ML20198M042

Forwards Comments Re Final Rule Re Deliberate Misconduct by Unlicensed Persons

ML20198M042
Person / Time
Issue date:	08/28/1997
From:	Halman E NRC OFFICE OF ADMINISTRATION (ADM)
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 AF35-2-019, AF35-2-19, NUDOCS 9801160176
Download: ML20198M042 (69)

Text

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[ j NUCLEAR REGULATORY COMMISSION o '

s* File i WASHINGTON. 0.C. 30665 0001 NG, 59, k , , , , , */* August 28, 1997 MEMORANDUM FOR: Malcolm R. Knapp, Acting Director Office of Nuclear Regulatory Research .

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Edward L. Halman, Direct  !

'fROM: ,

Office of Administration

' 0FFICE CONCURRENCE ON flNAL RULE PACKAGE ENTITLED,

SUBJECT:

"DEllBERATE MISCONDUCT BY UNLICENSED PERSONS" The Office of Administration concurs on the final rule that amends Parts 30, 32, 40, 50, 52, 60, 61, 70, 71, 72, 110, and 150, and on the corresponding Federal Register notice that amends the Deliberate Conduct Rule aortion of the '

NRC Policy and Procedure for Enforcement Actions. We have attacled a copy of the package that presents our comments.

When these documents are forwarded for publication, please include a 3.5 inch ,

~ diskette that'contains'~a copy of the documents in Wordperfect 5.1 as part of the transmittal-package. The diskette will be forwarded to the OFR and the Government Printing Office for their use in typesetting the documents.

In oider to assist you in preparing the list of docume'its centrally relevant 1 i to this final rule that is required by NRC's regulatory hhtory procedures, .

you should place the designator "AF35-2" in the upper right-hand corner of each document concerning the final rule that you forward to the Nuclear Documents System.

If you Save i any questions, please contact Michael Harrison, 415-6865, or .

Michael Lesar, 415-7163, of the Office of Administration. '

Attachment:

As stated -

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NUCLEAR REGULATORY COMMISSION 10 CFR Parts 30, 32, 40, 50, 52, 60, 61, 70, 71, 72,110, and 150 RIN: 3150 AF35 Deliberate Misconduct by Unlicensed Persons 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; applicants 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 hc.:ders of, quality assurance program approvals; and the employees, contractors, subcontractors and consultants of the first fiva cetegories of persons, so that they may be subject to enforcement actiun for deliberate miscondJCt. Deliberate misconduct may involve providing information that is known to be incomplete or inaccurate and in some respect matnrial 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.

EFFECTIVE DATE: TBD

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FOR FURTHER INFORMATION CONTACT: Toni DiPalo, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415 6191, e-mail, ajd@nrc. gov.

SUPPLEMENTARY INFORMATION: , , .

Background

On August 15,1991 (56 FR 40664), the Commission adopted changes to NRC regulations that estbolished 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, makes the rule applicable to persons conducting activities under reciprocity in areas of NRC jurisdiction (see 10 CFR 150.20, Recognition of Agreement State licenses). The Deliberate Misconduct Rule placed licensed and unlicensed persont, on notice that they may be subject to enforcement action for deliberate misconduct that causes or would have caused, 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 er inaccurate in some respect material to the NRC. The rule also revised the NRC's procedures for issuing orders to include persons not licensed by the Commission, but who are otherwise subject to the Commission's statutory authority.

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Currently, the Deliberate Misconduct Rula does not apply to:

(1) Applicants for NRC licenses; (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 holders of, early site permits, standard design certifications, or combined licenses fos nuclear power plants issued under 10 CFR Part 52; (4) Applicants for, or holders of, certificates of registration issued under Parts 30 and 32; (5) Applicants for, or 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.

To ensure that these persons are subject to enforcament action for wrongdoing under the Deliberate Misconduct Rule, the NRC is extending the rule to them. This final rule will also add the Deliberate Misconduct Rule to 10 CFF Parts 52 and 71 where it currently does not appear.

The Commission 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 rt,le as licensees under 10 CFR Part 50. Similarly, the Commission does not believe that it is necessary to add the Deliberate Misconduct Rule to 10 CFR Part 55 because applicante for, and holders of, reactor operator licenses are already subject to this rule as employees of 10 CFR Part 50 licensees. Moreover, licensed operators are subject to all applicable Commission 3

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requirements (see 10 CFR 55.53(d)) and thusA finding of deliberate misconduct is not W,-

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required to take enforcement action against a licensed reactor operator, 4

Discussion It is important that all information provided to the NRC be complete and accurate in all material respects. Section 186 of the Atomic Energy Act of 1954, as amended (AEA),

underscores this need by providing that "lal license may be revoked for any material false 4 4Y-statement in the application or any statement of f act required (by statute or regulation]A"

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The Commission has promulgated rules concerning completeness and accuracy c,f l Information that specifically 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(all. 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 enforcemint action against a licensee, or, if appropriate, referral to the Department of Justice for consideration for criminbi prosecution.

The Deliberate 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 certi ficates of registration, applicants for,-

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and holders of, early site permits, certified designs and combined licenses, and applicants for, and holders of, quality at.surance program approvals.

incomplete or inaccurate information has potential safety significance, whether submitted before or after a license, certificate, permit, or approval has been issued. The [

Commission 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." Bandall C. Orem.

DJs CLl 9314,37 NRC 423 (1993). The .Q1Wm case involved a consultant to an  ;

i applicant for a license who provided inaccurate information that was included in the

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'licente application and the Commission found that information as tc the status of the facility was material to the licensing decision. M. at 428.

The Commission believes that.there may be significant safety consequences from the deliberate submission of f alse or incomplete information or other deliberate wrongdoing by an applicant for a license or other unlicensed personn covered by this moolfication to the Deliberate Misconduct Rule. For example, a quality assurance program that is submitted to the NRC for approval but is supported by delfoerately falsified data that mask a significant defect could also be a public health and safety threat. Under the present Deliberate Misconduct Rule, a cert:ficate holder who obtained a certificate by deliberate submittal of f alse 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 otherwise deter the deliberate submittal of materially false or inaccurate information by those entities not currently covered by the rule. The NRC knows of no reason why the rule should not Lpply to persons who deliberately submit materially incomplete or inaccurate information, 5

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0 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.

The Commission will amend the Deliberate Misconduct Rule etch place it appears in 10 CFR Chapter I to 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 ap;.ticants for, and holders of, early site permits, certified designs, and combined licens..

for nuclear power plants issued under 10 CFR Part 52; to applicants for, and holders of, j certificates of registration issued under Parts 30 and 3?.; 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 include, for example, a consultant engaged by an applicant to prepare a license application for such activities as radiography, willogging, 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 will be added to incorporate the rule in Part 71 and 6 52.10 will be added to incorporate the rule in 10 CFR Part 52. In addition,10 CFR 150.2 and 10 CFR 32.1(b) will be 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. i(c), 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 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 cf deliberate misconduct by unlicenseo persons 6

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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 for, and holders of, early site permits, standard design certifications, or combined licenses for nuclear power plants issued under 10 CFR Part 52; applicants for, and holders of, certificites of registration issued under Parts 30 and 32; snd applicants for, and holders of, quality assurance program approvals issued under Part 71; snd to the employees, contractors, subcontractors and consultants of all the above categories of persons, implements the Commission's euthority 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 1611 of the AEA provides broad authority to issue 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 th$ 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:

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I 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 thoreunder, 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 136, shat! be subject to a civil penalty, to be imposed by t the Commission, of not to exceed $100,000 for each such violation.

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

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

The emendments are made under the authority of sections 161b and i and the ,

above identified licensing and certification provisions in Section 234. The changes apply to any person 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 Commission may now be able to exercise its Sec. tion 234 authority to impose civil penalties on unlicensed persons who deliberately cause a licensee, applicant, or permit or certificate holder to be in violation of requirements secause they are persons who violate 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 misconduct that causes a licensee, applicant, or permit or certificate holder to be in violation of a Commission requirement, the order would be issued in part pursuant to a regulation (e.g., 6 30.10) that was promulgated under a licensing provision 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.

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r 4 4 Summary of Public Comments On December 18,1996fhe comment perioj for the proposed amen:Iments to the /

Deliberate Misconduct Rule closed. The NPC received 6 comments on the proposed rule, tl Five comments f avored the rule and one was against. One commenA in addition to addressing the proposed rule, requested otner information on the status of NRC enforcement cases against dry cask storage venders which the NRC views to be outside the scope of this proposed rulcmaking. Copies of the public comments are available in the NRC Public Document Room,1120 L Street, NW. (Lower Level), Washington, DC. A summary of the comments is provided below.

Comment: One commenter representing a utility had concerns that the proposed revisions to the rule 6d not address preliminary or "for information only" information that may be sent to the NRC staff. This commenter believed that situations could arise where M

licensees provide information to thegtaff to support teleconferences or meetings and where the information is considered to be preliminary and changing over time. In these case he commenter believed preliminary information should not be construed as [

complete and the conclusions reached that deliberate misconduct occurred. A second issue raised by this commenter pertained to how potentially erroneous information in a NRG staff Safety Evaluation Report (SER) could result in conclusions reached by thgstaff that may not be consistent with the information provided in the licensees submittal which in the broadest sense could constitute willful misconduct.

Resnonse: The NRC completeness and accuracy rules require that allinformation provided to the Commission shall be complete and accurate in all material respects 9

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(10 CFR 30.9, 40.9, 00.9, etc.). Accordingly, the willful submission of any information, preliminary or otherwise, is considered deliberate misconduct and subject to enforcement ,

action if it is known to be incomplete or inaccurate. The submission of a report would not be considered deliberate misennduct if it is made in good f aith and bared on the best information available, but is corrected later based on additionalinformation or analysis. _

The NRC's General Statement of Policy and Procedures for Enforcernent Actions (NUREG-1600) points out that a citation is not made if an initial submittal was accurate when made but later turns out to be erroneous because of newly discovered information or advances in technology.

Cornment: One commenter, a private citizen, f avort d the rule and suggested the NRC finalize the rJe as soon as possible. This commentor also had concern that th NRC was aware of the problem in 1993 and the final rule had not been made finalin 1996.

Respongn: When the concern with the scope of the Deliberate Misconduct Rule occurred in 1993, the NRC conducted a review of its existing regulatory framework to determine if the regulations needed amendments. The review was completed in June 1995 and i nvisioned that this process would encompass only a few minor revbions to the regulations. Upon further assessment of the scope of this rule, it became apparent that a more thorough review was necessary to determine the various cateDories of persons to be included. This was a lengthy and detailed process and eventually expanded the proposed amendments to include six new categories of persons in eight separate parts of 10 CFR. Thus, the proposed amendments to the Deliberate Misconduct Rule were issued for public comment in October 1996, ulemaking is a process for which public particie"n b, encouraged, additional time was needed for addressing public Comments

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and conducting an[pency-wide management review of the final rule - Also, a further legal review was required in response to a public comrnent to determine that the NRC had- -

f authority to include certain categories of persons in this rulemaking.- Considering the above activities, the time for this piocess does not appear to be excessive.

Comment: One commenter, the Nuclear Energy Institute (NEI), believes that the NRC it exceeding its statutory authority under the Atornic Energy Act of 1954 (the AEA) in promulgeting thess 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 c!rcumstances carved out in the AEA as exceptions, in particular, Section 1611(3) of the AEA does not provide jurisdictiun over noit licensee persons because it does not contain the operative phrase "any person" and therefore, NElimplies, is confined to licensees. NEl recognizes that deliberately provided misinformation or other deliberate misconduct could have a very serious effect or. public health and sefety and thus needs to 4

be deterred. However, in the view of NEl,18 U.S.C. I 1001, the general criminal statute applicable to the Federal ovemment and its agencies, provides an adequate deterrent to  ;

the wrongdoers NRC seeks to capture in this rulemaking.

Response: The Commission considered, but rejected, the objection that it did not ,

have juriodiction over non-licensees at the time it issued the original Deliberate Misconduct i

Rule. - See 56 FR 40664,40666 71 (1991). As the Commission in e_nacting 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 * *

• regu'stions * *

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O deem necessary to govern any activity authorized pursuant to Ithe 1954 Act), in order to prote:t health and minimize danger to life and property '-

,/ q00 56 FR 400 respect to the absence of specific provisions setting forth the limits of the NRC's personal jurisdiction, the Commission statedf .-

Where Congress does not include statutory provisions governing ja personam jurisdiction, it is appropriale to look to the scope of subject matter jurisdiction in order to determine the scope of in oersonam jurisdiction. Since Congress did not include any specific personal jurisdiction 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 subic . matter jurisdiction. The agency's personal jurisdiction is established when a person acts within the a9ocy's subject matter jurisdiction. K${

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cThe persons who are beira 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.

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_L NEl also contends that the Deliberate Misconduct Rule and these amendments are 5 n eeded because an adequate deterrent and remedy is provided by 18 U.S.C. 6 1001. This statute allows the imposition of criminal penalties for persons who, inigI pJin, knowingly and willfully make f alse statements to an agency of the Federal Government. There are several reasons why this enforcement option is not an adequate substitute for the Deliberate Mi onduct Rule. First,18 U.S.C. I 1001 punishes deliberate false statements but does not cover other types of deliberate misconduct captured by the rule. Second, the civ!I 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

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appropriate cases and thus afford the NRC greater ability to deter and remedy deliberate misconduct.

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Comment: One commenter representing the[uclear[dustry indicated one of the rule's standards for enforcement action -- knowingly providing incomplete or inaccurate information which is "in some respect rnaterial 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 being sufficiently clear to inform the public of the elements of the prohibited action.

Besoonse: The Commission disagrees with the commenter's assertion that the rule is overly broad. The rule specifies that the persons who are delineated as being subject to the rule must knowinalv orovide components, materials or other goods and services that relate to, e.g., a licensee's or certificate holder's activities subject to NRC regulation.

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f Such persons, therefore, know that they are acting in an area thut relates to activities within NRC's regulatory jurisdiction. As the Commission said with respect to a similar comment objecting to the original Deliberate Misconduct Rule, "a person with the requisite knowledge who deliberately provides f also or inaccurate information that is material to the NRC presents a health and safety concern within the f(RC's regulatory sphere." 56 FR 40670. The f act 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

@h should be involved in nuclear activities.Jfibs, 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 detee'.lon,qhe Commission does not believe that this f act renders the standard overly broad.

Comment: One commenter, the JAl Corporation, felt the scope of the proposed rule should be broadened to include persons rubmitting information under 10 CFR Part 21.

It is unf air to penalize persons who knowingly submit incomplete or inaccurate information to licensees, but not thase who wubmit similar information to the NRC under 10 CFR Part 21. Extending the rule would deter deliberate misrepresentations made as a result of employee or contractor disgruntlement, labor disputes, and the like.

Responsg: The commenter appears to confuse the purposes of the 10 CFR Part 21 notification requirements with the purposes of the Deliberate Misconduct Rule. Under 10 CFR Part 21, certain types of persons, e.g., individual directors or responsible officers of a corporation, are r9 quired to notify the NRC of certain types of information to which id(H d they may be priv , e. information concerning defects in components which could cause a substantial safety hazard. 'Iao Deliberate Misconduct Rule does not require the 14

Q submission of any particular type of information whgh requiresghat any information material to the NRC, which is submitte.: y a person subject to the rule, be free of any known incompleteness or inaccuracy. Thus, a contractor to a licensee, who submits information to either the NRC or a licensee, becomes subject to the Deliberate Misconduct

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Rule b; .W: c' "- o"' -,,m.and. could incur the same penalties as any other N 1 perso nowingly submit $ng incomplete or inaccurate inforr- 'n materian to the NRC or to a licensee. The regulations do not create a disparity in t. itment between persons deliberately submitting misinformation to the NRC and person, deliberately submitting misinformation to a licensee.

Comment: One commenter representing a source production and equipment company f avored the provisions of the proposed rule but, als recommended that the rule /

be revised to apply to persons who maintain the equ pmen(malfunction records that are required by the Quality . . C'~~mburan Qualit QlllRQrograms 1,i,~h x 2required under 10 CFR Part 32 for the manufecture and distribution of radiography equipment. This commenter also believes that because these records are not part of the Quality Assurance progra they are not submitted to the NRC as part of a registration certificate application. Nevertheless, the accuracy and integrity of these records are essential for the OA/OC program to be effective. The current proposed revision to the Deliberate Misconduct rule appears to apply only to information that is submitted to the NRC as part of a registration certificate application. The commenter believes the proposed rule should be extended to apply to QA/OC records that must be maintained by the c .'ficate holder af ter equipment registration has been issued. The commenter felt this extension was 15

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I important to public health and safety because improved equipment design is one of the efforts needed to reduce the number of radiography equipment malfunctions.

Besponse: The fulflanguage specifies that registration holders may not:

M gage 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, ]

regulatiori, or order; or any term, condition or limitat on of any license issued by the Commission ,Thefule perbtrI'.1 forms tion submitted to the NRC, but als to information / records that the licensee /applical t is te tuired to, or has committed to, DHAn\L maintain..Bfhee maintaining equipment malfunction records is a requirement of the registration certificato holder, these records w$nd.be covered by the - : :::j rulp

': .;;% n addition, i persons who maintain equipment malfunction data for a certificate holdekiso are subject to the/ cluding the[ contractors, subcontractors, or t employees of a contractor, subcontractor, or the certificate holde

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Environmental impact: Categorical Exclusion The NRC has determined that this final rule relates to enforcement matters and, i

therefore, f alls within the scope of 10 CFR 51.10(d). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this final ru'.J.

. 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.).

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Existing requirements were approved by the Office of Management and Budget, approval numbers 3150-0017, 3150-0151, 3150-0127, 3150-0135, 3150 0009, 3150-0132,

. j 3150-0036, and 3150-0032.

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

Compatibility of Agreement State Regulations This rule is designated a Division 3 matter of compatibility with respect to Agreement State regulations because it deals with enforcement actions such as the issuance of orders and civil penalties to unlicensed persons for deliberate misconduct. In addition to license applicants, these changes expand applicability of the rule to include O

persons such as certificate holders and quality assurance program approval holders.

actions are addressed individually by States through each State's administrative code.

Division 3 regulations are appropriate for Agreement States to adopt, but do not require

. any degree of uniformity between the NRC and Agreement State rules. Agreement States are not required to adopt the regulatory approach identified in Division 3 regulations.

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• Regulatory Analysis i

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

.. .,_ certificate holder or an applicant fgr a license or certificate to be in violation of the 9A NyM1 lh ,

Commission's requirements. A1991, the NRC promulgated the del;erate Misconduct

- 2 Ruleh6 FR 40664)which put licensed and unlicensed persons on notice that they may be subject to enforcement action for deliberate misconduct that causes or, if not detected, would causo 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 meteri to the NRC. However, the Deliberate Misconduct Rule dt,.s not specifically apply 1) plicants for NRC license i kpplicants for, and holders of, certificates of compliance axP issued ungerg arts 71 and plicants for, and holders of, early site permits, standard desi ertifications, or combined licenses for tQ G4 plicants for, and holders of, certificates nuclear power plants issued undegPart 52ff(

of registration issued u de rts 30 and 3N ) piic,nts for, and holders of, quality ,

assurance program approvals issued u d art 71band ( ) e employees, contractors, I J

subcontractors and consultants of the first five categories of persons.

On November 29,1991, the NRC staff issued an Order Revoking License to Mb Dr. Randall C. Orem after thedstaff learned that information in his license application was f alse and that the application had been prepared by a consultant who had prnvided the f alse information, glqg Randall C. Orem, D.O., CLl 93-14, 37 NRC 423 (1993). In this b

case, thgtaff realized that under the provisions of the existing Deliberate Misconduct 18

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.c Rule, it was unable to take additional enforcement action against . Orem and precluded from taking enforcement action against the consultant because the consultant  :

was working for an applicant rather than for a licensee. Subsequently, the Commission i

i realized that other categories of persons within the Commission's jurisdiction had not been I

explicitly included within the Deliberate Misconduct Rule; e.g., certificate holders under k Parts 71 and 72 and holders f early site permits, certified design certifications and a

@ Cf '

combined licenses undepPart 52.

The Commission believes that there may be significant safety consequences from the deliberate submission of false or incomplete information er 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 f alsified test data could represent a threat to i public health and safety. Similariy, a quality assurance program that is submitted to the

~

NRC for approval, but is supported by deliberately falsified data that m6sk a significant Dt ?.44 defect, could also be a public health and safety threat 4 /le potential for injury is serious, eng the NRC knows eason why the Deliberate Misconduct Rule 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 persons encompassed by this a

t modification of the Deliberate Misconduct Rule on notice that enforcernent action may be

~

- taken against them for deliberate misconduct or deliberate submission of incomplete or 1

inaccurate information = in relation to NRC licenseo activities. Under Section 234 of the 19

- -- rrr . -w-- 4 ,r- w ,e- er,- -rec-, ,r-=-w,w=. , --

-w ti ,- -9w, * , - - . - -

t d

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 4

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.

P The alternatives available to the Cominission 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 approprlhte unforcement 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 and attendant adverse publicity encourage future compliance, the Notice of Violation calls for a precise response as to corrective action 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 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.

L

~

20 e

.. -i m -a i. v. & e- . n, y -.r% .a, wy.-w

,.e--.yy- =,v.* i- v---m +4 r.,-- -. , y7,y- .i. .t - , -

e i

o 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 Certification in accordance with the Regulatory Flexibility Act of 1980,5 U.S.C. 605(b), the Comrnission certifies that this final rule, if adopted, will not have a significant economic impact on a substantial number of small entitles. The final rule would put: (1) applicants for NRC licentes; (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 under 10 CFR Part 52; (4) applicants for, and holders of, certificates of registration issued ~

19(.fk undegarts 30 and 32; (5) applicants for, and holders of, quality assurance program 60 (fd approvals issued under4P art 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, subject to civil enforcemsat action if they deliberately cause a licensee, certificate holder, or an applicant for a license or certificate to be in violation of NRC requirements. The final ruleA Gee" does not impose any additional obligations on entitles that may f all within the definition of "small antities" as set forth in Section 601(3) of the Regulatory Flexibility Act; or within the definition of "small business" as iound 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).

21

Small Business Regulatory Enforcement Act in accordance with the Small Business Regulatory Enforvement Fairness Act of 1996, the NRC has determined that this action is not "a major" rule and has verifierf this determination with the Office of information and Regulatory Affairs, Office of Management-and Budget.

Backfit Analysis The NRC has determined that the backfit rule,10 CFR 50.109, does not apply to this final rule and, therefore, a backfit analysis is not required for this final rule ber.'use these amendments do not involve any provisions that would impose backfits as defined in 10 CFR 50,109(a)(1).

Enforcement Policy

(

4 Concurrently with publication of the Deliberate Misconduct Final Rule, the Office of Enforaement will publish its own FRN that amends NUREG 1600, " General Statement of Policy and Procedures for NRC Enforcement Action," to address enforcement action agairist the categories of unlicensed persons listed under this Final Rule.

I 22

l List of Subjects

- 10 CFR Part 30 Byproduct material, Criminal pencities, Government contracts, Intergovernmental relations, Isotopes, Nuclear materials, Radiation protection, Reporting and recordkeeping , _,,

requirements. ,

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

10 CFR Part 40 Criminal penalties, Government contracts, Hazardous materials transportation,

- Nuclear materials, Reporting and recordkeeping requirements, Source material, Uranium.

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 recordkeeping requirements.

, 10 CFR Part 52_

O-Administrative practice and procedure, Antitrust, Backfitting, Combined license, Early site permit, Emergency planning, Fcas, inspection, Limited work authorization, Nuclear power plants ata asctors, Probabilistic risk assessment, Prototype, Reactor siting 23

___._________.m _ _ _ _ ___ __.. . _ _ . .__.__ __ _

1.

1 criteria, Redress of site, Reportir g 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 recorJkeep',1g requirements, Waste treatment and disposal..

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

10 CFR Part 70 Criminel 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 naterial.

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

10 CFR Part 72L M'anpower training programs, Nuclear materials, Occupational safety and health,

. Reporting and recordkeeping requirements, Security measures, Spent fuel.

1 -24

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

.k

10 CFR Part 110 i Administra'tive practice and procedure, Classified information, Criminal penalties,.

Export, import, intergovernmental relations, Nuclear materials, Nuclear power plants and reactors, Reporting and recordkeeping requirements, Scientific equipment.

i

..s.

i, 10 CFR Part 150 Criminal penalties, Hazardous materials trensportation, intergovernmental relatio,is, .;

c . Nuclear materials, Reporting and recordkeeping requirements, Security measures, Source

.?

! material, Special nuclear material. l For the reasons stated in the preamble and under the authority of the Atomic-Energy Act of 1954, as amended; the Energy Reorganization Act of 1974,'as amended; and 5 U.S.C. 553; the NRC is adopting the following amendments to 10 CFR Parts 30,32, ,

. 40, 50, 52, 60, 61, 70, 71, 72,110, and 150.

1 PART 30 -RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF BYPRODUCT MATERIAL i

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

AUTHORITY: Secs. 81, 82,161,182,183,186, 68 Stat. 935, 948, 953, 954, 4

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 L amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846).

25 4

-, e *- w , - -- ,,r-- - - we . ., ,- , w -, w

l i

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. 2123:.'(42 U.S.C. 5851). Section 30.34(b) also issued under sec.184,68 Stat. 954, os 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, Scope is revised to read as follows:

6 30.1 Scone.

This pert prescribes rulee 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 Stet. 919), and under title 11 of the Energy Reorganization Act of 1974(83 Stat.1242), and exemptions from the domestic licensing requirements permitted by Section 81 of the . set. This part also gives notice to all persons who knowingly provide to any licensee, applicant, certificate of registration holder, contractor, or subcontractor, components, equipment, materials, or other goods or services, that relate to a licensee's, applicant's or certificate of registration holder's activities subject to this part, that they may be individually subject to NRC enforcement action for vlolation of 5 30.10.

3. Section 30.10 is revised to read as follows:

8i 30.10 Deliberate misconduct.

(a) Any licensee, certificate of registration holder, applicant for a license or certificate of registration, employee of a licensee, certificate of registration holder or appl: cant; or any contractor (including a supplier or consultant), subcontractor, employee 1

26

. _ _ _ _ _ _ _ _ _ _ _ _ _ _____ __ 1

4 of a contractor or subcontractor of any licensee or applicant for a license or certificate of registration, who knowingly provides to any licensee, ar,,. scant, 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 d.iliberate misconduct that causes or would have caused, if not detected, a licensee, certificate of registration holder, or appliennt 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 licensee's, certificate holder's or applicant's, contractor or subcontractor, information that the person submitting the information knows to be incornplete or inaccurate in some respect raatorial 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[ art 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, certificate of regiatration 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, instructic: , contract, i

purchase order, or policy of a licensee, certificate of registration holaer, applicant, contractor, or subcontractor.

27

PART 32-SPECIFIC DOMESTIC LICENSES TO MANUFACTURE OR TRANSFER CERTAIN ITEMS CONTAINING 8YPR9 DUCT MATERIAL

)

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

AUTHORITY: Secs. 81.1_61,182,183, 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).

1

5. Section C2.1(b) is revised to read as follows:

6 32.1 Purnose and scope.

M -Y k /

(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.

28 Au . _ - _ _ _ _ . - _ - _ _ - _ _ - _ - _ . _ _ . - _

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 2902,-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).

7. Section 40.2Ms revised to read as follows:

4 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 also gives notice te all persons who knowingly provide to any licensee, applicant, contractor, or subcontractor, components, equipment, materiais, 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 40.10.

8. Section 40.10 is revised to read as follows:

- t 40.10 Deliberate misconduct.

-(a) Any licensee, applicant 'or a license, employee of a licensee or applicant; or any contractor (including a supplier or consultant), subcontractor, employee of a contractor or 29

~

)

1 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, k

muy not:

(1) Engage in deliberate misconduct that causes or would have caused, if not detected, a licensee or applicant to be ir 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 NR,C.

(b) A person who violates paragraph (a)(1) or (a)(2) of th.s section may be subject to enforceme.it action in accordance with the procedures in 10 CFR art 2, subpert B.

(c) For the purpnses 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 cf 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 lice 1see, applicant, contractor, or subcentractor.

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, cec. 234,83 Stat.1244, as amended 30

- - - - - -_m._ ___________,__,_

(42 U.S.C. 2132, 2133, 2134, 2135, 2201, 2232, 2233, 2236, 2239, 2282); secs. 201,.

as amended, 202, 206, 88 Stat.1242, as amended,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). See tion 50.10 also issued under secs. 101,185, 68 Stat. 936, 955, as amended (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(dd),

and 50.103 also issued under sec.10P. 68 Stat. 039, 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 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). Secticn 50.78 also issued under sec.122, 68 Str.t. 939 (42 U.S.C. 2152). Sections 50.80- 50.81 also issued under sec.184, 08 Stat. 954, as amended (42 U.S.C. 2234). Appendix F elso issued under sec.187,68 Stat. 955 (42 U.S.C 2237).

7

10. Section 50.14x'r r"=^=a -d ~~&n ;;; Erd' is revised to read as A >

follows:

T 3 50.1 Basis, ourpose, 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 il of the

= Energy Reorganization Act of 1974 (88 Stat.1242), to provide for the licensing of 31

production and utilization facilities. 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 50.5.

11. Section 50.5 is revised to read as follows:

5 50.5 Deliberate misconduct.

(a) Any licensee, applicant for a license, employee of a (icensee 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, 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 g. )(1) or (a)(2) of this section may be subject to ' enforcement action in accordance with the procedures in 10 CFR[ art 2, subpart/B.

32

E *%

(c) For the purposes of paragraph (a)(1) of this section, deliberato 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, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

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

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

AUTHORITY: Secs 103,104,161,182,183,186,189, 68 Stat. 936, 948, 953, 964,955,956, as amended, sec. 234, 83 Stat.1244, 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, Scope is revised to read as follows:

5 52.1 Scoce.

This part governs the issuance of early site permits, stardard 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 ll of the Energy Reorganization Act of 1974 (88 Stat.1242). This part also gives notice to all persons

~.who knowingly provide to any holder of os applicant for an early site permit, standard 33

1 e

.e.

design certification, or combined license, or to a contractor,' subcontractor, or consultant of any cf 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 they may be individually subject to NPC enforcement action for violation of 5 52.10.

14. Section 52.9 is added following 6 52.8 and reads as follows:

I 52.9 Deliberate Misconduct.

(a) Any holder of, or applicant for, an early site permit, standard design certification, or combined license, including its employees, contractors, subcontractors, or consultants and their employees, who knowingly provides to any holder of, or applic. ant 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 issued by the Commission; or (2) Deliberately submit to the NRC, a holder of, or applicant for, an early site permit, standard design certification, or combirted 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.

34

^

e t

(b) A person who violates paragraph (a)(1) or (a)(2) of this section may be subject to enfe' cement action in accordance with the procedures in 10 L. R[ art 2, subpart B.

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

(1) Would cause a holder of, or applicant for, an early site permit, standard design mrtification, or combined license, to be in violation of any rule, regulation, or order; or any term, condition, or limitation, of any license issued by the Commissicn; or (2) Consti;utes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a holder of, or applicant for, an early site permit, certified design or combined license, or a contractor or subcontractor of any of them.

PART 60--DISPOSAL OF HIGH-LEVEL RADIOACTIVE WASTES IN GEOLOGIC REPOSITORIES

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, 2233); secs. 202, 206, 88 Stat.1244,1246 (42 U.S.C. 5842, j 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 Stat. 3123 (42 U.S.C. 5851).

35 1

16. Section 60.1r"r;::: :M :-g revised to read as follows:

5 60.1 Purcose and Scoce.

.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 individually subject to NRC enforcement action for violation of i 60,11.

4

17. Section 60.11 is revised to read as follows:

160.11 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:

36

4 1

6 (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, regulationi.or order; or any 1 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 4

person means an intentional act or omission that the person knows:

(1) Would cause a licenseu 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, centract, 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).

37

+

C

19. Section 61.1.Srp;;; ; .d 14-gs revised to read as follows:

.l__61.1 Puroose and Scone.

(c) This part also gives notice to all persons who knowingly provide to oriy licensee- app 2icent, 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 9 61.9b.

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

6 61.9b Deliberate misconduct.

(a) Any licensee, aoplicant for a license, employee of a licensee or - splicant; 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 ccmponents, 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 cauces 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 38

1 d

(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 -

q

- information knows to be incomplete or inaccurate in snme 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[ art 2, subpart B.

(c) For the purposes of paragraph (a)(1) of this section, deliberate misconduct by a person means an intentional act or omissi'an 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 Ccmmission; or  !

t

(?) Constitutes a violation of a requirement, proceduie, instruction, contract, purciuse order, or policy of a licensee, applicant, contractor, or subcontractor.

1 PART 70-DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

21. The authority citation for Part 70 continues to read as follows:

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

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

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

39 t

,,..,..,.,._..,,.._...._m

9 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 sacs.186,187, 68 Stat. 955 (t.2 U.S.C. 2236, 2237). Section 70.62 also issued under sec.108, 68 Stat. 939, as amended (42 U.S.C. 2138).

22. Section 70.2 s revised to read as follows:

6 70.2 Scone.

Except as provided in il 70.11 to 70.13, inclusive, the regulations in this part apply to all persons ? : 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 5 70.10.

23. Section 70.10 is revised to read as follows:

6 70.10 Doliberate 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 licensre, applicant, contractor, or subcontractor, any components, eqeipment, materials, or other goods or services that relate to a licensee's or applicant's activities in this part, may not:

40

l l

4 (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, or a licensee's or applicant's contracto_r 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 C.

(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 a

order; or any term, condition, or limitation, of eny license issued by the Commission; or (2) Cc.1stitutes 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. 2951,1952, 2953 (42 U.S.C.

2073, 2077, 2092, 2093, 2111, 2201, 2232, 2233, 2297f); secs. 201, as amended,

, 202, 206,88 Stat.1242, as amended, 1244,1246 (42 U.S.C. 5841, 5842, 5846).

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

41

. e .-- ,,,

25. L Section 71.Or",,;,,eec to read as follows:

...d aegs 6 71.0 Puroose and Scoce.

dd new (fpkn ryW- 'd'n. g _ ,

(f) This part also gives notice to all persons who knowingly provide to any licensee, certificate holder, quality assurance prograrn approval holder, applicant for a license,

- cert"icate, 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, or applicant's activities subject to this part, that they may be individually subject to NRC enforcement action for violation of 5 71.11,

29. Section 71.11 is added to read as follows:

6 71.11 Deliberate misconduct.

(a) This section applies to any-5 (1) Licensee:

(2) Certificate holder; (3) Quality assurance prog am approval holder:

(4) Applicant for a licence, certificate, or quality assurance program approval; (5) Contractor (including a supplier or consultant) er subcontractor, to any person

. Identified in paragraphs (a)(1) through (a)(4) of this section; or 42

_me_____._______ ____ . _ _ _ _ _ _ _ _ . _ _ _ _ . . _

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

(b) A person identified in paragraph (a) of this section who krbwingly provides to any entity, listed in paragraphs (a)(1) through t .)(5) of this section any components, materials, or other goods or services that relate to a licensee's, certificaa 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 license 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 st bject to enforcement action in accordance with the procedures in 10 UR Part 2, subpart B.

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

(1) Would cause a licensee, certificate holder, quality assurance program approval i

holder or applicant for a license, certificate, or quality assurano 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 Comm!:sion; or 43

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

+

d (2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

2 PART 72-LICENSING REQUIREMENTS i'OR THE INDEPENDENT STORAGE OF SPENT--

NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE i

- 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, at 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. 2951 (42 U.S.C. 5851); sec.102, Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332); Secs.131,132,133,135,137,141, Pub. L. 97 425, 96 Stat. 2229,

- 2230,2232,2241,a 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 und r sec.189,68 Stat. 955 (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), a;b. L.

100-203,101 Stat.1330-235 (42 U.S.C.1016F',1). Subpart J also issued under secs.

2(2), 2(15), 2(19),117(a),' 141(h), Pub. L. 9 /-425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C.10101,10137(a),10161(h)). Subparts K and L are also issued under o 44

+

e a v-r f -v 9r rev, n -

g

sec.133,98 Stat. 2230 (42 U.S.C.10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C.

10198);

k$ 4 MN )4/4 /gf N

28. Section 72.2, Scope is revisefo read as follows:

6 72.2 Scope, 5 g k F (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, .

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:

5 72.12 Deliberate misconduct.

(a) Any licensee, certificate he' der, applicant for a license or certificate, employee of a licensee, certific. ce holder, or applicant for a license or certificate; or any contractor (including a supplier c,. ",nsultant) or subcontractor, employee of a contractor or

- subcontractor of any licensee, certificate holder, or applicant for a license or certificate-who knowingly provides o any licensee, certificate holder, applicant for a license or 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:

45

4 (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.

k (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,/ art 2, subpart B.

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

h) Would cause a licensee, certificate holder or applicant for a license or certificate 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, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

PART 110--EXPORT AND IMPORT OF NUCLEAR EOJIPMENT AND MATERIAL

30. The authority citation for Part 110 continues to ree 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, 2092-46

t 2095, 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. 1 184,6'8 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 f

seq.).

31. Section 110.1 A: - is revised to read as follows:

...d x:;d 6110.1 Pecose and Scoce.

(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 s

- material, as set out in 5110.9a. This part also gives notice to all persons who knowingly

,i .

(prov:de to any licensee, applicant, contractor, or subcontractor, components, equipment, materials, or othei goods or services, that relate to a licensee's or applicant's activities 47

l l  %

{

subject to this part, that they may be individually subject to NRC enforcement action for violation of 6110.7b.

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

6110.7b 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 contractor or subcontractor of any licensee or applicant for a license, who knowingly provides to any licensee, applicent, 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, condithi, or limitation of any license issued by the Commission; or (2) Doliberately submit to the NRC, a licensee, an applicant, or a licensee's or applicant's contractor or subcontractor, iaformation 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 t}

to enforcement action in accordance with the procedures in 10 CFR art 2, subpart B. /

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

it) Would caura a licensee or applicant to be in violation of any rule, .egulation, or order; or any term, condition, or limitation, of any license issued by the Commission; or 48 i:

(2) Constitutes a violation of a requirement, procedure, instruction, contract, purchase order, or policy of a licensee, applicant, contractor, or subcontractor.

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

33. The authority 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. 201,38 Stat.1242, as amended (42 U.S.C. 5841).

Sections 150.3,150.15,150.15a,150 J1,150.32 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 isseed under secs. 135,141, Pub.L.97-425, 96 Stat. 2232, 2241 (42 U.S.C.10155,10161). Section 150.17a also issued under sec.122,68 Stat. 939 (42 U.S.C. 2152). Section 150.30 also issued under sec. 234, 83 Stat. 444 (42 U.S.C. 2282).

34. Section 150.2 is revised to read as follows:

f; 150.2 Scope.

The regulations in this part apply to all States that have entered into agreements with the Commission or the Atomic Energy Commission pursuant to subsection 274b of the Act. This part also gives notice to all persons who knowingly provide to any licensee, applicant for a license or certificate or quality assurance program approval, holder of a 49

certificate or quaht/ assurance program approval, contractor, or subcontractor, any ,

- . components, equipment, materials. or other goods or services that relate to a licensee's, certificate holder'si quality assurance program approval holder's or applicant's activities .

~

subject to this part, that they may be individual!y 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.-

4 For the Nuclear Regulatory Commission.

l John C. Hoyle,-

Secretary of the Commission.

r 1

50

- : -- - - - - - ~ . _ . . _ ... ,_._ , _ . _

[7590-01 P]

NUCLEAR REGULATORY COMMISSION

[NUREG 1600]

~

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

-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 applicants for NRC licenses, applicants for, and holders of.

certificates, early site ermi';s. st nJpre design certifications, or ce" ined

' *H me in licenses issued und an the employees. contractors, subcontractors, and consultants of those persons. By a separate action published in this 1.. e of the Federal Register, the Commission has iss'Jed a final rule amendingy

'!," !!?,;-d'.EO. $1/ h}',hp h j MN '

'r + " " , ' O to E? $0 $1 b6 EFFECTIVE DATE: This action is effective on [30 days after publication.in the federal Register).

FOR FURTHER INFORMATION CO R .,T: James Lieberman. Director. Office of Enforcement. U.S. Nuclear Regulatory Comission. Washington, DC C0555 0001.

(301) 415-2741.

,- , - ,- .,r.. < r ,

S'.iPPLEMENTARY INFORMATION:

The Commission's " General Statement of Policy and Procedure for NRC Enforcement Actions" (Enforcement Policv or Policy) was first issued on September 4. 1980. Since that time, the Enforcement Policy has been revised

. on a number of occasions. OnJune30,"1995(60FR34381),theEnforcement The Policy was revised in its-entirety and was also published as NUREG 1600.

- Policy primarily addresses violations by licensees and certain non-licensed persons, as discussed further in footnote 3 to Section 1. Introduction and Purpose, 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 fo a licensee; and any contractor (including a supplier or consultant), subcontractor,.or any employee of a wntractor 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, info"mation that is incomplete or inaccurate and in some respect material to the NRC.

LThe final rulemaking expands 'he 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 Land 71. This expansion arises out of a realization that the current le does not'opply to. applicants for NRC licenses, applicants for, or

/

2 1 T 4 t

4 holders of, certificates, early site permits, standard design certifications, or combined licenses issued under Part 52, and the employees, contractors.

subcentractors and consultants of those persons. The Commission believes that it is equally important for these categories of persons to be subject te 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 regulations. The changes include: (1) expansion of footnote 3 in Section I.

which discusses the scope of the Policy: (2) deletion of references to vendors and contractors 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 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 n.anufactures 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 Hatter of: Five Star Products. Inc. and Construction Products Research. Inc., 38 NRC 169. Ct.1-93 23 (October 21, 1993). In light of that holding. the remainirig references to vendors throughout the ,

Enforcement Policy are also being modified to refer to contractors as the inclusive term. These changes are being made in Sections V. VI.B.1, VI.C.

VI.0, Vill, X.' Table 1A. and Supplements 1.C. and VII.C.

3 a

Paperwork Reduction Act 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 ManagemenEandBudget,approvalnumber 3150-0136. The approved information collection requirements contained in this policy statement appear in Section Vll.C.

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

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

1

', Accordingly. Sections 1. V. VI B., C., and E., Vill X. and Supplements i I and Vil of the NRC Enforcement Policy are amended to read as follows:

i i

4

GENERAL STATEMENT ;A F 11CY AND PROCEDURE FOR NRC ENFORCEMENT ACTIONS =

l

1. INTRODUCTION AND PURPOSE l t

The purpose of the NRC enforcement program is to support the NRC's -j overall safety mission in protecting the public and the environment. S l

Consistent with that purpose enforcement action sfioulo be used: n N

e As a deterrent to emphasize the importance of compliance with ty requirements..and i

e To encourage prompt identification and prompt comprehensive /

correction of violations.

i 4/  :

,t s -

t Consistent with the purpose of this program, prompt and vigorous ~) y enforcement action will be taken when dealing with licensees, contractor

.and their employees, who do not achieve the necessary meticulous attention to p l detail and the high standard of compliance which the NRC expects Each l

~  :

. W The' term " contractor" as used in this licy includes vendors who

supply products or services to be used in an NRC-licensed facility or activity. l t

3 Thishiicy primarily addresses the activities of NRC licensees and a)p icants for NRC licenses. Therefore. the term licensee *' is used t1roughout the_ policy. However, in those cases where the NRC determines that it is appro individual..priate~to the guidancetake enforcement in this policy will be action used, as against applicable. a non-licenseeThese or  ;

non~-licensees: include contractors and subcontractors. holders of, or -

applicants for. NRC approvals, e.g., certificates of compliance. trly . site permits,- o~ standard design certificates. Specific guidance regarding enforcement ' action against individuals and non licensees is addressed in Sections VIIF and Y respectively. ,

-s 4 -

,eEr ..,.e- rw em-k we sw ,...+4 +-we,-.,-, e wt -

+w,-,w ,,r-r.w -e e r,wm mnW----,py---e=.,,---r-y r, w--,-I

i

• 4'.  ; . .

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 wh'o cannot achieve and l maintain adequate levels of protection be permitted to conduct licensed t

- activities.

• * *- * * [

V. PREDECISIONAL ENFORCEMENT CONFERENCES Whenever the-'NRC het learned 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 opportunity 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 violations.  ;

(2) a common u.1derstanding of corrective actions taken or planned, and (3) a common understanding of the significance of issues and the need for lasting.

.compre h ensi ve corrective action.

i During the predecisional. enforcement conference, the licensee. .

1 contractor,'or other persons will be given an opportunity to provide

-6

, l w y - A*ws e s- eeg '.yy-g-p4 - r- , , , 4 - --

m,. ,,,,..,,,-w.e- e e ., -- ,- y , mv,-r-., w w w+A-...w-vr ey wa .- w

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

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i I

t

~ information consistent with the purpose of the conference. including an explanation to the NRC of the immediate corrective actions '(if any) that were l

• akenfollowingidentificationofthepdtentialviolationornonconformance j and the long-term comprehensive actions that were taken or will be taken to i

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

f i

i

[

4 VI. ENFORCEMENT ACTIONS

-l Base Civil Penalty VI. B. 1.

The NRC imposes different levels of penalties for different reverity level violations and different classes of licensees. contractors and other l persons. Tables IA and 18 show the base civil penalties for varinus reactor.

fuel cycle, and materials programs. (Civil penalties issued to individuals are determined on a case-by case basis.) The structure of these tables 1 generally takes into account the gravity of the violation as a primary _

consider 6 tion'and the ability to pay.os a secondary consideration. Generally, operations involving greater nuclear material inventories and greater 1

potential consequences to the public and licensee employees receive higher civil. penalties ~. Regarding ths secondary factor of ability of various classes

- of licensees to pay _ the civil penalties.. it is not the NRC's intention that

~

7.

g 7

h , Ee- Ff w-- k v. % 4.- $ - Me s. v wr aw-4 w y 1 4gM yn9 -ry+4' g=qg w e y, g - g weD*.y F +rqw%r-- 'm-WewavyT T'"#M*'-tTaf-t'-'**' f%T" ' ' ' '"

- ..- = . _

l l

the economic impact of a civil penalty 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.1f a licensee can -

deaonstrate financial hardship, the NRC will cc,nsider payments over time. ,

including interest, rather than reducing the amount of the civil penalty. l 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.

1 TABLE 1A BASE CIVIL PENALTIES

a. Power reactors and gaseous diffusion plants.......$110.000

b. Fuel fabricators. industrial processors, and indeandent spent-fuel and monitored retrieva)le storage installations..................$27.500

c. Test reactors, mills and uranium conversion facilities. contractors, waste disposal licensees.

and industrial radiographers. . . . . . . . . . . . . . , . . . . . . . . $11.000 V d. Research reactors. academip medical.

or other materia) licensee .........................$5.500 LThis applies- to nonprofit institutions not otherwise categorized in thisitable. mobile nuclear services, nuclear pharmacies, and physician offices.

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- C .- O'rders

5. Orders to unlicensed persons, and empidyees of any of them. are

-'used when the NRC has identified deliberate misconduct thai. may cause a licensee to be in violation of an 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.

6

+ * * *

• D. Related AdninistratIve Actfons 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.

t-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 froin these actions.and will not

. 1

hesitate to issue appropriate orders to ensure that these obligations and icommitments are met. -

9 s -??

4 4

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1. Notices of Deviation are written notices describing a licensee's .

failure to satisfy a commitment where the commitment involved has not been f made a legally binding requirement. A Notice of Deviation requests a licensee i i

to provide a written explanation or statement describing corrective steps ,

taken (or planned).-the results achieved, and the date when corrective action .. . . . ;

will be completed.

t 2, Notices of Nonconformance are written notices describing l contractors' failures to meet comitments 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 8. Notices of Nonconformances request non-licensees to provide written explanations or statements describing corrective steps (taken or planned). the results achieved, the dates when corrective actions will be completed, and measures [

e 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 concerns ,

about health and safety, safeguards, or the environment.

iVIII. ENFORCEMENT: ACTIONS INVOLVING INDIVIDUALS

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

actions described in these examples are taken by a licensed operator 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

~

thesesituationsmayresultinenforcementaction5gainstalicenseethatmay impact an individual. The sitaations include. but are not limited to, violations that involve:

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

e Willfully taking action that would have caused a licensee to be in violation of NRC requircments but the action did nut do so because it was detected and corrective action was taken.

• Reccgnizing a violation of procedural requirements and willfully not

'taking corrective action.

e Willfully defeating alarms which have safety significance.

• Unauthorized abandoning of reactor controls.

e Dereliction of duty.

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

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

e:

i e Willfully withholding safety significant information rather than i i

making such information known to appropriate supervisory or technical personnel in the licensee's organization. i e Submitting false information and as a result gain 6g unescorted ,

access to a nuclear power plant.

e Willfully providing false data to a licensee by a contractor or other person who provides test oc other services. Ehen the data affects the t

licensee's compliance with 10 CFR part 50 appendix _8. or other regulatory requirement.  ;

e Willfully providing false certification that-components meet the .

requirements of their intended use, such as ASME Code.

e Willfully supplying by contractors of equipment for transportation of radioactive material, ccsks that do not comply with their certificates of ,

compliance.

X.. ENFORCEMENT ACTION AGAINST NON LICENSEES The_ Commission's enforcement policy is also applicable to non-licensees, including contractors _and subcontractors, holders of NRC approvals e.g.,

certificates of compiiance, early site permits standard design certificates, t _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 ,

i .12

.- s- _ . . _ _ ._ _. _ . _ _ . _ . _ _ _ _ . ._ _

r submission of incomplete or inaccurate irfuerr.ation are provided in the rule on -

deliberate misconduct, e.g., 10 CFR 30.10 and 50.5.

-Contractors-who supply products or i i n orovided for use in nuclear

~ activities are subject to certain requirements designed to ensure that the products or services supplied that could affectla~fety are of high quality.

- Through. procurement contracts with reactor licensees, suppliers may be required to have quality assurance programs that meet applicaole requir-ements including 10 CFR Part 50. Appendix 8, and 10 CFR Part 71 Subpart H.

Contractors supplying products or services to reactor materials, and 10 CFR Part 71 licensecs 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 nave failed to fulfill centractual 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 Lapplicable requirements. Notices of Violation will be issued for contractors who violate 10 CFR Part 21. Civil penalties will be imposed-against individu'ai directors or responsible officers of a contractor organization who 2 knowingly and consciouslyf fail to provide the notice required by 10 CFR

.21.21(h)(1). LNotices cf Nonconformance will oe used for contractors who fail Lto meeticommitments related to NRC activities.

13-

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SUPPLEMENT I REACTOR OPERATIONS C.6. Alicenseefailuretochnbuctadequateoversightofcontractors resulting in the use of products or services that are of defective or indeterminate quality and that have safety significance:

SUPPLEMENT VII MISCELLANE0US HATTERS C.8. A failure to assure, as required, that contractors have an effectiv? fitness-for-duty program:

Dated at Rockville. Maryland. this day of 1997.

For The Nuclear Regulatory Commission.

John C. Hoyle.

Secretary of the Comniission.

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UNITED STATES NUCLEAR REGULATORY COMMISSION o 2 WASHINGTON D.C. 90006 0001 TN Honorable James M. Inhofe, Chairman committee on Clean Air, Wetlands, Private noperty and Nuclear Safety Committee on Envitenm:mt xd Pub!ic 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 rule dealing with deliberate misconduct to be published in the Federal Reaister. The Nuclear Regulatory Commission (NRC) is amending its regulations to expand the Deliberate Misconduct Rule where it appears in 10 CFR Parts 30,40,50,60,61,70,72 110 and adds the rule to Parts 32,52, and 71. These modifications extend the rule io.

(1) applicants for NRC licenses; (2) applicants for, or ho!ders of, certificates of compliance; (3) applicants for, or holders of, early riite permits, standard design certifications, "

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 make the rule applicable to persons conducting activities l

under reciprocity in areas of NRC jurisdiction.

The Deliberate Misconduct flute 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 celiberate canduct 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 URC believes that because there may be significant safety consequences from the intentional submittal of materially incomplete or inaccurate information or other de!iberate 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 Recieter.

i Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs e Encl 6sure:

Federal Register. Notico y .cc: Senator Bob Graham. , ,

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s* NUCLEAR REGULATORY COMMIS810N A WAsHMToN. D.C. 2004640:4

~s.,...../

The Honorable Dan Schaefer, Chai.. nan Subcommittee on Energy and Power Coramittee on Commerce Unit:d StMcs "ouse of Representatives Washington, DC 20515

Dear Mr. Chairman:

E.g.losed 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 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 32,52, and 71. These modifications extend the rule to:

(1) app!! cants for NRC licenses; (2) applicants for, or holders of, certificc!es of compliance; (3) applicants for, or holders of, early site permits, standard design certliscations, 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 i (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 make the rule applicable to persons conducting activities under reciprocity in areas of NRC jurisdiction.

The Deliberate Miscar. duct 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 i f any of the Commission's requirements. The NRC believes that because there may be inificant safety consequences from the interitional submittal of materially incomplete 4 accurate 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 Reaister.

Sincerely, Dennis K. Rathbun, Director

- Office of Congressional Affairs p

Endesure:

Federal Register Notice -

cc: RepretentatWe Ralph Hall N _f' ,

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UNITED STATES p t - .

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2 NUCLEAR REGilLATORY COMMISSION WASHINGTON. D.C. 3084H001

• \...../ .

Mr. Robert P. Murphy General Ccunsel General Accounting Office

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rioom 7175 441 "G" Street, N.W.

Washington, DC 20548 -

Dear Mr. Murphy:

Pursuant to Subtit!e E of the Small Cusiness 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 first five categorios 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 and 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 Lignificant safety consequences from the intentional submittal of incomplete or inaccurate information or other deliberate wrongdcMg by such persons, these persons should be subject to enforcement action under the Commission's existing rules regarding deliberate misconduct. In additior, 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 fur 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 in September 16,1991, i

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

Enclosure:

Final Rule .

,a e A8 AfD t UNITED STATES j

[i p NUCLEAR REGULATORY COMMISSION

" t WASHINGTON. D.C. 30MH001

\...../ .

The Honorable Newt Gingrich Speaker of the United States House of Represnetatives  :

Washington, DC 20515  :

Dear Mr. Gingrich:

1 Pursuant to Subtitle E of the Small Rusiness 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, centractors, subcontractors, and consultants of the first 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 and in some respect material to the NRC, or it may involve conduct that causes or would have caused, if not detected, a licensee, certificate holdet, 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 insecurate information or other deliberate wrongdoing by such persons, these persons should be subject to enforcement action under the Commission's existing rules regarding deliberate raisconduct, 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 publicatien. 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 flegister 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 in September 16,1991.

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

Enclosure:

Final Rule ,

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% UNITED STATES, ,

y j

2 NUCLEAR REGULATORY COMMISSION WASHINGTON. D.c. 306n4001

• %...../ .

The Honorable Al Gore President of the United States Senate Washington, DC 20510

Dear Mr. Gore:

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: eaplicants 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 fer, or holders of, certificates of registration; applicants for, or holders of, quality assurance program approvals; and the employees, contractors, subcontractors, and consultants of the first 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 and in some respect material to the NRC, or it may involve conduct that causos or would have caused, if not detectad, a licensee, certificate holder, or applicant to be in violation of any of the Commission's requirements. The NRC believes that because the.e ,

may oe 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 rerulations. ,

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 t.re similar to those provided by the Deliberate Misconduct Rule, which became effective in September 16,1991.

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

Enclosure:

Final Rulo

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