit analysis is not required for these amendments because they do not involve any provisions that would impose backfits as defined in 59 50.109(a)(1) and 76.76(a)(1).

l 18 l

1

List of Subjects 10 CFR Part 2 Administrative practice and procedure, Antitrust, Byproduct material, Classified information, Environmental protection, Nuclear materials, Nuclear power plants and reactors, Penalties, Sex discrimination, Source material, Special nuclear material, Waste treatment and disposal.

10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials transportation, Nuclear materials, Reporting and recordkeeping requirements, Source material, Uranium.

10 CFR Part 70 Criminal penalties, Hazardous materials transportation, Material control and accounting, Nuclear materials, Packaging and containers, Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material.

t 10 CFR Part 76 Certification, Criminal penalties, Radiation protection, Reporting and i

recordkeeping requirements, Security measures, Special nuclear material, Uranium enrichment by gaseous diffusion .

For the reasons set forth in the preamble and under the authority of the

Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, i

19

as amended; and'5 U.S.C. 552 and 553; the Commission is-adopting the following

' amendments to 10 CFR Parts.2, 40, 70, and 76.

PART 2 -- RULES OF PRACTICE FOR DOMESTIC LICENSING PROCEEDINGS AND i

ISSUANCE OF ORDERS L

4 e

j 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.

i i :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.

Section 2.101 also issued under secs. 53, 62, 63, 81, 103, 104, 105, 68 4

l Stat. 930, 932, 933, 935, 936, 937, 938, as amended'(42 U.S.C. 2073, 2092, 2093, 2111, 2133, 2134, 2135); sec. 114(f), Pub. L.97-425, 96 Stat. 2213, as amended (42 U.S.C. 10134(f)); src. 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, ,

1 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, I, o,182,186, 234, 68 Stat. 948-951, 955, 83 Stat. 444, as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349, as amended (42 U.S.C. 2201 (b),

(I), (o),' 2236, 2282); sec. 206, 88 Stat 1246 (42 U.S.C. 5846). Sections 2.600-2.606 also issued under sec.102, Pub. L.91-190, 83 Stat. 853, as amended (42 U.S.C. 4332). Sections 2.700a, 2.719 also issued under 5 U.S.C.

554. Sections 2.754, 2.760, 2.770, 2.780 also issued under 5 U.S.C. 557. ,

Section 2.764 and Table 1A of Appendix C also issued under secs. 135, 141, 20

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 4 ,

U.S.C. 552. Sections 2.800 and 2.808 also issued under 5 U.S.C. 553. Section l 2.809 also issued under 5 U.S.C. 553 and sec. 29, Pub. L.85-256, 71 Stat.

579, as amended (42 U.S.C. 2039). Subpart K also issued 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). Subpart L also issued under sec. 189, 68 Stat. 955 (42 U.S.C.

2239). Appendix A also issued under sec. 6, Pub. L. Pt.560, 84 Stat. 1473 (42 U.S.C. 2135). Appendix B also issued under sec. 10, Pa )

.99-240, 99 Stat.

1842 (42 U.S.C. 2021b et seq.).

2. In 5 2.200, paragraph (a) is revised to read as follows:

6 2.200 Scope of subpart.

(a) This subpart prescribes the procedures in cases initiated by the staff, or upon a request by any person, to impose requirements by order, or to modify, suspend, or revoke a license, or to take other action as may be proper, against any person subject to the jurisdiction of the Commission.

However, with regard to the holder of a Part 76 certificate of compliance or compliance plan, except for civil penalty procedures in this subpart, the applicable procedures are set forth in 5 76.70.

21

3. In f 2.205, paragraph (a) is revised to read as follows:

6 2.205 Civil penalties.

(a) Before instituting any proceeding to impose a civil penalty under section 234 of the Act, the Deputy Executive Director for Nuclear Materials Safety, Safeguards, and 0 rations Support, or the Director's designee, as appropriate, shall serve a written notice of violation upon the person charged. This notice may be included in a notice issued pursuant to f 2.201 or 9 76.70(d). The notice of violation shall specify the date or dates, facts, and the nature of the alleged act or omission with which the person is i 1

charged, and shall identify specifically the particular provision or provisions of the law, rule, regulation, license, permit, Part 76 certificate of compliance or compliance plan, or cease and desist order involved in the alleged violation and must state the amount of each proposed penalty. The notice of violation shall also advise the person charged that the civil penalty may be paid in the amount specified therein, or the proposed imposition of the civil penalty war be protested in its entirety or in part, by a written answer, either denying the violation or showing extenuating circumstances. The notice of violation shall advise the person charged that upon failure to pay a civil penalty subsequently determined by the Commission, if any, unless compromised, remitted, or mitigated, be collected by civil action, pursuant to section 234c of the Act.

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1 PART 40 -- DOMESTIC LICENSING 0F SOURCE MATERIAL

4. The authority citation for Part 40 is revised to read as follows: i AUTHORITY: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2), 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2014(e)(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 't246 (42 U.S.C. 5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.97-415, 96 Stat.

2067 (42 U.S.C. 2022); sec. 193, 104 Stat. 2835, as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243).

Section 40.7 also issued under Pub. L.95-601, sec.10, 92 Stat. 2951 (42 U.S.C. 5851). Section 40.31(g) also issued under sec. 122, 68 Stat. 939 i

(42 U.S.C. 2152). Section 40.46 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 40.71 also issued under sec. 187, 68 Stat, 955 (42 U.S.C. 2237).

i j 5. In 6 40.4, the term " Corporation" is added to rc. 3s follows:

6 40.4 Definitions.

• * * * *

• I i

i j Corporation means the United States Enrichment Corporation (USEC), or  !

its successor, a Corporation that is authorized by statute to lease the

gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, 23

from the Department of Energy, or any person authorized to operate one or both of the gaseous diffusion plants, or other facilities, pursuant to a plan for the privatization of USEC that is approved by the President.

6. A new f 40.38 is added to read as follows:

4 40.38 Ineliaibility of certain aoolicants.

1 A license may not be issued to the Corporation if the Commission '

)

determines that:

(a) The Corporation is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government; or (b) The issuance of such a license would be inimical to-(1) The common defense and security of the United States; or (2) The maintenance of a reliable and economical domestic source of enrichment services.

l PART 70 -- DOMESTIC LICENSING OF SPECIAL 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, 948, 953, 954, as l amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2201, 2232, 2233, 2282, 2297f); secs. 201, as amended, 202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846); sec. 193, 104 Stat. 2835 as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C.

2243).

24

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Sections 70.1 and 70.20a(b) also issued under secs. 135, 141, Pub. L.

l t

97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 70.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub. L.93-377, 88 Stat. 475 (42 U.S.C.

2077). Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138).

8. In f 70.1, A new paragraph (e) is added to read as follows:

6 70.1 Purpose.

(e) As provided in the Atomic Energy Act of 1954, as amended, the regulations in this part establish requirements, procedures, and criteria for the issuance of licenses to uranium enrichment facilities.

9. In S 70.4, the term " Corporation" is added to read as follows:

6 70.4 Definitions.

Corporation means the United States Enrichment Corporation (USEC), or its successor, a Corporation that is authorized by statute to lease the gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, from the Department of Energy, or any person authorized to operate one or both 25

l of the gaseous diffusion plants, or other facilities, pursuant to a plan for the privatization of USEC that is approved by the President.

• * * *

• I

10. A new f 70.40 is added to read as follows:

6 70.40 Ineliaibility of certain aoolicanti.

A license may not be issued to the Corporation if the Commission determines that:

(a) The Corporation is owned, controlled, or dominated by an alien, a e

foreign corporation, or a foreign government; or (b) The issuance of such a license would be inimical to-(1) The common defense and security of the United States; or 1

(2) The maintenance of a reliable and economical domestic source of enrichment services.

PART 76 -- CERTIFICATION OF GASE0US DIFFUSION PLANTS i

11. The authority citation for Part 76 is revised to read as follows: l AUTHORITY: Secs. 161, 68 Stat. 948, as amended, secs. 1312, 1701, as, amended, 106 Stat. 2932, 2951, 2952, 2953, 110 Stat. 1321-349, (42 U.S.C.

2201, 2297b-11, 2297f); secs. 201, as amended, 204, 206, 88 Stat. 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846); sec. 234(a), 83 Stat. 444, as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243(a)).

Sec. 76.7 also issued under Pub. L.95-601, sec.10, 92 Stat. 2951 (42 l U.S.C. 5851). Sec. 76.22 is also issued under sec.193(f), as amended,104 26 l

. . . . - - - _-. .= . .-

Stat. 2835, as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C.

- 2243(f)). Sec. 76.35(j) also issued under sec.122, 68 Stat. 939 (42 U.S.C.

2152).

12. -In 5 76.4, the term " Corporation" is amended to read as follows and the term " Uranium enrichment plant" is removed:

6 76.4 Definitions.

Corporation means the United States Enrichment Corporation (USEC), or 4

its successor, a Corporation that is authorized by statute to lease the gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, from the Department of Energy, or any person authorized to operate one or both 4

of the gaseous diffusion plants, or other facilities, pursuant to a plan for the privatization of USEC that is approved by the President.

4 4

27

1 i

l

13. In f 76.10, paragraph (b) is revised to read as follows:  !

4 76.10 Deliberate misconduct.

, (b) A person who violates paragraph (a)(1) or (a)(2) of this section may I be subject to enforcement action in accordance with the procedures in 10 CFR part 2, subpart B.

I

14. In f 76.21, paragraph (b) is revised to read as follows:  !

1 6 76.21 Certificate reouired. l (b) For the purposes of 95 30.41, 40.51, and 70.42 of this chapter, the Corporation shall be authorized to receive, and licensees shall he authorized l to transfer to the Corporation, byproduct material, source material, or  ;

spe;ial nuclear mater..i to the extent permitted under the certificate of compliance issued, and/or the compliance plan approved, pursuant to this part. ,

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15. A new f 76.22 is added to read as follows:

6 76.22 Ineliaibility of certain applicants.

A certificate of compliance may not be issued to the Corporation if the Commission determines that:

(a) The Corporation is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government; or 28

(b) The issuance of such a certificate of compliance would be inimical

! to-(1) The common defense and security of the United States; or (2) The maintenance of a reliable and economical domestic source of enrichment services.

16. Section 76.31 is revised to read as follows:

6 76.31 Periodic aoolication recuirement.

The Corporation shall periodically apply to the Commission for a certificate of compliance, in accordance with 6 76.36, on or before April 15 of the year specified in an existing certificate of compliance as determined by the Commission, but not less frequently than every 5 years.

17. In 6 76.35, paragraph (n) is revised to read as follows:

4 76.35 Contents of initial aoolication. l l

(n) A description of the funding program to be established to ensure i

that funds will be set aside and available for those aspects of the ultimate i disposal of waste and depleted uranium, decontamination and decommissioning, relating to the gateous diffusion plants leased to the Corporation by the Department of Energy, which are the financial responsibility of the Corporation. The Corporation shall establish financial surety arrangements to ensure that sufficient funds will be ava1lable for the ultimate disposal of waste and depleted uranium, and decontamination and decommissioning activities which are the financial responsibility of the Corporation. The funding mechanism, such as prepayment, surety, insurance, or external sinking fund, 29 s

(

1 must ensure availability of funds for any activities which are required to be i

completed both before or after the return of the gaseous diffusion facilities to the Department of Energy in accordance with the lease between the Department and the Corporation. The funding program must contain a basis for cost estimates used to establish funding levels and must contain means of adjusting cost estimates and associated funding levels over the duration of

the lease. The fund'ing program need not address funding for those aspects of decontamination and decommissioning of the gaseous diffusion plants assigned to the Department of Energy under the Atomic Energy Act of 1954, as amended.

The Corporation should address the adequacy of the financing mechanism <

l selected in its periodic application for certification.  ;

4

18. In 9 76.36, the section heading and paragraph (a) are revised to read as follows:

6 76.36 Renewals.

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(a) After issuance by the Commission of the initial certificate of '

j compliance and/or an approved compliance plan, the Corporation shall file ,

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periodical applications for renewal, as required by 6 76.31. ]

\

19. Section 76.43 is revised to read as follows:

6 76.43 Date for decision.

The Director will render a decision on an application within 6 months of the receipt of the application unless the Director alters the date for decision and publishes notice of the new date in the Federal Reaister.

30

20. In f 76.45, paragraph (a) is revised to read as follows:

1_76.45 Aanlication for amendment of certificate.

(a) Contents of amendment anolication. In addition to the application for certification submitted pursuant to 6 76.31, the Corporation may at any time apply for amendment of the certificate to cover proposed new or modified activities. The amendment application should contain sufficient inforn.ation for the Director to make findings of compliance or acceptability for the proposed activities as required for the original certificate.

21. Section 76.55 is revised to read as follows:

J A 76.55 Timely renewal.

In any case in which the Corporation has timely filed a sufficient application for a certificate of compliance, the existing certificate of compliance or approved compliance plan does not expire until the application for a certificate of compliance has been finally determined by the NRC. For purposes of this rule, a sufficient application is one that addresses all elements of f 76.36.

22. In f 76.60, paragraphs (c)(1), and (d)(1), are removed and reserved

and paragraph (i) is revised to read as follows

j 6 76.60 Reaulatory reouirements which acolv.

(c) 31

4 (1) (Reserved]

(d)

(1) (Reserved]

1

(i) The Corporation shall comply with the applicable provisions of I' '10 CFR part 95, " Security Facility Approval and Safeguarding of National Security Information and Restricted Data," as specified in subpart E to this part.

23. In 6 76.66, paragraph (c) is revised to read as follows:

) 76.66 Expiration and termination of certificates.

(c) If the Corporation does not submit a renewal application under 6 76.36, the Corporation shall, on or before the expiration date specified in the existing certificate, terminate operation of the gaseous diffusion plants.

24. In f 76.68, paragraph (b) is revised to read as follows:

6 76.68 Plant chanaes.

32

,(b) To ensure that the approved application remains current with respect to the actual site description and that the plant's programs, plans, policies, and operations are in place, the Corporation shall submit revised pages to the approved applicaticii and safety analysis report, marked and dated to indicate each change. The Corporation shall evaluate any as-found conditions that do not agree with the plant's programs, plans, policies, and operations in accordance with paragraph (a) of this section. These revisions must be submitted before April 15 of each calendar year, or at a shorter interval as may be specified in the certificate. If a renewal application for a certificate is filed in accordance with 6 76.36 of this part, the revisions shall be incorporated into the application.

25. In f 76.72, paragraph (d) is revised to read as follows:

6 76.72 Miscellaneous procedural matters.

(d) The procedures set forth in 10 CFR 2.205, and in 10 CFR Part 2, subpart G, will be applied in connection with NRC action to impose a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended, or Section 206 of the Energy Reorganization Act of 1974 and the implementing regulations in 10 CFR Part 21 (Reporting of Defects and Noncompliance), as authorized by Section 1312(e) of the Atomic Energy Act of 1954, as amended; 33

4

26. In f 76.76, paragraph (a)(2) is revised to read as follows:

6 76.76 Backfittina.

(a)

(2) Except as provided in paragraph (a)(4) of this section, the Commission shall require a systematic and documented analysis pursuant to paragraph (b) of this section for backfits which it seeks to impose.

27. Section 76.111 is revised to read as follows:

6 76.111 Physical security. material control and accountina and orotection of certain information.

Nuclear Regulatory Commission regulations that will be used for certification of the Corporation' for physical security and material control and accounting are contained in Title 10 of the Code of Federal Regulations as described in this subpart. The' regulations referenced in this subpart contain requirements for physical secu ' y and material control and accounting for formula quantities of strategic specia uclear material (Category I), special nuclear material of moderate strategic signifi ce (Category II), and special nuclear material of low strategic significance (Category III), and for protection of Restricted Data, National Security Information,. Safeguards Information, and information designated by the U.S. Department of Energy as i Unclassified Controlled Nuclear Information.

'For the purpose of this subpart, the terms " licensee" or " license" used in parts 70, 73, and 74 of this chapter, mean, respectively, the Corporation, or the certificate of compliance or approved compliance plan.

34

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28. In f 76.113, paragraph (c) is revised to read as follows:

6 76.113 Formula cuantities of strateaic special nuclear material-Cateaory I.

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1 (c) The requirements for the protection of Safeguards Information pertaining to formula quantity of strategic special nuclear material 4

(Category I) are contained in f 73.21. Information designated by the U.S.

Department of Energy _as Unclassified Controlled Nuclear Information must be protected at a level equivalent to that accorded Safeguards Information.

29. Section 76.131 is revised to read as follows:

6 76.131 Violationi.

(a) The Commission may obtain an injunction or other court order to prevent a violation of the provisions of:

(1) The Atomic Energy Act of 1954, as amended; (2) Title II of the Energy Reorganization Act of 1974, as amended; (3) A regulation or order issued pursuant to those Acts.

J (b) The Commission may obtain a court order for the payment of a civil penalty imposed under Section 234 of the Atomic Energy Act of 1954, as amended, or under Section 1312(e) of the Atomic Energy Act of 1954, as amended, and Section 206 of the Energy Reorganization Act of 1974, as amended, for violations of:

(1) Sections 53, 57, 62, 63, 81, 82, 101, 103, 104, 107, 109, or 1701 of the Atomic Energy Act of 1954, as amended; 35

d (2) Section 206 of the Energy Reorganization Act; (3) Any rule, regulation, or order issued pursuant to the sections specified in paragraph (b)(1) of this section; (4) Any term, condition, or limitation of any certificate of compliance or approved compliance plan issued under the sections specified in paragraph (b)(1) of this section.

Dated at Rockville, Maryland, this day of , 1996.

For the Nuclear Regulatory Commission.

John C. Hoyle, Secretary of the Commission.

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i ENCLOSURE 1-B PROPOSED RULE 1

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[7590-01-P]

NUCLEAR REGULATORY COMMISSION 10 CFR Parts 2, 40, 70, and 76 RIN: 3150-AF56 USEC Privatization Act AGENCY: Nuclear Regulatory Commission.

< ACTION: Proposed rule.

3

SUMMARY

The Nuclear Regulatory Commission (NRC) is proposing to amend its regulations concerning the licensing of uranium enrichment facilities to

] conform to changes made to the Atomic Energy Act of 1954, as amended (the 4

Act), by the USEC Privatization Act legislation. Although the principal

effect of this legislation is to direct the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity, this legislation also amended the Act with respect to NRC certification of gaseous diffusion plants leased by USEC and the licensing l of atomic vapor laser isotope separation (AVLIS) technology. The Corporation is responsible for the operation of the two gaseous diffusion plants and the j development of the AVLIS technology.

l The legislation requires that AVLIS uranium enrichment facilities be i J

licensed subject to the provisions of the Act pertaining to source material and special nuclear material rather than under the provisions pertaining to a production facility; provides for issuing civil penalties to USEC or its

. ruccessor for failure to comply with regulatory requirements governing the operation of gaseous diffusion plants; prohibits issuance of a license / certificate to the Corporation or its successor if it is owned,

controlled, or dominated by an alien, a foreign corporation, or a foreign government or its issuance would be inimical to the common defense and security of the United States or to the maintenance of a reliable and economical domestic source of enrichment services; and eliminates the requirement that the Commission certify that USEC or its successor is in compliance with NRC regulations each year. The Commission can determine how frequently USEC or its successor must submit a recertification application to the NRC, provided that the NRC recertify USEC's or its successor's compliance with its regulations not less frequently than every five years. The proposed changes to the regulations bring 10 CFR Parts 2, 40, 70, and 76 into conformance with the USEC Privatization Act.

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l DATE: Comments on the proposed rule must be received on or before [ insert i date 30 days after publication in the Federal Register).

ADDRESSES: Mail written comments to: The Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. ATTN: Docketing and Service Branch.

l Hand deliver comments to: 11555 Rockville Pike, Rockville, MD, between  !

7:30 am and 4:15 pm on Federal workdays.

For information on submitting comments electronically, see the l

discussion under Electric Assess in the Supplementary Information Section. l 4

Copies of comments received may be examined or copied for a fee, at the NRC Public Document Room, 2120 L Street NW. (Lower Level), Washington, DC.

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FOR FURTHER INFORMATION CONTACT: Mr. C. W. Nilsen, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-6209.  ;

i SUPPLEMENTARY INFORMATION:

For additional information see the Direct Final Rule published in the rules section of this Federal Register.

Procedural Background The NRC considers this action noncontroversial and routine because it implements specific statutory requirements (Public Law 104-134). Therefore, we are publishing this proposed rule concurrently as a Direct Final Rule in the final rule section of this federal Reaister. The Direct Final Rule will become effective on [ insert 60 days after publication in the Federal Register).

However, if the NRC receives significant adverse comments by (30 days after publication in the Federal Reaister), the NRC will withdraw the Direct l Final Rule and address the significant adverse comments received in response to the revisions. Any significant adverse comments will be addressed in a  !

subsequent final rule on this proposal. Absent significant modifications to  ;

the proposed revisions requiring republication, the NRC will not initiate a second comment period on this action.

3

Electronic Access

, Comments may be submitted electronically, in either ASCII text or Wordperfect format (version 5.1 or later), by calling the NRC Electronic Bulletin Bo~ard (C35) on FedWorld. The Bulletin Board may be accessed using a personal computer, a modem, and one of the commonly available communications software packages, or directly'via Internet. Background-documents on the rulemaking are also available, as practical, for downloading and viewing on the Bulletin Board.

If using a personal computer and modem, the NRC rulemaking subsystem on FedWorld can be accessed directly by dialing the toll free number (800) 303-9672. Communication software parameters should be set as follows: parity to none, data bits to 8, and stop bits to 1 (N,8,1). Using ANSI or VT-100 l terminal emulation, the NRC rulemaking subsystem can then be accessed by selecting the " Rules Menu" option from the "NRC Main Menu." Users will find the "FedWorld Online User's Guides" particularly helpful. Many NRC subsystems and data bases also have a " Help /Information Center" option that is tailored to the particular subsystem.

The NRC subsystem on FedWorld can also be accessed by a direct dial phone number for the main FedWorld BBS, (703) 321-3339, or by using Telnet via Internet: fedworld. gov. If using (703) 321-3339 to contact FedWorld, the NRC subsystem will be accessed from the main FedWorld menu by selecting the ,

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" Regulatory, Government Administration and State Systems," then selecting

" Regulatory Information Mall." At that point, a menu will be displayed that I has an option "U.S. Nuclear Regulatory Commission" that will take you to the NRC Online main menu. The NRC Online area also can be accessed directly by I

4

typing "/go nrc" at a FedWorld command line. If you access NRC from FedWorld's main menu, you may return to FedWorld by selecting the " Return to FedWorld" option from the NRC Online Main Menu. However, if you access NRC at FedWorld by using NRC's toll-free number, you will have full access to all NRC systems, but you will not have access to the main FedWorld system.

If you contact FedWorld using Telnet, you will see the NRC area and

menus, including the Rules Menu. Although you will be able to download documents and leave messages, you will not be able to write comments or upload 4

files (comments). If you contact FedWorld using FTP, all files can be accessed and downloaded but uploads are not allowed; all you will see is a list of files without descriptions (normal Gopher look). An index file listing all files within a subdirectory, with descriptions, is available.

There is a 15-minute time limit for FTP access.

Although FedWorld also can be accessed through the World Wide Web, like FTP, that mode only provides access for downloading files and does not display the NRC Rules Menu.

For more information on NRC bulletin boards call Mr. Arthur Davis, Systems Integration and Development Branch, NRC, Washington, DC 20555-0001, telephone (301) 415-5780; e-mail AXD30nrc. gov.

List of Subjects 10 CFR Part 2 Administrative practice and procedure, Antitrust, Byproduct material, Classified information, Environmental protection, Nuclear materials, Nuclear j 5

power plants and reactors, Penalties, Sex discrimination, Source material, Special nuclear material, Waste treatment and disposal.

10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials transportation, Nuclear materials, Reporting and recordkeeping requirements, ,

Source material, Uranium.

I 10 CFR Part 70 Criminal penalties, Hazardous materials transportation, Material control and accounting, Nuclear materials, Packaging and containers, Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, l Security measures, Special nuclear material.

10 CFR Part 76 Certification, Criminal penalties, Radiation protection, Reporting and l recordkeeping requirements, Security measures, Special nuclear material, Uranium enrichment by gaseous diffusion .

For the reasons set forth 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 Commission is adopting the following amendments to 10 CFR Parts 2, 40, 70, and 76.

6

PART 2 -- RULES OF PRACTICE FOR DOMESTIC !.1 CENSING PROCEEDINGS AND ISSUANCE OF ORDERS

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.

Section 2.101 also issued under secs. 53, 62, 63, 81, 103,-104, 105, 68 Stat. 930, 932, 933, 935, 936, 937, 938, as amended (42 U.S.C. 2073, 2092, 2093, 2111, 2133, 2134, 2135); sec.114(f), Pub. L.97-425, 96 Stat. 2213, as amended (42 U.S.C. 10134(f)); 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, I, o, 182, 186, 234, 68 Stat. 948-951, 955, 83 Stat. 444, as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349, as amended (42 U.S.C. 2201 (b),

(I), (o), 2236, 2282); sec. 206, 88 Stat 1246 (42 U.S.C. 5846). Sections 2.600-2.606 also issued under sec. 102, Pub. L.91-190, 83 Stat. 853, as amended (42 U.S.C. 4332). Sections 2.700a, 2.719 also issued under 5 U.S.C.

554. Sections 2.754, 2.760, 2.770, 2.780 also issued under 5 U.S.C. 557.  ;

i Section 2.764 and Table 1A of Appendix C 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 inder 5 U.S.C. 553. Section 7

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2.809 also issued under 5 U.S.C. 553 and sec. 29, Pub. L.85-256, 71 Stat.

! 579, as amended (42 U.S.C. 2039). Subpart K also issued 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). Subpart L also issued under sec.189, 68 Stat. 955 (42 U.S.C.

j 2239). Appendix A also issued under sec. 6, Pub. L.91-560, 84 Stat. 1473 (42 l U.S.C. 2135). Appendix B also issued under sec. 10, Pub. L.99-240, 99 Stat. .i i'

j 1842 (42 U.S.C. 2021b et seq.).

2. In i 2.200, paragraph (a) is revised to read as follows:

1 2.200 Scope of subpart.

(a) This subpart prescribes the procedures in cases initiated by the staff, or upon a request by any person, to impose requirements by order, or to modify, suspend, or revoke a license, or to take other action as may be proper, against any person subject to the jurisdiction of the Commission.

However, with regard to the holder of a Part 76 certificate of compliance or compliance plan, except for civil penalty procedures in this subpart, the  !

applicable procedures are set forth in i 76.70.

3. In-5 2.205, paragraph (a) is revised to read as follows: _

5 2.205 Civil penalties.

(a) Before instituting any proceeding to impose a civil penalty under section 234 of the Act, the oeputy Executive Director for Nuclear Materials Safety, Safeguards, and Operations Support, or the Director's designee, as appropriate, shall serve a written notice of violation upon the person charged. This notice may be included in a notice issued pursuant to i 2.201 8

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or i 76.70(d). The notice of violation shall specify the date or dates, facts, and the nature of the alleged act or omission with which the person is charged, and shall identify specifically the particular provision or provisions of the law, rule, regulation, license, permit, Part 76 certificate of compliance or compliance plan, or cease and desist order involved in the alleged violation and must state the amount of each proposed penalty. The notice of violation shall also advise the person charged that the civil pnalty may be paid in the amount specified therein, or the proposed

) imposition of the civil penalty may be protested in its entirety or in part, by a written answer, either denying the violation or showing extenuating circumstances. The notice of violation shall advise the person charged that upon failure to pay a civil penalty subsequently determined by the Commission, if any, unless compromised, remitted, or mitigated, be collected by civil

action, pursuant to section 234c of the Act.

PART 40 -- DONESTIC LICENSING 0F SOURCE MATERIAL

4. The authority citation for Part 40'is revised to read as follows:

AUTHORITY: Secs. 62, 63, 64, 65, 81, 161, 132, 183, 186, 68 Stat. 932, 933, j 935, 948, 953, 954, 955, as amended, secs. 11e(2), 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 U.S.C.

2014(e)(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 4

5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.97-415, 96 Stat.

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l 2067 (42 U.S.C. 2022); sec. 193, 104 Stat. 2835, as amended by Pub. L. 104- j i

134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243). l Section 40.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951-(42 U.S.C. 5851). Section 40.31(g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C.'2152). Section 40.46 also issued under sec. 184, 68 Stat. 954, as i amended (42 U.S.C. 2234). Section 40.71 also issued under sec. 187, 68 Stat.

955 (42 U.S.C. 2237).

5. In 5 40.4, the term " Corporation" is added to r(ad as follows:

's 40.4 Definitions. .

1 Corporatfon means the United States Enrichment Corporation (USEC), or its successor, a Corporation that is authorized by statute to lease the gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, from the Department of Energy, or any person authorized to operate one or both of the gaseous diffusion plants, or other facilities, pursuant to a plan for the privatization of USEC that is approved by the President in accordance with Sections 1501 and 1502 of the Atomic Energy Act of 1954, as amended.

6. A new i 40.38 is added to read as follows:

1 40.38 Ineligibility of certain applicants.

A license may not be issued to the Corporation if the Commission ,

determines that:

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_ . _ _ - -_ _ _ _ _ _ _ _ _ - _ _ _ . _ _ _ __ _ _ _ = -. ._ _ _ . _ . _ _.

(a)' The Corporation is owned, controlled,.or dominated by an alien. a ,

foreign corporation, or a foreign government; or

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(b) The issuance of such a licen::e would be inimical to-3 (1) The common defen e and security of the United States; or 1

(2) The maintenance of a reliable and economical domestic source of enrichment services.

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PART 70 -- DOMESTIC LICENSING 0F SPECIAL NUCLEAR MATERIAL L

i j 7. The authority citation for Part 70 is revised to read as follows:

AUTHORITY

Secs, 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, 954, as cended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2201, 2232, 5

2233, 2282, 2297f); secs. 201, as amended,'202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846); sec. 193, 104 Stat. 2835 as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C.

2243).

Sections 70.1 and 70.20a(b) also issued under secs. 135, 141, Pub. L.97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 70.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec.122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub. L.93-377, 88 Stat. 475 (42 U.S.C.

2077). Sections 70.36 and 70.44 also issued under sec.184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under sec.108, 68 Stat. 939, as amended (42 U.S.C. 2138).

11

8. 'In i 70.1, A new paragraph (e) is added to read as follows

5 70.1 Purpose.

(e) As provided in the Atomic Energy Act of 1954, as amended, the regulations in this part establish requirements, procedures, and criteria for the issuance of licenses to uranium enrichment facilities.

9. In 5 70.4, the term " Corporation" is added to read as follows:

l'70.4 Definitions.

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Corporation means the United States Enrichment Corporation (USEC), or its successor, a Corporation that is authorized by statute to lease the gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, from the Department of Energy, or any person authorized to operate one or both of' the gaseous diffusion plants, or other facilities, pursuant to a plan for the privatization of USEC that is approved by the President in accordance with Sections 1501 and 1502 of the Atomic Energy Act of 1954, as amended.

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10. A new $ 70.40 is added to read as follows:

5 70.40 IneliaibilitY of certain applicants, l

A license may not be issued to the Corporation if the Commission i determines that:

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(a) The Corporation is owned, controlled, or dominated by an alien, a 3 i

foreign corporation, or a foreign government; or (b) The issuance of such a license would be inimical to- {

(1) The common defense and security of the United States; or (2) The maintenance of a reliable and economical domestic source of enrichment services.

PART 76 -- CERTIFICATION OF GASE0US DIFFUSION PLANTS

11. The authority citation for Part 76 is revised to read as follows:

AUTHORITY: Secs. 161, 68 Stat. 948, as amended, secs. 1312, 1701, as.

amended, 106 Stat. 2932, 2951, 2952, 2953, 110 Stat. 1321-349, (42 U.S.C.

2201, 2297b-11, 2297f); secs. 201, as amended, 204, 206, 88 Stat. 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846); sec. 234(a), 83 Stat. 444, as amended

! by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243(a)).

Sec. 76.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Sec. 76.22 is also issued under sec. 193(f), as amended, 104 l Stat. 2835, as amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C.

2243(f)). Sec. 76.35(j) also issued under sec.122, 68 Stat. 939 (42 U.S.C.

2152).

12. In i 76.4, the term " Corporation" is amended to read as follows and the term " Uranium enrichment plant" is removed:

I76.4 Definitions.

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• Corporation means the United States Enrichment Corporation (USEC), or its successor, a Corporation that is authortied by statute to lease the l gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, from the Department of Energy, or any person authorized to operate one or both of the gaseous diffusion plants, or other facilities, pursuant to a plan for

, the privatization of USEC that is approved by the President in accordance with i

! Sections 1501 and 1502 of the Atomic Energy Act of 1954, as amended.

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13. In i 76.10, paragraph (b) is revised to read as follows:

! 5 76.10 Deliberate misconduct.

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• i (b) A person who violates paragraph (a)(1) or (a)(2) of this section may be subject to enforcement action in accordance with the procedures in 10 CFR Part 2, subpart B.

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14. In 5 76.21, paragraph (b) is revised to read as follows:

5 76.21 Certificate reauired.

(b) For the purposes of 15 30.41, 40.51, and 70.42 of this chapter, the Corporation shall be authorized to receive, and licensees shall be authorized to transfer to the Corporation, byproduct material, source material, or 14

special nuclear material to the extent permitted under the certificate of compliance issued, and/or the compliance plan approved, pursuant to this part.

15. A new 5 76.22 is added to read as follows:

5 76.22 Jneliaibility of certain applicants.

A certificate of compliance may not be issued to the Corporation if the Commission determines that:

(a) The Corporation is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government; or (b) The issuance of such a certificate of compliance would be inimical to-(1) The common defense and security of the United States; or (2) The maintenance of a reliable and economical domestic source of enrichment services.

16. Section 76.31 is revised to read as follows:

5 76.31 Periodic application reauirement.

The Corporation shall periodically apply to the Commission for a certificate of compliance, in accordance with 5 76.36, on or before April 15 <

of the year specified in an existing certificate of compliance as determined by the Commission, but not less frequently than every 5 years.

17. In 5 76.35, paragraph (n) is revised to read as follows:

5 76.35 Contents of initial application.

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l (n) A description of the funding program to be established to ensure that funds will be set aside and available for those aspects of the ultimate i 1

disposal of waste and depleted uranium, decontamination and decommissioning, relating to the gaseous diffusion plants leased to the Corporation by the Department 'of Energy, which are the financial responsibility of the Corporation. The Corporation shall establish financial surety arrangements to l ensure that sufficient funds will be available for the ultimate disposal of waste and depleted uranium, and decontamination and decommissioning activities which are the financial responsibility of the Corporation. The funding mechanism, such as prepayment, surety, insurance, or external sinking fund, must ensure availability of funds for any activities which are required to be j completed both before or after the return of the gaseous diffusion facilities to the Department of Energy in accordance with the lease between the Department and the Corporation. The funding program must contain a basis for cost estimates used to establish funding levels and must contain means of adjusting cost estimates and associated funding levels over the duration of the lease. The funding program need not address funding for those aspects of decontamination and decommissioning of the gaseous diffusion plants assigned 3

to the Department of Energy under the Atomic Energy Act of 1954, as amended. l I

The Corporation should address the adequacy of the financing mechanism selected in its periodic application for certification.

18. In 5 76.36, the section heading and paragraph (a) are revised to read as follows:

I 76.36 Renewals.

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(a) After issuance by the Commission of the initial certificate of compliance and/or an approved compliance plan, the Corporation shall file periodical applications for renewal, as required by 5 76.31.

19. Section 76.43 is revised to read as follows:

5 76.43 Date for decision.

The Director will render a decision on an application within 6 months of the receipt of the application unless the Director alters the date for decision and publishes notice of the new date in the Federal Register.

20. In i 76.45, paragraph (a) is revised to read as follows:

5 76.45 Application for amendment of certificate.

(a) Contents of amendment application. In addition to the application for certification submitted pursuant to 5 76.31, the Corporation may at any time apply for amendment of the certificate to cover proposed new or modified activities. The amendment application should contain sufficient information for the Director to make findings of compliance or acceptability i

for the proposed activities as required for the original certificate.

! 21. Section 76.55 is revised to read as follows:

_5 76.55 Timely renewal .

, In any case in which the Corporation has timely filed a sufficient application for a certificate of compliance, the existing certificate of compliance or approved compliance plan does not expire until the application 17

d for a certificate of compliance has been finally determined by the NRC. For  ;

purposes of this rule, a sufficient application is one that addresses all elements of 5 76.36.

$ 22. ~In i 76.60, paragraphs (c)(1), and (d)(1), are removed and reserved i

and paragraph (1) is revised to read as follows:

I 76.60 Reaulatory reauirements which aDDlY. l l

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t (c)

(1) (Reserved]

t (d)

(1) [ Reserved) ,

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(1) The Corporation shall comply with the applicable provisions of ,

10 CFR part 95, " Security Facility Approval and Safeguarding of National Security Information and Restricted Data," as specified in subpart E to this a part.

i I 23. In 5 76.66, paragraph (c) is revised to read as follows:

5 76.66 ExDiration and termination of certificates.

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(c) If the Corporation does not submit a renewal application-under 1

5 76.36, the Corporation shall, on or before the expiration date specified in the existin~g certificate, terminate operation of the gaseous diffusion plants.

24. In i 76.68, paragraph (b) is revised to read as follows:

J 5 76.68 Plant changes.

i (b) To ensure that the approved application remains current with respect to the actual site description and that the plant's programs, plans,

. policies, and operations are in place, the Corporation shall submit revised

) pages to the approved application and safety analysis report, marked and dated l

to indicate each change. The Corporation shall evaluate any as-found conditions that do not agree with the plant's programs, plans, policies, and f

operations in accordance with paragraph (a) of this section. These revisions must be submitted before April 15 of each calendar year, or at a shorter

interval as may be specified in the certificate. If a renewal application for a certificate is filed in accordance with 5 76.36 of this part, the revisions shall be incorporated into the application.

i

25. In 5 76.72, paragraph (d) is revised to read as follows:

5 76.72 Miscellaneous procedural matters.

19

(d) The procedures set forth in 10 CFR 2.205, and in 10 CFR Part 2, subpart G, will be applied in connection with NRC action to impose a civil penalty pursuant to Section 234 of the Atomic Energy Act of 1954, as amended, or Section 206 of the Energy Reorganization Act of 1974 and the implementing regulations in 10 CFR Part 23 (Reporting of Defects and Noncompliance), as authorized by Section 1312(e) of the Atomic Energy Act of 1954, as amended;

26. In i 76.76, paragraph (a)(2) is revised to read as follows:

5 76.76 Backfitting.

(a) l 1

(2) Except as provided in paragraph (a)(4) of this section, the Commission shall require a systematic and documented analysis pursuant to paragraph (b) of this section for backfits which it seeks to iapose.

l l

l

27. Section 76.111 is revised to read as follows:

5 76.111 Physical security, material control and accounting, and protection of certain information, i Nuclear Regulatory Commission regulations that will be used for certification of the Corporation

• for physical security and material control '

and accounting are contained in Title 10 of the Code of Federal Regulations as

'For the purpose of this subpart, the terms " licensee" or " license" used in parts 70, 73, and 74 of this chapter, mean, respectively, the Corporation, or the certificate of compliance or approved compliance plan.

20

i.

described in this subpart. The regulations referenced in this subpart contain requirements for physical security and material control and accounting for formula quantities of strategic special nuclear material (Category I), special nuclear material of moderate strategic significance (Category II), and special 1

nuclear material of low strategic significance (Category III), and for t

protection of Restricted Data, National Security Informatior,, Safeguards Information, and information designated by the U.S. Department of Energy as Unclassified Controlled Nuclear Information.

4 i

28. In 5 76.113, paragraph (c) is revised to read as follows:

5 76.113 Formula auantities of strategic special nuclear material-Category I.

(c) The requirements for the protection of Safeguards Information pertaining to formula quantity of strategic special nuclear material (Category I) are contained in i 73.21. Information designated by the U.S.

Department of Energy as Unclassified Controlled Nuclear Information must be protected at a level equivalent to that accorded Safeguards Information.

i

29. Section 76.131 is revised to read as follows:

5 76.131 Violations.

(a) The Commission may obtain an injunction or other court order to prevent a violation of the provisions of:

(1) The Atomic Energy Act of 1954, as amended; (2) Title II of the Energy Reorganization Act of 1974, as amended; 21

- _ _= _ - . _--- - ._

l l (3) A regulation or order issued pursuant to those Acts.

(b) The Commission may obtain a court order for the payment of a civil l penalty _ imposed under Section 234 of the Atomic Energy Act of 1954, as

) amended, or under Section' 1312(e) of the Atomic Energy Act of 1954, as l

?

amended, and Section 206 of the Energy Reorganization Act of 1974, as amended, for violations of:

i (1) Sections 53, 57, 62, 63, 81, 82, 101, 103, 104, 107, 109, or 1701 i ,

l of the Atomic Energy Act of 1954, as amended; 4 (2) Section 206 of the Energy Reorganization Act; (3) Any rule, regulation, or order issued pursuant to the sections  ;

! specified in paragraph (b)(1) of this section; 1

l (4) Any term, condition, or limitation of any certificate of compliance l or approved compliance plan issued under the sections specified in paragraph l

! (b)(1) of this section.

l i Dated at Rockville, Maryland, this day of , 1996.

For the Nuclear Regulatory Commission.

1 John C. Hoyle, 1 Secretary of the Commission.

i J

22

l l

l i

l I

I e

i l

i 1

i

ENCLOSURE 1-C LINE IN/0UT ATTACHED a

• i

[7590-01-P]

NUCLEAR REGULATORY COMMISSION 10 CFR Parts 2, 40, 70, and 76 RIN: 3150-AF56 USEC Privatization Act LINE IN I LINE OUT List of Subjects i

10 CFR Part 2 Administrative practice and procedure, Antitrust, Byproduct material, i Classified information, Environmental protection, Nuclear materials, Nuclear power plants and reactors, Penalties, Sex discrimination, Source material,

, Special nuclear material, Waste treatment and disposal.

! 10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials transportation, Nuclear materials, Reporting and recordkeeping requirements, Source material, Uranium.

10 CFR Part 70 Criminal penalties, Hazardous materials transportation, Material control and accounting, Nuclear materials, Packaging and containers, Radiation protection, Reporting and recordkeeping requirements, Scientific equipment, Security measures, Special nuclear material.

l 4

1 4

i l

10 CFR Part 76 Certification, Criminal penalties, Radiation protection, Reporting and record keeping requirements, Security measures, Special nuclear material, Uranium enrichmen' gaseous diffusion.

For the reasons set forth 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 Commission is adopting the following amendments to 10 CFR Parts 2, 40, 70, and 76.

PART 2 -- RULES OF PRACTICE FOR DOMESTIC LICENSING PROCEEDINGS AND ISSUANCE OF ORDERS

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.

Section 2.101 also issued under secs. 53, 62, 63, 81, 103, 104, 105, 68 Stat. 930, 932, 933, 935, 936, 937, 938, as amended (42 U.S.C. 2073, 2092, 2093, 2111, 2133, 2134, 2135); sec. 114(f), Pub. L.97-425, 96 Stat. 2213, as amended (42 U.S.C. 10134(f)); 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.

2

. I 161b,I,o,182,186,234,68 Stat.948-951,955,83 Stat.444,as%meWdedlby PugMi104sl34@l0] tit'j]321M3213349 Bas amended (42 U.S.C. 2201 (b),

(I), (o), 2236, 2282); sec. 206, 88 Stat 1246 (42 U.S.C. 5846). Sections 2.600-2.606 also issued under sec. 102, Pub. L.91-190, 83 Stat. 853, as amended (42 U.S.C. 4332). Sections 2.700a, 2.719 also issued under 5 U.S.C.

554. Sections 2.754, 2.760, 2.770, 2.780 also issued under 5 U.S.C. 557.

Section 2.764 and Table 1A of Appendix C 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 and sec. 29, Pub. L.85-256, 71 Stat.

579, as amended (42 U.S.C. 2039). Subpart K also issued 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). Subpart L also issued under sec.189, 68 Stat. 955 (42 U.S.C.

2239). 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, Pub. L.99-240, 99 Stat.

1842 (42 U.S.C. 2021b et seq.).

j 2. In i 2.200, paragraph (a) is revised to read as follows:

5 2.200 Scope of subpart.

(a) This subpart prescribes the procedures in cases initiated by the staff, or upon a request by any person, to impose requirements by order, or to modify, suspend, or revoke a license, or to take other action as may be

proper, against any person subject to the jurisdiction of the Commission.

HosieveQwi th ihg a fdit o' the' hol deE o f" E Pa rtR6Tcerti fi Ea tsy f[conipl i ance M 3

NINsIlN255M5fNE!!Id5NNE[8fNtMNI$1518 NIM 5IEE MMEReadiiMi!MMIfRtGEUMPI

3. In i 2.205, paragraph (a)' is revised to read as follows:

1 2.205 Civil penalties.

(a) Before instituting any proceeding to impose a civil penalty under section 234 of the Act, the Deputy Executive Director for Nuclear Materials Safety, Safeguards, and Operations Support, or the Director's designee, as appropriate, shall serve a written notice of violation upon the person charged. This notice may be included in a notice issued pursuant to 5 2.201 5pjji?6.70(d). The notice of violation shall specify the date or dates, facts, and the nature of the alleged act or omission with which the person is charged, and shall identify specifically the particular provision or provisions'of the law, rule, regulation, license, permit,{PjptMggsptyfjjsti sfdompliance" owc56 s]ijikijlk@ or cease and desist order involved in the alleged violation and must state the amount of each proposed penalty. The notice of violation shall also advise the person charged that the civil penalty may be paid in the amount specified therein, or the proposed imposition of the civil penalty may be protested in its entirety or in part, by a written answer, either denying the violation or showing extenuating circumstances. The notice of violation shall advise the person charged that upon failure to pay a civil penalty subsequently' determined by the Commission, if any, unless compromised, remitted, or r.itigeted, be collected by civil action, pursuant to Section 234c of the Act.

4

. . _ _ . _ _ _. . . _ - _ . - . _ _ _ . _ _ _ . _ _ . _ _ _ . _ _ . . . _ _ . ~ . _ . . _ _ . _ _ . . . . _

.:I 1

^

d PART 40 -- DOMESTIC LICENSING 0F SOURCE MATERIAL  ;

4. The authority citation for Part 40 is revised to read as follows:

l AUTHORITY: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 Stat. 932, l 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2), 83, 84, Pub. L.95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 83 Stat. 444, as amended (42 i

U.S.C. 2014(e)(2), 2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233,  ;

i i 2236, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688 (42 U.S.C. 2021); sees.

t l

201, as amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.

i i 5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.97-415, 96 f 2

i Stat. 2067 (42 U.S.C. 2022); sec.193,104 Stat. 2835, Efamen_d_edl>by.l.Ps_b??_H . - . ~ m ,

10!jl3ffs{S(({H13((Tjl321333$f(42 U.S.C. 2243).

I i Section 40.7 also issued under Pub. L. 95-601, sec.10, 92 Stat. 2951 ,

                                                                                                                                            'l (42 U.S.C. 5851). Section 40.31(g) also issued under sec.122, 68 Stat. 939

[ (42 U.S.C. 2152). Section 40.46 also issued under sec.184, 68 Stat. 954, as > 1 amended (42 U.S.C. 2234). Section 40.71 also issued under sec.187, 68 Stat. [ 955 (42 U.S.C. 2237). l l-l } 5. In i 40.4, the term " Corporation" is added to read as follows: , l 640.4 Definitions. i j i i  ! e i }- CoM@p(%f(@j$%SQth{j;EhychmiistjC6poytjoiQ(U}EC)Rg l l Mi!!#MEigiggMit@ltWgy[auth@gidylitititWJjMQM l 1 i' 5 4-  ; i  : l 5

                  .-gs,--          -. ish-- sqwg,,E,.v,T;E,,.,

bi...s..s,6., h...sT,d,,. i...f. f...ss.i..,s, I g-h..,n, y - -

d. .h..,t,y,,p,l i.h. .t, L.,,,,.,i s, y;?, P. i..d. e, 0

                                                                                                                                      .s. di.K,,,F,f;K,. ,,

s. h,, t..,,0...E, k.,y$.,.

f. F6E:thi,~

D.e.pift.aeh.

                                          .i[6fC..Eds!QFR. OF. ?inyi.Jpi..

r,ss..sii.

                                                                                         ~

s_t.h6.Hi.dd._5tF?5p_eFithX.ons.?6ip~%th.

        -   t ,                       ,y                    .      ,

s . 1 . . . , , . - . , .>

t. heiVFi,i/iti..zsfi.b.h._iof2,US. ECithi.t_'Els?.i.,pp_Fb,sid_5byithi}

                           - -               -        ~ .        -                                    ., Pfeiid. e..ha.ihiaEc_orda, ts~              .,

h.dd.:l._ith  ;

SEEti6Ws]jJ 501fahd 7J 502[hfsthilAtoniQ'E6ffgQEtysM95Misfasihded?

6. A new 5 40.38 is added to read as follows:

1440.?38MIssl iai tii l i tFof fEbEtii nTipol i cants!

             ~

ARiEeWisya ydf[bd@issEsdyt61the!CoppoRatiohiifjths Conniss106 determinsi[thitM 1 (a)}}he(Coppotstio@igswnedg;ddntF611sdG6ridssihited byfinfaljiehga j f 9MdiIiddfR 6ratidnH6fl?i(f6Fiigp[jovRnsehtflbf (b)]Thejisisasds{o f@dch{hiMEsdis lWuld[bijihimicalJt69

                  '( 1)3he]clomm6n]defehsefind fiecs@tyibf!t helun it6,d!S tate s Gbfj (2)}:Thefmaihtinance?bf]E{rdliabisTandlhdon; f'islidosi5ticis6dreef of esr,ichmeht'seFvidssi PART 70 -- DOMESTIC LICENSING 0F SPECIAL NUCLEAR MATERIAL

7. The authority citation for Part 70 is revised to read as follows: l AUTHORITY: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, i 1

954, as amended, sec. 238 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2201, 2E32, 2233, 2282, 2297f); secs. 201, as amended, 202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846); sec. 1 1 6

    - .         -    -       -       =   _ -.        - --     _ - .   .-        .     --       --  . -

193,104 Stat. 2835[is][ssiidedifflPa6?gg10411}451]Ojytit$1321G13211349 (42 U.S.C. 2243). Sections 70.1 and 70.20a(b) also issued under secs. 135, 141, Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 70.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub. L. 93-377, 88 Stat. 475 (42 U.S.C.

,       2077). Sections 70.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as A.

amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under sec.108, 68 Stat. 939, as amended (42 U.S.C. 2138).

8. In i 70.1, A new paragraph (e) is added to read as follows:

5 70.1 Purpose. l(s)]Aijygopj dedfinithe/ At6aii.WEnsfgy[Act?[pf3954fas3aEndedgthe pegul hti6pyysthi s}piftjeitablilih]sqsipemehtsEyf6csdureij]sdliiritefja]for I the?is;suanEd@fflijeniss7toluradium? enrichment]ficilitieg l 1 l

9. In i 70.4, the term " Corporation" is added to read as follows: l 5 70.4 Definitions.

l ppfpdfaf f od[mdins} thy [U@ tedlSt at eMEnri chment { CoMofsfi on?.(USEC) Eof

        ;i tyisyce s s6djyC6rppfationj that]j siauthohtied} bj]statut s]toj,l eili~ithe 7

                                                                        -          --                      -s                                                          -       - -

e gs,. sss. ur,iTd,s..iffiff.,.6n.i.s.

         <. s-:1n         7.s ' n he n, Fi chas. h..t.

d-' - <- l i.n ti, f, i...n..//t4??

                                                                     +. s.pn.a.v r - '

rj1 '< n - '- Padi.c.a. hK,, A:t./.-i.w-Ksnts. #44r.<*N--id re ' -

                                                                                                                                               - 'rV - *kis'  " ve
                                                                                                                                                                                 -ckflfshd?Piket6,"hE0h16..?
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                                                                                               .                     .         ,, .                                      5     w      .

6f.Ath. .s. .v!,V. is.u,s. y- u .//-p s 6..z . ir,di ffuito. s - . T #..,a.mp;,lis,,ts,,,; e o r.,.,?.ot.,,,y.v.

                                                                  ,9           . , ,      -u     -

h.,e,,s.M,4-iE111tisiMpsFssahtitd7Erplinifsp

                                                                                                                           . . , . , ,,g,. .,,,./p,.   ...s-   s     :
                                                                                                                                                                  ...n. y . p.   &bk- w.=k t.he.l api.satifit_is_sibfsuSEC.St.hst.i?i.i..
   -                 - - ~ -                    - - - . ~ ~

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                                                                                                                                                        ~

Secti oss]l501Eand il 502il6fEthFEAtos.idlEneff930Gb;ffl95M's;iiadisdedi

10. A new 5 70.40 is added to read as follows:

i t 70740 MInel idi b~il i tf offdsrt ai rFibol i c ants? Mijcenss';~mhy notlbelissiisdg61the36# oration 31fghe3Comm_issied detsrmines;thit:;

                                          ~

(i)}ThelCo rpora ti on 11 sI6Whsd ycontFol l ed {on[domi h at ed ( tiflarj;iil hmj[i foreignfcorporation,'or.a[forsigh}governasntRor

                   ;(b)3The" issuance of- suchliflicense MLldibejinikidalyth9 (1)/The[ common defenseiand.isscurity]df!:thilusitediSthissi[bd 7
                   .(2)lThe maintenance of f aireliabl#7andiedohomicEll:dodest1Csburden.[of i

enrichment;? services. PART 76 -- CERTIFICATION OF GASE0US DIFFUSION PLANTS

11. The authority citation for Part 76 is revised to read as follows:

AUTHORITY: Secs. 161, 68 Stat. 948, as amended, secs. 1312, 1701, as amendsd]106 Stat.2932,2951,2952,2953,f1]0]Staty1321y349?(42U.S.C. 2201, 2297b-11, 2297f); secs. 201, as amendea, 204, 206, 88 Stat. 1244, 1245, 1246(42U.S.C.5841,5842,5845,5846);pec;1234(a)Q831Statji444Qaffamehded byfPuby g 1943134,jl10LStaty 1321 G 132193491(42(U;SjCQ2243(a)). 8 1

_. -. . . .- .- - .. . . . . ..= - . Sec. 76.7 also issued under Pub. L. 95-601, sec.10, 92 Stat. 2951 (42 U.S.C. 5851) . S45_76.!22WRa~li. d._lii,s. .h_edi,s_ndeM.,_is._c5193(f)]n'as,i,umshds_d@;l04 I . - 8 5t..iG.

     ~-

2n.i.3.5.,FEin,s, de_d_iby.iPs.

                    .                      .- b5.W-_10,4?,_l34s4.1.10I5t_ati3_132.1._W13_2.1..F3._49.I(42"_U!$!C'.*

2243,(f)) Msec.76.35(j)alsoissuedundersec.122,68 Stat.939(42U.S.C. !, 2152). 1 1

12. In 5 76.4, the term " Corporation" is amended to read as follows 1

and the term " Uranium enrichment plant" is removed: 5 76.4 Definitions. I * *

• l Corporation means the United States Enrichment Corporation (USEC),[R jts: successor,'aCorporationthatisauthorizedbystatutetoleasethe gaseous diffusion enrichment plants in Paducah, Kentucky, and Piketon, Ohio, from the Department of Energy, or any person authorized to operate one or both of the gaseous diffusion plants, or other facilities, pursuant to a plan for the privatization of USEC that is approved by the President in accordance with Sections 1501 and 1502 of the Atomic Energy Act of 1954, as amended.

Ur:n!= cr-!chent p!:nt me:nt: (1) ^ny plant used fer sep:r ting the icetcpc: cf uranier er cr-iching ur:nium i r the icetcpc 235, using g :ccu di#fe icn techelegy; er (2) ^ny equip = cat er device, er impert:nt cc=penent part c:pecially I designed fer such equ:pecnt er device, cap:ble cf separating the icctcper crf l 4 9 4

                                          --_=_ .

er:nier er ---ich'ng tranier r the iretepe ??5, esi g gc:cce: di'ft:icn 4 techtcl gy.

13. In 5 76.10, paragraph (b) is revised to read as follows: ,

1 76.10 Deliberate misconduct. t (b) A person who violates paragraph (a)(1) or (a)(2) of this section may be subject to enforcement action in accordance with the procedures in 10 CFR Part 2, subpart B; cxcept, that the Ccrper:tien is net subject tc the authcrity Of Section 224 cf the Act.

14. In 176.21, paragraph (b) is revised to read as follows:

l 76.21 Certificate reauired. l 1 i 1 (b) For the purposes of El 30.41, 40.51, and 70.42 of this chapter, the Corporation shall be authorized to receive, and licenseec shall be authorized to transfer to the Corporation, byproduct material, source material, or special nuclear material to the extent permitted under the certificate of compliance issued, and/or the compliance plan approved, pursuant to this part.

15. A new I 76.22 is added to read as follows: )

l 1276222VineTidibil'itV'bf TEeftals ?holiEahts{ l 10 I

Aihe_fti.fiEat.. . ~ - bis. ff.Eoi..pl~iis. cut'M.if?.E.6t b._e71s.~i_ssd. .itsitWCdfpofiti6nliffth.s.

                                                                                                                . . -                ~                    .                                       -                                  ,- ...                      - - . --                                   i.

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l mi si.,n d.h,.,?d.et#,n..c.rsiniFt.ha.t.

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16. Section 76.31 is revised to read as follows:

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17. In 5 76.35, paragraph (n) is revised to read as follows:

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d 1 (n) A description of the funding program to be established to ensure that funds will be set- aside and available for those aspects of the ultimate disposal of waste and depleted uranium, decontamination and decommissioning, relating to the gaseous diffusion plants leased to the Corporation by the . Department of Energy, which are the financial responsibility of the-i Corporation. The Corporation shall establish financial surety arrangements to  : i ensure that sufficient funds will be available for the ultimate disposal of waste and depleted uranium, and decontamination and decommissioning activities

                    'which are the financial responsibility of the Corporation.       The funding mechanism, such as prepayment, surety, insurance, or external sinking fund, 4                     must ensure availability of funds for any activities which are required to be a

l completed both before or after the return of the gaseous diffusion facilities

to the Department of Energy in accordance with the lease between the

                  ,  Department and the Corporation. The funding program must contain a basis for cost estimates used to establish funding levels and must contain means of I                     adjusting cost estimates and associated funding levels over the duration of the lease. The funding program need not address funding for those aspects of decontamination and decommissioning of the gaseous diffusion plants assigned to the Department of Energy under the Atomic Energy Act of 1954, as amended.

The Corporation should address the adequacy of the financing mechanism ! selected in its paisi6didr=:1 application for certification.

18. In 5 76.36, the section heading and paragraph (a) are revised to '

read as follows: r i 76.36 Annua 4 44tenewals. 12  ! 4 L

I ! (a) After issuance by the Commission of the initial certificate of compliance and/or an approved compliance plan, the Corporation shall file  ! pefioy}cil :nne:1 applications for renewal, as required by 5 76.31.

19. Section 76.43 is revised to read as follows:

5 76.43 ^ ne:1 dDate for decision, f The Director will render a decision on an application within 6 months of the receipt of the application unless the Director alters the date for decision and publishes notice of the new date in the Federal Reaister.

20. In 5 76.45, paragraph (a) is revised to read as follows:

5 76.45 Application for amendment of certificate. (a) Contents of amendment application. In addition to the annual application for certification submitted pursuant to 5 76.31, the Corporation may at any time apply for amendment of the certificate to cover proposed new or modified activities. The amendment application should contain sufficient information for the Director to make findings of compliance or acceptability for the proposed activities as required for the original certificate.  ; ^

21. Section 76.55 is revised to read as follows:

176.55 Timelv renewal. In any case in which the Corporation has timely filed a sufficient

rnu:1 application for a certificate of compliance, the existing certificate of compliance or approved compliance plan does not expire until the 13

application for a certificate of compliance has been finally determined by the NRC. For purposes of this rule, a sufficient application is one that addresses all elements of 5 76.36.

22. 'In i 76.60, paragraphs (c)(1), and (d)(1), are removed and ' reserved and paragrrr' li) is revised to read as follows:

1 76.60 Regulatory reauirements which apply. (c) (1) [ Reserved] (c)(1) Civ pen:ltic: :y net be impe ed en the Corpcr:tien perce:r.t te 5 19.30 cf thi: ch:pter except for viel:tien: Of Section 205 ef the Encrgy Recrg:r.iz: tion .^.ct. (d) (1) [ Reserved] . (d)(1) Civil pen:ltic: ::y not be impc cd en the Cerpcratien perce:nt t 5 20.2101 cf this chapter except fer viel: tion: cf Sectica 205 cf the Energy Recrg:niz:tien ^.ct. 14

i i (i) The Corporation shall comply with the applicable provisions of 10 CFR Part 95, " Security facility Approval and Safeguarding of National Security Information and Restricted Data," as specified in subpart E to this part previded, 50::cver, th:t civ" penaltier :h:11 net be 4:pened en the Ccrper:tien perte:nt te 5 95.61 cf tFi: ch:pter except for viclation: cf Secticn 206 cf the Energy Recrganizction Act.

23. In 5 76.66, paragraph (c) is revised to read as follows:

5 76.66 Expiration and termination of certificates. 1 2 (c) If the Corporation does not submit an :nnual renewal application under 5 76.36, the Corporation shall, on or before the expiration date specified in the existing certificate, terminate operation of the gaseous diffusion plants.

24. In 5 76.68, paragraph (b) is revised to read as follows:

5 76.68 Plant chanaes. (b) To ensure that the approved application remains current with respect to the actual site description and that the plant's programs, plans, policies, and operations are in place, the Corporation shall submit revised pages to the approved application and safety analysis report, marked and dated to indicate each change. The Corporation shall evaluate any as-found conditions that do not agree with the plant's programs, plans, policies, and operations in 15

accordance with paragraph (a) of this sectian. These revisions must be submitted = = lly 2: Cpecified in 5 75.25 cf +H: p;rt[yefoifulAprilj}5{df j))h}jaisndaDj(l or at a shorter interval as may be specified in the certificate. I Qialfe'n esilfippiica,tisMf6jQj[6sitj fijjts[i@flilediih ictordanceNi thilp6?36j[offthigpirt@thsTEs{isj shshhsllj be?[incopsFhted Eihto the{ application;

25. In 5 76.72, paragraph (d) is revised to read as follows:

5 76.72 Miscellaneous procedural matters. i (d) The procedures set forth in 10 CFR 2.205, and in 10 CFR Part 2, subpart G, will be applied in connection with NRC action to impose a civil penalty pursuant to SedtibM23470Ethe2Atbinid{EnsFgRAutiofi1954Misiamendedi or;Section206oftheEnergyReorganizationActof1974andtheimplementing regulations in 10 CFR Part 21 (Reporting of Defects and Noncompliance), as authorized by Section 1312(e) of the Atomic Energy Act of 1954, as amended; , 1 i i I

26. In 5 76.76, paragraph (a)(2) is revised to read as follows:

I 76.76 Backfittina. (a) 16

4 (2) Except as provided in paragraph (a)(4) of this section, the Commission shall require a systematic and documented analysis pursuant to paragraph (sb) of this section for backfits which it seeks to impose.

27. Section 76.111 is revised to read as follows:

1 76.111 Physical security, material control and accountina. and protection of certain information. Nuclear Regulatory Commission regulations that will be used for certification of the Corporation

• for physical security and material control and accounting are contained in Title 10 of the Code of Federal Regulations as described in this subpart. The regulations referenced in this subpart contain requirements for physical security and material control and accounting for formula quantities of strategic special nuclear material (Category I), special nuclear material of moderate strategic significance (Category II), and special nuclear material of low strategic significance (Category III), and for protection of Restricted Data, National Security Information, Safeguards Information, and information designated by the U.S. Department of Energy as uncentrelled chssified UsElisiifjedlChntfalled Nuclear Information.

28. In i 76.113, paragraph (c) is revised to read as follows:

5 76.113 Formula auantities of strateaic special nuclear material-Category I.

         'Fcr the purpose of this subpart, the terms " licensee" or " license" used

, in parts 70, 73, and 74 of this chapter, mean, respectively, the Corporation, or the certificate of compliance or approved compliance plan. 17

(c) The requirements for the protection of Safeguards Information pertaining to formula quantity of strategic special nuclear material (Category I) are contained in 5 73.21. Information designated by the U.S. Department of Energy as uncentrclled cl::cifiedupdlass[ifijd$ptplied Nuclear Information must be protected at a level equivalent to that accorded Safeguards Information.

29. Section 76.131 is revised to read as follows:

5 76.131 Violations. (a) The Commission may obtain an injunction or other court order to prevent a violation of the provisions of: (1) The Atomic Energy Act of 1954, as amended; i 1 (2) Title II of the Energy Reorganization Act of 1974, as amended; (3) Title XI cf the Energy Pelicy Act cf 1992, :: : mended; f4} A regulation or order issued pursuant to those Acts. (b) The Commission may obtain a court order for the payment of a civil penaltyimposedunderSsetioW]i3476ffthe2 Atomic?EnsrgifAbtisf?1954Jyas ameind6Mbr;Tunder3Section1312(e)oftheAtomicEnergyActof1954,as amended, and Section 20C of the Energy Reorganization Act of 1974, as amended, f6QJ61ationslof:;andforaviclatienofSection206cftheEnergy Recrgani :tien Act of 1971, :: amended. (1)@ctl6nij 53/ 57 lJ 62263281?f 82 ;j[101M10312104810Q1098crl 17.01 6 f j theltomiclEhergy?Adt?6Q 954]fisfainendsdj 4

           ;(2)]"3 Sect'i on1206 TBf8hMEndFgp]Rs6risiffiatf6n? Actj 18

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                                                                                                                   )'

i I i l l l i l I i l ENCLOSURE 2 i PUBLIC LAW 104-134 \ s. I I

        - - - - _ - - _ - _ - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _      - - - - . _ . . . _ _ _ _ _ - _ _ . . _ _a

PUBLIC LAW 104-134-APR. 26,1996 110 STAT.1321 l i

• Public Law 104-134 104th Congress '

An Act Apr. 26,1996 M: king appropnations for fiscal year 1996 to make a further downpayment toward a balanced budget, and for other purposes. [H R.3019] Be it enacted by the Senate and House of Representatives of omnibus the United States of America in Congress assembled, consolidated SECTION 101. For programs, projects or activities in the Depart, Racissions and m:nts of Commerce, Justice, and State, the Judiciary, and Related Ag;ncies Appropriations Act,1996, provided as follows, to be effec- $U$"9$ "" tiva as if it had been enacted into law as the regular appropriations Act: Departments of AN ACT Commerce, Justice, and Making appropriations for the Departments of Commerce, Jus. t' tic), and State, the Judiciary, and related agencies for the fiscal y,'*dida$ and a iat g agencies ysr ending September 30,1996, and for other purposes Appro Act Ibriation TITLE I-DEPARTMENT OF JUSTICE GENERAL ADMINISTRATION SALARIES AND EXPENSES + For expenses necessary for the administration of the Depart- , m:nt of Justice, $74,282,000; including not to exceed $3,317,000 f;r the Facilities Program 2000, and including $5,000,000 for m:nagement and oversight of Immigration and Naturalization Service activities, both sums to remain available until expended: Provided, That not to exceed 48 permanent positions and 55 full-time equivalent workyears and $7,477,000 shall be expended for the Department Leadership Program, exclusive of augmentation th t occurred in these offices in fiscal year 1995: Provided further, Th t not to exceed 76 permanent positions and 90 full-time equiva-hnt workyears and $9,487,000 shall be expended for the Offices of Legislative Affairs, Public AfTaira and Policy Development: Pro-vided further, That the latter three aforementioned offices shall not be augmented by personnel details, temporary transfers of personnel on either a reimbursable or non reimbursable basis or cny other type of formal or informal transfer or reimbursement cf personnel or funds on either a temporary or long-term basis.

• Note: This is e typeset print of the ongmal hand enrollment as signed by the President on Apnl 26, ".996. The text is pnnted without corrections. Footnotes indicate missing or illegible text in the ongins!

2D-1JO o - 96 (134)

l 110 STAT.1321-335 PUBLIC LAW 104-134-APR. 26,1996 l i GENERAL PROVIS:ONS SEC. 21101. In administering funds provided in this title for domestic assistance, the Secretary of any involved department may waive or specify alternative requirements for any provision of any  ! statute or regulation that the Secretary administers in connection  ! with the obligation by the Secretary or any use of the recipient of these funds, except for the requirement related to civil rights' fair housing and nondiscrimination, the environment, and labo standards, upon finding that such waiver is required to facilitate the obligation and use of sv.;h funds would not be inconsistent I with the overall purpose of the statute or regulation. l SEC. 21102. No part of any i title shall remain available for obh, appropriation gation contained beyond the current fiscal in this

    - -                      year unless expressly so provided herein.

SEC. 21103. Notwithstanding section 106 of Public Law 104-Ant <, p. 27,30, 99, sections 118,121, and 129 of Public Law 104-99 shall remain

34. in effect as if enacted as part of this Act.

Reports. SEC. 21104. The President may make available funds for assist-ance activities under titles II and IV of P. L. 104-107, beginning immediately upon enactment of this Act and without regard to monthly apportionment limitations, notwithstanding the provisions of section 518A of such Act, if he determines and reports to the Congress that the effects of the restrictions contained in that section would be that the demand for family planning services would be 1 less likely to be met and that there would be a significant increase in abortions than would otherwise be the case in the absence of such restrictions; Provided, That none of the funds appropriated or otherwise made available in P. L. 104-107 may be made available for obligation for the major foreign donor federation ofinternational population assistance except through the regular notifications proce-  ! dures of the Committees on Appropriations. . This title may be cited as the

• Supplemental Appropriations l Act of 1996".

TITLE III RESCISSIONS AND OFFSETS ii CHAPTER 1 ENERGY AND WATER DEVELOPMENT USEC SusCHAPTER A-UN'TED STATES ENRICHMENT CORPORATION Privatization Act- PRIVATIZATION 42 USC 2011 SEC. 3101. SHORT TITLE. This subchapter may be cited as the "USEC Privatization Act". 42 USC 2297h. SEC. 3102. DEFINITIONS. For purposes of this subchapter: (1) The term "AVLIS means atomic vapor laser isotope separation technology. (2) The term " Corporation" means the United States Enrichment Corporation and, unless the context otherwise requires, includes the private corporation and any successor thereto following privatization. 1 I 1 i t

s

• i

      .                                                                                                          1 PUBLIC LAW 104-134-APR. 26,1996                  110 STAT.1321-336 (3) The term " gaseous diffusion plants" means the Paducah Grseous Diffusion Plant at Paducah, Kentucky and the Ports-mouth Gaseous Diffusion Plant at Piketon, Ohio.                                                         '

(4) The term " highly enriched uranium" means uranium ' Tnriched to 20 percent or more of the uranium 235 isotope.  ; (5) The term " low-enriched uranium" means uranium anriched to less than 20 percent of the uranium-235 isotope, including that which is denved from highly enriched uranium. (6) The term " low-level radioactive waste" has the meaning given such term in section 2(9) of the Low-Level Radioactive

• Waste Policy Act (42 U.S.C. 2021b(9)).

(7) The term " private corporation" means the corporation catablished under section 3105. (8) The term "privatization" means the transfer of owner-  ! i ship (of the Corporation to private investors.9) The term "privatization date" means the date on which ' 100 percent of the ownership of the Corporation has been transferred to private investors. (10) The term "public offering" means an underwritten  ; offering to the public of the common stock of the private corpora-tion pursuant to section 3104.

               . (11) The " Russian HEU Agreement" means the Agreement BItween the Government of the United States of America and the Government of the Russian Federation Concerning the Disposition of Highly Enriched Uranium Extracted from Nuclear Weapons, dated February 18,1993.

(12) The term " Secretary" means the Secretary of Energy. (13) The " Suspension Agreement" means the Agreement to Suspend the Antidumping Investigation on Uranium from the Russian Federation, as amended. (14) The term " uranium enrichment" means the separation  ; of uranium of a given isotopic content into 2 components,1 h:ving a higher percentags of a fissile isotope and I having  ! a lower percentage. l 42 USC 2297h-1. isEC. 3103. SALE OF THE CORPORATION. l (c) AUTIIORIZATION.-The Board of Directors of the Corporation, ' with the approval of the Secretary of the Treasury, shall transfer i the interest of the United States m the United States Enrichment I Corporation to the private sector in a manner that provides for l the 1:ng-term viability of the Corporation, provides for the continu-rtion the Corporation of the operation of the Department of En gaseous diffusion plants, provides for the protection of -- tha pu e interest in maintammg a reliable and economical domes- i tic source of uranium mining, enrichment and conversion services, ' end, to the extent not inconsistent with such purposes, secures l tha maximum proceeds to the United States. i (b) PROCEEDS.-Proceeds from the sale of the United States' l int: rest in the Corporation shall be deposited in the general fund  ! of tha Treasury. 42 USC 2297h-2. [EC. 3104. METHOD OF SALE. _ (a) AUTHORIZATION.-The Board of Directors of the Corporation, with the approval of the Secretary of the Treasury, shall transfer owntrship of the assets and obligations of the Corporation to the priv:te corporation established under section 3105 (which may be consummated through a merger or consolidation effected in accord-enca with, and havmg the effects provided under, the law of the

110 STAT.1321-337 PUBLIC LAW 104-134-APR. 26,1996 State of incorporation of the private corporation, as if the Corpora-tion were incorporated thereunder). (b) BOAlrD DETERMINATION.-The Board, with the approval of the Secretary of the Treasury, shall select the method of transfer and establish terms and conditions for the transfer that will provide the maximum proceeds to the Treasury of the United States and will provide for the long-term viability of the private corporation, the continued operation of the gaseous diffusion plants, and the public interest in maintaining reliable and economical domestic uranium mining and enrichment industries. (c) ADEQUATE PROCEEDS-The Secretary of the Treasury shall not allow the privatization .if the Corporation unless before the sale date the Secretary of the Treasury determines that the method of transfer will provide the maximum proceeds to the Treasury consistent with the principles set forth in section 3103(a). (d) APPLICATION OF SECURITIES LAWS-Any offering or sale of securities by the private corporation shall be subject to the Securities Act of 1933 (15 U.S.C. 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), and the provisions of the Constitution and laws of any State, territory, or possession of the United States relating to transactions in securities. (e) EXPENSES.-Expenses of privatization shall be paid from Corporation revenue accounts in the United States Treasury. 42 USC 2297h-3. SEC. 3105. ESTABLISitMENT OF PRIVATE CORPORATION. (a) INCORPORATION.--(1) The directors of the Corporation shall establish a private for-profit corporation under the laws of a State for the purpose of receiving the assets and obligations of the Cor-poration at privatization and continuing the business operations of the Corporation following privatization. (2) The directors of the Corporation may serve as incorporators of the private corporation and shall take all steps necessag to establish the private corporation, including the filing of articles of incorporation consistent with the provisions of this subchapter. (3) Employees and officers of the Corporation (including mem-bers of the Board of Directors) acting in accordance with this l section on behalf of the private corporation shall be deemed to be acting in their official capacities as employees or officers of the Corporation for purposes of section 205 of title 18, United States Code. (b) STATUS OF THE PRIVATE CORPORATION.--(1) The private corporation shall not be an agency, instrumentality, or establish-ment of the United States, a Government corporation, or a Govern-ment-controlled corporation. (2) Except as otherwise provided by this subchapter, financial obligations of the private corporation shall not be obligations of, or guaranteed as to principal or interest by, the Corporation or < the United States, and the obligations shall so plainly state. I (3) No action under section 1491 of title 28, United States Code, shall be allowable against the United States based on actions of the private corporation. (c) APPLICATION OF POST-GOVERNMENT EMPLOYMENT REST TIONS.-Beginning on the privatization date, the restrictions stated in section 207 (a), (b), (c), and (d) of title 18, United States Code, shall not apply to the acts of an individual done in carrying out official duties as a director, oflicer, or employee of the private corporation, if the individual was an officer or employee of the

PUBLIC LAW 104-134-APR. 26,1996 110 STAT.1321-338 Corporation (including a director) continuously during the 45 days prior to the privatization date. (d) DISSOLUTION.--In the event that the privatization does not occur, the Corporation will provide for the dissolution of the private corporation within 1 year of the private corporation's incorporation unless the Secretary of the Treasury or his delegate, upon the Corporation's re additionalyear. quest, agrees to delay any such dissolution for an CEC. 3106. TRANSFERS TO THE PRIVATE CORPORATION. 42 USC 2297b4. Concurrent with privatization, the Corporation shall transfer to the private corporation-(1) the lease of the gaseous diffusion plants in accordance with section f107, (2) all personal property and inventories of the Corporation, (3) all contracts, agreements, and leases under section 3108(a), (4) the Corporation's right to purchase power from the Secretary under section 3108(b), (5) such funds in accounts of the Corporation held by the Treasury or on deposit with any bank or other financial institution as approved by the Secretary of the Treasury, and (6) all of the Corporation's records, including all of the Records. papers and other documentary materials, regardless of physical form or characteristics, made or received by the Corporation. CEC. 3107. LEASING OF GASEOUS DIFFUSION FACILITIES. 42 USC 2297b5. (a) TRANSFER OF LEASE.-Concurrent with privatization, the Corporation shall transfer to the private corporation the lease of th3 gaseous diffusion plants and related property for the remainder ef the term of such lease in accordance with the terms of such Inse. (b) RENEWAL.-The private corporation shall have the exclusive eption to lease the gaseous difTusion plants and related property f;r additional periods following the expiration of the initial term cf the lease. (c) EXCLUSION OF FACIUTIES FOR PRODUCTION OF HIGHLY ENRICHED URANIUM.-The Secretary shall not lease to the private corporation any facilities necessary for the production of highly enriched uranium but may, subject to the requirements of the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), grant the Co ration access to such facilities for purposes other than the p uction of highly enriched uranium. (d) DOE RESPONSIBILITY FOR PREEXISTING CONDITIONS.-The pryment of any costs of decontamination and decommissioning, rerponse actions, or corrective actions with respect to conditions cxisting before July 1,1993, at the gaseous diffusion plants shall remain the sole responsibility of the Secretary. (e) ENVIRONMENTAL AUDIT.-For purposes of subsection (d), tha conditions existing before July 1,1993, at the gaseous diffusion pl:nts shall be determined from the environmental audit conducted pursuant to section 1403(e) of the Atomic Energy Act of 1954 * (42 U.S.C. 2297c-2(e)). (f) TREATMENT UNDER PRICE ANDERSON PROVISIONS.-Any Irse executed between the Secretary and the Corporation or the private corporation, and any extension or renewal thereof, under this section shall be deemed to be a contract for purposes of section 170d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)). s _

110 STAT.1321-339 - PUBLIC LAW 104-134-APR. 26,1996 (g) WAIVER OF EIS REQUlkkMENT.-The execution or transfer . of the lease between the Secretary and the Corporation or the private corporation, and any extension or renewal thereof, shall not be considered to be a major Federal action significantly affecting the quality of the human environment for purposes of section 102 of the National Environmental Policy Act of 1969 (42 U.S.C. 4332).

          - 42 USC 2297h-6. SEC.3108. TRANSFER OF CONTRACTS.

(a) TRANSFER OF CONTRACTS.--Concurrent with privatization, the Corporation shall transfer to the private corporation all con-tracts, agreements, and leases, including all uranium enrichment contracts, that were-(1) transferred by the Secretary to the Corporation pursu-ant to section 1401(b) of the Atomic Energy Act of 1954_(42 or U.S.C. 2297c(b))Into by the Corporation before the privatization (2) entered j date.

                                 -(b) NONTRANSFERABLE POWER CONTRACTS.-The Corporation t

shall transfer to the private corporation the right to purchase power from the Secretary under the power purchase contracts for the gaseous diffusion plants executed by the Secretary before July J 1,1993. The Secretary shall continue to receive power for the gaseous diffusion plants under such contracts and shall continue 1 to resell such power to the private corporation at cost during the term of such contracts. (c) EFFECT OF TRANSFER.H1) Notwithstanding subsection (a), the United States shall remain obligated to the parties to the

' contracts, agreements, and leases transferred under subsection (a) -

for the performance of its obligations under such contracts ments, or leases during their terms. Performance of such obl ions by the private corporation shall be considered performance y the United States. 4 (2) If a contract, agreement, or lease transferred under sub-l section (a) is terminated, extended, or materially amended after the privatization date-(A) the private corporation shall be responsible for any

obligation arising under such contract, agreement, or lease 4

after any extension or material amendment, and (B) the United States shall be responsible for any obligation i arising under the contract, agreement, or lease before the termi-nation, extension, or material amendment. , (3) The private corporation shall reimburse the United States for any amount paid by the United States under a settlement agreement entered into with the consent of the private corporation or under a judgment, if the settlement or judgment-

(A) anses out of an obligation under a contract, agreement.

1 or lease transferred under subsection (a), and ! (B) arises out of actions of the private corporation between 1 O privatization date and the date of a termination, extension. l or material amendment of such contract, agreement, or lease. t (d) PRICING.-The Corporation may establish prices for its prod-l ucts, materials, and services provided to customers on a basis that will allow it to attain the normal business obj ctives of a j ' profit making corporation. 42 USC 2297h-7. SEC. 3109. LIABILITIES. l (a) LIABILITY OF THE UNITED STATES.41) Except as otherwise ' provided in this subchapter, all liabilities arising out of the oper. 4 1 k l l p o a i l l

r 5 PUBLIC 1AW 104-134-APR. 26,1996 110 STAT.1321-340 ction of the uranium enrichment enterprise before July 1,1993, shill remain the direct liabilities of the Secretary. (2) Except as provided in subsection (al(3) or otherwise provided in c memorandum of agreement entered into by the Corporation tnd the Omce of Management and Budget prior to the privatization

   . d:ts, all liabilities arising out of the operation of the Corporation between July 1,1993 and the privatization date shall remain                                 '
    - the direct liabilities of the United States.

(3) All liabilities arising out of the disposal of depleted uranium g:rarated by the Corporation between July 1,1993, and the privatization date shall become the direct liabilities of the Secretary. (4) Any stated or implied consent for the United States, or cny agent or omcer of the United States, to be sued by any person for cny legal, equitable, or other relief with respect to any claim crising from any action taken by any agent or otticer of the United St t s in connection with the privatization of the Corporation is hir:by withdrawn. (5) To the extent that any claim against the United States undir this section is of the type otherwise required by Federal st:tute or regulation to be presented to a Federal agency or omeial - f:r cdjudication or review, such claim shall be presented to the rtment of Energy in accordance with procedures to be estab-Dep lishe d by the Secretary. Nothing in this paragraph shall be con-struid to impose on the Department of Energy liability to pay cny claim presented pursuant to this paragraph.

(6) The Attorney General shall represent the United States '

in cny action seeking to impose liability under this subsection. (b) LIABILITY OF THE CORPORATION.-Notwithstanding any  ; provision of any agreement to which the Corporation is a party, i tha Corporation shall not be considered in breach, default, or viola-ti:n of any agreement because of the transfer of such agreement to the private corpe. ration under section 3108 or any other action th3 Corporation is required to take under this subchapter. 4 (c) LIABILITY OF THE PRIVATE CORPORATION.-Except as pro-vid d in this subchapter, the private corporation shall be liable for any liabilities arising out ofits operations after the privatization , dite. (d) LIADIUTY OF OFFICERS AND DIRECTORS.-(1) No officer, director, employee, or agent of the Corporation shall be liable in any civil proceeding to any party in connection with any action tak n in connection with the pnvatization if, with respect to the , subj:ct matter of the action, suit, or proceeding, such person was reting within the scope of his employment. (2) This subsection shall not apply to claims arising under thz Securities Act of 1933 (15 U.S.C. 77a. et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a. et seq.), or under the Constitu- . tion or laws of any State, territory, or possession of the United States relating to transactions in securities. 42 USC 2297h-8. fEC.3110. EMPLOYEE PROTECTIONS. , (a) CONTRACTOR EMPLOYEES.-(1) Privatization shall not dimin- t ish the accrued, vested pension benefits of employees of the Corpora-tion's operating contractor at the two gaseous difWsion plants. , (2) in the event that the private corporation terminates or

chtnges the contractor at either or both of the gaseous difTusion p12nts, the plan sponsor or other appropriate fiduciary of the pen-

      . sion plan covering employees of the prior operating contractor shall i

I 110 STAT.1321-341 PUBLIC LAW 104-134-APR. 26,1996 arrange for the transfer of all plan assets and liabilities relating . to accrued pension benefits of such plan's participants and bene-ficiaries from such plant to a pension plan sponsored by the new contractor or the private corporation or a joint labor-management plan, as the case may be. (3) In addition to any obligations arising under the Naticaal Labor Relations Act (29 U.S.C.151 et seq.), any employer (including the private corporation if it operates a gaseous difTusion plant without a contractor or any contractor of the private corporation) at a gaseous difrusion plant shall-(A) abide by the terms of any unexpired collective bargain-ing agreement covering employees in bargaining units at the plant and in effect on the privatization date until the stated expiration or termination date of the agreement; or

 -                        (B) in the event a collective bargaining agreement is not in effect upon the privatization date, have the same bargaining obligations under section 8(d) of the National Labor Relations Act (29 U.S.C. 158(d)) as it had immediately before the privatization date.

(4) If the private corporation replaces its operating contractor at a gaseous diffusion plant, the new employer (including the new contractor or the private corporation if it operates a gaseous diffu-sion plant without a contractor) shall-(A) offer employment to non-management employees of the predecessor contractor to the extent that their jobs still exist or they are qualified for new jobs, and (B) abide by the terms of the predecessor contractor's collec-tive bargaining agreement until the agreement expires or a new agreement is signed. (5) In the event of a plant closing or mass layoff (as such terms are defined in section 2101(a) (2) and (3) of title 29, United States Code) at either of the gaseous diffusion plants, the Secretary of Energy shall treat any adversely affected employee of an operat-ing contractor at either plant who was an employee at such plant on July 1,1993, as a Department of Energy employee for purposes of sections 3161 and 3162 of the National Defense Authorization Act for Fiscal Year 1993 (42 U.S.C. 7274h-7274i). (6XA) The Secretary and the private corporation shall cause the post-retirement health benefits plan provider (or its successor) to continue to provide benefits for eligible persons, as described under subparagraph (B), employed by an operating contractor at either of the gaseous diffusion plants in an economically efficient manner and at substantially the same level of coverage as eligible retirees are entitled to receive on the privatization date. (B) Persons eligible for coverage under subparagraph (A) shall be limited to: (i) persons who retired from active employment at one of the gaseous diffusion plants on or before the privatization date as vested participants in a pension plan maintained either by the Corporation's operating contractor or by a contractor employed prior to July 1,1993, by the Department of Energy to operate a gaseous diffusion plant; and (ii) persons who are employed by the Corporation's operat-ing contractor on or before the privatization date and are vested participants in a pension plan maintained either by the Cor-poration's operating contractor or by a contractor employed I l 1

                                                                                            )

PUBLIC LAW 104-134-APR. 26,1996 110 STAT.1321-342 prior to July 1,1993, by the Department of Energy to operate a gaseous diffusion plant. (C) The Secretary shall fund the entire cost of post-retirement hr.dth benents for persons who retired from employment with an oper: ting contractor prior to July 1,1993. (D) The Secretary and the Corporation shall fund the cost of post-retirement health benents for persons who retire from employment with an operating contractor on or after July 1,1993, in proportion to the retired person's years and months of service ct a gaseous diffusion plant under their respective managerrent. (7XA) Any suit under this subsection alleging a violation of en agreement between an employer and a labor organization shall be brought in accordance with section 301 of the Labor Management Rel:tions Act (29 U.S.C.185). (B) Any charge under this subsection alleging an unfair labor practice violative of section 8 of the NationalLabor Relations Act (29 U.S.C.158) shall be pursued in accordance with section 10 of the National Labor Relations Act (29 U.S.C.160). (C) Any suit alleging a violation of any provision of this sub-section, to the extent it does not allege a violation of the National Labor Relations Act, may be brought in any district court of the United States having jurisdiction over the parties, without regard to the amount in controversy or the citizenship of the parties. (b) FORMER FEDERAL EMPLOYEES.-(1XA) An employee of the Corporation that was subject to either the Civil Service Retirement System (referred to in this section as "CSRS") or the Federal Employees' Retirement System (referred to in this section as "FERS") on the day immediately preceding the privatization date shdl elect-(i) to retain the employee's coverage under either CSRS or FERS, as applicable, in lieu of coverage by the Corporation's retirement system, or (ii) to receive a deferred annuity or lump-sum benent pay-cble to a terminated employee under CSRS or FERS, as cpplicable. (B) An employee that makes the election under subparagraph (AXii) shall have the option to transfer the balance in the employee's Thrift Savings Plan account to a denned contribution plan under tha Corporation's retirement system, consistent with applicable law and the terms of the Corporation's denned contribution plan. (2) The Corporation shall pay to the Civil Service Retirement cnd Disability Fund-(A) such employee deductions and agency contributions es are required by sections 8334, 8422, and 8423 of title 5, United States Code, for those employees who elect to retain their coverage under either CSRS or FERS pursuant to para-graph (1); . (B) such additional agency contributions as are determined necessary by the Ofnce of Personnel Management to pay, in ' combination with the sums under subparagraph (A), the "nor-mal cost" (determined using dynamic assumptions) of retire-ment benefits for those employees who elect to retain their coverage under CSRS , pursuant to paragraph (1), with the concept of " normal cost being used consistent with generally cceepted actuarial standards and principles; and (C) such additional amounts, not to exceed two percent ' cf the amounts under subparagraphs (A) and (B), as are deter-

110 STAT.1321-343 PUBLIC LAW 104-134-APR. 26,1996 mined necessary by the Office of Personnel Management to pay the cost of admmistering retirement benefits for employees who retire from the Corporation after the privatization date under either CSRS or FERS, for their survivors, and for survi-vors of employees of the Corporation who die after the privatiza. tion date (which amounts shall be available to the Office of Personnel Management as provided in section 8348(aXIXB) ' of title 5, United States Code). (3) The Corporation shall pay to the Thrift Savings Fund such

'                           employee and agency contributions as are required by section 8432 of title 5, United States Code, for those employees who elect to retain their coverage under FERS pursuant to paragraph (1).

(4) Any employee of the Corporation who was subject to the Federal Employee Health Benefits Program (referred to in this

  " ~                       section as "FEHBP") on the day immediately preceding the privatization date and who elects to retain coverage under either CSRS or FERS pursuant to paragraph (1) shall have the option
                                                                   ~

to receive health benefits from a health benefit plan estabhshed by the Corporation or to continue without interruption coverage under the FEHBP, in lieu of coverage by the Corporation's health benefit system. (5) The Corporation shall pay to the Employees Health Benefits Fund-(A) such employee deductions and agency contributions 4 as are required by section 8906 (a)-(f) of title 5, United States Code, for those employees who elect to retain their coverage under FEHBP pursuant to paragraph (4); and (B) such amounts as are determined necessary by the Office of Personnel Management under paragraph (6) to reimburse the Office of Personnel Management for contributions under section 8906(gX1) of title 5, United States Code, for those employees who elect to retain their coverage under. FEHBP pursuant to paragraph (4). (6) The amounts required under paragraph (5XB) shall pay the Government contributions for retired employees who retire from the Corporation after the privatization date under either CSRS or FERS, for survivors of such retired employees, and for survivors of employees of the Corporation who die after the privatization date, with said amounts prorated to reflect only that portion of the total service of such employees and retired persons that was performed for the Corporation after the privatization date. 421'SC 2297h-9. SEC. 3111. OWNERSHIP LIMITATIONS. (a) SECURITIES LIMITATIONS.-No director, officer, or employee of the Corporation may acquire any securities, or any rights to acquire any securities of the private corporation on terms more favorable than those offered to the general public-(1) in a public offering designed to transfer ownership of the Corporation to private investors, (2) pursuant to any agreement, arrangement, or under-standing entered into before the privatization date, or (3) before the election of the directors of the private corporation. (b) OWNERSHIP LIMITATION.-Immediately fcllowing the con-summation of the transaction or series of transactions pursuant to which 100 percent of the ownership of the Corporation is trans-ferred to private investors, and for a period of three years thereafter,

b [

PUBLIC LAW 104-134-APR. 26,1996 110 STAT.1321-344 ,

i no person may acquire, directly or indirectly, beneficial ownership  : cf securities representing more than 10 percent of the total votes  ;

cf rJ1 outstanding voting securities of the Corporation. The foregoing -

i limitation shall not apply to- - (1) any employee stock ownership plan of the Corporation, (2) members of the underwriting syndicate purchasing shares in stabilization transactions in connection with the privatisation, or ! (3) in the case of shares beneficially held in the ordinary 1

           . course of business for others, any commercial bank, broker-                                            t d:aler, or clearing agency.

SEC. 3113. URANIUM TRANSFERS AND SALES. 42 USC 2297h-(c) TRANSFERS AND SALES BY THE SECRETARY.-The Secretary t sh ll not pmvide enrichment services or transfer or sell any.ura-nium (including natural uranium concentrates, natural uranium h:xafluoride, or enriched uranium in any form) to any person t as consistent with this section. I exc:fb) RUSSIAN HEU.-(1) On or before December 31,1996, the United States Executive Agent under the Russian HEU Agreement , shill transfer to the Secretary without charge title to an amount . 5 of ur:nium hexafluoride equivalent to the natural uranium compo-nint of low-enriched uranium derived from at least 18 metric tons of highly enriched uranium purchased from the Russian Executive Ag2nt under the Russian HEU Agreement. The quantity of such i urtnium hexafluoride delivered to the Secretary shall be based I en a tails assay of 0.30 U82. Uranium hexafluoride transferred

to tha Secretary pursuant to this paragraph shall be deemed under

! Unith States law for all purposes to be of Rusalan origin. (2) Within 7 years of the date of enactment of this Act, the .. Secretary shall sell, and receive payment for, the uranium

!      hxx fluoride transferred to the Secretary (1). Such uranium hexafluoride shall be sold pursuant to paragraph                                            t 2

(A) at any time for use in the United States for the purpose , ofoverfeeding; ,

                                                                                                                    ~

(B) at any time for end use outside the United States; < (C) in 1995 and 1996 to the Russian Executive Agent at the purchase price for use in matched sales pursuant to , the Suspension Agreement; or,

                  . (D) in calendar year 2001 for consum tion by end users                                          :

in the United States not prior to January , 2002, in volumes 4 not to exceed 3,000,000 pounds U30 equiva ent peryear. (3) With respect to all enrichee uuhium dehvered to the United

Statis Executive Agent under the Russian HEU Agreement on er cft*r January 1,1997, the United States Executive Agent shall, upon request of the Russian Executive Agent, enter into an agree- t m:nt to deliver concurrently to the Russian Executive Agent an i Emtunt of uranium hexafluoride equivalent to the natural uranium component of such uranium. An agreement executed pursuant to  ;

a- request of the Russian Executive Agent, as contemplated in this p:ragraph, may pertain to any deliveries due during any period , remaining under the Russian HEU Agreement. The quantity of -

,       such uranium hexafluoride delivered to the Russian Executive                                                !

Ag:nt shall be based on a tails assay of 0.30 U2as. Title to uranium h:xdluoride delivered to the Russian Executive Agent pursuant  : to this paragraph shall transfer to the Russian Executive Agent i F upon delivery of such material to the Russian Executive Agent,  ! 1 i

110 STAT.1321-345 PUBLIC LAW 104-134-APR. 26,1996 with such delivery to take place at a North American facility des-ignated by the Russian Executive Agent. Uranium hexafluoride delivered to the Russian Executive Agent pursuant to this para-graph shall be deemed under U.S. law for all purposes to be of Russian origin. Such uranium hexafluoride may be sold to any person or entity for delivery and use in the United States only  ; as p(ermitted

4) In the event in thatsubsections (bX5),Agent the Russian Executive (bX6) doesandnot (bX7 exercise its right to enter into an agreement to take delivery of the natural uranium component of any low-enriched uranium, as contensplated in paragraph (3), within 90 days of the date such low-enriched uranium is delivered to the United States Executive Agent, or upon request of the Russian Executive Agent, then the United States Executive Agent shall engage an independent entity through a competitive selection process to auction an amount of uranium hexafluoride or U30s (in the event that the conversion component of such hexafluoride has previously been sold) equivalent i to the natural uranium component of such low-enriched uranium.

An agreement executed pursuant to a request of the Russian Execu-tive Agent, as contemplated in this paragraph, may pertain to any deliveries due during any period remaining under the Russian HEU Agreement. Such independent entity shall sell such uranium . hexafluoride in one or more lots to any person or entity to maximize the proceeds from such sales, for disposition consistent with the limitations set forth in this subsection. The independent entity shall pay to the Russian Executive Agent the proceeds of any such auction less all reasonable transaction and other administra-tive costs. The quantity of such uranium hexafluoride auctioned shall be based on a tails assay of 0.30 U235 Title to uranium hexafluoride auctioned pursuant to this paragraph shall transfer to the buyer of such material upon delivery of such material to the buyer. Uranium hexafluoride auctioned pursuant to this para-graph shall be deemed under United States law for all purposes to be of Russian origin. (5) Except as provided in paragraphs (6) and (7), uranium , hexafluoride delivered to the Russian Executive Agent may undernotpara-be graph (3) or auctioned pursuant to paragraph (4)d States either dehvered for consumption by end users in the Unite directly or indirectly prior to January 1,1998, and thereafter only in accordance with the following schedule: Annual Maximum Deliveries to End Users team m me.UA equiveleau l Year: 2 1998. 4 1999 . 6 2000 . 8 2001 10 2002 12 2003 14 2004 . . . . . 16 2005 le 2006. 16 2007 . 19 2008 _ - - 20-2009 and each year thereafter . (6) Uranium hexafluoride delivered to the Russian Execu Agent under paragraph (3) or auctioned pursuant to paragr,aph (4) may be sold at any time as Russian-origin natural uranium i

4 ( PUBLIC LAW 104-134-APR. 26,1996 110 STAT.1321-34G in e matched sale pursuant to the Suspension Agreement, and in such case shall not be counted against the annual maximum dzliviries set forth in paragraph (5). (7) Uranium hexafluoride delivered to the Russian Executive AgInt under paragraph (3) or auctioned pursuant to paragraph (4) mIy be sold at any time for use in the United States for tha purpose of overfeeding in the operations of enrichment facilities. (8) Nothing in this subsection (b) shall restrict the sale of th2 c:nversion component of such uranium hexafluoride.

          - (9) The Secretary of Commerce shall have responsibility for thi administration and enforcement of the limitations set forth in this subsection. The Secretary of Commerce may require any person to provide any certifications, information, or take any action th:t may be necessary to enforce these limitations. The United State.s Customs Service shall maintain and provide any information required by the Secretary of Commerce and shall take any action requisted by the Secretary of Commerce which is necessary for th2 tdministration and enforcement of the uranium delivery limita-tions set forth in this section.

(10) The President shall monitor the actions of the United President. St:tes Executive Agent under the Russian HEU Agreement and Repo h sh:ll report to the Congress not later than December 31 of each ys r on the effect the low-enriched uranium delivered under the Rus:i2n HEU Agreement is having on the domestic uranium min-ing, conversion, and enrichment industries, and the operation of tha giseous diffusion plants. Such report shall include a description of actions taken or proposed to be taken by the President to prevent or mitigate any material adverse impact on such industries or any loss of employment at the gaseous diffusion plants as a result of th) Russian HEU Agreement. (c) TRANSFERS TO THE CORPORATIONM1) The Secretary shall tr:n" fir to the Corporation without charge up to 50 metric tons of snriched uranium and up to 7,000 metric tons of natural uranium from the Department of Energy's stockpile, subject to the restric-tiins in subsection (c)(2). (2) The Corporation shall not deliver for commercial end use in tha United States-(A) any of the uranium transferred under this subsection b:. fore Ja tuary 1,1998; (B) n2 ore than 10 percent of the uranium (by uranium hrzafluorUe equivalent content) transferred under this sub-

   -         section or more than 4,000,000 pounds, whichever is less, in cny calendar year after 1997; or
                  - (C) more than 800,000 separative work units contained in low-enriched uranium transferred under this subsection in cny calendar year.

(d) INVENTORY SALES.41) in addition to the transfers author-ized under subsections (c) and (e), the Secretary may, from time to time, sell natural and low-enriched uranium (including low. , snriched uranium derived from highly enriched uranium) from the Department of Energy's stockpile. (2) Except as provided in subsections (b), (c), and (e), no sale or tr_nsfer of natural or low-enriched uranium shall be made unliso-- (A) the President determines that the material is not nec- President. sssary for national security needs, .

110 STAT.1321-347 PUBLIC LAW 104-134-APR. 26,1996 (B) the Secretary dctermines that the sale of the material . will not have an adverse material impact on the domestic uranium mining, conversion,. or enrichment industry, taking into account the sales of uranium under the Russian HEU Agreement and the Suspension Agreement, and (C) the price paid to the Secretary will not be less than the fair market value of the material. (e) GOVERNMENT TRANSFERS.-Notwithstanding subsection (d)(2), the Secretary may transfer or sell enriched uranium-(1) to a Federal agency if the material is transferred for the use of the receiving agency without any resale or transfer to another entity and the material does not meet commercial specifications; (2) to any person for national security purposes, as deter-mined by the Secretary; or (3) to any State or local agency or nonprofit, charitable, or edt.cational institution for use other than the generation of electricity for commercial use. (f) SAVINGS PROVISION.-Nothing in this subchapter shall be read to modify the terms of the Russian HEU Agreement. 42 USC 2297h- SEC. 3113. LOW-LEVEL WASTE. R (a) RESPONSIBILITY OF DOE.-(1) The Secretary, at the request of the generator, shall accept for disposal low level radioactive waste, including depleted uranium if it were ultimately determined to be low-level radioactive waste, generated by-(A) the Corporation as a result of the operations of the gaseous diffusion plants or as a result of the treatment of such wastes at a location other than the gaseous difrusion plants, or (B) any person licensed by the Nuclear Regulatory Commis-sion to operate a uranium enrichment facility under sections 53,63, and 193 of the Atomic Energy Act of 1954 (42 U.S.C. 2073,2093, and 2243). (2) Except as provided in paragraph (3), the generator shall reimburse the Secretary for the disposal of low-level radioactive waste pursuant to paragraph (1) in an amount equal to the See-retary's costs, including a pro rata share of any capital costs but in no event more than an amount equal to that which would be charged by commercial, State, regional, or interstate compact entities for disposal of such waste. (3) In the event depleted uranium were ultimately determined to be low-level radioactive waste, the generator shall reimburse the Secretary for the disposal of depleted uranium pursuant to paragraph (1) in an amount equal to the Secretary's costs, including a pro rata share of any capital costs. (b) AGREEMENTS WITH OTHER PERSONS.-The generator may also enter into agreements for the disposal of low level radioactive waste subject to subsection (a) with any person other than the Secretary that is authorized by applicable laws and regulations to dispose of such wastes. (c) STATE OR INTERSTATE COMPACTS.-Notwithstanding any other prevision of law, no State or interstate compact shall be liable for the treatment, storage, or disposal of any low-level radio-active waste (including mixed waste) attributable to the operation, decontamination, and decommissioning of any uranium enrichment facility.

t PUBLIC IAW 104-134-APR. 26,1996 ' . 110 STAT.1321-348 CEC.3114. AVLIS. 42 USC 2297h-

                                                          ~

12. (a) EXCLUSIVE HIcHT TO COMMERCIALIZE.-The Corporation shall have the exclusive commercial right to deploy and use any AVLIS patents, processes, and technical information owned or con-trolled by the Government, upon completion of a royalty agreement with the Secretary. (b) TRANSFER OF RELATED PROPERTY TO CORPORATION.- (1) IN GENERAL.-To the extent requested by the Corpora- Pmident. tion and subject to the requirements of the Atomic Energy -

                   - Act of 1954 (42 U.S.C. 2011, et seq.), the President shall trans-
                 . fer without charge to the Corporation all of the right, title,                                                              ,

or interest in and to roperty owned by the United States under control or custod of the Secretary that is directly related

                   . to and materially usefu in the performance of the Corporation's purnoses regardmg AVLIS and alternative technologies for ura.                                                               )

nium enrichment, including- ' (A) facilities, equipment, and materials for research, development, and demonstration activities; and-(B) all other facilities, equipment, materials  : i esses, patents, technical information of any Idad, proc- con-t tracts, agreements, and leases. (2) EXCEPTION.-Facilities, real estate, improvements, and

equipment related to the gaseous diffusion, and gas centrifuge, uramum enrichment programs of the Secretary shall not trans-

fer under paragraph (1)(B).

(3) EXPIRATION OF TRANSFER AUTHORITY.-The President's ,' authority to transfer property under this subsection shall expire

                   ; t.pon the privatization date.                                                                                                 l
                   - (c) LIABILITY FOR PATENT AND REl.ATED CLAIMS.-With respect to cny right, title, or interest provided to the Corporation under subsection (a) or (b), the Corporation shall have sole liability for                                                                     i

. eny payments made or awards under section 157b.(3) of the Atomic l En:rgy Act of 1954 (42 U.S.C. 2187(bX3)), or any settlements or i judgments involving claims for alleged patent infringement. Any ' , roy:lty agreement under subsection (a) of this section shall provide l . fsr a reduction of royalty payments to the Secretary to offset any I pIyments, awards, settlements, or judgments under this subsection. l ! gEC. 3115. APPLICATION OF CERTAIN LAWS. 42 USC 2297h-  ; (a) OSHA.--(1) As of the privatization date, the private corpora-

• i tien shall be subject to and comply with the Occupational Safety

        - a .d Ihc!th Act of 1970 (29 U.S.C. 651 et seq.).

(2) The Nuclear Regulatory Commission and the Occupational Contrut . Saf2ty and Health Administration shall, within 90 days after the 4 d:te of enactment of this Act, enter into a memorandum of agree-m:nt to govern the exercise of their authority over occupational sifaty and health hazards at the gaseous diffusion plants, including , in2pection, investigation, enforcement, and rulemaking relating to ! such hazsrds. . (b) ANTITRUST LAWS.-For purposes of the antitrust laws, the performance by the private corporation of a " matched import" con-l tre.ct under the Suspension Agreement shall be considered to have e occurred prior to the privatization di te, if at the time of privatiza- , tion, such contract had been agreed to by the parties in all material L terms and confirmed by the Secretary of Commerce under the

         . Su: pension Agreement.                                                                                             .-

t i

  .+          m'    .,             a  .
                                                 ...-m- -     i,...___,.~.,  ...-,1- w.   --              s e <. - .- - --r w    c---   e-.- -.-.-

l l . (- 110 STAT.1321-349 PUBLIC LAW 104-134-APR. 26,1996 (c) ENERGY' REORGANIZATION Acr REQUIREMENTS.-(1) The pri-vate corporation and its contractors and subcontractors shall be subject to the provisions of section 211 of the Energy Reorganization Act of 1974 (42 U.S.C. 5851) to the same extent as an employer subject to such section. (2) With respect to the operation of the facilities leased by the private corporation, section 206 of the Energy Reorganization Act of 1974' (42 U.S.C. 5846) shall apply to the directors and officers of the private corporation. SEC. 3116. AMENDMENTS TO THE ATOMIC ENERGY ACT. (a) REPEAL.-(1) Chapters 22 through 26 of the Atomic Energy Act of 1954 (42 U.S.C. 2297-2297e-7) are repealed as of the privatization date. (2) The table of contents of such Act is amended as of the privatization date by striking 'he items referring to sections repealed by paragraph (1). (b) NRC LICENSING.-(1) Section 11v. of the Atomic Energy Act of 1954 (42 U.S.C. 2014v.) is amended by striking *or the construction and operation of a uranium enrichment facility using Atomic Vapor Laser Isotope Separation technology". (2) Section 193 of the Atomic Energy Act of 1954 (42 U.S.C. 2243)is amended by adding at the end the following:

                       "(f) LIMITATION.~No license or certificate of compliance may be issued to the United States Enrichment Corporation or its succes-sor under this section or sections 53,63, or 1701, if the Commission determines that-
                             "(1) the Corporation is owned, controlled, or dominated by an alien, a foreign corporation, or a foreign government; or
                             "(2) the issuance of such a license or certificate of compli-ance would be inimical to-
                                  "(A) the common defense and security of the United States; or
                                  "(B) the maintenance of a reliable and economical domestic source of enrichment services.".

(3) Section 1701(cX2) of the Atomic Energy Act of 1954 (42 j U.S.C. 2297ficX2))is amended to read as follows:

                             "(2) PERIODIC APPLICATION FOR CERTIFICATE OF COMPLI-ANCE.-The Corporation shall apply to the Nuclear Regulatory Commission for a certificate of compliance under paragraph (1) periodically, as determined by the Commission, but not less than every 5 years. The Commission shall review any such application and any determination made under subsection (bX2) shall be based on the results of any such review.".

(4) Section 1702(a) of the Atomic Energy Act of 1954 (42 U.S.C. 2297f-1(a)) is amended-(1) by striking "other than" and inserting " including", and (2) by striking " sections 53 and 63" and inserting " sections 53,63, and 193". (c) JUDICIAL REVIEW OF NRC ACTIONS.-Section 189b. of the Atomic Energy Act of 1954 (42 U.S.C. 2239(b)) is amended to read as follows:

                         "b. The following Commission actions shall be subject to judicial review in the manner prescribed in chapter 158 of title 28, United States Code, and chapter 7 of title 5, United States Code:

V o, [ }. l 3 PUBLIC LAW 104-134-APR. 26,1996 .110 STAT.1321-350  ; 1 $ "(1) Any final order entered in any proceeding of the kind '

              . specified in subsection (a).
                       "(2) Any final order allowing or prohibiting a facility to                                                                                                                                ;

begin operating under a combined construction and operating > licznse.  ; j' "(3) Any final order establishing by regulation standards  ; j to govern the Department of Energy,a gaseous diffusion ura-  ! nium enrichment plants, including any such facilities leased  ! ! to a corporation established under the USEC Privatization Act. ' ' "(4) Any final determination under section 1701(c) relating i to whether the gaseous. diffusion plants, including any such  ; ficiW leased to a corporation established under the USEC  : Pri- tion Act, are in compliance with the Commission's I- sta. ..s governing the gaseous diffusion plants and all cpphe. ole laws.". (d) CIVII, PENALTIES.-Section 234 a. of the Atomic Energy J Act of 1954 (42 U.S.C. 2282(a)is amended by l (1) striking "any licensing rovision fosection . 53,57,62, 2 63, 81, 82, 101, 103, 104, 10 or 109" and inserting: "any  ! licensing or certification provis on of section 53, 57, 62, 63, . 81,82,101,103,104,107,109, or 1701"; and  ! (2) by striking "any license issued thereunder" and insert-1 - ing: any license or certification issued thereunder". l i (s) REFERENCES TO THE CORPORATION.-Following the 42 USC mie-2297 ' 4 priv:tization date, all references in the Atomic Energy Act of 1954  ;

'        to tha United States Enrichment Corporation shall be deemed to

, ba refsrences to the private corporation. ' ~ SEC. 3117. AMENDMENTS TO OTHER LAWS. i (a) DEFINITION OF GOVERNMENT CORPORATION.-As of the , privstization date. section 9101(3) of title 31. United States Code,  ! ! is emsnded by striking subparagraph (N) as added by section 902(b) l of Public Law 102-486. j , (b) DEFINITION OF THE CORPORATION.-Section 1018(1) of the  ; Entrgy Policy Act of 1992 (42 U.S.C. 2296b-7(1)) is amended by ' 4 . inserting "or its successor" before the period. a SUBCHAPTER B 16 USC 838L

        - SEC. 33o1. BONNEVillE POWER ADMINISTRATION REFINANCING.                                                                                                                                                ,

(a) DEFINITIONS.-  ; For the purposes of this section- -  ! ) (1) " Administrator" means the Administrator of the l Bonneville Power Administration; .

 .                          - (2) " capital investment" means a capitalized cost funded by Federal appropriations that-(A) is for a project, facility, or separable unit or 4                              ' feature of a project or facility;

, (B) is a cost for which the Administrator is  ;

                     *        ' required by law to establish rates to repay to the                                                                                                                               1 United States Treasury through the sale of electric 1                               . power, transmission, or other services;                                                                                                                                         ;
                                     -(C) excludes a Federal irrigation investment; and                                                                                                                          ~

(D) excludes an investment financed by the current

                              - revenues of the Administrator or by bonds issued and sold, or authorized to be issued and sold, by the t

j_ 29-139 o _96 13(l.M) T

                                                        -ns.n-            - ,                - --            , , - - - - - - - - - - - . - - - - - - - . - - - - - - . _ _ . - - - - - - - - _ _ - -   -

__ . _ . _ _ ~ - __ . _ ___ _ _ __ _ _ _ _ _ _ . . _ . . _ . . \. l \ s. PUBLIC LAW 104-134-APR. 26,1996 110 STAT.1321-350

                     "(1) Any final order entered in any proceeding of the kind specified in subsection (a).
                     "(2) Any final order allowing or prohibiting a facility to begin operating under a combined construction and operating license.
                     "(3) Any final order establishing by regulation standards to govern the Department of Energy's gaseous diffusion ura-nium enrichment plants, including any such facilities leased to a corporation established under the USEC Privatization Act.
                     "(4) Any final determination under section 1701(c) relating to whether the gaseous diffusion plants, including any such
            = facilities leased to a corporation established under the USEC Privatization Act, are in compliance with the Commission's standards governing the gaseous diffusion plants and all applicable laws.",
            . (d) CIVIL PENAI. TIES.-Section 234 a. of the Atomic Energy Act of 1954 (42 U.S.C. 2282(a)is amended by-(1) striking *any licensing provision of section 53,57,62, 63, 81, 82,101,103,104,107, or 109" and inserting: "any j        licensing or certification provision of section 53, 57, 62, 63, 81,82,101,103,104,107 109, or 1701"; and (2) by striking "any license issued thereunder" and insert-ing: "any license or certification issued thereunder".

(e) REFERENCES TO THE CORPORATION.-Following the 42 USC 2297 privatization date, all references in the Atomic Energy Act of 1954 mte. to the United States Enrichment Corporation shall be deemed to be references to the private corporation. I SEC. 3117. AMENDMENTS TO OTHER LAWS. (a) DEFINITION OF GOVERNMENT CORPORATION.-As of the privatization date, sxtion 9101(3) of title 31, United States Code, is amended by striking subparagraph (N) as added by section 902(b) of Public Law 102-486. (b) DEFINITION OF THE CORPORATION.-Section 1018(1) of the l Energy Policy Act of 1992 (42 U.S.C. 2296b-7(1)) is amended by insertmg "or its successor" before the period. 1 SUBCHAPTER B SEC. Stol. BONNEVILLE POWER ADMINISTRATION REFINANCING. 16 USC 838l. (a) DEFINITIONS.- For the purposes of this section- .. (1) " Administrator" means the Administrator of the Bonneville Power Administration: (2) " capital investment" means a capitalized cost funded by Federal appropriations that-(A) is for a project, facility, or separable unit or feature of a project or facility; (B) is a cost ' for which the Administrator is required by. law to establish rates to repay to the United States Treasury through the sale of electric power, transmission, or other services; (C) excludes a Federal irrigation investment; and (D) excludes an investment financed by the current revenues of the Administrator or by bonds issued and sold, or authorized to be issued and sold, by the

                 . 29-139 o . 96 13(134)

0 0 t i ENCLOSURE 3 SUPPLEMENT TO NUREG-1600 i l

[7590-01-P] NUCLEAR REGULATORY COMMISSION [NUREG-1600] Policy and Procedure for Enforcement Actions; Policy Statement AGENCY: Nuclear Regulatory Commission. ACTION: Policy Statement: Amendment.

SUMMARY

The Nuclear Regulatory Commission (NRC) is amending its General Statement of Policy and Procedure for Enforcement Actions (Enforcement Policy) to modify Supplement VI, " Fuel Cycle and Materials Operations." This amendment is warranted to reflect experience gained through fuel cycle enforcement actions and as a result of the Commission's recently designated responsibility for jurisdiction over the Gaseous Diffusion Plants (GDPs). In addition, the Enforcement Policy is being amended to establish base civil penalties for GDPs. By a separate action published in this issue in the Federal Register, the Commission has issued a final rule amending the current regulations that govern GDPs. The revision to the Enforcement Policy reflects ,

those amendments. DATES: This amendment is effective on (Date of Publication in the Federal Reaister]. Comments are due on or before [30 days after publication in the , Federal Reaister).  ! i I

ADDRESSES: Send written comments to: The Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555. ATTN: Docketing and Service Branch. Hand deliver comments to: 11555 Rockville Pike, Rockville, Maryland, between 7:45 am and 4:15 pm, Federal workdays. Copies of comments received miy be examined at the NRC Public Document Room, 2120 L Street, NW. (Lower Level), Washington, DC. FOR FURTHER INFORMATION CONTACT: ' James Lieberman, Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, (301) 415-2741. i SUPPLEMENTARY INFORMATION: The Commission's Enforcement Policy was first issued on September 4,  ! 1980. The Enforcement Policy is published as NUREG-1600, " General Statement 4 of Policy and Procedure for NRC Enforcement Actions (60 FR 34381; June 30,  ! l 1995)." The Enforcement Policy has been amended on a number of occasions, l most recently on October 18, 1996 (61 FR 54461). As a result of experience i gained through fuel cycle enforcement actions and amendments to 10 CFR Part 76 i being published today as a final regulation, an amendment to the Enforcement l l Policy is warranted to provide guidance on categorizing potential violations i of 10 CFR Part 76 and establish base civil penalties for violation of Part 76. j This amendment to the Enforcement Policy is being issued concurrently with the l new rule. l i 2

l Base Civil Penalties Table 1A of the policy, which establishes base civil penalties for different types of licensees, is being modified to add GDPs to category "a." The amended table will provide that the base civil penalty for a Severity Level I violation of the Commission's requirements by a GDP will be at the statutory limit of $110,000. In accordance with Table 18, base civil penalties for Severity Level II and III violations are lesser amounts. In determining the proper civil penalty amount, the Commission considered the structures of these tables, which generally take into account the gravity of the violation as a primary consideration and the ability to pay as a secondary consideration. Generally, operations involving greater nuclear material inventories and greater potential consequences to the public and to workers receive higher civil penalties. In the case of GDPs, there are large numbers of workers at the sites, significant source term present (i.e., inventory of licensed material), and various chemical and toxic substances used as part of the GDPs operations. Therefore, in the event of an accident, there is the potential for significant radiological and non-radiological hazards to members of the public, including workers, and the environment. l With regard to the secondary factor of ability to pay, it is not the NRC's intention that the economic impact of a civil penalty be so severe that l 1 it puts the licensee or certificate holder out of business' or adversely l l Orders, rather than civil penalties, are used when the intent is to l suspend or terminate licensed activities. 3

affects a licensee's or certificate holder's ability to safely conduct licensed activities. The deterrent effect of civil penalties is best served when the amount of penalties take into account a licensee's or certificate holder's ability to pay. In this case, issuing a civil penalty of less than

 $110,000 to the Corporation for a significant violation would be disproportionate to the Corporation's significant revenues.       In other words, a civil penalty of $110,000 for a Severity Level I violation would be financially appropriate, but not financially crippling.       In addition, a penalty based on this amount should get more attention from the Corporation and should have a greater deterrent effect.

Given the financial resources of GDPs, it is appropriate to utilize significant civil penalties to provide an effective deterrence from violating the Commission's requirements such that the likelihood of performance necessitating a shutdown order would be minimal. Accordingly, a base civil penalty of $110,000 is appropriate in view of the potential consequences during an accident and the ability to pay. In addition, establishing the base civil penalty at the statutory limit would provide, at the outset, a clear l message concerning the cost of noncompliance and additional motivation to maintain safety and compliance. Severity Levels The policy recognizes that regulatory requirements have varying degrees of safety, safeguards, or environmental significance. Therefore, the relative importance of each violation, including both the technical significance and the regulatory significance, is evaluated as the first step in the enforcement 4 l l

      .   . - - _-                    .     . . .     .   .. .  . _ - _ . =    _  _    - .-.

L - 4 i process. In considering the significance of a violation, the staff considers the technical significance (i.e., actual and potential consequences) and regulatory significance. Supplement VI, " Fuel Cycle and Materials Operations," is being amended to provide additional examples for categorizing the severity levels of violations. The changes are: Severity Level I

1. Example A.5, which is being added to Supplement VI, is consistent with Supplement I guidance. This example is applicable for the Gaseous Diffusion Plants (GDPs) because other fuel facilities do not have Technical Safety Requirements (TSRs). Safety limits are those bounds within which the process variables must be maintained for adequate control of the operation and that must not be exceeded in order to protect the integrity of the physical system that is designed to guard against the uncontrolled release of radioactivity.

2. Example A.6 is being added to Supplement VI to emphasize that a significant injury or loss of life due to a loss of control over licensed or certified activities, including chemical processes that are integral to the licensed or certified activity, whether radioactive material is released or not, is of very significant regulatory concern. This concern exists because an actual impact to the health and safety of the public or workers has occurred from activities related to the processing of radioactive material.

5

Severity Level II

1. Example B.4 is being added to Supplement VI to emphasize that, although less significant than Example A.3 in Supplement VI, the absence of all the criticality safety controls for a single anticipated or unanticipated nuclear criticality scenario is of very significant regulatory concern when the availability of fissile material makes a nuclear criticality accident possible.

2. Example B.5 is being added to Supplement VI to underscore that events which do not involve actual significant injuries or loss of life, but reasonably could have if circumstances had been different, are considered of very significant regulatory concern.

Severity Level III

1. Example C.5 is being modified in Supplement VI so that it is consistent with Supplement IV guidance. The NRC considers that a substantial potential for exposures, radiation levels, contamination levels, or releases (including releases of toxic material) caused by the failure to comply with NRC regulations or with procedures established to comply with license conditions to be a significant regulatory concern because it could have serious consequences to the public and licensee employees.

2. Example C.12 is being added to Supplement VI to emphasize that the failure of a certified facility to comply with a limiting condition for operation is considered a significant regulatory concern. This example is similar to Supplement I guidance and has been selected for the GDPs because other fuel cycle facilities do not have TSRs.

6

3. Example C.13 is being added to Supplement VI to emphasize that the loss of defense-in-depth over licensed or certified activities is considered a significant regulatory concern. This example is consistent with Supplement I guidance and is applicable to both fuel cycle and gaseous diffusion operations ~.

4. Example C.14, which is consistent with Supplement I guidance, is being added to Supplement VI. This example is generally applicable to the fuel cy:le facilities.

5. Example C.15 is being added to Supplement VI. The failure to meet the requirements of 10 CFR 76.68 is significant because of the importance of certificate holders using the required process for maintaining and operating the facilities in accordance with the design and procedures described in their safety analysis report when there is uncertainty as to whether an unreviewed safety question is present. An after-the-fact evaluation that demonstrates that an unreviewed safety question was not involved would, in general, not mitigate the regulatory significance of failing to perform an appropriate evaluation prior to implementation of the change.

6. Example C.16 is being added to Supplement VI to emphasize that adequate control over vendors or contractors performing safety-related work or providing safety-related services is a significant regulatory concern. This example amplifies the NRC's concern that all safety-related activities, whether performed by the certificate holder or by one of its contractors, be conducted in accordance with the requirements in the application, TSRs and certificates.

7. Example C.17, which is consistent with the Supplement I guidance, is being added to Supplement VI. This example points out that equipment failures 7

caused by inadequate or improper maintenance that substantially complicates recovery from a' plant transient is a significant regulatory concern.

8. Example C.18 is being added to Supplement IV. This example l

indicates that the absence of all but one criticality safety control for a single anticipated or unanticipated nuclear criticality scenario is a significant regulatory concern when a critical mass of fissile material was preser.t or reasonably available, because a nuclear criticality accident was possible. S9 verity Level IV

1. Although less significant than the above examples, examples D.5 through D.8 are being added to Supplement VI to stress that such failures are more than a minor concern because they could lead to a more serious concern if ,

i left uncorrected. Paperwork Reduction Act Statement l This policy statement does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget, approval number 3150-0136. The approved information collection requirements contained in this policy statement appear in Section VII.C. 8

l Public Protection Notification The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Small Business Regulatory Enforcement Fairness Act In accordance with the Small Business Regulatory Enforcement Fairness j Act of 1996, the NRC has determined that this action is not a " major rule" and

              -    has verified this determination with the Office of Information and Regulatory         '

1 Affairs, Office of Management and Budget. Accordingly, Table IA, Category a., and Supplement VI, " Fuel Cycle and Materials Operations," of the NRC Enforcement Policy are amended as follows: GENERAL STATEMENT OF POLICY AND PROCEDURE FOR NRC ENFORCEMENT ACTIONS VI. ENFORCEMENT ACTIONS 9

__~ __ _ ___ _ _. . . - _. __ . I B. Civil Penalty TABLE 1A--BASE CIVIL PENALTIES  ; i

a. Power reactors and gaseous diffusion plants.......$110,000 -

b. Fuel fabricators, industrial processors, I and independent spent fuel and monitored

{ retrievable storage installations. . . . . . . . . . . . . . . . . 527,500

c. Test reactors, mills and uranium conversion -

l facilities, contractors, vendors, waste disposal licensees, and industrial  ! radiographers......................................511,000

d. Research reactors, academic, medical, or other materi al licensee . . . . . . . . . . . . . . . . . . . . . . . . .$5,500 2

i J f i i

• This applies to nonprofit institutions not otherwise categorized in I

this table, mobile nuclear services, nuclear pharmacies, and physician offices. '

                  *             *             *                     *

• I 10

                                                                                                            )

i , t

SUPPLEMENT VI--FUEL CYCLE AND MATERIALS OPERATIONS This supplement provides examples of violations in each of the four severity levels as guidance in determining the appropriate severity level for violations'in the area of fuel cycle, gaseous diffusion plants, and materials operations. A. Severity Level I - Violations involving for example:

3. A nuclear criticality accident;

. 4. A failure to follow the procedures of the quality management program, required by 10 CFR 35.32, that results in a death or serious injury 3 (e.g., substantial organ impairment) to a patient; ) i

5. A safety limit, as defined in 10 CFR 76.4, the Technical Safety l 4

Requirements, or the application being exceeded; or 4

6. Significant injury or loss of life due to a loss of control over

< licensed or certified activities, including chemical processes that are integral to the licensed or certified activity, whether radioactive material is released or not. i l B. Severity Level II - Violations involving for example: I 4 * * * *

• i

2. A system designed to prevent or mitigate a serious safety event  ;

being inoperable; ' 11

                                                                -   .   . . - = _

1 1

3. A substantial programmatic failure in the implementation of the

quality management program required by 10 CFR 35.32 that results in a misadministration;

4. A failure to establish, implement, or maintain all criticality controls (or control systems) for a single nuclear criticality scenario when a critical mass of fissile material was present or reasonably available, such that a nuclear criticality accident was possible; or

5. The potential for a significant injury or loss of life due to a loss of control over licensed or certified activities, including chemical processes that are integral to the licensed or certified activity, whether radioactive material is released or not (e.g., movement of liquid UF, cylinder by unapproved methods).

C. Severity Level III - Violations involving for example

1. A failure to control access to licensed materials for radiation protection purposes as specified by NRC requirements;

5. A substantial potential for exposures, radiation levels, contamination levels, or releases, including releases of toxic material caused by a failure to comply with NRC regulations, from licensed or certified activities in excess of regulatory limits;

10. A failure to receive required NRC approval prior to the implementation of a change in licensed activities that has radiological or l programmatic significance, such as, a change in ownership; lack of an R50 or 12 l

i

i replacement of an RSO with an unqualified individual; a change in the location where licensed activities are being conducted, or where licensed material is being stored where the new facilities do not meet safety guidelines; or a change in the quantity or type of radioactive material being processed or used that has radiological significance;

11. A significant failure to meet decommissioning requirements including a failure to notify the NRC as required by regulation or license condition, substantial failure to meet decommissioning standards, failure to conduct and/or complete decommissioning activities in accordance with regulation or license condition, or failure to meet required schedules without adequate justification;

12. A significant failure to comply with the action statement for a Technical Safety Requirement Limiting Condition for Operation where the appropriate action was not taken within the required time, such as:

(a) In an autoclave, where a containment isolation valve is inoperable for a period in excess of that allowed by the action statement; or (b) Cranes or other lifting devices engaged in the movement of cylinders having inoperable safety components, such as redundant braking systems, or other safety devices for a period in excess of that allowed by the action statement;

13. A system designed to prevent or mitigate a serious safety event:

(a) Not being able to perform its intended function under certain conditions (e.g., safety system not operable unless utilities available, materials or components not according to specifications); or (b) Being degraded to the extent that a detailed evaluation would be required to determine its operability; 13

14. Changes in parameters that cause unanticipated reductions in margins of safety;

15. A significant failure to meet the requiraments of 10 CFR 76.68, including a failure such that a required certificate amendment was not sought;

16. A failure of the certificate holder to conduct adequate oversight of vendors or contractors resulting in the use of products or services that l are of defective or indeterminate quality and that have safety significance; I

17. Equipment failures caused by inadequate or improper maintenance

that substantially complicates recovery from a plant transient; or

18. A failure to establish, maintain, or implement all but one

! criticality control (or control systems) for a single nuclear criticality 1 scenario when a critical mass of fissile material was present or reasonably ] available, such that a nuclear criticality accident was possible. i D. Severity Level IV - Violations involving for example: 1 i 2. Other violations that have more than minor safety or environmental significance;

3. Failure to follow the quality management (QM) program, including procedures, whether or not a misadministration occurs, provided the failures '

are isolated, do not demonstrate a programmatic weakness in the implementation of the QM program, and have limited consequences if a misadministration is involved; failure to conduct the required program review; or failure to take corrective actions as required by Section 35.32;

4. A failure to keep the records required by Sections 35.32 or 35.33; l

14 l l i

5. A less significant failure to comply with the Action Statement for a Technical Safety Requirement Limiting Condition for Operation when the appropriate action was not taken within the required time;

6. A failure to meet the requirements of 10 CFR 76.68 that does not result in a Severity Level I, II, or III violation;

7. A failure to make a required written event report, as required by 10 CFR 76.120(d)(2); or

8. A failure to establish, implement, or maintain a criticality control (or control system) for a single nuclear criticality scenario when the amount of fissile material available was not, but could have been sufficient to result in a nuclear criticality.

Dated at Rockville, Maryland, this day of 1996. For the Nuclear Regulatory Commission. John C. Hoyle, Secretary of the Commission. 15 i I

                                                                                 \

_ , _ - , __.m h ENCLOSURE 4 USEC LETTER 1 l l i 1 l l

United States Ennchm:nt Corporation

      -                                                                                            2 Dernocracy Center 6903 Rockledge Drivr:

Bethesda MD 20817 Tel (301)564 3200 Fan (301) S64-3201 United States Enrichment Corp > ration November 13,1996 Mr. Charles W. Nilsen SERIAL: GDP 96-0195 US Nuclear Regulatory Commission Two White Flint North 11555 Rockville Pike Rockville, MD 20852-2738 Paducah Gaseous Diffusion Plant (PGDP) Portsmouth Gaseous Diffusion Plant (PORTS) Docket Nos. 70-7001 and 70-7002 Direct Final Rulemaking - Part 76 This letter is in response to the posting on FedWorld, the NRC's electronic bulletin board, of the "Rulemaking Plan - USEC Privatization Act" for information and comment. The United States Enrichment Corporation (USEC) is pleased to provide proposed revisions to 10 CFR Parts 76, 70 and 40 for the purposes ofimplementing the USEC Privatization Act signed into law by President Clinton on April 26,1996. In addition to these revisions, we have also proposed language to 76.45 to clarify the agency's intention conceming Director's decisions on applications for amendments to the Certificate. This proposed clarification is consistent with the process followed by the agency concerning decisions on license amendment requests for nuclear power plants. Finally, we have also proposed deleting certain sections which are immaterial now that the Director's decision on the initial certification has been issued. We would be pleased to discuss these proposed revisions and respond to any questions. Please contact me or Ms. Lisamarie Jarriel at (301) 564-3247. Sincerely,

                                                ;                  VM h Robert L. Woolley Nuclear Regulatory Assurand6 and Policy Manager Enclosure Offices in Paducah. Kentucky Portsmouth. Ohio Washington. DC

 ~

UNITED STATES ENRICHMENT CORPORATION Comments on NRC's Rulemaking Plan - USEC Privatization Act i Secti:n # Proposed Revision 10 CFR 76 76.31 "The Corporation shall . . and therefore, the Corporation shall apply to the Commission each Lcar on or beforc Ap-i! 15 periodicsBy$dsteriisiissiS~tSW

                                                                    -  . ~ . . ~ - - -
                                                                                                      ^ ~~"M66f"66(Miidnin.
                                                                                                           ..~-- - +     .
                'every: 5_ year.       ereva, l of a certificate of compliance in accordance with 76.36. An,y.

s, for r.~.- ~ hertdicatSofc6N=WissueddiE C6mmissid6~lsElllspecifftE'dasiMylish tikidi applicationlidue;" 76.36 "{ 76.36 Annud renc=6 ReneWalofEsrtifisatis.

                "(a) After issuance by the Commission of. . the Corporation shall @6didallj file an annual application for renewal, .

76.43 "{ 76.43 Annud dDate for decision." 4 Q 76.45 "(a) Contents of amendment application. In addition to the annud an application for certific^ tion ieneual 6f aicertifliati submitted .

                "(b) Director's decision. Upon receipt. .the Director will, after appropriate review, issue a decision pursuant to subpart C of this partiex'cep{that Difebt6?s decisi6nsLdn applicationpfor;.

amendmehts will bs Effestise upon issuance? Such;debisi6ns will bes6me final As prescribed inf{ 76,62(c)." Q 76.55 "In any case in which the Corporation has timely filed a sufIicient annual application for seneWal of a certificate . . does not expire until the application for a certifiate of cc:npli .nce fenewal bs been finally determined . 76.60 "(a) The Corporation shall .

                   ~
                 "(b) TElCoris6fatiorisisalll hot bi'own5d[66ntr611ed[;or[dominaisdgan'hi@i' foreign h0N(.~or a foreign government;
                 ,"(s) C6Edaisiiisisil~not be inimidal t6*thsmainienanceI6fneliablibd"economi6domestid
                                                               ~                      - -                -
                  "(bd) The Corporation shall .

v. .- -__ +---u - _._ _ ____ _ _ . m_

         ~

USEC Comments on Enclosure NRC's Rulemaking Plan USEC Pnvatization Act Page 2 of 3 J Section # Proposed Revision 10 CFR 76 (cont.) 76.60 (cont.) "(es) The Corporation shall comply with the applicable provisions of 10 CFR part 19, " Notices, Instructions and Reports To Workers: Inspection and Investigations?," v.i:h the fc!!cwing __J:c__.u__. a s avus a avu s ava na. in en v. _r.t:, m, ya c : .,.:s., _y a_ .._ .a _ . t.~. _a s: s._ar_v _.~ _u Jva_a . .a~ i . .:a_,a _a __,. .a~. t. _ c~__ v a_rua _ _ . .~a

_ _a_. . . ..~

y.sa . __a._.~. _ v.c _ 4..~ .a a. _L__.__ _,___. r_ ..: t_ L __ _f c, .:- ent r L r ___ _. n ______ L _a!: vaa4 _ A _. aw s . w a auyswa wnwy. ava . ave - .4va sa va swu savaa *vv va .saw unma gy aswva gua-11_ _ ,. un r. r_ _ 9 I, \ TL c _ . _ _ _ . L _ L ._u a g f a saw vva yva usavaa asa yuas siasv a vaan e s avs1..wa a . __.anuaa

                                                                                                                                         .L _ _ .L  umw _ Juusv

_. _ va _ eun n' _ww6va _. _ sa Jwwaa~aa

                                                                                                                                                                                             - _M _ _vaa  _ _ a4.L  sw-L:.L1__              :c__ ._ _ c _ _ _ _ t : _ _ _ _ _ _ J /,. __aaL_: . L t _1__ _ r_ ., .L L .* _ .
                                                                                                                              . ma  uvum      . use         _
                                                                                                                                                            .vuayu  _ , L__   _

a_,_ .J.._*__

                                                                                                                                                                                       .as u s, 4L_

u m 4,w,am _ uma- -a.as_ m v. vvamayas aa_ _ a_ va ._a ya n r . t. vs .a~ _~ a...~

C ~ . .,_ _ A ~r ma o n.~.J. .,.,.

                                                                            .     ..,. c 11m.~n ... .a.:a~.
                                                                                                                 ,. ~ : c ,. _ . _ L_.

se w a . a ma _ . .. a a aaa

.~as

                      "(df) The Corporation shall comply with the applicable provisions of 10 CFR part 20, " Standards For Protection Against Radiation l," veith the fc!!cwing modiSca icas:

_. . . . . _ _. . _ c ~. , n , 4 n i _ r . t. : . m, c : . a.a

                                        .: i. _v~a _ i..~asa-
                                                            .u- _ ,. . _ .a~. t. _ :- ._ _saaarv.~

_ _ _ J _a _vas . t. .a~

                                                                                                                    , c v_ __e     v_ _a
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v.s .a a. chap;ct cxecp: for v;claticas of ,cctica 205 of:he Energy Recrgad:-tica Ac:. I' _ ,. . L _ L ,,11 _ . _ _ f . . . . . L . L _ . _ . . L _ _ _ _ . L . L * ,. _ ,. - ,. 1,. . _ _ . L__ _ . L ,. J _ . _ _ c I, g \, T4Lsaw. vva yva u6avn anuaa vvanyay v. uu um a v pau waama s.a an uua yua m savs suwa 6a sa .uw wuw va

                      .L n:.._._s J__L'                          - __      .L,. L:.Lt __               :r__._ _r _ __t:,.___                     __J/_            -     ___:c J L __ __.                   .._J
                      .asw un wwws a uwaasvaa vaa usw uuuua wwa uuwu6w va wvuayasuna suaw va ua aywwuawu asa un uyya v v wu plan for achic.ing compli nce.
                      "(es) The Corporation shall comply with the applicable provisions of 10 CFR pan 21, "Reponing of Defects and Noncompliance.," .v;;h the fc!!cv.ing modiEca:icas:

(!) The Corpora:ica ;ha!! comply . ith :he require =ca:s in Sec ; 21.5 and 21.21 nc: !ater than th; da:c cf:he Directors decisica on the initial certiScate of compliance and/or n initial phn for _ _ t. u. .L _ .. _ _ , L _ _ _ uwauw v us3 svu ayuunww. (2) Under Sec. 2131, procurement documents issued by the Corpora:ica ancr it ;ubmi:s the initial applica:ica for a cer:!ficate of compliance mu ; ;pecifj : hat the provi:; ions of 10 CFR pa-:

                      ,,__t,..
                      .a uyya
                      "(fh) The Corporation shall .
                      "(gi) The Corporation shall .
                      "(hj) The Corporation shall .
                       "(ik) The Corporation shall comply nh the applicable provisions of 10 CFR part 95, " Security Facility Approval and Safeguarding of National Security Information and Restricted Data," as specified in subpart E to this parti provid d, hoveever, that civil penahics ;ha!! not bc imposed en
                       .t._c____.:__-....__._c,.                                           n e a _ r . t.u _t. _. _. . __. r . . .u, . L _ _ c c _. : _ _ ,vvncvac um                                            . t._

Ta m vvayvauuvu yusauun. ~ sw. -s.va va u ua va my m. vnwy. ava .avmuvua va wwwuvu r____.n______L.L_ a.n a u*' 5J ' v ' 5"* "'"* " v " d *

• 6 -

J Q 76.66 "(c) If the Corporation does not subrnit en-ennuel a timal renewal application under Q 76376.. " l

t. USEC Comments on Enclosure ) NRC's Rulemaking Plan - USEC Privatization Act Page 3 of 3 J l 1 i Section # Proposed Revision i 10 CFR 76 (cont.) , I

    % 76.72             "(d) The procedures set forth in 10 CFR 2.205, and in 10 CFR part 2, subpart G, will be applied in connection with NRC action to impose a civil penalty pursuut to S;;;ica 205 cf the Entgy Recrg=ist:ca Act of 1971 =d the imp!; men:ing regu!; icas in 10 CFR pr.r: 21 (Repc".ing of Def=:s ad Nonec;nplia=c), n authori=d by Scc:ica 1312(c) cf he Atomi; Entgy Ac cf 1954, = a:nnded,"

76.131 "(b) The Commission may obtain a court order for the payment of a - civil penalty imposed under Section +312(c) cf the A:c=ic Energy Act of 1954, s amaded, and Sectica 205 cf the E=rgy Recrgaintica Act of 1974, as maded, and for a violatica cf S=tica 206 cf the Energy I Rectgulatica Act of1974, n maded. 234lbf ths^idruidEneip? Act!

                       , ((l) Form 61ations"6f any licensing 6r certification provision of:                                         I
                           ! (i) Sections 53l57/62,63,;81l82,,101003fl04A107,(109lor 1701 ;of the Atomic Energy lAet
                                       ^

of1954,: as amended, 1 (ii) Section 206.of thh Energy Reorganintion Act;

                           ' (iii)' Any rule, regulation, or order issued pursuant toithe sections'specifiEd in paragrkph (b)(1)(i) of this section;
                        ~ (iv) Any term, condition, or limitation 6f snilicense or ssrtificile issssd undsr tisiktions              ;

specified in paragraph (b)(1)(i) of this section; i w a license may.be revoked undsr secti'o n;186 of the Atomic f(2) For an) violation for . hich EnersEAct of1954Taiamended; 10 CFR PART 70

    % 70.4              " Uranium enrichmentfacility means:

1 (1) Any facility used for separating the isotopes of uranium or enriching uranium in the isotope 235 including a facility usins at6mic ..por laser isotope'sep'ar'atidritesimol6gy except. 10 CFR PART 40 l l

    % 40.4              " Uranium enrichmentfacility means:

l (1) Any facility used for separating the isotopes cf uranium or enriching uranium in the isotope 235 including;T fasiliip;insing at6mic vapoi laser isdtop siparafi6tiidchnology except. l l l l l

L 4 4 4 ENCLOSURE 5 PUBLIC ANNOUNCEMENT l 1 l l 1

l 4 f l 4 NRC REVISES REGULATIONS FOR URANIUM ENRICHMENT FACILITIES OPERATED BY USEC OR ITS SUCCESSOR j ' The Nuclear Regulatory Commission is revising its i regulations for uranium enrichment facilities operated by the United. States Enrichment Corporation (USEC) to be consistent with

provisions of the USEC Privatization Act.

f The principal effect of the act, which was signed into law  : on April 26, is to require the government-owned USEC to sell its i l assets to a private company.  ; 4 The act also changes the way uranium enrichment facilities

- operated by USEC or its successor are to be certified or licensed by the NRC. NRC has therefore changed its regulations to

(1) Incorporate authority granted by the legislation to  !

impose civil penalties on USEC or its successor if NRC i

requirements are violated.

i (2) Specify that the Commission will not issue a certificate i or license to a foreign-owned or dominated corporation, and will not issue a certificate or a license if it would be inimical to i the common defense and security of the United States or the i maintenance of a reliable and economical domestic source of i l enrichment services. (3) Revise the frequency with which the operator of the

existing gaseous diffusion plants must apply to NRC for a certificate of compliance with NRC regulations. Currently the 1

I

operator must apply for recertification annually. The revisions state that the operator must apply for a new certificate of compliance before April 15 of the year specified by NRC, but at least every five years. 4 (4) Establish the licensing process for atomic vapor laser isotope separation enrichment facilities as a single-step process similar to the one used for nuclear materials licenses, rather than the two-step process used for nuclear power plants. The revised regulations will be effective on (60 days

after publication of a Federal Register notice on ), unless

significant adverse comments are received by 1

(30 days af ter the Federal Register notice) . 3 The NRC is also amending its policy statement related to i l enforcement actions to reflect the new authority to issue civil  ! penalties for the gaseous diffusion plants. The maximum for the  ! i l i most severe violations of NRC requirements will be $110,000 for 4 each violation, each day. Interested persons may submit written comments to the ) 1 Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 02555-0001, Attention: Docketing and Service Branch. Comments may also be submitted electronically, as described in the Federal

 ;    Register notice.

2

l I l* l l l* 1 i a ENCLOSURE 6 l CONGRESSIONAL COMMITTEE LETTERS

. l l f*C':u gj & UNITED STATES 2

j NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 3066He01

    \...../

Mr. Robert P. Murphy General Counsel General Accounting Office Room 7175 441 G Street, NW Washington, DC 20548

Dear Mr. Murphy:

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801, the Nuclear Regulatory Commission (NRC) is submitting a direct final rule amending its regulations to conform the licensing of uranium enrichment facilities to changes made to the Atomic Energy Act of 1954, as amended (the Act) by Public Law 104-134. Included within the legislation is a subchapter entitled the "USEC Privatization Act," which directs the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation that purchases the assets of the Corporation will be responsible for the operation of the two gaseous diffusion uranium enrichment plants, known as the Portsmouth Plant and the Paducah Plant, located at Piketon, Ohio, and Paducah, Kentucky, respectively, and the development of the atomic vapor laser isotope separation (AVLIS) technology. In addition, this legislation amended the Act with respect to the NRC licensing of enrichment using AVLIS technology, and certification of the uranium enrichment operations at the two gaseous diffusion plants. To implement these amendments to the Act, this final rule makes several conforming changes to 10 CFR Parts 2, 40, 70, and 76, and to the NRC Enforcement Policy (NUREG-1600). We have determined that this rule is not a " major rule" as defined in 5 U.S.C. 804(2). We have confirmed this determination with the Office of Management and Budget. Enclosed is a copy of the final rule, which is being transmitted to the Office of the Federal Register for publication. Neither a Regulatory Flexibility Certification nor a Regulatory Analysis has been prepared for this minor, nonsubstantive amendment which has no economic impact on NRC licensees or the public. This final rule is scheduled to become effective 60 days after publication in the Federal Register unless significant adverse comments are received. In that case, the NRC will withdraw this action and address the significant adverse comments received before a final rule becomes effective. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule

*  *                                                                                      (

g enuso 4  % UNITED STATES f j f NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20066-0001 e%..... /. The Honorable Al Gore President of the United States Senate Washington, DC 20510

Dear Mr. President:

         . Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801, the Nuclear Regulatory Commission (NRC) is submitting a direct final rule amending its regulations to conform the licensing of uranium enrichment facilities to changes made to the Atomic Energy Act of 1954, as amended (the Act) by Public Law 104-134.      Included within the legislation is a subchapter entitled the "USEC Privatization Act,"

. which directs the Board of Directors of the United States Enrichment ! Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation that purchases the assets of the Corporation will be responsible for the operation of the two gaseous diffusion uranium enrichment plants, known as the Portsmouth Plant and the Paducah Plant, i located at Piketon, Ohio, and Paducah, Kentucky, respectively, and the 4 development of the atomic vapor laser isotope separation (AVLIS) technology. 4 In addition, this legislation amended the Act with respect to the NRC licensing of enrichment using AVLIS technology, and certification of the uranium enrichment operations at the two gaseous diffusion plants. To implement these amendments to the Act, this final rule makes several conforming changes to 10 CFR Parts 2, 40, 70, and 76, and to the NRC Enforcement Policy (NUREG-1600). We have determined that this rule is not a " major rule" as defined in 5 U.S.C. 804(2). We have confirmed this determination with the Office of Management and Budget. , Enclosed is a copy of the final rule, which is being transmitted to the Office of the Federal Register for publication. Neither a Regulatory Flexibility Certification nor a Regulatory Analysis has been prepared for this minor, nonsubstantive amendment which has no economic impact on NRC licensees or the public. This final rule is scheduled to become effective 60 days after publication in the Federal Reaister unless significant adverse comments are received. In that case, the NRC will withdraw this action and address the significant adverse comments received before a final rule becomes effective. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule ?-

   .e.

pMe%q p t UNITED STATES

       ;!           [           NUCLEAR REGULATORY COMMISSION
       "                                                                                      I 2                     WASHINGTON, D.C. 20066-0001
        \...../                         .

Honorable Newt Gingrich Speaker of the United States House of. Representatives-Washington, DC 20515

Dear Mr. Speaker:

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801, the Nuclear Regulatory Commission (NRC) is submitting a direct final rule amending its regulations to conform the licensing of uranium enrichment facilities to changes made to the Atomic Energy Act of 1954, as amended (the Act) by Public Law 104-134. Included within the legislation is a subchapter entitled the "USEC Privatization Act,"

 ,         which directs the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity.

The private sector corporation that purchases the assets of the Corporation

will be responsible for the operation of the two gaseous diffusion uranium enrichment plants, known as the Portsmouth Plant and the Paducah Plant, located at Piketon, Ohio, and Paducah, Kentucky, respectively, and the development of the atomic vapor laser isotope separation (AVLIS) technology.

In addition, this legislation amended the Act with respect to the NRC licensing of enrichment using AVLIS technology, and certification of the uranium enrichment operations at the two gaseous diffusion plants. To implement these amendments to the Act, this final rule makes several conforming changes to 10 CFR Parts 2, 40, 70, and 76, and to the NRC Enforcement Policy (NUREG-1600). We have determined that this rule is not a " major rule" as defined in 5 U.S.C. 804(2). We have confirmed this determination with the Office of Management and Budget. Enclosed is a copy of the final rule, which is being transmitted to the Office of the Federal Register for publication. Neither a Regulatory Flexibility Certification nor a Regulatory Analysis has been prepared for this minor, nonsubstantive amendment which has no economic impact on NRC licensees or the public. This final rule is scheduled to become effective 60 days after publication in the Federal Recister unless significant adverse comments are received. In that case, the NRC will withdraw this action and address the significant adverse comments received before a final rule becomes effective. Sincerely, 1 Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule

eterg% y UNITED STATES s" j NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20666 4001

      +9 . . . . . ,o The Honorable Lauch faircloth, Chairman Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety Committee on Environ'nent and Public Works United States Senate Washington, DC 20510

Dear Mr. Chairman:

Enclosed for the information of the subcommittee is a copy of a final amendment to 10 CFR Parts 2, 40, 70, and 76 to be published in the Federal Register. The Nuclear Regulatory Commission (NRC) is amending its regulations to conform the licensing of uranium enrichment f M 11 ties to changes made to the Atomic Energy Act of 1954, as amended (the Act; by Public Law 104-134. Included within the legislation is a subchapter entitled the "USEC Privatization Act," which directs the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation that purchases the assets of the Corporation d will be responsible for the operation of the two gaseous diffusion uranium enrichment plants, known as the Portsmouth Plant and the Paducah Plant, located at Piketon, Ohio, and Paducah, Kentucky, respectively, and the development of the atomic vapor laser isotope separation (AVLIS) technology. In addition, this legislation amended the Act with respect to the NRC licensing of enrichment using AVLIS technology, and certification of the uranium enrichment operations at the two gaseous diffusion plants. To implement these amendments to the Act, this direct final rule makes several conforming changes to 10 CFR Parts 2, 40, 70, and 76, and to the NRC Enforcement Policy (NUREG-1600). Neither a Regulatory Flexibility Certification nor a Regulatory Analysis has been prepared for this minor, nonsubstantive amendment which has no economic . impact on NRC licensees or the public. This final rule is scheduled to become effective 60 days after publication in the Federal Reaister unless significant adverse comments are received. In that case, the NRC will withdraw this action and address the significant adverse comments received before a final rule becomes effective. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule cc: Senator Bob Graham

 .                                                                                       i va "849
   ,y          \                           UNITED STATES
                 ,            NUCLEAR REGULATORY COMMISSION 3             &                     WASHINGTON, D.C. 20066 4 001                      1 g%
              /                                                                          ;

The Honorable Dan Schaefer, Chairman Subcomittee on Energy and Mr Comittee on Commerce United States House of Representatives Washington, DC 20515

Dear Mr. Chairman:

Enclosed for the information of the subcommittee is a copy of a final amendment to 10 CFR Parts 2, 40, 70, and 76 to be published in the Federal Register. The Nuclear Regulatory Commission (NRC) is amending its regulations to conform the licensing of uranium enrichment facilities to changes made to the Atomic Energy Act of 1954, as amended (the Act) by Public Law 104-134. Included within the legislation is a subchapter entitled the "USEC Privatization Act," which directs the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation that purchases the assets of the Corporation will be responsible for the operation of the two gaseous diffusion uranium enrichment plants, known as the Portsmouth Plant and the Paducah Plant, l located at Piketon, Ohio, and Paducah, Kentucky, respectively, and the i

development of the atomic vapor laser isotope separation (AVLIS) technology.

In addition, this legislation amended the Act with respect to the NRC licensing of enrichment using AVLIS technology, and certification of the uranium enrichment operations at the two gaseous diffusion plants. To implement these amendments to the Act, this direct final rule makes several conforming changes to 10 CFR Parts 2, 40, 70, and 76, and to the NRC Enforcement Policy (NUREG-1600). Neither a Regulatory Flexibility Certification nor a Regulatory Analysis has been prepared for this minor, nonsubstantive amendment which has no economic j impact on NRC licensees or the public. This final rule is scheduled to become effective 60 days after publication in the Federal Register unless significant adverse comments are received. In that case, the NRC will withdraw this action and address the significant adverse coments received before a final rule becomes effective. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule cc: Representative Frank Pallone

a 2 m. O a 4 s 1 ENCLOSURE 7 MAJOR RULE i 1 4 4

o V AGENCY: Nuclear Regulatory Commission TITLE OF ACTION: USEC Privatization Act LEVEL OF SIGNIFICANCE: Not a major rule UPCOMING ACTION: Final rule IDENTIFICATION NUMBER: 3150-AF56 ESTIMATED DATE OF ISSUANCE: December 1996 STATUTORY OR JUDICIAL DEADLINE: None DESCRIPTION OF ACTION: This final rule amends the Nuclear Regulatory Commission's regulations concerning the licensing of uranium enrichment facilities to reflect changes made to the Atomic Energy Act of 1954, as amended (the Act) by Public Law 104-134. Included within the legislation is a subchapter entitled the "USEC Privatization Act," which among other things, directs the Board of Directors of the United States Enrichment Corporation (USEC) to sell the assets of the USEC to a private sector entity. The private sector corporation that purchases the assets of the Corporation will be responsible for the operation of the two gaseous diffusion facilities, known as the Portsmouth Plant and the Paducah Plant, located at Piketon, Ohio, and Paducah, Kentucky, respectively, and the development of the atomic vapor laser isotope separation (AVLIS) technology. In addition, this legislation amended the Act with respect to the NRC licensing of AVLIS enrichment and certification of the two gaseous diffusion uranium enrichment operations. This final rule makes several conforming changes to 10 CFR Parts 2, 40, 70, and 76 to implement the amendments to the Act. Conforming changes are also being made to the NRC Enforcement Policy (NUREG-1600). A Regulatory Flexibility Certification has not been prepared for this minor, nonsubstantive amendment which has no economic impact on NRC licensees or the public. A Regulatory Analysis statement is contained in the final rule.

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