ML22230A065

Tran-M780118: Policy Session 78-4

ML22230A065
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Issue date:	01/18/1978
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&URN TO SECRETARIAT RECORDS NUCLEAR REGULATORY COMMISSION IN THE MATTER OF:

POLICY SESSION 78-4 Place - Washington, D. C.

Date - Wednesday, 18 January 1978 Pages l - 85 Telephone:

{202 ) 347-3700 ACE. FEDERAL REPORTERS, INC.

Official Reporters 444 North Capitol Street Washington, D.C. 20001 NATlONWIDE COVERAGE* DAILY

DISCLAIMER This is an unofficial transcript of a meeti~ cr Nuclear Regulatory Commission held on*.* January 1 ' 97

~he United States in the Commission's offices at 1717 H Street, N. W., Washington, *o. C. The meeting was open to public attendance and observation. This transcript has not been *reviewed, corrected, or edited, and it may contain inaccuracies.

The transcript is intended solely for general informational purposes.

As provided by 10 CFR 9.103, it is not part of the formal or informal record of decision of the matters discussed. Expressions of opinion in this transcript do not nec~ssarily reflect final determinations or beliefs. No pleading or other paper may be filed \\lith the Commission in any proceeding as the result of or addressed to any statement or argument contained herein, except as the Commission may authorize.

1  !

II l:R6083 I 6arther 1 UNITED STATES OF AMERICA I 2

NUCLEAR REGULATORY COMMISSION 3

POLICY* SESSION 78-4 4

6 7

8 9

10 11 Commissioners' Conference Room 12 1717 H Street N.W.

Washington, D.C.

13 2:15 p.m., Wednesday, January 18,1~78 14 The Commission met, pursuant to notice, for 15 discussion of SECY-77-616, Export/Import Regulations, Part 110 *

. 16 PRESENT: *commissioners Hendrie, Glinsky, Bradford 17 a:hd Kennedy.

18 19 20*

21 22 23

. 24 e-Federal Reporters, Inc.

25

2

. 1 CHAIRMAN HENDRIE: We. discussed the matter of

2 the proposed part 110 regulations, the reformulation or 3 perhaps a gathering together in one place would be a better 4 way to put it, of the Commission's export-inport reguilations s in connection with a general briefing on int.ernat.ional programs 6 about*a week or two ago.

7 'b'l' Wehsch~duled tdhbe dhisc ufssio~ tobd~y ~gainhst the . . *I 8 possi i ity t a t it wou 1 e e 1 p ul in ringing t e Commission' 9 to an agreement on those things, and to have the opportunity 10 for further discussion. So we are gathered on the subject 11 here once more.

12 Are there particular matters that you would like 13 to bring us up-to-date on?

14 *MR. GOSSICK: We don't have any presentation* or 15 anything,* other than just to.address the questions the 16 Cornrnissfon may have as a result of our briefing on the matter 17 last week, and any study that you have made of it.

18* COMMISSIONER GLINSKY.: I have a question. It goes 19

• to the *matter of our procedure:s in reviewing these applications,*

.I 20 whether or not, for example, they come up before the

. 21 Commission: .

22 We discussed this last time, and I.raised then the I

• - 23 question did our announcement of the_se procedures have to be 24 in -the form of a rule, and to what extent does this constrain our e-Federal Reporters, Inc.

25

• flexibility in dealing with these applications.

3

.1 I wonder if we could go over that again. You

.. 2 seemed to_indicate, Howard, as -long.as we-weren't making any 3 sweeping changes in practice that one could d~part from the 4 , procedures laid down in the rule, because they were descri_bed 5 as the normal procedures.

6 MR. SHAPAR: Insofar as *the internal review within 7 the Commission. of these applic.at;i.ons 8 COMMISSIONER KENNEDY: You mean within the Commission 9 and the staff.

10 MR. SHAPAR: And the staff, or the entire establish-11 ment, actually, I would think the Commission has flexibility 12 to- depart from this, and to establish a different way of

13. reviewing them

• 14 . t suggested, hqwever, when this question came up 15 before if. it was the Commission's intent to do it on a 16 general basis, that the rules ought to reflect the actual 17 manner in which the Commission proposes to do its business.

COMMISSIONER GLINSKY.: Let me tell you why I 19 raise this. I think it is entirely proper that certain 20 categories of licenses should be handled routinely by the 21 staff, b~cause they are routine, at least they fit certain 22 categories whi~h have b~en given a blessing by the Commission

- 23 and they don't differ all that much from the earlier ones 24 that had been approved.

lce:federal Reporters, Inc.

25 . But occasionall_y,

• for one reason or another, one

4 1 may want to lookat one or another of these licenses. Now if 2 you*are departing from an estal:>lished practice, and thi.s is 3 known, the departure. itself becomes a delicate matter, or 4 could become a delicate matter.

5 So *1 wouldn't-want us*to be constrained by* that and 6 come to the conclus-ion we ought not to review it, because in 7 reviewing it we are raising questions about a . particular

• I .

license

• a singling it out in a way that might seem awkward.

9 MR. SHAPAR: _If you are talking in terms of reviewing 10* additional matters other than those specifically mentioned 11 in.the rule.:..- as I recall the rule, it provides the necessary 12 flex'ibility without any departure from the rules-for you 13 to review *these additional applications. \

14 COMMISSIONER.GLINSKY: We would not have.to make 15 any specific announcement of that?

16 MR. SHAPAR: That is correct. The rules provide 17 for it.

18 MR. GUHIN: It says "except as the Commission may 19 provide otherwise." It is page 91, sub part (.e) * "Except 20 as the Commission may provide otehrwise, applications will be 21 reviewed by the Commission."

22 COMMISSIONER.GLINSKY: What does that mean?

. 23 MR. SHAPAR: Number 4 says "any lic~nse application 24 deter;mined to warrant review by the Commissioners" which ideral Reporters, lni:.

25 might mean one phone call from a Cqmmissioner.*

5

. 1 COMMISSIONER GLINSKY: Does it mean the Commission

2 would have to vote to look at a license?

3 MR. SHAPAR: No.

4 COMMISSIONER GLINSKY: One Commissioner could bring 5 a license before the entire Commission?

6 MR. SHAPAR: I think that might be over-extending 7 it to say that.

8 MR. STROIBER: You could change that subsection 9 4 to say "any other license application determined to warrant 10 review by any Commissioner."

11 COMMISSIONER GLINSKY: So one Commissioner could bring*

12 it.before the other Commissioners? . I MR. SHAPAR: If you made that change. I don't think I

13 .

14 the language now could be read to mean one Commissioner* could 15 do it at the present time.

16 COMMISSIONER KENNEDY: What would you consider the 17 language now to say?

1a* MR. SHAPAR: At least the fariest reading would be 19 a majority, the way I read it how~ If your intent is to have 20 one Commissioner, it is easy enough to specify it.

21 MR. GUHIN: We could make that clear. The review 22 by the Commissioners is not referring to the Commissioners I

- 23 making a decision. The reason it is less specific-than in 24 the pr?posed rules is because the Staff could set it up. You

~-Federal Reporters, Inc.

25 could say any license application determined by the staff or

6 by a Commissioner to warrant review by the Commission.

1 I COMMISSIONER GLINSKY: I think that would he 2

preferable.

3 COMMISSIONER KENNEDY: Commissioner?

4 COMMISSIONER GLINSKY: Yes.

5 COMMISSIOINER KENNEDY: It see~s to me if any one 6

of us wanted a license review by the body, I can't imagine 7

any of the rest of us would say Heavens no.

8 CHAIRMAN HENDRIE: I agreee with that. I think that 9

was the intent.

10

• • Further, I agree with you it would be cumbersome 11 to have it come up and require a_ quorum of the Commission.

12 We would have to schedule a meeting and so on. So the 13 language would read "Any"application determined by the staff 14 or any: Commissioner"?

15 MR. GUHIN . : "Any other license application determined 16 by a Commissioner or the staff to warrant review by th~

17 Commission." The determination is by a Commissioner or 18 by the staff.

19 CHAIRMAN HENDRIE: Is that the way it ought to read?

20 MR. SHAPAR: Yes.

21 MR. GUHIN: "Any other license application determined 22 by the staff or any Commissioner to warrant review by the 23 Commission."*

24

~-Federal Reporters, -Inc.

COMMISSIONER GLINSKY: You are saying so long as 25

7 1 this then doesn't result in a wholesale departure from the 2 present rules --

3 MR. SHAPAR: If there is a cat~gory or kind of 4 application you would routinely want to review, I would think

s. it would be desirable. for y~u to reflect that* in.the rules 6 as the normal practice.

7

• COMMISSIONER KENNEDY: Couldn't the-Statement.of 8 Considerations indicate that, that that is the understanding 9 of the Commission, the meaning of it?

10 MR. SHAPAR: You mean without making the* change we

11. just discussed?

12 COMMISSIONER KENNEDY: No. Commissioner Glinsky

-.13. has a slightly different point. The one we just took*care 14 of, the language takes care of the problem I think we all 15 see. But there is an additional point which I understand 16

• him to be suggesting, that under th~ *normal* circumstances as 17 stated in the rule, this is the way things would work.

18 Now since the rule says that is the way we are 19 goi~g to do business, if we decide in some case not to do 20 business that way, are we going t9 have to make some big 21 thing out of it because we are departing from the rules?

22 You say no, ,because there is enough flexibility in liere

.e 23 to permit that, so long as it is not a regular and routine 24 departure from the rules.

Ace-Federal Reporters, Inc.

25 Can't we just indlcate that is our understanding

• and intention by a simple*statement somewhere in the

i 8 i I

.1 Statement of Cbnsiderations?

l

• 2 MR. SHAPAR: Yes indeed we can.

I 3 COMMISSIONER GLINSKY: Let me ask you one more 4 thing. As I remember, it speaks of reload of fuel requiring Ij II 5 approval if* the . application *falls into a certain category, and if

• I 6 the original core has been approved, something like that.

7 Now there are.some otehr possible cases where there 8 is a reactor abroad of perhaps U.S. supplied, perhaps not 9 U.S. supplie_d, which we may have supplied with fuel at one 10 point, and subsequent shipments may have come f~om other 11 sources, and then we may *again be supplying fuel.

12 How do you envisage dealing with these sorts of 13_ *situations? Or.did y~u really mean reactors*that the U.S.

14 *supplied fuel.right from the beginning and we are simply 15 dealing with those* situations?

16 MR. GUHIN: I think it is really dealing with the 17 U.S. reactors and the initial cores coming from the U.S.

1a* If you had a reload coming, .. where* we* hadn't had a license 19 before, obviously that would be sent.by the staff to the 20 Commission, because we had not had either the react9r or 21 any fuel loading.

• 22 If you had a situation where you had u:s. fuel and

- 23 then someone else's fuel, and then back to U.S. fuel, I think 24 that would have to be determined on the basis of the circumstances Federal Reporters, Inc.  !

25 *of that case. That case hasri*t*ari~en, and probably will not I.

9 .

• 1 IJarise for several years. Most of these fuel contracts right 2 ';no~ are calling for at least 10 years' supply, and an option 3 to renew after that time.

4 It is not a specifi6 issue we addressed because

5. we didn't see i t arising in any time frame with whi.ch we 6 would have to be concerned. If,

• for- example, there were an 7 expanse of time between the Commission's action on a* c_aae and 8 then you had someone else supplying for several years, and 9 then we started to supply again, the staff would automatically 10 assume that that is not a routine reload. .That is, where 11 we have been out of the business for a while arid we would 12 want to see_ about .getting back into it.

13 CHAIR..~7:1,.N HENDRIE: Presumably in reviewing such a 14 resumption of supply, or perhaps initial taking up of 15 supply*, then the Commission could deal with the question of 16 whether subsequent sequential reloads in the same series would 17 or would not constitute routine reloads.

18 *COMMISSIONER GLINSKY: It always seemed to me that 19 the cases of applicatiop of these categories that are 20 .routine -- I wonder why the applications theselves don't cover.

21 this?

22 MR. GUHIN: Some have and some have not. :r.bst are

- 23 *into the particular individual reload application, a few come 24 in- for. two or three at a. time *. And we are in f-act thinking lderal Reporters,. Inc.

25 about this -very- issue at the staff -level, and hope to do a

10 1 piece on that, how one would want to look at multiples.

2 This is a question that has been around for a long time.

3 COMMISSIONER GLINSKY: That might simplify matters 4 too.

5 MR.*. GUHIN: Absolutely.

6 CHAIRMAN HENDRIE: Peter, do you have a *question?

7 COMMISSIONER BRADFORD: Yes. I don't have anything 8 else on this point, though.

9 CHAIRMAN HENDRIE: On other points?

COMMISSIONER BRADFORD: Okay, sort of at random.

11 Under the-exemption section now, is there anything about 110.11 12 that* would exempt spent fuel tha.t is coming back-for storage in 13 a DOE facility?

14 VOICE: Would that be technically possible?

15 *MR. GUHIN: Howard can answer the question whether 16 it is technically possible. As a matter of fact, material 17 today comes back to Savannah River for reprocessing, and 18 it comes through the import license application and it is 19 more or Jess l.ike the export process; even though it is 20

• coming from DOE or to DOE, normally the imports have been 21 subject to licensing by the Commission.

22 My assumption would be that would continue to be 23 the case under the example you cite.

24 MR. SHAPAR: What do you mean by technically e-Federal Reporters, Ilie.

25 possible?

11 1 I. CHAIRMAN HENDRIE: Legally possible. Presumably 2 ..

it could be transported, but may it be transported?

3 COMMISSIONER BRADFORD: If under the DOE spent fuel 4

program, as it eventually evolves, spent fuel is being s*

sent back from foreign reactors

• for handlin*g

• and storage 6

by DOE, I wondered whther Section 110.11, ietem (a), would 7

exerript that?

8 MR. SHAPAR: I. think it would, if they chose to go 9

the contract route. This is, of courses, based on a provision 10 of the At_om~c Energy Act, an exemption that relates to 11 contracts with and for the account of the Commission~ It 12 applies not just to export licenses, but across the board to 13 all activities of DOE and you will find a similar provision 14 in all of _the parts of the regulations.

15 COMMISSIONER KENNEDY: _In fact, it says we are 16 not going to license the government's business.

17 MR. SHAPAR: That is essentially the thought behind 18 it. The technical term is "contracts with*and for the 19 account of the Commission, 11 the Commission meaning the old 20.

Commission that is now fragmented into NRC and DOE.

21 Whether or not they would actually seek to use 22 ,

that exemption is something I can't answer. Maybe Mr. Guhin 23 can *

. 24

-Federal Reporters, Inc. CHAIRMAN HENDRIE: I think it is too soon to tell 25 what.direction that*policy would take.

I.

12 i

MR. GUHIN: The law says they do not*have to have these 1 I!

. 11 1* :activities licensed?

2 3 MR.SHAPAR: A contract with and for the account of 4 the Commission is the term of art in:the statute.

. \_,

5 MR.* $TROIBER:* I would guess~ since we have quite*

6 a bit of time before any*policy like that is put into effect, 7 the Congress would be looking at*these issues fairly closely 8

• and probably indicate its intentions fairly*clearly about what 9 it wanted the Commission.involvement in this process .to be

. 10 and the rule could be changed relatively quickly in'view of 11 *those expressions.

12 MR. SHAPAR: You mean a change in the statute or

.13 some other expression of Congressional sentiment?

14 MR. STROIBER: I assume the activity would have to be I

1 15 supported by appropriations or some other funding.

16 MR. SHAPAR: Of course~. there is t_he related matter 17 of government-to.;.government transfers* which is also not 18 subject to licensing, which is also a matter I am sure the 19 Congress-is deeply interested in. That is a realted area, 20 but the principle is the same. Certain governmental activities 21 .are not subject to licensing.

22 CHAIRMAN HENDRIE: Please go on, Peter.

23 COMMISSIONER BRADFORD: Again, would it be difficult 24 or detrimental to this section to draw it in such a way re~Federal RePQrters; Inc.

25 that it did not at this point in time exempt that type of

13 1*1 activity?

2

,MR. SHAPAR: this purports to reflect a statutory 3

exemption which is now part of the statute.

4 COMMISSIONER BRADFORD: S~ what 1ou are saying is 5

under the *statute they could do it, even if we didn't have 6

the regulation?

7 MR. SHAPAR: That's right.

8 CHAIRMAN HENDRIE: We could probably do it even if we,

.9 did have the regulation.

10

. CO:MM.ISSIONER GLINSKY: I just wondered if we should 11 go .on and indicate this activity ought to be licensed. Are 12 we merely stating a legal fact?

.13 MR. SHAPAR: I think we are stating a legal fact.

14 MR. DORIAN: What we have *done in the regulations 15 is incorporated the:other.parts of the regulations, 36, 50 16 and 70, all of which had the same intentions as these 17 regulations except *these regulations are now so written so it hits you in the face~

19 COMMISSIONER KENNEDY: I read in the paper that 20 that trend is commendable.

21 MR. SHAPAR: I. am.not- sure we were completely 22 I responsive to the last question of Mr. Bradford. One change 23 we could make, to be responsive to your thought, is not to 24

,re°Federal Reporters, Inc. . attempt to fill out in the regulations what the statute _says, 25 .

but to *use the : actual statutory language, which is "contract

14 with a,nd for the account of DOE,." and leave it at that, if that would relieve any of your problem.

3 What we did do was to use exactly the same format 4 we used in other ~arts of the .regulations, to define what 5 a contract with and for the account *of* the C'ommis'sion is, 6 without making any changes whatevere 7 COMMISSIONER BRADFORD: We have never defined that*any-8 where?

9 MR. SHAPAR: This is the definition you see in the

• I 10 rules.

11 COMMISSIONER ~ENNEDY:_ It is in the rules elsewhere,

• 12 ali of the parts Don mentioned.

13 COMMISSIONER BRADFORD: It is the same lang*uage which, 14 appears elsewhere in all of your rules?

15 MR.SHAPAR: Exactly.

16 COMMISSIONER BRADFORD: Can somebody lay out for me 17 what the line is between ~n *adjudicatory and legislative 18 type hearing?

19 MR. SHAPAR: The traditional distinction between 20 a legislative and adjudicatory hearing is that an adjudicatory 21 hearing is a hearing that is conducted in accordance with 22 sections 5, 7, and 8 of the APA, which means *the decision 23 is made only on the record, and there is the right to cross-24 examination, present your evidence, rebuttal, that type of tie-Federal Repomirs. Inc. ,

25 1::hing.

15 l COMMISSIONER BRADFORD: If you held a legislative 2 hearing~ *called it a legislative hearing, is there anything 3 that then prevents you from setting it up on the same scaffold

• .5 4

6 as an adjudicatory_ hearing?*

that.

MR. *sHAPAR: There are two parts to the'answer to Legislative type hearingisnot a term of art. It 7 is a popular colloquialism. Usually it is meant to refer 8 to the kind of a hearing that you get -before a Congressional 9 Committee, where witnesses appear.and present written and-or 10* oral statements, and are subject*to questioning by the Congress-11 mean who. are present. That* is *the usual conception of a legis-12 lative type hearing .

.13 There are no legal .constraints as such when an 14 administrative agency l*ike NRC chooses to use that kind of a 15

• concept in its o~m proceedi11gs. They are free to conduct

• 16 . ?!-DY kind_ of a quote legislative h_earing that they want to, 17 and add as many of the adjudicatory facets as they_ choose to 18 the proceeding. There is no legal constraint as such in that 19 regard.

20 If you ask what the typtcal differences are 21 between a legislative type hearing and an adjudicatory 22 proceeding, I think I have described it ..

COMMISSIONER BRADFORD: Okay. So part of the

-- 23 i I

.24 problem m~y come *from the use of .the word "legislativ_e" to l

!(feral Reporters, Inc. r[

25 des~ribe everything that is l~ss than fully adjudicatory?

.t iI

.*I t-

16 MR. SHAPAR: Part of the problem, yes. Another word we used in the past to describe that particular animal

• 2 is an informal hearing.

3 COMMISSIONER GLINSKY: Can't you have an adjudicatory:

4 I

.5 hearing under the APA -- and I am ge_tting ou:t of my depth 6

here -- and use the foreign affairs exemption to basically run it back to what is in effe_ct a legislative hearing?

7 MR. SHAPAR: We think we have authority under the 8

law to have a basically legislative type hearing, as I just 9

described it, for export matters.

10 What I think Commissioner Bradford's question was 11 do we have authority under the law to go further. As a 12 legal proposition, the answer is yes.

13 So that leaves a policy question to be decid~d.

14 CHAIRMAN HENDRIE:. There was another facet to that 15 also. It seemed to me part of the question also was in 16 using the word "legislative" hearing, had you then ruled out

• 17 the possibility of including some of the other facets of 18.

an adjudicatory proceedi*ng tha_t you might want to put in.

19 There have been hybrid structures here. I didn't follow your 20 thrust.

• 21 COMMISSIONER GLINSKY: 'The point is. there are 22 I

formal and informal hearings. You have sort of a formal hearing 23 which doesn't have all of the trappings of the adjudicatory 24 i-Federal Reporters, Inc'.

hearing.

25

17 MR. SHAPAR: Something more than a* legislative type 1

2 hearing, and yet less than an adjudicatory hearing?

3 ~OMMISSIONER GLINSKY: You wouldn't have to grant all 4 of the rights of cross-examination and so on that would 5 accompany a normal adjudicatory hearing.

6 MR. SHAPAR: Yes, you have that discretion as a matter 7 of law.

8 I should point out that the rules as written 9 don't explicitly rule it out, but these rules were intended 10 to be responsive to directions that we got from the Commission 11 when the staff undertook-to prepare these rules. The specific 12 instruction from the Commission was as follows: "Cross-13 examination between participants *in an oral hearing will not 14 be authorized."

15 COMMISSIONER BRADFORD:. I would have some reluctance, 16 with due deference to that Commission,* to rule out at this 17 point once and for all cross*-examination or other tools that 18 might -- I suppose they are trappings of adjudicatory hearings.

19 But I would think the Commission would be unwise simply to 20 say at this point there are no circumstances under which it 21 would permit, say cross-examination. I think you could say 22 the same thing_ about al~ost any of the other tools one might or 23 might not want to allow in particular circumstances.

24 COMMISSIONER GLINSKY: Wait a minute. Are we not

,ce:Federal Reporters, Inc.

25

• f_ree still, if ~,e wanted "t:-o *-- -can you have an informal hearing

18 1 with cross-examination?

2 MR. SHAPAR: An informal hearing is not a term of art 3 either. The answer to the question is yes, you can. At 4 some point, though, if you added*too many tra-pings of an

5. adjudicatory process, then nobody in the world would call it 6 an informal hearing.

• 7 COMMISSIONER GLINSKY: What I am getting at is we 8 leave it to our discretion and decide what kind -of hearing 9 we might have.

10 MR. SHAPAR: You_have that discretion.

11 CHAIRMAN HENDRIE: Does the language here preserve 12 that discretion?

13 MR. SHAPAR: I don't think well enough.

14 COMMISSIONER BRADFORD: Howard, I think, is reading 15 that instruction, and if anyone wanted to contest the 16 Cornrnis.sion I s power to extend cross-examination under this 17 language, and wanted to show what the intent of the Commission 18 was in adopting these regulations, they would say these 19 regulations were based on an instruction from the Commission to 20 the staff to be darn sure the* regulations didn't allow cross-21 examination.

22 MR. SHAPAR: l _.would say if i t is your intent to all w 23 yourselves the flexibility to permit cross-examination and we 24 shouldn't rely on the present :wording of the ~egulations, we

~ce-Federal Reporters, Inc.

25 should ch~rige it to reflect your. intent, if irideed that is

19 1 I your intent. And you are certainly not bound by the prior 2 instructions of the Commission in .terms of making up your minds 3 now.

4 COMMISSIONER BRADFORD: That is true. But if we

-* _ 5 didn't make it explicit, the*n that is the* kind of _thihg that 6 would happen, an indication that it meant no cross~examination.

7 *MR. SHAPAR: Ata minimum you would have confusion.

8 COMMISSIONER KENNEDY: *Before we decide what rur 9 intent is in this regard, if this is what is required, I guess 10 we*ought to have a through-going examination on.the part 11 of the staff*, which maybe they are prepared to do right this 12 minute, as to what the.effects. would be of changing the regul-13 ations in :that regard.

14 MR. SHAPAR: As I understand the change suggested 15 by Commissioner Bradford, it i$* merely to allow you to 16 permit.cross-exa~ination in the event you*wished to make that 17 ,decision in an individual pr6ceeding, and*not to exclude it 18 in~erentially as the norm.

19 COMMISSIONER KENNEDY: The reason it was excluded 20 inferentially as the norm-~ beautifully phrased, apropos 21 of that article I was reading in *the paper 22 MR. SHAPAR: Which article?

23 COMMISSIONER KENNEDY: I will send you a copy.

24 CHAIRMAN HENDRIE: -The one on plain language in ederal Reporters, Irie.

25 regulations.

20

-1 I COMMISSIONER KENNEDY:* And as to lawyers.

• 2 Anyway, the question is not whether we would make that *obvious,_or change the language of the regulation, but I 3

4 if we were to make it, if we were to authorize this at some I I I

I

. . Ii s point, what would the effect be in this proceeding vis a vis '

i

• 1 6 the foreign affairs exemption questions and all of the I 7 questions which we went into when the instruction was drafted*

• j I

l 8 by the Commission in the first instance?

9 MR. SHAPAR: I think all you can say is if you 10 decide to exercise the flexibility that would be put into 11 the rule, the proceedings would take longer. In some cases 12 those would impinge, in others they would not. I don't know 13

• what else you could say.*

14

• COMMISSIONER KENNEDY: What about the question of 15 foreign policy exemption?

16 MR. SHAPAR: That is permissive. You don't have 17 to use it. You can, if you *choose. As of now the premise 1s* has been that you wished to, and that was specifically 19 articulated as one of the bases for not using an adjudicatory 20 kind of proceeding.

21 COMMISSIONER KENNEDY: If we now choose to redraft 22 the regulation in this way, would it not be appropriate to

- 23 seek the further comment of the agencies who would be 24 *_affected?

~re;Federal Reporters, Inc.

25 MR. SHAPAR: I think that would be appropriate.

I 21 i MR. *STROIBER:

I As you*have structured *the proces now in

• 2 , these rule_s, the Commission has broad discretion to frame 3 its procedures as theyv.ent to. It is at the stage that 4 the notice of the oral hearing is given under subsection 5 110.85 that the nature of the hearing whic~ is granted is 6 delineated. It would be a simple matter to include an 7 additional statement in that subsection preserving the right 1

8 to tailor the process by the addition of limited'cross-examinati6n 9 or anything else the Commission would want. But then that.

I 10 would defer the decision about what you wanted the*

11 hearing to look like at the point at which you issue your r 12 hearing notice.

13 I think it is clear that there would be some diffi.-

14 culties with implying as a .routine matter that cross-15 examination is -going to be involved, for example, of State 16 Department witnesses. We have no means of compelling the 17 attendance of witnesses from the Executive Branch. It might 18

• be difficult to convince those people to present themselves 19 if they expected to be subjected to cross-examination_ by 20 intervenors' attorneys.

21 On the otehr hand, in other instances, it might be 22 appropriate. I am not sur.e.

23 MR.SHAPARA: That is right. And something else that 24 is germ~ne, although it is only. a m~tter of history and leral Reporters, Inc.

25 do~sn't decrease your flexibility, the Commiss1.on articulated

22 1 two reasons in the proposed rule that went out, in the 2 $tatement of Considerations, for not having cross-examination, ad 3 they were both legal reasons. One was that as the Commission 4 construed Section 189 of the Act, which guarantees a hearing 5_ upon the request of any pers.on whose interest may be affected, 6 it read that section as not requiring an adj,udicator.y hearing 7 in connection with exports.

8 'l'he other reason which was given in the Statement 9 bf Considerations that at-ended the publication of the proposed 10 rule was the foreign policy exemption we just discussed.

11 COMMISSIOENR KENNEDY: Well, that sort of comes back 12 to the point I was making, that -if indeed we were now going 13 to suggest in whatever way to change this rule, with*the 14 intention of authorizing possible cross-examinatino, whereas the 15 commenters previously assumed we were not, we'" ought to go 16 back ~nd tell them and_give them an-opportunity to cement 17 on that point.

18 MR. SHAPAR: I think that is fair. to fill out the 19 picture one could also say the reason you go out with a 20 proposed rule is to get comments.

21 As I recall some of the comments that came from .

22 intervenor groups, they pommented they would like to see cross-*

- 23 examination. So I guess one, as a counter argument, could say 24 since you went through *the exercise, and it was not just an

-Federal Reporters, Inc.

25 exercise of* sol_iciting public* s:o~ent, and you got public

23 1

_ Ii commen~_s urging this kind of extended proceeding, that 2 ;:

following the normal course of rule-making, you.-1.are now 3

being responsive to those comments you chose to accept, if in*

4 fact that is your- decision.

s COMMISSIONER KENNEDY: In the interest of even-6 handedness, which requires two hands,** it wou.ld seem to me ~~~~--~1 7

one party is informed that the intention of the rule is to 8

do X, and that conforms to his views given his own conerns, 9

rightful concerns, it would seem *highly unlikely t~at he would 10 wish to comment on it, unless, for other reasons he had

. 11

• nothing else to do and wanted to spend some time saying that is 12 a grand rule, we are certai_nly glad to see you did all of that.

• 13 I susf)ect he wouldn't say anything, would he?

14 Only if he objected to it woul.d he comment, right? Therefore, 15 one would have to assume, having* stated the premises as we 16 stated them, one would hear only from the side which *_felt 17 that that was inapprorpriate.

18 Now if you are going to chang.e it the other way,

• 19 the other guy hasn't had an opportunity to.comment on that*

20 proposition. That is not even-handed, is it?

21 MR. SHAPAR: I would say your logic is Unassailable *.

i-22 i COMMISSIONER KENNEDY: Thank*you. Since our watc-hword 23 here is even-handedness, my object *becomes almost compelling -as 24, Are*F~eral R_eporters, Inc. well as . unassailable.

25 MR. SHAPAR:* Irrefutabl*e as well *.

-24 1

COMMISSIONER BRADFORD: Let me suggest an alternat~ve 2

. lt seems to me if we include something in the regulations to 3

the effect that the Commission will determine the procedures 4

to be used at the hearings as it sees fit consistent with 5

the subject of those individual-hearings, then anyone who might 6

feel that cross-examination, for example, was inappropriate in 7

the *context of a particular subject matter, would have ample 8

ti~e to object to it then and there.

9 I wouldn't think it would. be worth anybody's 10 time to spend a l,ot of time objecting to a provision in the 11 Co~ission's regulations providing that.the hearing procedures 12 for any given matter will be those set by the Commission 13 for that matter.

14 I suppose they could get up and say for God's sake 15 don't let it be cross-examination* but it would be a pretty 16 nebulous exercise *. The place where the objection would come 17 with a lot more focus would be at the time the hearing were 18 being set.

19 MR. GUHIN: * *If I may add one thing. here, it seems

• 20 under 110, 113, 120, 121 {e) it says at the end of the

• 21 section:"The Commission may defer any hearings, consolidate 22

• I applications for hearings, narrow or broaden.the hearing 23 issues or take other actions as *appropriate." It seems that 24

-Federal Reporters, Inc. f6.rmulation itself is giving the Commission a* fair amount 25 of discret1on. Would _you agre(:;!?

• 25 1l MR. SHAPAR: I would not agree. I think*reading the n

2\$tatement of Considerations, although you can milk the 3 lagnuage to extract some flexibility, I think the clear 4 message this Commission hs- given the outside as of this

5. point in time is there would be no cross-examination.. If the 6 Commission wishes to* provide. an opportunity for cross-examinati,o ,

7 my r~commendation would be-we.don't keep it quiet, we 8 articulate it.*.

9 COMMISSIONER KENNEDY: And if we do, I think we 10 should do that in fairly unequivocable terms,(a), and (b) 11 I think then we should give everyone an opportunity to know we 12 have now changed our minds,. and *ask_ if they have* any comment 13 on that.

• 14 Having changed our minds once, who is to say that 15* we might wish to change it even again?

16 MR. SHAPAR:. That is the*genius of the administrative 17 process.

18 COMMISSIONER KENNEDY: You taught me well, counsel.

19 MR. MALSCH: On >page 117 , paragraph (f) says:

.20 "Participants and witnesses will be questioned orally or 2l in writing only by the presiding officer."

22 COMMISSIONER GLINSKY: By the presiding officer?

23 MR. SHAPAR: The Commission, if they conducted the 24 hearing, or any board the Comin.ission appoints~ That is all i-Federal Reporter~. fnc.

25 the more reason why I think you would need to *change the rule

26

_1_ l if you. wished to. go in that directi_on.

• 2 ; COMMISSIONER GLINSKY: By the way, are the 3 informational requirements in the applications spelled out 4 here? There was one point here that I wondered about. Someone i 5 . suggested that that either waste management**or fuel storage plans

• I 6 of foreign customers ought to be indicated on the application. I 7 I can't find the place.

8 I think you responded by saying that was inappropriat~ -*

9 and unnecessary.

10 MR. GUHIN: It is page 85 of the rules.

11 VOICE:. br 89, really.

12 COMMISSIONER GLINSKY: THere is an earlier place 13 where you dealt with that com..ient.

14 MR. GUHIN: In the statement, page 21.

fs COMMISSIONER GLINSKY: .Why.do you think .it would be

• 16 inapproprai te to request the _custoiner to indicate or t_he

• 11 applicant to indicate the fuel storage plans?

18 MR. GUHIN: I think the first view here, the initial.

19 view, is that the staff drafted this on page 21, is that 20 this was not a requirement as such*that should be laid on the 21 applicants, but if we.wanted the information, i t should come

~2 through our governmental,channels, or through actually.the

-- 23 governmental context, rather than putting this information

• 24 requirement on the applicant himself.

,re-Federal Reporters; Inc.

25 COMMISSIONER GLINSKY:. But there is no sugge*stion then

27 that this is not appropriate information to be included?

2 . MR .. GUHIN: Absolutely not, no,*that is not the I think when we want that information, the Commi-ssion I

3 suggestion.

I 4 wants it, in termsof the processing;that-we can gather that I

5 information -- in fact, in some of our applications we do 6 hc!,Ve statements on end-use requirements, orif it is known 7 to.the applicant, he will say it.is planned to be reprocessed i

• I 8 after four or six years, what-have-we. that is about. the most i

I 9 they know, however, . and as we noted

• in our Commission papers 10 in that regard, there are no specific plans iden~ified as such, 11 but that is just a reflection of their over-all intentions of 12 what they plan to do with the guel.

13- COMMISSIONER GLINSKY: I would think we would routinely_

14 want to know this kind of .information, would want to include

.15 it in any of our standard inquiries. You are saying this 16 doesn't preclude that?

17 MR. GURIN: Not* at all, no. I think, as I read it, 18 it doesn't preclude it, and in-fact, the regulations also say 19 we can request other information as we deem appropriate, 20 either from the applicant or from the Executive Branch as a

.21 matter of course.

22 COMMISSIONER 1 BRADFORD: Okay, I guess I understand

• - 23 what* you are saying. The last sentence says "It is I

24 unriecessary and inappropriate .to ieqriest the license applicant to re-Federal Reporters, Inc.

25 provide such information. 11 What you really niean ;_,.there is

28

,1 presumably if we ask it of the state Department, the license 2 applicant, or somebody is going to have to provide it?

3 MR. GUHIN: Right. I guess what we are saying

- 4

• s here is _that really should be reformulated on page 21, that it is inappropriate to put this as an information requirement

.I 6 on him in the initial process of *the application, although I

7 as requested, or as deemed desirable, it would be made available 8 through the government channels,_ or something like that.

9 You know, we also would have no qualms in asking 10 an applicant, if known,. to let us know, advise us, or 11

• something like this. In cases where he does J<_now, I don't 12 think he would feel any reservation at all about providing

. 13 that.

14 COMMISSIONER KENNEDY: The applicant in this case 15 being generally a freight forwarder?

16 MR. GUHIN: That's right. He only knows, for 17 example, if the other fellow tells him, say a particular reactor, 18 operator overseas says yes, I am going to use it in this

19. reactor, and I plan to have it reprocessed afterwards. That 20 is .about the extent of it. Then the applicant knows. Otherwise 21 the applicant would really be guessing.

22 COMMISSIONER'GLINSKY: But if we thought it 23 important that this information be ~upplied,_ the applicant 24

• could obtain it from the. user of the fuel, or whatever.

,e-Federal Reporters*. Inc.

25 COMMISSIONER KENNEDY: Or alternatively stop being the

29 applicant, since his customers would say why don't you go 2 peddle newspapers or some other junk for 4-living, d6n 1 i 3 bother me with your irrelevancies; I asked you if you would 4 ship me this material, if you can't get me a license, go

5. somewhere else and do your business.

6 COMMISSIONER GLINSKY: Well,.it turns out we have 7 certain requirements.

8 COMMISSIONER KENNEDY: There is no question about 9 the requirement. The quesetion is is it unreasonable to be lO lacing this requirement on a guy who is essentially a shipper, 11 you know.* He is not -involved in what they do with the 12 material; all he does is pick it up here and del.iver it to 13 them, and-having delivered-it, he has no further responsibility 14 for it at all .

15 . COMMISSIONER GLINSKY: Okay. You are saying this 16 is the wrong person to do it.

17 COMMISSIONER KENNEDY: Yes, that .is all I am saying.

18 I_am not suggesting that maybe the customer may feel 19 he is the wrong guy to be asking for that information. The 20 customer may'be fully prepared to give it, through their 21 embassy, as they do; end-use ,st~tements are not usually provided 22 directly by the freigh forwarders, they come from the e*mbassy ..

I 23 MR. GUHIN: No, we have eliminated those requirements 24 in here that the applicant provide an end-use statement from Ace-Federal Reporters, Inc.

-25 the reactor operator, because you get those same assurances

30 1 I as to.the authority of the reactor to have this material, 2 the fact it will be under agreement, from the.embassy 3 itself.

4 COMMISSIONER KENNEDY: Through government channels.

5 -~ MR. GUHIN: . So in the case where *we wi.sh it, we 6 could*request it through the Executive Branch, government 7 channels, and get it. In other cases, in some reactor *i reviews we have.asked the spent fuel capacity,.if th~ applicant I

8 9 knows it, or through the Executive Branch, whichever one.

10 The applicant in that case, for example, would not know if 11 he is not in charge of that part of the reactor construction 12 abroad.

13 COMMISSIONER GLINSKY: I would think the Executive 14 Branch would want to know this, too.

15 'MR *. GUHIN: Yes, that'*s right. Of course there 16 will *be time, if the legislation passes, you have time of 17 both the internati_onal fuel cycle evaluation and the renegot-18* iation effort and I guess in some cases the plans would be 19 -heavily dependent upon the outcome of those efforts.

20 COMMISSIONER BRADFORD: There is another reason, which is if you got mis-information or there was a pattern of 22 mis-information, ..

you would I

have to deal with the applicant

- 23 24" 1ederal Reporters, Inc:

and *straighten it out at that point. It is cleaner if

.the- mis-information has come directly to you, you then know 25 .who you have to go talk to.

.31 MR. GUHIN: I guess there is a tactical question 2

involved here, even in our specific reviews, that if one 3

is.indeed dealing with "X" country on the question of in 4

• effect whethe:i:;-. reprocessing,. under what* controls, what 5*

conditions, whether one would want a conscious reaffirmation*

6 that they plan to reprocess this stuff, when that very issue 7

is indeed part of a broader dialogue as to where we are going.

8 But again, as I say, -I think the government channel 9

is the way to *get that information.*

10 GHAIRMAN HENDRIE: could I ask about 110.90? I 11 have a recent filing, January 10, from you, Jim, on th:i.s.

12 What was the issue here?

13

-MR. SHAPAR: Whether or not the filings by the 14 staff and.the Executive Branch with respect to the question 15 o*f holding a discretionary hearing_ should be a formal 16 filing served on all

• p~rties or be handl_ed informally. There 17 was a split among the staff, which has been resolved in 18 accordance with the discus$ion in the piece of paper you 19 just referred to.

20.

CHAIRMAN HENDRIE: "The views of the staff and the*

21 Executive Branch on discretionary haearings be public exc~pt 22 \

to the extent that there is classified material involved, or 23 it involves-information which the Commission staff* or the 24 A.ce-Federal Reporters. Inc. Executive Branch has ae*ter1:11ined would adversely affect the

. common defe~se and security or the conduct of. U.S. foreign

32 1 I policj if rel~ased. " The Commi.ssion will review that 2i decision or that finding.

3 * *MR. GUHIN: That is just in the c:.iscretionary 4 heaiing. 90 refers to a hearing as a matter of right. This 5 is an addition to 110.90.

6 CHAIRMAN HENDRIE: So it doesn't overlap or require 7 other changes in (b)?

8 MR. GUHIN: No ..

• +- the staff recommendation, 9 CHAIRMAN HENDRIE: I .. take 1 .....

10 then is that paragraph (c) of 110.90 on the separate sheet 11 is part of the proposal before us at this time?

12 MR. GUHIN: Yes.

13 CHAIRMAN HENDRIE: Peter, you had some other 14 questions?

15 COMMISSIONER BRADFORD:* On page 29, paragraph 37, 16 those are the criteria for* holding a hearing?

17 MR. GUHIN: No, for a license.

18- COMMISSIONER BRADFORD: Is that then an accurate

• 19 statement? For example, I guess it .is* true the *commission 20 as a whole does. It seems to me there has been some dissent

• 21 on this.

22 CHAIRMAN HENDRIE: Can somebody elaborate a little 23 bit?

24' COMMISSIONER GLINSKY: The criteria being what?

ederal Reporters, Inc'.

25 MR. ROTHCHILD: Cri t.eria for acting on a hearing request.

• . * . *

• Ir, ** '- ~... .,-. * * . - * ' - * ' .,.

33 One*of the criteria that was suggested by the 2 ; intervenors, such as the non-proliferation impact and other 3 things, they wanted us to spell out* in the particular export

- *4 license. We just felt the criteria we had set forth were 5 detailed e~ough to consider all fac-tors, .including non-pro-6 liferation aspects of the vari9us licenses before the 7 Commission~and the significance of that particular license, I

.l 8 that that additional criteria was not necessary, the 9 Commission had enough flexibility.

10 MR. SHAPAR: I think a counterpart o_f. the question 11 would be health and safety in domestic -licensing.

12 COMMISSIONER BRADFORD: Yousay the present creitera 13 are adequate. You mean adequate to encompass the concerns 14 expressed?

15 MR.* ROTHCHILD: Yes.

16 COMMISSIONER BRADFORD: On that same page, talking 17 about the ability of one Commissioner to bring a matter to 18

• the Commission; s attenetion, there seemed to be a feeling_ if 19 Commissioner wanted to bring something to the Commission's

• 20 attention, that could certainly be done.

On this question of whether or not there should be 22 a hearing, it.would have to be a vote of the majority.

23 It would be possible, with 5 Commissioners, 2 could want a 24 hearing, but there would still be no hearing.

ce-Federal Reporters, Inc.

25 MR. ROTHCHILD: .No. *rt ~ays right here, we used the phrase "by consensus." Th e way th a t 1s* genera 1 ly used

34 1 does not necessarily mean a pure vote, generally you are 2 able to* discuss things and come up with a --

3 COMMISSIONER BRADFORD: I understand that. But

-

• 4 failing that, you could have a 3 to 2 vote and not have a 5 hearing.

6 COMMISSIONER.KENNEDY: Yes, that is what it says 7 now.

8 CHAIRMAN HENDRIE: What page is this?

9 COMMISSIONER BRADFORD: Page 29, next to last 10 paragraph. That procedure, I gather, is somewhat more 11 rigorous than the U. _S. Supreme Court, *which provides one less 12 than a majority can have a hearing .

. 13 MR. MALSCH: It also parallels our domestic 14 practice, where the Commission, in deciding to*hold a hearing 15* .also acts on the basis of~ majority.

16 COMMISSIONER BRADFORD: Wait a minute. In an 17 intervention petition, that wouldn't normally come to the 18 Commission. You would be talking about the licensing 19 board.

20 MR. MALSCH: Well, it w~uld be, since it is delegated 21 generally, it would be a majority decision by a licensing 22 board; specifically appointed to rule on the intervention

\

- 23 petition. If there was an appeal, it would be a Commission 24 majority _decision.

~re-Federal Re~rters,* Inc.

25 MR. BRADFORD: That is different . .If you are deciding

35 1 iwhethe~ or not to admit an intervenor, I don't think one 2!would argUe that .one Commissioner's vote or one board member's 3 vote should be sufficient *to get an intervenor in if the 4 other two didn't want him.

.. 5 MR. MALSCH: the same holds true in a'commission 6 decis_ion in the domestic *area to grant the hearing as a* matter 7 of its discretion, or rule-making or licensirig:matters. That 8 would also require a majority vote, although it has not happened 9 very often.

• 10 COMMISSIONER BRADFORD: I am inclined to think that if

11. it is _unlikely that/a substantial group of commissioners 12 wanted a hearing, the Commission as a whole wouldn't go along  !

i

- -*- -- --** -- . --- --- . --- .--- .-*-- *----------- -- ----~ - !

.13 with it. But I think that the rejected procedure here is margina:11~

14 sounder than the one that is suggested.

15* MR. GURIN: The one that was rejected, another 16 aspect of that, it could allow, ~hen 4 commissioners did not 17 want a hearing, one commissioner could have a hearing.

18 COMMISSIONER BRADFORD: No, 3 to 2.

19 MR. GURIN: Excuse me, you are right. If you had 20 3 commissioners, then it could be i. That is right. So 21 it could be 2 to 1. I see.

22 COMMISSIONER \GLINSKY: Five person Commission, you

- 23 mean.

.24 CHAIRMAN HENDRIE: I have become lost in the discussion

e-Federal Reporters; Inc.

25 I am sorry to say. Can somebody recap it and-re-acquant me

,36

• 1 with what it is1

• 2 COMMISSIONER BRADFORD: I don't know that it is a matter 3 of high importance in the _real world;* because I think in 4 terms of the way we have worked thus far, if two commissioners 5 wanted a hearing out of 4, you would be likely to have one 6 and P!Obably the same would be.true of five.

7 COMMISSIONER GLINSKY: YOua:-e talking about 3, 8 aren't you, that* is a majority~

9 COMMISSIONER BRADFORD: In the recommendation I am 10 talking about. But it seems to me _oh the question of whether 11 or not something should he heard,. that there should be a 12 slightly lower threshold for that than is required to actually Ii 13 make the. 'decision.

14

.COMMISSIONER KENNEDY: I would have no objection 15 to this. But I:would like to have Mr. Shapar's thoughts about 16 what effect this might have on the rest of our rules.

17 MR. BHAPAR: I don't think it need have any 18' effect on the rest of yo~r rules, except that I would assµm~

19 you will be getting a suggesti9n for a counterpart rule 20 in the domestic area, and you could reasonably anticipate 21 that. I suppose following that pa1:h, you would sa*y well, 22 number one, it -would be a good idea there, too, or the 23

- other- alternative would be some way of distinguishing between 24 ice-Federal Reporters, Inc.

the domestic and £:oreign .policy area.

25 COMMISSIONER BRADFORD: My off-the-top-of-my-head

37 1 feeling is there probably is not. The same argument here 2 ; would hold there.

3 COMMISSIONER KENNEDY: So what we are doing then, 4 in effect, if we change this, the effect is we are changing our 5 rules generally.

6 MR. SHAPAR: It woiuld turn out that way.-

7 COMMISSIONER KENNEDY: That is, a fairly important s decision we ought to make.-

9 COMMISSIONER BRADFORD: would it make a lot of 10 substantive difference? I can't recall a time since I have 11 been here where we decided whether or not to have a hearing 12 on the basis of a vote. These things are generally done by 13 consensus.

14 COMMISSIONER KENNEDY: It wouldn't make any.sub-15 stantive *difference unless one questions why change our 16 exi-sting rule.

17 CHAIRMAN HENDRIE:* I guess there could come circumstances in which the decision to hold** the hearing 19 would involve such an extended and substantive piece of .business\

20 that i t would **be a significant decision, not just a matter of I 21 developing more information to lead to a decision, but it in 22 itself could be a significant step.

23 In that circumstance, I would think a *majority of 24 the Commission ought to believe i t should be done. That is, e:Federal Reporters, Inc.

25

• I don't for myself. see a 1:1,tility in going to *a reduced number.

38

' Furthermore, I am havi~g trouble finding the

_1 I language *. This is 110.83? \ .

2 3 MR. SHAPAR: Page 29.

\

• - 4 s

6 CHAIRMAN HENDRIE: Page 29 of the commentary?

COMMISSIONER KENNEDY:

• COMMISSIONER BRADFORD:

The paragraph is 83.

I won't hold you to what you 7 just said after you read the language.

8 CHAIRMAN HENDRIE:. 83 simply says the Commission*

9 will do this and the Commission will do that, right?* And that

. 10 is understood pretty clearly to be a majority.

11

• COMMISSIONER BRADFORD: There are certainly bigger 12 fish to fry than this. I *guess I would prefer the one less

-

• 13 14 15 than a majority, but certainly on.

~*Te could leave .*J.._

+- and pass COMMISSIONER GLINSKY: Are you talking about a 16 *hearing as a _matter of right or discretionary?

17 COMMISSIONER BRADFORD: As a matter of .right.

18 COMMISSIONER GLINSKY: The point is that is still

19. determined by the Commission.

20 COMMISSIONER BRADFORD: . ~ s, whether or not someone 21 has. standing, yes, I think that really "is not the drift 22 here.

23 COMMISSIONER GLINSKY: That has to be a Commission 24- decision.:

1-i=~eral Reporters, Inc.

25 COMMISSIONER BRADFORD: I keep*having difficulty with

39 I

1 I whether standihg -- I guess it is something you either have *i 2 or you don't._ The Commission makes a decision .either rightly 3 or wrongly. But ihere isn't any point in trying to deal with 1 I

- 4 s

6 standing in a regulation, you can't grant it or withold it, apart from what the Act does for you.

MR . . SHAPAR: What you do is list the factors you 7 are going to consider.

8 COMMISSIONER GLINSKY: It has to be,the Commission.

9 MR. SHAPAR: It is the Commission that is granting 10 or denying.

11 COMMISSIONER :eRADFORD: Granting or denying a 12 hearing, but can the Commission grant or deny standing, or is 13 that done by the statute?

.e 14 MR. SHAPAR: It is done by the Commission.

15 COMMISSIONER KENNEDY: *The Commission decides whether:

16 under the statutes it concludes that they have standing.

17 . COMMISSIONER BRADFORD: B ut it is not *discretionary ..

18* In other words, you don't have _standing because the Commission 19 says you have.standing, it is'because --

20 MR. SHAPAR: You are entitled to as a matter of

• 21 law. But the Commission has to decide the matter of law.

22 COMMISSIONER BRADFORD: If the court felt the I

23 Commission had decided that wrongly, the fact the Commission 24 .decided it doesn't weight with the court .

.ce-Federa1

• Re1>0rter's, Inc.

25 MR. SHAPAR: Except .the unsual deference or lack

40 1 thereof the courts give to Commission decisions~

2 COMMISSIONER GLINSKY: So we are really talking about 3 discretionary hearings, whether or not to grant discretionary

-- 4 hearings, how many .commissioners it takes to do that.

5 CHAIRMAN HENDRIE: *r would certainly opt for -- I .

6 think we do try to see where the consensus of*the group lies.

I 7 And I expect that is what we will* always continue to do.

8 But barring that, I would think a majority decision.

9 is the appropriate way for the Commission to decide its 10 business.

11 *COMMISSIONER BRADFORD: What is the rationale I 12 think I know it in general. terms -- for something like the

.13 Supreme court doing it differently? I take it their 14 feeling is on a decision as to whether or not somebody should fs be heard, it is barely possible after you have actually heard 16 .them, they will have said someth~ng that made a real 17 difference, so the threshold.for hearing them ought to be a 18 iittle lower than the threshold for actually *upholding 19 their contentions.

20 You.do more damage if you refuse to hear them at 21 all-than you do if you reject their contentions.

22 MR. STROIBER:\ If you have a. decision in place by*

- 23 a lower court, that has come up through several layers of

• 24 review, first by the trial court ~nd then by an appeallate b-Federal Reporters; Inc.*

25 court, and I would think th~*rationale is because of the

41 press of business, since the court can't hear everything, it 2

ought to only consider matters of great significance. And 3

therefore you have to have some device for winnowing the wheat 4 from the cahff and the idea is if four members of-the court 5 *think thsi is* a* significant enough legal issue, then it 6

probably warrants taking the time out of your schedule to do 7 that.

8 Here, in these kinds of cases~ you don't have a 9

decision of any body below,,hou*are considering whether or not 10 you will grant a hearing.

11 COMMISSIONER GLINSKY: The question is why 5 justice~ instead of 4? Probably because at that level they 13 get just the right nu.~ber cf cases.

14 MR. STRIBER: I am*informed that four members.

15 can grant certiorari, but my informant notes, and it is 16

• well taken, that it takes 5 to declare certiorari has been 17 improvidently granted, and they take a majority vote before 18 they can .toss it out again.

19 CO~.iMISSIONER BRADFORD: But it would also take 5 to 20 turn it down -- I see. It would take 6 to turn them down in 21

• the first place.

22 CHAIRMAN HENDRIE: If it takes a majority of the cour 23 to get an item before the court, then .presumably a bare maj~ritj 24

-Federal Reporters,. Inc.

of the court, -if that were the case, a bare majority of the 25 6ourt could exclude from consideration by the court a whole

42

. class of petitions for review. You haven't got the same 1 I - -

proposition here. The request for a hearing o;n a subject comes 2 .

and i:t gets considered by the Commission, should the request 3

be granted or should it not. And there isn't any mechanism 4

for denying the consideration of tha:t. request, *inde,ed the ..

s Commission has to make an answer to the petition.

6 Now in making the answer there is a very:.. substantia_l 7

difference in the course of events for*that particular piece 8

of business, whether there is a hearing held or not held.

9 There may also be a very substantial difference for the 10 petitioner'.s conduct of business in that .. area, .whether a 11 hearing is held or a hearing is not held.

12 --- --------- -- --*- - ----- -- ----

It seems to me appropriate that it is a 13 serious policy decision or may be one, particularly in the 14 export area, and it is appropriate that that decision to go 15 to hearing or not go .to a hearing should be made by a 16 majority of the Commission rather than a majority less one.

17

,. COMMISSIONER BRADFORD: I think I agree with most 18 of what you said, but would co.me out differently., again,

• 19 because i t is possible that those seeking a hearing might 20 have an impact on the Commission's decision, the de.cision 21 to hear them *ought to allow, if you will, a slightly greater 22 margin for error than the decision to turn them down after hearing

.. I 23 them.

24 i\.c-e,Federal Reporters, Inc.

The decision not to hear them is really a decision 25

43 that there is no npossibility that what they say will 2 µtake any difference to you.

3 It is something to me that doesn't respond well to 4 the proposition that they should be turned off just as easily 5_ as turned d_own.

6 COMMISSIONER GLINSKY:. You are saying there ought to 7 be a lower threshold for hearing people.*

8 I think that is certainly right. I think it is 9 also probably right that individual commissioners would 10 themselves apply a lower threshold to that.

. 11 COMMISSIONER BRADFORD: If we could write that into 12 the regulations, I would relax ..

13 . COMMISSIONERKENNEDY: As a matter of ract, history 14 suggests that they have.

15 COMMISSIONER GLINSKY: I think that is true.

16 COMMISSIONER KENNEDY: I. think on precisely the 17 grounds you are citing.

18 COMMISSIONER BRADFORD: What we are talking about 19 here is the question of what happens if what we regard as 20 an unlikely contingency should actually occur, then what 21 is the right way to handle it.

22 MR. SHAPAR:

• 1 That is usually why you have rutes.

23 CHAIRMAN HENDRIE: Let me note this as another point.

24 of d~fferenc~ here. Do you have other points?

Ace-Federal Reporters, Inc.

'COMMISSIONER BRADFORD: If anyone else has one, why

44 don't you take it up while I fumble around for it here.

CHAIRMAN HENDRIE: I have run down at the moment.

3 Let's see. While Peter is looking,* I would note that, 4 110.40 (b) now says we are going to tell people the 5 .reason for delays.

6 -MR. SHAPAR: ~his was in response to a comment, I 7 believe.

8 COMMISSIONER KENNEDY: If it hadn't been, I would 9 have suggested it myself. I think it is a grand idea,*

10 in the interest of responsibility to the public, which includes

11. the applicants for l,icenses.

12 MR. GUHIN: Something along this line should be

• 13 included in non-profiferation as well.

14 MR. SHEA: A possible time limit on NRC reviews 15 or something, that's_ right~

16 CHAIRMAN HENDRIE: !guess I don't have a particular 17 problem with it, I would just note that I ~xpect it will give 18 rise to a need for-creative draftsmanship.

19 MR. SHAPAR: You mean put the word "truthfully" 20 before 21 CHAIRMAN HENDRIE:. No, that **s no problem.

22 COMMISSIONER,KENNEDY: In total candor, *r think 23 it should give us no difficulty at all.

. .

• 24 MR. GUHIN: I think in most instances ir we IAce-Federal Reporters; Inc.

25 h_ave sought information from the Executive Branch, or what-have-you, they can be informed of this. They know it anyway.

I

45 MR.* SHAPAR: It is either you or_the Executive 2 Branch *

.3 COMMISSIONER KENNEDY: We can give them an envelope in.which they can put their next request for information.

s MR. SHAPAR: A form with two boxes, and they just 6 check it.

7 *tHAIRMAN HENDRIE:. The public notice requirements 8 are changed. You now are noticing receipt of *an application 9 for a utilization facility-~

10 MR. SHEA: We have always done that.

11 MR. SHAPAR: What is 11ew is the nuclear material.

12 CHAIRMAN HENDRIE: One can go for more?

13 MR. SHAPAR: Yes. A..11.d 10,000 kg or more of 14 source.material.

15 COMMISSIONER KENNEDY: In that connection, Mr.

16 Chairman, that leads to that part which deals with the public 17 notice and procedure, and w note 110.80 helps Commissioner 18

• Bradford in his concern about hearing *from the public who_ may 19

'have something significant to say on the matter that we would 20 certainly wish to have before us in our decision, because it

• encourages public comment on all license applications, and such 22 licence applications* in ,;the preceding section, in 110. 70, 23 will be noticed in the* public document room. And they are 24'

~ncouraged to comment to the extent they wish to do so

e-Federal Reporters, Inc'.

25 *within 30 days. And it duly *I)otes, as is appropriate indeed,

46 1 I that we would take these comments into account. And if 2

l appropriate, also request the applicants to respond to them, 3 which would give us a friler background and understanding of 4 any* issues that m~y be raised, a hearing notwithstanding.

s COMMISSIONER BRADFORD: *These *are fine.as "far as 6 they go, no problem with that.

7 CHAIRMAN HENDRIE: Did you find some more?

8 COMMISSIONER BRADFORD: Just one. Is there out-9 standing still a paper of some sort on the cost of exemptions or 10 non-exemeptions for source materials?

11 MR. SHEA: That's right, we do have a staff paper 12 ih preparation on the issue of* whether we should* continue to 13 exempt those exports from an agreement about cooperation 14 requirements and the associated safeguards. That is a paper 15 we have iri p~ocess that I believe I mentioned last week at the 1'6 brie~ing.

17 COMMISSIONER BRADFORD: And these regulations would do 18 what on that subject? They would continue the exemption?

19 MR. SHEA: Continue the exemption *.

. 20 MR. GURIN: As I recall it, under the standards 21 source material may be exported upon a finding that it is not 22 inimical, which in effect every time we do exempt it, we would I

- 23 not have to make a specific exemption, which _we do** now, which 24 is standard for source material to non-nuclear end uses.

-Federal Reporters, l'nc.

25 * *So the regulations as such I don't*think call for the agreement of coooeration requirement for source

47

. 1 I material. The agreement comes only in effect for special

.*2 I nuclear material, or for a utilizatibn facility, and not for 3

the 100 grams or so of contaminant in the material.

4 So* under th~ regulations. . if you .had source

. - . . materi~l 5

that was not to go under an agreement, you would have no 6

exemption to make.

7 On the other hand, you could still determine, as 8

we have in our Security Branch reviews, that certain source 9

material will go under agreement, and we would want those 10 assurances, i:he most obvious being the*source material going 11 into fuel, whether that be uranium or thorium.

12 That doesn't preclude that; in facti that is the 13 working relationship we have with the Executive Branch.

14 So you are right,._ at this stage at any rate, under 15 these, we would continue to work the way we have been working.

16 COMMISSIONER BRADFORD: We would be doing it under 17 a regulation which said that they were exempt. So it would be just a sort of working agreement we have with_. the Executive 19 Branch that would p_revent them from being exempt?

20

• MR. GUHIN: Yes, as I read this on page 93, it 21 says we have to make the non-inimical determination, and, two, 22 . I that the proposed export of utilization facility or Sand M' 23 would be under the terms of an agreement for coooperation.

24 l

~re-Federal Reporte~s. In~. COMMISSIONER BRADFORD: That is in *terms of issueing a 25 license~ It do~sn't have_anything:to do with gran£ing an

48 1 l exempti~-~-'__ doe: __ ~~~

2 *: . . No, but- the question raised here is VOlCE:

• 3 how about the applicability of the agreement for cooperation 4 for source material for nuclear uses~ Isn't that the 5- question? _Why doesn't it say under (a) (2) the proposed export 6 utilization facility or Sand Mor source material for 7 nuclear end uses would be tinder an agreement ~or cooperation?

8

• MR. GUHIN: I think you :get into definition problems 9 by adding that. Under our procedur~s it-would be subject 10 to an agreement. The question came with DOE and otehrs 11 if you say source material for nuclear uses, how do you 12 really start defining that in a*regulatory framework. I 13 . . think we ra.n into* a lot of difficulties in that sense, because.

14 then you can start talking about *gram quantities for nuclear 15 uses, too. Then you have to go through the exemption 16- process for them each time.

17 COMMISSIONER.BRADFORD: Is that paper coming along 18 pretty soon?

19 MR. SHEA: I would say a few weeks yet.

• 20 *MR. GUHIN: Yes, it is in very rough draft form now.*

21 MR~.SHEA: I think your sense of urgency could 22 affect the timi~g.

23 l COMMISSIONER KENNEDY: That would be novel.

24 COMMISSIONER BRADFO,RD: It does seem to me to.be

e-Federal Reporter~. Inc. ,

25 somewhat relevant in dectdincj .whether or not to put this out.*

49 1 MT. SHEA: The preliminary staff work does. indicate 11.

2*: that i t appears reasonable to continue to exempt it. So 3 we felt comfortable that this was consistent.

MR.:GUHIN: The*roughness in the analysis is s sort of the backdrop to that, *the* infortnation*whlch supports 6 one conclusion or another, depending on what it is. When 7 I say very rough, I think that is where it*is rough. But a there has been nothing in the research thus far that has 9 led the staff to conclude, even tentatively, that the way to 10 go is to try to put all source material for non-nuclear end 11 uses under an agreement.

• 12 They ~ound, for example, you would have to take

. 13 so many 7 4 7 s apart, it would be a very uneconomical source 14 of source material if one wanted to do that,* you know. And l!f shielding in doctors' offices, and so on.

16

• CHAI~ HENDRIE: Now.where does that leave us?

17 There have been two matters identified on which there.is 18 some difference of opinion. One of them is legislative type

19. pearings*, and the second whether *it should be two commissionrs 20 or three to grant a hearing, where that is a matter of

\

21 .Commission discretion.

22 This last.matter is or is not in your view a

• - 23 difference which needs to be settled?

. 24 COMMISSIONER BRADFORD: I guess I don't feel that I ce-Federal Repqrters, *Inc.'

25 have enough grasp of it to really make an iss.ue out of it at .th.ir

• poi"nt.

50 If we were going to take action right now,. I

_1 1

• 2 wouldn't say anything one way or_ another. If we are not 3 going to take action right away --

• . 4 CHAIRMAN HENDRIE: Then it would come up naturally.

5 .Would you tell us again, there is some desirability, you were

'6 telling us last week, to*get on with these rules.

7 MR. STROIBER: The real difficulty, I think, and 8 Tom can perhaps fill us in on this, we have 1some statutory I

9 obligations to meet in terms of publishing the rule and.

10 making it available to GAO, is that correct,* before we can l

I*

11 . .actually put it in place.

12 Mr. Dorian. Once we make the Federal Register

-13 announcement, we would like these rules in place because there 14 has to be a review by GAO. That review takes 45 days.

15 COMMISSIONER KENNEDY: ~ould you refresh our memory 16 *as to why that is true? What is.the nature of that requirement?

17 MR~ DORIAN: GAO looks at any record-keeping or 18 reporting requirements, and also at the content of any 19 application made by an export licensee. In this case we have

.20 said that we are not changing in any substantial way our 21

• record-keeping, or reporting requiremerits,.or the information 22 that we request from apvlicants.

23  :.In fact, we may be ruducing that load.

• Now there 24 is a question as to whether or not the GAO re.view is

~-Federal Re~rters,. Inc. '

25 necessa:r;y. We will find out the answeJ;" to that question very

. 1 soon.* But if a GAO review is necessary, it takes 45 days

• 2 under the_ curr_ent procedures worked* out *between GAO and 3 this *commission; and added to that 45. days is .another requirement

• 4 of. 30.days under the APA for publication of a rule.

s *So in fact it would take

• 75 days *from 'the time you

6. initially announced in the Feveral Register*to publish the 7 rule.

8 We have informally contacted GAO and they said- that 9 they would be looking at it, and as .soon as*they*have reviewed iO it, we could make our Federal Register announcem,ent and come out 11 and say in the announcement that they have reviewed it,so 12 now from this date. it will take 30 days. It will take 13 less than 7 5 days totally *

. 14

• The second thi:og is if you want *to you could 15 probably.divorce the procedural part of the reguilations from 16 the substantive part, that is, the content of the 17 applications, the.forms required, the exemption procedure, 18 other procedures, in sub parts 8 A through F, you could divorce 19

• from the other parts, G through L, those concerning hearing 20 requirements, rule-making and so oh, and*those need not be 21 reviewed by GAO.

22 So the ones the court is concerned about you could

- 23 _say, assuming you agr*ee, that 30 days from the* time* of I

24 _publiqation in the Feveral Regist~rthey '?an become.effective.

~-Federal Reporters, Inc.

COMMISS°IONER *. GLINSKY: What is the

• importance of the i **

I 52 I, . -

1 effective date? Doesn't the court simply want to take a

_ II look*at the rules?

2 3 MR.* STROIBER: I think that *is *probably true, 4 Commissioner. I think, however, depending.on what additional 5 .interventions we may get, and *it looks*iike*ther~ are some 6 interesting questions coming up that might provoke that sort 7 of thing, we would want to have them in place as early as 8 possible.

9 I think in terms of the court's view, the date is 10 irrelevant. They want to see what*it says at the e~rliest 11- possible date.

12 COMMISSIONER GLINSKY: You could show it to the

- *13 14 15 court at the same time you show it to *GAO.

reporting requirements are not going to affect it.

MR. DORIAN:

After all, YOu. show it to GAO at the time you 16 have agreed to these rules. At thatpoint you can go to the 17 court and say you have agree*dnow, you can look at it.

18 COMMISSIONER GLINSKY: So what is the relevance of 19 the effective date?

20 MR. DORIAN: To the extent you might want. to have 21 procecures in place in connection with any other proceeding.

22 MR. SHAPAR: 1__ It is a question of how much yrgency 23 Carl feels in the matter of the court.

24. MR. STROIBER: _ 'And potential other interventions.

e-Federal Reporters; Inc.

25 MR. ROTHCHILD: In de_aling recently with LAU and HEU

53 1 llintervent.ion petitions, we ran into several snag*s *and much 2 1;discussion on how we go about solici'tin*g public commen:ts. I 3 think those kinds of proble~s are resolved by these regulations ,i .

I 4 and the sooner we get them into force the better* *off we are 5 as far as dealing with *future interventions** and e'iiminating 6 th~ number of Commission meetings on *this kind of subject.

7 COMMISSIONER KENNEDY:- Could we look at the other sidJ 8 of that coin?

9 Suppose there was a delay, what would be the bad 10 things that would result?

11 MR. STROIBER: I think that depends on what 12 posture the Tarapur matter arrives at. We expect to receive 13 the Executive Branch views on that in short order. I don't 14 know whether Jim can shed any _light on that or not.

15 COMMISSIONER GLINSKY: Let me understand, Carl.

16 That will then be the license which is before the court?

17 MR. STROIBER: That*is absolutely correct.

18 COMMISSIONER KENNEDY: The one which we will be 19 receiving-for review?

20 MR. STROIBER: Yes. And therefore in the abasence 21 of any procedures, you know, if the intervenors are so 22 inclined to .challenge any; licensing action of this Commission, 23 the court has previ~usly indicated on the occasion when we

.24 issued the. earlier license that they were disturbed by the Federal Reporters, Inc.

25 absence of Commission regulations here, and I think that could

54 1 have.an adverse impact 6n our litigation posture and *the.ability 2 Of the Commission to act. ,.

3 COMMISSIONER KENNEDY: .Would a further consolidation 4 process, such as that taken in the past, help?

5. .MR. STROIBER: Well, I think *1egally 'that* would 6 perhaps remove the mootness issue as *a legal matter. However, 7 I think it is also possible -- well, in the first place, 8 the intervenors have not sought any sort of consolidation 9 of the follow-on license with the present license.

10 COMMISSIONER GLINSKY: Is there a follo*w-on license?

MR. STROIBER: Yes, there*is. THere are two 12 license applications now

• 13 . COMMISSIONER GLINSKY: THere are two more application 9 14 in-house, in effect. Have they been sent to the Executive.

15 Branch?

16 .MR. STROIBER: They have both been sent to the 17 Executive Branch and we have not received views on either 18 one of those at present.

19 However., we have President Carter's statements in 20

• New Delhi COMMISSIONER GLINSKY: Wait a minute. Are those 22 two plus one? I*

23 MR. STROIBER: No,_ just two.

• 24 COMMISSIONER GLINSKY: So there are two,- one of Ace-Federal Reporters, Inc. ,

• 25 which we

• have heard about..

• MR. STROIBER: One of which we hav.en' t. heard about.

55 1 Well, we hav:e he_ard about, but not -officially.. . - *'. *_* -

2 CHAIRMAN HENDRIE:_ It seems to me_ there is some 3 utility _in being* able to put this body of material together 4 COMMISSIONER GLINSKY: Certainly~ - --

5 CHAIRMAN HENDRIE:. Peter, what shail we do with the 6 two where we have differences?

7 *COMMISSIONER 'BRADFORD: I don't know, we_never really 8 -focused on the question of who felt how about the proper 9 hearing format.

10 For myself, I would be inclined to reserve the 11 . question of specific proced-ures to be used in individual 12 hearings for decision at the time that those hearings are

-13 set up. And that would, as Howard indicated, require some 14 rewriting *

. 15 . COMMISSIONER KENNEDY: And it raises the question

• - 16 -that I raised, and I feel and I think Howard -- I won't 17 speak .for Howard in this regard 18 MR. SHAPAR: This is policy, you dori't need my 19 views on this.

20 COMMISSIONER KENNEDY: .I know _that, I appreciate -

21 *your discerning that as well as stating* it.

22 COMMISSIONER,BRADFORD: You are not saying i t is 23 legally _necessary to _put them out again?

24 MR. SHAPAR: Right.

=ederal Reporters,' Inc.

25 COMMISSIONER KENNEDY: I am not suggesting it is

56 1*

1 Illegally.necessary~* I am suggesting.our.basic doctrine of I! . . .

2 ,; £air*ness imposes that obligation upon. us.*

3 CHAIRMAN HENDRIE: I*would hate to have to go 4 around ag*ain.

• It would take some. time*~*

5. ..COMMISSIONER KENNEDY: Not nec*essarily.

6 COMMISS!ONER BRADFORD: If everybody agreees with 7 me, then.that is not an area of difference. But assuming a they don't 9 COMMISSIONER KENNEDY: You are, I think, saying it 10 would take some time. I don't think that is necessary at 11 all~ How long would it take? The language could be written 12 this afternoon. A letter would-be drafted to the parties 13 who commented on the matter, in particular, because in this 14 case, surely the parties who commented and who now would be 15 satisfied would hardly need too much time to come back and 16 say what a commendable. act this was. I could help them do 17 that in minutes.

18 MR. SHAPAR: But there is a step that hasn't been 19 mentioned.

• 20 COMMISSIONER KENNEDY: And then there are those who had 21 a misapprehension which we gave them, and which we are now ..

. 22 correcting, and they witl probably take a little longer. But 23 -I daresay they would. respond fair.ly rapidly, . too; and_

24 then we: would have before us*a set ofviews*on ;both sides i-Federal Reporters, Inc.

25 of that questipn*, whereas* now. w~ liave 'th_em on: only one side and by* our own action, hav,tng foreclosed the question, . you see *. _

57

• MR. SHAPAR: I think. the* comments could. be 2 solicited arid received fairly pro~ptly., I think that the time-3 consuming part of the problem would be resolving the 4 controversy that I think we all*predict with the result from 5 receiving antithetical*comments.

6 COMMISSIONER KENNEDY: *But at least the record would 7 be clear that all parties had an opportunity to comment on e matters directly affecting them, whereas up until now only 9 one set of parties has had .. that opportunity, since the others i I.

10 thought it wasn't going to affect them. By our own *statements lI

• 11 they concluded that.

12* MR. STROIBER: I think there is an extent to which 13 we are pr.obably on fairly sound constructive notice of the Il

_14 views of those other parties,_however, because we have

. l litigated 15 this very question before the court of Appeals, and we have 16 -the brief of the U.S. Government on those questi_ons of 17 cross-examination and the lik~.

18 So I wouldn't expect that anything we would hear would 19 be a surprise to us.'

20 I think the basic issue is whether or not the 21 Commission really feels it wants to expressly reserve the 22 possibility of these procedureal

. I devices.in the rule. And I guess I feel that-that issue could. beaddr~i:;sed* fairly quickly, 24 whether or not we wanted to seek additional comments.*

-Federal Reporter~. li:ic.

25 MR. SHAPAR: There is another possibility I would

58

. 1 sugge~t that might involve 1;:he time* problem and that is to put out the rules as written, and very* shortly thereafter I go out with a proposed amen_dment to those rules to make .

II 3

.I 4 the exp_ress provis_ion which you have in mind. . And' so1ici t s public comments on that.

6 That would allow the rules to go out, meet OGC's 7

time schedule, and then throw *out for* public consideration 8

this possible amendment.

9 COMMISSIONER KENNEDY: That seems to me to be a 10 fair proposition.

11 COMMISSIONER GLINSKY: This applies to poth formal 12 heaiing and informal hearings~ is that correct?

13 MR. SHAPAR: There aren't any formal hearings under 14 the structure envisaged in these rules. They are all informal 15 hearings*.

16 COMMISSIONER GLINSKY: But I mean it does allow for 17 a determination of_ standing?*

18" MR. SHAPAR: Yes.

19 COMMISSIONER GLINSKY: So in both cases you would 20 have a hearing.

21 MR. SHAPAR: Yes. That was just a suggestion to try 22 to accomodate all points of view.

. . \

23 CHAIRMAN HENDRIE: Let me see if I understand the 24 proposition you have in mind. This is not an initiative to ederal Reporters, Inc.

25 .specify these as *formal proceedings under one of the appropriate

59 111 se~tions of the Administrative Procedure Act, but rather 2 *; ~ort of the reverse of that, to not.rule out the possibility 3 that in connection with ~he informal hearing structure 4 established for these things, -the Commission, in -any particular 5 _ one of-thes~, might want to incorporate other features?

6 COMMISSIONER BRADFORD: Yes, features that are in 7 some cases expressly and in other*cases perhapp impliedly ruled 8 out by the present wording.

9 It doesn't promise anything to anybody, other than 10 that we are keeping the question open.

11 .. CHAIRMAN HENDRIE: The language at hand here, could 12 somebody point out to me where in the regulation*itself it 13 specifies 'this, and what precisely does it say?

14 MR. GUBIN: Page 117, paragraph (f).

15 MR. SHAPAR: It says*: "W itnesses will be questioned 16 orally* or in writing an.d only by the presiding officer."

17 There is not only this express language, but of courss . the 18 whole tenor and thrust of this.

19 COMMISSIONER BRADFORD: Yes. It is true that that

• 20 is one of the sections. I guess I would have to go through 21 and make a laundry list of others that seem to rule out i

• • I 22 procedures that we might1 want to grant. I had intended to

- 23 us_e cross-examination only illustratively as one* of the 24 procedures.

e-Federal Reporters, Inc.

_ 25 MR. ROTHCHILD: rt*go~s_into detail as to whether

60 1 I you are talking about legislative type hearings.

2i CHAIRMAN HENDRIE: The whole sub part J is sort 3 of embedded in this. So extensive rewriting would be 4 involved.

5 .MR. SHAPAR: No, it wouldn't be extensive. The 6 rewrite would be rather simple, as a*matter of fact. It would 7 not be difficult to draft the language *if thi~ is the direction 8 you want to go.

9 CHAIRMAN HENDRIE: What would you do?

10 MR. SHAPAR: Just say in the general section that 11 theCommissionrs reserve the authority to provide further 12 rights and then maybe give a couple of examples,* under unusual J3_ circumstances or certain circumstances as a matter of 14 discretion.

15 CHAIRMAN HENDRIE: WOuld you leave the bulk of 16 this. still in place, and just add that?

17 MR. SHAPAR: I would, as I understand the discussion 18 at this table, reserve authority to be used under unusual 19 circumstnces or whatever standard suits you.

20. I am merely making the point that the drafting

• 21 is simple.

22 MR. MALSCH: iSome of the language in here on the

- 23 policy aspects of formal versus informal hea~ings resembles 24 th~ discussi6n of it in the btief filed with the court

--Federal Reporters, Inc.

• 25 i;n the Tel:'.apur. case.

61 i

1 MR. SHAPAR: You have-to take that*into consideration,\

2 for sure.

3 COMMISSIONER KENNEDY: Where does that leave us with 4 the brief before the court? Undercutting it?

5 MR. SHAPAR: I think we can.handle.it in a way that*

6 would *not undercut it. We could put some disclaimers on 7 that, that we are doing this purely as a matter of discretion, a we think the circumstances would be unusual, something_ like 9 that.

10 COMMISSIONER BRADFORD: As long as it is being done,

. 11 I am not all that familiar with the Terapur case, b_ut the 12 contention there must be you are compelled to do it. I don't 13 think you undercut that by saying we are not compelled to do 14 it, but we are doing it ju~t because we want to.

15 MR~. SHAPAR: I agree.

16 CHAIRMAN HENDRIE: What is your feeling?

17 COMMISSIONER GLINSKY: (inaudible) 18 COMMISSIONER KENNEDY: What did you say?

19 CHAIRMAN HENDRIE: He is not sure he has a 20 strong feeling about it.

COMMISSIONER GLINSKY: It cuts both ways. It also 22 means that applicants who\ are concerned with licenses will

- 23 not have certain rights.

24 COMMISSIONER KENNEDY:

• I think the Statement of a-Federal Reporters*, Inc.

25 *Considerations might wish to point that out.

~~-------- -

62 COMMISSIONER BRADFORD: I am not sure that is 2 true. They along of all people have standing.

3 VOICE: But they didn't*raise this question in 4 their comments~

5 COMMISSIONER BRADFORD: No. But they could request 6 and g_et a hearing. I suppose under the foreign policy exemption 7 it might turn out to be 8 MR. SHAPAR: It would be the same hearing everybody 9 else would get.

10 COMMISSIONER GLINSKY: But they are not going to*

11 get an adj.udicatory hearing* under these rules.

12 MR. SHAPAR: And they didn't object to this in

.13 th,eir comments.

14 COMMISSIONER BRADFORD: They can compel a hearing 15* of some sort, but it need not be an adjudicatory hearing.

. 16 COMMISSIONER GLINSKY: It won't be, under these 17 rules.

18 COMMISSIONER KENNEDY: That is right.

19 CHAIRMAN HENDRIE: Dick, what is your feeling 20 on this question?

21 COMMISSIONER KENNEDY: I would prefer to leave it the 22 way it is. However, if ~e wish to chang.e it, I do think

- 23 that we are, in fairness to all of the parties. who *aid go

,

• 24 through this I just noticed one comment, and I quote:

!Federal Reporters,* 1nc.

. . . 25 11 On the whole we applaud the. very carefully structured

63 1

handling 0£ the questionof public participation in the 2

proposed licensing process. The insistence on-the legislative 3

type hearing as stated in the preamble of the rules is indeed 4 II in the public interest.

5 There is somebody who looked at it and commented 6

favorably on it. And we are_ looking to one other set of .-

7 comments which .suggest the other, adopting that, and these other; 8 -

parties who thought that they were commenting on one rule are

. I 9

suddenly going to be faced with a conclusion that they didn't

10. .

expect at all, and therefore never had an.opportunity to 11 comment on.

12 I think that is a bit unfair in the process. That 13 is what concerns me.*.

14 COMMISS~ONER BRADFORD: I don't necessarily disagree 15 with that. I would ask in that context whether there aren't 16 other sections of this that have been changed, which received 17 one set ,of public comments? I mean this can go on forever.

18

• COMMISSIONER KENNEDY: I realize that~ . But I did* 1001'.:

19 .

at nearly all of the changes that were made and all of the 20 comments made, public comments that were made, and for the 21 most part they were rather technical in character.

,22

• I This is a fundamental policy question, and I think 23 the~e ~s a difference there.

24

~~-Federal Reporters, Inc. Don't misunderstand me. *r am not saying no, we 25 shouldn't.do it~ I-am say~ng. only I would prefer not to,

-64 1 because I don't think it is necessary. But if we are, ~then*

2 :i: helieve, for my own* part, I feel obligated to go out and give 3 people a chance to put on the record what they feel about 4 it, just in a sense of fairness.

s. ~ad we posed the option or indicated some tendency 6 in this direction, or even been silent on the question, then 7 I think I could say well, you know, they had t~eir chance. But 8 we weren't, we were affirmative in our statements to the 9 public saying we were not going to do this. And you know that 10 is the difference between saying we would like you to comment 11 on-how you* like red automobiles and then when we get their*

12 co~ents, we think red automobiles*are'nice, we say well, 13~ what you didn't understand is we are not.going to build red 14 automobiles, we are going to build black airplanes, and here is 15 our rule on black airplanes.

16 I think that is not quite fair ..

17 CHAIRMAN HENDRIE: WHat sort of a circulation would.

l! one contemplate? The fuli listi I suppose.

19 MR. ROTHCHILD: It would go in the Federal Register,

-20 just like the rules.

21 COMMISSIONER KENNEDY: How long would you suggest 22 a matter that restricted, would require?

23 MR. SHAPAR: Fifteen days at a minimum. Maybe 24 you would want to give 3 0 days*.

,re-Federal Aepo"ers, Inc.

25 _COMMISSIONER KENNEDY: I would think 15 days would

65 1 be all right, if people really thought it was an important 2 enough matter. After all, some of them have already commented.

3 MR. SHAPAR: I think maybe a mail solicitation

- 4 5.

6 of all those who commented.

MR~ STROIBER:

who would need more -time ..

We have some foreign commeriters also 7 COMMISSIONER KENNEDY: Some cf them commented by 8 cable, didn't they?

9 MR. GUHIN: As a practice, as with this rule, if 10 someone came in and said they needed more time, of course 11 it would be *extended too, to give them an opportunity, if there 12 was a basis for doing so.

13  ; MR. SHAPAR: You could also, if you wished to follow 14 the thought I threw out before of doing this by amendment, 15 you could cross-reference that.in the Statement of Consideration 16 that the Commission is giving further consideration to this 17 point.

18 COMMISSIONER KENNEDY: And will propose for public 19 comment a suggested amendment? I would find that a wholly

. 20 feasible way*to address th~ question .

21 COMMISSIONER BRADFORD: I guess I wouldn't mind doing 22 that if the regulation that went out -- if this regulation I

- 23 went out with the thing deleted that posed the q~estion.

24 MR. SHAPAR: - Like taking out the *word "only".

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25 *COMMISSIONER _BRADFORD: I would have to look at it

66 again. It seems to me that we are going from a*posture in which the Co~ission does have these choices into one in which it doesn't.

3 4

• I guess I wouldn"'t want

• to concur *in that, and 5 then turn around and discover *later 6n that that*was in fact going to be the regulation that stayed in place *

. 6 7

MR~ SHAPAR: If you took out the word "only",

8 plus an explicit reference to that point in.the Statement of 9

Considerations, it might accommodate your view.

10 COMMISSIONER KENNEDY: But it would seem *to me that 11 ha*s the same ef feet as revising the* rule, you know, as a

• 12 P ractica*1 matter.

13 My concern goes to the way this Commission put the question to the public. And some segments of the public have 14 been, if we proceed in- this way, inmy view, been 15* misled.

16 I don't think that we wish to do that as a*matter of public policy. I don't think we wish to conduct our affairs that 17 way, that is all.

18 19 I, for one, would not wish to be put in.a position 20 of acting in that way vis a vis part of the public, which 21 includes*,* by. the way, the.:_ Executive Branch of our own government.

22 CHAIRMAN HENDRIE: There may be. some views there.

23 COMMISSIONER KENNEDY: I am sure there will be.

24 hey have never offered them, because they weren't asked *.

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• 25 heir:.:own previous researche,s were those clearty stated as the

67 intention of the rule, you see. So I just thirik it has 2 left them in a very very difficult position, and *I don't think 3 we want to do that.

4 As*a Commission, I think that is not treating s the public fairl_y in the way that we by and large do. I think' 6 we treat the public fairly, and I think here is a case in*which 7 we could be, I think, severely criticized, and I don't think 8 we want to be in that position.

9 MR. SHAPAR: I don't think it is by and'large, 10 I think it is invariably.

COMMISSIONER KENNEDY: Invariably, I agree, a splendi 12 change, and improvement.

13 CHAIRMAN HENDRIE: It strikes me there may be some 14 maneuver room. Your aim, after all, was not to institute 15* a ne-w and more formal hearing*regime, but rather to preserve 16 some flexibility for the Commission which it might choose to 17 exercise. in say the exceptional case, rather than in every lS case, to allow .these hybrid formats, what~have-you. i.

t" .

19 COMMISSIONER BRADFORD: Yes. I .think this case 20 clearly in most export cases you don't even have the request, 21 never mind the serious question. So, yes, everything you say 22 is correct.

23 COMMISSIONER KENNEDY: The difficulty with that,

~4 if I may note, however,.just sow~ *think it through a little, Federal Reporters, l11c.

25 the difficulty with that is t_hat _every case which is

68 1 interve*ned in will be exceptional. It is precisely_for that 2 r*eason, I am sure, that the intervenors propose to i~ter~ene *.

I 3 Why would they waste their time on matters that are routine 4 and not exceptional?

'l'he only thing on.which they intervene ;is exceptional 6 things, so yoq_:.c:I1ave already defined the result.

7 Again, I don't want to argue that g~estion here, 8 because I think it is premature. until we have had an 9 opportunity to review the other side of the question. We have 10 not had that opportunity on the otehr side, because we n particularly by our own action foreclosed it. That is all I 12 am concerned about.

- 13 14 15 I am not concerned.about the substance of. the question, because I am. notpre:E)ared*to even think about that yet, because I have only heard.one side of it.

16 CHAIRMAN HENDRIE: I am just trying to map out what 17 I think might be some possible other language for comment, 18 to see whther I understand what would suffice.

19 Howard suggested one could accomplish this

• 20 f°lexibility by going into the- section on the yearings, leaving 21 -- with some adjustment to take accoubt of. the exception 22 leaving the bulk.of thatI in place as the normal process*, and

- 23 then noting at an appropriate place or places_ that the 24 Commission does reserve the right to add additional featrures

, -Federal Reporters, Inc.

25 i*n an. exceptional case or -spe~ia_l case, at its discretion, whatever.

(i 9 MR. SHAPAR: That is nOt really*what I suggested, 1 li

• I 2 * .Mr. Chairman, al though that i_s- an option that can be 3 considered.

4 What I suggested was leave the rule as it is,

5. but with a.statement in the Statement of Consideration that 6 the Commission is re*considering whether or not --

7 CHAIRMAN HENDRIE: That is an alte~ante procedure; 8 that is another point. I am sayi~g suppose we attempted to 9 do some rewriting, which we would then circulate to the 10 full list for comment. What might that look like?

11 MR. SHAPAR: Just the way you described it.

12 CHAIRMAN HENDRIE: .I-think that is right. Now 13, does that fit what you are looking for, or is that too narrow?

14 COMMISSIONER BRADFORD: No*, I think that is all 15 right. Obviously we will all review what has been written.

16 _But if what you are talking about is essentially 17 putting together something that does preserve to the 18 Commission discretions on a case-by-case basis, and circulating ,* t 19 for comments, that is all right with me.

-20 I think the Commission would want. to be leery about 21 getting into a situation where every time it changed a 22 regulation, it had to gq back out for comments. But that 23 aside, I don't mind doing that on a short timetable.~

24 I do think that the comments we wi~l get will all

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25 be comment~ that could also be_ mc1.de by those affected in the

70 individual proceedings with the same force. But so be it.

CHAIRMAN HENDRIE: If we decided to try to map some 3

language like this and_go out for comments, I think, if I 4 accept your view we ought to explore this further and so on, 5 there is a_strongly held view that we ought to go for comments,

• l 6

when you talk about retaining the Commission's prerogative Il 7

to do it on a case-by-case basis; are we really then in .1 I

8 essence saying that subpart J here, all of the 'details laid 9

out for a so-called legislative type hearing, it may say that, 10 but that is not what we mean, what we mean is eyery time we 11 get a request for a hearihg or ~aent to consider one on our 12 own motion, that we will sit down and sort of decide the 13 procedures for that h~aring at that time?

14 That is one way*of looking at it. Another way of 15 looking at it is saying, Gee, in such cases, 8 or 9 times out 16 of 10 we ought to do like it says in subpart J ,. but we recognize; 17 there may be the exceptional case presented where you would I'

18

• want some additional pro~eedings~

19 COMMISSIONER BRADFORD: I guess I haven't been 20 here long enough to know whether 8 or 9 times out o~ 10 is right. I certainly am not saying in every case we would want 22 to go the full -panoply of procedures. I just don't know 23 how to formulate what the right fraction would be for cases 24*

• Federal Reporters, Inc.

that you might go _a little beyond bare legislative type 25 hearings would .be, or what I .take is al so or-al argument type

I 71 1 I of_proceeding~. But that is.certainly what_ r" had in my 2 mind contemplates some showing that any given procedure 3 would make an important contribution and the basic test 4 for a hearing itself seems to me to be a fair test of the 5 procedures_ in it, do they detract from* the common security,

.i I

6 do they add to the proceeding._ I guess *that is what I would 7 ask in each instance.

8 MR. STROIBER: I would only add. in the Statement 9 of Considerations on page 12 we state explicitly"The Commission 10 has endeavored to provide a structure for publ~c. partici-11 pation that is_ sufficiently comprehensive so as to-eliminate 12 or substantially decrease the need for time-consuming case-

-- 13 14 JS by-c"ase d~'velcpment of procedures for export or import license applications."

I feel that very strongly, because that is what 16 we have been doing for the past two years.is improvising.

17 And I think the court will feel that also. If you make the 18 process too open, they will say

19. CHAIRMAN HENDRIE: I agree with that thrust, and 20 that is the direction I would like to see us go. B~t-Peter, I 21 think it is fair then to ask,with what you have in mind, 22 don't we have to strikeithat paragraph and that thrust in 23 'the regulation?

24 COMMISSIONER BRADFORD: I don't think so. Let me ai-Federel Reporters, Inc.

25 look at the paragraph again.

72 1

• CHAIRMAN HENDRIE: Bec:ause what you suggest is

. 21 that as each occasion where a hearing is requested and we 3 consfder the request or on our own motion think we should 4 have a hearing on :this matter, we are to.decide what special 5 proceedings or procedures ought to be a part of th~ procedural 6 framework of that hearing.

7 We will once again be.doing it ad hoc, on a case-8 by-case basis the whole procedural structure.

9 COMMISSIONER BRADFORD: In that relative minority of 10 cases where public participation is of a type that requests 11 hearings, or where we feel it is necessary, yes, then 12 that last sentence would be of *limited applicability.

13 *I still wouldn't say non.

• I *am not sure I understand 14 exactly what you are expecting from the court. If the court 15 is worried about anything in the Tarapur case, it is not that 16 we decide these things case-by-case, it is we .are too 17 restrictive.

10* What you are suggesting is if we come out with a 19 *policy consistenly very restrictive, the court would be more 20 comfortable than if we go on deciding them case-by-case.

21 *There is everything to be said for having a 22 systematic policy, but ~hat isn't waht the court is going to 23 get the Commission for in Tarapur.

24 MR. STROIBER: I th;i.nk the court is lo.eking for as

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25 definitive a statement of the Commission's intentions with

73

. 1 regard to its procedures as possible. We stated what we were

.2 going to do inone specific case, and that was.the Tarapur 3 proceeding, and we said that was frankly an experimental mode, 4 we were seeing how things looked and whether*they would work, 5 and we would promulgate regulations *based upon our*experience, 6 and we would state what we expected to doin'the export 7 licensing process.

8 You are certainly correct-that the main issue is 9 the substantive issue of whether or not the intervenors got 10 what they were entitled to under the statute. But I think even 11 *more important than that.to the court,-"and why *it is looking

_12 for these regulations, is being able to tell *whether or not 13

• what the Commission is going to typically grant people 14 meets the legal standard.

15 And if you promulgate.a rule which is still open 16 end!=d, then the court is just not going to be able to rule on 17 that issue, it.will have to -~*take every case as it arises on 18* an ad hoc basis, and you have to start from zero again.

19 *COMMISSIONER BRADFORD: But the court has got to 20 decide in Tarapur whether they think what was granted to 21 those pet:i.tioners was sufficient.

22 MR. STROIBER:I Yes, that is true.

23 COMMISSIONER BRADFORD: And nothing this* rule says wil 24 help the court one way or another on that issue.

ice-Federal Reporters, Inc.

25 MR. STROIBER: Well, except that the courts, I

74

,j I!

1 thi.nk, tend to look ahead at what agencies are doing also.

2 : I.f they are satisfied with the *procedures that we put in 3 place, they might say ;..._

4 COMMISSIONER BRADFORD: Carl, if they like what 5 the Commission did .in Tarapur, they will* like these regulations.

6 If they disapprove of what the Commission: did in Tarapur, they 7 can't like these regulations.

8 COMMISSIONER KENNEDY: I am not sure that necessarily 9 follows. These regulations do things that certainly were lO not in place in the case of Tarapur. These reguilations call 11 for and indeed suggest the Commission is anxious for 12 and I think the word is encourages public comment on every 13 lic.ense, and -f1.1rther notices those licenses which haS not 14 been the case except. in the case of reactors up until now.-_

15 There is a substantial panoply of new actions 16 encouraging and facilitating public *participation in these 17 regulations that did not exist in the Commission's regulations 18 t the time of Tarapur. And certainly go beyond, it seems to.me, 19 in a variety of ways, anything that we did in *the Tarapur 20 matter. Is that not correct; Carl?

21 MR. STROIBER: That is right.

22 MR. SHAPAR: I would have to raise a caviat about 23 that.

24 COMMISSIONER KENNED¥: Please.

Federal Reporters, Inc.

25 -MR. SHAPAR: I would .read the regulations, or a

75 1 reasonable interpretation of the reguilations as they now exist 2 is that the full adjudicatory procedures of subpart (g) 3 __apply to exports.

4 Now-the Commission has not chosen to follow that S . interpretation in the Tarapu_r proceedings, but a reasonable 6 interpretation of the part 2 as it now exists is the full 7 adjudicatory procedures in subpart (g) do in fact apply-to 8 export licensing.

.9 VOICE: Are you sahing we get a hearing as a 10 matter of right in any case?

11 . MR. SHAPAR: When you have standing.

12 COMMISSIONER GLINSKY: Then you have a hearing

-13 as a matter-of ri~ht.

14 MR. SHAPAR: Yes. I don't think that viciates your 15* main point, but I think it *should_ be said .

. 16 COMMISSIONER KENNEDY: r*undersatnd.

17 CHAIRMAN HENDRIE:. I am not sure where to go.

18 Vic, are things clarifying?

19 COMMISSIONER GLINSKY: I don't have any other

• 20 questions.

21 CHAIRMAN HENDRIE: Are you inclined to go with 22 them as they are, or to try to recirculate and move forward the

- 23 ore flexible posture?

• 24  : I am obviously trying to see if there is any

-Federal Re~rters, *1nc.

• 25 _ossibility I can fabricate a 3-1 he.re. Then he could maybe

76

• II 1

supply his views in a separate memorandum.

2 COMMISSIONER KENNEDY: I am trying .. to support

.* 3

• Peter. I am trying to make it possible for Peter to at least 4

get the' public Is view.:

5 CHAIRMAN HENDRIE: Let me see, first, if there 6

is any way in which I can bring the Commission to an action 7

this afternoon. I think that would be my first choice. _If 8

not, then let's *see where we go.from there.

9 COMMISSIONER GLINSKY: Well, perhaps we can follow 10 Howard's suggestion and this point in the last comment, at 11 least.in one area, the case may be better for discretionary 12 hearings, and we could go and ask for a comments on that

-13 specific point.

14 COMMISSIONER KENNEDY: I would be for that.

15

• . CHAIRMAN HENDRIE: -This would be along the line of 16 noting that we are contemplating.an incrased flexibility, and 17 will be circulating further language for comment.* Is that it?

18 COMMISSIONER GLINSKY: _That was my suggestion.

19 COMMISSIONER KENNEDY: That seems to me to be 20

.reasonable.

21 COMMISSIONER GLINSKY: I don't think at *this time I 22 I would propose a-change for rnyse_lf, but I think I would

-23 certainly be interested in putting it out for comment.

• 24

-Federal Reporters," Inc. CHAIRMAN HENDRIE: That would be a way of 25 sort of doing both things at once.

\

77 COMMISSIONER GLINSKY: Yes.

2 COMMISSIONER BRADFORD: I have a purely practical 3 objection to that. As I see it,the present situation is better.

e *4 than the situation in the rule. Therefore, if I can persuade 5 - only one of* you .. to agree with me, I am better off *than I 6 would be under the rule. Once the rule is in place, and the 7 public is commenting, then if I persuade only one of you to 8 agree with me, it doesn't do me any good at all.

9 So I am better off under. these circumstances.

10 COMMISSIOENR KENNEDY: Here s thought Howard had 11 generated the generally Solomonic conclusion.

12 CHAIRMAN HENDRIE: You would prefer to get from here 13 to whereever you::re going either by only going this fa.r, 14 if that is all that is necessary, rather than going like this.

15 (Indicating) 16 COMMISSIONER BRADFORD: I.have no objecdtion to 17 getting like this, but I am afraid the accordian gets stuck 18 out there and never plays a note.

19 CHAIRMAN HENDRIE: Clearly a possibility. And it

-20 does have the aspect that if you are immediately going to 21 change something, perhaps we ought to recognize that.

22 COMMISSIONER GLINSKY: would it be an effective 23 change in one less than majority?

24 COMMISSIONER KENNEDY: That would require a change

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25 in the Commission's rules, wouldn't it? And that would have

78

_1 I to go out for public comment.

2 CHAIRMAN HENDRIE: Carl, what sort of deterioriation, 3 if that is the right word, of the Cornmissin's position, 4 ppsture~ and so ori, accrues for another month and a half 5 of delay on this?

6 MR. STROIBER: I think that is in large measure 7 dependent on when we receive the Executive Branch views on 8 the follow-on license and how u:r:gently they request action, 9 and a lot of imponderables.

10 I just.can't speculate on that. *I would guess that two weeks is not crucial, a month and a half might be a 12 problem.

• COMMISSIONER GLINSKY: Carl, is there any possi-14 bility of a hearing on this application that is about to 15 reach us? Or was that hearing aLready held in July.of '76?

16 MR. STROIBER: I think*you can hold a hearing on 17 this matter if you decide you want to hear it.

18 COMMISSIONER GLINSKY: WOuld somebody have to come

19. in and ask for it, or is it too late, or what?

20 MR. STROIBER: The Commission can always, as r*

21 understand it, and correct me if I am wrong, call for a hearing 22 on its own motion.

23 MR. SHAPAR: That is correct.

24. MR. S'l;'_ROIBER: I think there would be at least a *

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25

• logical burden for you_ to show that there were at least

79 1 new circumstances that you wanted to consider in that context.

2 But I dbri't see any legal barrier to doing that~

3 COMMISSIONER GLINSKY: That would be on the 4 Commission's motion. But what about interven6rs? Can they s _request another.hearing, or is this material basically 6 standing-in for the material they have already had a hearing 7 on?

8 MR. STROIBER: I hadn't thought about that, but I*

9 would think there is no reason why they couldn't request a 10 hearing on this license and the Commission would have to 11 consider under the rules whether or not it thought that the 12 fact that this* was a different license number raised sufficient

.13 issues that it wanted to hear it.

14 COMMISSIONER KENNEDY: If for no other reason, I 1s* suppose. they could argue the passage of .time has maybe 16 .introduced new factors which ought to be reviewed.

17 MR. STROIBER: And -new politi'cal developments. We 18 have a new President, there are a lot Lof things you might 19 use as reasons for a further hearing.

20 But those are all factors the Commission would have 21 -to weigh in deciding to.hear them in either written or 22 oral form.

23 MR. ROTHCHILD: Perhaps the worst possible scenario 24 would be :the Commission.say* consolidate the application, it ce-Federal Reporters; Inc.

25 would moot the court case, we promise everyone we won't act

80 in suc_h a fashion as to moot it out. *We then. act on the

2 license, if the Commission denied the license,* the intervenors 3 would be enthralled and the litigation would *be over*.

4 *MR. STROIBER: No, I think we would be sued 5 immediately by the applicant.

6 MR. ROTHCHILD: That would be new litigation.

7 COMMISSIONER KENNEDY: Also somebody would move 8 to work through GSA to cancel our lease on the. building.

9 MR. ROTHCHILD: If we were to act favorably upon the 10 license, there might be an application to enjoin, like 11 what* happened last time, .and the court might be reluctant to 12 let us keep this procedure of consolidating arid moving the 13

• issue along that way, .. and might say hold it a minute, we will 14 wait for your regulations.

15 COMMISSIONER GLINSKY:*. *If this license is about 16 to come over to us, and .these regulations, even if adopted 17 today, wouldn't become effective for at least 75 days, the 18* chances are they would not apply to this csae anyway.

~ ---**-**--** --- - --* .

19 MR. STROIBER: Unle*ss the. Commission chose to make 20 them effective on an interim basis.

21 MR. SHAPAR: The Commission could make.them immediately 22 effective. They have to find a cause for doin~ so.

. I 23 COMMISSIONER GLINSKY: What about GAO and all that?

I 24 MR. SHAPAR: We would have to talk to GAO. It has i . ,

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25 beeri done before.

81 1 COMMISSIONER KENNEDY: In any event, those aspects 2 -of the reguilations that would* apply to the hearing process, 3 as has already been pointed out, could be separated out and 4 made immediately effective without GAO review. So i t would s- be possible to do that.

6 Or, alternatively, I suppose,*the Commission could 7 say _al though the ruiles are not yet effective.,. it wi.11 follow 8 the outlines of those rules in the.instant case.

9 MR. STROIBER: Since yo':!- have announced you are 10 going to be dealing.with these export matters on an ad hoc

. 11 basis, you can say we are going to continue to c1o so on an ad 12 hoc basis, but we think the rules provide superb guidance.

13

• COMMISSIONER KENNEDY: On the other hand,* the mails 14 could be slowed up so the thing wouldn'~ get here.

15 MR. SHAPAR: If the court evenutally decides 16 adjudicatory treatment is required; this discussion is somewhat*

- 17 academic

• 18 COMMISSIONER KENNEDY: That is one of the things 19 .I suppose we would_ wish to consider, whether *we wish_ to pre-empt,

20. the court in this regard.

21 COMMISSIONER BRADFORD: How would the court possibly 22 make that decision? ev~n if they granted there was 23 standing, then there is the question of a fo~eign exemption *

.24 Is there a way they could find that didn't *a~ply?

ce-Federal Reporters, Inc.

MR *. SHAPAR: THat* ;ts_ probably the* strongest part of*

82 our -- I really don't like to dis6uss litigation strategy in an.op~n meeti~g. I will, if Carl.wouldn't object.

3 COMMISSIONER KENNEDY: If he doesn't, I will.

4 CHAIRMAN HENDRIE: I think-it would be useful for s

the draftsmen to once more s*et ingenious *pen to paper -*and 6

see what this flexibility might look like. It seems to me 7

that as yori get draft materials iri hand, please get it 8

back here rapidly, and I wouldn't think it need be shrouded 9

in the whole splendor of the proposed rule. What wquld it be, subpart J?

11 MR. SHAPAR:

• I don't know where I would. put it, but it would be one self~contained p~rag~aph.

13 I CHAIRMAN HENDRIE: And the Statement of Corn:dderations.

14 I think it would be useful-for the _Commissionrs to see what that language might look like* and*the we will have to 16 decide.

17 Now with regard to the less than the majority 18 required to make the decision, could I allow you some 19 additional comments on that, and see if I can ..talk you oµt 20 of pressing that?

21 COMMISSIONER BRADFORD: If-the rest of the Commission-22 I is against that, I won't pres.s it.

23 COMMISSIONER KENNEDY: My-sensing of thatcne is

. 24

-F.ederal Reporters,-lnc. not against it at all. I am only concerned that we not do it in.

25 such a restricted format,_ but rather since, as. we said earlier,

83

.1 it applies to all of our regulations, we just* change them

.2 all.

3 CHAIRMAN HENDRIE: The mind boggles.

4 5

COMMISSIONER KENNEDY:

But as eminent counsel on*both]

ends of the table have already told us, that will be the 6 precedental effect.

7 CHAIRMAN HENDRIE: That is the *trouble with getting 8 counsel to the-left and counsel to th~ right. ,

9 MR. SHAPAR: Yes, you *listen to counsel too much; 10 I think you ought to disregard us a bit.

11 *COMMISSIONER BRAPFORO: Wht I was about.to say on 12 that was assuming that in fact it was going to go out, 13 *I have said all I would say on that. I don't even really feel 14 a need to write any comments on it~

15 CHAIRMAN HENDRIE: Let *us then see the additional 16 language, the change and supplemented language on the 17 flexibility issue .. And I went around once more along the 1s* line -- we are unable to agree on a fraction of cases which 19 *would be.the particular ones ,which the Commission might want 20 to do this on. Certainly one wouldn't want to try to specify 21 any* such fract~on in the regulations. But do I have the 22 sense fairly ttat in th~ run of such cases for which hearings

.e* 23 might be co*nsidered, the laguage now in proposed slibpart J is I

• 24 probably all right? And all one would want is to *preserve

~-Federal Reporters, Inc.

25

• flxibility to amplify t:hose p~ocedures in special cases?

84 COMMISSIONER BRADFORD: Yes. I guess instead of

- 2, special cases, I would say in a case where the Commission 3 thought it would help more than it would hurt. I would. assume 4 that is not a big part of the cases.

5 COMMISSIONER KENNEDY: A- I not correct fhat you 6 said at the very outset that that flexibility now exists?

7 MR. SHAPAR: I wasn**t aware of that.

8 MR. STROIBER: Thereis no specific language in the 9 ruiles which precludes the Commission doing that.

10 *MR. SHAPAR: I think the word "only" might do it.

11 CHAIRMAN HEND~IE: But there is a very strong set of 12 preconditioning set up by the Statement of Considerations.

13 If you want the flexibility, I thirik it is in fact there, 14 but do something with the language.

15 COMMISSIONER KENNEDY:. For thinking purposes is your 16 proJ.)osa1* as the, first step in implementing the concept as 17 outlined by Howard or not?

18- In other words, you would or would not contemplate 19 .any comment on the part of those who have not had an opportunity 20 to do so?

• 21 CHAIRMAN HENDRIE: What I am contemplating is we 22 look at some draft language_ and when we think "it is a fair I

- 23 thing to try on people, we will circulate this thing.

• 24

• COMMISSIONER KENNEDY: All right.

Federal Reporters, Inc:

25 CHAIRMAN HENDRIE: .And Carl will have to conternpal te

85 where at my PhD final, my thesis adviser asked me if there 1i 2

I were anything he could do for me, and I told him to be prepared to set the wastebasket on fire when I got into 3

trouble~ Well, I got into trouble, and he didn't do it. But 4

that is about all I can recommend to you by way of helping s.

the *litigation posture.

6 MR. STROIBER: A statement al;>out arguing cases is 7

that when the facts are on your side, pound the facts; when 8

they are on the other _side, pound the table.

9 MR. SHAPAR: That is all right, Carl, we will*

. 10 get better couns~l next time.

11 CHAIRMAN HENDRIE: Okay. I declare this,meeting 12 long overdue at an end.

13 (Thereupon, at 4:40 p.m. the meeting was 14 concluded.)

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- 23 24 ce-Federal Reporters, Inc.

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