ML20198L667

Forwards Regulatory Documents Comprising Regulatory History of Notice of Final Rulemaking Entitled, Deliberate Misconduct by Unlicensed Persons, Which Amends 10CFR30,32, 40,50,52,60,61,70,71,72,110 & 150

ML20198L667
Person / Time
Issue date:	01/14/1998
From:	Dipalo A NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS)
To:	Lanham D NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
Shared Package
ML20198L674	List: ML20198L667 ML20198L765 ML20198L892 ML20198L903 ML20198L929 ML20198L965 ML20198L970 ML20198L985 ML20198L996 ML20198M005 ML20198M031 ML20198M042 ML20198M069 ML20198M084 ML20198M087 ML20198M097 ML20198M130 ML20198M136 ML20198M143 ML20198M160 ML20198M200 ML20198M221 ML20198Q028
References
FRN-57FR1890, FRN-57FR1980, FRN-63FR1890, FRN-63FR1980, RULE-PR-110, RULE-PR-150, RULE-PR-30, RULE-PR-32, RULE-PR-40, RULE-PR-50, RULE-PR-52, RULE-PR-60, RULE-PR-61, RULE-PR-70, RULE-PR-71, RULE-PR-72 AF35-2-001, AF35-2-1, NUDOCS 9801160090
Download: ML20198L667 (3)

Text

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o WASHINGTON, D.C. 20616 0001 f

%, ***** f January 14, 1998 MEMORANDUM TO: Donald H. Lanham Nuclear Document System (NUDOCS), Mail Stop 03H8 _

Division of Information Resource Management Office of Chief information Officer -

FROM: Anthony DiPolo -

Operations Branch j Division of I-^sstrial and Medical Nuclear Safety i Office of Nuctear Material Safety and Safeguards .

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SUBJECT:

REGULATORY HISTORY INDEX FOR 10 CFR PARTS 30,40,50,52, 60,61,70,71,72,110, AND 150 " NAL RULE, " DELIBERATE -

MISCONDUCT BY UNLICENSED PERSONS" ..

Enc;osed for your processing are the regulatory documents comprising the regulatory history of the Not! e of Final Rulemaking entitled " Deliberate Misconduct by Undcensed Persons," which amends ' 0 CFR Parts 30,32,40,50,52,00,61,70,71,72,110 and 150. This notice was published in the Federal Register on January 14,1998, (57 FR 1890). ,

I If you have any questions or if we can be of furthar assistance, please call Anthony DiPalo on . .

415-6191.

Anthony DiPalo p [)k

• _ Operctions Branch -

, Division of Industrial and Medical Nuclear Safety

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Office of Nuclear Material Safety and Safeguards Attachments: ,

1. Index

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fr Regulatory History Index for.10 CFR 30. 40. 50. 60. 61. 70.71. 72. ,6.110. and 150..." Deliberate Misconduct by Unlicensed Persons".

1. Request for Initiation of rulemaking by NMSS on 5/19/95.

2. RES request for concurrence on the rulemaking plan by the Program Offices and other affected Offices.11/7/95.

3. SECY-96-017. January 26.1996. Negative Consent Paper. Changes to Deliberate Misconduct Rule. Contains the Rulemaking Plan and Office concurrences.

4. Commission SRM dated February 8.1996, a3 proving the proposed cha.iges to the deliberate misconduct rule in SECY-96-017.

5. Memo To JTaylor (EDO) From D".orrison. Dir. RES. dated 8/13/96 transmitting Commission Paper and Proposed Rule on Deliberate Misconduct by Unlicensed Persons. This paper became SECY-96-184,

6. SECY-96-184. August 20. 1996. Notation Vote Commission Paper Proposed Rule.

Deliberate Misconduct By Unlicensed Persons.

7. SRM on SECY-95-184. Proposed Rule--Deliberate Misconduct By Unlicensed Persons. September 11. 1996. Commission approved publication of proposed rule in the Federal Register.

8. Memo to David Meyer. Chief. Rules Review and Directive Branch. ADM.

Implementation of the Commission's SRM to publish the proposed deliberate misconduct rule in the Federal Register, September 25.1996.

9. Congressional letters sent to Congressman Faircloth. Senator Graham.

Congressman Schaefer, and Congressman Pallone. October 1. 1996,

10. Proposed Rule. Deliberate Misconduct by Unlicensed Persons published in Federal Register for public comment on October 4. 1996 (VOL.61. No.194).

11. Six public comments received on the proposed rule during the public comment period (Comment period ended December 18, 1996).

12. Memo to NRC Office Directors (8/14/97) requesting their review and concurrence on a final rule package (containing Commission Paper. FRN.

Enforcement Policy Statement. Congressional, letters, and public announcement) for deliberate miscnduct rule by unlicensed persons.

13. -Concurrences received by the offices on the 8/14/97 package on deliberate misconduct.

IRM .. 8/25/97 OCF0.. 8/25/97 NRR .. 8/28/97 NMSS.. 8/29/97 ADM ,. 8/28/97-SP .. 9/3/97 OE .. 9/9/97 and *9/30/97 (based on a minor revision)

OGC .. 10/2/97

4-

14. - Final Rule package on Deliberate' Misconduct. from RES M.Knapp to J. Callan, E00 for review and transmittal to the Commission. Oct.6.1997.

15. SECY-97-252. October 27.1997. Final Rule Deliberate Misconduct by Unlicensed

.-Persons.

16. SRM dated 12/12/97. approving the final rule and its publication in.the Federal Re91 ster including the Commission vote _ sheets.

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Action: [Knann- ort /

' *'\ l* r* .m ano Lieberman,OT I

UNITED STATES '

[ g NUCLEAA REGULATORY COMMISSION a i

, y c WASHING 10N,D C. 20555-0001 Thompson Norr

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December 12, 1997 IN RESPONSE,y PLEASE REFER TO: 'M971211A SECRETARY Blaha

Collins, NRR Bangart, SP MEMORANDUM'TO: L. Joseph Callan Paperiello. NMSS Executive Director for Operations Meyer, ADM -

Shelton, IRM Y e D. Cyr, General Counsel DiPalo, RES L

FROM: hn C. oyle

SUBJECT:

STAFF REQUIREMENTS: AFFIRMATION SESSION, 2:00-P.M.

THURSDAY, DECEMBER.11, 1997, COMMISSIONERS' CONFERENCE ROOM, ONE WHITE FLINT NORTH, ROCKVILLE, i

MARYLAND (OPEN TO PUBLIC ATTENDANCE)

I. SECY-97-252 -

FINAL RULE - DELIBERATE MISCONDU N BY UNLICENSED PERSONS

. The Commission approved a final rule amending 10 CFR Parts 30, 32, 40, 50, 52, 60, 61, 70, 71, 72, 110, and 150, which would y extend the scope of the Deliberate Misconduct Rule to cover certificate holders and applicants for licenses or certificates of compliance as well as employees, contractors, subcontractors, and' consultants for certificate holders and applicants, and confonning changes to the NRC Enforcement Policy. The staff should incorporate the attached changes to the Federal Register Notices for the final rule and to the separate Federal Register Notice conforming the NRC's " General Statememt of policy and Procedures for NRC Enforcement Actions" to reflect the change in scope of'the Deliberate Misconduct Rule, and forward the revised Federal Register Notices to the Office of the Secretary for signature and publication.

(-BBO) (RES/0E) .(SECY suspense: 12/29/97) 9600007 II. SECY 9'-266 - ORDER DENYING A MOTION TO OUASH SIX SUBPOENAS ISSUED BY THE OFFICE OF INVESTIGATIONS The Commission approved an order denying a motion to quash six

' subpoenas issued by the Office of Investigations to employes of a hospital. holding an NRC medical license pursuant to 10 CFR Part 30.

(Subsequently, the Secretary signed the order on December 11, 1997)

Attachment:

As. stated WQi obY p5 y .p

1 cc i - Chairman Jackson Commissioner Dicus Commissioner Diaz Commissioner McGaffigan EDO OGC CIO CFO

. OCAA-OCA 01G .

Office Directors, Regions, ACRS, ACNW, ASLBP (by E-Mail)

~PDR DCS 4

Editorial Changes to the Eederal Reaister Notice on the final rule in SECY-97-252

1. On page 7, paragraph 2, line 1, insert 'such' after ' issue.'

2. On page 10, replace the last word (implies) with ' infers.'

3. On page 13, in the response, line 1, replace ' types' with

' categories.'

Editorial Change to the Federal Reaister Notice on t;w Enforcement Actions in SECY-97-252

1. On page 2, paragraph 2, line 3, replace the last 'or' with

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UNITED STATES

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WASHINGTON, D C. 20$$$-0001-

...,, .' December 12,_1997' OFFICE OF THE

~ SECRETARY f COMMISSION VOTING RECORD 4

DECISION-ITEM:- SECY-97-252

~ TITLE: FINAL RULE - DELIBERATE MISCONDUCT-'BY UNLICENSED PERSONS The Commission (with all-Commissioners agreeing) approved the subject' paper as recorded in the Staff Requirements Memorandum (SRM) of December 12, 1997.

This Record contains a summary of voting on this matter together

'with the individual vote sheets, views and conanents of the Commissioners, and the SRM of December 12, 1997.

Sec/Aohn rfetaryC. ofHoyle the Commission

-Attachments:.

• 1.-Voting Summary _

2.: Commissioner Vote Sheets

3. Final SRM 1-I cc: Chairman Jackson Commissioner Dicus Commissioner'Diaz--

c Commissioner McGaffigan 3 OGC EDO' PDR DCS'

• 19 1122? & 4

-VOTING

SUMMARY

- SECY-97-252 RECORDED-VOTES NOT APRVC DISAPRVD ~ ABSTAIN' PARTICIP -COMMENTS DATE CHRM. CTACKSON X 11/19/97 COMR. DICUS X 11/5/97 COMR.-DIAZ X 11/17/97  !

lCOMR. McGAFFIGAN X X 11/17/97 COMMENT RESOLUTION In their vote sheets, all Commissioners approved the staff's ,

recommendation. Subsequently, the Commission affirmed this item and issued the attached SRM on December 12, 1997, j

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A F F I R M A T I O N VOTE.~

RESPONSE SHEET TO: John C. Hoyle, Secretary FROM: CHAIRMAN JACKSON

SUBJECT:

SECY-97-252 - FINAL RULE - DELIBERATE MISCONDUCT BY UNLICENSED PERSONS Approved xx Disapproved Abstain Not Participating Request Discussion COMMENTS:

F dw'F-Shirlef Ann Jackson SIGNATURE Release Vote -/ XX / _ November 19, 1997 DATE Withhold Vote / /

Entered on "AS" Yes No 00k or 71239 OQ Ol

A F F I R M A T I O N VOTE RESPONSE SHEET ,

TO: John C. Hoyle, Secretary P

FROM: ' COMMISSIONER DICUS

SUBJECT:

SECY-97-252 - FINAL RULE - DEllBERATE MISCONDUCT BY UNLICENSED PERSONS

. Approved X Disapproved Abstain Not Participating Request Discussion COMMENTS: None.

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$NATU$JFJ Release Vote / x / N#em A w7 5 / 9 9 -)

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-DAT(

Withhold Vote / /

Entere'd on "AS" Yes - x No ob Q-ht2gcot? DI

FILE No. 894 11/17 '97 18:33 ID:Doub le Tree Hotel ABQ.M1 505 247 7025 PCGE 4 11'17'97 17:16 N R C + %c 247 7025 W.241 DM ,

b A F F l R M A T I O N VOTE RESPONSE SHEET TO: John C. Hoyle, Secretary ,

FROM, COMMISSIONER DIAZ

SUBJECT:

SECY 97 252 FINAL RULE DELIBERATE MISCONDUCT BY UNLICEN8ED PERSONS Approved - XI -

Isapproved Abstain Not Participating Request D!scussion COMMENTS:

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Release Vote I I / O -l 7 ~W

. DATE j . Withhold Vote /_/

Entered on "AS" Yes - No 8

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A F F l R M A T I O N VOTE

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RESPONSE SHEET TO: John C. Hoyle, Secretary FROM: COMMISSIONER MCGAFFIGAN

SUBJECT:

SECY-97-252 - FINAL RULE - DELIBERATE MISCONDUCT BY UNLICENSED PERSONS Approved / Disapproved Abstain Not Participating Request Discussion COMMENTS: , gg C

d OLL SIGN TURE {/ /j If Release Vote / - w / I7, /'197 DATE Withhold Vote / /

Entered on "AS" Yes X No V

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certifications,' or combined licenses for nuclear power plants issued under 10 CFR Part 52; -

applicants for, and holders of, certificates of registration issued'under Parts 30 and 32;)

and applicants for, and holders of, quality assurance program approvals issued under Part 71; and to the erriployees, contractors, subcontractors and consultants of all the 4 above categories of persons, implements the Commission's authority under the AEA to - ,

issue regulations and orders to any person Idefined in Section 11s'of the AEA to include, _ ,

- e.g., an individual, corporation, firm, or a Federal, State, or local agency) who engages in :

t conduct affecting activities within the Commission's subject matter jurisdiction.

in brief, Section 1611 of the AEA provides broad authority to issu gulations and orders as the Commission deems necessary to govern any activity authorized pursuant to the AEA in order to protect public health and safety. Section 161b of the AEA similarly authorizes the Commission to issue regulations and orders to impose " standards and -

instructions" on persons to govem the possession and use of special nuclear material, d

source material, and byproduct material, as may be necessary or desirable to provide for the common defense and security and protect public health and safety. Sect;on 234 of the AEA authorizes the NRC to impose civil penalties on certain unlicensed persons for violating the NRC's substantive requirements. Section 234a of the AEA reads as follows:

[ A'ny person who (1) violates any licensing or certification provision of Sections 53, 57, 62, 63, 81, 82,101,103,104,107,109, or 170*. or any rule, regulation, or

order issued thereunder, or any term, condition, or limitation of any license or certification issued thereunder, or (2) commits any violation for which a license may

be revoked under Section 186, shall be subject to a civil penalty, . . . .

, The licensing provisions listed in Section 234a generally prohibit the possession, use, _

receipt, or transfer of nuclear materials or facilities unless authorized by and in accordance iwith a license, ,

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' iaccurate.when made but later turns out to be erroneous because of newly discovered

, = information or advances in technology. Also, the Commission recognizes that oral ~

information may in some situations be less reliable. This is addressed in Section IX of the

~

Enforcement Policy. .

T

[ Finally, tho' Commission does not take lightly its responsibility in this area and p carefully considers each action involving an individual. - At the Commission stated in the

[ original Deliiserate Misconduct Rule:

"It would be an crroneous reading of the final rule or, deliberate misconduct to -

j -

conclude that conscientious people may be subject to personal liability for mistakes. The -

Commission realizes that people may make_ mistakes while acting in good faith.

. Enforcement actions directly against mdividuals are not to be used for activities caused by ,

merely negligent conduct. These persons should have no fear of individual liability under this regulation, as the rule requires that there be deliberate misconduct before the rule's

' sanctions may be imposed. The Commission recognizes, ... that enforrsment actions ,

. involving individuals are significant actions that need to be closely controlled and

^

judiciously applied." (See 56 FR 40664,40681)

Comment: One commenter, the Nuclear Energy institute (NEl), believes that the

~

NRC is exceeding its statutory authority under the Atomic Energy Act of 1954 (the AEA)

in promulgating these amendments to the Do!iberate Misconduct Rule because, in the view of NEl, authority over non-licenses persons was not provided by Congress other than in

' limited circumstances carved 'out in the AEA as exceptions. In particular, NEl believes that

- Section 1611(3) of the AEA does not provide jurisdiction over non-l.?cenlee persons -

because it does not contain the operative phrase "any person" and therefore, NEljspptr6, 7

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comment objectinD to the original Deliberate Misconduct Rule, "a persor$ with the requisite

knowledge who deliberately provides false or inaccurate information that is material to the NRC presents a health and safety concern within the NRC's regulatory sphere." 56 FR 40670. The fact that no actual violation has occurred, or would have occurred but for -

detection, has no bearing on whether, frr,m a health and safety stan9 point, that person should be involved in nuclear activities. Although, the commenter is correct that the standard permits the NRC to take enforcement action whether or not a violation has -

occurred, or would have occurred but for detection, the ComrNssion does not belicve that this fact renders the standard overly oroad.

Comment: One commenter, the JAl Corporation, proposed that the scope of the proposed rule be t,roadened to include persons submitting information pursuant to the notification requirements of 10 CFR Part 21. The commenter, apparently believing that such persons are not presently covered by the De;iberate Misconduct Rule, pointed to the unfairness that would exist if persons who knowingly submit incomplete or inaccurate information to licensees are penalized but persons who knowingly submit incomplete or inaccurate information to the NRC regarding detects or non-compliance under Part 21 are not penalized.

M/

Resoonse: Under 10 CFR Part 21, certain3ypt(s' f persons, e.g., individual

^

directors or responsible officers of a corporation, must notify the NRC when they obtain certain types of information; e.g., information concerning defects in components which could cause a substantial safety hazard. When such persons provide information to the NRC they are subject to the Deliberate Misconduct Rule as it appears in the relevant Part of Chapter i of 10 CFR. For example, if the director of a corporation obtains information 13

i' . :, ,'. .

SUPPLEMENTARY INFORMATION: '

P

The Commission's " General Statement of Policy and Procedurd for NRC Enforcernent Actions" (Enforcement Policy or Policy) was first issued on September 4,1980. Since that time, the Enforcement Policy has been revised on a number of occasions. _On June 30,1995

, (60 FR 34381), the Enforcement Policy was revised in its entirety and was also published as ,

NUREG-1600.. The Policy primarily addresses violations by licensees cnd certain non-

licensed persons, as discussed further'in footnote 3 to Section 1, introduction and Perpose, and in Section X: Enforcement Action Against Non-licensees.

The Deliberate Misconduct Rule was adopted in September 1991 and applies to any licensee or any employee of a licensee; and any contractor Uncluding a supplier or

[

consultant), subcontractor, or any employee of a contractor or subcontractor o any licensee.  !

/

The Deliberate Misconduct Rule placed licensed and unlicensed persons on notice that they ,

may be subject to enforcement action for deliberate misconduct that causes or would have caused, if not detected, a licensee to be in viohtion of any of the Commission's requirements, or for deliberately providing to the WRC, a licensee, or contractor, information that is incomplete or inaccurate in some raspect material to the NRC.

The final rulemaking expands the Deliberate Misconduct Rule, where it appears in 10 g

- CFR Parts 30,' 40,50,60,61,70,-72, and 110, clarifies the scope of Part 32 and adds the -

- Rule to Parts 52 and 71. ' This expansion arises out of a realization that the current Rule

- does not apply to applicants for NRC licenses, applicants for, or holders of, certificates of compliance, early site permits, standard design certifications, or combined licenses issued -

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RULEMAKING ISSUE (Affirmation)

October 27, 1997 SECY-97-252 EQB: The Commissioners FROM: L. Joseph Callan, Executive Director for Operations

SUBJECT:

FINAL RULE - DELIBERATE MIS':ONDUCT BY UNLICENSED PERSONS PURPOSE:

To obtain Commission approval for publication of final amendments to 10 CFR Parts 30, 32,40, 50, 52,60,61,70,71,72,110 and 150 dealing with deliberate misconduct of unlicensed persens.

BACKGROUND:

In SECY-96-017, dated January 26,1996, the NRC staff informed the Commission of its plans to extend the Deliberate Misconduct Rule to certificate holders, and to applicants for licenses or certificates of compliance. The Commission, in an SRM dated February 8, 1996, advised the Executive Director for Operations (EDO) that it approved SECY-96-017 and had no objections to the proposed changes to the Deliberate Misconduct Rule found at 10 CFR 30.10, 40.10, 50,5, 60.11, 61.9b, 70.10, 72.12, and 110.7b. In developing this rulemaking, the staff extended the scope of the Deliberate Misconduct Rule to also cover applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants issued under 10 CFR Part 52; applicants for, or holders of, certificates of registration issued under Parts 30 and 32; and applicants for, or holders of, quality assurance program approvels issued under Part 71 (including contractors, subcontractors and consultants of the above categories and employees of each of them).

In addition, the scope of 10 CFR 150.2 is being changed to provide similar notice to persons conducting activities under reciprocity in areas of NRC jurisdiction.

CONTACT:

Tony DiPalo, DRA/RES NOTE: TO BE MADE PUBLICLY AVAILABLE (301) 415-6191 WHEN THE FINAL SRM IS MADE AVAILABLE James Lieberman, OE (301)415-2747 l

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The Commissioners The proposed rule was submitted to the Commission for approval (SECY 96184, dated August 20,1996) and published in the Federal Reoister on October 4,1996 (61 FR 51835). The comment period ended on December 18,1996. The Commission received 6 comments on the proposed rule. The Nuclear Energy Institute opposed issuance of the rule for allegedly being in excess of statutory authority. Other commenters generally supported the rule, but suggested limited changes.

A summary of the comments and NRC's responses are provided in the Statement of Consideration for Final Ru!e (Enclosure 1).

DISCUSSION:

As a result of the staff's review of the public comments, no changes were made to the final rule. Thus, the final ru% revises the regulations to extend the scope of the Deliberate Misconduct Rule to six categories of persons. They are: (1) applicants for NRC licenses, under 10 CFR Parts 30, 40, 50, 60, 61, 70 and 110; (2) applicants for, or holders of, certificates of compliance issued under 10 CFR Parts 71 and 72; (3) applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants issued under 10 CFR Part 52; (4) applicants for, or holders of, certificates of registration issued under 10 CFR Parts 30 and 32; (5) applicants for, or holders of, quality tssurance program approvals issued under 10 CFR Pr+ 71; and (6) the employees, contractors, subcontrectors and consultants of the first five categories of persans, so that they may be subject to enforcement action. In addition, che scope of 10 CFR 150.2 is being changed to provide similar notice to persons conducting activities under reciprocity in areas of NRC jurisdiction. These persons willinclude applicants for a license or certificate or quality assurance program approval and holders of a certificate or quality assurance program approval.

The staff does not believe that it is necessary to add the Deliberate Misconduct Rule to 10 CFR Part 54 because licensees applying to renew their operating licenses for nuclear power plants are already subject to this rule as licensees under 10 CFR Part 50. Similarly, the staff does rot believe that it is necessary to add the Deliberate Misconduct Rule to 10 CFR Part 55 because applicants for, and holders of, reactor operators' licenses are already subject to this rule as employees of 10 CFR Part 50 licensees. Moreover, licensed operators are subject to all applicab!a Commission requirements (see 10 CFR 55.53 (d))

and thus a finding of deliberate misconduct is not required to take enforcement action against a licensed reactor operator.

As a resuh of adoption of this final rule, the NRC's Enforcement Policy needs to be amended. The proposed revisions are described in the enclosed Federal Register notice (Enclosure 2). The revision would be effective concurrently with these amendments to the regulations. They will also be reflected in the next revision to NUREG-1600, "GenetM Statement of Policy and Procedures for NRC Enforcement Action." As these amendments address the terminology used in referring to various unlicensed entities, e.g., contractors, vendoss, it is appropriate to modify all existing references to vendors to conform to the Commission's hc! ding in Fiv0 Star Products, Inc. and Construction Products Research, Inc.,

38 NRC 169, CLI-93-23, that the term " contractor" includes vendor. Those changes are reflected in the Federal Register notice. During the final stage of this rulemaking, it was

- m i

The Commissioners ' 3-recognized that the DJ!ibt. rate Misconduct Rule, by its terms, does not expressly cover persons who conduct actNities that require an NRC license but do not hold a license, i.e.,

using material withou: a li:ense. The staff is of the view that the Rule covers those. .

persons.

COORDINATION:

The Office of the Gent rel Counsel has no legal objection to this Final Rule. The Office of the Chief Information Officer has reviewed this Commission Paper for information technology and information managernent implicaticns and concurs in it. The Office of the Chief Financial Officer aas reviewed this Commission Paper for resource impacts and has -

no objections.

RECOMMENDATIQN:

That the Commission:

1. Anorove publication in ths Federal Reaister of the notices of the attached Final Rulemaking (Enclosure 1) and revision to the NRC Enforcement Policy (Enclosure 2),

2. In order to satisfy the requirements of the Regulatory Flexibility Act,5 U.S.C.

605(b), certify that this rule, if promulgated, will not have a significant economic impact on a substantlaf number of smail entities. This certification is included in the <

enclosed Federal Register notice.

3. Ngte:

a. The Regulatory Analys% has been included in the Federal Recistgr notice.

b. Tne appropriate Congressional committees will be informed (Enclosure 3).

c. A public announcement will be issued by the Office of Pubi.. Affairs when the final rulemaking is filed with the Office of the Federal Register

-(Enclosure 4),

d. The Chief _ Counsel for Advocacy of the Small Business Administration will be informed of the certification regarding economic impact on small entities and the reasons, as required by the Regulatory Flexibility Act,

e. The final rule does not contain any new or amended information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C.

3501, et seq.).'

[

The Commissioners 4-

' f. - The staff has determined that this is not a " major" rule as defined in the Small Business Regulatory Enforcement Fairness Act of 1996,5 U.S.C. ' q 804(2), and has confirmed this determination with the Office of Management j and Budget. The appropriate Congressional and GAO contacts will be informed (Enclosure 5). l C'

L. J seph Callan Executive Director for Operations E; closures: As stated (5)

Commissioners' comments or consent should be provided directly to the Office of the Secretary by COB' Wednesday, November 12.-1997. i Commission Staff Office-comments, if any, should be submitted to the Commissioners NLT_ November 4, 1997, 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 November 3, 1997. Please refer to the appropriate Weekly Commission Schedule, when published, for a specific date and time.

DISTRIBUTION:

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! ENCLOSURE 1 l

J FEDERAL REGISTER NOTICES LINCLUDES STATEMENT OF L

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[7590 01-P]:

..1 INUCLEAR REGULATORY. COMMISSION-10 CFR Parts 30, 32, 40, 50, 52, 60, 61, 70, 71, 72,110, and 150

. __ l RIN: 3150-AF35 -

4 Deliberate Misconduct by Unlicansed Persons - l P

- AGENCY:? Nuclear Regulatory Commission.

- ACTION: Final rule.

SUMMARY

- The Nuclear Regulatory Commission (NRC) is amending'its regulations to extend the Deliberate Misconduct Rule to six categories of persons: applicants for NRC -

- licenses; cpplicants for, or holders of, certificates of compliance; applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear

, power plants; applicants for, or holders of, certificates of registration; applicants for, or holders of, quality assurance program approvals; and the employees, contractors,

!l '

- subcontractors and consultants of the above five categories of persons. This amendment m

would subject these categories of persons to enforcemerit action for deliberate misconduct. Deliberate misconduct may involve providing information that is known to be incomplete or inaccurate in some respect material to the NRC, or it may involve conduct--

that causes or would have caused, if not detected, a licensee, certificate holder, or- .

t

-- applicantfo be in violation of any of the Commission's requirements.

EFFECTIVE DATE:: This final rule is effective on (insert 30 days from date of publication in .

the Federal' Register) l I

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FOR FURTHER INFORMATION CONTACT: Tony'DiPalo, Office of Nuclear Regulatory ,

Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone '

-(301) 415-6191, e-mail, aJd@nrc. gov. .

i SUPPLEMENTARY INFORMATION:

Background

.On August 15,1991 (56 FR 40664), the Commission adopted chinges to NRC regulations that established the Deliberate Misconduct Rule found at 10 CFR 30.10, 40.10, 50.5, 60.11, 61.9b, 70.10,72.12, and 110.7b, which applies to any licensee or any employee of a licensee; and any contractor (including a supplier or consultant),

subcontractor, or any employee of a contractor or subcontractor, of any licensee. In addition,10 CFR 150.2, Scope, provides notice to persons conducting activities under reciprocity in areas of NRC jurisdiction that they are subject to the rule (agg 10 CFR 150.20, Recognition of Agreement State licences). The Deliberate Misconduct Rule placed licensed and unlicensed persons on notice that they may be subject to enforcement action

-for deliberate misconduct that causes or would have caused, if not detected, a licensee to be in violation of any of the Commission's requirements, or for deliberately providing to the NRC, a licensee, or contractor, information that is incomplete or inaccuiate in some respect material to the NRC.

Currently, the Deliberate Misconduct Rule does not apply to:

(1)~ Applicants for NRC licenses; 2

(2) Applicants for, or holders of, certificates of compliance issued under 10 CFR Parts 71 and 72, including those for dry cask storage; (3) Applicants for, or hniders of, early site permits, standard design certifications, or combined licenses for nuclear power plants issued under 10 CFR Part 52; (4) Applicants for, or holders of, certificates of registration issued under Partr. 30 and 32; (5) Applicants for, or holders of, quality assurance program approvals issued under Part 71; and (6) The employees, contractors, subcontractors and censultants of the first five categories of persons.

To ensure that these persons are subject to enforcement action for wrongdoing under the Deliberate Misconduct Rule, on October 4,1996 the NRC issued a proposed rule to extend the rub to them (61 FR 61835). This final rule will also add the Deliberate Misconduct Rule to 10 CFR Parts 52 and 71 where it currently doec not appear.

The staff does not believe that it is necessary to add the Deliberate Misconduct Rule to 10 CFR Part 54 because licensees applying to renew their operating licenses for nucleer power plants are already subject to this rule as licensees under 10 CFR Part 50.

Similarly, the staff does not believe that it is necessary to add the Deliberate Misconduct Rule to 10 CFR Part 55 because applicants for, and holders of, reactor operators' licenses are already subject to this rule as employees of 10 CFR Part 50 licensees. Moreover, licensed operators are subject to all applicable Commission requirements (see 10 CFR 55.53 (d)) and thus a finding of deliberate misconduct is not required to take enforcement action against a licensed reactor operator.

3

I Discussion It is important that allinformation provided to the NRC be complete and accurate in-

~

' 1 all material' respects. Section 186 of the Atomic Energy Act of 1954, as amended (AEA), l l

underscores this need by providing thJt "(a) license may be revoked for any material false

]

statement in the application or any statement of fact required [by statute or regulation]

... " The Commission has prnmulgated rules concerning completeness and accuracy of information that spe:ifically apply to information provided to the Commission by a licensee or an applicant for a license (see 10 CFR 30.9(a),40.9(a), 50.9(a), 60.10!a), 61.9a(a),

70.9(a), 71.az, 72.11(a), 76.9(a) and 110.7a(a)). Similarly, subsection (b) of each of

, these sections, which deals with notification to the Commission of significant safety information, refers to applicants as well as licensees. Violation of these provisions can result in denial of the license application, civil enforcement action against a licensee, or, if appropriate, referral to the Department of Justice for consideration for criminal prosecution.

The De8iberate Misconduct Rule permits the NRC to take individual action, such as issuing an order, against an individual who deliberately provides information that the individual knows to be incomplete or inaccurate. However, when the Deliberate Misconduct Rule was promulgated, it did not address applicants for licenses; applicants for, and holders of, certificates of compliance or certificates of registration; applicants for, and holders of, early site permits, certified designs and combined licenses; and applicants for, and holders of, quality assurance program approvals, and their employees, and contractors and consultants, and their employees.

4

Incomplete or inaccurate information has potential safety significance, whether submitted before or after a license, certificate, permit, or approval has been issued. The Commiss;on has clearly emphasized the importance of applications containing accurate information; e.g., "[The Commission) cannot overstate the importance of a licensee's or an applicant's duty to provide the Commission with accurate information." Randall C. Orem.

D.O., CLI 93-14, 37 NRC 423 (1993). The Orem case involved a consultant to an applicant for a license who provided inaccurate information that wa2 included in the license application and the Commission found that information as to the status of the facility was material to the licensing decision. Id. at 428.

The Commission believes that there may be significant safety consequerices from the deliberate submission of f alse or incomplete information or other deliberate wrongdoing by an .pplicant for a license or other unlicensed persons covered by this modification to the Deliberbte Misconduct Rulo. For example, a quality assurance program that is submitted to the NRC for approval but is supported by deliberately falsified data that mask a sign;ficant defect could be a public health and safety threat. Under the present Deliberate Misconduct Rule, a cer'licate holder who obtained a certificate by deliberate submittal of false information could escape individual NRC enforcement action because the deliberate misconduct may not have put an "NRC licensee"in violation. To effectively exercise its authority under the AEA, the Commission needs to prevent or otMrwise deter the deliberate submittal of materially falso or inaccurate information by those entities not currently covered by the rule.

The Commission is amending the Deliberate Misconduct Rule each place it appears in 10 CFR Chapter ! to make the rule apply to applicants for NRC licenses; to applicarits for, and holders of, certificates of compliance issued under 10 CFR Parts 71 and 72; to 5

applicants for, and holders of, early site permits, certified designs, and combined licenses for nuclear power plants ist Jed under 10 CFR Part 52; to applicants for, and holders of, certificates of registration issued under Parts 30 and 32; and to applicants for, and holders of, quality assurance program approvals issued under Part 71; and to the employees, contractors, subcontractors and consultants of all the above categories of persons. This would irciude, for example, a consultant engaged by an applicant to prepare a license application for such activities as radiography, well logging, irradiation, and teletherapy. It would also apply to a consultant preparing an application for a certificate for a spent fuel cask, or individuals conducting performance tests to support such an application. The amendments to the Deliberate Misconduct Rule will appear in 10 CFR 30.10,40.10, 50.5, 60.11, 61.9b, 70.10, 72.12, and 110.7b. Section 71.11 is being added to incorporate the rule in 10 CFR Part 71 and 10 CFR 52.10 is being added to incorporate the rule in 10 CFR Part 52. In addition,10 CFR 150.2 and 10 CFR 32.1(b) are being revised to incorporate the proposed che es. A!so, the scope provisions found in 10 CFR 30.1, 40.2, 50.1, 52.1, 60.1, 61.1 M, 70.2, 71.0, 72.2, and 110.1(a) are being modified to reflect these revisions to the rule. The Commission is also making a minor language change to improve readability by altering the phrase "but for detection" to "if not detected" where the phrase appears in each rule, but intends no substantive change by this revision. Having this enforcement authority available will help the NRC pursue redress in cases of deliberate misconduct by unlicensed persons acting within the scope of the Commission's jurisdiction and may deter such behavior as well.

This rulemaking extending the Deliberate Misconduct Rule to applicants for NRC licenses; applicants for, and holders of, certificates of compliance issued under 10 CFR Parts 71 and 72: applicants fer, and holders of, early site permits, standard design 6

certifications, or combined licenses for nuclear power plants is;ued under 'i0 CFR Part 52; applicants for, and holders of, certificates of registration issued under Parts 30 and 32; and applicants for, and holders of, quality assurance program approvals issued under Part 71; and to the employees, contractors, subcontractors and consultants of all the i

above catepories of persons, implements the Commission's authority under the AEA to issue regulations and orders to any person (defined in Section 11s of the AEA to include, e.g., an ind!vidual, corporation, firm, or a Federol, State, or local agency) who engages in conduct affecting activities within the Commission's subject matter jurisdiction.

In brief, Section 1611 of the AEA provides broad authority to issue regulations and orders as the Commission deems necessary to govern any activity autnortzed pursuant to the AEA in order to protect public health and safety. Section 161b of the AEA similarly authorizes the Commission to issue regulations and orders to impose " standards and instructions" on , ; sons to govern the posserdun and use of special nuclear material, source material, and byprodt .t material, as may be necessary or desirable to provide for the common defense end security and protect public health and safety. Section 234 of the AEA authorizes the NRC to impose civil penalties on certain unlicensed persons for violating the NRC's substantive requirements. Section 234a of the AEA reads as follows:

Any person who (1) violates any licensing or certification provision of Sections 53, 57, 62, 63, 81, 82,101,103,104,107,109, or 1701 or any rule, regulation, or order issued thereunder, or any term, condition, or limitation of any license or certification issued thereunder, or (2) commits any violation for which a license may be revoked under Section 186, shell be subject to a civil pe ialty, . . . .

The licensing provisions listed in Section 234a generally prohibit the possession, use, receipt, or transfer of nuclear materials or f acilities unless authorized by and in accordance with a license.

7

The amendments are made under the authority of sections 161b and i and the above identified !icensing provisions in Section 234. The changes apply to any person in the categories enumerated above who engages in deliberate misconduct, or who deliberately submits materially incomplete or inaccurate information, as provided in the rule. By imposing a direct prohibition on unlicensed persons, the Corrmission may be able to exercito its Secticn 234 authority to impose civil penalties on unlicensed persons when they deliberately cause violations of requirements issued under the licensing provisions enumerated in Section 234. In cases when the Commission issues an order (other than an order imposing a civil penalty) to a person based on deliberate miscondu. t, the order would be issued in part pursuant to a regulation (e.g.,10 CFR 30.10) that wcs promulgated under a licensing provision of the AEA. A civil penalty could be available for violations of such an order. In addition, criminal canctions under Section 223 of the AEA are available for willful violations of orders and regulations issued under sections 161b and i. Injunctions are also available under Section 232 of the AEA for violations of Commission orders.

Summary of Public Comments On December 18,1996, the comrr.ent period for the proposed amendments to the Deliberate Misconduct Rule closed. The NRC received 6 comments on the proposed rule which are addressed below. One comment, in addition to favoring speedy adoption of the proposed rule, requested informatien on the status of NRC enforcement cases against I certain dry cask storage vendors which the NRC views to be outside the scope of this proposed rulemaking. Copies of the public comments are available in the NRC Public 8

Document Room, 2120 L Street, NW. ' Lower Level), Washington, DC. A summary of the comments is provided below.

Comment: One utility commenter was concerned that the proposed revisions to the rule did not address preliminary or "for information only" information that may be sent to the NRC staff. This commenter believed that situations could arise where licensees provide information to the NRC staff to support teleconferences or meetings and where the information is considered to be preliminary and subject to change over time. In these cases, the commencer bel oved preliminary information should not be con = trued as intended to be complete and the conclusion reached that deliberate misconduct occurred.

A second issue raised by this commenter pertained to how potentially enoneous information in a Safety Evaluation Report could result in a conclusion reached by the NRC staff that since this erroneous information is inconsistent with that provided in the licensee's suomittal, the licensee committed willful misconduct.

Resoonse: The NRC's completeness and accuracy rules require that allinformation provided to the Commission shall be complete and accurate in all material respects (10 CFR 30.9, 40.9, 50.9, ett:.). The deliberate submission of information which is incomplete or inaccurate in material respects, where the submitter of the information knows of the incompleteness or inaccuracy, may be considered deliberate misconduct.

However, the submission of information acknowledged to be incomplete would not be considered deliberate misconduct if it is made in good f aith and based on the best information available, but is corre.ted later based on additional information or analysis.

The NRC's General Statement of Policy and Procedures for Enforcement Actions (NUREG-1600) (Enforcement Policy) points out that a citation is not made if an initial submittal was 9

accurate when me.le but later tunts out to be erroneous because of newly discovered l l

information or advances in technology. Also, the Commission recognizes that oral l information may in some situations be less reliable. This is addressed in Section IX of the Enforcement Policy.

Finally, the Commission does not take lightly its responsibility in this area and carefully considers each action involving an individual. As the Commission stated in the original Deliberate Misconduct Rule:

"It would be an erroneous reading of the final rule on deliberate misconduct to conclude that conscientious people may be subject to personalliability for mistakes. The Commission realizes that people may make mistakes while acting in good faith.

Enforcement actions directly against individuals are not to be used for activities caused by merely negligent conduct. These persons should have no fear of individual liability under this regulation, as the rule requires that there be deliberate misconduct before the rule's sanctions may be imposed. The Commission recognizes, ... that enforcement actions involving individuals are significant actions that need to be closely controlled and judicr ously applied." (See 56 FR 40664,40681) l Comment: One commenter, the Nuclear Energy Institute (NEl), believes that the NRC is exceeding its statutory authority under the Atomic Energy Act of 1954 (the AEA) in promulgating these amendments to the Deliberate Misconduct Rule because, in the view of NEl, authority over non-licensee persons was not provided by Congress other than in limited circumstances carved out in the AEA as exceptionn. In particular, NEl believes that Section 1611(3) of the AEA does not provide jurisdiction river non-licensee persons because it does not contain the operativa phrase "any person" and therefore, NEl implies, 10

I is confir.ed to licensees. NEl recognizes ths; deliberately provided misinformation or other deliberate misconduct could have a very serious effect on public health and safety and I

thus needs to be deterred. However, in the view of NEl,18 U.S.C. I 1001, the general criminal statute applicable to the Federal government and its agencies, provides an )

adequate detenent to the wrongdoers NRC seeks to capture in this rulemaking.

Beponse: The Commission considered, but rejected, the objection that it did not j have jurisdiction over non licensees at the time it issued the original Deliberate Misconduct l Rule. See 56 FR 40664, (1991). As the Commission stated:

In enacting Section 161 of the 1954 Act, Congress conferred uniquely broad and flexible authority on the Commission. Specifically, Congress authorized the Commission in Section 161 to ' prescribe such * *

• regulations * *

• as it may deem necessary to govern any activity authorized pursuant to (the 1954 Act], in order to protect health and minimize danger to life and property.'

With respect to the absence of specific provisions setting forth the limits of the NRC's personal jurisdiction, the Commission stated at 56 FR 40666 - 40667:

Where Congress does not include sta atory provisions governing ja personam jurisdiction, it is appropriate to look to the scope of subject matter jurisdiction in order to determine the scope of La personam jurisdiction. since Congress did not include any specific personaljurisdiction provisions in the 1954 Act, or any limitations on such jurisdiction, the NRC is authorized to assert its personal jurisdiction over persons based on the maximum limits of its subject matter jurisdiction. The agericy's personal jurisdiction is established when a person acts within the agency's subject matter jurisdiction. * *

• The persons who are being brought within the scope of the Deliberate Misconduct Rule in these amendments are all persons who, in some way, engage in activities within NRC's subject matter jurisdiction. - Thus, the Commission discerns no statutory prohibition on making these persons subject to the restrictions of the Deliberate Misconduct Rule.

11

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

Nih Oso coritends that the Deliberate Misconduct Rule and these amendments are dot ocac44 d A tause an adequate deterrent and remedy is provided by 18 U.S.C. I 1001.

5 % tieMr. triows the imposition of criminal penalties for persons who, inter g!!n,

. c ingly and willfully make false statements to an agency of the Federal Government.

lhere are several reasons why this enforcement option is not en adequate substitute for the Deliberate Misconduct Rule. First,18 U.S.C. I 1001 punishes deliberate false staternents but does not cover the types of deliberate misconduct captured by Section all) of the rule. Second, the civil enforcement penalties available to the NRC for violations of its rule, precisely because they are less drastic than criminal penalties, are more flexible and, thus, are more likely to be used in appropriate cases, affording the NRC greater ability to deter and remedy deliberate misconduct.

Comment: NEl also commented that one of the rule's standards for enforcement action - knowingly providing incomplete or inaccurate information which is "in some respect material to the NRC" -- is overly broad. This standard appears to permit the NRC to take enforcement action whether or not a violation of NRC regulations has occurred or would have occurred but for detection. This breadth of scope results in the standard not 1

I being sufficiently clear to inform the public of the elements of the prohibited action.

Response: The Commission disagrees with the commenter's assertion that the rule l

l is overly broad. The rule specifies that the persons who are delineated as being subject to the rule must knowinalv nrovide components, materials or other goods and services that l

l relate to, e.g., a licensee's or certificate holder's activities subject to NRC regulation.

Such persons, therefore, know that they are acting in an area that relates to activities within NRC's regulatory jurisdiction. As the Commission said with respect to a similar 12

comment objecting to the origina: Deliberate Mis:onduct Rule, "a person with the requisite knowledge who deliberately provides f alse or ineccurate information that is material to the NP.C presents a health and safety concern within the NRC's regulatory sphere." 56 FR 40070. The fact that no actual violation has occurred, or would have occurred but for detection, has no bearing on whether, from a health and safety standpoint, that person should be involved in nuclear activities. Although, the comrnenter is correct that the standard permits the NRC to take enforcement action whether or not a violation has occurred, or would have occurred but for detection, the Commission does not believe that this fact renders the standard overly broad.

Comment: One commenter, the JAl Corporation, proposed that the scope of the proposed rule be broadened to include persons submitting information pursuant to the notification requirements of 10 CFR Part 21. The commenter, apparently believing that such persons are not presently covered by the Deliberate Misconduct Rule, pointed to the unfairness that would exist if persons who knowingly submit incomplete or inaccurate information to licensees are penalized but persons who knowingly submit incomplete or inaccurate information to the NRC regarding defects or non-compliance under Part 21 are not penalized.

Response: Under 10 CFR Part 21, certain types of persons, e.g., individual directors or responsible officers of a corporation, must notify the NRC when they obtain certain types of information; e.g., information concerning defects in components which could cause a substantial safety hazard. When such persons provide information to the NRC they are subject to the Deliberate Misconduct Rule as it appears in the relevant Part of Chapter i of 10 CFR. For example, if the director of a corporation obtains information 13

indicating a f ailure to comply or a defect affecting a basic component that is supplied for a nuclear power plant subject to 10 CFR Part 50, the director is subject to the Deliberate Misconduct Rule as it appears in Part 50 (10 CFR 50.5) when reporting this failure to comply or defect to the NRC. Further, the Deliberate Misconduct Rule makes no distinction between deliberately subrnitting information known to be incomplete or inaccurate to the NRC and submitting the same information to a licensee, or to a licensee's contractor or subcontractor. Thus, the regulations do not countenance the disparity of treatment envisioned by the commenter.

Comment: One commenter, a source production and equipment company, supported the proposed rule but also recommended that the rule be revised to specifically apply to the persons who maintain the equipment malfunction records that are required by the Quality Control and Quality Assurance (OA/OC) programs which are required under 10 CFR Part 32 for the manufacture and distribution of radiography equipment. The commenter recognizes that because these records are not part of the Quality Assurance program itself, they are not submitted to the NRC as part of a registration certificate application. Nevertheless, the commenter believes that the accuracy and integrity of these records are essential for the QA/OC program to be effective and thus the Deliberate Misconduct Rule should apply to persons who maintain equipment malfunction records for certificate holders.

Resnonse: The Deliberate Misconduct Rule is being made applicable to certificate holders and applicants, and to their employees, contractors and subcontractors, not only when they deliberately submit information to the NRC, but also when they deliberately submit to a certificate of registration holder or applicant, or a certificate holder's or 14 l

applicant's contractor or subcontractor, information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

Thus, for example, an employee or contractor of a certificate of registration holder responsible for maintaining equipment malfunction records who knowingly submits incomplete or inaccurate information to the certificate of registration holder violates the Deliberate Misconduct Rule if the information submitted is in some respect material to the NRC. However, in the absence of a requirement for maintenance of equipment malfunction records, a person generating an inaccurate or incomplete equipment malfunction record is not subject to the Deliberate Misconduct Rule unless and until these records are actually submitted to one of the persons covered by section a(2) of the rule.

Comment: One commenter, while agreeing with the proposed rule, did not see why amendment of the Deliberate Misconduct Rule is necessary with respect to Part 72 certificate holders and their contractors and subcontractors because, in the view of the commenter, the, rule presently encompasses the contractors and subcontractors of licensees and certificate holders are contractors to licensees and thus are covered by the rule as it now exists.

Response: Insofar as certificate holders are contractors to licensees (and certificate holders' contractors and subcontractors are subcontractors to licensees), the commenter is correct. Those certificate holders, and their contractors and subcontractors, are covered by the present rule. However, the NRC does not require tne existence of a contract as a prerequisite to the issuance of a Certificate of Compliance (ggg 72.236; 72.238). Thus, it is possible for a certificate holder not to be a contiactor to a licensee. The amended rule will cover those certificate holders.

15

Criminal Penalties l For purposes of Section 223 of the Atomic Energy Act (AEA), the Commission is issuing the final rule under one or more of sections 161b,1611 or 161o of the AEA.

Willful violations of the rule will be subject to criminal enforcement.

Environmental Impact: Categorical Exclusion The NRC has determined that this final rule relates to enforcement matters and, therefore, falls within the scope of 10 CFR 51.10(d). Therefore, neither an environrnental impact statement nor an environmental assessment has teen prepared for this final rule.

Paperwork Reduction Act Statement This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).

Exi:: ting requ!/ements were approved by the Office of Management and Budget, approval numbers 3150-0017, 3150-0151, 3150-0127, 3150-0135, 3150-0009, 3150-0132, 3150-0036, and 3150-0032.

Public Protection Notification The NRC may not conduct or sponsor, and a person is not required to respond to, a l

collection of information unless it displays a currently valid OMB control number, 16

Compatibility of Agreement State Regulations .

t The Commission did not make the original Deliberate Misconduct Rule and the supporting enforcement guidance a matter of Agreement State compatibility. However, in the intervening period, the Commission has re-examined its compatibility policy and issued two new policy statements which establish principles for determining the degree of compatibil.ty expected between NRC and Agreement State regulations: " Statement of Principles and Policy for the Agreement State Program," and " Policy Statement on Adequacy and Compatibility of Agreement State Programs," (62 FR 46517). The N1C staff,in conjunction with the Joint NRC-Agreement State Adequacy and Compatibility Working Group, re-evaluated the compatibility categorization of 10 CFR 30.10,40.10 and 70.10 and recommended that these deliberate misconduct requirements be required for compatibility under Category C of the new Policy Statement. Under Category C, Agreement States would have to adopt the essential objectives of these requirements to avoid conflicts, duplications or gaps between the NRC and Agreement State Programs. -

The Commission has approved staff's plan to provide an opportunity for the Agreement States and the public to comment on this and other recommendations. After receipt and resolution of comments, the staff will submit final recommendations to the Commission for approval.

Regulatory Analysis The Nuclear Regulatory Commission has statutory authority to issue enforcement actions against unlicensed persons whose deliberate misconduct causes a licensee or a 17 l

r l

,m_

certificate holder or an applicant for a license or certificate to be in violation of the Commission's requirements. On August 15,1991 (56 FR 40664), the NRC promulgated the Deliberate Misconduct Rule which put licensed and unlicensed persons on notice that they may be subject to enivreement action for deliberate misconduct that causes or, if not detected, would cause a licensee to be in violation of any of the Commission's requirements or for deliberately providing to the NRC, a licensee or a contractor information that is incomplete or inaccurate in some respect material to the NRC.

However, the Deliberate Misconduct Rule does not specifically apply to: (1) applicants for NRC licenses, (2) applicants for, and holders of, certificates of compliance issued under Parts 71 and 72, (3) applicants for, and holders of, early site permits, standard dt, sign certifications, or combined licenses for nuclear power plants issued under Part 52, (4) applicants for, and holders of, certificates of registration issued under Parts 30 and 32, (5) applicants for, and holders of, quality assurance program approvals issued under Part 71, and (6) the employees, contractors, subcontractors and consultants of the first five categories of persons.

On November 29,1991, the NRC staff issued an Order Revoking License to Dr. Randall C. Orem after the NRC staff learned that information in his license application was falso and that the appl' ition had been prepared by a consultant who had provided the false information. Sig Randall C. Orem. D.C.. CLl 93-14, 37 NRC 423 (1993). In this case, the NRC staff realized that under the provisions of the existing Deliberate Misconduct Rule, it was unable to take additional enforcement action against Dr. Orem and was precluded from taking enforcement action against the consultant because the consultant was working for an applicant rather than for a licensco. Subsequently, the Commission realized that other categories of persons within the Commission's jurisdiction 18

had not been explicitly included within the Deliberate Misco^ duct Rule; e.g., certificate holders under 10 CFR Parts 71 and 72 and holders of early site permi'.s, certified design certifications and combined licenses under 10 CFR Pert 52.

The Commission believes that there rnay be significant safety consequences from the deliberate submission of falso or incomplete information or other deliberate wrongdoing by an applicant for a license or other unlicensed persons proposed to be covered by this modificathn to the Deliberate Misconduct Rule. For example, a spent fuel storage cask that is certified by the NRC on the bosis of f alsified test data could represent a threat to public health and safety. Similarly, a quality assurance program that is submitted to the NRC for approval, but is supported by deliberately falsified data that mask a significant defect, could also be a public health and safety threat. Because the potential for injury is serious, the NRC knows no reason why the Deliberate Misconduct Hule should not apply to persons who deliberately submit materially incomplete or inaccurate information, whether that submittalis by or on behalf of an applicant, or by or on behalf of a holder of a license, certificate, permit or approval.

The objective of the rule is to explicitly put those pe* sons encompassed by this modification of the Deliberate Miscond at Rule on notice that enforcement action may be taken against them for deliberate misconduct or deliberate submission of incomplate or inacc irate information, in relation to NRC licensed activities. Under Section 234 of the Atomic Energy Act, the Commission may impose civil penalties on any person who violates any rule, regulation, or order issued under any one of the enumerated provisions of the Act, or who commits a violation for which a license may be revoked. The enforcement actions that may be taken, including orders limiting activities of wrongdoers in the future and civil penalties, will serve as a deterrent to others throughout the industry.

19

The alternatives available to the Commission are to promulgate a modification of the Deliberate Misconduct Rule, as is proposed herein, or do nothing. Given the f act that a case has already occurred where the Commission was precluded from taking appropriate enforcement action against a consultant to an applicant, and the potential harm to the puMic, the alternative of doing nothing was rejected. The benefits of taking enforcement action are similar to those of taking action against licensed entities in that a civil penalty and attendant adverse publicity encourage future compliance, the Notice of Violation calls for a precise response as to corrective sction taken, and an enforcement order, if obeyed, will directly control the involvement of an individual in a licensed activity. The effect of having these options available in the enforcement program should reduce the probability of repetitive violations by wrongdoers.

The NRC does not anticipate that additional investigations will be necessary to implement the rule because it focuses on the results of investigations. Gased on experience, the NRC expects fewer than 10 additional cases per year to result in enforcement action being taken against unlicensed individuals. The cost of preparing and publishing the additional actions beyond the current workload is not significant.

The rule constitutes the preferred course of action and the cost involved in its promulgation and application is necessary and appropriate. The foregoing discussion constitutes the regulatory analysis for this rule.

Regulatory Flexibility Certificatic n in accordance with the Regulatory Flexibility Act of 5 60, 5 U.S.C. 605(b), the Commission certifies that this final rule, if adopted, will not have a significant economic 20

4 impact on a substantial number of small entities. The final rule would pat: (1) applicants for NRC licenses; (2) applicants for, and holders of, certificates of comp'iance issued under 10 CFR Parts 71 and 72, including those for dry cask storage; (3) spplictnts for, and holders of, early site permits, standard design certifications, or combined licenses issued under 10 CFR Part 52; (4) applicants for, and holders of, certificates nf registration issued under 10 CFR Parts 30 and 32; (5) applicants for, and holders of, quality assurance program approvals issued under 10 CFR Part 71; and (6) tne employees, contractors, subcontractors and consultants of the first five categories of persons on notice that they are subject to the Deliberate Misconduct Rule and, therefore, are subject to civil enforcement action if they deliberately cause a licensee, certificate holder, or an applicant for a license or certificate to be in *.lolation of NRC requirements. The fina' rule does not impose ony additional obligations on entities that may f all within the definition of "small entitles" as set forth in Section 601(6) of the Regulatory Flexibility Act; or within the definition of "small business" as found in Section 3 of the Small Business Act,15 U.S.C.

P32; or within the size standards adopted by the NRC on April 11,1995 (60 FR 18344).

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

21

Backfit Analysis The NRC has determined that the bac'*. fit rule,10 CFR 50.109, does not apply to this final rule and, therefore, a backfit analysis is not required for this final rule because these amendments do not involve any provisions that would impose backfits as defined in 10 CFR 50.109(a)(1).

Enforcement Policy Concurrently with publication of the Deliberate Misconduct Final Rule, the Commission is publishing modifications to NUREG-1600, ' General Statement of Policy and Procedure for NRC Enforcement Actions," to address enforcement action against the categories of unlicensed persons listed under this Final Rule.

List of Subjects 10 CFR Part 30 Byproduct material, Criminal penalties, Government contracts, Intergovernmental relations, Isotopes, Nuclear materials, Radiation prctection, Reporting and recordkeeping '

requirements.

10 CFR Part 32 Byproduct material, Criminal penalties, Nuclear materials, Labeling, Radiation protection, Reporting and recordkeeping requirements.

22

10 CFF. Part 40 Criminal penalties, Government contracts, Hazardous materials transportation, Nuclear materials, Reporting and recordkeeping requirements, Source material, 'Jranium.

10 CFR Part 50 Antitrust, Classified information, Criminal penalties, Fire protection, Intergovernmental relations, Nuclear power plants and reactors, Radiation protection, Reactor siting criteria, Reporting and reco:dkeeping requirements.

10 CFR Part 52 Administrative practice and procedure, Antitrust, Backfitting, Combined license, Early site permit, Emergency planning, Fees, inspection, Limited work authorization, Nuclear power plants and reactors, Probabilistic risk assessment, Prototype, Reactor siting 1

criteria, Redress of site, Reporting and recordkeeping requirements, Standard design, Standard design certification.

10 CFR Part 60 Criminal penalties, High level waste, Nuclear power plants and reactors, Nuclear materials, Reporting and recordkeeping requirements, Waste treatment and disposal.

10 CFR Part 61 Criminal penalties, Low-level waste, Nuclear materials, Reporting and recordkeeping requirements, Waste treatment and disposal.

23

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

10 CFR Part 71 Criminal penalties, Hazardous materials trancportation, Nuclear materials, Packaging and containers, Reporting and recordkeeping requirements.

t0 CFR Part 72 Manpower training programn, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, Spent fuel.

10 CFR Part 110 Administrative practice and procedure, Classified information, Criminal penalties, Export, Import, Intergovernmental relations, Nuclear materials, Nuclear power plants and reactors, Reporting and recordkeeping requirements, Scientific equipment.

10 CFR Part 150 Criminal penalties, Hazardous materials transportation, intergovernmental relations, Nuclear materials, Reporting and recordkeeping requirements, Security measures, Source material, Specia! nuclear r,aterial.

24

For the reasons stated in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganizatw.. \ct of 1974, as amended; and 5 U.S.C. 552 and 553; the NRC is adopting the following amendments to 10 CFR Pans 30, 32, 40, 50, 52, 60, 61, 70, 71, 72,110, and 160.

PART 30- RULES OF GENERAL APPLICABillTY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL

1. The authority citation for Part 30 continues to read as follows:

AUTHORITY: Sees. 81, 82,161,182,183,186, 68 Stat. 935, 948, 953, 954, 955, as amended, sec. 234,83 Stat. 444, as amended (42 U.S.C. 2111, 2112,2201, 2232, 2233, 2236, 2282); secs. 201, as amended, 202, 206, 88 Stat.1242, as amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846).

Section 30.7 also issued under Pub. L.95-601, sec.10,92 Stat. 2951 as amended by Pub. L. 102 486, sec. 2902,106 Stat. 3123, (42 U.S.C. 5851). Section 30.34(b) also issued under sec.184,68 Stat. 954, as amended (42 U.S.C. 2234). Section 30.61 also issued under sec.187,68 Stat. 955 (42 U.S.C. 2237).

2. Section 30.1, is revised to read as follows:

3 30.1 Scoce.

This part prescribes rules applicable to all persons in the United States governing domestic licensing of byproduct material under the Atomic Energy Act of 1954, as . 4 amended (68 Stat. 919), and under title 11 of the Energy Reorganization Act of 1974 (88 25

Stat.1242), and exemptions from the domestic licensing requirements permitted by Section B' of the Act. This part also gives notice to e!! persons who knowingly provide to soy licensee, aprli;; ant, certificate of registration holder, contractor, or subcontractor,

@mponents, equipment, materials, or other goods or services, that relate to a licensee's, opplicant's or cartificate of registration holder's activities subject to this part, that they may be ina;vidually subject to NRC enforcement action for violation of i 30.10.

3. Section 30.10 is revited to read as follows:

9 30.10 Det,Nuyftnt%N<nitpd.

(a) Any licensee, certificate of registration holder, applict.at for a license or certificate of registration, employee of a licensee, certificate of registration holder or applicant; or any centractor (including a supplier or consultant), subcontractor, employee of a cont. actor or subcontractor of any licensee or certificate of registi tion holder or applicant for a license or ccrtificate of registration, who knowingly provides to any l!censee, applicant, certificate holder, contractor, or subcontractor, any components, equipment, materials, or other goods or services that relate to a licensee's, certificate holder's or applicant's activities in this part, may not:

(1) Engage in deliberate misconduct that causes or would have caused, if not detected, a licensee, certificate of registration holder, or applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation of any license issued by the Commission; or (2) Deliberately submit to the NRC, a licensee, certificate of registration holder, an applicant, or a lisensee's, certificate holder's or applicant's, contractor or subcontractor, 26 i

l

l information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

(b) A person who violates paragraph (a)(1) or (a)(2) of this section may be subject to enforcement action in accordance with the procedures in 10 CFR Part 2, subpart 8.

(c) For the purposes of paragraph (a)(1) of this section, delfaerate misconduct by a person mes.7s an intentional act or omission that the person knows:

. (1) Would cause a licensee, certificate of registration holder or applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation, of any license issued by the Commission; or (2! Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, certificate of registration holder, applicant, contractor, or subcontractor.

PART 32--SPECIFIC DOMESTIC LICENSES TO MANUFACTURE OR TRANSFER CERTAIN ITEMS CONTAINING BYPRODUCT MATERIAL

4. The authority citation for Part 32 continues to read as follows:

AUTHORITY: Secs. 81,161,182,183, 68 Stat. 935, 948, 953, 954, as amended (42 U.S.C. 2111, 2201, 2232, 2233); sec. 201, 88 Stat.1242, as amended (42 U.S.C.

5841).

27

f

5. Section 32.1(b) is revised to read as follows:

13?J Purpose and scope.

(b) The provisions and requirements of this part are in addition to, and not in substitution for, other requirements of this chapter, in particular, the provisions of Part 30 of this chapter apply to applications, licenses and certificates of registration subject to this <

part.

PART 40-DOMESTIC LICENSING OF SOURCE MATERIAL

6. The authority citation for Part 40 continues to read as follows:

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

3033, as amended, 3039, sec. 234,83 Stat. 444, as amended (42 U.S.C. 2014(e)(2),

2092, 2093, 2094, 2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, Pub. L 86 373,73 Stat. 688 (42 U.S.C. 2021); secs. 201, as amended, 202,206, 88 Stat.1242, as amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L.97-415, 96 Stat. 2067 (42 U.S.C. 2022).

Section 40.7 also issued under Pub. L. 95 601, sec.10,92 Stat. 2951 as amended by Pub. L. 102-486, sec 2002,106 Stat. 3123, (42 U.S.C. 5851). Section 40.31(g) also issued under sec.122,68 Stat. 939 (42 U.S.C. 2152). Section 40.46 also issued under sec.184,68 Stat. 954, as amended (42 U.S.C. 2234). Section 40.71 also issued under sec.187,68 Stat 955 (42 U.S.C. 2237).

28

7. Section 40.2, is revised to read as follows:

6 40.2 Scone.

Except as provided in il 40.11 to 40.14, inclusive, the regulations in this part apply to all persons in the United States. This part c!so gives notice to all persons who knowingly provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's or applicant's activities subject to this part, that they raay be individually subject to NRC enforcement action for violation of i 40.10.

8. Section 40.10 is revised to read as follows:

5 40.10 Deliberate misconduct.

(a) Any licensee, applicant for a license, employee of a licensee or applicant; or any contractor (including a supplier or consultant), subcontractor, employee of a contractor or subcontractor of any licensee or applicant for a license, who knowingly provides to any licensee, applicant, contractor, or subcontractor, any components, equipment, materials, or other goods or services that relate to a licensee's or applicant's activities in this part, may not:

(1) Engage in deliberate misconduct that causes or would have (,aused, if not detected, a lice.isee or applicant to be in violation of any iule, regulation, or order; or any term, condition, or limitation cf any license issued by the Commission; or (2) Deliberately submit to the NRC, a licensee, an applicant, or a licensee's or applicant's contractor or subcontractor, information that the person submitting the 29 r

information knows to be incomplete or inaccurate in some respect material to the NRC.

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

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omission that the person knows:

(1) Would cause a licensee or applicant to be in violation of any rule, regulation, or order; or any terne, condition, or limitation, of any license issued by the Commission; or (2) Constitutes a violation of ,oirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

PART 50-DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES

9. The authority citation for Part 50 continues to read as follows:

AUTHORITY: Secs. 102,103,104,105,161,182,183,186,189, 68 Stat. 936, 937,938,948,953,954,955,956, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 2232, 2233, 2236, 2239, 2282); secs. 201, as amended, 202, 206, 88 Stat.1242, as amendad, 1244,1246 (42 U.S.C. 5841, 5842, 5846).

Section 50.7 also issued under Pub. L.95-601, sec.10, 92 Stat, 2951 as amended by Pub. L. 102-486, sec. 2902,106 Stat 3123, (42 U.S.C. 5851). Section 50.10 also is:ued under secs. 101,185, 68 Stat. 936, 955, as r, mended (42 U.S.C. 2131, 2235);

sec.102, Pub. L.91-190,83 Stat. 853 (42 U.S.C. 4332). Sections 50.13, 50.54(cd),

and 50.103 also issued under sec.108,09 Stat. 939, as amended (42 U.S.C. 2138).

Sections 50.23, 50.35, 50.55, and 50.56 also issued under sec.185, 68 Stat. 955 (42 30

i U.S.C. 2235). Sections 50.33a, 50.55a and Appendix Q also issued under sec.102, Pub.

L.91-190,83 Stat 853 (42 U.S.C. 4332). Sections 50.34 and 50.54 also issued under sec. 204,88 Stat.1245 (42 U.S.C. 5844). Sections 50.58, 50.91, and 50.92 also issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239). Section 50.78 also issued under sec.122,68 Stat. 939 (42 U.S.C. 2152). Sections 50.F0 - 50.81 also issued under sec.184,68 Stat. 954, as amended (42 U.S.C. 2234). Appendix F also issued under sec.187,08 Stat. 955 (42 U.S.C 2237).

4

10. Section 50.1, is revised to read as follows:

6 50.1 Basis, ouroose, and orocedures aoolicable.

The regulations in this part are promulgated by the Nuclear Regulatory Commission pursuant to the Atomic Energy Act of 1954, as amended (68 Stat. 919), and Title ll cf the Energy Reorganization Act of 1974 (88 Stat.1242), to provide for the licensing of production and utilization f acilities. This part also gives notice to all persons who knowing,'y provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's or applicant's activities subject to this part, that they may be individually subject to NRC enforcement action for violation of 5 50.5.

31

11. Section 50.5 is revised to read as follows:

6 50.5 Deliberate misconduct.

(a) Any licensee, applicant for a license, employee of a licensee or applicant; or any contractor (including a supplier or consultant), subcontractor, employee of a contractor or subcontractor of any licensee or applicant for a license, who knowingly provides to any licensee, applicant, contractor, or subcontractor, any components, equipment, materials, or other goods or services that relate to a licensee's or applicant's activities in this part, may not:

(1) Engage in deliberate misconduct that causes or would have caused, if not detected, a licensee or applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation of any license issued by the Commission; or (2) Deliberately submit to the NRC, a licensee, an applicant, er a licensee's or applicant's contractor or subcontractor, information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

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

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omission that the person knows:

(1) Would cause a licensee or applic66t to be in violation of any rule, regulation, or order; or any term, condition, or limitation, of any license issued by the Commission; or (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

32

PART 52--EARLY SITE PERMITS; STANDARD DESIGN CERTIFICATIONS; AND COM8INED LICENSES FOR NUCLEAR POWER PLANTS

12. The authority citation for Part 52 is revised to read as follows:

AUTHORITY: Secs.103,104,161,182,183,186,189, 68 Stat. 936, 948, 953, 954,955,956, as amended, sec. 234,83 S'.at. 444, as amended (42 U.S.C. 2133, 2201, 2232, 2233, 2236, 2239, 2282); secs. 201, 202, 206, 88 Stat.1242,1244, 1246, as amended (42 U.S.C. 5841, 5842, 5846).

13. Section 52.1 is revised to read as follows:

5 52.1 Sang.

This part governs the issuance of early site permits, standard design certifications, and combined licenses for nuclear power facilities licensed under Section 103 or 104b of the Atomic Energy Act of 1954, as amended (68 Stat. 919), and Title 11 of the Energy Reorganization Act of 1974 (88 Stat.1242). This cart also gives notice to all persons who knowingly provide to any holder of or applicant for an early site permit, standard design certification, or combined license, or to a contractor, subcontractor, or consultant of any of them, components, equipment, materials, or other goods or services, that relate to the activities of a holder of or applicant for an early site permit, standard design certification, or combined license, subject to this part, that tNy may be indiviqiually subject to NRC enforcement action for violation of 6 52.9.

33

(

14. Section 52.9 is added to read as follows:

i 52.9 Deliberate Misspnduct.

(a) Any holder of, or applicant for, an early site permit, standart. design certification, or combined license, including its employees, contractors, subcontractors, or consultants and their employees, who knowingly provides to any holder of, or applicant for, an early site permit, standard design certification, or combined license, or to a contractor, subcontractor or consultant of any of them, equipment, materials, or other goods or services that relate to the activities of a holder of, or applicant for, an early site permit, standard design certification or combined license in this part, may not:

(1) Engage in deliberate misconduct that causes or would have caused, if not detected, a holder of, or applicant for, an early site permit, standard design certification, or combined license, to be in violation of any rule, regulation, or order; or any term, condition, or limitation of any permit, certification or license iss%d by the Commission; or (2) Deliberately submit to the NRC, a holder of, or 1pplicant for, an early site permit, standard design certification, or combined license, or a contractor, subcontractor, or consultant of any of them, information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

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

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or ominion that the person knows; (1) Would cause a holder of, or applicant for, an early site permit, standard design certification, or combined license, to be in violation of any rule, regulation, or order; or any 34

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

)

term, condition, or limitation, of any license issued by the Commission; or .

. (2) Constitutes a violation of a requirement, procedure, instruction, contract,-

i purchase order, or policy of a holder of, or applicant fo:,- an early site permit, certified - l i

design or combined license, or a contractor or subcontractor of any of them.  ;

-?

PART 60-DlSPOSAL OF HIGH LEVEL RADIOACTIVE WASTES l

, IN GEOLOGIC REPOSITORIES s

15. The authority citation for Part 60 continues to read as follows:- ,

AUTHORITY: Secs. 51, 53, 62, 63, 65, 81,161,182,183, 68 Stat. 929, 930, ,

932, 933, 935, 948,-953, 954, as amended (42 U.S.C. 2071, 2073, 2092, 2093, 2095,'

2111, 2201, 2232, 2'233); secs. 202, 206,~ 88 Stat.1244,1246 (42 U.S.C. 5842, t

5846); secs.10 and 14, Pub. L. 95 601, 92 Stat. 2951-(42 U.S.C. 2021a and 5851);-

sec.102, Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332); secs.114,121, Pub. L.97-425,96 Stat. 2213g, 2228, as amended (42 U.S.C.10134,10141) and Pub. L. 102-486,

~

sec. 2902,106 Stet. 3123 (42 U.S.C. 5851).

16. Section 60.1, is revised to read as follows:

- t 6

0.1 Purpose and Scope

This part prescribes rules governing the licensing of the U.S. Department of Energy E to receive and possess source, special nuclear,'and byproduct material at a geologic

/ repository operations area sited, constructed, or operated in accordance with the Nuclear

).. Waste Policy Act of 1982. This part does not apply to any activity licensed under another 4

35

+  ;

d.

~

.)

. - - - , . . - - + .__m..

part of this chapter. This part also gives no; ice to all persons who knowingly provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's or applicant's activities subject to this part, that they may be individually subject to NHC enforcement action for violation of 5 60.11.

17. Section 60.11 is revised to read as follows:

1 60,11 Deliberate misconduct.

(a) Any licensee, applicant for a licence, employee of a licensee or applicant; or any contractor (including a supplier or consultent), subcontractor, employee of a contractor or subcontractor of any licensee or applicant ior a license who knowingly provides to any licensee, applicant, contractor, or subcontractor, any components, equipment, materials, or other goods or scrvices that relate to a licensee's or applicant's activities in this part, may not:

(1) Engage in deliberate rnisconduct that causes or would have caused, if not detected, a licensee or applicant to be in violation of any rulo, regulation, or order; or any term, condition, or limitation of any license issued by the Commission; or (2) Deliberately submit to the NRC, a !!censee, an applicant, or a 1.~:ensee's or applicant's contractor or subcontractor, information that the pe son submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

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

36

• (c) For the purposes of paragraph (a)(1) of this section, deliberate misconauct by a person means an intentional act or omission that the person knows:

(1) Would cause a licensee or applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation, of any license issued by the Commission; or (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

PART 61--LICENSING REQUIREMENTS FOR LAND DISPOSAL OF RADIOACTIVE WASTE

18. The authority citation for Part 61 continues to read as follows:

AUTHORITY: Secs. 53, 57, 62, 63, 65, 81,161,182,183, 68 Stat. 930, 932,

-933,935,948,953,954, as amended (42 U.S.C. 2073, 2077, 2092, 2093, 2095, 2111, 2201, 2232, 2233); secs. 202, 206, 88 Stat.1244,1246 (42 U.S.C. 5842, 5846); secs.10 and 14, Pub. L.95-601, 92 Stat. 2951 (42 U.S.C. 2021a and 5851) and Pub. L.102-486, sec 2902,106 Stat. 3123, (42 U.S.C. 5851).

1s. Section 61.1 (c), is revised to read as follows:

f3 61.1 Puroose and Scooe.

(c) This part also gives notice to all persons who knowingly provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's or applicant's activities subject to this 37

. . . , . .- .-. -- = - .- . - - . . - - - . . . - - . - . . -

e c .

partl that they may be individually _ subject to NRC enforcement action for violation of - 34 i 61.9b.- f

~

- 20.- Section 61.9b is revised to read as follows:

s 6 81.9b Deliberate misconduct.

(a) Any licensee, applicant for a license, employee of a licensee or applicant; or any

- contractor (including a supplier or consultant), subcontractor, employee of a contractor or

- subcontractor of any licensee or applicant for a license, who knowingly provides to any .

ilicensee, applicant, contractor, or subcontractor, any components, equipment, materials,-

. or other goods or services that relate to a licensee's or applicant's activities in this part, i

may not: -

(1)' Engage in deliberate misconouct th'at causes or would have caused, if not

- detected, a licensee or applicant to be in violation of any rule, regulation, or order; or any

< term, condition, or limitation of any license issued by the Commission; or (2) Deliberately submit to the NRC, a licensee, an applicant, or a licensee's or

. applicant's contractor or subcontractor, information that the person submitting the .

information knows to be incomplete or inaccurate in some respect material to the NRC.

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

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omission that the person knows:

- (1)'_ Would cause a licensee or applicant to be in violation of any rule, regulation, or

order; or any term, condition, or limitation l of any license issued by the Commission; or '

. 38 a

4 .,,, -m

V w

+

^

a- (2) LConstitutes a violation of a requirement, procedure, instruction, contract,'

- puichase order! or policy of a licensee, applic' ant, contractor, or subcontractor.

.s PART 70-DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL-_

21. The authc>rity citation for Part 70 continues to read as follows:

AUTHORITY: Socs. 51, 53,161,182,183, 68 Stat. 929, 930, 948, 953, 954, as '

amended, sec. 234, 83 Stat. 444, as amended, sec. 1701,106 Stat. 2951; 2952, 2953 -

(42 U.S.C.' 2071, 2073,' 2201, 2232, 2233,' 2282, 2297f); secs. 201, as amended, 202, i

'204,206,88 Stat.1242, as amended, 1244,1245,1246 (42 U.S.C. 5841, 5842, 5845, 5846).-

Sections 70.1(c) and 70.20a(b) also issued under secs. 135,141, Pub. L.97-425, ,

96 Stat. 2232,2241 (42 U.S.C.10155,10161). Section 70.7 also issued under Pub. L.

4

- 95 601, sec.10,92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(g) also issued rder sec.122,68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under see. 57d, Pub.

L 93-377,88 Stat. 475 (42 U.S.C. 2077). Sections 70.36 and 70.44 also issued under sec.184,68 Stat. 954, as amended (42 U.S.C. 2234). Section 70.61 also issued under secs.186,187,68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under >

sec.108,68 Stat. 939, as amended (42 U.S.C. 2138).

j.._

n 4

1

. 39 M

--) e y

-. -r e . , , , , . - , - - , , , , -.7 %c- ,-,r- r.~.-.r-- , y- r.-- *-.w ,,+ ,.

\

. 22. Section 70.2, is revised to read as follows: '

5 70.2 Scone.

Except as provided in il 70.11 to 70.13, inclusive, the regulations in this part apply to all persons in the United States. This part also gives notice to all persons who knowingly provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's or applicant's activities subject to this part, that they may be individually subject to NRC enforcement action for violation of 6 70.10.

23. Section 70.10 is revised to read as follows:

I 70.10 Deliberate misconduct.

(a) Any licensee, applicant for a license, employee of a licensee or applicant; or any contractor (including a supplier or consultant), subcontractor, employee of a contractor or subcontractor of any licensee or applicant for a license, who knowingly provides to any licensee, applicant, contractor, or subcontractor, any components, equipment, materials, or other goods or services that relate to a licensee's or applicant's activities in this part, may not:

(1) Engage in deliberate misconduct that causes or would have caused, if not detected, a licensee or applicant to be in violation of any rule, regulation, or order; or any term, condition, or ' imitation of any license issued by the Commission; or 40

. l l

4 (2) Deliberately submit to the NRC, a licensee, an applicant, or a licensee's or )

applicant's contractor or subcontractor, information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC. i (b) A person who vioiates paragraph (a)(1) or (a)(2) of this section may be subject to enforcement action in accordance with the procedures in 10 CFR Part 2, subpart B.

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omission that the person knows:

(1) Would cause a licensee or applicant to be in violation of any rule, regulation, or order; or any term, condition, or litnitation, of any licensa issued by the Commission; or (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

PART 71--PACKAGING AND TRANSPORTATION OF RADIOACTIVE MATERIAL

24. The authority citation for Part 71 continues to read as follows:

AUTHORITY: Secs. 53, 57, 62, 63, 81,161,182,183, 68 Stat. 930, 932, 933, 935,948,953,954, as amended, sec. 1701,106 Stat. 2951, 2952, 2953 (42 U.S.C.

2073, 2077, 2092, 2093, 2111, 2201, 2232, 2233, 2297f); secs. 201, as amended, 202, ?O6,88 Stat.1242, as amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846).

Section 71.97 also issued under sec. 301, Pub. L.96-295, 94 Stat. 789-790.

41

25. In section 71.0, paragraph (f) is added to read as follows:

I 71.0 Purpose and Scoce.

(f) This part also gives notice to all persons who knowingly provide to any licensee, certificate holder, quality assurance program approval holder, applicant for a license, certificate, or quality assurance program approval or to a contractor, or subcontractor of any of them,' components, equipment, materials, or other goods or services, that relate to a licensee's, certificate holder's, quality assurance program approval holder's or applicant's activities subject to this part, that they rnay be individually subject to NRC enforcement action for violation of 5 71.11.

26. Section 71.11 is added to read as follows:

I 71.11 Deliberate misconduct.

(a) This section applies to any-(1) Licensee:

(2) Certificate holder;

- (3) Quality assurance program approval holder; (4) Applicant for a license, certificate, or quality assurance program approval; (5) Contractor (includirg a supplier or consultant) or subcontractor, to any person identified in paragraphs (a)(1) through (a)(4) of this section; or 42

(6) Employee of any person identified in paragraphs (a)(1) through (a)(5) of this section.

(b) A person ider]tified in paragraph (a) of this section who knowingly provides to t

any entity, listed in paragraphs (a)(1) through (a)(5) of this section any components, materials, or other goods or services that relate to a licensee's, certificate holder's, quality assurance program approval holder's or applicant's activities subject to this part may not:

(1) Engage in deliberate misconduct that causes or would have caused,if not detected, a licensee, certificate holder, quality assurance program approval holder, or any applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation of any license, certificate or approval issued by the Commission; or (2) Deliberately submit to the NRC, a licensee, a certificate holder, quality assurance program approval holder, an applicant for a licent-s, certificate or quality assurance program approval, or a licensee's, applicant's, certificate holder's or quality assurance program approval holder's contractor or subcontractor, information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC, (c) A person who violates paragraph (b)(1) or (b)(2) of this section may be subject to enforcement action in accordance with the procedures in 10 CFR Part 2, subpart B.

(d) For the purposes of paragraph (b)(1) of this section, de.iberate misconduct by a person means an irt ;ional act or omission that the person knows:

(1) Would cause a licensee, certificate holder, quality assurance program approval holder or applicant for a license, certificate, or quality assurance program approval to be in violation of any rule, regulation, or order; or any term, condition, or limitation, of any license or certificate issued by the Commission; or 43

(2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, certificate holder, quality assurance program approval holder, applicant, or the contractor or subcontractor of any of them.

PART 72-LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL AND HIGH LEVEL RADIOACTIVE WASTE

27. The authority citation for Part 72 continues to read as follows:

AUTHORITY: Secs. 51,53,57,62,63,65,69,81,161,182,183,184,186, 187,189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202,206,88 Stat.1242, as amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846); Pub. L.95-601, sec.10,92 Stat. 295 as amended by Pub.L. 102-486, sec. 7902,106 Stat. 3123 (42 U.S.C. 5851); sec.102, Pub. L.91-190, 83 Stat. (42 U.S.C. 4332); secs.131,132,133 135,137,141, Pub. L.97-425, 96 Stat. 2229, 2230, 2232, 2241, sec.148, Pub. L.

100-203,101 Stat.1330-235 (42 U.S.C.10151,10152,10153,10155,10157,10161, 10168).

Section 72.44(g) also issued under secs.142(b) and 148(c), (d), Pub. L. 100-203, 101 Stat.1330-232,1330-236 (42 U.S.C.10162(b),10168(c), (d)). Section 72.46 also issued under sec.189,68 Stat. 935 (42 U.S.C. 2239); sec.134, Pub. L.97-425, 96 Stat. 2230 (42 U.S.C.10154). Section 72.96(d) also issued under sec.145(g), Pub. L.

100-203,101 Stat.1330-235 (42 U.S.C.10165(g)). Subpart J also issued under secs.

44

4

.4

~

2(2), 2(15),- 2(19),117(a),141(h), Pub. L 97-425; 96 Stat. 2202, 2203, 2204, 2222, . b 2224 (42 U.S.C.10101,-10137(a), IO161(h)). Subparts K and L are also issued under-sec.133, 96 Stat. 2230 (42 U.S.C.10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C.

1

-10198), H 1

-l 3 28. In section 72.2, paragraph (f) is revised to read as follows. <

1 5 72.2 Scone.

m.

(f) This part also gives notice to all persons who knowingly provide to any licensee, certificate holder, applicant for a license or certificate, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's, x

certificate holder's, or applicant's activities subject to this part, that they may be individually subject to NRC enforcement action for violation of 5 72.12,

29. Section 72.12 is revised to read as follows:

I 72.12 Q2wate m!se.g.nduct.

x (a) Any licensee, certificate holder, applicant for a license or certificate, employee

. of a licensee / certificate holder, or applicant for a 1.icense or certificate; or any contractor

(including a supplier or consultant) or subcontractor, employee of a contractor or-

subcontractor of any licensee, certificate ho' der, or applicant for a license or certificate

,!j7 L who knowingly provides to any licensee, certificate holder, applicant for a license or

\If . - -

, 45 f

.g .

9 certificate, contractor, or subcontractor, any components, materials, or other goods or services that relate to a licensee's, certificate holder's, or applicant's activities subject to this part, may not:

(1) Engage in deliberate misconduct that causes or would have caused,if not detected, a licensee, certificate holder or applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation of any license or certificate issued by the Commission; or (2) Deliberately submit to the NRC, a licensee, a certificate holder, an applicant for a license or certificate, or a licensee's, applicant's, or certificate holder's contractor or subcontractor, information that the person submitting the information knows to be incomplete or inaccurate in some respect material to the NRC.

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

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omission that the person knows:

(1) Weutd cause a licensee, certificate hotoer or applicant for a license or certificate to be in violation oi any rule, regulation, or order; or any term, condition, or limitation, of any license or certificate issued by the Commission; or (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, certificate holder, applicant, contractor, or subcontractor.

46 l

____.___m g

4 PART 110-EXPORT AND IMPORT OF NUCLEAR EQUIPMENT AND MATERIAL

30. The authority citation for Part 110 continues to read as follows:

AUTHORITY: Secs. 51,53,54,57,63,64,65,81,82,103,104,109,111,126, 127,128,129,161,181,182,183,187,189, 68 Stat. 929, 930, 931, 932, 933, 936, 937,948,953,954,955,956, as amended (42 U.S.C. 2071, 2073, 2074, 2077, 2092-2005, 2111, 2112, 2133, 2134, 2139, 2139a, 2141, 2154-2158, 2201, 2231 -2233, 2237,2239); sec. 201,88 Stat.1242, as amended (42 U.S.C. 5841; sec 5, Pub. L.101-575,104 Stat 2835 (42 U.S.C.2243).

Sections 110.1(b)(2) and 110.1(b)(3) also issued under Pub. L. 96-92, 93 Stat.

710 (22 U.S.C. 2403). Section 110.11 also issued under sec.122,68 Stat. 939 (42 U.S.C. 2152) and secs. 54c and 57d., 88 Stat. 473,475 (42 U.S.C. 2074). Section 110.27 also issued under sec. 309(a), Pub. L.99-440. Section 110.50(b)(3) also issued under sec.123,92 Stat.142 (42 U.S.C. 2153). Section 110.51 also issued under sec. 184,68 Stat. 954, as amended (42 U.S.C. 2234). Section 110.52 also issued under sec. 186,68 Stat. 955 (42 U.S.C. 2236). Sections 110.80-110.113 also issued under 5 U.S.C. 552, 554. Sections 110.130-110.135 also issued under 5 U.S.C. 553. Sections 110.2 and 110.42 (a)(9) also issued under sec. 903, Pub. L.102-496 (42 U.S.C. 2151 et seq.).

47

31. In Section 110.1, paragraph (a) is revised to read as follows:

I 110.1 Purpose and Scooe.

(a) The regulations in this part prescribe licensing, enforcement, and rulemaking procedures and criteria, under the Atomic Energy Act, for the export of nuclear equipment and material, as set out in il 110.8 and 110.9, and the import of nuclear equipment and material, as set out in i 110.9a. This part also gives notice to all persons who knowingly provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's or applicant's activities subject to this part, that they may be individually subject to NRC enforcement action for violation of 5110.7b.

32. Section 110.7b is revised to read as follows:

I 110.7b Deliberate misconduct.

(a) Any licensee, applicant for a license, employee of a licensee or applicant; or any contractor (including a supplier or consultant), subcontractor, employee of a centractor or subcontractor of any licensee or applicant for a license, who knowingly provides to any licensee, applicant, contractor, or subcontractor, any components, equipment, materials, or other goods or services that relate to a licensee's or applicant's activities in this part, may not:

(1) Engage in deliberate misconduct that causes or would have caused,if not detected, a licensee or applicant to be in violation of any rule, regulation, or order; or any term, condition, or limitation of any license issued by the Commission; or 48

~

(2)- Deliberately submit to the NRC, a licensee, an applicant, or a licensee's or j

- applicant's contractor or subcontractor, information that the person' submitting the information knows to be incomplete or. inaccurate in some respect material to the NRC.  !

(b) A person who violates paragraph (a)(1) or (a)(2) of this se: tion may be subject  ;

to enforcement action in accordance with the procedures in 10 CFR Part 2, :subpart B. .

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omission that the person knows: ,

(1) Would cause a licensee or applicant to be in violation of any rule, regulation, or i

- order; or any term, condition, or limitation, of any license issued by the Commission; or (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

PART 150-EXEMPTIONS AND CONTINUED REGULATORY AUTHORITY IN AGREEMENT STATES AND IN OFFSHORE WATERS UNDER SECTION 274 t

33. The authoritv citation for Part 150 continues to read as follows:

AUTHORITY: Sec.161,68 Stat. 948, as amended, sec. 274,73 Stat. 688 (42 U.S.C. 2201, 2021); sec. 201,88 Stat.1242, as amended (42 U.S.C. 5841).

Sections 150. 3, 150.15, 1 50.15 a , 1 50. 31, 150. 32 also issued under secs,11e(2),

81,68 Stat. 923,935, as amended, secs. 83, 84, 92 Stat. 3033, 3039 (42 U.S.C.

- 2014e(2), 2111, 2113, 2114).-- Section 150.14 also issued under sec. 53,' 68 Stat. 930, as amended (42 U.S.C. 2073).' Section.150.15 also issued under secs. 135,141,- Pub.L.

a M '

,' 49 1

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

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t 97-425, 96 Stat. 2232,' 2241_ (42 U.S.C.110155,10161). Section 150.17a also issued ~

under sec.122, 68' Stat. 939 (42 U.S.C. 2152).- Section 150.30 also issued under sec.-

a 234, 83 Stat. 444 (42 U.S.C. 2282).

. 34. Section 150.2 is revised to read as follows:

I 150.2 - Scone. ,

The regulations in this part apply to all States tt.q have entered into agreements

~

cwith the Commission or the Atomic Energy Commission pursuant to subsection 274b of -

! the Act. This part also gives notice to all persons who knowingly provi/ 'o any licensee, applicant for a license or certificate or quality assurance program approval, holder of a certificate or quality assurance program approval, contractor, or subcontractor, any [

components, equipment, materials, or other goods or services that relate to a licensee's, >

certificate holder's, quality assurance program approval holder's or applicant's activities subject to this part, th'at they may be individually subject to NRC enforcement action for

. violation of 5 5.30.10, 40.10, 70.10 and 71.11.

Dated at Rockville, Maryland, this day of ,1997.

For the Nuclear Regulatory Commission.

1 John C. Hoyle, Sectetary of the Commission.

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4

'l e ENCLOSURE 2 FRN - ENFORCEMENT POLICY 4

e 4

1

_________-______.___________m_ -- e. v- w- --w s-

. [7590-01-P]

NUCLEAR REGULATORY COMMISSION

[NUREG 1800)-

Policy and Procedure for Enforcement Actions; Deliberate Misconduct Rule

-AGENCY: Nuclear Regulatory Commission.

l ACTION: Policy statement: Amendment

SUMMARY

' The Nuclear Regulatory Commission (NRC) is amending its " General Statement of Policy and Procedure for NRC Enforcement Actions" to conform to modifications to the Deliberste Misconduct Rule. These modifications extend that Rule to applicants for NRC licenses, applicants for, and holders of, certificates of compliance, early site permits, standard design certifications, or combined licenses issued under Part 52, applicants for or holders of certificates of registration, quality assurance approvals, and the employees, contractors,.

subcontractors, and consultants of those persons. By a separate action published in this issue of the Federal Register, the Commission has issued a final rule amending 10 CFR Parts 30, 32, 40, 50, 52, 60, 61, 70, 71, 72,110, and 150.

- EFFECTIVE DATE: This action is effective on [30 days after publication in the Federal

' Register].

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of-Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, (301) 415-2741.

4

)

SUPPLEMENTARY INFORMATION:

The Commission's General Statement of Policy and Procedure for NRC Enforcement Actions (Enforcement Policy or Policy) was first issued on September 4,1980. Since that time, the Enforcement Policy has been revised on a number of occasions. On June 30,1995 (60 FR 34381), the Enforcement Policy was revised in its entirety and was also published as NUREG-1600. The Policy primarily addresses violations by licensees and certain non-licensed persons, as discussed further in footnote 3 to Section I, Introduction and Purpose, and in Section X: Enforcement Action Against Non-licensees.

The Deliberate Misconduct Rule was cdopted in September 1991 and applies to any licensee or any employee of a licensee; and any contractor (including a supplier or consultant), subcontractor, or any employee of ~ contractor or subcontractor, or any licensee.

The Deliberate Misconduct Rule placed licenseo and unlicensed persons on notice that they may be subject to enforcement action for deliberate misconduct that causes or would have caused, if not detected, a licensee to be in violation of any of the Commission's requirements, or for deliberately providing to the NRC, a licensee, or contractor, information that is incomplete or inaccurate in some respect material to the NRC.

The final rulemaking expands the Deliberate Misconduct Rule, where it appears in 10 CFR Parts 30,40,50,60,61,70,72, and 110, clarifies the scope of Part 32 and adds the Rule to Parts 52 and 71. This expansion arises out of a realization that the current Rule does not apply to applicants for NRC licenses, applicants for, or holders of, certificates of compliance, early site permits, standa d design certifications, or combined licenses issued 2

under Part 52, applicants for or holders of certificates of registration, quality assurance program approvais and the employees, contractors, subcontractors, and consultants of those persons. The Commission believes that it is equally important for these categteles of persons to be subject to enforcement action for deliberate wrongdoing, such as the submission of inat. curate or incomplete information.

The Cornmission is making this change to the General Statement of Policy and Procedure for NRC Enforcement Actions to make it consistent with the regulations. The changes include: (1) expansion of footnote 3 in Secion I, which discusses the scope of the Policy; (2) deletion of the reference to vendors in Section VI.C.5, to avoid possible confusion as a result of a partial listing of those to whom the Rule and Policy apply; and (3) restating the opening sentence in Section VI.C.5 and in Section X: Enforcement Actions Against Non-licensees, to set out the full scope of the Rule and its application through the Enforcement Policy.

The Commission has held that the term " contractor" includes a vendor or supplier that manufactures and offers for sale materials intended for use by NRC licensees and certified to meet the requirements of 10 CFR Part 50, Appendix B. In the Matter of: Five Star Products, Inc. and Construction Products Research, Inc., 38 NRC 169, CLl-93-23 (October 21,1993).

In light of that holding, the remaining references to vendors throughout the Enforcement Policy are also being modified to refer to contractors as the 3

inclusive term. These changes are bein0 made in Sections V, VI.B.1, VI.C, VI.D. Vlli, X, Table 1A, and Supplements I.C. and Vll.C.

Paperwork Reduction Act t

This policy statement does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

Existing requirements were approved by the Office of Management and Budget, approval number 3150-0136. The approved information collection requirements contained in this policy statement appear in Section Vll.C.

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

Small Business Regulatory Enforcement Faimess Act in accordance with the Small Business Regulatory Enforcement Faimess Act of 1996, the NRC has determined that this action is not "a major" rule and has verified this determination with the Office of Information and Regulatory Affairs, Office of Maragement and Budget.

4

m I

9 l

Accordingly, Sections I, V, VI B., C., and D., Vill, X, and Supplements I and Vil of the -

NRC Enforcement Policy are amended to read as i aws:

GENERAL STATEMENT OF POLICY AND PROCEDURE FOR NRC ENFORCEMENT ACTIONS

l. INTRODUCTION AND PURPOSE The purpose of the NRC enforcement program is to support the NRC's overall safety mission in protecting tho public and the environment. Consistent with that purpose, enforcement action should be used:

. As a deterrent to emphasize the importance of compliance with requirements, and To encourage prompt identification and prompt, comprehensive correction of violations.

Consistent with the purpose of this program, prompt and vigorous enforcement action will be taken when dealing with licensees, contractors,2 and their employees, who do not achieve the necessary meticulous attention to detail and the high standard of a The term " contractor

• as used in this policy includes vendors who supply products or services to be used in an NRC-licensed f acility or activity.

5 l

l

l compliance which the NRC expects.* Each enforcement action is dependent on the circumstances of the case and requires the exercise of discretion after consideration of these policies and procedures. In no case, however, will licensees who cannot achieve and maintain adequate levels of protection be permitted to conduct licensed activities.

V. PREDECISIONAL ENFORCEMENT CONFERENCES Whenever the NRC has teamed of the existence of a potential violation for which escalated enforcement action appears to be warranted, or recurring nonconformance on the part of a contractor, the NRC may provide an ooportunity for a predecisional enforcement conference with the licensee, contractor, or other person before taking enforcement action.

The purpose of the conference is to obtain information that will assist the NRC in determining the appropriate enforcement action, such as: (1) a common understanding of facts, root causes and missed opportunities associated with the apparent violat,ons, (2) a common understanding of corrective actions taken or planned, and (3) a common understanding of the significance of issues and the need for lasting comprehensive corrective action.

• This policy primarily addresses the activities of NRC licensees and apphcants for NRC licenses.

Therefore, the term " licensee" is used throughout the pokcy. However, in those cases where the NRC determines that it is appropriate to take enforcement action against a non-licensee or individual, the guidance in this policy will be used, as applicable. These non-licensees include contractors and subcontractors, holders of, or apphcants for, NRC approvals, e.g., certificates of compliance, early site permits, or standard design certificates and the employees of these nonlicensees. Specific guidance regarding enforcement action against Individuals and nordlicensees is addressed in Sections Vill and X, respectively.

6

f a

During the predecisional enforcement conference, the licensee, contractor, or other persons will be given an opportunity to provide information consistent with the purpose of the' conference, inclu6n(; an explanation to the NRC of the immediate corrective actions (if any) that were taken following identification of the potential violatio;t or nonconformance and the long-term comprehentive actions that were taken or will be taken to prevent recurrence.

Licensees, contractors, or other persons will be told when a meeting is a predecisional enforcement conference.

VI. ENFORCEMENT ACTIONS

. . . . . I VI.B.1. Base Civil Penalty The NRC imposes different levels of penalties for different severity level violations and different classes of licensees, contractors, and other persons. Tables 1A and 1B show the base civil penalties for various reactor, fuel cycle, and materials programs. (Civil penalties

issued to individuals are determined on a case-by-case basis.) The structure of these tables

> generally takes into account the gravity of the violation as a primary consideration and the

. ability to pay as a secondary consideration. Generally, operations involving greater nuclear material inventories and greater potential' consequences to the public and licensee .

employees receive higher civil penalties. Regarding the secondary factor of ability of various ,

7 s

.-u-

~

classes of licensees to pay the civil penaities, it is not the NRC's intention that the economic impacts of a civil penany be so severe that it puts a licensee out of business (orders, rather than civil penalties, are used when the intent is to suspend or terminate licensed activities) or adversely affects a licensee's ability to safely conduct licensed activities. The deterrent effect of civil penalties is best served when the amounts of the penalties take into account a licensee's ability to pay. In determining the amount of civil penalties for licensees for whom the tables do not reflect the ability to pay or the gravity of the violation, the NRC will consider as necessary an increase or decrease on a case-by-case basis. Normally, if a licensee can demonstrate financial hardship, the NRC will consider payments over time, including interest,

- c rather than reducing the amount of the civil penalty. However, where a licensee claims financial hardship, the licensee will normally be required to address why it has sufficient resources to safely conduct licensed activities and pay license and inspection fees.

TABLE 1A-BASE CIVIL PENALTIES

c. Test reactors, mills and uranium conversion facilities, contractors, waste disposal licensees, and industrial radiographers.. . . .. , , ..$11,000 d

C. Osders 8

S. Orders to non-licensees, including contractors and subcontractors, holders of NRC approvals, e.g., certificates of compliance, early site permits, standard design certificates, or applicants for any of them, and to employees of any of the foregoing, are used when the NRC has identified deliberate misconduct that may cause a licensee to be in violation of can NRC requirement or where incomplete or inaccurate information is ~ deliberately submitted or where the NRC loses its reasonable assurance that the licensee will meet NRC requirements with that person involved in licensed activities.

D. Related Administrative Actions In addition to the formal enforcement actions. Notices of Violation, civil penalties, and orders, the NRC also uses administrative actions, such as Notices of Deviation, Notices of Nonconformance, Confirmatory Action Letters Letters of Reprimand, and Demands for Information to supplement its enforcement program. The NRC expects licensees and contractors to adhere to any obligations and commitments resulting from these actions and

. will not hesitate to issue appropriate orders to ensure that these obligations and commitments are met.

1. Notices of Deviation are written notices describing a licensee's failure to satisfy a commitment where the commitment involved has not been made a icgally binding requirement. A Notice of Deviation requests a licenses to provide a written exp.anation or statement describing corrective steps taken (or planned), the results achieved, and the date when corrective action will be completed.

2. Notices of Nonconformance are written notices describing contractors' failures to meet commitments which have not been made legally binding requirements by NRC. An example is a commitment made in a procurement contract with a licensee as required by 10 CFR Part 50, Appendix B. Notices of Nonconformances request non-licensees to provide written explanations or statements describing corrective steps (taken or planned), the resulte achieved, the dates when corrective actions will be completed, and measures taken to -

preclude recurrence.

3. Confirmatory Action Letters are letters confirming a licensee's or contractor's agreement to take certain actions to remove significant concems about health and safety, safeguards, or the environment.

Vill. ENFORCEMENT ACTIONS INVOLVING INDIVIDUALS 9

Listed below are examples of situations which could result in enforcement actions involving individuals, licensed or unlicensed. If the actions described in thase examples are e

- taken by a licensed opemtor or taken deliberately by an unlicensed individual, enforcement action may be taken directly against the individual. However, violations involving willful conduct not amounting to deliberate action by an unlicensed individual in these situations may result in enforcement action against a licensee that may impact an individual. The situations include, but are not limited to, violations that involve:

• Willfully causing a licensee to be in violation of NRC requiremants.

• Willfully taking action that would have caused a licensee to be in violation of NRC requirementt, but the action did not do so because it was detected and corrective action was taken.

• Recognizing a violation of procedural requirements and willfully not taking corrective action.

I Willfully defeating alarms which have safety significance.

• Unauthoic<ed abandoning of reactor controls.

. Dereliction of duty.

Falsifying records required by NRC regulations or by the facility license.

. . Willfully providing, or causing a licensee to provide, an NRC inspector or investigator with inaccurate or incomplete information on a matter material to the NRC.

I + Willfully withholding safety significant information rather than making such information known to appropriate supervisory or technical personnel in the licensee's organization.

L Submitting false information and as a ress gaining unescorted access to a nuclear power plant. .

10

,q-w ue _ _ . . _ , _ m_- _ _____ - +- -

______._v-' _ - r __-- _ ,._ _ _ _

t

+ Willfully providing false data to a licensee by a contractor or other person who provides test or other services, when the data affects the licensee's compliance with 10 CFR -

Part 50, Appendix B, or ot'er regulatory requirement.

Willfully providing false certification that components meet the requirements of their intended use, such as ASME Code.

• Wi!' fully supplying, by contractors of equipment for transportation of radioactive material, casks that do not comply with their certificates of compliance.

X. ENFORCEMENT ACTION AGAINST NON-LICENSEES The Commission's enforcement policy is also applicable to .wn-licensees, including contractors end subcontractors, holders of NRC approvals, e.g., certificates of compliance, early site permits, standard design certificates, quu8ty assurance program approvals, or applicants for any of them, and to employees of any of the foregoing, who knowingly provide components, equipment, or other goods or services that relate to a licensee's activities subject to NRC regulation. The prohibitions and sanctions for any of these persons who engage in deliberate misconduct or knowing submission of incomplete or inaccurate information are provided in the rule on deliberate misconduct, e.g.,10 CFR 30.10 and 50.5.

Contractors who supply products or services provided for use in nuclear activities'are subject to certain requirements designed to ensure that the products or services supplied that

'; could affect safety are of high quality. Throe-k procurement contracts with licensees, 11

4 i

suppliers may be required to have quality assurance programs that meet applicable requirerpents, e.g.,10 CFR Part 50, Appendix B, and 10 CFR Part 71, Subpart H.

ContrLctors supplying certain products or services to licensees are subject to the requirements of 10 CFR Part 21 regarding reporting of defects in basic components.

When inspections determine that violations of NRC requirements have occurred, or that contractors have failed to fulfil! contractual commitments (e.g.,10 CFR Part 50, Appendix B) that could adversely affect the quality of a safety significant product or service, enforcement action will be taken. Notices of Violation and civil penalties will be used, as appropriate, for licensee failures to ensure that their contractors have programs that meet applicable requirements. Notices of Violation will be issued for contractors who violate 10 CFR Part 21. Civil penalties will be imposed against individual directors or responsible oMicers of a contractor organization who knowingly and consciously fail to provide the notice required by 10 CFR 21.21(b)(1). Notices of Nonconformance will be used for contractors who fail to meet commitments related to NRC activities.

SUPPLEMENT l-REACTOR OPERATIONS C.6. A licensee failure to conduct adequate oversight of contractors resulting in the use of products or services that are of defective or indeterminate quality and that have safety significance; 12

SUPPLEMENT Vll-MISCELLANEOUS MATTERS C.8. A failure to assure, as required, that contractors have an effective fitness for duty program; Dated at Rockville, Maryland, this day of 1997.

For The Nuclear Regulatory Commission.

John C. Hoyle, Secretary of the Commission.

13

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The Honorable James M. Inhofe, Chairman Subcommittee on Clean Air, Wetlands, Private Property and Nuclear Safety Committee on Environment and Public Works United States Senate Washington, DC 20510

Dear Mr. Chairman:

Enclosed for the information of the subcommittee is a copy of a notice of a final rulo dealing with deliberate misconduct to be published in the Federal Realster. The Nuclear Regulatory Commission (NRC) is amending its regulations to expand the Deliberate Misconduct Rule where it appears in 10 CFR Parts 30, 40, 50, 60, 61, 70, 72, and 110 and adds the rule to Parts 32,62, and 71. These modifications extend the rule to:

(1) applicants for NRC licenses; (2) applicants for, or holders of, certificates of compliance; (3) applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants; (4) applicants for, or holders of, certificates of registration; (5) applicants for, or holders of, quality assurance program approvals; and (6) the employee;, contractors, subcontractors and consultants of ths first five categories of persons, so that they may be subject to enforcement action. In addition, the scope of 10 CFR 150.2 was changed to provide notice to the above categories of persona when conducting activities under reciprocity in areas of NRC jurisdiction.

The Deliberate Misconduct Rule was originally issued in 1991 (56 FR 40664). Deliberate misconduct may involve providing information that is known to be incomplete or inaccurate in some respect material to the NRC, or it may involve deliberate conduct that causes or would have caused, if not detected, a licensee, certificate holder, or applicant to be in violation of any of the Commission's requirements. The NRC believes that because there may be significant safety consequences from the intentional submittal of materially incomplete or inaccurate information or other deliberate wrongdoing by such persons, the categories of persons cited above also should be subject to enforcement action under the Commission's rules regarding deliberate misconduct. In addition, the NRC's Enforcement Policy is modified concurrently to reflect these changes to the regulations.

The Commission is issuing the final rule for publication in the Federal Reoister.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Federal Register Notice cc: Senator Bob Graham

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s The Honorable Dan Schaefer, Chairman Subcommittee on Energy and Power Committee on Commerce United States House of Representatives Washington, DC 20515

Dear Mr. Chairman:

Enclosed for the information of the subcommittee is a copy of a notice of a final rule dealing with deliberate misconduct to be published in the Federal ataltitt. The Nuclear Regulatory Commission (NRC) is amending its regulations to expand the Deliberate Misconduct Rule where it appears in 10 CFR Parts 30, 40, 50, 60, 61, 70, 72, and 110 and adds the rule to Parts 32,52, and 71. These modifications extend the rule to:

(1) appilcants for NRC licenses; (2) applicants for, or holders of, certificates of compliance; (3) applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants; (4) applicants for, or holders of, certificates of registration; (5) applicants for, or holders of, quality assurance program approvals; and (6) the employees, contractors, subcontractors and consultants of the first five categories of persons, so that they may be subject to enforcement action. In addition, the scope of 10 CFR 150.2 was changed to provide notice to the above categories of persons when conducting activities under reciprocity in areas of NRC jurisdiction.

The Deliberate Misconduct Rule was originally issued in 1991 (56 FR 40664). Deliberate misconduct may involve providing information that is known to be incomplete or inaccurate in some respect material to the NRC, or it may involve deliberate conduct that causes or would have caused, if not detected, a licensee, certificate holder, or applicant to be in violation of any of the Commission's requirements. The NRC believes that because there may be significant safety consequences from the intentional submittal of materially incomplete or inaccurate information or other deliberate wrongdoing by such persons, the categories of persons cited above also should be subject to enforcement action under the Commission's rules regarding deliberate misconduct. In addition, the NRC's Enforcement Policy is modified concurrently to reflect these changes to the regulations.

The Commission la issuing the final rule for publicatioa in the Federal Realster.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Federal Register Notice cc: Representative Ralph Hall

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NRC AMENDING REQUIREMENTS GOVERNING DEllBERATE MISCONDUCT BY UNLICENSED PERSONS The Nuclear Regulatory Commission is adopting amendments to NRC regulations that established the Deliberate Misconduct Rule, in September 1991. The original rule failed to include a number of categories of persons whc engage in activities within the Commission's subject matter jurisdiction. The amendments extend the Deliberate Misconduct Rule , six new categories of persons:

(1) applicants for NRC licences; (2) applicants for, or holders of, certificates of ,

compliance; (3) applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants; (4) applicants for, or holders  ;

of, certificates of registration; (5) applicants for, or holders of, quality assurance program approvals; and (6) the employees, contractors, subcontractors and consultants of the first t

five categories of persons, so that they may be subject to enforcement action. Deliberate misconduct may involve providing information that is known to be incomplete or inaccurate in some respect material to the NRC, or it may involve conduct that causes or would have caused, if not detected, a licensee, certificate holder, or applicant to be in violation of any of the Commission's requirements. The NRC believes that because there ,

may be significant safety consequences from the intentional submittal of materially ,

incomplete or inaccurate information or other deliberate wrongdoing by such persons, these persons should be subject to enforcement action under the Commission's existing rules regarding deliberate misconduct. In addition, the NRC's Enforcement Policy is being-modified concurrently to reflect these changes to the regulations.

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Mr. Robert P. Murphy ,

General Counsel '  ;

General Accounting Office Room 7175 441 "G" Street, N.W.

Washington, DC 20548

Dear Mr. Murphy:

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1990, 5 U.S.C. 801, the Nuclear Regulatory Commission (NRC) is submitting a final rule to amend its regulations to extend the Deliberate Misconduct Rule to six categories of persons: applicants for NRC licenses; applicants for, and holders of, certificates of compliance; applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants; applicants for, or holders of, certificates of registration; applicants for, or holders of, quality assurance program approvals; and the employees, contractors, subcontractors, and consultants of the above five categories of persons, so that they may be subject to enforcement action for deliberate misconduct.

Deliberate miscondu::t may involve providing information that is known to be incomplete or inaccurate in some respect material to the NRC, or it may involve conduct that causes or would have caused, if not detected, a lic.ensee, cert!ficate holder, or applicant to be in violation of any of the Commission's requirements. The NRC believes that because there may be significant safety consequences from the intentional submittal of incomplete or inaccurate information or other deliberate wrongdoing by such persons, these persons should be subject to enforcement action under the Commission's existing rules regarding deliberate misconduct, in addition, the NRC's Enforcement Policy is modified concurrently to reflect these changes to the regulations.

We have determined that this rule is not a " major rule" as defined in 5 U.S.C. 804(2). We have confirmed this determination with the Office of Management and Budget.

Enclosed is a copy of the final rule, which is being transmitted to the Office of the Federal Register for publication. The Regulatory Flexibility Certification is included in the fint.l rule.

A Regulatory Analysis has been prepared for this final rule and is included in the Federal Register notice, however the benefits derived from the changes to the current regulation are similar to those provided by the Deliberate Misconduct Rule, which became effective on September 16,1991.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule

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l The Honorable Newt Gingrich Speaker of the United States House of Represnetatives '

Washington, DC 20515

Dear Mr. Speaker:

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801, the Nuclear Regulatory Commission (NRC) is submitting a final rule to amend its regulations to extend the Deliberate Misconduct Rule to six categories of persons: applicants for NRC licenses; applicants for, and holders of, certificates of compliance; applicants for, or holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants; applicants for, or holders of, certificates of registration; applicants for, or holders of, quality assurance program approvals; and the ,

employees, contractors, subcontractors, and consultants of the above five categories of persons, so that they may be subject to enforcement action for deliberate misconduct.

Deliberate misconduct may involve providing information that is known to be incomplete or inaccurate in some respect material to the NRC, or it may involve conduct that causes or would have caused, if not detected, a licensee, certificate holder, or app!icant to be in violation of any of the Commission's requirements. The NRC believes that because there may be significant safety consequences from the intentional submittal of incomplete or inaccurate information or other deliberate wrongdoing by such persons, these persons should be subject to enforcement action under the Commission's existing rules regarding delibeiate misconduct. In addition, the NRC's Enforcement Policy is modified concurrently to reflect these changes to the regulations.

We have determined that this rule is not a " major rule" as defined in 5 U.S.C. 804(2). We have confirmed this determination with the Office of Management and Budget.

Enclosed is a copy of the final rule, which is being transmitted to the Office of the Federal Register for publication. The Regulatory Flexibility Certification is included in the final rule.

A Regulatory Analysis has been prepared for this final rule and is included in the Federal Register notice, however the benefits derived from the changes to the current regulation are similar to those provided by the Deliberate Misconduct Rule, which became effective on September 16,1991.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule

• *pNn g g% UNrrED STATES

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NUCLEAR REGULATORY COMMISSION WAsHlNGioN. D.C. sete64eM The Honorable Al Gore President of the United States Senate i Washington, DC 20510 Daar Mr. President:

Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 801, the Nuclear Regulatory Commission (NRC) is submitting a final rule to amend its regulations to extend the Deliberate Misconduct Rule to six categories of persons: applicants for NRC licenses; applicants for, and holders of, certificates of compliance; applicants for, or holders of, early site permits, standard design certificaticns, or combined licenses for nuclear power plants; applicants for, or holders of, certificates of registration; applicants for, or holders of, quality assurance program approvals; and the employees, contractors, subcontractors, and consultants of the above five categories of persons, so that they may be subject to enforcement action for deliberate misconduct.

Deliberate misconduct may involve providing information that is known to be incomphte or inaccurate in some respect material to the NRC, or it may involve conduct that causes or would have caused, if not detected, a licensee, certificate holder, or applicant to be in violation of any of the Commission's requirements. The NRC believes that because there may be significant safety consequences from the intentional submittal of incomplete or inaccurate information or other deliberate wrongdoing by such persons, these persons should be subject to enforcement action under the Commission's existing rules regarding deliberate misconduct. In addition, the NRC's Enforcement Policy is modified concurrently to reflect these changes to the regulations.

We have determined that this rule is not a " major rule" as defined in 5 U.S.C. 804(2). We have confirmed this determination with the Office of Management and Budget.

Enclosed is a copy of the final rule, which is being transmitted to the Office of the Federal Register for publication. The Regulatory Flexibility Certification is included in the final rule.

A Regulatory Analysis has been prepared for this final rule arid is included in the Federal Register notice. however the benefits derived from the changes to the current regulation are sirnitar to those provided by the Deliberate Misconduct Rule, which became effective on September 10,1991.

Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs

Enclosure:

Final Rule

certifications, or combined licenses for nuclear power plants issued under 10 CFR Part 52; applicants for, and holders of, certificates of re0 i stration issued under Parts 30 and 32: and applicants for, and holders of, quality assurance program approvals issued under Part 71; and to the employees, contractors, subcontractors and consultants of all the above categories of persons, implements the Commission's authority under the AEA to issue regulations and orders to any person (defined in Section ils of the AEA to include, e.g.,

an individual, corporation, firm, or a Federal, State, or local agency) who engages in conduct affecting activities within the Commission's subject matter jurisdiction.

In brief, Section 1611of the AEA provides broad authority to such regulations and orders as the Commission deems necessary to govern any activity authorized pursuant to the AEA in order to protect public health and safety. Section 161b of the AEA similarly authorizes the Commission to issue regulations and orders to impose " standards and instructions" on persons to govern the possession and use of special nuclear material, source material, and byproduct material, as may be necessary or desirable to provide for the common defense and security and protect public health and safety. Section 234 of the AEA authorizes the NRC to impose civil penalties on certain unlicensed persons for violating the NRC's substantive requirements. Section 234a of the AEA reads as follows:

Any person who (1) violates any licensirig or certification provision of Sections 53, 57,62,63,81,82,101,103,104,107,109, or 1701 or any rule, regulation, or order issued thereunder, or any term, condition, or limitation of any license or certification issued thereunder, or (2) commits any violation for which a license may be revoked under Section 186, shall be subject to a civil penalty, . . . .

The licensing provisions listed in Section 234a generally prohibit the possession, use, receipt, or transfer of nuclear materials or f acilities unless authorized by and in accordance with a licenso.

7

h comment objecting to the original Deliberate Misconduct Rule, "a person with the requisite  !

knowledge who deliberately provides false or inaccurate information that is material to the ,

NRC presents a health and safety concern within the NRC's regulatory sphere." 56 FR l

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40670. The fact that no actual violation has occurred, or would have occurred but for detection, has no bearing on whether, from a health and safety standpoint, that person j should be involved in nuclear activities. Although, the comrnenter is correct that the l

-standard permits the NRC to take enforcement action whether or not a violation has  !

t occurred, or would have occurred but for detection, the Commission does not believe that this fact renders the standard overly broad.

Comment: One commenter, the JAl Corporation, proposed that the scope of the proposed rule be broadened to include persons submitting information pursuant to the  !

notification requirements of 10 CFR Part 21. The commenter, apparently believing that such persons are not presently covered by the Deliberate Misconduct Rule, pointed to the unf airness that would exist if persons who knowingly submit incomplete or inaccurate '

information to licensees are penalized but persons who knowingly submit incomplete or inaccurate information to the NRC regarding defects or non compliance under Part 21 are not penalized. .

Resoonse: Under 10 CFR Pa't 21, certain categories of persons, e.g., individual directors or responsible officers of a corporation, must notify the NRC when they obtain certain types of information; e.g., information concerning defects in components which

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could cause a substantial safety harcrd. When such persons provide information tr, the

• NRC they are subject to the Deliberate Misconduct Rule as it appears in the relevant Part of Chapter I of 10 CFR,- For example,if the director of a corporation obtains information i i3

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information or advancec in technology. Also, the Commission recognizes that oral information may in some situations be less reliable. This is addressed in Section IX of the Enforcement Policy.

Finally, the Commission does not take lightly its responsibility in this area and carefully considers each action involving an individual. As the Commission stated in the original Deliberate Misconduct Rule:

"It would be an erroneous reading of the final rule on deinerate misconduct to i

conclude that conscientious people may be subject to personalliability for mistakes. The Commission realizes that people may make mistakes while acting in good f aith.

Enforcement actions directly against individuals are not to be used for activities caused by merely negligent conduct. These persons should have no fear of individualliability under this regulation, as the rule requires that there be deliberate misconduct before the rule's sanctions may be impowd. The Commission recognizos, ... that enforcement actions involving individuals are significant actions that need to be closely controlled and judiciously applied." (See 56 FR 40664,40681)

Comment: One commenter, the Nuclear Energy Institute (NEI), believes that the NRC is exceeding its statutory authority under the Atomic Energy Act of 1954 (the AEA) in promulgating these amendments to the Deliberate Misconduct Rule because, b W view of NEl, authority over non licensee persons was not provided by Congress other than in limited circumstances carved out in the AEA as exceptions. In particular, NEl believes that Section 1611(3) of the AEA does not provide jurisdiction over non-licensee persons because it does not contain the operative phrase "any person" and therefore, NEl infers, 10

t 7

SUPPL.EMENTARY INFORMATION: i The Commission's " General Statement of Policy and Procedure for fjRC l

i Enforcement Actions" (Enforcement Policy or Policy) was first issued on September 4, _ [

1980. Since that time, the Enforcement Policy has been revised on a number of occasions, On June 30,1995 (60 FR 34381), the En'.orcement Policy was revised hiits entirety and was also published as NUREG 1600. Tne Policy primarily addf esses violations-by licensees and certain non licensed persons, as discussed further in footnote 3 to f

- Section I, Introduction and Purpose, and in Section X: Enforcement Action Against Non-licensees.  ;

I The Deliberate Misconduct Rule was adopted in September 1991 and applies to any licensee or any employee of a licensee; and any contractor (including a supplier or consultant), subcontractor, or any employee of a contractor or subcontractor, of any licensee. The Deliberate Misconduct Rule placed licensed and unlicensed persons on  ;

i notice that they may be subject to enforcement action for deliberate misconduct that causes or would have caused, if not detected, a licensee to be in violation of any of the l Commission's requirements, or for deliberately providing to the NRC, a licensee, or contractor, information that is incomplete or inaccurate in some respect material to the l NRC.

The final rulemaking expands the Deliberate Misconduct Rule, where it appears in i 10 CFR Parts 30,40,50,60,61,70,72, and 110, and adds the Rule to Parts 52 and 71.-

This expansion arises out of a realization that the current Rule does not apply to applicants 2

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