ML23151A398

PR-002 - 57FR61013 - Availability of Official Records

ML23151A398
Person / Time
Issue date:	12/23/1992
From:	Chilk S NRC/SECY
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PR-002, 57FR61013
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ADAMS Template: SECY-067 DOCUMENT DATE: 12/23/1992 TITLE: PR-002 - 57FR61013 -AVAILABILITY OF OFFICIAL RECORDS CASE

REFERENCE:

PR-002 57FR61013 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

PAGE 1 OF 2 STATUS OF RULEMAKING RECORD 1 OF 1 PROPOSED RULE: PR-002 OPEN ITEM (Y/N) N RULE NAME: AVAILABILITY OF OFFICIAL RECORDS PROPOSED RULE FED REG CITE: 57FR61013 PROPOSED RULE PUBLICATION DATE: 12/23/92 NUMBER OF COMMENTS: 6 ORIGINAL DATE FOR COMMENTS: 03/08/93 EXTENSION DATE: I I FINAL RULE FED. REG. CITE: FINAL RULE PUBLICATION DATE: I I NOTES ON: SEE ALSO SECY\92\341A FILE LOCATED ON 16-G.

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F RULE:

PRESS PAGE DOWN OR ENTER TO SEE RULE HISTORY OR STAFF CONTACT PRESS ESC TO SEE ADDITIONAL RULES, (S) TO STOP DISPLAY OR (P) TO PRINT HITS PAGE 2 OF 2 HISTORY OF THE RULE PART AFFECTED: PR-002 RULE TITLE: AVAILABILITY OF OFFICIAL RECORDS tOPOSED RULE PROPOSED RULE DATE PROPOSED RULE SECY PAPER: 92-341 SRM DATE: I I SIGNED BY SECRETARY: 12/17/92 FINAL RULE FINAL RULE DATE FINAL RULE SECY PAPER: SRM DATE: I I SIGNED BY SECRETARY: I I STAFF CONTACTS ON THE RULE CONTACTl: MARRY PATRICIA SIEMIEN MAIL STOP: 15-B-18 PHONE: 504-1565 CONTACT2: MAIL STOP: PHONE:

PRESS PAGEUP TO SEE STATUS OF RULEMAKING PRESS ESC TO SEE ADDITIONAL RULES, (S) TO STOP DISPLAY OR (P) TO PRINT HITS

DOCKET NO. PR-002

{57FR61013)

In the Matter of AVAILABILITY OF OFFICIAL RECORDS DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT

- 12/17/92 12/17/92 FEDERAL REGISTER NOTICE - PROPOSED RULE 02/08/93 02/04/93 COMMENT OF OHIO CITIZENS FOR RESPONSIBLE ENERGY

{SUSAN L. HIATT, DIRECTOR) { 1) 03/04/93 03/04/93 REQUEST OF THE NUCLEAR MANAGEMENT AND RESOURCES COUNCIL {NUMARC) FOR AN EXTENSION OF TIME TO MARCH 31, 1993, IN ORDER TO FILE ITS COMMENTS.

03/09/93 03/08/93 COMMENT OF NIAGRARA MOHAWK, NORTHEAST UTILS. AND TU

{NICHOLAS S. REYNOLDS, ESQUIRE) { 3) 03/12/93 03/05/93 COMMENT OF SIERRA NUCLEAR CORPORATION

{JOHN V. MASSEY, PH.D.) { 2) 03/17/93 03/10/93 LETTER FROM SECRETARY CHILK TO ROBERT W. BISHOP, NUMARC GENERAL COUNSEL ADVISING THAT NUMARC COMMENTS WILL BE ACCEPTED IF FILED BY 3/31/93.

03/31/93 03/31/93 COMMENT OF NUCLEAR MANAGEMENT AND RESOURCES COUNCIL

{ROBERT W. BISHOP, V.P.) ( 4) 04/01/93 03/31/93 COMMENT OF WESTINGHOUSE ELECTRIC CORPORATION (C. L. CASO) ( 5) 04/02/93 03/30/93 COMMENT OF GE NUCLEAR ENERGY {P. W. MARRIOTT) { 6)

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rr~OPOSEO RULE PR ~---- r GE Nuclear Energy (51 f-'Y<.., 61013)

General Electnc Company 175 Curtner Avenue, San Jose, CA 95125

• 93 APR - 2 p 4 :i 5 March 30, 1993 MFN049-93 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: Proposed Rule, "Availability of Official Records,"

57 Fed. Reg. 61013 (Dec. 23, 1992)

Dear Mr. Chilk:

GE Nuclear Energy (GE) welcomes the opportunity to submit its views in response to the subject Federal Register notice, which invited comments on the Commission's proposal to amend its regulations governing NRC treatment of proprietary and copyright information. GE actively participated in formulating the comments on the subject amendments concurrently being submitted by the Nuclear Management and Resources Council (NUMARC), and we fully support those comments.

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exceptions to the current right to withdraw information claimed by the submitter to be proprietary if the NRC disagrees with that claim. These exceptions constitute more than a fine-tuning of the NRC process for handling proprietary information. If adopted, they would substantially alter the long-standing and effectively operating Commission regime governing the submission, review, and protection of proprietary information. The consequent potential for inappropriate disclosure of proprietary information -- particularly as regards the so-called "FOIA" and "Advisory Committee" exceptions -- poses serious risks for property rights developed at great expense, and for the competitiveness of the U.S. nuclear energy industry.

We believe the exceptions as proposed go well beyond what the governing law requires, and that they are unwise as a matter of sound regulatory policy, as well as of national energy policy.

Their adoption without complementary changes in the current NRC process for submission and review of proprietary information, as recommended by NUMARC, would markedly lessen protections against disclosure of proprietary information. Dilution of those protections would adversely impact competition within the domestic nuclear industry, and would endanger the competitive position of U.S. nuclear companies in the world marketplace.

These competitive consequences and the attendant impact on the MAY 1 1 1993_.

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Mr. Samuel J. Chilk March 30, 1993 U.S. economy implicate important national policy interests and should weigh heavily in the Commission's determination of the final rule's proprietary protection regime.

In addition, though not as critical, there is the potential for significant mischief, and the certainty of much wasted time and effort, in the overly prescriptive proposed marking requirements. As discussed in NUMARC's comments, any system of marking which clearly identifies the proprietary claim should suffice. Requiring the entire industry to use precisely the same language accomplishes little, inconveniences many and creates the potential for loss of valuable proprietary information due to a trivial error in wording of a notice, an error which in no way makes unclear the proprietary claim to that information. The requirement as proposed is simply not worth the effort and risk it entails.

GE agrees with NUMARC that alternatives to the subject proposals can be adopted which will meet the requirements of law while affording appropriate protection to proprietary information submitted to the NRC. We therefore urge the Commission to consider carefully the recommendations contained in NUMARC's comments.

iott Manager, Safety & Licensing M/C 444, ( 408) 925-6948

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Westinghouse Energy Center Westinghouse Energy Systems *93 ~PR -1 P3 :28 PO Box 355 Electric Corporation Business Unit Pittsburgh PA 15230-0355 cL Caso General Manager

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Nuclear & Advanced March 31, 1993 Technology Division Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attn: Docketing and Service Branch Re: Proposed Rule "Availability of Official Records" 57 Fed. Reg. 61013 (December 23, 1992)

Dear Mr. Chilk:

Westinghouse has reviewed the NRC proposal to amend its regulations related to the treatment of proprietary and copyright information. In response to your invitation for comments on the proposed rule, the attached comments detail our position on the adverse effects the proposed rule would have on the competitive position of the U.S. and the nuclear industry. In addition to providing our own perspective on the proposed rule, Westinghouse has participated in and fully endorses the comments provided by the Nuclear Management Resources Council Inc.

(NUMARC) on this most important matter.

Westinghouse firmly believes that the proposed rule change could cause irreparable harm to the U.S. nuclear industry both at home and abroad as foreign competitors could have essentially free access to information customarily held proprietary by U.S. corporations but submitted to the NRC. Under the proposed rule, the competitive position of U.S. corporations, including Westinghouse, will be seriously harmed in what has clearly become a global market. Moreover, the proposed changes to the current rule are not necessary and, we believe, are not mandated by law. The existing NRC rule on proprietary information, as currently implemented, provides the NRC with the information it needs to carry out its responsibilities while maintaining necessary protection against release of proprietary information into the public domain.

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s. J. Chilk: March 31, 1993 If the current rule is amended, it should contain a provision for the presubmission of documents whereby the proprietary status of documents could be determined before they become agency records. At any time during the presubmission review, the owner of the information should have a right of withdrawal. A pi:esubmission review provision in the amended rule would help protect vital U.S. corporate proprietary information and alleviate many of the problems inherent in the proposed changes to the current rule.

Westinghouse appreciates the opportunity to submit these comments. Protection of proprietary information is required as a matter of sound public policy and is of great importance to Westinghouse, the U.S. nuclear industry and U.S. companies in general. Westinghouse therefore urges the Commission to carefully consider these comments and those submitted by NlfMARC before deciding whether to amend the current proprietary rule. If the decision is made to amend the '?Urrent rule, the Commission should* adopt the changes to the proposed rule recommepded by Nl.JMAllC.

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Very truly yo1:1rs, cc: Chairman Ivan Selin Commissioner James R. Olrtiss Commissioner Kenneth C. Rogers Commissioner Forrest J. Remick Commissioner E. Gail de Planque William C. Parl~r, Esq., General Counsel Martin G. Malsch, Esq., Deputy General Counsel Joseph F. Scinto, Esq. Deputy General Counsel

WESTINGHOUSE COMMENTS ON NRC PROPOSED RULE REGARDING AVAILABILITY OF OFFICIAL RECORDS (PROPRIETARY RULE)

March 31, 1993 Westinghouse Electric Corporation ("Westinghouse,.) submits these comments in response to the invitation for comments on the proposed rule which would amend Nuclear Regulatory Commission (*NRC" or "Commission*) regulations on the treatment of proprietary and copyright information submitted to the NRC.

• Availability of Official Records" - Proposed Rule, 57 Fed. Reg. 61013 (December 23, 1992). Westinghouse believes that as currently drafted the proposed rule is inadequate to protect the important public policy interests in nondisclosure of proprietary information and, if promulgated, will have serious adverse affects on the competitive position of Westinghouse and the U.S. nuclear industry.

• Westinghouse participated with other members of the nuclear industry in the preparation of comments submitted by the Nuclear Management and Resources Council, Inc. (*NUMARc*)

in connection with this rulemaking (the "NUMARC Comments*). Westinghouse fully supports the views expressed in the NUMARC Comments1* If revisions to the Commission proprietary information rules are to be made, Westinghouse urges the Commission to adopt the modifica-tions and proposals set forth in those comments as part of its final proprietary information rule.

The purpose of this submittal by Westinghouse is to provide additional perspective on certain aspects of the proposed rule from the viewpoint of a leading U.S. corporation engaged in nuclear These Comments by Westinghouse do not purport to cover all of the points made in the NUMARC Comments. This does not diminish in any way the support of Westinghouse of all of the suggestions in the NUMARC Comments.

reactor design and manufacture, whose confidential research, engineering and commerical I

activities result in the development of valuable proprietary information.

The Proposed Amendments to NRC Proprietary Rule Are Hannful and Unnecessary Westinghouse believes that the proposed amendments, to the NRC proprietary rules2 could cause irreparable harm to U.S.

. industry

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and have the potential for adversely affecting the ability of U.S. firms to compete with foreign companies in the worldwide nuclear market. In the current economic and competitive environment, where competition is global in nature, it is 9, inconceivable that the NRC would adopt rules which could have the effect of making freely available to our foreign competitors nuclear technology that has been developed in this country with substantial private and public investment. Such a course would adversely affect competition and endanger the competitive position of the U.S. companies in the world market for nuclear power reactor technology.

The implications of the proposed amended regulations go beyond the nuclear industry.

If, as suggested in SECY 92-341 and the Supplementary Information which accompanied the proposed rule, the proposed amendments are required in order to conform NRC regulations to existing case law and statutes, such as the Federal Advisory Committee Act, the Freedom of Information Act and the Sunshine Act, such a result must also be required for other federal agencies. Yet we could locate no instance where other federal agencies have adopted - or even proposed - regulations similar to those now being suggested by the NRC.

2 These comments are directed at the proposed regulations respecting the protection of proprietary information. As discussed below at page 14, the proposed changes to govern copyrighted information submitted to the Commission are reasonable provided they are modified to reflect the intent of the proposed changes as set forth in the Supplementary Information published with the proposed rule.

Further, the present NRC regulations for the protection of proprietary information have been in place with essentially no change for more than fµteen years. Over that time an extensive body of administrative and case law has developed to support their implementation. There have been no changes in statutory language during that period which suggest the need for, much less require, any of the changes that are now being proposed. Moreover, there have been no court decisions mandating the proposed changes.

The system which the NRC currently utilizes for the protection of proprietary information, and for implementing FOIA, works and works well. The present system benefits everyone - the industry by providing assurance that the proprietary information will be maintained as confidential when submitted to the NRC; the NRC by making readily available the necessary information to enable it to carry out its statutory obligations; and the public by providing interested parties to NRC proceedings access to proprietary information in connection with those proceedings. The present system minimizes the resources required for administration by the NRC and the industry. The proposed rule, if adopted, would represent a major step backward in this regard. Adoption of the proposed rule would be contrary to the stated Commission objective of revising existing regulations to lessen unnecessary regulatory requirements and would divert resources from the primary Commission and industry objective of ensuring the safety of nuclear facilities and activities.

If the proposed rule changes are adopted, they will not only substantially alter the manner in which proprietary information must be handled but also will dramatically increase the amount of time and effort which will be necessary to ensure protection of proprietary information. The proposed rule, if adopted, also may create delays in the use of proprietary information by the NRC staff while questions of proprietary status are considered. Because of the substantial uncertainties as to the protection of proprietary information which would be introduced by the proposed changes, there almost certainly will be a reduction in the free flow of such information which the NRC has enjoyed under the present system.

Thus, not only could the proposed rule changes cause competitive harm to Westinghouse and other U.S. companies, and not only are the proposed rule changes not justified by changes in law or court interpretation of Commission responsibilities under the law, but the proposed rule changes also threaten to make more cumbersome and costly the handling of proprietary information, with no commensurate benefit.

Westinghouse Position on Protection of Proprietary Infonnation Proprietary information comprises an integral part and is at the heart of Westinghouse business and is crucial to the ability of Westinghouse to maintain its competitive advantage in the nuclear services and supply industry both in the U.S. and abroad. The value of Westing-house proprietary information to its ongoing business can be maintained, however, only so long as the information is appropriately protected from public disclosure.

In the course of conducting its business, Westinghouse regularly supplies the NRC with extensive information and data in support of applications to the NRC for various licenses and license amendments, including applications for construction permits, operating licenses and material licenses, and in support of continued maintenance of such permits and licenses. In addition, Westinghouse regularly supplies the NRC with information and data in connection with NRC rulemakings, currently including the design certification proceeding for the Westinghouse simplified passive advanced light water reactor plant, the AP600. The AP600 program, and the proprietary infonnation being developed in connection therewith in particular, is an integral part of Westinghouse's future involvement in the nuclear industry.

Westinghouse proprietary information is made available to the Commission, its staff, its Boards, and the Advisory Committee on Reactor Safeguards (* ACRS "). Westinghouse proprietary information also is made available on a confidential basis to consultants to the Commission, its staff and the ACRS, such as national laboratories, universities and individual consultants. In addition, Westinghouse, upon request and subject to protective agreement, supplies proprietary information to various cogniz.ant state agencies. Westinghouse also makes proprietary information available to its licensees, customers and potential customers upon agreement of nondisclosure to unauthorized persons. With regard to licensing reviews and proceedings, as well as NRC rulemakings, Westinghouse proprietary information also is made available to intervenors who request such information in connection with matters at issue in hearings, subject to their agreement not to disclose the information to unauthorized persons. In making such information available to intervenors, Westinghouse makes such information available to the parties themselves, their counsel, and their technical advisors, if requested to do so.

The only group to whom Westinghouse proprietary information is not made available, with exceptions relevant to safety, are competitors of Westinghouse. Even with respect to competitors, Westinghouse proprietary information has been made available (to the extent necessary, when the need to do so has been determined by the Commission in consultation with Westinghouse) to identify potential safety problems in such competitors' reactors or fuels. The point is that although- this information is proprietary, Westinghouse has managed its access in a manner consonent with preserving its commercial value while adequately serving the needs of the NRC and the public.

The preponderance of the information submitted to the NRC by Westinghouse is not proprietary and only a fraction of the total information is submitted with a request for confidential treatment. Westinghouse internal procedures are based upon strict criteria and standards, and provide that Westinghouse protect as proprietary that information which Westinghouse customarily holds in confidence and which constitutes trade secrets or commercial

• or financial information that is privileged or confidential, the public disclosure of which is likely to cause substantial harm to the competitive position of Westinghouse. Such information is integral to Westinghouse's continuing business endeavors and provides it with a competitive economic advantage over its competitors in its ability to generate and maintain business and to respond to safety questions of its customers and the NRC. Proprietary information also generates substantial license fees to Westinghouse from domestic and foreign entities.

Disclosure of proprietary information other than in the manner described in the preceding paragraphs would result in domestic and foreign competitors of Westinghouse obtaining, at essentially no cost to them, access to and unrestricted use of valuable trade secrets and

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confidential commercial information developed at great cost by Westinghouse. Disclosure of such information publicly therefore would substantially harm the commercial and economic interests and competitive position of Westinghouse and would weaken free competition in private enterprise. Public disclosure also could endanger the position of the United States (and

- Westinghouse) as the world leader in nuclear power reactor technology.

Increasingly, Westinghouse is competing in the global nuclear market, and disclosure of proprietary information would adversely effect its ability to compete. This would particularly be the case if foreign competitiors of Westingh~use and other U.S. companies in the nuclear industry could gain access and knowledge of commercially sensitive technical and commercial information simply by stationing an employee in the NRC public document room or by filing frequent and broadly worded FOIA requests.

Westinghouse interest in NRC regulations concerning treatment of proprietary information is not hypothetical, but is both real and substantial as Westinghouse would be faced with loss of business opportunities and its competitive position in the global market if it loses the ability to protect the proprietary information upon which its business is based. Such disclosure also would harm the interests of the NRC and .the public by limiting the availability of technical information to the NRC and discouraging research and development. Withholding of such information from public disclosure is consistent with applicable law and does not interfere with the NRC's ability to inquire into the safety of nuclear power facilities and conduct its regulatory functions.

Policy Rea.wus ror Protection or Proprietary Infonnation The NUMARC Comments describe the Commission's responsibility under the law to protect proprietary inform~on and the sound policy reasons underlying that policy. 3 Westinghouse would add the following observations to those of the NUMAkC Comments.

The safeguarding of proprietary information benefits a number of significant public interests. In the past, there has always existed a free exchange of information between the nuclear industry and the Commission uninhibited by fears that valuable information would be disclosed to competitors. This has enhanced nuclear safety and reliability and the continued 3

The Commission's responsibility stems from "the longstanding congressional policy which disfavors disclosure of proprietary information." Westin~house Electric C01l)Oration Y, NRC, 555 F.2d 82, 90-91 (3d Cir. 1977).

development of industry innovations and improvements. It is merely stating the obvious to note that the competitive incentive a reactor vendor like Westinghouse has to undertake research, development and testing is chilled by the prospect that the results of such research and testing might freely be made available to competitors. Furthermore, it follows that the voluntary reporting of such information to the Commission may be discouraged if the information thereafter might be openly available to competitors or other unauthorized persons. The result may well be to encourage disclosure of only the minimum amount of information required to obtain a sought-after license or a desired rule .

In addition, publicly disclosing proprietary information and hence making it available to a company's competitors may lead to situations where the work of one vendor no longer can be compared by the NRC against the work of another vendor. After public disclosure there will be less incentive to continue research, development and testing and more incentive to copy or use what the first company's disclosure, whether analysis, problem, solution, etc., reveals, particularly if the information in such disclosure has the approval of the Commission.

Incentives, to perform additional research or follow-on testing on a subject which has been investigated and tested by another vendor also would be weakened. The end-result would be a chilling effect on the development of enhancements to nuclear safety and reliability.

At present, the Commission is able to review and evaluate independent and sometimes

• I different solutions to common problems as well as to cross-check the work of various reactor vendors. Disclosure of proprietary information could result in an injurious disruption of this Commission's practice of independent review, analysis and evaluation. In short, disclosure of proprietary information can seriously impair the capability of the Commission to independently review licensing submissions by reducing the data base and the number of analysis techniques upon which the Commission's safety evaluations are presently predicated. Moreover, the current protection afforded proprietary research and test data by the Commission results in more than one vendor submitting similar information on subjects of Commission interest, thus permitting the Commission, by means of comparison and cross-checking, to evaluate test accuracy, etc.

The Commission currently is able to conduct its evaluations in this manner without incurring the substantial delay and cost which would be associated with any research program which it otherwise might need to conduct independently in order to verify the accuracy, etc., of the test data .

Pricing practices in a competitive market where one commercial vendor could anticipate receiving the benefits of another such vendor's research and development soon would eliminate any margin in prices for the conduct of independently supported research and development work.

Westinghouse believes that independent development work is beneficial to the industry, the Commission and the public, and contributes to nuclear safety. Such independent development work, which by definition results in the generation of proprietary technical and engineering data, should be encouraged, rather than discouraged as the proposed rule would do.

As noted above, unrestricted disclosure of proprietary information could endanger the position of the United States as the world leader in nuclear power reactor technology. This position is the result of years of pioneering work by U.S. companies and the government on the power generation applications of nuclear energy. Many benefits to the United States are derived from this world leadership position. These benefits are discussed in the NUMARC Comments.

For example: (1) the sale of U.S. reactors and licensing of U.S. technology abroad contributes significantly to this country's balance of payments; (2) the existence of a highly developed nuclear power generation technology contributes to this country's goal of energy self sufficiency and curtailing of its dependency on the energy resources of other nations for the continued growth of the U.S. economy; and (3) nuclear power technology is a major source of employment in this country at a time when the nation is continually confronted with unemployment and the shift of more and more U.S. jobs to foreign nations.

The current United States position of nuclear power technology leadership has not gone unchallenged. Many of the major industrialired nations in the world are seeking to supplant the United States in that position. In this regard, foreign reactor vendors closely scrutinize all information disclosed by the Commission to the general public. To the extent that these foreign companies can secure reactor technology developed at great cost by U.S. firms in this manner, they reap a significant competitive advantage yis-a-yis U.S. companies including Westinghouse.

Thus, disclosure of the proprietary information by the Commission not only will harm Westinghouse but also other U.S. companies in the world market and have a detrimental effect on the U.S. economy. Moreover, to the extent that the U.S. loses its leadership position in the area of nuclear technology, U.S. efforts relating to nuclear non-proliferation will be weakened.

One clear and current example of the adverse effects on the United States and its companies that would result under the proposed rule is in connection with the advanc¢ light water reactor program. In addition to private investment by reactor vendors and the utility industry in the development, engineering and design certification of this "new generation* of U.S. nuclear plants, there has been extensive public commitment of time and investment in this program, through the funding of research and development by the U.S. government. The totality of this investment, both public and private, could be significantly compromised by the proposed rule. If not modified as suggested in the NUMARC comments, the proposed rule

could lead to the disclosure of proprietary information relating to advanced light water reactor designs.

In the case of the Westinghouse advanced passive light water reactor, AP600, there are significant features of the design which are proprietary, including the passive containment cooling system and the passive core cooling system. Westinghouse is aware that foreign governments, in cooperation with reactor vendors who are competitors to Westinghouse, also are interested in developing plants based on the AP600 passive safety systems developed by Westinghouse. 4 A competitor given the opportunity under the proposed rule to reap the benefits of Westinghouse's AP600 design effort without making the corresponding investment made by Westinghouse, U.S. utilities and the U.S. government could hardly be expected not to do so.

This is particularly the case where obtaining such proprietary information would be as simple as obtaining it from the public document room or pursuant to a FOIA request. Thus, to the extent that this technology is proprietary, but is made available as a result of the proposed NRC regulations, the U.S. as well as Westinghouse will be the clear loser.

Discussion on Proposed Exceptions to the BJ&bt of Withdrawal

1. Predisclosure Review Procedures The NUMARC Comments propose that the Commission adopt, by regulation, predisclosure review procedures whereby a document would not become an agency record, and For example, Westinghouse is aware that at a recent meeting of a nuclear society in a foreign country, a paper was presented entitled "A Proposed Concept of Passive Pressuri7.ed Water Reactor Based on Existing Reactor Coolant System Designs.* The paper discusses that country's preliminary conceptual design work to develop a 2-loop 1000 MWe passive pressurized water reactor incorporating known passive safety features of the Westinghouse AP600 into the ABB-CE's reactor coolant system design. It concludes, among other things, that the proposed reactor could be developed under the leadership of that country's domestic nuclear industry and with the maximum utilization of the existing U.S. NSSS designs and manufacturing technology.

hence not be subject to a FOIA exception and not be submitted to an advisory committee or considered by the Commission in a Sunshine Act meeting, until after a determination has been made to afford the document confidential treatment. Westinghouse supports this proposal. The presubmission review procedures suggested by NUMARC would provide for appropriate protection of proprietary information by having the Commission determine whether documents will be afforded confidential treatment if they are submitted to the NRC and affording the submitter the right to withdraw the documents prior to the documents becoming an "agency records." Westinghouse believes that any predisclosure reviews would need to be conducted and concluded promptly by the NRC, and suggests that a time limit be included in the regulations.

A ten-day presubmission review period seems appropriate, except in extraordinary circum-stances.

2. Predisclosure Notification Procedures The NUMARC Comments also suggest that the Commission adopt predisclosure notification procedures in accordance with Executive Order 12,600 of June 23, 1987. Here again, Westinghouse believes that the procedures suggested for such notification would enhance the protection afforded owners of proprietary information by furnishing them the opportunity to fully and fairly challenge, in advance, any proposed public release of proprietary information.

3. Commission Meeting Exception and Advisory Committee Exception There should be no disclosure of proprietary information at open Commission or advisory committee meetings, and the Commission rules should so state. The law provides for closing such meetings when such information is to be discussed, and thus there is no justification for discussion of such information at open meetings. If proprietary information is inadvertently discussed at an open meeting, it should not lose its proprietary status, and there is no reason to "republish" the disclosure by including the information with the minutes of such meeting.

4. NRC Position on No Right of Withdrawal Under the FOIA Exception In discussing the proposed FOIA exception to the right of withdrawal, the NUMARC Comments point out that the NRC took opposite positions on a submitter' s right to withdraw proprietary information in the cases of Westin~house Electric Coi:poration Y, NRC, 555 F.2d 82 (3d Cir. 1977) and General Electric Co. y. NRC, 750 F.2d 1394 (7th Cir. 1984).5 In five separate places in its brief to the Court in the Westinghouse case, the NRC acknowledged that there was a right of withdrawal (except in the limited situation where proprietary information formed the basis of an NRC rule), and this acknowledged right of withdrawal was emphasized to the Court by attorneys representing the NRC during oral argument. The Third Circuit relied on the NRC representations as to the right of withdrawal in rendering its opinion, making reference to that right several times in rej~ting Westinghouse arguments. 555 F.2d at 88, 92 and 94. At one point the Third Circuit decision refers to the "absolute right" of return (with the one exception noted). 555 F .2d at 88. Since the Westinghouse case, FOIA has not been amended in any respect affecting the NRC position taken before the Third Circuit In the 7th Circuit General Electric case, the Court made no reference to the "absolute right" of withdrawal discussion in the 3rd Circuit Westinghouse decision, or the position of the NRC before the 3rd Circuit. As pointed out by the NUMARC comments, the most that can be said s A full discussion of the inconsistent NRC position, together with NRC documents highlighting the position taken by the Commission in the Westinghouse case, is found in the Brief of Westinghouse Electric Corporation dated July 25, 1985 submitted to the Commission on remand from the U.S. Court of Appeals for the Seventh Circuit~

Matter of General Electric Company v, United States Nuciear R~ulatory Commission

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is that there is a split in the Circuit, and the NRC has been on both sides of the issue. Thus, there is no clear direction from the courts that the right of withdrawal in the current Commission rule is inconsistent with FOIA.

Material Subject to Copyright Protection Westinghouse believes that the description of the NRC proposed rule concerning copyright protection, as contained in the Supplementary Information which accompanied the proposed rule, provides* an appropriate accommodation of the interests in maintaining copyright documents as copyright. Such copyright documents are valuable to a manufacturer such as Westinghouse because of their organiz.ation and content, and should not be pennitted to be freely copied by those who seek such material at the NRC Public Document Room. At the same time, the NRC has a legitimate interest in providing copies for its own internal use (including use by its advisory committees, etc.) and in providing one a copy (with the copyright notice intact) to its public document rooms. Westinghouse believes it is a reasonable accommodation (although not mandated by law) to permit one copy (with the copyright notice intact) to be furnished in response to public requests for such documents. If the proposed rule is appropriately modified to meet the description contained in the Supplementary Information, as more fully discussed in the NUMARC Comments, Westinghouse supports the NRC resolution of the copyright matter.

Transition Proylsiom The NUMARC Comments address the need for transition provisions for proprietary and copyrighted material currently at the NRC if the NRC adopts the proposed rule, even in modified form. Westinghouse emphasizes the need for such provisions. The Commission currently has information submitted by Westinghouse as to which no NRC determination has been made on the Westinghouse proprietary claim. Such information was submitted with the understanding that (subject to the existing exception in 10 CFR §2.790(c)) it could be withdrawn if the NRC later determined it was not entitled to proprietary treatment. Westinghouse has a right to rely on NRC regulations in effect at the time it submits information. It would be unfair to change the rules in mid-stream without affording Westinghouse the right to protect such information from public disclosure.

Conclusion Westinghouse appreciates the opportunity to submit these comments. Protection of

• proprietary information is required as a matter of sound public policy and is of great importance to Westinghouse, the U.S. nuclear industry and U.S. companies in general. Westinghouse therefore urges the Commission to carefully consider these comments and those submitted by NUMARC before deciding whether to amend the current proprietary rule. If the decision is made to amend the current rule, the Commission should adopt the changes to the proposed rule recommended by NUMARC.

DOCl<ET NUMBER

~"F'=i=w=rAi=ii~ PROPOSED RULE Pl z~-

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NUCLEAR MANAGEMENT AND RESOURCES COUNCIL 1776 Eye Street, NW

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• Washington, DC 20006-2496 c202)8n-1280 *93 mr J1 rs :29 Robert W. Bishop Vice President &

l. r General Counsel March 31, 1993 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 ATTENTION: Docketing and Service Branch RE: Proposed Rule Availability of Official Records 57 Fed. Reg. 61013 (December 23, 1992)

Dear Mr. Chilk:

These comments are submitted by the Nuclear Management and Resources Council, Inc. ("NUMARC") 1 on behalf of the nuclear industry in response to the notice for comments on the U.S. Nuclear Regulatory Commission ("NRC" or "Commission")

proposal to amend its regulations pertaining to treatment of proprietary and copyright information submitted to the NRC. Availability of Official Records" - Proposed Rule, 57 Fed. Reg. 61013 (December 23, 1992).

• The industry's detailed comments are provided in the Attachment to this letter.

In summary, the industry believes that the proposed rule does not properly recognize the important public policy interest in the protection of proprietary information. This interest was recognized by Congress when it incorporated Exemption 4 in the Freedom of Information Act and has assumed even greater importance in our current economic and competitive environment. Although the Commission must ensure compliance of its proprietary information regulations with the Freedom of Information Act, the Federal 1

NUMARC is the organization of the nuclear power industry that is responsible for coordinating the combined efforts of all utilities licensed by the NRC to construct or operate nuclear power plants, and of other nuclear industry organizations, in all matters involving generic regulatory policy issues and on the regulatory aspects of generic operational and technical issues affecting the nuclear power industry. Every utility responsible for constructing or operating a commercial nuclear power plant in the United States is a member of NUMARC. In addition, NUMARC's members include major architect/engineering firms and all of the major nuclear steam supply system vendors.

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Mr. Samuel J. Chilk March 31, 1993 Page 2 Advisory Committee Act and the Sunshine Act, the method proposed by the NRC to fulfill its statutory respoDSibilities is flawed and goes well beyond what those statutes require. The proprietary information protection established by those statutes would be seriously compromised, with significant adverse consequences, if the proposed rule is adopted. Failure to provide effective protection against public disclosure of proprietary information will tend to (1) adversely impact competition and competitive commercial positions; (2) endanger the competitive position of U.S. companies in the world market of nuclear power reactor technology; (3) limit the availability of technical information that would be provided to the NRC and thus potentially impair the NRCs review process; and (4) discourage research and development by private parties. Inadequate disclosure protection can also adversely affect the national security interest underlying the technology transfer constraints contained in 10 CFR Part 810. We believe that alternatives to the proposed rule can be adopted that will comport with the law and, at the same time, furnish appropriate protection for proprietary information.

Specifically, the industry believes that the Commission should adopt procedures to provide for and govern presubmission review of requests that information be protected from disclosure as proprietary information. A presubmission review would consist of submitting asserted proprietary information for the sole purpose of NRC review and determination on the proprietary claim. The asserted proprietary information would be put to no other agency use, and given no further internal distribution, until the NRC decides the proprietary claim. Such procedures for advance proprietary information determinations would be in line with the Commission's direction in the Staff Requirements Memorandum on SECY-92-341 ("SRM") that additional procedural safeguards should be provided to persons submitting proprietary information. Adoption of the presubmission review procedures that the industry here proposes will alleviate many of the problems that would be created by each of the three proposed new exceptions to the right of withdrawal. Further, we believe that NRC procedures dealing with proprietary information should implement (1) Executive Order 12,600, Predisclosure Notification Procedures for Confidential Commercial Information (52 Fed. Reg. 23781, June 25, 1987), and (2) the recent court decision in Critical Mass Ener~ Project v, Nuclear Re~atory Commission, 975 F2d 871 (D.C. Cir. 1992), cert. denied, _ _ U.S.

_ _ (1993). -

The industry believes that if proprietary information is to be discussed at a Commission meeting, the meeting should be closed in accordance with the provisions of the Sunshine Act, and there should be no discussion of proprietary information at an open Commission meeting. Inadvertent disclosure of proprietary information at an open meeting should not result in such information being included in the minutes of the open meeting or otherwise released.

Mr. SamuelJ. Chllk March 31, 1993 Page 3 With respect to the proposed changes governing copyrighted information submitted to the Commission, the changes discu,ssed in the Supplementary Information contained in the Federal Register Notice (57 Fed. Reg. at 61014-15) are reasonable but are not properly reflected in the language of the proposed rule. The language currently proposed is overly broad and needs to be modified to reflect the description of the intent of the proposed rule as set forth in the accompanying Supplementary Information.

In addition, we believe that the proposed revisions relating to the marking of proprietary information are unnecessarily prescriptive and are not needed to achieve the NRCs goal of ensuring the proper identification of proprietary information.

Finally, the industry believes that any amendment to Commission regulations concerning proprietary information or copyrighted material needs to contain transition provisions to deal with the considerable amount of such information and material currently at the NRC. It is neither practicable nor fair to modify the rules dealing with property rights in proprietary and copyrighted materials in a way which substantially undermines their protection without affording the owners of such material currently in the NRCs possession the opportunity suitably to protect them before the new rules go into effect.

The industry appreciates the opportunity to provide these comments. Protection of proprietary information is an important public policy and is necessary to encourage research and development and assure competitiveness of U.S. companies both at home and abroad. We urge the Commission to carefully consider the concerns expressed herein and the accompanying recommendations before adopting final regulations modifying the current rules governing treatment of proprietary information. We would appreciate the opportunity to answer any questions the Commission or NRC staff may have concerning this important matter.

Sincerely, RWB:bJb

Mr. Samuel J. Chilk March 31, 1993 Page 4 c: Chairman Ivan Selin Commissioner Kenneth C. Rogers Commissioner Jam.es R. Curtiss Commissioner Forrest J. Remick Commissioner E. Gail de Planque James M. Taylor, Executive Director for Operations William C. Parler, Esq., General Counsel

Attachment AVAILABILlTY OF OFFICIAL RECORDS Proposed Rule 57 Fed. Reg. 61013 (December 23, 1992)

Detailed Comments Nuclear Management & Resources Council, Inc.

March 31, 1993

TABLE OF CONTENTS Page No.

l Exceptions to the Right of Withdrawal 1 A Background 1

- B.

C.

Protection of Proprietary Information

- Legal and Public Policy Bases Presubmission Review Procedures 3 1

D. Comments on the Proposed Specific Exceptions to 6 the Right of Withdrawal

1. The Advisory Committee Exception 6

2. The FOIA Exception 6

3. The Commission Meeting Exception 8

• E. Further Necessary Modifications to§ 2.790 1.

2.

Predisclosure Notification Procedures Rule Change Required by Critical Mass Energy 9

9 10 Project v. NRC

3. Assuring Compatibility with 10 CFR Part 810 11 F. Transition Provisions 12 II. Material Subject to Copright Protection 12

m. Marking of Proprietary Information 14

I. EXCEPTIONS TO THE RIGHT OF WITHDRAWAL A Back~ound The NRC is proposing to amend 10 CFR § 2.790(c) to add three additional circumstances where information claimed to be proprietary and submitted to the NRC would not be returned to the owner of such information if the NRC either determined that the information is not proprietary or determined that although the information is proprietary it should nonetheless be disclosed after balancing "the right of the public to be fully apprised of the basis for and effects of' a proposed Commission action and the "concern for protection of a competitive position" of the owner of such information. In addition to the current exception to the right of withdrawal when information has been submitted in a rulemaking proceeding and subsequently forms the basis of a final rule, the Commission now proposes that proprietary information not be returned (1) if it bas been made available to or prepared for a Federal Advisory Committee (the "Advisory Committee exception"), (2) if it has been requested pursuant to a Freedom of Information Act request (the FOIA exception"), or (3) if it was discussed at an open Commission meeting held in accordance with the Commission's Sunshine Act regulations (the "Commission Meeting exception").

In addition, the proposed rule would require specified marking of each page of any information submitted to the NRC that the submitter considers company confidential or proprietary information. Finally, the proposed rule would modify current NRC regulations with respect to the treatment of information submitted to the NRC that is marked or designated as copyrighted material.

• B. Protection of Prcwrietazy Information -- Le~al and Public Policy Bases NRC protection of proprietary information is mandated by the Atomic Energy Act of 1954, as amended (the "AEA"). Section 103 of the AEA requires the NRC to protect proprietary information from public disclosure (including disclosure to competitors and foreign entities) except under very limited circumstances. The proprietary information provisions of 10 CFR § 2.790 were adopted by the Commission to implement that statutory requirement and the other legislative enactments affording protection to proprietary information. The underlying public policy interests expressed in these statutes are the protection of substantial property rights and the strengthening of a competitive economy.

The legislative, judicial and public policy bases for protection of proprietary information are manifold and deep-rooted. They are found in (1) the policy expressed in Section l(b) of the AEA to "strengthen free competition in private enterprise"; (2) the responsibilities of the Commission as mandated by§ 103(b) of the AEA; (3) the court interpretations of Congressional intent, which speak of the "longstanding congressional

policy which disfavors disclosure of proprietary information," (see Westin~ouse Electric CoJl)Oration y, NRC, 555 F.2d 82, 92 (3d Cir. 19TI)); (4) the common law policy, as reflected in the law of at least 36 states, to protect trade secrets, as well as numerous state criminal law sanctions designed to protect trade secrets (see Kewanee Oil Co. v.

Bicron Corp .. 416 U.S. 470 (1974)); (5) the policy of Congress against public disclosure of proprietary information, as reflected in at least 27 statutes enacted by Congress to protect such information from disclosure; (6) the imposition of criminal sanctions by Congress in support of this policy (ie., 18 U.S.C. § 1905); and, of course, (7) the express exception contained in the FOIA to ensure protection of proprietary information (5 u.s.c. § 552(b)).

One of the principal reasons for the protection of proprietary information is to prevent disclosure of such information to competitors and would-be competitors of the owners and licensees of that information, which would impair the valuable property rights intrinsic to that information. Equally important is the need to protect the competitive position of the United States and its industry in the world marketplace. This need is particularly relevant to nuclear technology. As a result of decades of pioneering work, the United States and its* nuclear industry brought reactor technology to commercial fruition. The results of this research, development and commercialization have brought many benefits to this country: (1) the sale of U.S. reactors and the licensing of U.S. technology abroad, which contnbutes significantly to this country's balance of payments; (2) .the existence of a highly developed nuclear power generation technology, which contnbutes to the national goal of energy self-sufficiency and the reduction of dependence on the energy resources of other nations; and (3) a major source of employment in this country at a time when the nation is experiencing significant unemployment and the shift of U.S. jobs to foreign nations.

To the extent that foreign companies can secure reactor technology developed at

• great cost by U.S. firms simply by making copies of documents containing proprietary information in the NRCs Public Document Room, they reap a significant competitive advantage vis-a-vis U.S. companies that have made significant investments to develop the technology and their licensees who have purchased those rights. U.S. companies enjoy no comparable access abroad in that foreign entities are not required to provide similar disclosure of their information. Not only would the substantial private investment in the U.S. to develop nuclear technology here be at risk, but the significant public investment made by the U.S. Government through funding of research and development ( e.g., the advanced light water reactor program) would also be at risk. Those investments will be significantly compromised by regulations which provide for inappropriate disclosure of propriety information.

• For these reasons, failure to provide adequate protection of proprietary information by the NRC would jeopardize the position of U.S. companies vis a vis their domestic competitors, and U.S. companies would be deprived of the opportunity to compete on an equal footing with their foreign competitors in selling their products or 2

licensing their technology. This would have a detrimental effect on those U.S.

companies and on the U.S. economy. Further, inappropriate disclosure is more likely to occur if a party is hampered in its efforts to withdraw proprietary information that the agency declines to protect, and thereby effectively loses control over the information.

C. Presubrni:,.5ion Review Procedures The proposed rule would add three additional situations where a person submitting proprietary information would have no subsequent right to withdraw the information. The proposed exceptions considerably increase the likelihood that proprietary information would not be adequately protected. The increased danger of inappropriate disclosure was recognized in the SRM on SECY-92-341 in its endorsement of the need for timely NRC proprietary determinations and the Commission's further directive that NRC internal procedures be modified to "provide for return of the document to the submitter where (a) the NRC denies the submitter's request for proprietary treatment, (b) the submitter requests that the document be returned, (c) the NRC does not need the document to carry out its responsI"bilities, and (d) the document is not 'captured' by any pending FOIA request" As noted by the Commission, "[t]hese procedures would provide for return of the document before the agency relies on the document as the basis of a final rule, the staff submits the document to an advisory committee, or the document is considered by the Commission in an open Commission meeting under the Government in Sunshine Act."

The steps directed by the SRM, while a constructive partial response to the problems created by the proposed exceptions, are inadequate to provide the necessary protection. First, internal staff procedures do not have the force and effect of regulation, and hence do not provide the requisite degree of stable and predictable protection; such procedures should be made part of the revised regulation. Moreover, the requirement in the proposed procedures whereby the NRC would return the document ( except for the FOIA and Advisory Committee exceptions) where the "NRC does not need the document to carry out its responsibilities" is vague and overly broad and could greatly limit the effectiveness of the proposed procedures. Where proprietary documents are voluntarily submitted, this requirement is simply inappropriate. Where documents are not voluntarily submitted, retention should be limited to that portion of the document which is needed by the NRC to carry out its statutory responsibilities, and the staff should be required to document the need that justifies non-return of that information.

Thus, a provision should be added to the NRCs regulations to state that where information in a document not voluntarily submitted is needed for the NRC to carry out its statutory respoilSl"bilities, such information shall be specifically identified by the NRC, the reason for the need shall be stated, and only such specific information shall not be returned.

Beyond the foregoing, however, what is also required is a true presubmission review procedure, under which a document does not become an "agency record," and 3

hence is not (1) subject to the FOIA exception, (2) submitted to an advisory committee, or (3) considered by the Commission in a Sunshine Act meeting, until after a determination has been made as to its proprietary status. Only "agency records" are subject to FOIA requests and fall within the ambit of the Advisory Committee Act and Sunshine Act By determining proprietary status before a document becomes an agency record and is available for regulatory use by the agency, the document will not be inappropriately "captured" by any of the three exceptions proposed in the regulation.

Although the term "agency record" is not defined in the FOIA, federal court decisions have given explicit meaning to that phrase. Fundamentally, two requirements must be satisfied for a document to become an agency record First, the agency must either "create or obtain" the document Forsharn v. Harris. 445 U.S. 169, 186 (1980).

Second, the agency must be in control of the document Kissin~er v. Reporters Committee for Freedom of the Press, 445 U.S. 136, 157 (1980); Forsham v. Harris, rn-See also United States Department of Justice Y, Tax Ana]ysts, 492 U.S. 136, 144-6 (1989). Further, the case law suggests that a document not generated by the agency but obtained from a third party must be "used" by the agency to become an agency record See Kissinger., 445 U.S. at 157; Bureau of National Affairs v. Department of Justice, 742 F.2d 1484 (D.C. Cir. 1984); General Electric Company v. NRC, 750 F2d 1394, 1400 (7th Cir. 1984).

An effective presubmission review procedure should be established by the Commission so that proprietary documents do not come under the control of the NRC (i.e., do not become available for NRC use) until after a review has been performed and the NRC has determined whether the information was properly categorized as proprietary. Under such a regime, any person considering the submission of what the person considers to be proprietary infoonation could request a presubmission review to determine the proprietary status of the document The person requesting the review would be required to state why the data or information is proprietary in the same manner as currently provided for in NRC regulations. The subject document would be provided to and reviewed by the NRC (at a special NRC office or, where the circumstances warranted, at the premises of the requester) for the sole purpose of determining whether it is appropriately classified as proprietary. No use would be made by the NRC of the document in connection with its nuclear safety regulatory functions in that the sole purpose of the presubmission review would be to determine whether the NRC would accord proprietary protection to the document if and when the document were to be submitted to the agency in support of a request for substantive regulatory action or for some other regulatory use.

The regulations of two agencies - the Food and Drug Administration ("FDA")

and the Environmental Protection Agency (EPA") - provide for presubmission review of requests for confidential treatment of proprietary information. Both agencies deal with matters related to public health and safety and both receive significant amounts of information - much of it of a confidential nature -- from private parties. The regulatory 4

regimes which they have adopted for presubmission reviews are similar, and should provide the Commission with useful precedent. The applicable FDA provisions for prior review are contained in 21 CFR § 20.44; the applicable EPA provisions are in 40 CFR

§ 2.206. Under both the FDA and EPA regulations, documents for which proprietary protection is sought are sent to the agency with a request for a determination as to confidentiality. The person submitting the request may withdraw the documents if the request for proprietary treatment is denied.

In a case where a document actually had been obtained by the FDA, placed in its unrestricted files, and used by its staff in preparation for a proposed inspection, a District Court found that the FDA presubmission review regulation, which would have found the document not to be an "agency record" and allowed the originator to withdraw the document, violated FOIA and thus was invalid. Teich v, Food and Drug Admjnjstration, 751 F. Supp. 243 (D. D.C. 1990). The Court in the Teich case, applying the

• requirements established in Tax Analysts that, to be an "agency record," a document must be one obtained by the agency and in its control, found that both requirements existed. We do not read this district court decision as a~~ preclusion of an appropriately implemented presubmission review process and believe such a process can be structured and applied so as to be fully compatible with relevant Supreme Court decisions.

A r~gulation allowing for presubmission review by the NRC, with a right of withdrawal, should be valid even if the document actually is sent to the NRC, so long as it is furnished for proprietary review only (i.e., it is not coupled with any request for substantive regulatory action). In appropriate cases, the NRC could perform- its presubmission proprietary review of a document at the offices of the requester or at some other non-NRC facility; again, this review would be limited to a determination of proprietary status .. In either circumstance (review at a special NRC location or at the requester's premises), no copies of the document would be taken by the NRC from the reviewing location until it had been determined that the document was proprietary or until the requester agreed to furnish the document for regulatory use as non-proprietary.

Thus, at no time would the NRC use the document until after its proprietary status had been determined and the *requester had determined whether and, if so, when to submit the document for regulatory use.

While we believe that an appropriately structured presubmission review process would not result in "agency record" status for documents under such review, in any event the documents would.have been submitted on a voluntary basis and thus be entitled to protection under the standard prescnbed for voluntary submittals in Critical Mass.

In summary, the industry recommends that the NRC adopt provisions which would allow alternative methods for presubmission review. In that manner, the objective of the SRM on SECY-92-341 will be achieved and appropriate protection, consistent 5

with statutory requirements, will be accorded to persons who seek to submit proprietary information to the Commis.gon.

D. Comments on the Prqposed Specific Exceptions to the Ri~t of Withdrawal

1. The Advis01y Committee Exce,ption The first proposed exception would provide that a document submitted to the NRC will not be returned and may not be withdrawn if it has been prepared for or made available to an NRC advisory committee. (Proposed§ 2.790(e)(1)(ii)). Adoption of the presubmission review procedures discussed above will alleviate much of the problem otherwise created by this proposed exception. As noted by the Commission in the Federal Register notice containing the proposed rule, a copy of many documents submitted to the NRC is provided routinely to the Advisory Committee on Reactor

• Safeguards ("ACRS") and the Advisory Committee on Nuclear Waste ("ACNW") without any consideration having been given to whether the information provided may have been proprietary or was necessary for the Committees' deliberations. In this situation, it is especially important that presubmission review procedures be adopted The Commission also should amend its regulations to make it explicit that proprietary documents utilized by the ACRS, the ACNW or other Commission advisory committees are not to be publicly disclosed by those entities either. The Federal Advisory Committee Act specifically authorizes this. Section 10(b) of FACA begins:

"Subject to section 552 of Title 5, United States Code, the [documents] which were made available to or prepared for or by each advisory committee shall be available for public inspection ...." Section 552 of Title 5 is, of course, the provision of the Administrative Procedure Act containing the FOIA and Exemption 4 that provides for the protection of proprietary information from disclosure. FDA regulations relating to the advisory committees of that agency provide a useful example of such an explicit disclosure constraint. ~ 21 CFR Subparts B and D.)

2. The FOIA Ex@l>tion The second proposed exception would provide that when information contained in a document submitted to the NRC has been requested pursuant to the FOIA, the document will not be returned to the submitter. (Proposed§ 2.790(c)(1)(iv)). The industry believes that the position set forth in SECY-92-341 (i.e., that this result is required by the FOIA) is not correct and that, at best, the state of the law in this area is ambiguous.

SECY-92-341 cites the case of General Electric Co. v. NRC, 750 F.2d 1394 (7th Cir. 1984) in support of its position that a FOIA request results in the "capture" of a document by the agency. In that case, which involved disclosure of the GE "Reed Report," the NRC argued that the provision in its rules for return of a document as to 6

which a request for withholding has been made does not apply once a FOIA request has been filed. The Seventh Circuit held that the NRC had interpreted its regulation,

§ 2.790(c), to mean that the right of return is not applicable once a FOIA request is filed and that "this is a reasonable interpretation [by the NRC] of its own regulation." 750 F.2d at 1399. The Court did not hold that this result was mandated by FOlA, suggesting in dictum only that a wholesale right of withdrawal "would certainly violate the spirit, and maybe even the letter," of FOIA. The Court's dictum was addressed to a postulated worst-case hypothetical which plainly goes beyond the limited withdrawal right currently afforded by§ 2.790(c).

SECY-92-341 failed to note, or make any reference to, Westinghouse Electric Coox>ration v, NRC, 555 F.2d 82 (3d Cir. 1977), where the NRC, in a case similarly involving the validity of § 2.790, took the opposite position from its position in the General Electric case as respects the interpretation of§ 2.790(c) - namely, that there

• was an absolute right of withdrawal by a submitter of proprietary information except for the limited case of a document submitted in a rulemaking which subsequently forms the basis of the final rule. This right of withdrawal afforded by the NRC was one of the key points repeatedly made by the NRC in its brief to the Third Circuit and in oral argument in the Westin~ouse case. The Third Circuit made reference to that right several times in its opinion and, at one point, referred to the "absolute right" of return, with the one exception noted for a document that formed the basis of a final rule.

Thus, the most that can be said is that there is a split in the Circuits, and that the NRC has been on both sides of the issue. Given that situation, the industry believes that the public policy underlying FOIA Exemption 4 should be honored and the NRC regulations should continue to provide that the submitter of information has the ability to reclaim its information prior to disclosure.

In sum, we believe that the so-called FOIA exception is not dictated by the requirements of that Act and that§ 2.790(c) can and should be maintained in its current form. However, if the Commission chooses to modify § 2. 790( c) regarding disclosure under FOIA, it should narrow the exception contained in the proposed rule. Where a decision is made that a document submitted to the NRC is proprietary, the balance between disclosure and withholding struck by the Congress in establishing FOIA Exemption 4 should be honored, and there should be no further balancing by the NRC of public and private interests; no disclosure should be allowed In this situation, there can be no conflict with the FOIA because once the Commission has found that a document is proprietary, the FOIA mandates withholding from public disclosure. 1 We would emphasize, however, that this issue and much of the problem otherwise created by 1

See the discussion below of why Commission balancing is not appropriate once a FOIA exemption determination has been made.

7

the proposed FOIA and other exceptions would be alleviated by adoption of the presubmission review procedures discussed earlier.

3. The Commission Meetjni Exception The third proposed exception would provide that if proprietary information for which a request for withholding has been made "was discussed at an open Commission meeting held in accordance with 10 CFR part 9, subpart C," the document containing the information will not be returned. (Proposed§ 2.790(c)(l)(iii)). In our view, such a course is neither appropriate nor necessary.

As an initial proposition, we submit that there should be no disclosure of proprietary information at an open meeting of the Commission. H proprietary information is to be discussed at a Commission meeting, which in our experience is a very rare event, the meeting should be closed pursuant to the provisions of the Sunshine Act, 5 USC § 552b, so that confidentiality of proprietary information can be preserved.

Thus, there should be no need for a Commission meeting exception to the proprietary rules. In the event that proprietary information is inadvertently mentioned at an open Commission meeting, there is nothing in the Sunshine Act that requires that the information be included in the public record of the meeting or be subject to further disclosure. It is not acceptable, and it is not the law, that rights to proprietary information are lost because of inadvertent disclosure of such information at an open Commission meeting. H there is such inadvertent disclosure, the transcript of the open meeting should not include the proprietary information which was discussed at the meeting.

• In addition, there is a significant difference between the wording of the proposed regulation and the discussion of it in the Supplementary Information contained in the Federal Register notice. The proposed regulation refers to the situation where the "information. .. was discussed at an open Commission meeting held in accordance with 10 CFR Part 9, Subpart C." However, the Supplementary Information states that the exception "would relate to documents considered in connection with an open Commission meeting held in accordance with the Commission's Sunshine Act regulations." There is an obvious difference between the narrower "information ...

discussed at an open Commission meeting" and the broader "would relate to documents considered in connection with an open Commission meeting." The latter language is vague and unbounded, and raises numerous questions. The former language -- the language of the proposed regulation itself - is more precise. We believe the language in the proposed regulation relates to specific proprietary information actually discussed at an open Commission meeting and that the proposed withdrawal exception is intended to apply to that information only. H the subject exception is maintained, this matter needs clarification so that the overly broad description in the Supplementary Information is not imputed to the language of the regulation itself.

8

In discussing this proposed exception, the Supplementary Information states,

"[A]fter balancing the interests, if the Commission determines to release the information, there is no reason to provide for its return to the submitter, except for [extraneous material easily segregated]." The Commission, however, never reaches the balancing test unless it first has concluded that the information is proprietary and falls within FOIA Exemption 4. Once this conclusion is reached, there is no conflict between the FOIA and return of the information, and there is no reason under the FOIA for the Commission not to return the information.

Moreover, we submit that disclosure of proprietary information based on the balancing test referred to here, and which applies elsewhere in the present § 2. 790, is neither within the authority of the Commission nor otherwise appropriate. With respect to Commission authority, Congress already has achieved the public policy "balance of interests" in the provisions of FOIA and has decided that "trade secrets and commercial

• or financial information obtained from a person and privileged or confidential" are entitled to withholding from public disclosure. The relevant case law affirms that Congress has struck what it deems to be the equitable public policy balance and that, with one exception not here relevant, the courts and agencies are not to become involved in a new balancing that would upset the determinations made by the Congress. See, ~

Soucie v. Davi4 448 F.2d 1067, 1077 (D.C. Cir. 1971); Getman v. NLR,B., 450 F.2d 670, 674 (D.C. Cir. 1971); Wellford Y, Hardin, 444 F.2d 21, 24-25 (4th Cir. 1971).

With respect to the appropriateness of a Commission balancing test after detenuioiog information is proprietary, we note that for involuntarily submitted material to be proprietary, the test requires a likelihood of substantial competitive harm. Thus, for the Commission to perform a balancing test and release information after finding the material to be proprietary, the Commission would be releasing information in the face of the fact that it had previously determined that substantial competitive harm. is likely to ensue. We submit that this is an inappropriate result With respect to voluntarily submitted information, the recent Court decision in Critical Mass makes the test solely one of whether the information is customarily held in confidence, and no "balancing test" at all is appropriate.

E. Further Necessary Modjfjcations to § 2,790

1. Predisclosure Notification Procedures Predisclosure notification procedures should also be incorporated into NRC regulations as provided by Executive Order 12,600 of June 23, 1987, Predisclosure Notification Procedures for Confidential Commercial Injonnation, 52 Fed. Reg. 23781 (June 25, 1987). That Order, which applies to all executive departments and agencies subject to the FOIA, requires that predisclosure procedures be established to notify submitters of records containing confidential commercial information whose records are requested under the FOIA when the agency determines it may be required to disclose 9

the records. First, the procedures must afford the submitter an opportunity to object to disclosure. The agency is then required to give careful consideration to all specified grounds for nondisclosure and, if it elects nonetheless to disclose the documents, it must give the submitter, in advance of disclosure, a written statement briefly explaining why the submitter's objections are not sustained. Further, the submitter must be notified by the agency of any FOIA suit seeking to compel disclosure so that the submitter can pursue what additional steps it might deem appropriate.

Chapter NRC-0211 of the NRC Manual, entitled "Freedom of Information Act,"

contains provisions for processing requests for proprietary information. The procedures set forth in that chapter do not fully comport with the provisions of Executive Order 12,600 and, in any event, are not reflected in the agency's regulations, as specified by the Executive Order. Under Section E3 of Chapter NRC-0211, documents marked proprietary are provided to the NRC Division of Freedom of Information and

• Publication Services ('DFIPS"). The DFIPS, the Office of General Counsel ("OGC') and the cognizant NRC office each review the documents for which proprietary information protection is sought, and if the proprietary claim is rejected, the DFIPS advises the submitter that the NRC does not consider the withheld information to be proprietary and that the information will be released within fifteen days. These provisions do not afford the submitter an adequate opportunity to object to disclosure and do not require a written statement as to why the submitter's objections to disclosure were not sustained.

Further, these provisions do not require the NRC to notify the submitter of information if any FOIA suit is filed seeking to compel disclosure~ Moreover, we question whether a fifteen-day notice period is a "reasonable number of days," as prescnbed by the Executive Order, within which the submitter can seek court intervention.

The industry believes that the Commission should adopt regulations to implement the predisclosure notification regime prescn"bed by the Executive Order. The regulations could be based in part on the provisions of NRC Manual Chapter NRC-0211, but should be expanded to include the provisions contained in the Executive Order. Such regulations would be cumulative to those which provide for presubmission review of documents where a proprietary claim is asserted and, taken together, would enhance the protection properly to be accorded proprietary information.

2. Rule Chan~e Regwred by Critical Mass Energy Project v, NRC 10 CFR § 2.790 should be modified to reflect the en bane decision of the United States Court of Appeals for the District of Columbia Circuit on August 21, 1992, in Critical Mass. In that case, Critical Mass Energy Project sought the release of INPO reports which had been voluntarily submitted to the NRC with the understanding that they would not be released to the public. The Court of Appeals revisited its decision in National Parks and Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974),

in which the Court had established a two-part test for determining when financial or commercial information in the government's possession was to be treated as confidential 10

under FOIA Exemption 4. In Critical Mass, the Court reaffirmed the National Parks two-part test but confined its application to information that persons are required to provide to the government The Court held that where information sought to be released is given to the government voluntarily, it will be treated as confidential under FOIA Exemption 4 if it is the kind of information that the provider would not customarily make available to the public. In so holding, the Court said:

We know of no provision in FOIA that obliges agencies to exercise their regulatory authority in a manner that will maximize the amount of information that will be made available to the public through that Act Nor do we see any reason to interfere with the NRCs exercise of its own discretion in determining how it can best secure the information it needs. So long as that information is provided voluntarily, and so long as it is the kind that INPO customarily withholds from the public, it lllllfil be treated as confidential. (975 F2d at 880, emphasis added.)

The regulation governing the treatment of trade secrets and commercial or financial information submitted to the NRC, 10 CFR § 2.790, makes no distinction between submission of such information which has been compelled by the NRC and submission of information on a voluntary basis. NRC regulations should be revised to be consistent with the Critical Mass decision. Specifically, Section 2.790(b)(3) should be revised to reflect the National Parks two-part test for information required to be submitted, and the Critical Mass test for information voluntarily submitted to the NRC.

Further, Sections 2.790(b)(2) and 2.790(b)(5) also should be revised to reflect the Critical

~ standard for agency treatment of information which is voluntarily submitted, i.e., if that information is of a type which is customarily not released to the public, it must be afforded Exemption 4 treatment by the agency.

3. Assuring Compattoility with 10 CFR Part 810 The Commission must also ensure that its disclosure regulations and their implementation are compatI"ble with the national security objectives and related technology access constraints of 10 CFR Part 810. The Department of Energy's Part 810 regulations - which implement Section 57b. of the Atomic Energy Act -- govern transfers to non-U.S. recipients of U.S.-origin nuclear technology which is not "public information,"

with specific constraints on making such technology available to proliferation-suspect countries. Oearly, making "public information" out of otherwise proprietary materials through a "balancing test" - indeed, denying proprietary status to nuclear technology which a submitter would not customarily make available to the public -- holds the potential for conflict with Part 810 national security objectives. In short, there may be 11

national security interest considerations in non-disclosure that would be compromised by the amendments to the rule as currently proposed.2 F. Transition Provisions In the past there have been countless submittals of information to the NRC where information has been identified by the submitter as proprietary. NRC practice generally has been to protect the information from disclosure while it determines the validity of the proprietary claim. Thus, there currently are at the NRC documents as to which a proprietary claim has been asserted where there has not yet been a determination of the validity of that claim. H the Cornrniooon adopts revisions to § 2. 790, there should be a transition provision to protect proprietary information previously submitted to the NRC as to which a proprietary determination has not yet been made. Otherwise, owners of such information who submitted it to the NRC in good faith with the understanding that

• the information could be withdrawn if it was subsequently determined not to be proprietary will have had the groundrules changed and may be deprived of their property without due process. In addition, unless the proposed provisions relating to marking of proprietary documents are changed and made less prescriptive, transition provisions relating to marking of documents will also be needed with respect to proprietary documents previously submitted to the NRC.

IL MATERIAL SUBJECT TO COPYRIGHT PROTECTION The proposed revisions to§ 2.790 also would modify Commission regulations relating to submittal of information bearing a copyright notice. The industry supports the *thrust of the proposed revision as that revision is explained in the Supplementary Information. Unfortunately, the language in the proposed revision (Proposed

§ 2.790(e)(l) and (2)) is significantly different from the description of the proposed change contained in the Supplementary Information. The Supplementary Information states that "the proposed regulation provides notice that the submission of a document to the NRC in connection with NRC licensing and regulatory activities authorizes NRC to reproduce and distribute copies required for its regulatory and public information responsibilities." 57 Fed. Reg. at 61014. It also states that the proposed rule provides 21:t is noteworthy that Section 57b. expressly provides that "[a ]ny trade secrets or proprietary information submitted by any person seeking an authorization [thereunder]

shall be afforded the maximum degree of protection allowable by law." (Emphasis supplied.) Thus did Congress, in 1978, express a public policy judgment that proprietary information required to be submitted as part of a Section 57b. authorization request (i.e.,

any information which may "directly or indirectly" aid the production of special nuclear material outside the United States) should not be made public solely as a result of such submittal and, indeed, that, in order safeguard the national security, agency discretion must be exercised in favor of protecting such information.

12

that such document submission "is deemed to be a representation to the NRC by the submitter that the submitter has the authority to submit the document and to authorize the NRC to make copies of the document, whether or not the document bears a copyright notice." These descriptions are reflected in the language of the proposed regulation.

However, other discussion in the Supplementary Information as to what is intended to be accomplished by the proposed regulation is not reflected in the proposed rule. For example, the Supplementary Information states:

The proposed regulation authorizes only the NRC to copy and distnbute the document and does not extend these rights to other persons receiving copies from NRC. The proposed rule provides that if the document bears a copyright notice or is accompanied by an explicit statement that the document is protected under the copyright law, a notice would be placed on the document indicating that the NRC has the authority to copy the document; however, all copyright markings contained on the submitted document would be retained.

This description of what the proposed rule is to provide is not reflected in the actual wording of the proposed regulation.

Similarly, the Supplementary Information states:

However, with respect to distnbution of documents to the general public, only one copy per request will be made of documents bearing a copyright notice or documents accompanied by an explicit statement indicating that the document is protected under the copyright law.

Again, this description is not reflected in the actual wording of the proposed regulation.

The language of the proposed regulation should reflect the intent of the NRC as descnbed in the Supplementary Information. Further, as currently written, the proposed regulatory language is ambiguous and difficult to understand. Moreover, the language actually proposed in the rule (as distinct from the description in the Supplementary Information) appears to violate the Federal Copyrights Act, 10 U.S.C. § 101 ~ ~ and to be unauthorized by any statutory authority possessed by the Commission. H the language is properly revised to be consistent with the NRC's intent as described in the Supplementary Information, we believe the revised provisions relating to copyrights would be reasonable. However, as the law applicable to copyrights is within the special competence of the Registrar of Copyright in the Library of Congress, we recommend 13

that the NRC seek comment from that office before adopting any final rule related to the copyµig, external distnbution and other treatment of copyrighted materials.

IIL MARKING OF PROPRlETARY INFORMATION The proposed regulation would require that a person proposing that a document, or part thereof, be withheld from disclosure as proprietary "shall mark the first page of the document and every other page containing this [proprietary] information

'Confidential Information Submitted Under 10 CPR§ 2.790' or 'Proprietary Information Submitted Under 10 CPR§ 2.790.'" (Proposed§ 2.790(b)(l)). In contrast, current Commission regulations only require that the submitter "identify the document or part sought to be withheld." (§ 2.790(b)(l)(i)). Although no consequence is set forth from the failure to use the exact language of the proposed regulation, it could be inferred that the consequence is forfeiture of the proprietary status of the information - an unjustifiable result The proposed new regulation is unnecessarily prescriptive.

Other agencies do not impose the prescriptive type of notice which is embodied in the proposed Commission regulation. For example, the EPA regulations provide that a proprietary claim may be asserted by the submitter of a document "by placing on ( or attaching to) the information, at the time it is submitted to the EPA, a cover sheet, stamped or typed legend, or other suitable form of notice employing language such as trade secret, proprietary or company confidential Allegedly confidential portions of otherwise nonconfidential documents should be clearly identified" 40 CPR § 2.203(b)

(emphasis added). The FDA does not specify even this general language. ~ 21 CFR

§ 20.44.

There appears to be no justification for the very specific and prescriptive wording which the proposed NRC regulation would i:equire. As descnbed in the Supplementary Information, the reason for the new provision appears to be to ensure that information which a submitter seeks to be withheld from public disclosure is not placed in the NRC Public Document Room when the mail containing such information is opened. 57 Fed Reg. at 61014. This goal can be accomplished by utilizing more general language, like that of the BPA, requiring that the proprietary claim be clearly identified but allowing some variation depending on the practice of each submitter and the nature of the document being submitted. Any submitter of proprietary information will have an obvious interest in making sure that the information is properly marked, and this self-interest, coupled with a nonprescriptive, generalized requirement, will accomplish the goal which is apparently sought by the Commission in the proposed regulation.

14

FREDERICK H. WINSTON (1853-1886) 1400 L STREET, NW. CHICAGO OFFICE SILAS H. STRAWN (1891-1946) WASHINGTON , D.C. 20005-3502 35 WEST WACKER DRI VE

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._, CH ICAGO, ILLINOIS 60601 (3 12) 558-5600 (202) 371 -5700 NEW YORK OFFICE FACSIMILE (202) 371-5950 175 WATER STREET WRITER ' S DIRECT DIAL NUMBER NEW YORK. NY 10038-4981 (212) 269-2500 March 8, 1993 VIA MESSENGER Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Docketing and Service Branch Re: Comments on the Proposed Rule on Availability of Official Records, 10 C.F.R.

§ 2.790, 57 Fed. Reg. 61,013 (December 23, 1992)

Dear Mr. Chilk:

On December 23, 1992, the Nuclear Regulatory Commission

("NRC" or "Commission") issued a proposed rule to, inter alia, amend 10 C.F.R. § 2.790 specifically, the portion of that regulation governing the withdrawal of material designated to be "trade secrets and commercial or financial information obtained from a person and privileged or confidential," 10 C.F.R.

§ 2. 790 ( a) ( 4) ( "proprietary information") , for which the agency has denied a request for withholding from public disclosure.

Thereafter, the Commission invited public comment on the proposed rule. On behalf of the licensees identified below, we are filing these comments within the time period set forth in the Federal Register Notice.Y y We are filing these comments on behalf of the following licensees: Niagara Mohawk Power Corporation, Northeast Utilities, and Texas Util i ties Electric Company.

us.r*r, .,,. 'r

WINSTON & STRAWN Mr. Samuel J. Chilk March 8, 1993 Page 2

1. The NRC Should Permit The Withdrawal Of Information Made Available To, Or Prepared For, A Federal Advisory Committee If The Agency Denies A Request To Withhold The Proprietary Information From Public Disclosure.

The proposed rule will automatically prohibit the return of any and all materials made available to or prepared for a Federal Advisory Committee even in the event the agency determines not to grant the protection against non-disclosure as requested by the submitter of the materials. In support of this position, the Supplementary Information accompanying the proposed rule states that the Federal Advisory Committee Act ("FACA") requires that "all reports received by the committee must be contained in the minutes of the meeting to which they pertain (FACA, sec. l0(c)) ." 57 Fed.

Reg. at 61013. It is the position of the Commission, therefore, that all documents made available to, or prepared for, any advisory committee may not be returned. This position goes too far.

As an initial matter, the requirement that "all reports" be contained in the advisory committee minutes does not disable the committee from protecting privileged materials. If that were the case, no materials contained in any reports would be protectable if made available to, or prepared for, any advisory committee. That is not the law. Indeed, courts have recognized that the Freedom of Information Act ("FOIA"), with its nine specific exemptions from public disclosure of information, is applicable to advisory committee proceedings. National Security Archive v. Archivist of the United States, 909 F.2d 541, 545 (D.C. Cir. 1990) ("Section l0(b) [of the FACA] renders the disclosure provisions of the FOIA applicable to advisory committees and designates each committee as the appropriate repository of its own records"); Food Chemical News

v. Advisory Committee on the Food and Drug Administration, 760 F.

supp. 220, 221 (D.D.C. 1991) (same). Accordingly, the language in the FACA requiring the inclusion of "all reports" in the minutes of the meeting to which they pertain does not, in and of itself, demand the public disclosure of all such material as stated in the Supplemental Information to the proposed rule.£1

'?,.I Nor does the fact that the FACA "has no provision for the withdrawal of a document that has been provided to an advisory committee," 57 Fed. Reg. at 61013, demand a different result.

Courts that have considered the issue have held that Section 10 (b) of the FACA "incorporates FOIA procedures as well as FOIA exemptions." Food Chemical News, 760 F. Supp. at 222.

See also National Security Archive v. Executive Office of the (continued ... )

WINSTON & STRAWN Mr. Samuel J. Chilk March 8, 1993 Page 3 Recognizing that public disclosure is not demanded by the FACA, the Commission should not now amend its rule regarding the withdrawal records to absolutely bar the retrieval of materials containing proprietary information, simply because they were sent to an advisory committee. The regulation of the nuclear power industry by the Commission is unique in many respects. The highly technical aspects associated with the regulation of the industry have demanded that the industry submit detailed technical proprietary information to the NRC, and to the various advisory committees established by the agency, as they investigate, analyze, and resolve extremely complex technical issues. The industry must be in a position to believe that certain submissions will be protected by the agency, or, in the event the agency denies the requested protection, that the submitter will have the opportunity to retrieve documents prior to their public disclosure without litigation. The Commission should seek through its rules to ensure that interested persons or entities will continue to submit materials including, in this instance materials containing proprietary data -- to advisory committees.

With respect to the determination that information is protectable as privileged or confidential trade secrets and commercial or financial information, courts have long recognized that an agency may withhold such material where it determines that disclosure would "impair the Government's ability to obtain necessary information in the future." National Parks and Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).

In constructing an absolute bar to the return of materials made

'?:.I ( *** continued)

President, 688 F. Supp. 29, 33 (D.D.C. 1988), aff'd, 909 F.2d 541 (D.C. Cir. 1990). Accordingly, the advisory committee should operate in a manner consistent with the agency to which it is responsible. S e e , ~ , 10 C.F.R. § 1.ll(c) (the ACRS and other committees report to the Commission). Under the NRC's proposed rule, the treatment by the NRC of proprietary material for which protection has been denied may be returned unless it has been "captured" by a FOIA request or discussed in an open meeting. See Proposed Rule§ 2.790(c) (1) (iv), 57 Fed. Reg. at 61016. At a minimum, the same treatment should be afforded materials submitted to an advisory committee.

Such a result would be consistent with the recognition of the applicability to advisory committees of the FOIA standards applied to the agency under which any such committee operates.

WINSTON & STRAWN Mr. Samuel J. Chilk March 8, 1993 Page 4 available to, or provided for, an advisory committee, the agency will effectively discourage interested persons from submitting materials containing privileged or confidential trade secrets and commercial or financial information, for which protection from public disclosure is sought. Id. at 767 ("Unless persons having necessary information can be assured that it will remain confidential, they may decline to cooperate with officials and the ability of the Government to make intelligent, well informed decisions will be impaired"). See also Critical Mass Enerqv Project v. NRC, 975 F.2d 871, 879 (D.C. Cir. 1992) (en bane) ("It is a matter of common sense that the disclosure of information the Government has secured from voluntary sources on a confidential basis will both jeopardize its continuing ability to secure such data on a cooperative basis and injure the provider's interest in preventing its unauthorized disclosure"). The proposed rule will severely undercut the availability of information to such advisory committees with a resulting decrease in their effectiveness to render advice and assistance to the agency.

We believe that the proposed rule should not provide such a bar to withdrawal of information simply because the material was submitted to an advisory committee. Rather, we believe that there is no reason to require the treatment of the submission of records to an advisory committee any differently than the treatment of the submission of records to the Commission.~1 Accordingly, we suggest that the provision regarding the submission of records to an advisory committee be modified to correspond to the manner in which the Commission treats documents in connection with an open Commission meeting held in accordance with the Commission's sunshine Act Regulations -- that is, to the extent that proprietary information was discussed at an open meeting of an advisory committee, the material will not be returned to the applicant, except for any material that may have been extraneous to the

~1 Indeed, it appears inconsistent to recognize the availability of relief with respect to documents submitted to the Commission and for which protection was denied and not to recognize a similar right to relief with respect to documents submitted to an advisory committee. This may lead to the filing of materials containing proprietary information only with the Commission even though such materials would be useful to an advisory committee. Under the proposed rule, until such time as the material is then forwarded to an advisory committee, the submitter retains the right to retrieve the material. This distinction makes no sense and is not mandated or justified by the provisions of the FACA.

WINSTON & STRAWN Mr. Samuel J. Chilk March 8, 1993 Page 5 submittal officially before the advisory committee and that may be easily segregated from the remainder. See Supplementary Information to the Proposed Rule, 57 Fed. Reg. at 61013.

2. The NRC Staff Should Not Circulate Any Materials For Which Protection Is Sought Until The Agency Determines Whether To Grant The Requested Protection To The Materials.

First, while the present rule requires the NRC to determine claims of proprietary privilege, there is no provision in either the existing -- or the proposed -- rule requiring the agency to make its determination before the information is circulated within the agency. In the past, the NRC has permitted the submitter to demand the return of the material in the event the agency denied the request for protection and this practice has not been affected by the distribution of the material within the agency. Accordingly, the lack of a requirement regarding the timing of the determination of privilege was not significant.

Under the proposed rule, however, certain relief -- specifically, the right to withdraw the material -- will no longer be afforded if the information has been circulated within the agency, including, critically, if the information was made available to an advisory committee. The NRC should not nullify the right of the submitter to seek return of proprietary materials by providing copies of such materials to an advisory committee before a determination of privilege is made.

As the Commission notes in connection with the proposed rule, "a copy of many of the documents submitted to the NRC is provided routinely" to the NRC's Advisory Committee on Reactor Safeguards (ACRS) and the NRC's Advisory Committee on Nuclear Waste (ACNW)). 57 Fed. Reg. at 61013. This includes providing copies of documents that are not specifically directed toward an advisory committee, but, for whatever reason, someone within the agency decides to send to the committee. The rights of the submitter to withdraw the information should not be allowed to be terminated by the random decision of an individual within the agency to direct a copy of a document to an advisory committee before the decision on the request for protection is made and the submitter has had the opportunity to withdraw the record if the request is denied. There is little question that licensees and other interested parties, who are encouraged to submit materials to the NRC under a variety of circumstances, will be reluctant to offer up materials voluntarily if such materials contain proprietary information, and no assurance of confidentiality is provided.

WINS T ON & STRAWN Mr. Samuel J. Chilk March 8, 1993 Page 6 Further, the lack of specific deadlines for the determination of the grant of privilege by the agency exposes the industry to potentially long periods of uncertainty with respect to the submission of privileged or confidential trade secrets and commercial or financial information. We believe that the rule governing the release of such materials should include definite time limits for determining whether the NRC will grant the protected status to the material.

We do not foresee this procedural requirement as imposing an undue burden on the agency. The NRC currently reviews submissions in order to determine if certain material is worthy of protection prior to placing the material in the Public Document Room ( "PDR") . We believe that the proposed rule should provide for a similar screening process -- with the option that the submitter may obtain the return of the information if the requested protection is denied -- before the material is circulated within the agency.

3. Section 2.790 Should Be Amended Explicitly To Provide A Procedure That Permits The Return Of Any Materials For Which The NRC Has Denied The Requested Protection.

Licensees often have occasion to submit information to the Commission seeking confidential treatment pursuant to

§ 2. 790 ( a) ( 6) , which allows the withholding of documents from public disclosure that constitute "[p)ersonnel and medical files and similar files, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." This exemption is often invoked, for example, in submissions that pertain to whistleblower allegations, and which necessarily reference the conduct and/or performance of named individuals. Presently, there is no provision explicitly mandating the return of such material when the agency denies a request for confidential treatment under this exemption. However, the NRC has, in practice, generally permitted the licensee to obtain the return of such information where§ 2.790 treatment is denied, thus avoiding public disclosure.

We believe that the agency should, by regulation, extend the opportunity to withdraw submitted information to all denials of

WINS TON & S T RAWN Mr. Samuel J. Chilk March 8, 1993 Page 7 protection, not just those pursuant to§ 2.790(a) (4) relating to trade secrets or other proprietary information.

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Nicholas s. Reynolds Marcia R. Gelman David M. Souders

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• 93 11AR 12 A1G :49 March 5, 1993 l,.J F (. ! . . : ~ l .; 1.; l. ~ t .'i._t* 'l' SNC-93-244 i~uLl'\t.-: 1ti'" , ' i r , ,r f 1 K, NV*

Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing and Service Branch

Dear Sirs:

We have a general comment en the entire section of paragraph 2.740 and the issue of proprietary information. As we have recently been severely stung by strict adherence to paragraph 2.790 we are acutely aware of a major problem with this paragraph. Under the current interpretation of 2.790 the NRC will not withhold any proprietary information that forms that basis of "rulemaking".

Under the new generic cask and reactor certification procedures, which require vendor specific "rulemaking" this means that very sensitive trade secrets, design details, calculational techniques, calculations and other proprietary information must be disclosed. This will place any company wishing to certify one of its designs in a very tedious position nationally and a downright losing position internationally. Trade secrets, design details and proprietary information will be lost to other vendors who can then develop similar or new designs at significantly less cost than the original vendor. While this is bad for a particular vendor nationally it is terrible for the U.S.

industrial base internationally. If representatives (particularly Japan, Taiwan & Korea) can go to the public document room and get all the information they need to design and build advanced storage cask and reactors they certainly aren't going to buy those products from a U.S. firm.

Worse yet, they will sell those same products internationally, possibly even in the U.S. at prices less than U.S. vendors can because they got the proprietary information, trade secrets and calculations for free! This will significantly increase the U.S.'s trade deficit, reduce American jobs and place U.S. firms at an even greater disadvantage on the world market.

We believe that 2.790 or at least its current interpretation must be changed. U.S. equipment vendors must be allowed protection of their trade secrets and proprietary information. We believe that 2.790 should be changed to allow the public access to all NRC generated material that forms the basis of rulemaking but also changed to explicitly state that vendor supplied information, if marked proprietary or as trade or commercial secrets will be withheld from public disclosure. It is the NRC's job to review such mate rial to assure the health and safety of the public and they can certainly summarize any material (without disclosing sensitive parts) in their SER's and other documents. However, we must protect sensitive material if U.S. vendors are to be able to compete in the emerging global economy.

Very truly yours,

PYt1~

John V. Massey, Ph.D.

JM:kam President 5619 Scotts Valley Drive

• Scotts Valley, California 95066 * (408) 438-6444

• FAX (408) 438-5206

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(S7FR 6/0/3)

OO CK[TEO 11 <:; !P r NUCLEAR MANAGEMENT AND RESOURCES COUNCIL 1776 Eye Street. NW

• Suite 300

• Washington.DC 20006-249'9 tlAP - 4 1 4 :19 (202) 8 72-1280 3 Robert W. Bishop -TAt,.'*'

Vice President &

March 4, 1993 i;'v1u General Counsel Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 ATIENTION: Docketing and Services Branch RE: Proposed Rule Availability of Official Records 57 Fed. Reg. 61013 (December 23, 1992)

Request for Extension of Time

Dear Mr. Chilk:

This request is submitted by the Nuclear Management and Resources Council, Inc. (NUMARC) 1 on behalf of the nuclear industry in response to the invitation for comments on the U.S. Nuclear Regulatory Commission ("NRC") proposal to amend its regulations in 10 CFR Part 2 governing treatment of proprietary and copyright information submitted to the NRC.

In the proposed rule, Availability of Official Records, noticed in the Federal Register on December 23, 1992, the NRC proposed modifications to its current regulation that would institute major changes in the way in which proprietary information and copyrighted material would be treated by the NRC. Because of the importance and complexity of the issues raised and the impact that the proposed changes would have on the nuclear industry, NUMARC, on behalf of the nuclear industry, respectfully requests an extension of time until March 31, 1993, to submit comments. No adverse effects to 1

NUMARC is the organization of the nuclear power industry that is responsible for coordinating the combined efforts of all utilities licensed by the NRC to construct or operate nuclear power plants, and of other nuclear industry organizations, in all matters involving generic regulatory policy issues and on the regulatory aspects of generic operational and technical issues affecting the nuclear power industry. Every utility responsible for constructing or operating a commercial nuclear power plant in the United States is a member of NUMARC. In addiction, NUMARC's members include major architect/ engineering firms and all of the major nuclear steam supply system vendors.

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the NRC, its licensees, or other interested parties would result from the granting of this limited extension of time, and the additional time would enable the industry to respond more effectively to the issues raised by the proposed rule and to provide concrete recommendations for NRC consideration.

RWB:bjb cc: William C. Parler, Esq., General Counsel Martin G. Malsch, Esq., Deputy General Counsel

UNITED STATES NUCLEAR REGULATORY COMMISSION W ASHINGTON . D .C . 20555 March 10, 1993 O FFICE OF THE

• 93 MA 17 p 9 :S 1 SECRET A RY

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Robert w. Bishop, Esquire General Counsel Nuclear Management and Resources Council 1776 Eye St., N.W.

Suite 300 Washington, D.C. 20006-2496 Dea r Mr. Bishop:

Your letter of March 4, 1993 on behalf of NUMARC requested an extension of time until March 31, 1993 to submit comments on the p roposed rule relating to Availability of Official Records, publi shed for comment on December 23, 1992. Since your letter was received two working days before the March 8, 1993 end of the c omment period, there was insufficient time to process an ex tension of the comment period before expiration. However, as i ndicated in the notice of proposed rulemaking, comments received a fte r the expiration date of March 8, 1993, will be considered if p ractical to do so. If NUMARC's comments are received by March 31, 1992, they will be considered as fully as if they were rece ived by March 8, 1993.

of the Commission BCC: J . Sc i nto, OGC M. P. Siemien, OGC

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USNRC

~ebruary 4, 1993

• 93 FEB -8 P 4 :l ?

COMMENTS OF OHIO CITIZENS FOR RESPONSIBLE ENERG!,e~NQ,.;. s~ {}~\()QJ.RE")

ON PROPOSED RULE, "AVAILABILITY OF OFFICIAL RE~f;.IR;OS1,i'Hl, .,5:,iYV IFED.

REG. 61013 (DECEMBER 23, 1992) 3RANC~

This proposed rule would (1) amend 10 CFR 2.790(c) to add three situations where information submitted to the NRC would not be returned to an applicant, and (2) add a new provision to inform the public of agency practice on reproduction and distribution of submitted copyrighted material. OCRE supports this proposed rule. These revisions are necessary to comply with the applica-ble statutes: the Federal Advisory Committee Act, the Freedom of Information Act, and the Sunshine Act. The provisions regarding copyrighted material are essential for the NRC to carry out its regulatory mission, including its public information and partici-pation responsibilities.

Recent industry submissions have brought the copyright issue to forefront. For example, consider the copyright notice contained in the Westinghouse AP-600 application. This notice states, "With regard to the non-proprietary versions of these reports, the NRC is permitted to make the number of copies beyond those necessary for its internal use which are necessary in order to have one copy available for public viewing in the appropriate docket files in the public document room in Washington, D.C. and in local public document rooms as may be required by NRC regula-tions if the number of copies submitted is insufficient for this purpose. The NRC is not authorized to make copies for the per-sonal use of members of the public who make use of the NRC public document rooms." If the NRC were to consider itself bound by these provisions, this will create a significant burden on per-sons who wish to review the application, especially if such persons do not reside near a public document room. It also raises a new issue to consider in the implementation of 10 CFR Part 52: handling of copyrighted information, particularly when such information is to be submitted as exhibits in the hearing or as part of written comments. While OCRE appreciates the commer-cial and public policy reasons for the protection of intellectual property, it appears that the Westinghouse position is rather extreme and perhaps was established to discourage public scrutiny of the design and public participation in the design certifica-tion proceeding.

Thus, the proposed rule is necessary to preserve the NRC's tradi-tional powers regarding reproduction and distribution of public 1

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documents and agency records to the public. However, the rule authorizes only the NRC to copy and distribute copyrighted docu-ments and does not extend these rights to other persons, such as those receiving copies from the NRC. While OCRE understands the reasons for this limitation, this does not solve the problem of how persons participating in NRC proceedings may legally use such documents as exhibits. The NRC should consider this issue as part of this rulemaking. Perhaps it would suffice for the NRC to declare that use of copyrighted materials as exhibits in NRC proceedings constitutes "fair use" under the copyright law.

Respectfully submitted, Susan L. Hiatt Director, OCRE Ohio Citizens for Responsible Energy, Inc.

8275 Munson Road Mentor, OH 44060-2406 (216) 255-3158 2

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• 92 DEC 17 P2 :27 NUCLEAR REGULATORY COMMISSION 10 CFR Part 2 .~.n,ci* -;:  ;~:>~[il\1,v i)OCKl i 1N~, '< i "v*:cr fl** /\NU*

RIN 3150-AC07 Availability of Official Records AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission (NRC) is proposing to amend its regulations pertaining to the availability of official records to conform the regulations to existing case law and agency practice. The proposed amendments would have three aspects: (1) it would inform the public of three additional exceptions to a submitter's right to withdraw submitted information; (2) it would provide more specific guidance for marking proprietary information; and (3) it would inform the public of agency practice regarding reproduction and distribution of submitted copyrighted material.

3 / ff-I C/3 DATES: The comment period expires (75 days from date of publication in the Federal Register). Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given except for those comments received on or before this date.

ADDRESSES: Comments may be mailed to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attn: Docketing and Service Branch. Comments may be hand-delivered to Docketing and Service \~'}..

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2 Branch, One White Flint North, 11555 Rockville Pike, Rockville, MD between 7:45 am and 4:15 pm Federal workdays. Copies of comments received may be examined at the NRC Public Document Room, 2120 L Street, NW (Lower Level),

Washington, DC.

FOR FURTHER INFORMATION CONTACT: Mary Patricia Siemien, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Telephone:

- 301-504-1565.

SUPPLEMENTARY INFORMATION: The Nuclear' Regulatory_Commission is proposing to amend 10 CFR 2.790 to conform its regulations pertaining to the availability of official records to existing case law and agency practice.

Document Withdrawal

- 10 CFR 2.790(c) currently provides that if the Commission (or an NRC official with delegated authority) denies a request to withhold information from public disclosure which an applicant seeks to have withheld under 10 CFR 2.790(a)(4), the applicant has a right to withdraw the information unless the information has been submitted in a* rulemaking proceeding and subsequently forms the basis for a final rule. In this case, the information will not be withheld from public disclosure and will not be returned to the applicant.

The NRC is proposing to amend 10 CFR 2.790(c) to add~three additional circumstances where information submitted to the NRC will not be returned to the applicant.

The first exception would provide that a document submitted to NRC will

3 not be returned nor may it be withdrawn if it has been made available to or prepared for a Federal Advisory Committee. Section 10 (b) of the Federal Advisory Committee Act (FACA) requires that, subject to the FOIA, these records be available for public inspection and copying until the Committee is abolished. Although the Federal Advisory Committee Act permits the closing of Federal Advisory Committee meetings (FACA, ,sec.lO(d)), all reports received by the committee must be contained in the minutes of the meeting to which they pertain (FACA, sec. lO(c)). The FACA has no provision for withdrawal of a document that has been provided to an advisory committee. In this connection it is important to note that a copy of many of the documents submitted to NRC is provided routinely to the Commission's Advisory Committee on Reactor Safeguards "(ACRS) and the Commission's Advisory Committee on Nuclear Waste (ACNW).

The second exception would provide that when information contained in a record submitted to the NRC has been requested pursuant to the Freedom of

- Information Act (5 U.S.C. 552(b)), the record will not be returned to the submitter. When the NRC receives a FOIA request for a record, that record is "capturedu as an agency record. The NRC is then obligated under the FOIA to determine whether to disclose the record or to withhold it, in part or in its entirety, under one of nine exemptions specified in the Act. If the agency discloses the information in a record which a submitter seeks to have withheld from public disclosure, the return of the submitted document provides no protection. Therefore, there generally is no reason for its return. If the record is withheld from public disclosure in response to a FOIA request, the agency is obligated to retain the record for six years under the record retention provisions of its Records Retention and Disposal Schedule, which has

1.

4 been approved by the National Archives and Records Administration. This schedule reflects a decision of the District of Columbia Circuit Court that the statute of limitations for appealing the denial of information requested under the FOIA is six years and ten days from the agency's receipt of the request. (Spannaus v. Department of Justice. 824 F. 2d 52 (D.C. Cir. 1987)).

The third exception would relate to documents considered in connection with an open Commission meeting held in accordance with the Commission's Sunshine Act regulations, 10 CFR Part 9, Subpart C. Information discussed at a Sunshine Act meeting is generally subject to the same openness requirements as the meetings themselves. To the extent that proprietary information may be involved in matters discussed by the Conunission, 10 CFR 9.104 provides that the meeting may be closed. However, after balancing the interests, if the Commission determines to release the information, there is no reason to provide for its return to the submitter, except for any material that may have I

been extraneous to the submittal officially before the Commission and that may easily be segregated from the remainder.

Document Marking The Convnission is proposing to amend 10 CFR 2.790(b)(l)(i) to require that any document that contains information which a submitter seeks to have withheld from public disclosure because it contains "Trade secrets and commercial or financial information obtained from a person and privileged or confidential" (10 CFR 2.790(a)(4)), be clearly marked, on the first page and on every other page that contains this information, to indicate that this type of information is contained within the document. The Commission has a centralized operation for receiving incoming mail relating to its licensing

j 5

activities. When mail is opened, a determination is made as to whether the information is to be made public. To ensure that information which a submitter seeks to be withheld from public disclosure under 10 CFR 2.790(a)(4) is not placed in the NRC Public Document Room, any document containing this type or information must be clearly marked to indicate that it contains information that the submitter considers company confidential (proprietary) information. The Commission will not be accountable for the public release of a document that is not marked in accordance with the Commission's regulations.

Further, to avoid unnecessary delay and wasted effort, if withholding from public disclosure is not intended, any markings that could be misinterpreted as indicating 1 a desire for withholding from public disclosure must be removed before submitting the document to NRC.

Material Subject to Copyright Protection The rule proposes to redesignate the current 10 CFR 2.790(e) as 10 CFR 2.790(f). The rule proposes a new 10 CFR 2.790(e) that would provide notice to persons submitting copyrighted information to the NRC, that by submitting the material, the submitter authorizes NRC to reproduce sufficient copies of the copyrighted information to carry out its regulatory and public information responsibilities under the Atomic Energy Act of 1954, as amended, and other applicable Federal laws, including the Freedom of Information Act. This authorization includes NRC's reproduction contractor acting within the scope of the reproduction contract with NRC.

Current Commission regulations do not specify how copyrighted material submitted to the NRC in connection with licensing or regulatory activities is handled. Recent submissions of material bearing copyright notices led the

6 Commission's staff to consider this issue. This in turn led to a recognition of the recent changes in U.S. copyright law (Title 17 United States Code),

which no longer require a copyright notice on a document in order for that document to be subject to copyright protection. Thus, a much larger quantity of documents may be affected and identifying documents entitled to protection against copying is no longer a matter that the NRC can determine simply by looking for a copyright notice. Because the NRC regularly reproduces and distributes copies of material submitted to the NRC in connection with its licensing and regulatory activities, it has become important to describe explicitly how the Commission will handle material submitted to it that may be subject to protection against copying under the copyright law. Although NRC's copying activities may well be encompassed by the "fair use" provisions of the copyright law, the Commission believes it is preferable to state clearly in its regulations the Conunission's policy with respect to copying and distributing documents submitted to the agency.

Specifically, the proposed regulation provides notice that the submission of a document to the NRC in connection with NRC licensing and regulatory activities authorizes NRC to reproduce and distribute copies required for its regulatory and public information responsibilities. Another provision of the proposed rule provides that the submission of a document to the NRC in connection with its licensing or regulatory activities is deemed to be a representation to the NRC by the submitter that the submitter has the authority to submit the document and to authorize the NRC to make copies of the document, whether or not the document bears a copyright notice.

The proposed regulation is designed to assure that copyright restrictions do not limit public access to information submitted to the NRC in connection

7 with its licensing and regulatory activities. The Commission's practice has been to provide broad public access to this information and thus meet its responsibility to keep the public informed of its activities relating to licensing and regulation of nuclear facilities and materials. The Commission believes that making these documents available to the public is essential to satisfy its regulatory and public information responsibilities.

The proposed regulation authorizes only the NRC to copy and distribute the document and does not extend these rights to other persons receiving copies from NRC. The proposed rule provides that if the document bears a copyright notice or is accompanied by an explicit statement that the document is protected under the copyright law, a notice would be placed on the document indicating that the NRC has the authority to copy the document; however, all copyright markings contained on the submitted document would be retained.

The proposed rule states that the NRC would not accept documents submitted in connection with NRC licensing or regulatory activities which bear or are accompanied by a statement that purports to restrict the copying of these documents by the NRC or that indicates that the submitter lacks the authority to permit the NRC to copy and distribute the document. These documents would not be considered by the Convnission and would be returned to the submitter unless the Commission has granted a waiver of the regulation.

However, with respect to distribution of documents to the general public, only one copy per request will be made of documents bearing a copyright notice or documents accompanied by an explicit statement indicating that the document is protected under the copyright law. In the absence of such an explicit statement, the Commission will continue its customary reproduction practices.

In addition to the provisions included in this proposed rule, the NRC

8 intends to post near each copying machine on NRC premises a copyright notice.

This notice will inform users and persons obtaining copies from the NRC that, although NRC has been authorized to copy the material pursuant to 10 CFR 2.790(e), this authorization does not extend to persons obtaining copies or access to documents from NRC and that these persons are responsible for any copyright infringement that may result from their activities.

Submitters of copyrighted information are on notice that, in order to meet its routine regulatory and public information responsibilities under the Atomic Energy Act of 1954, as amended, NRC reproduces sufficient paper and microfiche copies to meet its staff and contract needs, the needs of users of its headquarters Public Document Room (PDR) and Local Public Document Rooms (LPDRs), and to service subscribers of microfiche copies by the Department of Commerce National Technical Information Service (NTIS). As part of its normal practice, the NRC reproduces an average of 35 additional paper copies of written submittals made to the Commission. The copies are dispatched to the NRC staff; one copy is placed in the NRC Public Document Room, and, on occasion, a copy may be provided to an NRC contractor or an organization having an information exchange agreement with the NRC. In many instances, a copy of a document submitted to NRC is also routinely provided to the Advisory Committee on Reactor Safeguards (ACRS) and the Advisory Committee on Nuclear Waste (ACNW). The NRC films each record on 48X, (360-framed, packed) microfiche and currently duplicates 167 microfiche copies, which are made available to the staff, contractors and public users, if any, of the NRC's Nuclear Documents System (NUDOCS). Of these 167 microfiche copies, 71 copies are provided for agency staff use at locations in NRC headquarters and regional offices. Four microfiche copies are placed in the PDR, and one in

9 each of the NRC's 76 power-reactor LPDRs, which are maintained in facilities accessible to the public, such as local and university libraries. An additional microfiche copy is provided to the NTIS, which provides microfiche copies to 20 subscribers in the United States and various foreign countries.

Three copies are provided to NRC contractors. One copy is provided to the Institute for Nuclear Power Operations. Ten microfiche copies are maintained for archival reserve and replacement purposes.

The Commission also contracts with a private reproduction company to reproduce copies of records in the PDR collection in response to requests by individuals and organizations, including the processing of standing orders for copies of certain types of public records. Reproduction fees for the contractor service and use of the onsite copying machines are published at 10 CFR 9.35. Billing is handled directly between the contractor and the person or organization ordering the copy and payment is made directly to the contractor. Reference librarians assist users in this interface as needed.

In addition, the PDR maintains an electronic on-line system, the Bibliographic Retrieval System (BRS) which permits both retrieval of document citations and subject data and the ordering of desired copies. NRC also maintains an electronic document control system entitled NUDOCS which, for certain documents, has full-text search and retrieval capability. Written submittals to NRC, other than proprietary information, are accessible to the public through the NUDOCS system.

Environmental Impact: Categorical Exclusion The NRC has determined that this proposed regulation is the type of action described in categorical exclusion 10 CFR Sl.22(c)(l). Therefore,

10 neither an environmental impact statement nor an environmental assessment has been prepared for this proposed regulation.

Paperwork Reduction Act Statement This proposed rule contains no information collection requirements and, therefore, is not subject to the Paperwork Reduction Act of 1980 (44 U.S.C.

3501 et seq.}.

Regulatory Analysis The current regulations in §2.790 provide submitters of information the right to have the information returned to them upon their request. The amendment proposed in this rule would conform NRC's regulations concerning the availability of official records to existing case law and current agency practice. The proposed amendments would inform the public of three additional exceptions to an applicant's right to withdraw submitted information and of current agency practice concerning the reproduction and distribution of submitted copyright material.

The proposed amendments r~flect current agency administrative and procedural practice and would have only minor impact on the benefits or costs associated with the Commission's regulations. Some submitters currently mark documents as specified in the proposed amendments. For others, the proposed amendments shift some responsibility to the submitter for ensuring that privileged material is protected. While actual benefits would accrue to the Commission, they are largely intangible and difficult to quantify. The foregoing constitutes the regulatory analysis for this proposed rule.

11 Regulatory Flexibility Certification As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)),

the Commission certifies that this rule, if adopted, will not have a signiflcant economic impact on a substantial number of small entities. The proposed rule clarifies the right of the submitter of information to have that information returned on request and informs the public of the additional exceptions to the right of withdrawal and of agency practice concerning the reproduction and distribution of copyrighted material. The proposed rule does not impose any obligation or have any financial impact on entities including any regulated entities that may be "small entities" as defined by the Regulatory Flexibility Act (5 U.S.C. 601(3)) or under the size standards adopted by the NRC (50 FR 50241; December 9, 1985).

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

List of Subjects in 10 CFR Part 2 Administrative practice and procedure, Antitrust, Byproduct material, Classified information, Environmental protection, Nuclear materials, Nuclear power plants and reactors, Penalty, Sex discrimination, Source material, Special nuclear material, Waste treatment and disposal.

12 For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended~ and 5 U.S.C. 553, the NRC is proposing to adopt the following amendments to 10 CFR Part 2.

Part 2 - Rules of Practices for Domestic Licensing Proceedings

1. The authority citation for Part 2 continues to read as follows:

Authority: Secs. 161, 181, 68 Stat. 948, 953, as amended (42 U.S. C.

• 2201, 2231); sec. 191, as amended, Pub. L.87-615, 76 Sta:t. 409 (42 U.S.C. 2241); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841); 5 u.s.c. 552).

Section 2.101 also issued under secs. 53, 62, 63, 81, 103, 104, 105, 68 Stat. 930, 932, 933, 935, 936, 937, 938, as amended (42 U.S.C. 2073, 2092, 2093, 2111, 2133, 2134, 2135); sec. 114(f), Pub. L.97-425, 96 Stat. 2213, as amended (42 U.S.C. 10134(f)), sec. 102, Pub. L.91-190, 83 Stat. 853, as amended (42 U.S.C. 4332); sec. 301, 88 Stat. 1248 (42, U.S.C. 5871). Sections 2.102, 2.103, 2.104, 2.105, 2.721 also issued under secs. 102, 103, 104, 105, 183, 189, 68 Stat. 936, 937, 938, 954, 955, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2233, 2239). Section 2.105 also issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239).

Sections 2.200-2.206 also issued under secs. 161b, i, o, 182, 186, 234, 68 Stat. 948-951, 955, 83 Stat. 444, as amended (42 U.S.C. 220l(b), (i),

(o), 2236, 2282); sec. 206, 88 Stat 1246 (42 U.S.C. 5846). Sections 2.600-2.606 also issued under sec. 102, Pub. L.91-190, 83 Stat. 853, as amended (42 U.S.C. 4332). Sections 2.700a, 2.719 also issued under 5 U.S.C. 554. Sections 2.754, 2.760, 2.770, 2.780 also issued under 5 U.S.C. 557. Section 2.764 and Table lA of Appendix C also issued under

13 secs. 135, 141, Pub. L.97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 2.790 also issued under sec. 103, 68 Stat. 936, as amended (42 U.S.C. 2133) and 5 U.S.C. 552. Sections 2.800 and 2.808 also issued under 5 U.S.C. 553. Section 2.809 also issued under 5 U.S.C. 553 and sec. 29, Pub. L.85-256, 71 Stat. 579, as amended (42 U.S.C. 2039).

Subpart K also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134, Pub. L.97-425, 96 Stat. 2230 (42 U.S.C. 10154). Subpart L also

• issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239). Appendix A also issued under sec. 6, Pub. L.91-560, 84 Stat. 1473 (42 U.S.C. 2135).

Appendix B also issued under sec. 10, Pub. L.99-240, 99 Stat. 1842 (42 U.S.C. 2021b et seq.).

2. In §2.790, paragraph (e) is redesignated as paragraph (f); the introductory text of paragraph (b)(l) and paragraph (c) are revised; and a new paragraph (e) is added to read as follows:

- §2.790 Public inspections, exemptions, requests for withholding.

(b)(l) A person who proposes that a document or a part of a document be withheld in whole or part from public disclosure on the ground that it contains trade secrets, privileged or confidential commercial or financial information shall mark the first page of the document and every other page containing this information "Confidential Information Submitted Under 10 CFR 2.790 or "Proprietary Information Submitted under 11 10 CFR 2.790", to indicate that it contains information the submitter seeks to have withheld. The person shall also submit an application for withholding accompanied by an affidavit which:

14 (c}(l} If a request for withholding information under paragraph (b}

of this section is denied, the Commission shall notify the applicant of the denial and state the reasons for the denial. The notice of denial will specify a time, not less than 30 days after the date of the notice, when the document will be placed in the Public Document Room. If the applicant requests withdrawal of the document within the time specified in the notice, the document will not be placed in the Public Document Room and will be returned to the applicant unless the information --

(i} Was submitted in a rulemaking proceeding and subsequently forms the basis for a final rule; (ii) Is contained in a document that was made available to or prepared for an NRC advisory committee; (iii} Was discussed at an open Commission meeting held in accordance with 10 CFR Part 9, Subpart C; or (iv} Is subject to a request submitted pursuant to the Freedom of Information Act.

(2) If a request for withholding information under paragraph (b) of this section is granted, the Commission shall notify the applicant of this determination.

(e} (l} Any person submitting information to NRC to be considered in connection with NRC licensing or regulatory activities, whether or not such information bears a copyright notice, shall be deemed to authorize the NRC, including NRC's reproduction contractor acting within the scope

15 of the reproduction contract with NRC, to reproduce and to distribute sufficient copies to carry out the Commission's regulatory and public information responsibilities. Any person submitting such information to NRC shall be deemed to re,present to the NRC that such person has the authority to submit such document and the authority to authorize NRC to reproduce and distribute such document and shall hold the Commission harmless from damages that result from the Commission's reproduction or

,. distribution of such documents.

(2) The Commission shall return to the submitter a document bearing or accompanied by a statement purporting to restrict the NRC from copying the document in accordance with this regulation or a document which bears or is accompanied by a statement representing that the submitter lacks the authority to permit NRC to copy and distribute the document. These documents will not be considered by the Commission in the absence of a waiver of this regulation. The Commission may waive the requirements of this paragraph when requested, or by its own initiative, in circumstances the Co1T111ission deems appropriate.

Dated at Rockville, MD, this 17th day of December, 1992.

For the Nuclear Regulatory Commission.

Commission.