ML20149F971
| ML20149F971 | |
| Person / Time | |
|---|---|
| Issue date: | 09/12/1994 |
| From: | Urban P NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | NRC |
| Shared Package | |
| ML19352D293 | List: |
| References | |
| FRN-59FR17457, RULE-PR, RULE-PR-0 AE60-2-001, AE60-2-1, NUDOCS 9409290215 | |
| Download: ML20149F971 (12) | |
Text
+
AE60-2 cm UNITED STATES f
- pa KErug'o NUCLEAR REGULATORY COMMISSION
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WASHINGTON. D.C. 20555-0001 5
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OFFICE OF THE GENE RAL COUNSEL September 12, 1994 MEMORANDUM TO:
Nuclear Document System Mail Stop P1-37 t
FROM:
Pamela Urban, OGC Mail Stop 15-B-18
SUBJECT:
SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT i
^
FOR EMPLOYEES OF THE NUCLEAR REGULATORY COMMISSION (10 CFR PART 0) i The notice of final rule for the above matter was published in the Federal Register at 59 Fed. Reg. 17457 (April 13, 1994).
The proposed rule affects 10 CFR Part 0 and 5 CFR Part 5801.
The rulemaking history for the above consists of the attached documents.
The documents are designated either "CF" (Central Files Only) or "PDR" (Public Document Room).
Please prepare a computer printout that lists the documents and l
return it to me as soon as possible.
If you have any questions, please call me at 504-1634.
Thank you.
l Attachments i
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- gg'2;9gais,4o,,2-4 O 59FR17457 j
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17457
'I Rules and Regulations
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Vol. St. No. 7t i
Wedeesday. April 13. 1994 This secton et the FEDEMAl. REOSTEM carrected at 57 FR 48557 and 57 FR children, and other members of their conleins regtAssary documents having general 53583.%ese Sand =ds, wtuch took households. from holding stocks bonds.
appacemely and tegel eseca. enest eheum effect on February 3.1993, est unilerm and other securttles issued by mejor am anyes se ensesease en em come et Fedoni Reguissons. sesch as pittehed wule' ethical conduct standards applicable to entities in the commardel nuclear field.
50 anos pursuses p N 15m all==aam4w breach persommel.
Section 5801.102 imposes very similar 5 CFR 3655.105 authorises esecutive The code of Fedwei Regulomons le said toy agendes, with concurrence been OGE.
restrictions upon designated employees.
their and ammarcididsen. based tw Sm of Documuss.PMof to Publish assocy spedSc su;;'
^'
l upon r==l==Aa=*s determinetson new tsooks am hated an ene erst FEDERAL.
regP as'ame that are a-maa y to that these restrictions are naaaaaary to REGISTER issue of each week.
implement their ethics programs.De masatala public emafulaaamin the Naciser Reguistory e -- ""- with impartiahay and obpoetivity with which NUC12AR ftEOui.ATORY OGE's eencurrents, has determined that the NRC e=ame== its segulatory COMMISSION the following supplemental.. *". functaeas. N restrictaans also will help being codi$ed in new chapterXLVIH of to maisenia pubhccon&dence that 5 CFR.consistin 5 CFR ChapterXLVIE nors==ary for e g of part 5801 eso sensitive information seleting to agency r lisay1====*=*4aa u
of the NRC's elides pro opereuensis not saisused for pnvete notice,the Nudear =, gram. By this gain and will belp accoraphsh the 2 CM Part 0 RINs 3200-AAte and 3150 AE40
'%"m'i"laa is also r,epenhag,the parts NRC's seission by avoiding widespresd dispallArmama of employees from the SupplemeistelStenderde of Ethical ofits requietions widch were peeserved r--- - =of theirotBcialduties.
I by 5 CFR part 2835 pendingissuance of sareiam sa01.102 is marrower in scope l
Conduct der Esnployees of Wie Nuoleer thisou;;'
' regulation (see the than 10 CFR 0.735-29 in that it does not RegulatoryCommiselon addttional OCE grace period extension apply to all members of the employee's Agency: Nuclear Regulatory at H m4773-4780L hoanid Consiment wie 5 TR Commission.
IL Analysis of the Regulations 2635.403(a) and 2635.403(cXt). It ACTION: Final rule.
restricts onl om loyees. y the holdings of designate Section 5802.202 General their s suessAny: b Nuclear Regulatory Section 5801.10t explains that the dren.De =posases, and minor r =i= ton has Commission (NRC).with the regulations r=sannad in the Baal rule determined that application of the concurrence of the OlBoe of apply to all NRC a including securities restrictions in $ 5802.1021o Government Ethics (OCE).is issuing meenbersof the -
' " and ase spouses and minor ddldma is nar==ary e
regulattens for employees of the Nurtame supplesmantal to the anscutive bronch.
to the elRcincy of the service. As pr.t y ca===6==an the wide standards.hiambers and evidenced by to CFR 0.735-29.the NRC supplement the Standarde of Ethical employees of the Nuclear Angulatory believes it is isoportant to the success of Conduct for Employees of the Executive e-a,laalan also are subject to the its udselon for regulated entities and Bronch loseed by OCE.Dese Standards of Ethical e-i=* Jar othess affected by agency dedstons to supplemental regulations eddreas "rt,a of the Executive Branch at 5 have this additional degree of assurance outside employment by NRC employese CFR part 2635, the esecutive branch that agency decisions am not influenced 1
and ownership of secunties by NRC financial disclosure regulations at 5 CFR by considerations of personal gain on employees,their opeuses and annor part 2634, and addhia i the part of NRC personnet i
children.h NRCis also repenhag its regarding their conduct p ed by in addition to umiting the sectim's current.J^!_ u en thoes subjecas, the agency in 10 CFR part O.
application to employees, their spuses.
while adding a czoes.soference to the new psevisions and preserving certain Seedon 5802.302 ProhilWaed Securities and minor children.the Commissi t
has made other minor revisions to the separable An==niallaterest emmenpuaes.
5 GR 2835.403(a)authorises metrictions as stated in 10 CFR 0.735-EFFECfivt DATE:Finalrule effective poly agendes.by supplemental egulation.io 29. b categones of prohibited 12*1994' Prohibit or restrict the scituisition or securities est forth in 55801.102(b) have t
holdlag of a Enmaciat intarost or a class been revised to soGect the new types of FOR PURTMR SIP 0statafl0N CONTACT: John Szabo.OfBcs of the Genest Counsel, of Enanr4a1 interests by agency hannesestabliebed in 16 CFR 52 U.S. Nuclear Reguistcry Commission, employees based on a deernunadan and to incdude escuridesissu by Stue Washlagton. DC 20555, telephone: 301-that the acquisition or ho ofsudi or local governements to finance low.
504-1906.
interests would cause le level weste fedlities.Section persons to question the impartiality and se01.102(bXs) also prohibits saiployees supptassuntAnyesposeant:0es:
objectivity with which agency programs for the trat time from owning escurities
- 1. Bedcgreemd am u is p====y issued an or unty sectw to the etBeiency of the service, such mutual d that invested voore On August 7.1992.the OfEco of prohibitions or restrictions may be then 25 percent of the fund's assets in Government Ethics publiabad the extended to em Standards of Ethical Camduct for minor childsen.ployees' spouses and prohibited escustties.
N time frames lor cosaplying with Employees of the Executive Branch By to CFR 0.735-29.the r===tamaan (Standssdst for aad=rusia= st 5 CFR part has long prahe*=d onest ofits the escurity ownerebip regulations have also been seedi6ed.Under to CFR 2635.See 57 FR 35006-35067 as employees, their opeuses, raimor O.735-29. NRC employees have had 30 t
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17458 Federal Register / Vol. 59. No. 71 / Wednesday. April 13. 1994 / Rules and Regulations days :o comply aAer commencing Section 5802.203 PriorApprovolfor regulations in a different form, and the c:nployment or being promoted to a Outside Employment regulations pertain wholly to internal Position covered by the secunty 5 CFR 2635.803 authonzes individual agency personnel matters that affect ownership prohibitions; one year to agencies, by supplemental regulation, to only NRC employees, their spouses, and divest any security interest newly added require agency employees to obtain minor children. To increase the j
to the agency's prohibited secunty lists and a " reasonable time" to dispose of approval before engaging in outside likelihood of a smooth transition from employment or other outside activities.
the NRC's pnor ethics rules to the new j
secunties inherited by gik. Consistent
[
with 5 CFR 2635.403(d),the Anal rule The NRC haslong had the[orthin to Government. wide standards of ethical rior approvalrequirement set conduct regulations, these rulemaking provides a uniform 90-day period for CFR 0.735-40. Section 5801.103 of the actions shald take place as soon as divestiture, with extension available in final rule retains the requirement that Possible. The rule and accompanying cases of undue hardship.
NRC employees obtain prior written r* Peals will beconne effectin 90 days The criteria in $ 5802.102(e) for approval before engaging in outside after the date of publication in the waiving the prohibition on holding a employment with entities that are Federal Rgsser.
sped $c security have been modified to regulated by or have business with the provide greater speci8 city. A criterion Commission.The NRC policy has been. Environmentallmpact: Categorical Exclusion has been newly added to cover and will continue to be, to encourage circumstances in which legal teaching, lecturing. or writing not The NRC has determined that this I
constraints revent divestiture. One Prohibited by 5 CFR part 2635 or other final rule is the type of action described exampleof uch a logelconstraint applicable law.
In categoricalexclusions to CFR would be the situation in which the The agency designees for approval of 51.22(c) (11 and (2). Therefore, neither prohibited security is held as part of the utside employment and internal an environmental assessment nor an assets of a trust of which the employee agency procedures for obtaining the environmentalimpact statement has is a beneficiary and where the trustee, nece55ary 8Pprovals will be set forth in been prepared for this final regulation.
wbo has sole authority to purchase and ge D
he y,,
d l'
Paperwork Reduction Act Statement uest to sell the rohib t ty.
Directive and Handbook will be issued This final rule contains no The Commission has eliminated the on the effective date of this regulation information collection requirements and requirement contained in to CFR 0.735-and will be available in the NRC Public therefore is not subject to the Document Room and in each NRC 29 that employees who are subject to the Office.
requirements of the Paperwork secunty ownership restrictions certify Reduction Act of 1980 (44 U.S.C. 3501 each year that they are in compliance.
III. R* Peel of Superseded Portions of et seq.).
Because the annual certincetions have the NRC Condmet Regulations and rarely revealed violations of the Related maammew RegulatoryAnalysis substantive restrictions, there is The Analrule repeals the NRC The NRCis promulgating a inadequate justi8 cation for continuing conduct regulations to CFR 0.735-4
{PP ntal this requirement. However, to monitor 0.735-29. and 0.735-40 effective on the compliance, the NRC will continue to same day that this rule takes effect. The ulations in order to im lement
%ectively the NRC's et require employees holding designated information collection seguirements of P 8am Positions to certify compliance upon 5 0.735-6 are no longer necessary.
This rule ha no signiacantimpact En commencement of employment with the Section 0.735-29 will be superseded by health, safety or the environment. There
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agency or upon promotion for the first the prohibitions on securities contained time to a position covered by the in 5 CFR 5801.102 and $ 0.735-40 will R*
- ro era s*
secunty ownership restriction. Agency be superseded by the requirements for RegulatoryFlexibilityAct employees will also be required to prior approval of outside employment
~
report to the OfRce of the General contained in 5 CFR 5801.103. These As required by the Regulatory Counselin writing any prohibited repeals. together with those effected by Flexibility Act of 1980. 5 U.S.C. 605(b).
secunties obtained after the initial 58 FR 3825 and 29951. leave in to CFR the Commission certi8es that this rule certincation. This will permit the Office part 0 only the waiver provisions of will not have a significant economic of the General Counsel to track required 55 735-21 (a) and (b) which are impact on a substantial number of small divestitures.
prwerved by 5 CFR 2635.402(d)(1).
entities because it affects only NRC On the effective date of this These paragraphs are redesignated l
emP ay'e5-regulation.the NRC willissue 5 0.735-2 (a) and (b) to follow a new Backfit Analpss Management Directive 7.7 and its 5 0.735-1 which provides a cross.
accompanying Handbook which lists reference to the NRC s supplemental The NRC has determined that the g
y ow e sostri i
- s. h e fi ad us ar stan ds apply to this final rule and that a backfit Handbook will al describe procedures of ethical conduct regulations at 5 m analysis is not required for this final for obtaining Certi8 cates of Divestature Parts 2634 and 2635.
e t
u emental
)
and waivers from the secunty ownership restrictions. Both the -
IV. Matters of Regulatory Procedure provisions which would impose backfits Management Duective and Handbook Administrotive Procedure Act as denned in 10 CFR 50.109.
will be available at the NRC Public Pursuant to 5 U.S.C. 553(b), the NRC I.ist of Subjects Document Room. 21201. Street. NW..
finds good cause not to seek public Washington, DC 20555-0001. Copies comment on this rule. Such comment is 5 CFR Pmt sf will also be available in each NRC unnecessary because the NRCis Conflict ofinterests. Government Office.
essentially repromulgatmg existing employees.
4' Federal Register / Vol. 59. No. 71 / Wada==Amy. April 13, 1994 l Rules andC-lad-=
17059 1
socnt purte Co===== nan wiu puhush and diaribute debentures antes, securitized assets and 4
l 1
to *mP oyees a list of entities whoes commerdalpaper as wou as au types Conflict ofinterests* Criminal P"alues-securities a covered employee or the of preferred and aa=== moci.b spouse or minor child of a covered term encompasses both current and i
Dewd er neckvme. Marylend. this 23rd day employee may not own. b list shan contingent ownership interests.
I
- 'Ch 3 "'-
consist of entities which are:
including any beneScial or legal interest Fw uw W Regulewy Cmmm.on.
(1) Applicants for or holders of early derived fresa a trust. k extends to any 5==alI48L site pennits, construcuon permits.
right to acquire or dispose of any long 1
Seewtory of the Comm=* ion-operating Bosaces,or-2 M or ahost position in such securities and i
Approved: March 31.1994.
construction permits and operating includes,withoutlimitation interests Saephee n. Peas.
lioeness for 8-*H== which ganarete convertible into such securities, as wou Dmeror.Ogiceof Government Ethics.
eledric emergy by means of a anclear as options, rights. warrants, puts. calls.
For the rossons set forth in the reactor:
and straddles with respect thereto.
preamble the Nuclear Regulatory (2) State or local gover===* if the (d) Divestiture and se of r,-='=&a=
with the concwrence of primary purpose of the securityis to prohibited escurit as
- 1) Newly the Odim af Government Ethis,is finance the construction or operation of covered. employees. Upon promotion or i
===nding title 5 of the Code of Federal a nuclear reactor or a low-level waste other appointment to a position subject Regulations and title to, chapter 1. of the facility *.
to the securities prohibition of this j
Code of Federal Regulations as foDows:
(3)intities manufacturing or selling section, a covered employee shau alga nuclear power or test reactors; a certiacatica:
TITLE 6--[ AMENDED]
(4) Aa--? MM ~ C 4
(1) Identifying securities of an enti
- 1. A new chapter X1NIU. consisting of em W misung 2 on the prohibited securities Ust whi part 5801. is added to title 5 of the Code a nuclear Po**r reactw:
the mployee,er the spouse or minor of Federalitsgulatsons to rued as (5W.
Am.w holdere d. a child of the employee, owes.or follows,-
matined mandent denga.
(ii) Stating that the employee. or the l
(6) Entitses =a===ad or regulated by a
the ema=&a=&oe to snill, convert.annche spoues er minachnd d theemployee.
5 CFR G4 APTER XLVIE-44UCLEAR r
does not own any proWWeed secwides.
RE00LATORY NMbeentnel faLricate. store, or dispose of 90urm.
PART WD1--
the
===ARo.SI,PPLEMENTAL cT i.n a,uch Ho,ena,_m 0 =.cALOo me*mP ayee ga-m-chiid
- *e designe,ed h,B be embatandau m
e ___
OR EMPLOYEES OFTHE NUCLEAR of l
divest prohibitad esy am a wi REGULATORY CORAMON in nur:b auclear fuel cycle or securines within n days eher 8P{=*===e to the covered position, zuviusa.
d'F8 O'
tt leasd ascursues.
su i ps 5a01.103 Pr6er approval for outshle (b)(1)-.(b)(8) of this==r+4am and Prohibited seasritisslist to which an employmess.
(8) An energy eruti sector sou smamhasbadded,aowed (Etyhnce la _s U.S.C. 7301: 5 U.S.C. App.invoonment fund which more than em whoowns,orwbsse epouse t Act of197th 42 255s ofits essets invested in soewides or minorsidld owns,psebibited j
U.sn 2201. see1: E.O.12674. 54 FR 1$1St.
issued by entMas descrbd in sesmarities shall meks a wrieben report of 3 CI'R. test Comp p. 215.es modtted by En 12fst.ss FR 42se7.3 cru.1ssocas, paragraphs (b)(1)-(b)(7) of this section-met owmehip to theOGlas of es
- p. 308. 5 CFR 2635.105. 2635.403,2635.803.
()
g PWPom General Counsel. Except as provuled in paragraph (d)(4) of this sectaan, the 6 sect.101 Generes.
(1l A covered om eyee means covered employee or the spouse or in accordana with 5 CFR 2635.105 (11 A esember of r -
-- =,
minor child of the covered employee, the regulations in this part apply to (ii)h Gomesalof theNRC: shalldivest P securiues within members and othw employees of the (iii) A===
of the Sesdor Execnative 90 days aAer P = of the Nuclear Regulatory Commission and Servim (SES):
prohibited escuriues list.
supplement them==ntards of Ethimi (ivl An eenployee who holds a nom.
(3) Securities acquired without Conded for Employen of the Emacutive SES position above GG-15; and specific intent. Within 30 days after a Branch contained in 5 CFR part 2635,in (v) Any other employee, including a covered employee.or the spouse or addition to the =s==dards in 5 CFR part 5Pecial Government employee.whose minorchildof acoveredemployee.
2s35 and this part. members and oeer duties and r==pannihinel== as acquires seaarities of an entity on the employees are subtset to the executive determined by the Commission or its prohibited securities hat as a sesult of branch A===edaldisclosure.
M ~-s designees, seguire appliantion of the marriage, inheritance, gik or otherwise contained in 5 OR part 3634'andte securities owwship prohibition without specdSc intent to acquire the additional segolations regarding their nantat==d in this==r+ean to amam securities, the coverai mployee shall conduct contained in to CFR part 0.
Public confidemos that NRC programs make a written report of the acquisition are conducted impartielly and ta the Office of the W Counsel r
65001.10t Prehebetesseewnlos.
objectively. The positions of thes.
Except as provided in paragraph (d)(4)
(a) Gesoralprohrimpon.No coved employees are aparin=d in NRC of this semion. a covered employee, or employee, and no spouse or minor child Management Handbook 7.7 mitich is the spouse or minor child of a covered of a covered employee, shall own available in the NRC Public Document employee, shall divest prohibited securaties issued by an entaty on the list Room;and securities mthin 90 days after the date desenhed in paragraph (b) of this (2) h term
- securities" includes all of acquisition.
section.
interests 16 debts or equity instruments.
(4) Extenseon of period so drmt.
(b) Prohibited secunties list. Onm a The term includes, without limitation.
Upon a showang of undue hardship, the year.or on a more frequent basas, the secured and unsecured bonds.
Chairman of the Nuclear Regulatory 4
E' 17460 Federal Register / Vol. 59. No. 71 / Wednesday. Apnl 13. 1994 / Rules and Regulations Commission may extend the 90 day
$ $801.103 Prior approval for outside
$0.735-1 Cros> reference to employee penod for divest'iture specified in
- mp6oyment.
ethical conduct stancards and financial
- *""9"""*'
paragraphs (d)(1) through (d)(3) of this (a) An employee. other than a special section.
Government employee, shall obtain Employees of the Nuclear Regulatory (5) Disqualification pending written authorization before engaging in Commission (NRC) are subject to the divestiture. Pending divestiture of compensated outside employment with: executive branch wide Standards of prohibited securities, a covered (1) A Commission licensee:
Ethical Conduct at 5 CFR part 2635, the employee must disqualify himself or (2) An applicant for a Commission NRC regulation at 5 CFR part 5801 which supplements the executive herself in accordance with 5 CFR license; branch-wide standards, and the 2635.402. from participation in (3) An organization directly engaged executive branch wide financial particular matters which. as a result of in activities in the commercial nuclear disclosure reguladons at 5 Cm part continued ownership of the prohibited field-secunties. would affect the financial 2634.
g interests of the employee,or those of the
- 4. Section 0.735-21 is redesignated as spouse or minor child of the employee.
(5) A Commission supplier:
0.735-2 and the heading is revised to Disqualification is not required where a (6) An applicant for or holder of a read thereof " Exemptions for financial waiver described in 5 CFR 2635.402(d) license issued by a State pursuant to an interests."
applies. Procedures for obtaining agreement between the Commission and individual waivers are contained in the State:
$ 0.735-4. 0.735-29 and 0.735-40 NRC Handbook 7.7. which is available (7) A trade association which
[ Removed) in the NRC Public Document Room, represents clients concerning nuclear
- 5. Sections 0.735-a. 0.735-29 and (6) Tax treatment of gain on divested matters: or 0.735-40 are removed.
secunties. Where divesuture is required (8) A law firm or other orgamzation
[FR Doc. 94-6691 Filed 4-12-94: 8 45 aml by this section, the covered employee which is participating in an NRC m caos newo e l
(except a special Government employee) proceeding or which regularly may be eligible to defer the tax represents itself or clients before the consequences of divestiture under NRC.
subpart J of 5 CFR part 2634, pursuant (b) Requests for approval shall be DEPARTMENT OF AGRICULTURE to procedures in NRC Handbook 7.7 submitted in writing to the agency which is available in the NRC Public designee specified in NRC Management RuralTelephone Bank Document Room.
Directive 7.8 which is available in the 7 CFR Part 1610 (e) Waivers. (1)The Chairman may NRC Public Document Room.in grant a waiver to permit a covered accordance with procedures set forth in Rural Electrification Administration employee, or the spouse or minor child the accompanying NRC Handbook.
of a covered employee, to retain (c) Approval of outside employnant 7 CFR Parts 1735,1737,1744,1753 ownership of a security of an entity on shall be granted in writing only upoa a i
the prohibited securities list upon a determination by the agency designee RuralTelephone Bank andTelephone determination that the holding of the that the proposed outside employment Program Loan Policies, Procedures, 1
secunty is not inconsistent with 5 CFR would not violate a Federal statute or and Requirements; and i
part 2635 or otherwise prohibited by regulation including 5 CFR 2635.
Telecommunications System Construction Policles and Procedures law, and that:
(d) For purposes of this section.
(i) Under the circumstances.
"outside employment" means any form AGENCY: Rural Electnfication application of the prohibition is not of non Federalemployment, business Administration and RuralTelephone necessary to ensure confidence in the relationship or activity, involving the Bank
- USDA*
impartiality ar.d objectivity with which provision of personal services by the NRC programs are administered:
employee. It includos. but is not limited ACTION: Final rule.
(ii) Legal constraints prevent to personal services as an officer, divestature; or director, employee, agent, attorney.
SUMMARY
- The Rural Electrification consultant, contractor. general partner.
Administration (REA) adopts, except for (iii) For a special Govemment trustee, teacher or speaker.
the State Telecommunications emplovee. divestiture would result in Modemization Plan,its interim rule 10 FR A E EAR substactial financial hardship.
9 g
R (2) Where a waiver has been granted rule with minor technical changes. This under paragraph (e)(1) of this section.
PART 0-CONDUCT OF EMPLOYEES action makes changes to the telephone the covered employee must disqualify program required by the Rural himself or herself,in accordance with 5
- 2. The authonty citation for part 0 is Electnfication Loan Restructuring Act of CFR 2635.402, from participation in revised to read as follows:
1993 (RELRA or legislation).
particular matters which, as a result of Authonty: Secs. 25.161. 68 Stat. 9925.
EFFECTIVE DATE: May 13,1994.
continued ownership of the prohibited 948, as amended (42 U.S.C 2035. 2001h sec.
secunty, would affect the financial 201. 88 Stat.1242, as amended (42 tJ.S C.
FOR FURTHER INFORMATION CONTACT:
interests of the employee, or those of the 5841h E.O.12674. 54 FR 15159. 3 CFR.1989 Matthew P. Link. Director. Rural spouse or minor child'of the employee comp., p. 215 as modified by E.O. 12731.55 Telephone Bank Management Staff,
- 7. 3 19 3
R unless the employee has received a (R,42 Rural Electrification Administration,
,g waiver descnbed in 5 CFR 2635.402(d)*
U.S. Department of Agriculture.14th &
- 2. also issued under 5 U.S.C 552. 553.
pursuant to procedures in NRC Independence Avenue.SW., room llandbook 7.9. which is available in the
- 3. A new $ 0.735-1 is added to read 2832-S. Washington. DC 20250-1500.
NRC Public Document Room.
as follows:
telephone number (202) 720-0530.
Solda- /Wc(ssdlc g. /0/mY[hef,(
7 AFFIRMATION V 0 T E IR{Ldj//S4
/
/}h G
- RESPONSE SHEET E60-2 'PDR" '
TO:
SAMUEL J. CHILK, SECRETARY OF THE COMISSION f
FROM:
C0lWISSIONER REMICK
SUBJECT:
SECY-94-038 - SUPPLEMENTAL ETHICS REGULATIONS ges d APPROVED X DISAPPROVED ABSTAIN HOT PARTICIPATING REQUEST DISCUSSION C0lEENTS:
y 47;><vt
><ibI A c encAf'A A *l El"Y" q of y% e!wfl FAN l
W
(/(/4IGNATURE RELEASE VOTE
/X /
/d Ud" P 4 WITHHOLD VOTE
/
/
ENTERED on "AS" YES NO
I G3 3 l
The Commission has eliminated the requirement contained in i
10 CFR 0.735-29 that employees who'are subTect to the security ownership restrictions certify ear h vaar that they are in i
compliance.
Because the annuaf~certiflcations have rarely revealed violations of the substantive restrictions, there is inadequate justification for continuing this requirement.
However, to monitor compliance, the NRC will continue to require I
employees holding designated positions to certify compliance upon commencement of employment with the agency or upon promotion for the first time to a7osition covered by the security ownership l
restriction.
Agency employees will also be required to reoort to the office of the General Counsel in writing any prohibited
~
t securities obtained after the initial certification.
This will permit the office of theiFGeneral Counsel to track required i
divestitures.
l 5
on the effective date of this regulation, the NRC will issue Nanagement Directive 7.7 and its accompanying Handbook which lists those agency positions covered by the security ownership i
restrictions.
The Handbook will also describe procedures for l
obtaining Certificates of Divestiture and waivers from the security ownership restrictions.
Both the Management Directive and Handbook will be available at the NRC Public Document Room, 2120 L Street, NW, Washington, D.C.
200555-0001.
Copies will also be available in each NRC Office.
Section 5801.103 Prior annroval for outside aanlovmant 5 CFR 2635.803 authorizes individual agencies, by supplemental regulation, to require agency employees to obtain approval before engaging in outside employment or other outside activities.
The NRC has long had the prior approval requirement, set forth in 10 CFR 0.735-40.
Section 5801.103 of the final rule retains the requirement that NRC employees obtain prior written approval before engaging in outside employment with entities that are regulated by or have business with the Commission. g g g ]
The agency designess for approval of outside employment and internal agency procedures for obtaining the necessary approvals will be set forth in NRC Management Directive 7.8 and the accompanying Handbook.
This Directive and Handbook will be issued on the effective date of this regulation and will be l
available in the NRC Public Document Room and in each NRC Office.
III. Repeal of superseded Portions of the NRC Conduct Regulations and Related Nodifications The final rule repeals the NRC conduct regulations 10 CFR O.735-8, 0.735-29, and 0.735-40, effective on the same day that this rule takes effect.
The information collection requirements
[
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[ Insert on page 4 of draft FRN)
He NRCs policy has been, and will continue to be, to encourage teaching. lecturing or l
writing not prohibited by 5 CFR 2635 or other applicable law.
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AFFIRMATION V 0 T E fl2 b 6d-S^b e
'cdon l%1cy fsMj/E60-2 "pz)f RESPONSE SHEET TO:
SAMUEL J. CHILK, SECRETARY OF THE COM4ISSION FROM:
COM4ISSIONER REMICK
SUBJECT:
SECY-93-157 - SUPPLEMENTAL ETHICS REGULATIONS AND IMPLEMENTING MANAGEMENT DIRECTIVES w/ con-n/
APPROVED X DISAPPROVED ABSTAIN NOT PARTICIPATING REQUEST DISCUSSION C0144ENTS:
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SIGNATURE RELEASE VOTE
/X /
N /"h 93 DATE WITHHOLD VOTE
/
/
ENTERED ON "AS" YES / NO
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i i
Commissioner Remick's Comments on SECY-93-157:
I approve OGC's recommended revisions to these supplemental ethics regulations, and I commend OGC for careful and balanced work. I do, however, have three suggestions.
i First, the list of positions covered by the prohibited securities rule should include I
Commissioners' technical and legal assistants at GG-15 and below, and all attorneys in the l
Office of the Inspector General. 'Ibe draft list (" Exhibit 1" for the Handbook on security l
ownership) appears to assume, incorrectly, that all OIG attorneys and all Comminioners' l
technical and legal assistants are SI.S employees.
l I
Second, the argument in the draft Fedeml Reghter notice on behalf of the prohibited securities rule could be strengthened. Page 3 of the notice rightly says that the agency does not want a reasonable observer to suspect that an NRC decision affecting a large number i
of licensees was based in part on the effects the decision might have on the personal finances of NRC employees. However, the force of this argument is somewhat diluted by being made only in defense of the proposition that the rule should cover spouses and minor i
children. A potentially stronger defense of the prohibited securities rule appears on page 6 of the SECY paper, where OGC says, l
Obviously, the fewer ties that advisory committee members have with the commercial nuclear industry, the fewer the conflict of interest problems that may arise and the i
greater the credibility of the committee as an objective, independent body.
This argument puts forward more reasons for the prohibition than the argument in the draft j
Federal Reghter, and, generalized to include all NRC employees covered by the prohibition, would make a useful addition to the notice.
i Third, some document - if not the statement of considerations then perhaps Handbook 7.7 or some document even more readily available to employees - should give employees and 3
the Chairman some guidance on how to determine whether application of the prohibition j
would be " inequitable". Neither the Fedeml Register notice nor the Handbook say anything more than that the Chairman may exempt an employee from the restriction when application of it would be " inequitable". Of course, the very nature of " equity" makes it impossible to say in advance which applications of the restriction are " inequitable".
Nonetheless, the agency has sufficient experience in =&g exemption decisions to be able to say which kinds of exemption requests are typically granted and which not. I would think that a brief written description of some typical cases would be helpful to employees.
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Puis. //ptalsal /c e_. lot 8,q/1;ic au(d/R/s:
r V 0 T E T Obl,-((gg AFFIRHATION b
r!MotsNs RESPONSE SHEET 79E60-2 "phR ".
T0:
SAMUEL J. CHILK, SECRETARY OF THE COf94ISSION FROM:
THE CHAIRMAN
SUBJECT:
SECY-94-038 - SUPPLEMENTAL ETHICS REGULATIONS (with comment)
APPROVED x DISAPPROVED ABSTAIN Nor PARTICIPATING REQUEST DISCUSSION C0tEENTS:
I approve the draft Federal Register Notice with the attached editorial correction.
SIGNATURE RELEASE VOTE
/X /
March 4, 1994 DATE WITNHOLD VOTE
/
/
ENTERED ON "AS" YES x_
No
. 7 i
- (3)
Entities manufacturing or selling nuclear power or test reactors; j
I 3)
Architectural-engineering companies providing services relating to a nuclear power reactor; (5)
Applicants for, or holders of, a certified standard y@g) design; j
hie i
(6)
Entities licensed or regulated by the Commission to )
i mill, convert, enrich, fabricate, store, or dispose of source or special nuclear material, or applicants for such licenses th are designated by the commission because they are or will be substantially engaged in such nuclear fuel cycle or disposal j
activities; (7)
The parent corporation of any subsidiary described in (b)(6) of this section; and
{
paragraphs (b)(1)
(8)
An energy or utility sector investment fund which has more than 25% of its assets invested in securities issued by
{
entities described in paragraphs (b) (1)-(b) (7) of this section.
l (c)
Definitions.
For purposes of this section:
(1)
A covered employee means:
(i)
A member of the Commission; i
(ii)
The Inspector General of the NRC, (iii) A member of the Senior Executive Service (SES);
l (iv)
An employee who holds a non-SES position above GG-15; and (v)
Any other employee, including a special Government employee, whose duties and responsibilities, as determined by the Commission or its designees, require application of the securities ownership prohibition contained in this section to ensure public confidence that NRC programs are conducted impartially and objectively.
The positions of these employees are specified in NRC Management Handbook 7.7, which is available in the NRC Public Document Room; and (2)
The term " securities" includes all interests in debts or equity instruments.
The term includes, without limitation, secured and unsecured bonds, debentures, notes, securitized assets and commercial paper, as well as all types of preferred and common stock.
The term encompasses both current and contingent ownership interests, including any beneficial or legal m
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UNITED STATES
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NUCLEAR REGULATORY COMMISSION Q
g wassiscTow. o.c. rossa IN RESPONSE, PLEASE S
8 REFER TO:
M940318g
/7E60-2 P3R" March 21, 1994 OFFICE OF THE C C 2-
$ECRETARY MEMORANDUM FOR:
William C.
Parler, General Counsel Stephen G.
Burns, Director Office of Commission Appellate Adjudication FROM:
Samuel Secretary i
SUBJECT:
STAFF REQUIREMENTS - AFFIRMATION / DISCUSSION AND VOTE, 11:30 A.M.,
FRIDAY, MARCH 18, 1994, COMMISSIONERS' CONFERENCE ROOM, ONE WHITE FLINT NORTH, ROCKVILLE, MARYLAND (OPEN TO PUBLIC ATTENDANCE)
I.
SECY-94-008 - Petition for Adiudicatorv Hearina by Environmentalists. Inc.
The Commission, by a 4-0* vote, approved an order responding to a petition by Environmentalists, Inc. seeking an adjudicatory hearing regarding the removal of radioactive components of the Yankee Nuclear Power Station and their shipment to the Barnwell facility in South Carolina.
The order denied the petition.
(Subsequently, on March 18, 1994, the Assistant Secretary signed the Order.)
l
- Section 201 of the Energy Reorganization Act, 42 U.S.C.
Section 5841, provides that action of the Commission shall be determined by a " majority vote of the members present."
Commissioner Remick was not present when this item was affirmed.
Accordingly the j
formal vote of the Commission was 3-0 in favor of the decision.
Commissioner Recick, however, had previously indicated that he I
would approve this paper and had he been present he would have i
affirmed his prior vote.
J40uyeao?-
l
. II.
SECY-94-067 - Georcia Power Comoany -- Staff's Motion for Stav of LBP-94-06 The Commission, by a 4-0* vote, approved an order responding to a The NRC staff motion to stay the effectiveness of LBP-94-06.
commission order established a " housekeeping" stay to maintain the status quo pending a final Commission decision, after response from the other parties, on the staff's motion for a stay.
the Assistant Secretary signed (Subsequently, on March 18, 1994, the Order.)
EIII.
SECY-94-038 - Sunclemental Ethics Reculations The Commission, by a 4-0* vote, approved the supplemental employee conduct regulations relating to outside employment and The attached edits and security ownership restrictions.
clarifications should be incorporated into the final rule in consultation with the Office of Government Ethics and the FRN s.1ould be forwarded for signature and publication.
(OGC)
(SECY Suspense:
4/29/94)
Attachment:
As stated cc:
The Chairman Commissioner Rogers Commissioner Remick Commissioner de Planque EDO OIG OCA Office Directors, Regions, ACRS, ACNW, ASLBP (via E-Mail)
PDR - Advance DCS - P1-24 42 U.S.C. Section
- Section 201 of the Energy Reorganization Act, provides that action of the Commission shall be determined
- 5841, Commissioner Remick by a " majority vote of the members present."
Accordingly the was not present when this item was affirmed.
formal vote of the Commission was 3-0 in favor of the decision.
Commissioner Remick, however, had previously indicated that he would approve this paper and had he been present he would have affir=ed his prior vote.
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(3)
Entities manufacturing or selling nuclear power or test reactors; (4)
Architectural-engineering companies providing services relating to a nuclear power reactor; (5)
Applicants for, or holders of, a certified standard 4
design; yd) j
) Pi (6)
Entities licensed or regulated by the Commission to mill, convert, enrich, fabricate, store, or dispose of source or special nuclear material, or applicants for such licenses th are designated by the commission because they are or will be substantially engaged in such nuclear fuel cycle or disposal activities; (7)
The parent corporation of any subsidiary described in j
paragraphs (b) (1) - (b)(6) of this section; and (8)
An energy or utility sector investment fund which has more than 25% of its assets invested in securities issued by 4
entities described in paragraphs (b) (1)-(b) (7) of this section.
i (c)
Definitions.
For purposes of this section:
(1)
A covered employee means:
(i)
A member of the Commission; (ii)
The Inspector General of the NRC;
)
(iii) A member of the Senior Executive Service (SES);
(iv)
An employee who holds a non-SES position above GG-15; and (v)
Any other employee, including a special.
)
Government employee, whose duties and responsibilities, as determined by the commission or its designees, require application of the securities ownership prohibition contained in this section to ensure public confidence that NRC programs are conducted impartially i
and objectively.
The positions of these employees are j
specified in NRC Management Handbook 7.7, which is J
available in the NRC Public Document Room; and (2)
The term " securities" includes all interests in debts or equity instruments.
The term includes, without limitation, secured and unsecured bonds, debentures, notes, securitized assets and commercial paper, as well as all types of preferred and common stock.
The term encompasses both current and i
contingent ownership interests, including any beneficial or legal l
i
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. The Commission has eliminated the requirement contained in 10 CFR 0.735-29 that employees who are subTect to the security
~
ownership restrictions certify each vaar that they are in compliance.
Because the annuaGertif'ications have rarely revealed violations of the substantive restrictions, there is inadequate justification for continuing this requirement.
However, to monitor compliance, the NRC will continue to require employees holding designated positions to certify compliance upon commencement of employment with the agency or upon promotion for the first time to a7osition covered by the security ownership restriction.
Agency employees will also be required to recort to the Office of the General Counsel in writing any prohibited
~
securities obtained after the initial certification.
This will permit the Office of the"G'neral Counsel to track required f
e divestitures.
On the effective date of this regulation, the NRC will issue Management Directive 7.7 and its accompanying Handbook which lists those agency positions covered by the security ownership restrictions.
The Handbook will also describe procedures for obtaining Certificates of Divestiture and waivers from the 1
security ownership restrictions.
Both the Management Directive l
and Handbook will be avsilable at the NRC Public Document Room, 2120 L Street, NW, Washington, D.C.
200555-0001.
Copies will also be available in each NRC Office.
Section 5801.103 Prior annroval for outside==nlevment 5 CFR 2635.803 authorizes individual agencies, by supplemental regulation, to require agency employees to obtain approval before engaging in outside employment or other outside activities.
The NRC has long had the prior approval requirement, set forth in 10 CFR 0.735-40.
Section 5801.103 of the final rule retains the requirement that NRC employees obtain prior written e
approval before engaging in outside employment with entities that are regulated by or have business with the Commission. g g g ]
The agency designeas for approval of outside employment and internal agency procedures for obtaining the necessary approvals will be set forth in NRC Management Directive 7.8 and the accompanying Handbook.
This Directive and Handbook will be i
issued on the effective date of this regulation and will be available in the NRC Public Document Room and in each NRC Office.
III. Repeal of superseded Portions of the NRC Conduct Regulations and Related Modifications The final rule repeals the NRC conduct regulations 10 CFR O.735-8, 0.735-29, and 0.735-40, effective on the same day that this rule takes effect.
The information collection requirements l
v
1
[ Insert on page 4 of draft FRN]
The NRCs policy has been, and will continue to be, to encourage teaching, lecturing or writing not prohibited by 5 CFR 2635 or other applicable law.
1 l
1
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}
AFFIRMATION VOTE b
t RESPONSE SHEET T0:
SAMUEL J. CHILK, SECRETARY OF THE COMISSION FROM:
COINISSIONER DE PLANQUE
SUBJECT:
SECY-94-038 - SUPPLEMENTAL ETHICS REGULATIONS APPROVED x(w/comeneDISAPPROVED ABSTAIN NOT PARTICIPATING Rr.ouEST DISCUSSION
~
~
C0lEENTS:
Although at first glance it appears that the supplomantal ethics regulations only apply to male MRc eatployees, I recognize that the draft final rule is in accord with K C.F.R. 5 2535.102 (j) which provides that "thle. h and ]Lig include she, hers and her."
While this quaint remembrance of the past may be the preference of the office of Government Ethics, I would like to think that the Nuclear Regulatory Cosatission is more forward thinking.
I note that, in fact, the draft final rule OGC forwarded to OGE used terms like " employee," rather than "his,"
when both genders are intended. ~ Presumably, the return to the generie "he," "his" and "hia" was one of~the " editorial suggestions" requested by OGE.
I recommend that OGC return the draft to the stylistic devices used in the original draft which are consistent with MRC's practice.
Y
+b.
SIGNATURF/
RELEASE VOTE
/ xx /
March 7, 1994 DATE WImHOLD VOTE
/
/
ENTERE0 ON "AS" YES xx NO r
'Y v
L' AEU-2
" P2)R "
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RULEMAKING ISSUE SECY-94-038 February 18, 1994 (Affirmation)
Z9E:
The Commissioners FROM William C. Parler General Counsel RHBJECT:
SUPPLEMENTAL ETRICS REGULATIONS PURPOSE To obtain Commission approval of supplemental employee conduct regulations relating to outside employment and security ownership restrictions.
BACKGROUND:
On July 30, 1993, the Commission authorised the Office of the General Counsel (OGC) to submit proposed supplemental ethics regulations to the Office of Government Ethics (OGE) for its approval.
Under the government-wide standards of Ethical Conduct for Employees of the Executive Branch issued by OGE, OGE approval is a prerequisite for promulgation of the regulations.
The Commission also approved NRC Management Directives and Randbooks 7.7 and 7.8, which implement these regulations.
See the July 30, 1993 Memorandum from samuel J. Chilk to William C. Parler on sECY-93-157.
After extensive discussions which resulted in numerous editorial changes, OGC received informal approval from the Office of Government Ethics.
OGE has requested that, after the Commission approves the proposed draft and signs the Federal Recister Notice, the agency submit the Federal Racister Notice to OGE for cosignature.
The NRC will then be responsible for publication.
OGC will be revising Management Directives and Handbooks 7.7 and i
l 7.8 to reflect the Commission directives contained in the July 30 staff Requirements Memorandum and the text of the final rule ultimately approved by the Commission.
Contact NOTE:
TO BE MADE PUBLICLY AVAILABLE John Szabo, OGC WHEN THE FINAL SRM IS MADE 504-1610 AVAILABLE
@@ &O N
-2 OGE PROPOSED CHANGES TO THE NRC DRAFT SUBMITTED FOR THEIR APPROVAL The following summary describes the major changes to the proposed supplemental regulations that OGE has suggested.
All of these changes are reasonable and consistent with the i
philosophy incorporated in the draft regulation submitted to OGE, and raise no policy issues.
Most of the items listed below (as well as the numerous editorial suggestions) were requested so that NRC regulations would contain language that is consistent with other Federal agencies' supplemental conduct regulations that OGE has approved.
1.
5 CFR S 5801.101 (General).
This new section is a standard statement of the general purposes of the supplemental regulations.
It explains that the regulations apply to all NRC employees and that they supplement the government-wide standards of conduct regulations (5 CFR Part 2635).
It also notifies employees that they are subject to the government-wide regulations on standards of conduct, financial disclosure, and the NRC supplemental conduct regulations.
2.
5 CFR S 5301.102 (Prohibited securities).
a).
Mutual funds.
The NRC proposed adding a new category of entities to the NRC prohibited securities lists an energy or utility sector investment fund which has more than 20%
of its assets invested in prohibited securities or with more than 5% of its assets invested in a single prohibited security.
This 20%-5% rule was adopted from OGE's definition of a wide-diversified mutual fund.
However, OGE recommended, after consulting with the securities and Rxchange Commission on the operations and holdings of mutual funds, that this threshold be raised to 25% of the total assets of the fund and that there be no specific percentage limitation on an individual prohibited security that is part of the fund's portfolio.
Following the issuance of the July 30, 1993 staff Requirements Memorandum, OGC reviewed the prospectuses of energy or natural resource mutual funds to determine which of these funds NRC employees would be prohibited from owning if the Commission promulgated the proposed regulation, which incorporates OGE's modification.
Attached is a list OGC compiled i
of mutual funds that agency employees subject to the security ownership restrictions would be barred from owning.
These entities would be included in the next NRC prohibited securities list, which will be published after the supplemental regulations become effective.
b).
Prohibited security list.
The revised regulation makes it clear that the security ownership prohibition is not triggered until the NRC places the entity on its prohibited securities list.
This avoids any inference that an employee s
might be in violation of the restriction if the employee holds security interests in a company engaged in activities that qualify the entity for placement on the prohibited securities list the next time that it is issued.
c).
Definition of securities.
The regulation includes a more comprehensive definition of the term security interest.
d).
Waivers.
The original proposal authorised the chairman to grant a waiver of the requirement for divestiture of a prohibited security interest if divestiture would be
" inequitable".
The revised regulation is more specific on the conditions for granting a waiver.
To grant a waiver, the chairman must determine that the employee's holding of the security is not inconsistent with the standards of conduct regulations or prohibited by law and (a) is not necessary to ensure confidence in the impartiality and objectivity in administering MRC programs, or (b) legal constraints prevent divestiture.
The revision specifically authorises a waiver to a special Government employee if divestiture would result in substantial financial hardship.
3.
5 CFR S 5 01.103 (Prior approval for outside employ-ment).
The revision adds an expanded definition of outside employment.
4.
OGE has requested that we issue the implementing Management Directives 7.7 and 7.8 at the same time that the regulations go into effect.
Because we need to revise those directives to reflect the changes contained in the July 30, 1993 Staff Requirements Memorandum and to conform the directives to the language of the revised regulations, as well as inform agency employees of the rule changes, we recommend that the rule not be made effective until 90 days after publication in the Federal Register.
RECOMMENDATION:
That the commission affirm the enclosed proposed final rule.
i W 1 iam c. Parler General Counsel Attachments:
1.
Draft Final Rule 2.
List of Proposed Prohibited Mutual Funds 2
1 4
a y
l Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB Monday, March 7, 1994.
Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Monday, February 28, 1994, with an information copy to the Office of the 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.
This paper is tentatively scheduled for affirmation at an Open Meeting during the Week of March 7, 1994.
Please refer to the appropriate We'ekly Commission Schedule, when published, for a specific date and time.
DISTRIBUTION:
Commissioners OGC OCAA OIG OPA OCA EDO ACRS ACNW ASLBP SECY I
i 1
1
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4 0
ATTACHMENT 1 1
Draft Final Rule
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[7590-10]
NUCLEAR REGULATORY COMMIS&. ION 5 CFR Chapter XLVIII 10 CFR PART 0 RINs 3209-AAOO, 3209-A&O4, 3209-AA15 and 3150-1E60 supplemental Standards of Ethical conduct for Employees of the Nuclear Regulatory Commission AGENCY:
Nuclear Regulatory Commission.
ACTION:
Final Rule.
SUMMARY
The Nuclear Regulatory Commission (NRC), with the concurrence of the Office of Government Ethics (OGE), is issuing regulations for employees of the Nuclear Regulatory Commission that supplement the Standards of Ethical Conduct for Employees of the Executive Branch issued by OGE.
These supplemental regulations address outside employment by NRC employees and ownership of securities by NRC employees, their spouses, and minor children.
The NRC is also repealing its current regulations on those subjects, while adding a cross-reference to the new provisions and preserving certain separable financial interest exemptions.
EFFECTIVE DATE:
Final rule effective [ insert date 90 days after the date of Dublication in the FFDERAL REGISTER).
FOR FURTNER INFORMATION CONTP.CT:
John Szabo, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone:
301-504-1606.
SUPPLEMENTARY INFORMATION:
I.
Background
On August 7, 1992, the Office of Government Ethics published the Standards of Ethical Conduct for Employees of the Executive Branch (Standards) for codification at 5 CFR Part 2635.
See 57 FR 35006-35067, as corrected at 57 FR 48557 and 57 FR 53583.
These Standards, which took effect on February 3, 1993, set
... _ ~
1 i
uniform ethical conduct standards applicable to all executive i
branch personnel.
t 5 CFR 2635.105 authorizes executive agencies, with concurrence from OGE, to publish agency-specific supplemental j
regulations that are necessary to implement their ethics i
programs.
The Nuclear Regulatory Commission, with OGE's l
concurrence, has determined that the following supplemental i
regulations, being codified in new chapter XLVIII of 5 CFR, j
consisting of part 5801, are necessary for successful implementation of the NRC's ethics program.
By this notice, the i
Nuclear Regulatory Commission is also repealing the parts of its j
regulations which were preserved by 5 CFR 2635 pending issuance of this supplemental regulation (see the additional OGE grace l
period extension at 59 FR 4779-4780).
l i
II.
Analysis of the Regulations i
Section 5801.101 General Section 5801.101 explains that the regulations contained in l
the final rule apply to all NRC employees, including members of j
the commission, and are supplemental to the executive branch-wide standards.
Members and employees of the Nuclear Regulatory l
Commission also are subject to the Standards of Ethical Conduct for Employees of the Executive Branch at 5 CFR part 2635, the executive branch financial disclosure regulations at 5 CFR part 2634, and additional regulations regarding their conduct published by the agency in 10 CFR part 0.
Section 5801.102 Prohibited securities 5 CFR 2635.403(a) authorizes agencies, by supplemental l
4 regulation, to prohibit or restrict the acquisition or holding of 6
a financial interest or a class of financial' interests by agency employees based on a determination that the acquisition or i
holding of such interests would cause reasonable persons to
)
question the impartiality and objectivity with which agency programs are administered.
Where it is necessary to the i
efficiency of the service, such prohibitions or restrictions may be extended to employees' spouses and minor children.
I By 10 CFR 0.735-29, the Commission has long prohibited most of its. employees, their spouses, minor children, and other
)
members of their households, from holding stocks, bonds, and
)
other securities issued by major entities in the commercial nuclear field.
Section 5801.102 imposes very similar restrictions upon designated employees, their spouses and minor children, based upon the Commission's determination that these restrictions are necessary to maintain public confidence in the impartiality and objectivity with which the NRC executes its regulatory functions.
The restrictions also will help to 1
,., _ _ ~.,, _ _, __ _-_ --_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -
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~.
-3_
maintain public confidence that sensitive information relating to t
agency operations is not misused for private gain and will help accomplish the NRC's mission by avoiding widespread disqualification of employees from the performance of their official duties.
l Section 5801.102 is narrower in scope than 10 CFR 0.735-29 in that it does not apply to all members of the employee's household.
Consistent with 5 CFR 2635.403(a) and 2635.403 (c) (1),
it restricts only the holdings of designated employees, their spouses, and minor children.
The Commission has determined that application of the securities restrictions in 5 5801.102 to spouses and minor children is necessary to the efficiency of the service.
As evidenced by 10 CFR 0.735-29, the NRC believes it is important to the success of its mission for regulated entities and others affected by agency decisions to have this additional degree of assurance that agency decisions are not influenced by considerations of personal gain on the part of NRC personnel.
In addition to limiting the section's application to employees, their spouses, and minor children, the Commission has made other minor revisions to the restrictions as stated in 10 CFR 0.735-29.
The categories of prohibited securities set forth in 5 5801.102(b) have been revised to reflect the new types of licenses established in 10 CFR part 52 and to include securities j
issued by State or local governments to finance low-level waste facilities.
Section 5801.102 (b) (8) also prohibits employees for the first time from owning securities issued by an energy or utility sector mutual fund that has invested more than 25 percent of the fund's assets in prohibited securities.
The time frames for complying with the security ownership regulations have also been modified.
Under 10 CFR 0.735-29, NRC employees have had 30 days to comply after commencing employment or being promoted to a position covered by the security ownership prohibitions; one year to divest any security interest newly added to the agency's prohibited security list; and a " reasonable time" to dispose of securities inherited by gift.
Consistent with 5 CFR 2635.403(d), the final rule provides a uniform 90-day period for divestiture, with extension available in cases of undue hardship.
The criteria in S 5801.102 (a) for waiving the prohibition on holding a specific security have been modified to provide greater specificity.
A criterion has been newly added to cover circumstances in which legal constraints prevent divestiture.
One example of such a legal constraint would be the situation in which the prohibited security is held as part of the assets of a trust of which the employee is a beneficiary and where the trustee, who has sole authority to purchase and sell the assets,.
t refuses the employee's request to sell the prohibited security.
a 4-h The Commission has eliminated the requirement contained in 10 CFR 0.735-29 that employees who are subject to the security l
ownership restrictions certify each year that they are in compliance.
Because the annual certifications have rarely
{
revealed violations of the substantive restrictions, there is i
inadequate justification for continuing this requirement.
However, to monitor compliance, the NRC will continue to require
[
employees holding designated positions to certify compliance upon commencement of employment with the agency or upon promotion for j
the first time to a position covered by the security ownership restriction.
Agency employees will also be required to report to the Office of the General Counsel in writing any prohibited securities obtained after the initial certification.
This will l
permit the Office of the General Counsel to track required divestitures.
i on the effective date of this regulation, the NRC will issue i
Management Directive 7.7 and its accompanying Handbook which lists those agency positions covered by the security ownership i
restrictions.
The Handbook will also describe procedures for obtaining Certificates of Divestiture and waivers from the security ownership restrictions.
Both the Management Directive and Handbook will be available at the NRC Public Document Room, 2120 L Street, NW, Washington, D.C.
200555-0001.- Copies will also be available in each NRC Office.
)
Section 5801.103 Prior annroval for outside amnlovnent 5 CFR 2635.803 authorizes individual agencies, by j
supplemental regulation, to require agency employees to obtain approval before engaging in outside employment or other outside activities.
The NRC has long had the prior approval requirement, set forth in 10 CFR 0.735-40.
Section 5801.103 of the final rule retains the requirement that NRC employees obtain prior written approval before engaging in outside employment with entities that are regulated by or have business with the Commission.
The agency designees for approval of outside employment and internal agency procedures for obtaining the necessary approvals will be set forth in NRC Management Directive 7.8 and the accompanying Handbook.
This Directive and Handbook will be issued on the effective date of this regulation and will be available in the NRC Public Document Room and in each NRC Office.
III. Repeal of Superseded Portions of the NRC Conduct Regulations and Related Modifications The final rule repeals the NRC conduct regulations 10 CFR 0.735-8, 0.735-29, and 0.735-40, effective on the same day that this rule takes effect.
The information collection requirements es-m w
.us
er-7+,
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h
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?
of section 0.735-8 are no longer necessary.
Section 0.735-29 will be superseded by the prohibitions on securities contained in l
5 CFR 5801.102 and section 0.735-40 will be superseded by the
.i requirements for prior approval of outside employment contained in 5 CFR 5801.103.
These repeals, together with those effected by 58 FR 3825 and 29951, leave in 10 CPR part 0 only the waiver i
provisions of sections 0.735-21(a) and (b) which are preserved by 5 CFR 2635.402 (d) (1).
These paragraphs are redesignated 0.735-1 2(a) and (b) to follow a new section 0.735-1 which provides a cross-reference to the NRC's supplemental regulation and to the executive branch-wide financial disclosure and standards of i
ethical conduct regulations at 5 CFR parts 2634 and 2635.
l IV.
Matters of Regulatory Procedure j
Administrative Procedure Act l
I Pursuant to 5 U.S.C.
553(b), the NRC finds good cause not to seek public comment on this rule.
Such comment is unnecessary
. l because the NRC is essentially repromulgating existing regulations in a different form, and the regulations pertain l
wholly to internal agency personnel matters that affect only NRC employees, their spouses, and minor children.
To increase the likelihood of a smooth transition from the NRC's prior ethics rules to the new Government-wide standards of ethical conduct j
regulations, these rulemaking actions should take place as soon I
as possible.
The rule and accompanying repeals will become effective 90 days after the date of publication in the FEDERAL REGISTER.
Environ==ntal Innact:
Cateaorical-Exclusion l
The NRC has determined that this final rule is the type of action described in categorical exclusions 10 CFR' 51.22(c) (1) and (2).
Therefore, neither an environmental assessment nor an environmental impact statement has been prepared for this final regulation.
Panerwork Reduction Act Statement This final rule contains no information collection requirements and therefore is not subject to the requirements of the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).
Reaulatory Analysis The NRC is promulgating a supplemental regulation to OGE's Government-wide standards of conduct regulations-in order to implement effectively the NRC's ethics program.
This rule has no significant impact on health, safety or the environment.
There is no substantial cost to licensees, the NRC, OGE, or other Federal agencies.
j
(
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- Reculatory Flexibility Act As required by the Regulatory Flexibility Act of 1980, 5 U.S.C.
605(b), the Commission certifies that this rule will not have a significant economic impact on a substantial number of small entities because it affects only NRC employees.
Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not apply to this final rule and that a backfit analysis is not required for this final rule because these supplemental regulations do not involve any provisions which would impose backfits as defined in 10 CFR 50.109.
List of Subjects 5 CFR Part 5801 Conflict of interests, Government employees.
10 CFR Part 0 Conflict of interests, Criminal penalties.
Approved:
1994.
IVAN SELIN, Chairman. Nuclear Reculatory Commission.
Approved:
1994.
STEPHEN D. POTTS, Director. Office of Government Ethics.
For the reasons set forth in the preamble, the Nuclear Regulatory Commission, with the concurrence of the Office of Government Ethics, is amending title 5 of the Code of Federal Regulations and title 10, chapter I, of the Code of Federal Regulations as follows:
TITLE 5 -- [ AMENDED]
i i
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l 1.
A new chapter XLVIII, consisting of part 5801, is added to title 5 of the Code of Federal Regulations to read as follows:
5 CFR CHAPTER XLVIII--NUCLEAR REGULATORY COMMISSION l
PART 5801--8UPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE NUCLEAR REGULATORY COMMISSION Sec. 5801.101 General.
5801.102 Prohibited securities.
5801.103 Prior approval for outside employment.
Authority:
5 U.S.C.
7301; 5 U.S.C. App. (Ethics in l
Government Act of 1978); 42 U.S.C.
2201, 5841; E.O.
12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O.
12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306, 5 CFR 2635.105, 2635.403, j
2635.803.
S 5801.101 General.
In accordance with 5 CPR 2635.105, the regulations in this part apply to members and other employees of the Nuclear i
Regulatory Commission and supplement the Standards of Ethical Conduct for Employees of the Executive Branch contained in 5 CFR part 2635.
In addition to the standards in 5 CFR part 2635 and.
this part, members and other employees are subject to the executive branch financial disclosure regulations contained in 5 CFR part 2634 and to additional regulations regarding their conduct contained in 10 CFR part O.
S ss01.102 Prohibited securities.
(a)
General orchibition.
No covered employee, and no spouse or minor child of a covered employee, shall own securities issued by an entity on the list described in paragraph (b) of this section.
(b)
Prohibited securities list.
Once a year, or on a more frequent basis, the Commission will publish and distribute to employees a list of entities whose securities a covered employee or the spouse or minor child of a covered employee may not own.
The list shall consist of entities which are:
(1)
Applicants for or holders of early site permits, construction permits, operating licenses, or combined construction permits and operating licenses for facilities which generate electric energy by means of a nuclear reactor; (2)
State or local governments, if the primary purpose of the security is to finance the construction or operation of a nuclear reactor or a low-level waste facility;
' (3)
Entities manufacturing or selling nuclear power or test
- reactors, (4)
Architectural-engineering companies providing services relating to a nuclear power reactor; (5)
Applicants for, or holders of, a certified standard design; (6)
Entities licensed or regulated by the Commission to mill, convert, enrich, fabricate, store, or dispose of source or special nuclear material, or applicants for such licenses that
)
are designated by the commission because they are or will be J
substantially engaged in such nuclear fuel cycle or disposal 1
activities; (7)
The parent corporation of any subsidiary described in paragraphs (b) (1)
(b) (6) of this section; and (8)
An energy or utility sector investment fund which has I
more than 25% of its assets invested in securities issued by entities described in paragraphs (b) (1)-(b) (7) of this section.
(c)
Definitions.
For purposes of this section:
(1)
A covered employee means:
(i)
A member of the Commission; (ii)
The Inspector General of the NRC; l
(iii) A member of the Senior Executive Service (SES);
(iv)
An employee who holds a non-SES position above GG-15; and (v)
Any other employee, including a special Government employee, whose duties and responsibilities, as determined by the Commission or its designees, require application of the securities ownership prohibition contained in this section to ensure public confidence that NRC programs are conducted impartially and objectively.
The positions of these employees are specified in NRC Management Handbook 7.7, which is available in the NRC Public Document Room; and (2)
The term " securities" includes all interests in debts or equity instruments.
The term includes, without limitation, secured and unsecured bonds, debentures, notes, securitized assets and commercial paper, as well as all types of preferred and common stock.
The term encompasses both current and contingent ownership interests, including any beneficial or legal
l l 1 interest derived from a trust.
It extends to any right to acquire or dispose of any long or short position in such securities and includes, without limitation, interests convertible into such securities, as well as options, rights, warrants, puts, calls, and straddles with respect thereto.
(d)
Divestiture and renortino of nrohibited securities.
(1)
Newly covered emolovaes.
Upon promotion or other appointment to a position subject to the securities prohibition of this section, a covered employee shall sign a statement identifying securities of an entity on the prohibited securities list which he, his spouse or minor child own, or, if none are owned, certifying that he, his spouse and minor child own no such securities.
Except as provided in paragraph (d) (4) of this section, the newly covered employee, or his spouse or minor child, shall divest prohibited securities within 90 days after appointment to the covered position.
(2)
Newly orohibited securities.
Within 30 days after publication of the prohibited securities list to which an entity's name has been added, a covered employee who owns, or whose spouse or minor child owns, prohibited securities shall make a written report of that ownership to the Office of the General Counsel.
Except as provided in paragraph (d) (4) of this section, the covered employee, his spouse or minor child, shall-divest prohibited securities within 90 days after publication of the prohibited securities list.
(3)
Securities acauired without snacific intent.
Within 30 days after a covered employee, or the spouse or minor child of a covered employee, acquires securities of an entity on the prohibited securities list as result of marriage, inheritance, gift or otherwise without specific intent'to acquire the securities, the covered employee shall make a written report of the acquisition to the Office of the General Counsel.
Except as provided in paragraph (d) (4) of this section, a covered employee, or the spouse or minor child of a covered employee, shall divest prohibited securities within 90 days after the date of acquisition.
(4)
Extension of Deriod to divest.
Upon a showing of undue hardship, the Chairman of the Nuclear Regulatory Commission may extend the 90 day period for divestiture specified in paragraphs (d) (1) through (d) (3) of this section.
(5)
Disaualification nendina divestiture.
Pending divestiture of prohibited securities, a covered employee must disqualify himself, in accordance with 5 CFR 2635.402,'from participation in particular matters which, as a result of continued ownership of the prohibited securities, affect his
t
' l financial interests, or those of his spouse or minor child.
[
Disqualification is not required where a waiver described in l
5 CFR 2635.402(d) applies.
Procedures for obtaining individual waivers are contained in NRC Handbook 7.7 which is available in the NRC Public Document Room.
(6)
Tax treatment of aain on divested securities.
Where divestiture is required by this section, the covered employee (except a special Government employee) may be eligible to' defer the tax consequences of divestiture under subpart J of 5 CFR part 2634, pursuant to procedures in NRC Handbook 7.7, which is i
available in the NRC Public Document Room.
(e)
Waivers.
(1)
The Chairman may grant a waiver to permit a covered i
employee, or the spouse or minor child of a covered employee, to retain ownership of a security of an entity on the prohibited securities list upon a determination that the holding of the security is not inconsistent with part 2635 of this title or otherwise prohibited by law, and that:
(i)
Under the circumstances, application of the prohibition is not necessary to ensure confidence in the impartiality and objectivity with which NRC programs are administered; (ii)
Legal constraints prevent divestiture; or (iii) For a special Government employee, divestiture would result in substantial financial hardship.
(2)
Where a waiver has been granted under paragraph (e) (1) of this section, the covered employee must disqualify himself, in accordance with 5 CFR 2635.402, from participation in particular matters which, as a result of continued ownership of the prohibited security, would affect his financial interests, or those of his spouse or minor child unless he has received a waiver described in 5 CFR 2635.402(d), pursuant to procedures in NRC Handbook 7.9, which is available in the NRC Public Document Room.
5 sool.103 Prior approval for outside maployment.
(a)
An employee, other than a special Government employee, shall obtain written authorization before engaging in compensated outside employment with:
(1)
A Commission licensee; (2)
An applicant for a Commission license;
i e
t l
(3)
An organization directly engaged in activities in the commercial nuclear field; 1
(4)
A Commission contractor; (5)
A Commission supplier; I
(6)
An applicant for or holder of a license issued by a State pursuant to an agreement between the commission and the State; (7)
A trade association which represents clients concerning i
nuclear matters; or (8)
A law firm or other organization which is participating in an NRC proceeding or which regularly represents itself or i
clients before the NRC.
i (b)
Requests for approval shall be submitted in writing to l
the agency designee specified in NRC Management Directive 7.8, which is available in the NRC Public Document Room, in accordance with procedures set forth in the accompanying NRC Handbook.
(c)
Approval of outside employment shall be granted in writing only upon a determination by the agency designee that the l
proposed outside employment would not violate a Federal statute-or regulation.4 including 5 CFR 2635.
(d)
For purposes of this section, "outside employment" j
means any form of non-Federal employment, business relationship i
or activity, involving the provision of personal services by the employee.
It includes but is not limited to personal services as an officer, director, employee, agent, attorney, consultant, contractor, general partner, trustee, teacher or speaker.
10 CEAPTER I -- NUCLEAR REGULATORY C000tISSION PART 0 -- CONDUCT OF EMPLOYEES 2.
The authority citation for part 0 is revised to read as follows:
Authority:
Secs. 25, 161, 68 Stat. 9925, 948, as amended (42 U.S.C.
2035, 2201) ; sec. 201, 88 Stat. 1242, as amended (42 U.S.C.
5841) ; E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p.
i 306, 5 CFR 2635.105 and 2635.402 (d) (1).
Section 0.735-2, also issued under 5 U.S.C.
552, 553.
3.
A new section 0.735-1 is added to read as follows:
a
. S 0.735-1 Cross-reference to employee ethical conduct standards and financial disclosure regulations.
Employees of the Nuclear Regulatory Commission (NRC) are subject to the executive branch-wide Standards of Ethical Conduct at 5 CFR part 2635, the NRC regulation at 5 CFR part 5801 which supplements the executive branch-wide standards, and the executive branch-wide financial disclosure regulations at 5 CFR part 2634.
4<
Section 0.735-21 is redesignated as S 0.7~c -2 and the heading is revised to read thereof, " Exemptions fc_ financial interests."
)
5.
Sections 0.735-8. 0.735-29 and 0.735-40 are removed.
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ATTACHMENT 2 List of Proposed Prohibited Mutual Funds L
8 d
f
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PROPOSED LIST OF PRONIBITED ENERGY AND UTILITY MUTUAL FUNDS T
The following list was compiled from the Investment Company Institute's 1993-1994 Directory of Mutual Funds.
Based on the information provided from the individual funds, OGC calculated 1
the percentages of prohibited stocks, as they were listed in the repective funds' most recent prospectuses, as exceeding 25% of the fund's total assets.
ABT UTILITY INCOME FUND, INC.
AMERICA'S UTILITY FUND, INC.
DEAN WITTER UTILITIES FUND EATON VANCE TOTAL RETURN TRUST j
FLAGSNIP UTILITY INCOME FUND (CORPORATE CASN MANAGEMENT FUND) i FIDELITY UTILITIES INCOME FUND FIDELITY ELECTRIC UTILITIES FUND FIDELITY UTILITIES INCOME FUND l
FINANCIAL STRATEGIC UTILITIES PORTFOLIO FORTRESS UTILITY FUND, INC.
FRANKLIN UTILITIES FUND l
FRANKLIN GLOBAL UTILITIES FUND LIBERTY UTILITIES FUND MFS UTILITIES FUND PILGRIM CORPORATE UTILITIES FUND f
PRUDENTIAL UTILITY FUND, INC.
STRATTON MONTNLY DIVIDEND SNARES, INC.
VANGUARD UTILITIES INCOME PORTFOLIO i
1 i
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