ML20198L765

Discusses Final Rule Amending Deliberate Misconduct Rule. OGC Has No Legal Objection to Amended Rule

ML20198L765
Person / Time
Issue date:	10/02/1997
From:	Olmstead W NRC OFFICE OF THE GENERAL COUNSEL (OGC)
To:	Knapp M NRC OFFICE OF NUCLEAR REGULATORY RESEARCH (RES)
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-63FR1890, 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 AF35-2-009, AF35-2-9, NUDOCS 9801160112
Download: ML20198L765 (20)

Text

fd h T-b 3 h A-UNITEo STATES NUCLEAR REGULATORY COMMISS6ON

((ska aseug% ,

c WASHINGTON. D.C. 206M-4001 5

%, October 2. 1997 oFF6CE of THE of NERAL COUNSEL MEMORANDUM TO: Malcolm R. Knapp, Acting Director Office of Nuclear Regulatory Research FROM: William J. Olmstead Associate General Counselfor

"^

^N Licensing & Regulation

SUBJECT:

FINAL RULE DELIBERATE MISCONDUCT BY UNLICENSED PERSONS OGC has reviewed the final rule amending the Deliberate Misconduct Rule as modified subsequent to my memorandum of September 10,1997. OGC has no legal objection to the amended rule subject to incorporation of the further attached modifications.

Attachment:

As stated cc w/sttattachment: A. DiPalo, RES G. Cant, OE P. Brochman, NMSS L. Bolling, OSP M. Lesar, ADM S. Burns, OGC 09 9901160112 990114 FDR FR PDR y..... E 57FR1990 .

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f.Q3: The Commissioners  !

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L. Joseph Collen, Executive Director for Operations j

, i SutJECT: FINAL MULE DELitERATE MISCONDUCT BY UNLICENSED PERSONS i PURPOSE: pg l To obtain Commission approval for publication of final amendments toParts 30,32,40,. /' l

$0,52,60,61,70,71,72,110 and 150 dealing with deliberate misconduct of unlicensed l persons.  ;

. BACKGROUND: 1 l

l In SECY 96-017, dated January 26,1996, the NRC staff informed the Commission of its t plans to extend the Deliberate Misconduct Rule to certificate holders, and to applicants for l 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 l 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, cer*ificates of registration issued under Parts 30 and 32; and applicants for, or holders  ;

!. 'of, quality assurance program approvals issued under Part 71 (including contractors, subcontractors and consultants of the above categories and employees of each of therh. / i in addition, the scope of 10 CFR 150.2 was changed to provide notice to these additional r persons conducting activities under reciprocity in areas of NRC jurisdiction.  !

The proposed rule was submitted to the Commission for approval (SECY 96184, dated i

. August 20,1996) and published in the Federal Realster on october 4,1996 (61 FR 1

' CONTACT. ,

LTony DiPalo, DRA/RES ' MRT.E: TO BE MADE PUBLICLY AVAILABLE (301) 415 6191- .WHEN THE FINAL SRM IS MADE AVAILABLE j Attachment r

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

,V f whether such submittalis by or on behalf of an applicant, or by or on behalf of a holder of a license, certificate, permit or approval.

15 4 /  ;

The Commission m4ll amend the Deliberate Misconduct Rule each place it appears in 10 CFR ChapterJto make the rule apply to applicants for NRC licenses; to applicants for, /

and holders of, certificates of compliance issued under 10 CFR Parts 71 and 72; to applicants for, and holders of, early site permits, certified designs, and combined licenses for nuclear power plants issued under 10 CFR Part 52; to cpplicants for, and holders of, certificates of registration issued under Parts 30 and 32; and to applicants for, and holders of, quality assurance prograrn approvals issued under Part 71; and to the employees, contractors, subcontractors and consultants of all the above categories of persons. This would include, for example, a consultant engegad by an applicant to prepare a license opplication for such activities as radiography, welllogging, irradiation, and teletherapy. It would kiso 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,

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60.11,61.9b,70.10,72.12, and 110.7b. Section 71.11 witlh added to incorporate the

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rule in Part 71 und i 52.10 wi444e edded to incorporate the rule in 10 CFR Part 52. In ca.beig j addition,10 CFR 150.2 and 10 CFR 32.1(b) wihe revised to incorporate the proposed changes. Also, the scope provisions found in 10 CFR 30.1,40.2, 50.1, 52.1, 60,1, 61.1(c),70.2,71.0,72.2, and 110.1(al are being modified to reflect these revisions to the rule. The Commission is also making a minor language change 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 6

t1 t

. 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, shall be subject to a civil penalty, to be imposed by the Commission, of not to exceed $100,000 for each such violation.

The licensing provhions listed in Section 234a generally prohibit the possession, use, receipt, or transfer of nuclear materials or facilities unless authorized by and in accordance with a license, The amendments are made under the authority of sections 161b and I and the c ..

above identified licensinghe. -rtificationlprovisions 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 M

the rule. By imposing a direct prohibition on{hese unlicensed persons, the Commission r,

may ow be able to exercise its Section 234 authority to impose civil penalties onh

. . _ . . - ?. . .

setegoriee

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- ~ unlicensed persons when they dollberately cause qisse Met; n[- e=:h. Mcs;, n

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pasmit of-certMicete hdi- *^ M4n violation'of requirementdvdause n y . . J-*^=

wha H&e 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 misconduc3t; ca =4 !!:erere, epp!:nr;, : PrmjLg?ftstiliinate holder-toMviolatiemofYCbmmissice ?rds-.4 the order would be issued in part pursuant to a regulation (e.g., 6 30.10) that was promulgated under a licensing provition of the AEA. A civil penalty could be available for violations of such an order, in addition, criminal sanctions 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.

. 8 1

i i

Summary of Public Comments On December 18,1996, the comment 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 information on the status of NRC enforcement cases against -  !

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 i Document Room, 2120 L Street, NW, (Lower Level), Washington, DC. A sun. mary of the I I

- comments is provided below.  !

Comment: One utility commenter was concerned that the proposed revisions to the i rule did not address preliminary or "for information only" information that may be sent to I 3

the NRC staff. This commenter believed that situations could aries 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 commenter believed preliminary information should not be construed as intended to be complete and the conclusion reached that deliberate misconduct occurred.

j A second issue raised by this commenter portained to how potentially erroneous information in a staff Safety Evaluation Report ould result in a conclusion reached ,

by the NRC staff that since this erroneous information is inconsistent with that provided in the licensee's submittel, the license.e committed willful misconduct.

Renoonne: The NRC ompleteness and accuracy rules require that all information / '

- provided to the Commission shall be complete and accurate in all material respects 8

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(10 CFR 30.9, 40.9, 50.9, etc.). The deliberate submiss'on of information which is ter l

incomplete or inaccurate in material respects, where the submittee 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 faith and based on the best A- '

information available, but is corrected later based on additionalinformatio$nalysis. The /

NRC's General Statement of Policy and Procedures for Enforcement Actions (NUREG.

16001 (Enforcement Policy) points out that a citat%n is not made if an initial submittel was I

accurate when made but later turns out to be erroneous because of newly discovered M ,

information or advances in technology.pe Commission secognizes that oralinformation V i may in some situations be less reliable. This is addressed!a Section IX of theWRG's-Cr ::! *w-* ":Sy ;M ^;;;;L;; L LJo,6emem muuun hen;G-1000F l nforcement Policg hed r As the Commission stated in the original Deliberate Misconduct Rulo:

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" It would be an erroneous reading of the final rule on deliberate misconduct to conclude that conscientious people may be subject to personalliability for mista83s. The Commission realizes that people may make mistakes while acting in good faith.

Enforcement action 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.fhe Commission recognize hat stiforcement actions involving individuals are significant actions that need to be closely controlled and 2

judiciously applied." (See 56 FR 40864,40681) 10 P

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

i 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 holieving that such persons are not presently covered by the Deliberate Miscenduct Rule, pointed to the unfairness that would exist if persons who knowingly submit incomplete or insecurate 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 V" f 10 CFR. For example, if the director of a corporation obtains information g* andicating a failure 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 d:stinction between deliberately submitting information known to be incomplete or inaccurate to the NRC and submitting the same information to a licensee, or to a licensee's 14

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N 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 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 OA/OC program to be effective and thus the Doliberate Misconduct Rule should apply to persons who maintain equipment malfunction records for certificate holders.

Response

The Deliberate Misconduct Rule is being made applicab'e 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 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.

{

m: int:in. Because m:Intaini equipment malfuncti ecords is a requirement of the registration certificate holder, the cords be covered by the rule. In a6dition,  !

persons who maintain equipment m oc ' n data for a certificate holder including their contractors, subcontractors, I employees o contractor, subcontractor, or the  ;

e certificate holder also subject to 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 l

oertificate holders and thsir contractors and sabcontractors because, in the view of the i

i commenter, the rule presently encompasses the contractors and subcontractors of I licensees and certificate holders are contractors to licensees and thus are covered by the l; rule as it now exists.

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Reanonse: Insofar as certificate holders are contractors to licensees (and certificate t

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 the existence of a contract as a

, prerequisite to the issuance of a Certificate of Compliance (333 72.236; 72.238). Thus, it Is possible for a certificate holder not to be a contractor to a licensee. The amended rule ,

will cover those certificate holders.

Pl.eAs,e IusEKT YAlMINo4L PEN 19CTIES" sE<TIpl4 itS. REQU ESTEP JN O G , (; s *[lIsl91 t1Etto TO M S ,(9 .

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 en environmental 16 i

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Parts 71 cnd 72, (3) applic:nts for, cnd hold:rs cf, carly site permits, st:ndard desion 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 false and that the application had been prepared by a consultant who had provided i the falso information. Eng Randall C. Orem. D.O.. CLI 9314, 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 licensee. Subsequently, the Commission realized that other categories of persons within the Commission's jurisdiction had not been explicitly included within the Deliberate Misconduct Rule; e.g., certificate holders under 10 CFR Parts 71 and 72 and holders of early site permits, certified design certifications and combined licenses under 10 CFR Part 52.

The Commission believes that there may 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 modification to the Deliberate Misconduct Rule. For example, a spent fuel storage cask that is certified by the NRC on the basis of falsified test data could represent a threat to 19

i public he:lth and safety. Simil:rly, a qu:lity casurcnce program that is submktod to the  !

i NRC for approval, but is suppovted by deliberately falsified data that mask a significant i i

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 Rule should not apply -

f to persons who deliberately submit materially incomplete or inaccurate information, whether that out:mittal is by or on behalf of an applicant, or by or on behalf of a holder of  !

a license, certificate, permit or approval.

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The objective of the rule is to explicitly put those persons encompassed by this -

, 1 modification of the Deliberate Misconduct Rule on notice that enforcement action may be  ;

taken against them for deliberate misconduct or deliberate submission of incomplete or i

' inaccurate information, in relation to NRC licensed activities. Under Section 234 of the Atomic Energy Act, the Commissis:,n may impose civil penalties on any person who violates any rule, regulation, or order issued under any cne of the enumerated provisions of the Act, or who commits a violation for which a license mey bc 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.

0

- 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 fact that a case has already occurrvd where the Commission was precluded from taking approprirte >

onforcement action against a consultant to an applicant, and the potential harm to the  :

- public, the alternative of doing nothing was rejected. The benefits of taking enforcement action are similar to those of taking action against licensed entitles in that a civil penalty

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and attend:nt adverse publ: city cncourage futuro compliance, the N;tice cf Violation calls for a precise response as to corrective actioit 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 evalleble in the enforcement program should reduce the probability of '

repetitive violations by wrongdoers.

The NRC does not anticipate that additionalinvestigations will be necessary to implement the rule because it focuses on the results of investigations. Based 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.

& g6 .

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

Regulatory Flexibility Certification in accordance with the Regulatory Flexibility Act of Ib80,5 U.S.C. 605(b), the Commission certifies that this final rule, if adepted, will not have a significant economic impact on a substantial number of small entities. The final rule would put: (1) applicants for NRC licenses; (2) applicants for, and holders of, certificates of compliance issued under 10 CFR Parts 71 and 72, including those for dry cask storage; (3) applicants for, and holders of, early site permits, standard design certifications, or combined licenses issued l

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under 10 CFR Fort 52; (4) applicants for, and holders of, certificates of registrati:n 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) the 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 enfonement action if they deliberately cause a licensee, certifite. holder, or an applicant for a license or certificate to be in violation of NRC requirements. The final rule does not impose ar.y additional obligations on entities that may fall within the definition of "small entities" as set forth in Section 601(6) of the Regulatory Flexibility Act; or within the definition of "small t,usiness" as found in Section 3 of the Small Business Act,15 U.S.C. ,

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

t Small Business hs .latory Enforcement Fairness Act i In accordance with the Small Business Regulatory Enforcement Fairness Act of

'1996, the NRC has determined that this action is not k mejokrule and has verified this determination with the Office of Information and Regulatory Affairs, Office of Managemant and Budget.

Backfit Analysis The NRC has determined that the backfit rule, i0 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).

22 l - - ..

l 930,932,933,935,948,953,954, as amended (42 U.S.C. 2071, 2073, 2032, 2093, 2095,2111,2201,2232,2233); tsecs. 202,206,88 Stat.1244,1246 (42 U.S.C. 5842, 5846); secs.10 and 14, Pub. L. f:5-601, 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 Stat. 3123 (42 U.S.C. 5851).

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

I 60.1 Puroose and Scone.

This part prescribes rules governing the licensing of the U.S. Department of Energy 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 part of this chapter. 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 individu!:y subject to NRC enforcement action for violation of i 60.11.

17. Section 60.1. la rn.4ed to read as follows:

I 60.11 Deliberate m'sconduct.

oC (a) Any licensee, applicant for a license, employee of a licensee or applicant; and 36

i

.- o vny contractor (including w supplier or consultant), subcontractor, amployee of a contractor hr A kicC44 5 4 or subcontractor of any licensee or applicant [who knowingly prow! des to any licensee, applicant, contractor, or subcontractor, any components, equipment, mate *ials, 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, rettulation, or order; or any term, condition, or limitation of any license issued by the Commissioa; 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, of any license issued by the Commission; or (2) Constitutes a violation of a requirement, procedure, instruction, contract, pici'*tt arder, or policy of a licensee, applicant, contractor, or subcontractor.

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

i

18. The authority citation for Part 61 c.9ntinues to read as follows:

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

933,935,948,953,954, as amended (42 U.S.C. 2073,2077,2092,2093,2095, q :d 37

holder or cpplicant for a licenso, 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 (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchese ordet, or policy of a licensee, certificate holder, quality assurence program approvalisolder, applicant, or ?.he contractor or subcontractor af 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: Sees. 51,53,57,62.83,65,69,81,161,182,183,184,186, 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, rec.10,92 Stat. 295 s amended by Pub.L. 102-486,b.7902,106 Stat. 3123 (42 s

U.S.C. 5851); sec.102, Pub. L. 91 190, 83 Stat. (42 U.S.C. 4332);Kecs.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 44 l

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[7590-01 P]

NUCLEAR REGULATORY COMMISSION s

[NUREG - 1600]

Policy and Procedure for Enforcement Actions; Deliberate Misconduct Rule AGENCY: Nuclear Regulatory Commission.

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 Deliberate Misconduct Rule. These modifications extend that Rule to app!; cants 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 registrationjquality 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 130 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) 41 b-2741.

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, e s 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, L 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 1800. 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.

4 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, or 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 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 some respect material to the NRC.

4 The final rulemaking expands 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 52 and 71.

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

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xj P,.*w for NRC licenses, applicants for, or 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 program approvals j

and the employees, contractors, subcontractors, and consu tants of those persons. The Commission believes that it is equally important for these categories of persons to be subject to enforcement action for deliberate wrongdoing, such as the submission of inaccurate or incomplete information.

The Commission is making this change to the General Statement of Policy and Procedure for NRC Enforcement Actions to make it consistent with the regulstions. The changes include: (1) expansion of footnote 3 in Section 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 partiallisting 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: F/ve 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

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NRC AMENDIN3 REQUIREMENTS C3VEHNING DELIBERATE MISC 3NDUCT BY UNLICENSED PERSONS h'b' 4, Wye.d# h The/ Commission adopter cr;- to NRC regulations that established the M

Deliberate Misconduct RuleM2 t:9 Off :t SeptemberK1991, hmn,9 ^90 h =a a"-

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=lcht- thed@ule failed to4ddseas a number of categories of persons who engage i activities within the Commission's subject matter jurisdiction. 'Nts. axenclMedh Te cer;::t th!e d=ficiancy in the reaulations. the Nuclear Rennlatnrv ra=%e ^n GC) ii.. .umodd te 09'-d^ar ta extend the Deliberate Misconduct Rule to wly ie sixAcategories of persons:

(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 employees, contractors, subcontractors and consultants of the first 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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