ML20149F784
| ML20149F784 | |
| Person / Time | |
|---|---|
| Issue date: | 01/15/1987 |
| From: | Zech L NRC COMMISSION (OCM) |
| To: | Bush G SENATE, PRESIDENT OF THE SENATE |
| References | |
| NUDOCS 8801140335 | |
| Download: ML20149F784 (16) | |
Text
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, # o UNITED STATES
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! , g NUCLEAR REGULATORY COMMISSION I g WASHINGTON, D. C. 20555
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CHAlRMAN January 15, 1987 y y
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f%e}4 The Honorable George H. W. 3ush President of the "nited States Senate Washington, D.C. 20510
Dear Mr. President:
Enc'osed is a Nuclear Regulatory Comission legislative proposal in the form of a draf t bill to aniend section 206 of the Energy Reorganization Act of 1974, as amended. Its purpose is to extend the coverage of section 206 to assure that the Comission receives proper notice of defects or violations in nuclear power plants and other regulated activities which could create substantial safety hazards.
Section 206 of the Energy Reorganization Act requires directors and responsible officers of firms constructing, owning, operating, or supplying the components of any facility or activity which is licensed or otherwise regulated pursuant to that Act or the Atomic Energy Act of 1954, as amended, to notify the Comission imediately when they have knowledge of any defect which could create a substantial safety hazard or of any failure to comply with any Comission regulation, order or license which relates to substantial safety hazards. Knowing and conscious failure to do so exposes an individual to a civil penalty.
The Cortnission's bill would make the fim itself also directly responsible for failure to notify the Comission. In imple.7,enting section 206 through Part 21 of its regulations, the Comission detemined that compliance with section 206 could best be assured by requiring affected fims to adopt and implement procedures for the proper evaluation of information indicative of potential hazards within the scope of section 206 and for infoming directors and responsible officers. The institutional resources of affected firms thus should be brought to bear to assure routine compliance. It is therefore appropriate that the statute be clear that the firm itself is directly responsible for compliance. A firm may be liable for any failure to notify the Comission of any defect or violation, regardless of its intent or degree of negligence, in accord with the standards the Comission has applied in asscssing civil penalties under the Atomic Energy Act. The bill retains the present requirements that directors and responsible officers are required to notify the Comission of j
violations and defects, and that knowing and conscicus failures to notify the Comission could lead to assessment of a civil penalty l against an individual director or officer. Consistent with its current i enforcement policy, the Comission would consider willfulness or lack of willfulness in determining the level of sericusness of any failure to l notify by a firm.
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8801140335 870115 PDR COMMS NRCC l CORRESPONDENCE PDR l
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- s The Honorable George H.W. Bush 2 The proposed bill also clarifies the Commission's authority under section 206 over non-licensees as well as licensees, to conduct enforcement activities, including investigations and assessment of civil penalties, necessary to assure compliance with the statute or implementing regulations and orders. In addition, the proposed bill makes certain minor amendments set forth in the enclosed legislative memorandum and section analysis.
Finally, the proposed legislation renumbers a misnumbered section of the Energy Reorganization Act.
A draft bill (Enclosure 1), an analysis of the draft (Enclosure 2),
comparative text (Enclosure 3), and a memorandum explaining in greater detail the need for the legislation (Enclosure 4) are provided.
Sincerely, A. ,
Lando W. Zec Jr.
Enclosures:
- 1. Draft Bill
- 2. Analysis of Proposal
- 3. Ccmparative Text
- 4. Memorandum
o ENCLOSURE 1 DRAFT BILL To amend the Energy Reorganization Act of 1974, as amended, to clarify notification requirements for noncompliance, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that:
Sec. 2. (a) Section 206 of the Energy Reorganization Act of 1974, as amended, is amended to read as follows:
"NONCOMPLIANCE "Sec. 206. (a) Any firm constructing, owning, operating, or supplying the components of any facility or l
activity which is licensed or otherwise regulated pursuant to the Atomic Energy Act of 1954, as amended, or pursuant to this Act, and any individual director or responsible officer of such a firm, obtaining information reasonably indicating that such facility or activity or basic components supplied to such facility or activity --
"(1) fails to ecmply with the Atomic Energy Act of 1954, as amended, or any applicable rule, j regulation, order, or license of the Commission relating to substantial safety hazards, or
"(2) contains a defect which could creete a substantial safety hazard, as defined by reculations which the Commission shall promulgate, shall immediately notify the commission of such failure to comply, or of such defect, unless such fir.n or individual has actual knowledge that the Commission has been adequately informed of such defect or failure to ecaply.
"(b) The Commission is authorized to issue such regulations and orders as may be necessary to assure compliance with this section, including regulations and orders requiring any firn subject to this section to devise and implement procedures to identify, evaluate, and report defects.
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"(c) Any firm which fails to provide the notice required by subsection (a) of this section or violates any regulation or order issued under subsection (b) of this section and any individual who knowingly and consciously fails to provide such notice shall be subject to a civil penalty in the same manner and amount as for violations subject to a civil penalty under section 234 of the Atomic Energy Act of 1954, as amended.
- (d) The requirements of this section shall be prominently posted on the premises of any firm subject to this section.
"(e) The commission is authorized to conduct such reasonable inspections, investigations, and other enforcement activities as needed to ensure compliance with the provisions of this section and with any regulations and orders issued thereunder.
"(f) For purposes of this section, the term ' firm' shall have the meaning provided for the term ' person' in subsection 11 s of the Atomic Energy Act of 1954, as amended, except that it shall include the Department of Energy to the extent that its facilities, materials, or activities are licensed by the Commission and shall not include, an ' individual.'"
(b) The first of the two sections of the Energy Reorganization Act of 1974, as amended, that is numbered 210 (section 5850, Title 5, United States Code) is renumbered as section 209A.
(c) The Table of Contents of the Energy Reorganization Act of 1974, as amended, is amended by deleting:
"Sec. 210. Unresolved Safety Issues Plan."
and substituting instead:
"Sec. 209A. Unresolved Safety Issues Plan."
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O E!! CLOSURE 2 SECTION ANALYSIS This bill amends section 206 of the Energy Reorganization ~
Act of 1974, as amended.
Subsection (a) provides that firms constructing, owning, operating, or supplying the components of nuclear power plants and other facilities and activities regulated by the Nuclear Regulatory Commission, and individual directors and responsible officers of such firms, are directly responsible for notifying the Commission of violations or defects that could create substantial safety hazards.
Subsection (b) clarifies the Commission's authority to implement section 206 by regulation or order.
Subsection (c) clarifies that violations of such a regulation or order, in addition to violations of section 206 itself, may be grounds for a civil penalty, and requires that a failure to notify the Commission must be knowing and conscious before a civil penalty is imposed on an individual director or responsible officer. The "knowing and conscious" requirement is appropriate to protect individuals from an undue burden.
A firm, however, may be subject to sanctions for any failure to notify, regardless of its intent or degree of negligence in failing to comply with the Commission's I
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regulations. This is in accord with standards the commission has applied in assessing civil penalties under section 234 of the Atomic Energy Act.
Subsection (c) also clarifies that all the provisions of section 234 of the Atomic Energy Act of 1954, as amended, apply to the imposition of civil penalties under section 206.
Subsection (d) requires that the provisions of section 206 be posted on the premises of any firm subject to section 206, not just on the premises of firms licensed or regulated under the Atomic Energy Act.
Subsection (e) clarifies that the commission may conduct inspections, investigations, and other enforcement activities to assure compliance with its regulations, as well as with the statute.
Subsection (f) provides that under section 206, "firm" chall have the same broad meaning as ' person" under section 11 s. of the Atomic Energy Act of 1954, as amended, except that it also includes the Department of Energy, to the extent its facilities, materials, and activities are licensed by the Coi,tmission.
The bill also renumbers a misnumbered section of the Energy Reorganization Act.
o EUCLOSURE 3 COMPARATIVE TEXT "NONCOMPLIANCE
'Sec. 206. (a) Any individua&-dif: +beev-ef-fesponsible effiece-of-a firm constructing, owning, operating, or supplying the components of any facility or activity which is licensed or otherwise regulated pursuant to the Atomic Energy Act of 1954 as amended, or pursuant to this Act, and any individual director or responsible officer of such a firm, whe-ebbains obtaining information reasonably indicating that such facility or activity or basic components supplied to such facility or activity --
'(1) fails to comply with the Atomic Energy Act of 1954, as amended, or any applicable rule, regulation, order, or license of the commission relating to substantial safety ha:ards, or
"(2) contains a defect chich could create a substantial safety hazard, as defined by regulations which the commission shall promulgate, shall immediately notify the Ccmmission of such failure to comply, or of such defect, unless such peesen firm or individual has actual knowledge that the Commission has been adequately informeo of such defect or failure to comply.
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"(b) The Commission is authorized to issue such regulations and orders as may be necessary to assure compliance with this section, including regulations and orders requiring any firm subject to this section to devise and implement procedures to identify, evaluate, and report defects.
"(bc) Any firm which persen-whe-knewingly-and eenseieusly fails to provide the notice required by subsection (a) of thic section or violates any regulation or order issued under subsection (b) of this section and any individual who knowingly and consciously fails to provide such notice shall be subject to a civil penalty or failur_e to notify, in the same manner and amount as for violations subject to a civil penalty,in-en-amounk-equal-be-the-amount previded-by in the same manner and amount as for violations subject to a civil penalty under section 234 of the Atomic Energy Act of 1954, as amended.
- (ed) The requirements of this section shall be prominently posted on the premises of any Eaeiliby-lieensed ee-obherwise-eegulated-puesuant-te-the-Abemie-Eneegy-Aet-es 19547-as-amended firm subject to this section.
- (de) The Commission is authorir.ed to conduct such reasonable inspections, investigations, and other
3 enforcement activities as needed to ensure compliance with the provisions of this section, and with any regulations and orders issued thereunder.
- (f) For purposes of this section, the term ' firm' shall have the meaning provided for the term ' person' in subsection 11 s. of the Atomic Energy Act of 1954, as amended, except that it shall include the Department of Energy to the extent that its facilities, materials, or activities are licensed by the Commission, and shall not include an ' individual.'"
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ENCLOSURE 4 LEGISLATIVE MEMORANDUM IN SUPPORT OF PROPOSED DILL The proposed bill would amend section 7.06 of the Energy Reorganization Act of 1974, as amended, to modify and clarify the Commission's authority in several ways and to bring section 206 more in line with the general nature of the regulatory scheme established under the Atomic Energy Act. In particular, the proposed bill would clarify that any firm subject to section 206 is itself responsible for notifying the Commission as required by section 206 and would be liable for any failure to do so, regardless of its intent or degree of negligence. Individual directors and responsible officers would continue to be personally liable, as section 206 now provides when the failure to notify is "knowing and conscious."
The proposed bill would also clarify the Commission's authority to promulgate regulations and issue orders needed to assure compliance with section 206, to assess civil
< penalties for violations of those regulations and orders, and to conduct inspections, investigations, and other enforcement activities needed to assure compliance with these regulations as well as with the statute itself.
Finally, the bill would subject the Department of Energy to the requirements of section 206 to the extent that the Department's activities, facilities, or materials are licensed by the commission.
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Section 206 of the Energy Reorganization Act of 1974 l provides that *(alny individual director or responsible j officer of a firm constructing, owning, operating, or I supplying components of any facility or activity" licensed or regulated under the Atomic Energy Act or the Energy Reorganization Act must immediately notify the Commission of violations of the Atomic Energy Act "or any applicable rule, regulation, order, or license ... relating to substantial safety hazards, or" of any "defect which could create a substantial safety hazard ..." (subsection (a)). "Any person who knowingly and consciously fails to provide (this]
notice" is subject to a civil penalty (subsection (b)).
The commission promulgated part 21 of its regulations to implement section 206. In so doing, the Commission determined that notification of safety hazards could best be assured by requiring affected firms to adopt and implement procedures for proper evaluation of information suggesting potential hazards within the scope of section 206 and for informing directors or responsible officers. The institutional resources of affected firms are thus brought to bear to assure routine compliance. In particular, the regulations require affected firms to establish procedures (1) to evaluate any deviations from technical requirements in order to determine whether there is a defect in a
3 component, or to inform the purchaser so that it may evaluate the deviation or have it evaluated, and (2) to assure that a director or responsible officer is informed of violations and defects.
The regulations also require affected firms to maintain certain records, to permit necessary inspection, to conspicuously post section 206 and the regulations implementing it, and, when applicable, to inform suppliers that the regulations apply to them. The Commission has collected a civil penalty from one firm which violated the Commission's implementing regulations.
The Commission thus further determined that achieving compliance with section 206 requires holding the involved firm primarily responsible for compliance with the Commission regulations delineating the firm's responsibility. But the Commission's authority for these requirements under section 206 is not free from doubt and has been questioned by the affected firms. The proposed bill focuses on these points and would put the Commission's authority on a firm footing. It would c1so make the approach of section 206 more consistent with the regulatory scheme established under the Atomic Energy Act. Since the proposed bill adds a new subsection (b) to section 206, it ,
r reletters all the succeeding subsections.
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The proposed bill would amend subsection (a) to provide that the affected firm is responsible, along with individual directors and responsible officers, for notifying the commission. This assignment of responsibility would be more in accord with the general approach to regulation under the Atomic Energy Act, which imposes responsibility on the licensee for compliance with the Act and the Commission's regulations.
While subsection (c) of the bill retains the current provision that a civil penalty may be levied against individual directors and responsible officers only for a knowing and conscious failure to notify, the bill would subject a firm to sanctions for any failure to notify, regardless of its intent or degree of negligence in failing to comply with the commission's regulations. This is in accord with section 234 of the Atomic Energy Act, which authorizes civil penalties for violations without regard to whether they are knowing and conscious.
The proposed bill also clarifies the Commission's authority to promulgate regulations and issue orders under
! section 206, to assess civil penalties for their violation, and to engage in inspection, investigation, and other enforcement activities to assure compliance. First, new subsection (b) clarifies the commission's authority to l
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5 promulgate rules and regulations and issue orders under section 206. This provision parallels the Commission's existing authority under the Atomic Energy Act to ' prescribe such regulations or orders as it may deem necessary ...
(3) to govern any activity authorized pursuant to this Act ... in order to protect health and to minimize danger to life or property" (section 161 f.(3)). The new subsection endorses the Commission's present regulations by expressly authorizing the Commission to issue regulations and orders requiring affected firms to "devise and implement procedures to identify, evaluate, and report defects."
Second, subsection (c) clarifies that a firm, whether it be a licensee or non-licensee, may be subject to a civil penalty for violating Commission regulations or orders l
issued under section 206, as well as for violations of section 206 itself. This would make a firm civilly liable for failing, in a particular case, to implement the procedures that the regulations require it to devise. As discussed above, the subsection would also make individual r
directors and responsible officers personally liable for a knowing and conscious f ailure to report required defects or violations to the commission. In this circumstance, the "knowing and conscious' limitation avoids placing an undue burden on an individual. Subsection (c) also clarifies that
6 all the provisions of section 234 of the Atomic Energy Act apply to the imposition of civil penalties under section 206.
Third, subsection (e) clarifies that the commission may conduct investigations as well as inspections and other enforcement activities under section 206 and its implementing regulations. The firms and individuals currently investigated under section 206 are frequently unfamiliar with NRC's authority and often initially challenge an investigation. While the commission believes that investigative authority under section 206 may reasonably be inferred from reading that section in conjunction with the broad authority given to the commission under the Atomic Energy Act, a more explicit statement of the commission's authority would substantially reduce resources expended in resolving initial challenges to investigations.
Subsection (e) also clarifies that the Commission may conduct enforcement activities needed to ensure compliance with Commission regulations and ordets issued under section 206, as well as with section 206 itself. This authority is necescary to enable the Commission to assure compliance with the statute.
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The proposed bill makes three additional minor amendments to section 206. Subsection (d) clarifies that the requirements of section 206 must be prominently posted on the premises of any firm affected by the section, and not simply at facilities licensed under the Atomic Energy Act..
This would expand present subsection (c) to cover suppliers of components and other firms who are covered by section 206 but not regulated under the Atomic Energy Act. .
The definition of "firm" in new subsection (f) reflects the broad coverage provided for the term ' person" in section 11 s. of the Atomic Energy Act, except that it would also make the Department of Energy subject to section 206 to ,
the extent that its activities, facilities, and materials are licensed by the commission.
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