ML23151A715

PR-070 - 49FR04091 - Material Control and Accounting Requirements for Facilities Possessing Formula Quantities of Strategic Special Nuclear Material

ML23151A715
Person / Time
Issue date:	02/02/1984
From:	Chilk S NRC/SECY
To:
References
PR-070, 49FR04091
Download: ML23151A715 (1)

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{{#Wiki_filter:DOCUMENT DATE: TITLE: CASE

REFERENCE:

KEYWORD: ADAMS Template: SECY-067 02/02/1984 PR-070 - 49FR04091 - MATERIAL CONTROL AND ACCOUNTING REQUIREMENTS FOR FACILITIES POSSESSING FORMULA QUANTITIES OF STRATEGIC SPECIAL NUCLEAR MA TE RIAL PR-070 49FR04091 RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

DOCKET FILE INVENTORY In the Matter of Docket No. PR-70 (49 FR 4091) MATERIAL CONTROL AND ACCOUNTING REQUIREMENT FOR FACILITIES POSSESSING FORMULA QUANTITIES OF STRATEGIC SPECIAL NUCLEAR MATERIAL VOLUME 1 Document Docket Date of Title or No. Date Document Descrietion of Document 01 01/30/84 01/27/84 Federal Register Notice - Proposed rule 02 02/22/84 02/22/84 (published 02/02/84) Ltr NRC (Malsch) to NRC/OLD (Fonner) regarding NRC's publication for public comments of proposed rule 03 02/22/84 02/22/84 Ltr NRC (Malsch) to Department of Energy .04 (Silverstrom) regarding publication for public comments on proposed rule 02/22/84 02/22/84 Ltr NRC (Malsch) to Harmon & Weiss (Weiss) regarding publication for public conments on proposed rule 05 05/11/84 05/10/84 Ltr Babcock & Wilcox (Regan) to NRC (Chilk) requesting extension of 06 05/11/84 05/08/84 conment period Ltr UNC Naval Products (Collopy) to NRC (Chilk) requesting extension of comment period 07 05/15/84 05/11/84 Ltr Nuclear Fuel Services, Inc. (Hensley) to NRC (Chilk) requesting extension of comment period 08 05/29/84 05/25/84 Ltr GA Technologies, Inc. (Mowry) to NRC (Chilk) requesting extension of co1J111ent period 09 06/04/84 05/16/84 Ltr NRC staff (Fonner) to NRC (Chilk) regarding a final rule 10 06/14/84 06/13/84 Federal Register Notice - Proposed rule; extension of comment period (09/05/84) 11 09/04/84 08/31/84 Comments Nuclear Fuel Services, Inc. (Clark) (1} 12 09/05/84 09/05/84 Conments Babcock & Wilcox (Regan} (2} 13 09/10/84 09/04/84 Co1J111ents UNC Naval Products (Amy) ~3~ 14 09/10/84 09/05/84 Comments Babcock & Wilcox (Rejan) 4 15 (duplicate of conment no. 2 09/10/84 09/05/84 Cormients GA Technologies, Inc. (Mowry) (5)

.. -------------------GATechnologies--------------------* In Reply GA Technologies Inc. P.O. BOX ~ ! St() g SAN DIEGO. CALIFORNIA 92138 (619) 455-3000 5 September 1984 OOC.KETEJ USNRC U.S. Nuclear Regulatory C9pn~y~ p3:3B Attn: Docketing & Servicel't3rmfc!h Washington, D.C. 20555 Refer To: GEN-6062

Subject:

~ri:.. _,. :;t.1..,;,_ NRC Proposed ROl&t FRNblSit 84-2879; Comment Submittal. RAMCH Gentlemen: The NRC published in the February 2, 1984 Federal Register a proposed rule changing SNM material control and accounting requirements forcer-tain NRC licensed facilities. This incorporates our comments upon the proposed rule. The NRC has relied upon cost savings from the expensive and time consum-ing bimonthly inventories to justify changing the methodology to other inventory techniques which would presumably provide more rapid detection of losses while assuring an appropriate level of material accounting. We do not feel that the independent cost study conducted for NRC is an accurate representation for our facility. We also do not feel that there is a cost/savings ratio which in effect provides a "free" system. There would be incremental costs of implementation, both equipment and labor, which would not be recoverable. There would not be a cost savings in production either since there would be no reduction in personnel, no in-crease in productivity, and no change in any process steps. It would

~eqair~ -mor.e stringent controls, more data analysis, elimination of human errors, and rapid reconciliation of inventory balances.

The justifica-tion of the proposed rule solely or in part on cost savings is mislead-ing. To effectively manage a records system of the type necessary to meet the rule ' s objective, we would be required to install a minicomputer as a standalone, or to add applications software and peripheral equipment to existing centralized systems. While the installation in either case would be an on line system, the data would be processed in a batch mode as a matter of practicality and would support the near real time require-ments as presently defined. our review of costs 'associated with implementing the new rule as pub-lished and the marginal savings of operating a new system does not support NRC's optimistic conclusion particularly since costs of NRC reviews are not limited and costs of equipment required to handle the hundreds of measurements and records on a daily basis is expected to exceed several hundred thousand dollars.

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U. GEN-6062 The proposed rule [70.87(c)(3)] required the concurrent performance of bimonthly inventories and implementation of the new system for several bimonthly inventory periods to verify that the new system is performing as intended. We believe this to be an unworkable and costly situation. First, the forced shutdown and cleanout type inventory adversely impacts the data being accumulated for a more dynamic measurement and accounting system. Secondly, the cost of operating both systems are significant and beyond a reasonable cost effectiveness. We believe that any inventories after implementation of the new system has begun should only be taken to resolve an apparent discrepancy in material accounting. The proposed rule [70.85(a)(1)] requires that items be tampersafed or placed in a vault. We believe that "or other enclosure" should be added after "vault" to allow for placement of items in other forms of secure storage where a vault is not immediately available or convenient. The proposed rule 70.89(d)(3)(i) & (ii) mandate requirements for meas-urement uncertainties. The sub-paragraph (i) uncertainty of less than .1% is not achievable in the GA process. Current requirements for meas-urement uncertainty are 0.5% of throughput and should not be made more restrictive especially since the accounting is incorporated into the sys-tem on a more timely basis. In any case, the licensee should be allowed exemption possibilities to cover special cases as in HTGR fuels and scraps. The sub-paragraph (ii) seems to require making a bias correction to an item at the line of measurement and labeling. Biases may not be available at that moment. The rule should allow for use of predicted bias corrections or permit acceptable differences between the container labeled amount and the accounting record in the computer data base to avoid needless relabeling and material balance reanlysis

• The proposed rule [70.83(b) & (c)] stipulates power of detection tests of 99% and 90% respectively.

These levels are derived from assumptions of normality in the material loss distributions. Regulations should allow for variations in the power of detection to account for demonstrated non-normal distributions which, if not permitted, would result in abnormally high alarm frequencies. The problems associated with performing sequen-tial material balances involve complex statistical methods which we are not familiar with and which require further guidance by the NRC. We appreciate the opportunity of commenting on the proposed rule. We hope that the comments above are constructive and will be considered in development of the final rule. WRM:hc Very truly yours, w;L~~ William R. Mowry ~ Licensing Administrator /

Babcock & Wilcox a McDermott company UNCLASS IFIED DOCKETED U'3NRC OOCKEI ~UMBERPR rlA R1IDP.OiEO BULE - / U el) C-49 r~ 469})

• Naval Nuclear Fuel Division P. 0. Box 785 Lynchburg, Virginia 24505-0785 (804) 522-6000 September 5, 1984 Mr. Samuel J. Chilk Secretary of the Ccmnission "84 SEP 10 All :48

u. s. Nuclear Regulatory Ccmnission Washington, D. C. 20555

References:

1.

"Material Control and Accounting Requirements; Facilities Possessing Fomrula Quantities of Strategic Special Nuclear Material," published in 1he Federal Register, Voltllle 49, Number 23, dated February 2, 1984.

2.

"Standard Format and Content/Acceptance Criteria Guide for the MC&A Reform.Amendment"

Dear Mr. Chilk:

Babcock and Wilcox has reviewed the proposed rule (Reference 1) and its acceptance criteria (Reference 2) and appreciates the opportunity to ccmnent on both of these doctlllents jointly. B&W has also met with the NRC on several occasions to discuss the proposed rule and acceptance criteria. Based upon these discussions and our review, B&W has a number of major concerns with the proposed rule as well as specific ccmnents that need to be addressed by the NRC. we have also responded to the specific questions posed by the Coomission for ccmnent. A. Major Concerns

1. B&W takes issue with the "Regulatory Analysis." The entire paper is sumnarized by the following line from Paragraph 3.2, entitled "Results of Feasibility and Value/Impact Studies,"

Results **

• confirm that the prCJDpt accountability concept is technologically feasible and that significant benefits to MC&A systems could be achieved at rooderate cost.

Although not specifically referenced, B&W participated in a four (4) roonth study perfonned by Battelle-Pacific Northwest Laboratories (PNL) under contract to the NRC in our uranium scrap recovery facility. The results of this study did not prove to B&W that this system could be easily backfitted into an existing facility without modification of the facility and developnent of the measurements used for in-process roonitoring. UNCLASSIFl lt U i Ackn*owfedged by card ~ '~/ ~ .. u/.~-.... ~

U.S. NUCI ~ 1\ ~ R:G 1 " \',C?'.' COMM!SSIO~ oocrer: i~-!~ ,?.

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4 ~y OF *;I ((~;\' "' l. '>10.4 Postmark [': ' 1 Copies i Add' I c~ * * " Specii.1 C.:r' 1 *, v* ,, ICS

Babcock & Wilcox 2 - Septernbel:: 51 1984 Favorable conditions of the study included:

a. The scrap recovered during the study was the "cleanest" material available, i.e., acceptable canponents (with certified uranium loading-s) which were machined, chopped and put into process. This material was not difficult to dissolve, there were typical clOC)Ul1ts of undissolved solids, and the resulting solutions were rather consistent, which made process ana:nalies easier to detect.

b.

The isotopic values were uniform, which aided predicted measurement values *

c. Sane of the alarm resolution procedures used would not be acceptable in a regulatory environment.

If the study had been performed in a period or periods where the percentage of lCM-level (Nlli\ evaluated) material was higher with a wider range of isotopes present, the uncertainty of the measurements would have been greater resulting in m:>:re alarms and potentially higher loss quantities. B&W also disagrees with the statement that the proposed rule will involve "m:x:lerate costs. 11 While the NRC acknowledged increased initial costs {Paragraph 3.3.1 for fuel processing facilities) of $200,000 to $300,000 for labor and up to $195,000 for capital expenses in plants having a reoovery facility, the NRC projected cost benefit for the long tennis supposed to exceed installation costs and result in a cost savirt.Js. B&W's evaluation of the cost analysis does not support the NRC's conclusion because the cost savings is essentially based on the reduced number of physical inventories (fran biioonthly to sa:ni-annually), which would result in labor time savin'Js, reduced equipnent down time, increased availability of the facility for production, and reduced LEID calculation time. HCMever, B&W rtn.ISt meet both the NRC and. the Department of Energy requirements for physical inventory. Under the OOE contractual/financial accountability requirements found in IX>E 5630.2, Page II-5, dated 8-21-80, bi.Ioonthly inventories are required for both 1A and 1B materials. 'vl:J.ile B&W could relax the physical inventory requirements for safeguards purposes and rely on the proposed in-process and item I0011itoring-systems, the bi-monthly inventories would still be required for OOE contract and financial accounting. This would not result in cost savings for B&W. In fact, it would mean a cost increase to maintain two systems, one system for DJE contract and financial account-ability at the gram level and the second for the NRC safeguards accountability at the kilogram level. In the past, both safeguards and contract/financial accountability were based on

Babcock & Wilcox 3 - Septerrber 5, 1984 physical inventories and one (1) staff. '!be duality of the NRC and OOE requriements will not entail allocating the present staff to do their work a new way, but will require additional staffing to implement requirements which are in addition to what we are presently doing. And, since there are two other licensees also impacted by the dual requirements, the long run impact will be increased costs for all three (3) facilities.

2. The MC&A Reform Rule and its associated acceptance criteria should ccmprise a canplete bas is for cartnents.

However, B&W cannot formulate canprehensive camnents due to lack of definition in the rule, unanswered questions concerning the rule and the acceptance criteria, and incanplete technical info:rmation in the acceptance criteria. Sane of the problems are noted as follCMS:

a.

category 1A and lB materials have not been adequately defined.

b. 'Ille method of how to handle an untampersafed container in a controlled access area has not been defined.

c. The requirement found in 70.83 (a)(2) limiting scrap containers to 0.25 gm/liter versus B&W' s current license capability to have up to 350 grams of U-235 per container has not been resolved.

This will have a significant impact on B&W's storage capabilities as well as the aIOOUnt of material per container B&W can receive for outside scrap recovery campaigns *

d.

'!be receipt verification techniques required by Page 62, second bullet, of the Acceptance Criteria have not been resolved to determine whether or not all of than are required.

e. Additional information has been pranised on the statistical calculations which ccmprise an integral part of the MC&A reform rule. Although B&W has been told that the work has been contracted for calculating alarm limits, false alarm rates, AI.ARA (as low as reasonably achievable) quantities, etc.,

B&W will not have this information before the formal carment period is ended.

f. More detailed information on the AMASS methodology is needed.

B&W needs to determine the canpatibility of this system with existirg in-house canputer capabilities.

Babcock & Wilcox 4 - Septe:nber 51 1984

g.

B&W was advised by the NRC that no irodel is presently available for the multiple space-multiple time loss detection requirements of the proposed reform rule. '\

3. B&W is concerned that such a drastic change in the regulatory requirements as presented in the proposed MC&A Reform Rule is not getting rrore widespread review, evaluation, and agreanent within the NRC before this new approach is presented for carments. One (1) group of the NRC is writing the proposed rule and evaluating its technical appropriateness, but the two (2) groups who IIB..lst administer and audit the new rule at the licensee's facility are not part of the current writing and developnent effort. The impact of this on B&W is that, subsequent to the camient perioo, NRC Licensing and Regional Inspection can revise or make interpretations to the Acceptance Criteria which B&W would not be knowledgeable of but 'IK)Uld still be held accountable for.

B&W recarmends joint meetings between the NRC group that is developing the new rule, Licensing, and Regional Inspection to develop a joint understanding of the proposed rule and acceptance criteria and then give B&W (and other licensees) an opportunity to carment on the rule and the acceptance criteria it will be adninistered to and inspected against.

4. B&W acknowledges that the present biroonthly inventory system is weak in locating an ananaly in a short period of time.

However, our physical security measures to prevent this are extensive. At the sane time, B&W does not feel that the proposed rule is necessary to a fuel fabricator such as B&W because the losses and problems that this rule seeks to guard against (large kilcx,Jram quantities of unexplained ID's, l..lillleasured side streams, etc.) are not present at B&W. B&W's relatively gnall ID's have been duly documented for years to the NRC for each bimonthly inventory perioo. 1he proposed rule does seem to be roore pertinent to a facility where there are a m.nnber of sidestreams and associated larger, unexplained ID' s.

5. The new rule provides for a phase-in perioo of eighteen (18) months for the new system while maintaining the existing bimonthly inventory system. 'M"lile the intent is to phase-in to a reduced inventory period based on proven safeguards capabilities, B&W believes, as was addressed in major concern No. 3, that this would instead be a phase-in for additional requirements with associated increased costs.

Babcock & Wilcox 5 - September 5, 1984 B. Specific can:nents 'Ihe fonnat of these specific ccmnents will follow the flow of the Acceptance Criteria, beginning with Chapter 1 through Chapter S. B&W's ccmnents concerning the Acceptance Criteria will enccmpass concerns with the proposed rule as published in the Federal Register.

1. Chapter 1, Page 1

"'Ihe FNMC Plan and associated Annex shall contain the following affinnations, ccmnitments, and supporting infonnation:" '!his statement could be interpreted to mean that the Annex as well as the FNMC Plan should contain the affirmations and carmitrnents. '!he statanent should be revised to clearly state that the affi:rmations and carmitments are contained in the FNMC Plan and only supporting infonnation demonstrating canpliance is in the Annex.

2. Chapter 1, Page 1, second Mlet "The action thresholds for the material control tests will be updated based on the first six months of operating data and thereafter as deaned appropriate."

~en tenns are used such as "as deemed appropriate," it causes confusion between the licensee and NRC inspectors and can result in the licensee being judged in non-caopliance tiased on what an individual inspector deEIIIS "appropriate." This wording should be replaced by wording such as" *** as supported by test data."

3. Chapter 1, Page 6, first bullet More infonnation and definition is needed to classify the process material at B&W.

'Ihe full impact of this new rule cannot be assessed until we can properly classify our material.

4. Chapter 1, Page 7-8 "Substitute Material" B&W request guidance on what constitutes an acceptable prcgram to control substitute material.

5. Chapter 1, Page 9, first bullet "Control measures are in place that will prevent a credible diyersion totaling more than a designated AI.ARA quantity *** "

Please provide additional definition or calculating methodology for the AI.ARA quantity.

Babcock & Wilcox 6 - Septerrber 5, 1984

10. Chapter 3, Page 18, "Intent and Scope," last sentence in first paragraph The requirement states that "If SSNM is not tamper-safed, stored in a vault that provides protection at least equivalent to tamper-safing, or encapsulated, it is not considered an itEm and the SSNM is subject to the in-process control requirEments for bulk material.

11 B&W has several situations which are in our filler processing areas, ( controlled access areas), which have been discussed with the NRC and need further attention/definition for us to fully assess the impact of the proposed rule *

a. Fuel Containers

b.

c.

The SSNM is weighed and placed into untamper-safed containers. This operation is done in a vault type roan inside of a controlled access area. When the containers are issued to operations, the fuel is either put into process in.side glove-boxes or returned to the vault type rcxm. B&W does not consider tanpersafing each container to be econcmically feasible, particularly since they are maintained in a controlled access area. B&W requests that these containers be considered as items in the controlled access area rather than bulk material. Fillers Fuel fillers are very similar to the fuel containers in that they are fabricated in the sane controlled access area, put into labeled plastic bags after they are fabricated, and placed into vacuum chambers until inspected or used. Since )3&W cannot practically tc1Dpersafe each filler and handling of each filler must be minimal to prevent danage, B&W requests that the fuel fillers also be considered as items in the controlled access area. RRFE Fuel Containers and Fillers 'Ihe research reactor fuel and fillers are also handled in untanpersafed containers and in an unencapsulated condition respectively. Since they are also in a controlled access area, B&W requests that these fillers and fuel containers be considered as items.

Babcock & Wilcox 7 - September 5, 1984

7. Chapter 3, Page 21, third bullet, fourth dash

" *** all items in the area are tamper-sealed or encapsulated *** " This condition for storage to be classified as a pe:rmanently controlled access area should be deleted since the other conditions make it unnecessary. 'Ihe other conditions are:

a. The area is equipped with physical protection capabilities as detailed in Part 73.

b. Access to the storage area is limited to the minimun number of persons necessary and records are kept of persons who enter or exit.

c. Records of the items in storage are maintained.

d. An operator within the storage area will be continuously observed by another person, and all additions, removals, and roovements of material by either person are verifiable by the other person.

8. Chapter 3, Page 22, first bullet, second dash "The personnel authorized to enter and operate the vault are not authorized to ranove or handle SSNM beyond the boundaries of the vault" B&W proposes to allow the sane personnel who operate the vault to renove material fran the vault if proper docunentation, security surveillance, and receipt verification by another person are provided.

9. Chapter 3, Page 24, second bullet The formula shown is incorrect. It should be d-1 1/

n = (N - 2 ) (1 - B d)

10. Olapter 3, Page 26, second bullet, first dash The min:i.rm.m length of the longest dimension of sane of B&W's fuel canponents do not conform to the b<<) (2) rooter length criteria.

B&W suggests that this specific criteria for item definition be broadened to "any clad canponent that is large enough to preclude hiding on an individual" as currently defined in our security plan. This would preclude having similar ccmponents designated as 1A and lB with associated verification requirements whose only-distinction is a few inches in lerYJth.

Babcock & Wilcox 8 - September 5, 1984

11. Chapter 4, Page 33, seoond bullet 11 *** the maximum time after the alann for canpleting a remeasurement to confirm the contents should not exceed two working days. n To remeasure or confirm the contents when a tampersafed item has been canpranised within t\tKl days ~d be impossible. In order to verify the isotc,;,ic content, B&W must rely on an outside laboratory, a process which takes approximately eight (8) days.

12. Chapter 4, P.age 37

13.

B&W needs additional information on predicting false alarms and false ala:rm rates in order to ccmnent. The NRC per the "Note" on this p.age is developing additional estimation methods. Chapter 4, Page 38, third bullet under "Acceptance Criteria" One of the alarm resolution criteria is "outlining of a schedule of recalibrations of the key measurement systa:ns." B&W believes that a roore fundamental approach \tKluld be to verify the standard values on the appropriate measurement systems. Then, if the performance of the measurement system on the standard was inadequate, recalibrate.

14. Chapter 4, Pages 39-41, "Alleged Thefts", ref. 70.87 f B&W believes that the proposed acceptance criteria is too restrictive in its approach. The current guidelines offer a method for an external group or person to virtually halt work at NNFD by initiating alleged theft alarms that must be investigated.

An emergency plant-wide inventory -would certainly not always :be necessary nor appropriate to access the validity of an alleged theft.' The proi;x,sed rule would require that the Il.1()6t accessible 1A material be checked every three (3) days and the lB material every seven (7) days. These routine tests \tKluld give B&W a gcx:xi data base fran which to start, based on when the tests were performed canpared to when the alleged theft took place. B&W would integrate the results of the material control tests with the item control tests, giving credit for physical security if applicable, and formulate a plan that would present a list of potential items that could have been diverted and would have to be located and verified.

15. Chapter 4, Page 39, Paragraph 4.3, fifth bullet

". *

• accurate records will be established and maintained on the quantities of SSNM which have been received, shipped, or otherwise ranoved fran each MM., and *** SSNM remaining within each such area *** "

Babcock & Wilcox 9 - Septanber 5, 1984 These records \<<>uld also be required as part of the central accounting records to meet the separation of functions required by Chapter 5, Paragraph 5.1.2, pages 43-46. B&W also interprets that similar records may be required at the control unit level. This appears to be an increase in the recordkeeping requirements rather than a reduction as originally thought.

16. Chapter 4, Page 40, flrst bullet "The capability also exists to locate all items within a vault within 72 hours and all items outside a vault within one week."

B&W requests that the time span for finding items within a vault be revised to one (1) week and the time required to find all items outside a vault be revised to two (2) weeks. See carment U4.

17. Chapter 4, Page 40, second bullet nProvisions are included for maintaining the availability of fo:rms, tags, trained personnel, inventory listing and other itans that may be needed to initiate a plant-wide physical inventory within 24 hours."

B&W requests that the time frame be revised to forty-eight (48) hours. This time '\lnl.ld be needed to run canputer progra:ns, prepare i ten lists, allocate tags, etc. See cxmnent U4 *

18. Chapter 5, Page 45, fourth bullet, fifth dash "separation of canputer prcx,;Jram maintenance fran the progra!Il user function."

Does this separation of caaputer program maintenance cfran the program user function mean that another party IlllSt becane involved when the user wants to make a program rrodification?

19. Chapter 5, Page 46, Paragraph 5.2, "Personnel Qualification and Training"

'Ihe definition of "key position" is too vague. Since this is the focal _point of this section and the subject of the training, this position needs to be irore specifically designated or broadened to all<:M the licensees to define those positions where errors or faulty performance could directly degrade SSNM control and accounting. However, these requirements list as key positions not only "contributor" positions but also "MC&A management positions *** having responsibility for key measurements, data analysis, preparation

Babcock & Wilcox

20.

21.

22.

23. Septanber 5, 1984 of accountability source doctments, and collecting or recording of other data having a direct impact on loss detection, alann response and quality assurance functions." 111is definition encanpasses roost of the personnel of Nuclear Materials Control, many of whan would be the trainers.

B&W feels that the current regulations concerning training are sufficient and a strengthening of the regulations in this area is not needed. Chapter 5, Page 46, fifth dash "Assure *** only authorized persons have hands-on access to the material. n This is a function of physical security, not an M:&A function. B&W suggests that this requira:nent be deleted fran this section and :rooved to the appropriate security requirement. Chapter 5, Page 48, third bullet "111e training program provides for training of personnel already experienced and functioning in MC&A positions at the time of Plan :iropla:nentation when canpetency tests indicate that additional training is called for. The criterion will be whether or not the individual can be at the level of proficiency called for in the qualification criteria. 11 B&W requests additional information concerning the ca:npetency tests for persons experienced and functioning in MC&A position and the qualification criteria. Chapter 5, Page 49, first bullet, second dash What is the "predicted standard deviation due to measurements" and hCM is it calculated? Chapter 5, Page 52, Para. 5.3.6 and second dash "D3scribe the program for IOOnitoring cumulative shipper-receiver differences *** " "The course of action with respect to review of measuranent systems, shipper notification, and treatment with respect to impact on ID (i.e., hem the impact of the CUM.SRO will be accounted for in the evaulation of ID significance)." This wording implies receipts: therefore, there is no :impact on ID at the receiving facility provided the receiver books his own receipt measurements as B&W does.

24.

Chapter 5, Page 53, first paragraph B&W would like additional information on the AMASS methodology and its ccmpatibility with our present software. Are there acceptable alternatives to AMASS and, if so, what are they?

Babcock & Wilcox September 5, 1984

25. Chapter 5, Page 57, first bullet "Perfonn a physical inventory every twelve months" B&W would like to highlight the conflict between this sentence and 70.89(e), "twelve 100nths" has been revised to "six months."

26. Chapter 5, Page 57, fourth bullet, second dash The reference to 70.83(d)(3) should be 70.89(d) (3)

27. Olapter 5, Page 58, Para. 5.4, first bullet "A measured physical inventory is performed at least every 12 n:onths * *

• n B&W proposes that this time span be revised to aoo later than six (6) :roonths." 'Ibis wording-will give B&W the flexibility to meet both the present IDE and the proposed NRC physical inventory requirements.

28. Chapter 5, Page 58, fifth bullet, first dash Segregation throt.ghout the recovery process of scrap that originates off-site fran scrap generated on-site is not practicable at B&W.

After scrap is dissolved, the solution is measured in a wigh tank system, which conprises our receipt ~asurement. If the solution fran off-site scrap has the same isotopic value (within allowed limits) as solutions fran on-site scrap,the NRC has here-to-fore allowed B&W to integrate the two solutions and process them together. Follawing the recovery operation, the UNH is pro-rated based on the receipt quantity *

29. Chapter 5, Page 58, fifth bullet, second dash Recovery of scrap within six (6) months of the date generated if the measuranent uncertainty is greater than 5% will be difficult for B&W to accanplish.

Scrap generated by B&W cannot be processed for many 100nths due to the recovery of material fran other nuclear facilities. To deal with this situation, B&W presently has a license condition which alloos up to 30 Kgs. of scrap on hand awaiting recovery. A similar license condition will be needed under the proposed rule. It should be noted that B&W recognizes the caveat proposed by 70.89 (e) (4) (2). Since we have no quantitative estimate of active inventory at this time, it is difficult to say what impact, if any, this uncertainty will have on the total measurement uncertainty.

Babcock & Wilcox September 5, 1984

30. Chapter 5, Page 60, third bullet B&W w:,uld like a broader definition of "area equivalent to tampersafio;J.

11 1he intent of this phrase in context is that an untampersafed item might still be considered an item if it is located in a vault. B&W would like to extend this definition to locked (with approved locks) chambers or cabinets within controlled access areas. This would alleviate present concerns in our filler fabrication and recovery operations: both of which ma.y have items- (fillers and partial scrap containers, respectively) which do not lend themselves to ta:npersafing and cannot be transported fran that area to :roore suitable storage.

31. Chapter 5, Page 63, second bullet

'Ihe list of criteria to define a lot does not include a description that UNB frcm our recovery process would canply with. Is this list inclusive or can B&W amend this list as necessary?

32. Chapter 5, Page 63, first bullet - first sentence "The investigation of excessive shipper-receiver differences *** "

B&W believes that the wording should be amended to "significant shipper-receiver differences."

33. Chapter 5, Page 63, first bullet, fourth dash, second sub-dash There appears to be words missing in this statement which confuse its meaning.

34. Chapter 5, Page 68, fourth bullet

'Mlat is the definition of a "secure location?" At present, all of B&W's records that are needed to canply with this section are in a roan with a door secured by a canbination lock (whose canbination is known only by these with a need to know), which we define as a secured storage area. Is this adequate?

c. NRC Questions Posed for Ccmnent Question l "With respect to loss detection levels, should they be plant specific and to what extent would area loos detection levels greater than five for:mula kilo;irams facilitate area detection within material access area (MAA's) rather than within subdivisions of MM?

Babcock & Wilcox Response September 5 1 1984 B&W believes that the loss detection levels should be plant ' specific. The ability to detect a loss of 5 Kgs. of SSNM will depend upon measurement capabilities, the amount of material in process, and verifyng that there are no urmeasured sidestrec1DS. Mlile the measurement capabilities of all licensees, prescribed by 10CFR 70.57 and amended by the proi;x,sed MC&A rule, are scmewhat uniform, the a:nount of material in process differs greatly. A fuel fabricator, for exanple, would have to closely monitor all bulk operations until a clad item is fabricated. But even for the bulk operations, the fuei fabricator would be dealing with known weights of certified lots of material. If the fuel fabricator has a recovery q>eration, the aioount of material in process is not only the bulk material at the.beg'inning of the fabrication process, but also the entire liquid system which converts the scrap to a usable product. Finally, if the licensee's entire operation is one of liquid conversion of fuel fran one form to another, the ai:ociunt of material in process increases tremendously and product sidestreams becane a necessity. B&W therefore feels that, given an approved measurement system, it is the licensee's operation which will determine the loss detection levels, which will dictate that the levels be plant specific. Having an option to establish area limits greater than 5 Kgs. would be beneficial to both safeguards and in-house operational concerns. Usirg B&W's recovery operation as an example, this M.1\A. would, if acininistratively divided, have six (6) to eight (8) units with approximate alarm thresholds ~ing fran 200 grams of U-235 to 1500 grams and totalling approximately 6.5 Kgs. Since this MAA total -would not meet the current limit of 5 Kgs, B&W would have to divide this operation and v~rify that each unit had a high degree of assurance of not losing 5 Kgs. If four (4) of the units operated on a given day, B&W would attempt to assure, by material control tests on each unit, that a total of 20 Kgs. had not been lost fran these four units. But if the material control test could be perfo:tmed around the entire MAA (after appropriate limits have been established), B&W could assure that a total loss quantity of perhaps 6 Kgs. had oot been lost. The total MM test would require only measurements/establishing values of material going in and out of the facility and an ending inventory of containers/coll..llJ.nSI rather than also measuring transfers bet-wreen systems. Thus the area detection material control test with limits greater than 5 Kgs. \t,OUld be easier to perform and provide greater safeguards assurance (6 Kgs. vs. 20 Kgs.) than subdividing into adninistrative units.

Babcock & Wilcox SeptE!nber 5, 1984 Question 2 On the subject of physical inventories, should the current practice of autanatic plant shutdown when an inventory difference (ID) exceeds a specified threshold be continued and, if so, what should the threshold be?

Response

B&w-NNFD currently abides by a ruling set forth by the NRC regarding autanatic plant shutdowns when an inventory difference exceeds a specified threshold. 'Ihe current threshold is tied to plant thruput. With the current high costs of operating nuclear facilities, a forced plant shutdc:Mn could be disastrous. If specified plant shutdown limits are used, they should be designed in such a way that a plant shutdown would be required only in cases where a plant shutdown YKruld readily resolve an unusually high ID. The current threshold limits related to thruput are not realistic. If plant thruput is to be used, other factors such as plant design, manufacturing processes, scrap recovery operations, c!IIOUnt of recycle, etc., should also play a role in determining a threshold limit. The approach taken to setting threshold limits requiring plant shutdCMns described in Section 5.4.5 of the "Standard Fonnat and Content/Acceptance Criteria Guide for the MC&A Refonn Amendment" seems satisfactory and realistic. '!he Criteria Guide relates plant shutdown threshold limits to the standard error of the ID and to specific absolute quantities of SNM. Limits based on two specific criteria, i.e., one based on knc,,.m plant measurement uncertainties and one based on a strategically significant quantity of SSNM, will lessen the chances of a plant shutdown when, in fact, a significant loss of material has not occurred. Question 3 To what extent would the canbined effectiveness of (1) the in-process :roonitoring requirements in paragraph 70.83, in particular the 60-day area detection capability in paragraph 70.83 (c) (4); and (2) the item rronitoring requirements of paragraph 70.85, suffice as a near real-time physical inventory?

Babcock & Wilcox September 5, 1984

Response

'Ihe in-process and item monitoring requirements of the new reform rule may suffice as a near real-time physical inventory for NRC safeguards pur_poses. The proposed system is intended to timely detect kilogram size losses and to provide timely and effective loss alarm resolution without taking a physical inventory. For kilogram size loss detection, the proposed rule may be all that is needed. However, for contract and financial accountability of gram quantities of special nuclear material, a physical inventory with process equipnent cleanout and material balance accounting would still be necessary. This is particularly true when dealing with uranium recovery for several different custaners using the same recovery facility

• The Ccmnission also solicited ccmnents on the following points:

(1) '!he extent to which the semiannual physical inventory is a repetition of the near real-time inventory; To sane degree the semiannual physical inventory w::ruld be a repetition of the refo:an rule's in-process and item oonit;-.orir)(J. Bo.tlever, taking a physical inventory is a different approach than the prqx:>sed system and provides for a better inventory. Currently, both contract and safeguards accountability are perfo~ within the same system. However, this will char)(Je with the proposed rule because the accountability system that will satisfy safeguards concerns at the kilogram level will not satisfy contract/financial concerns at the gram level. (2) The extent to which the semiannual physical inventory provides an overcheck on the near real-time physical inventory, with significantly different characteristics which provide enhanced safeguards capabilities; The physical inventories, whether bi-monthly, quarterly, semi-annually or annually, oould provide different information than the proposed in-process and item IOC>nitoring system provides. Physical inventories would confinn or shc:M problems with the proposed system's statistics. Also, the physical inventories would provide info:tmation about equipnent and process holdup that the prqx:>sed system could not measure as well. These differences, however, may not be that significant when dealing with kilogram size concerns for safeguards reasons only. The physical inventories may enhance the safeguards capabilities; however, this enhancement may be oore than is really necessary frcm a safeguards perspective. (3) what additional requirements, if any, shoold be placed on near real-time physical inventories if semiannual physical inventories are not to be required?

Babcock & Wilcox NAR:mh

• Septerrber 5, 1984 Rather than adding nore new and unproven techniques to the proposed in-process and item monitoring system, periodic physical inventories should be considered as an acceptable method of evaluating and/or modifying the proposed system.

Sincerely,

BAl3CCX:K & WILCOX, NNFD

~t~~nsing Officer

Glenn 0. Amy President and General Manager unc nAVAL PRODUCTS A UnC RESOURCES Company September 4, 1984 67 Sandy Desert Road Uncasville, Connecticut 06382 Secretary of the Commission U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Telephone 203 / 848-1511 DOCKETED U5N~r' (j) Attention : Docketing and Service Branch

• a4 SEP 1 0 P 3 :51 Subject :

Proposed Rule 10CFR70 - Material Control and

Dear Sir :

Accounting Requirements : Facilities Posfsess.ing ~E Formula Quantities of Strategic Special Nuclea~R:\, Material 49FR4091-4097, February 2, 1984 This is in response to your request for comments on the subject proposed rule plus standard format /acceptance criteria document plus regulatory analysis.

1.

Regulatory Analysis - UN C Naval Products does not agree that the cost savings stated in the regulatory analysis are applicable to our facility. We believe, for our facility, the costs to com-puterize our Nuclear Material Control System to meet timely detection plus the cost to run parallel systems (i.e., safeguards, timely kilogram accountability and classical gram financial ac-countability) will accrue significant costs during development, implementation and operation. We do not foresee the large savings stated in the regulatory analysis for less frequent inventories and increased production throughput allowed by less frequent inventories. We can foresee, however, after the peak cost impact of computerization, implementation and opera-tion potential cost savings as performance capabilities are demonstrated and site specific regulatory requirements are relaxed. We, therefore, comment that the regulatory analysis should be revised and potential rather than actual cost savings be stated.

2.

Acceptance Criteria - UNC Naval Products personnel believe the acceptance criteria to be more directed to a bulk oriented facility rather than an item oriented facility. We believe since SO% of the Category 1 facilities are item oriented more descriptive requirements should be identified for an item oriented facility to aid in plan preparation and review. We believe the results of planned and completed studies conducted by the NRC regards control unit testing and resolution must be released to licensees as part of the final acceptance criter ia to be provided with the final rule.

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.._ secretary of the Commission - US NRC Proposed Rule 10CFR70 Page Two September 4, 1984

3.

NRTA vs. Physical Inventory - UNC Naval Products personnel cannot identify at the present time how near real time account-ability (NRTA) will ever replace physical Inventories. This conception is based on the apparent dichotomy between the intent of NRTA and the intent of physical inventories. Physical inventories are designed to continue reconciliation of gram quantities found to gram quantities booked. The reconciliation process is not time limited but rather pursued until all gram differences are accounted for or a rather small (possibly ex-plained or possibly acceptable) unaccounted gram quantity is attained. NRTA as currently envisioned is designed to rapidly assess that kilogram quantities are not lost. Detection level

4.

5.

ls sacrificed for detection time to ensure that significant quantities of SNM are not lost. It is difficult to relate with the present state of the art and the described acceptance criteria of the new rule that NRTA can replace some frequency of physical inventories. The customers of UNC Naval Products, as well as Corporation auditors, require zero gram base accounting for contract*closeout and financial accounting. These facts were the basis for our' increased cost comments In Item 1 above, since UNC Naval Products expects to continue physical inventories for customer and Corporate requirements even after frequency relief is given UNC Naval Products from NRC Safeguards required physical inventories. Physical inventories would never be totally redundant for Safe-guards application, since they would serve to overcheck the NRTA results. Should NRTA ever reach the level of gram de-tection then certainly customer and Corporate requirements could be re-evaluated to accept NRTA. This giant step seems to be in the future and must be fil*rst preceeded by acceptable per-formance of NRTA at the kilogram level. Excessive Inventory Differences/Plant Shutdown - UNC Naval Products personnel do not believe that future Inventory dif-ferences that result from a physical inventory in the future should result in plant shutdown as long as ~he NRTA results are within approved plan specifications. We even question whether the gram differences resulting from infrequent physical inventories in the future need to be reported to NRC, as long as kilogram loss quantities have not been indicated from frequent NRTA tests and resolutions. Loss Detection Levels - UNC Naval Products personnel believe loss detection levels should be site specific. Our conceptual design of the upgrade to date has indicated areas where greater than 5 Kgs. detection limits are appropriate.

~ Secrotary of the Commission - US N RC Proposed Rule 10CFR70 Page Three September 4, 1984

6.

Performance Oriented Safeguards - UNC Naval Products personnel believe that 10CFR70. 57 (Measurement Control Program For SNM Control and Accounting) and 10CFR70. 58 (Fundamental Nuclear Materials Control) should be changed to performance oriented safeguards. This action would con-vert the entire material control and accounting system to performance oriented safeguards. Please contact me should you have questions or comments concern-ing this reply. Very truly yours, PRODUCTS bl cc: T. J. Collopy, UNC R. J. Gregg, UNC T. E. Kiely, UNC M. Kelly, UNC A. Wolvendyk, UNC

U NCLASSlf"1£U lOCKH NU BERPR rt PROPOS_EO BULE -

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Babcock & Wilcox C4'f r,e 4,cJ9"?)

• • <!6;f Naval Nuclear Fuel Division a McDermott company P. 0. Box 785 Lynchburg, Virginia 24505-0785 (804) 522-6000 DOCKETED UStlP" september 5, 1984 "84 SEP -5 P 3 :02 Mr. Sanuel J. Chilk secretary of the Camlission

u. s. Nuclear Regulatory Ccxmlission washington, D. c. 20555

References:

1.

11Material Control and Accounting Requirements; Facilities Possessing Fonnula Quantities of Strategic Special Nuclear Material," published in lhe Federal Register, Volune 49, Nunber 23, dated February 2, 1984.

2.

• standard Format and Content/Acceptance Criteria Guide for the MC&A Refonn Amencinent 11

Dear Mr. Chilk:

Babcock and Wilcox has reviewed the proposed rule (Reference 1) and its acceptance criteria (Reference 2) and appreciates the opportunity to ccmnent on both of these docunents jointly. B&W has also met with the NRC on several occasions to discuss the proposed rule and acceptance criteria. Based upon these discussions and our review, B&W has a number of major concerns with the proposed rule as well as specific ccmnents that need to be addressed by the NRC. We have also responded to the specific questions posed by the Coomission for ccmnent. A. Major Concerns

1. B&W takes issue with the 11Regulatory Analysis." 'Ihe entire paper is s1..11111arized by the following line fran Paragraph 3.2, entitled "Results of Feasibility and Value/Impact Studies,"

Results *** confirm that the pranpt accountability concept is technologically feasible and that significant benefits to MC&A systems oould be achieved at m::derate cost. Although not specifically referenced, B&W participated in a four (4) ioonth study perfotmed by Battelle-Pacific Northwest Laboratories (PNL) under contract to the NRC in our uranium scrap recovery facility. The results of this study did not prove to B&W that this system could be easily backfitted into an existing facility without m::>dification of the facility and developnent of the measurements used for in-process 100nitoring. UNCLASSJF'IIHl L)h-}~. Acknowledged by card. 7!? fl.~.*~

U.S. NUCLEAR rJC::t!t *0"Y COMMISSIO!il oorKETl!G O ,,-r,.,,.. ~~ '"~".TION f>ostm,r'* ** Corw** Add' I - Spoci.!, ~ I

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Babcock & Wilcox 2 - Septenber 51 1984 Favorable conditions of the study !~eluded:

a. nie scrap recovered during the study was the "cleanest* material available1 i.e., acceptable ca:nponents (with certified uranium loadings) which were machined, chopped and put into process. This material was not ~ifficult to dissolve, there were typical mociunts of undissolved solids, and the resulting solutions were rather consistent, which made process ancmalies easier to detect.

b.

'Ihe isotopic values were unifo:r:m, -which aided predicted measure:oent values.

c. sane of the ala:r:m resolution procedures used would not be acceptable in a regulatory envirorment.

If the study had been perfonned in a period 1or periods where the percentage of lcw-level (Nile\ evaluated) material was higher with a wider range of isotq>es present, the uncertainty of-the measu.rEments would have been greater resulting in DX>re alarms and i;,otentially higher lass quantities. B&W also disagrees with the statement that the proposed rule will involve "m:derate costs.* Wlile the NRC acknowledged increased initial costs (Paragraph 3.3.1 for fuel processing facilities) of $200,000 to $300,000 for labor and up t~ $195,000 for capital expenses in plants having a recovery facility, the NRC projected cost benefit for the long te.nn is supposed to exceed installation costs and result in a cost savings. B&W' s evaluation of the cost analysis does not SUJ;l)Ort the NRC's conclusion because the cost savirgs is essentially based oo the reduced nl.lllber of physical inventories (fran b:IJoonthly to SEllli-aimually), which would result in labor time savings, 'reduced equipnent down time, increased availability of the facility for production, and reduced LEID calculation time. However, B&W nust meet both the NRC _arid' the Department of Energy requirements for physical inventory. Under the OOE contractual/financial accountability requirements found in OOE 5630.2, Page II-5, dated 8-21-80, bim::>nthly inventories are required for both 1A and 1B materials. \\\\bile B&W coold relax the physical inventory requiranents for safeguards puqx:iees and rely on the proposed in-process and item monitoring systems, the bi-monthly inventories would still be required for OOE contract and financial acca.inting. ibis t.'OUld not result in cost savings for B&W. In fact, it ~ld mean a cost increase to maintain t\olO systems, one system for OOE contract and financial acoount-ability at the grau level and the second for the NRC safeguards accountability at the kilograo. level. In the past, both safeguards and contract/financial accountability were based on

Babcock & Wilcox 3 - Septarber 5, 1984 physical inventories and one (1) staff. 'lhe duality of the NRC and OOE requrienents will not entail allocating the present staff to do their work a new way, but will require additional staffing to irrplement requirements which are in addition to what we-are presently doing. And, since there are two other licensees also impacted by the dual requirements, the long run inq;>act will be increased costs for all three (3) facilities.

2. 'Ihe MC&A Refollil Rule and its associated acceptance criteria should canprise a canplete basis for catments. HCAtlever, a&w*

cannot formulate canprehensive cannents due to lack of* definition in the rule, tmanSWered questions concerning the rule and the acceptance criteria, and ~lete technical information in the acceptance criteria. Sane of the problems are noted~ follCMS:

a. category 1A and 1B materials have not been adequately defined.

b. The methcd of hcM to handle an untarnpersafed container in a controlled access area has not been defined.

c. The requirement found in 70.83 (a) (2) limiting scrap containers to 0.25 go/liter versus B&W's current license capability to have up to 350 grams of U-235 per container has not been resolved. '!his will have a significant impact on B&W's storage capabilities as well as the atOOUnt of material per container B&W can receive for outside scrap recovery campaigns *

d.

'Ihe receipt verification techniques required by Page 62, second bullet, of the.Acceptance Criteria have not been resolved to detennine whether or not all of them are required.

e. Additional information has been pranised on the statistical calculations which canprise an integral part of the MC&A reform rule.

Although B&W has been told that the work has been contracted for calculatirYJ alarm limits, false alarm rates, AI.ARA (as !CY.ti as reasonably achievable) quantities, etc., B&W will not have this information before the fonnal carment-period is ended.

f.

fok>re detailed infonnation on the AMASS methodology is needed. B&W needs to dete:rmine the cacpatibility. -of this systElll with existinJ in-hoose CCIIpJter capabilities.

Babcock & Wilcox Sept.anber 51 1984

g.

B&W was advised by the NRC that oo model. is presently available for the multiple space-multiple time loss detection requirenents of the proposed refom rule.

3. B&W is concerned that such a drastic change in the regulatory requirements as presented in the proposed MC&A Refom Rule is not getting rrore widespread review, evaluation, and agrea:nent within the NRC before this new approach is presented for ccmnents.

One (1) group of the NOC is writing the proposed rule and evaluating its technical appropriateness, but the two (2) groups who rust adninister and audit the new rule at the licensee's facility are not part of the current writing and developnent effort. The impact of this on B&W is that, subsequent to the ccmnent period, NRC Licensing and Regional . Inspection can revise or make interpretations to the Acceptance Criteria which B&W would not be knoilledgeable of but would still be held accountable for. B&W recarmends joint meetings between the NRC group that is developing the Jvaw rule, Licensing, and ~ional Inspection.to develop a joint understanding of the proposed rule and acceptance criteria and then give B&W (and other licensees) an opportunity to o::mnent on the rule and the acceptance criteria it will be ad:ninistered to and inspected against.

4. B&W acknowledges that the present bimonthly inventory system is weak in locating an ancmaly in a short period of time.

However, our physical security meaeures to prevent this are extensive. At the saoo time, B&W does not feel that the proposed rule is necessary to a fuel fabricator such as B&W becauss the losses and problems that this rule seeks to guard a,;Jainst (large kilogram quantities of unexplained ID's, unneasured side streams, etc.) are not present at B&W. B&W's relatively snall ID' s have been duly documented for years to the NRC for each bwnthly inventory period. The proposed rule does seem to be 100re pertinent to a facility where there are a number of sidestreans and associated larger, unexplained ID's.

5. The new rule provides for a phase-in period of eighteen (18)

IOOnths for the new systEm while maintaining the existing biroonthly inventory system. Nlile the intent is to phase-in to a reduced inventory period based on proven safeguards capabilities, B&W believes, as was addressed in major ooncern No. 3, that this would instead be a phase-in for additional requiranents with associated increased costs.

• Babcock & Wilcox September 5, 1984 B. Specific Ca'lments

'Ibe for.mat of these specific ccmnents will follow the flCM of the Acceptance Criteria, beginning with Chapter 1 through Chapter 5. B&W's c::a:rments concerning the Acceptance Criteria will encanpass concerns with the proposed rule as p$lished in the Federal Register.

1. Chapter 1, Page 1 "lbe FNtt'.C Plan and associated Annex shall contain the following affinnations, ccmnitments, and supporting infonnation:*

'Ibis statement could be interpreted to mean that the Annex as well as the FNMC Plan should contain the affirmations and ccmnitments. '!be statement should be revised to clearly state that the affb:mations and ccmnitments are contained in the FNMC Plan and only supporting infor:mation demonstrating canpliance is in the Annex.

2. Chapter 1, Pagel', second bullet

• The action thresholds for the material control tests will be updated bas;ed on the first six roonths of q:>erating data and thereafter as deElned a,ppropriate.

11 Nlen te:ons are used such as "as deemed apprcpriate, 11 it causes confusion between the licensee and NRC inspectors aoo can result in the licensee being judged in non-ccmpliance based on what an individual inspector deans "appropriate." This wording should be replaced by wording such as* *** as supported by test data. ti

3. Chapter 1, Page 6; first bullet fik>re infonnation aoo definition is needed to classify the process material at B&W.

The full impact of this new rule cannot be assessed until we can properly classify our material.

4. Chapter 1, ];>age 7-8 "Substitute Material" B&W request guidance on what constitutes an acceptable program to control substitute material.

5. Chapter 1, Page 9, lirst bullet "Control measures are in place that will prevent a credible diversion totalirg more than a designated AI.ARA quantity *** ti Please provide aciUtional definition or calculating methodology for the AIAFA quaqtity.

Babcock & Wilcox 6 - Septenber 5, 1984

10. Chapter 3, Page 18, *Intent and seope,* last sentence in first paragraph The requirement states that *1f SSNM is not tamper-safed, stored in a vault that provides protection at least equivalent to tamper-safing, or encapsulated, it is not considered an itan and the SSNM is subject to the in-process control requirements.

for bulk material.* B&W has several situations which are in our filler prcx::essing areas, (controlled access areas), which have been discussed with the NRC and need further attention/definition for us to fully assess the impact of t):te proposed rule.

a. Fuel Containers The SSNM is weighed and placed into untamper-safed containers. This operation is done in a vault type roan inside of a controlled access area. When the containers are issued to operations, the fuel is either put into process inside glove-boxes or returned to the *vault type roan.

B&W does not consider tampersafing each container to be econanically feasible, particularly since they are maintained in a controlled access area. B&W requests that these containers be considered as it.ens in the controlled access area rather than bulk material.

b. Fillers Fuel fillers are very similar to the fuel ccntainers in that they are fabricated in the sane oontrolled access area, put into labeled plastic bags after they

• are fabricated, and placed into vacuum chambers until inspected or used. Since B&W cannot practically tampersafe each filler and handling of each filler Dl.lst be minimal to prevent danage, B&W requests that the fuel fillers also be considered as itans in the controlled access area.

c.

RRFE Fuel Containers and Fillers '!be research reactor fuel and fillers are also handled in unu.,npersafed containers and in an unencapsulated condition re~tively. Since they are also in a controlled access area, B&W requests that these fillers and fuel containers be considered as items.

Babcock & Wilcox 7 - Septarber 5, 1984

7. Chapter 3, Page 21, third b.tllet, fourth dash

• *** all itsns in the area are tanper-sealed or encapsulated ***
• This condition for storage to be classified as a pennanently oontrolled access area should be deleted since the other ccnditions make it unnecessary.

The other conditions ~re:

a. The area is equipped with physical protection capabilities as detailed in Part 73.

b. Access to the storage area is limited to the minimun nwt>er of persons necessary and records are kept of persons who enter or exit.

c. Records of the itans in storage are maintained.

d. An operator within the storage area will be continupusly observed by another person, and all additions, rem:>vals, ~

JOOVEments of material by either person are verifiable by the other person.

8. Chapter 3, Page 22, first bullet, second dash "The personnel authorized to enter and operate the vault are not authorized to reoove or handle SSN-1 beyond the boundaries of the vault*

B&W proposes to allow the same personnel who operate the vault to ren-ove material fran the vault if proper docuoentation, security surveillance, and receipt verification by another person are provided.

9. Chapter 3, Page 24, second bu~let nie formula shown is incorrect. It should be n = (N - a; 1) (1 - B l/ d)

10. Olapter 3, Page 26, secxxid atllet, first dash

'l;he minimtm lergth of the longest dilqension of sane of B&W's fuel canponents do noj:. oonfonn to the two (2) meter ler¥Jth criteria. B&W suggests that this specific criteria for item definition be broadened to "any clad ccmponent that is large erngh to preclude hidir¥J on an individual* as currently defined in our security plan. This would preclude havir¥J similar a:::lip:xl8nts designated as 1A and 1B with associated verification requirements whose only distinction is a*few inches in ler¥Jth.

Babcock & Wilcox Septanber 5, 1984

11. Chapter 4, Page 33, second bullet

" *** the maxi.mun time after the alarm for canpleting a ra:neasurement to confim the contents should not exceed two ~rking days." To reneasure or confii:m the oontents when a tampersafed item has been canpranised within two days would be ~ible. In order to verify the isotopic content, B&W must rely on an outside laooratory, a process whi~ takes approximately eight (8) days.

12. Chapter 4, Page 37

13.

B&W needs adiitional information on predicting false alarms and false alarm rates in order to caunent. The NRC per the 11Note 11 on this page is developing additional estimation methods. Chapter 4, P~e 38, third bullet under "Acceptance Criteria" One of the ala:rm resolution criteria is "outlining of a schedule of recalibrations of the key measurement systems." B&W believes that a JOC>re fundamental awroach would be to verify the standard values on the appropriate measuranent systems. Then, if the perfonnance of the measuranent system on the standard was inadequate, recalibrate.

14. Olapter 4, Pages 39-41, "Alleged Thefts", ref. 70.87 f B&W believes that the proposed acceptance criteria is too restrictive in its approach. The current guidelines offer a method for an external group or person to virtually halt ww:k at l\NFD by initiating alleged theft alarms that must be investigated.

An energency plant-wide inventory l<<lllld certainly not always be necessary nor appt'Clpriate to access the validity of an allege<l theft. 'Ihe proposed rule would require that the mst accessible 1A material be checked every three (3) days and the 1B material every seven (7) days. 'Ibese routine. tests would give B&W a gocx1 data base fran which to start, based on when the tests were performed o::mpared to when the alleged theft took place. B&W would integrate the results of the material control tests with the ite:n control tests, giving credit for physical security if applicable, and foi:mulate a plan that would present a list of potential it~ that could have been diverted and would have to be located and verified.

15. Chapter 4, Page 39, Paragraph 4.3, fifth bullet

" *** accurate records will be established and maintained on the quantities of SSNM which have been received, shipped, or otherwise resooved fran each Ml\A, and *** SStiM remaining within each such area ***

• Babcock & Wilcox 9 -

September 5, 1984 'Ibese records would also be required as part of the central accounting records to meet the separation of functions required by Chapter 5, Paragraph 5.1. 2, pages 43-46. B&W also interprets that similar records may be required at the control ~ unit level. This appears to be an increase in the recordkeeping requirements rather than a reduction as originally thought.

16. Olapter 4, Page 40, first bullet n'Ibe capability also exists to locate all items within a vault within 72 hours and all ita:ns outside a vault within one week."

B&W requests that the time span for finding items within a vault be revised to one (1) week and the time required to find all items outside a vault be revised to two (2) weeks. See caunent il4.

17. 01apter 4, Page 40, second b..lllet "Provisions are included for maintaining the availability of forms, tags, trained personnel, inventory listing and other items that may be needed to initiate a plant-wide physical inventory within 24 hoors.N B&W requests that the time frame be revised to forty-eight (48) hours. 'Ibis time \li'Ollld be needed to run canputer programs, prepare iten lists, allocate tags, etc.

See ocmnent 114 *

18. Chapter 5, Page 45, fourth bullet, fifth dash nseparation of cx::mputer program maintenance frcm the program user function."

Does this separation of cx::mputer program maintenance fran the program user function mean that another party must becane involved when the user wants to make a program modification?

19. Chapter S, Page 46, Para;Jraph 5.2, *Personnel Qualification and Training"

'Ibe definition of *key position" is too vague. Since this is the focal point of this section and the subject of the training, this position needs to be rrore specifically designated or broadened to allow the licensees to define those positions where errors or faulty performance could directly degrade SSNM control and accounting. HcMever, these requirements list as key positions not only ncontributorN positions but also "MC&A managE!Dent positions *** having responsibility for :,Cey measurements, data analysis, preparation

Babcock & Wilcox sept:.al'ber 5, 1984 of accountability source docu:nents, and collecting or recordiN;J of other data having a direct impact on loss detection, alarm response and quality assurance functions.* ~ 'Ibis definition encanpasses m::>st of the personnel of Nuclear Materials Control, many of whan would be the trainers. B&W feels that the current regulations concerning training are sufficient and a strengthening of the regulations in this area ~snot needed~

20. Chapter 5, Page 46, fifth dash

21.

• Assure *** only authorized persons have hands-oo access to the material."

This is a function of physical security, oot an MC&A function. B&W suggests that this requirement be deleted fran this section and IOOVed to the appropriate security requirement. Olapter 5, Page 48, third bullet

• The training program provides for training of personnel already experienced and functioning in MC.&A positions at the time of Plan implanentation when caopetency tests indicate that additional trainiN;J is called for.

1be criterion will be whether or not the individual can be at the level of proficiency called for in the qualification criteria.* B&W requests additional infoi:mation concerning the ccmpetency . tests for persons experienced and functioning in MC&A position and t:,he qualification criteria.

22. Olapter 5, Page 49, f~rst bullet, second dash Wiat is the "predicted standard deviation due to measurements*

aru,'l ~ is it calculated?

23. Olapter 5, Page 52, Para. 5.3.6 and second dash "Describe the program for Il'.k)l"U.toring cUTUlative shipper-receiver differences *** *

• The course of action with respect to review of measurEment systems, shipper notification, and treatment with respect to i:apact on ID (i.e., how the i:n\)act of the Ct.J,1SRD will be accounted for in the evaulation of ID significance}.*

This wording implies receiptsi therefore, there is no impact on ID at the receivin;;J facility provided the receiver boqks his own receipt measurements as B&W does.

24. Chapter 5, Page 53, first paragraph B&W w:ruld like additional information on the AMASS methodology and its ~tibility with our present software. Are there acceptable alternatives to AMASS and, if so, what are they?

Babcock & Wilcox September 5, 1984

25. Olapter 5, Page 57, first bullet

• Pertonn a physical inventory every twelve roc:inths" B&W would like to highlight the conflict between this sentence and 7!).89(e), "twelve months* has been revised to "six months.

11

26. Olapter 5, Page 57, foorth bullet, second dash The reference to 70.83(d) (3) should be 70.89(d) (3) 27, Olapter 5, Page 58, Para. 5.4, first bullet 11A*measured,physical inventory is perfol1lled at least every 12 months

,II', f -/. B&W prcposes that this time span be revised to "oo later than six (6) months.* This "'1'0rding will give B&W the flexibility to meet lx>th the present OOE and the prqiosed NRC physical ,1 inventory requi~nts.

28. Olapter 5, Page 58, fifth bullet, first dash Segregation throUJhout the recovery process of scrap that originates off-stte fron scrap generated on-site is not practicable at B&W..

After scrap is dissolved, the solution is measured in a weigh tank system, which caq;,rises our receipt measurement. lf the solution fran off-site scrap has the sane isotopic value (within allCM3d limits) as solutions fran on-site scrap,the NRC has here-to-fore allowed B&W to integrate the two solutions and process them together. Following the r:ec<:Nery operation, the UNH is pro-rated based on the receipt quantity *

29. Chapter 5, Page 58, fifth bullet, se<X>nd dash Recovery of scrap within six (6} months of the date generated if the measurement uncertainty is greater than 5% will be difficult for B&W to accanplish.

Scrap generated by B&W cannot be processed for many 100nths due to the recovery of material fran other nuclear facilities. To deal with this situation, B&W presently has a license oondition which allows up to 30 Kgs. of scrap on hand awaiting recovery. A similar license condition will be needed under the proposed rule. It sh::luld be ooted that B&W recognizes the caveat proposed by 70.89 (e)(4)(2). Since we have no quantitative estimate of active inventory at this time, it is difficult to say what i:n\)act, i~ any, this uncertainty will have on the total measurement uncertainty.

Babcock & Wilcox September 5, 1984 30 41 Cllapter 5, Page 60, third bullet B&W WQUld like a broader definition of *area equivalent to tampersaf ing. 11 The intent of this phrase in context is that an untaopersafed item might still be considered an item if it is located in a vault. B&W would like to extend this definition to locked (with approved locks) chaabers or cabinets within controlled access areas. 'lhis would alleviate present concerns in our filler fabrication and recovery operations1 both of which may have ite:os (fillers and partial scrap containers, respectively) which do not lend themselves to tatpersafing and cannot be transported fran that area to nore suitable storage.

31. Chapter 5, Page 63, secood bullet The list of criteria to define a lot does not include a

• description that UNH fran our reoovery process would ccmply with. Is this list inclusive or can B&W snend this list as neces~?

32. Chapter s, Page 63, first bullet - first sentence "The investigation of excessive shipper-receiver differences *** "

B&W believes that the \riOrding should be amended to *significant shipper-receiver differences.* ~3. Otapter 5, Page 63, first bullet, fourth dash, second sub-dash There appears to be words missing in this sta~nt which confuse its meaning.

34. Chapter S, Page 68', fourth bullet

~at is the definition of a *secure location?" At present, all of B&W's reoords that are needed to COl{)ly with this section are in a roon with a door secured by a ocmbination lock (whose CCJllbination is known only by those with a need to know), which we define as a secured storage area. Is this adequate!

c. NRC Questions Posed for caonent Question 1

• with respect to loss detection levels, shoold they be plant specific and to what extent WC>Uld area loss detection levels greater than five foDlll.lla kilograms facilitate area detection within material access area (Ml\A's) rather than within subdivisions of MAA?

_,/

Babcock & Wilcox Septanber 51 1984 Res['.X)n.Se B&W believes that the loss detection levels should be plant specific. 'I1le ability to detect a loss of 5 Kgs. of SSNM will depend upon measurement capabilities, the amount of material in process, and verifynJ that there are no UIJneaSured sidestreams. Mlile the measuranent capabilities of all licensees, prescribed by 10CFR 70.57 and anended by the pr()J;X)Sed MC&A rule, are scmewhat uniform, the a:nount of material in process differs greatly. A fuel fabricator, for exsople, would have to closely monitor all bulk operations until a clad item is fabricated. But even for the bulk operations, the fuel fabricator ~d be dealing with kna.m weights of certified lots of material. If the fuel fabricator has a rerovery operation, the cllX:mlt of material in process is not only the bulk material at the beginning of the fabrication process, but also the entire liquid system which converts the scrap to a usable product. Finally, if the licensee's entire operation is one of liquid conversion of fuel fran one form to another, the anount of material in process increases tn!mendously and product sidestrea:ns beccme a necessity. B&W therefore feels that, given an approved measurement system, it is the licensee's operation which will detennine the loss detection levels, which will dictate that.the levels be plant specific. HaviDJ an option to establish area limits greater than 5 Kgs. l<<>Uld be beneficial to both safeguards and in-house operational concerns. Using B&W's recovery operation as an exauple, this MAA would, if aaninistratively divided, have six (6) to eight (8) units with approximate alann thresholds ranJing fran 200 grans of U-235 to 1500 grclllS aoo totalling approximately 6. 5 Kgs. Since - this MAA total would not meet the current limit of 5 Kgs, B&W would have to divide this operation and verify that each unit had a high degree of assurance of not losing 5 Kgs. If four (4) of the units operated on a given day, B&W "'10Uld attempt to assure, by material control tests on each unit, that a total of 20 Kgs. had not been lost fran these four units. But if the material control test could be performed around the entire MAA (after appropriate limits have been established), B&W could assure that a total loss quantity of perhaps 6 Kgs. had oot been lost. The total MAA test would require only measurenents/establishing values of material going in and out of the facility and an ending inventory of containers/colunns rather than also measuring transfers between systems. '"bus the area detection material control test with limits greater than 5 Kgs. would be easier to perfonn and provide greater safeguards assurance (6 Kgs. vs. 20 Kgs.) than subdividing into aaninistrative units.

Babcock & Wilcox Septe:ru::,er 5, 1984 Question 2 On the subject of physical inventories, should the current practice of autanatic plant shutd<Mn when an inventory difference (ID) exceeds a specified threshold be continued and, if so, what should the threshold be? Respon.se B&w-NNFD currently abides by a ruling set forth by the NRC regarding autanatic plant shutdowns when an inventory difference exceeds a specified threshold. 'Ihe current threshold is tied to plant thruput. With the current high costs of operating nuclear facilities, a forced plant shutdown could be disastrous. lf specified plant shutdown limits are used, they should be designed in such a way that a plant shutdown \tK>Uld be required only in cases where a plant shutdown would readily resolve an unusually high ID. The current threshold limits related to thruput are oot realistic. If plant thruput is to be used, other factors such as plant design, manufacturing processes, scrap recovery cperations, aroount of recycle, etc., should also play a role in detennining a threshold limit. 'Ihe approach taken to setting threshold limits requiring plant shutdowns described in Section 5.4.5 of the *standard Foz:mat and Content/Acceptance Criteria Guide for the MC&A Refo:on.Amendment 11 seems satisfactory and realistic. 1he Criteria Guide relates plant shutdown threshold limits to the standard error of the ID and to specific absolute quantities of SNM. Limits based on two specific criteria, i.e., one based on known plant measurenent uncertainties and one based on a strategically significant quantity of SSNM, will lessen the chances of a plant shutdown when, in fact, a significant loss of material has not ~- Question 3 To what extent would the ccmbined effectiveness of (1) the in-prcx:::ess roonitoring requirements in paragraph 70.83, in particular the 6o-day area detection capability in paragraph 70.83 (c)(4h and (2) the item m::xiitoring requirsnents of paragraph 70.85, suffice as a near real-time physical invento.ry?

Babcock & Wilcox septanber 5, 1984

Response

The in-process and item m:::>nitoring requirements of the new refonn rule may suffice as a near real-time physical inventory for NRC safe<Juards purposes. The proposed system is intended to timely detect kilogram size losses and to provide timely and effective loss alarm resolution without taking a physical inventory. For kilogram size loss detection, the proposed rule may be all that is needed. HO\tt'ever, for contract and financial accountability of gram quantities of special nuclear material, a physical inventory with process equi);lllent cleanout and material balance accounting 'WOUld still be necessary. This is particularly true when dealing with uranium recovery for several different custcmers using the SaIOO recovery facility

• The Connission also solicited ccmnents on the following points:

(1) The extent to which the seniannual physical inventory is a repetition of the near real-time inventory; To sane degree the semiannual physical inventory \,Utild be a repetition of the refonn rule's in-process and item roonitoring. However, taking a physical inventory is a different approach than the proposed system and provides for a better inventory. Currently, both contract and safeguards accountability are performed within the same system. However, this will change with the proposed rule because the accountability system that will satisfy safe(Juards concerns at the kilogram level will not satisfy contract/financial concerns at the gram level. (2) The extent to which the semiann.ial physical inventory provides an overcheck on the near real-time physical inventory, with significantly different characteristics which provide enhanced safeguards capabilities; The physical inventories, whether bi-monthly, quarterly, semi-annually or annually, would provide different information than the proposed in-process and item rronitoring system provides. Physical inventories would confinn or show probl1DS with the proposed system's statistics. Also, the physical inventories would provide infotmation about equipnent and process holdup that the proposed systa:n could not measure as well. 'Ihese differences, however, may not be that significant when dealing with kilogram size concerns for safeguards reasons only. The physical inventories may enhance the safeguards capabilities; however, this enhancement may be more than is really necessary frcm a safeguards perspective. (3) What ao:Utional requirements, if any, should be placed on near real-time physical inventories if saniannual physical inventories are not to be requirea?

Babcock & Wilcox NAR:mh

• Septanber 5, 1984 Rather than adding IOOre new and unproven techniques to the proposed in-process and item roonitoring systan, periodic physical inventories should be considered as an acceptable method of evaluatin;J and/or modifying the proposed systen.

Sincerely, BABCCX::K & wn..cnx, NNFD ~~~ Nuclear Sa~~censing Officer

~ NFS OOCMT NUMBER P.ROPOS£D BULE PR-7J. (i) c //-9 ;:=,e. '4t:J tit) Nuclear Fuel Services, Inc. 6000 Executive Boulevard, Suite 600, Rockville, Maryland

• 20852 (301 ) 770-5510 OOCKETEO USNRC t 31 1984 Augus
• a4 SEP -4 A11 :08 Secretary of the Commission

o. s. Nuclear Regulatory Commission Washington, D. c. 20555 Attention:

Docketing and Service Branch

References:

(1) FR 45144-45151 dated September 10, 1981, Advance Notice of Proposed Rulemaking Gentlemen: (2) NFS Comments on ANPR dated November 6, 1981 (3) 49FR4091 dated February 2, 1984 When in 1981 the Commission published the Advance Notice of Proposed Rulemaking concerning *Material Control and Accounting Requirements for Facilities Possessing Formula Quantities of sSNM* (Reference 1), NFS studied the ANPRM and concluded that Option 1 (*retention of existing requirements*) was the only credible option. In support of this con-clusion, NFS offered extensive comments and recommendations (Reference 2). On February 2, 1984, the Commission published a proposed rule (Refer-ence 3) concerning *Material Control and Accounting Requirements for Facilities Possessing Formula Quantities of Strategic Special Nuclear Material.* To review this proposed rule, NFS formed a special team of technical managers with expertise in statistics, computer operations and process monitoring as well as material control and accountability. The team also met twice with the appropriate NMSS personnel at the NFS plant site and discussed the proposed rule in detail. The comments on the proposed rule developed by the special team review are attached. NFS would be pleased to meet with the Commission's staff and discuss these comments and recommendations in further detail. In summary, we wish to reassert our belief that improvements in material control and accountability can be best achieved by building upon the existing classic system of periodic inventories, with evolutionary changes coming from process monitoring experience (such as obtained at NFS during the last several years) and incorporating those improvements via facility-specific license amendments rather than generic rulemaking. Note that there are only four licensees affected. In response to the other issue for which the Commission solicited comment, NFS does not believe that two extensive MC&A systems, such as

• periodic inventory* and *near real-time accountability* can be effec-tively performed in parallel.

(. *.* ** Cc. ~..

Secretary of the Commission

o. s. Nuclear Regulatory Coallission Attn:

Docketing and Service Branch August 31, 1984 Page 'l'WO Thank you for the opportunity to present our views. JRC:jnw Enclosure cc: F. K. Guinn, NFS Erwin K. D. Bensley, NFS Erwin s R. Manager, Quality Assurance and Licensing

Attachment to Letter Dated 8/31/84 Item 1. "Regulatory Analysis" Comment Nuclear Fuel Services {NFS) anticipates major MC&A Reform Amendment costs to the overall programs in which NFS performs services. These costs, in addition to capital investment, include production down time and staffing impact. In particular, the staffing impact will materialize during the time period required to achieve necessary backfitting, model testing, and training. During this period, the staff will be maintaining dual MC&A systems which may degrade the performance of both. The result which we foresee is a system so cumbersome that time spent in performance will leave little time to assess the value - let alone engineer the necessary changes to the initial models. We are not in a position to evaluate the value added by the-MC&A Reform Amendment in terms of protection of the public safety. The weaknesses in MC&A requirements relative to detection timeliness and localization of losses were in large part justification for past physical protection upgrades. There-fore, we visualize some redundancy in costs when both systems are in place. Specifically, a divertor performing protracted diver-sion will have to accept an increased risk of being apprehended. This licensee has for some time had requirements to perform some subset of the reform amendment criteria with an arbitrary set of alarm levels {rather than those established by advanced 1

statistical methods), less stringent timing and alarm resolution constraints, and no control unit accessibility requirements. It has been our experience that resulting discrepant material con-trol reports (alarms) and our current ability to resolve alarms will not meet the draft performance objectives. One repeat recommendation resulting from these discrepant material control reports has been to implement a major backfitting to the process consisting of repiping and the addition of well calibrated proc-ess equipment in order to provide improved in-process measurements and mass transport with 11 clean 11 batch breaks. Our preliminary engineering estimate indicates that 6-8 calendar weeks of lost production in the main fabrication areas will be incurred during such a retrofit. Additionally, the scrap recov-ery process would require a major backfitting to the extent that it may be more cost effective to relocate the facility and replace the system in its entirety. These two major undertakings alone will re~uire an estimated 10-12 million dollar investment. This, if necessary, could best be achieved by means of a phased approach which will exceed the allowed time for implementation (10 CFR 70.Bl(c)). As a result of our experiences and current engineering judgements, the costs required to achieve compliance are signif-icantly 11 out-of-line 11 with published NRC and NRC contractor cost estimates. 2

Item 2. Laboratories, R&D Facilities & Process Modifications Comment The applicability of the proposed MC&A Reform Amendment to a facility possessing "true processing characteristics" is not in question since control by means of statistical evaluation of processing parameters is well suited to that environment. In the classical sense, a "true processing operation 11 is characterized by a set of random variables of which the central tendency and variance are known. NFS wishes to comment on the applicability of the proposed rule to processes which may be classified as 11 not well characterized 11 or which for other reasons do not appear to fit the 11 true process operation" mold. These types of processes include pilot facilities designed for research and development and laboratories which support production and R&D efforts. R&D facilities because of their nature may not be designed for optimum material accounting. The parameters under which they are operated may not be well established and may be altered for external reasons before a model can be developed and thoroughly tested. Such an environment will cause the modeling effort to be of limited value and resultant derived predictors being of poor quality relative to MC&A performance objectives. In a laboratory setting, MC&A performance objectives might be more cost effectively served by advancing credit to the phys-ical protection requirements already in place. A rationale for this approach would be that the SSNM contained in the laboratory is in small quantities and would require a protracted diversion 3

scenario to obtain 5 FKg with a high likelihood of detection resulting from the physical protection already provided (10 CFR Part 73). Additionally, typical process or quality control labo-ratories which support SSNM production operations contain at any given time between 50-200% of the desired control quantity (5 FKg). An abrupt diversion scenario would require that the divertor remove many items representing between 50-100% of the total inventory. This removal, if abrupt, would be detected immediately because of the sample control system inherent to lab-oratory operations of this kind and the item monitoring requirements of the proposed rule. Also, the impact of major product specification changes or process modifications in 11 true process operations 11 is of concern to NFS as these can be experienced on a somewhat frequent basis in support of our program contracts. While the proposed rule addresses initial start-up and phase-in periods (10 CFR 70.8l(c){3) and (4)), the rule makes no provision for 11 start-over 11 conditions. A major modification to a control unit, we believe, will have a high likelihood of affecting multiple space testing unti1 suitab1e modeling of the modified unit proc-ess or specification change is achieved. Staffing may not be available to readily readapt to bimonthly physical inventories after each major change. A1so, alarm frequencies could increase to unmanageable levels after such modifications. In summary, NFS recommends the following regarding R&D facilities, laboratories, and major process modifications: 4

Maintain status quo (bimonthly physical inventories) for R&D facilities. Other possible alternatives such as item moni-toring and periodic balancing might also be considered. In any case, allow abrupt and recurring loss tests to be set at a lower power of detection due to the poorly characterized test statistics.

• Require administrative control via item monitoring of SSNM in laboratories possessing at any given time in sample form less than two control quantities (10 FKg).

Materials will belong to their respective control unit while residing in the laboratory.

• Provide a lower power of detection for multiple space test-ing requirements for some reasonable period of time, in order to allow for appropriate remodeling of the multiple space test statistics after major process modifications.

Regarding the third item, the licensee would be required to dem-onstrate that potential changes in process holdup require longer times for holdup modeling, extended instrumentation calibration of new measurements with unsupported or undocumented histories, and justify the temporary power of test relaxation. 5

Item 3. 10 CFR 70.83(b) Unit Process Detection (1) The licensee shall detect any abrupt loss of SSNM from any unit process using any statistical test that has 99 percent power of detecting the loss of five formula kilograms. The detection shall occur within: (i) Three (3) working days of a loss of Category IA mate-rial from any accessible location; and (ii) Seven (7) calendar days of a loss of Category IB material from any accessible location. Comment With regard to the abrupt *unit process detection criteria, NFS 1 process monitoring data are non-normal in distribution and/or consist of several normal distributions combined. As a result, false alarm rates would be excessively high due to the problems associated with the 11 tails" of these distributions. Also, additional studies are necessary, when PMU 1 s have been established, to dev~lop models that will better estimate the lev- .1 el of statistical significance for which actual losses can be determined. Until these complex statistical issues can be appro-priately resolved, NFS recommends that the 99 percent power of detection be reduced to 90 percent. There will be occasions when the time constraints cannot be achieved due to process interruptions that prevent material move-ments to a measurement point. These abnormal conditions will require a relaxation of the accessibility/time requirement since, 6

in some cases, five FKg or greater will be in accessible locations at the time of interruption. For a batch type process, such as used at NFS, continuous piping and closed equipment with locked sample ports or sealed openings. should be considered as inaccessible, e.g., a glovebox designed so that activities such as entry/exit or glove changes cannot be performed without surveillance that provides accessi-bility control. The "two-man rule" or "tampersafing" are two administrative controls that could be employed. These interpre-tations fall under the guidance identified in the "Acceptance Criteria" which states: 11 Acce'ss to the SSNM is physically impossible without the need for visible puncturing, breaking, or otherwise violat-ing the integrity of the process equipment containing the SSNM, and;

• The removal of the SSNM from its authorized location cannot be accomplished because the tools or equipment needed for its movement are unavailable."

With regard to detection time criteria, it appears that the common situation where input is accessible Category IA material and the output is accessible Category IB material has not been addressed. 7

Item 4. 10 CFR 70.83(c)(2) 11 If detection within administratively controlled areas is elected, provide administrative or physical measures to protect against diversion of five formula kilograms from being accumu-lated from two or more administratively controlled areas: 11 Comment NFS interprets the requirement for 11 physical controls 11 not to preclude the transfer of the workforce from one material access area within the plant to another and, the unrestricted use of workforce within the MAA. 8

Item 5. 10 CFR 70.85 Item Monitoring Comment It is our opinion that items containing less than 50 grams uranium 235 should be exempt from the item monitoring require-ments due to the large number of items necessary to divert five (5) formula kilograms. Additionally, NFS is concerned about items that consist of totally undesirable materials which are contained in large con-tainers such as 55-gallon drums and 5-gallon buckets. Specif-ically, these materials are combustibles, non-combustibles, maintenance trash, etc. It is our position that these materials have no strategic significance and should be exempt from the item monitoring requirements. 9

Item 6. 10 CFR 70.89(d)(3)(ii) "Bias corrections for measurement systems are applied if their bias estimates exceed the larger of twice the standard deviations of their estimators or 50 grams of SSNM; 11 Comment The problems associated with making bias corrections to SSNM accountability data cannot be ignored. In particular, the pro-posed rule makes two key assumptions: (1) the referenced value, µo, is exactly known and, (2) production measurements behave in the same manner as standards data over time. There is no simple answer to (1). With regard to (2), even in carefully controlled experiments that extend over some period in time, the 11 time 11 effect can be quite a dominant effect for reasons which are often unexplainable. Because of the relatively small size of the bias in any one period of time, coupled with the administrative difficulties in adjusting data after the fact, the data consisting of measure-ments on the standard are not used to correct production data generated at the same time as the standards data, but rather to make inferences about uncertainties in unknown sample data gener-ated by the same measurement process. In this situation, the bias may be regarded as having been randomly selected from some probability distribution. The proposed rule has admitted the inadequacies associated with the concept of LEID; however, it is our opinion that the fallacies with bias corrections were not adequately studied prior 10

to the proposed rule. It is our position that some relaxation in this area is justified. Specifically, it is recommended that the criteria be changed to 11 *** Bias corrections for measurement sys-tems are applied if their bias estimates exceed both three times the standard deviations of their estimators and 50 grams SSNM. 11 Moreover, NFS strongly opposes the 50 gram SSNM bias cor-rection requirement as it pertains to measurement systems involved in material control tests. It is apparent from NRC studies that process variability, not measurement bias, dominates material control test statistics. Not only is it unrealistic under any effort/benefit analysis, it is our position that such a requirement would be unmanageable from an administrative stand-point. Therefore, we propose that bias corrections not apply to measurement systems involved in material control tests. 11

Item 7. 10 CFR 70.89(d)(3){iv) "If, for like material, shipper-receiver differences accumu-lated over an inventory period exceed the larger of one formula kilogram or 0.1 percent of the total amount shipped, then the licensee shall investigate and take corrective action, as appro-priate, to identify and reduce measurement biases." Comment Based on discussions with the staff, NFS has the following interpretation of the above requirement: (1) the licensee is required to monitor only receipts of like material and, (2) a physical inventory resets the cumulative shipper-receiver differ-ence to zero. Our concern is that the failure to address these items specifically in the Acceptance Criteria" (Re: Pages 48 and 50) would result in future disagreements regarding the intent

• 12

Item 8. NRC Solicited Comment "To what extent would the combined effectiveness of (1) the in-process monitoring requirements in 70.83 in particular the 60-day area detection capability in 70.83(c)(4); and (2) the item monitoring requirements of 70.85 suffice as a near real-time physical inventory? To facilitate a Commission determination as to whether both the near real-time physical inventory capabili-ties of 70.83 and 70.85 and the semiannual inventory capabilities of 70.89(e)(l) are required, the Commission also solicits com-ments on (1) the extent to which the semiannual physical inventory is a repetition of the near real-time inventory; (2) the extent to which the semiannual physical inventory provides an overcheck on the near real-time physical inventory with signif-icantly different characteristics which provide enhanced safeguards capabilities; and (3) what additional requirements, if any, should be placed on near real-time physical inventories if semiannual physical inventories are not to be required." Comment In developing classical physical inventory procedures the goal has been to utilize the best possible measurements, e.g., to minimize high uncertainty measurements. MC&A Reform Amendment requires development of process localized predictors for in-process measurements which may be avoided or minimized in con-ducting physical inventory because better, but less timely, measurements are available. At least initially, we do not feel confident that this approach (process monitoring) will serve the 13

other needs (mainly contractual or financial) for which we use physical inventory data. This is not to infer that the proposed requirements, if achievable, do not meet the primary safeguards objectives of more rapid and localized response to goal quantity losses during processing of SSNM. It also seems essential that the periodic physical inventory process clean-out data be used to rezero control unit estimated losses. These loss estimates, at the outset may be due to unre-fined process models or small real world trickle losses. Further, we believe that experimental projects conducted over the past ten years which were specifically designed to enhance the state-of-the-art of real time material accounting have not been successful to the extent necessary for adaptation in actual proc-essing facilities. We do not believe the necessary requirements for achieving real time inventory can be legislated via rule mak-ing. These must be developed over time as the technology to do so avails itself. Therefore, NFS recommends a physical inventory frequency of at least annually. 14

NUCLEAR REGULATORY COMMISION 10 CFR Part 70 OOCKETCO USNRC Material Control and Accounting Requirements; Facilities Possessing Fonnula Quantities of Strategic §P.ecial Nuclear Material: Extension of comme"iila Pd:ijloli4 P4 :15 7590-01 AGENCY: Nuclear Regulatory Convnission OFF: CE OF St CRt:.l 1, r OOCI\ETING & SERVI! f. BRANCH ACTION: Proposed rule; extension of comment period.

SUMMARY

On February 2, 1984, a Notice of Proposed Rulemaking entitled Material Control and Accounting Requirements; Facilities Possessing Fonnula Quantities of Strategic Special Nuclear Material, was published in the Federal Register (49 FR 4091). Conments were requested on or before; June 5, 1984. Since several parties have commented that insufficient time was provided to review the technically complex, perfonnance-oriented rule, the NRC is issuing this notice extending the comment period. .,,.,.,,,,~, "li-04',l.,t. ;' ~' New-*cciiiioont period expires September 5, 1984. COOJnents received after this date will be considered if it is practical to do so but assurance of consideration cannot be given except as to corunents received before this date. FOR FURTHER INFORMATION CONTACT: Mr. C. W. Emeigh, Fuel Facility Safeguards Licensing Branch, Division of Safeguards, Office of ttuclear Material Safety and Safeguards, U.S. Nuclear Regulatory C011111ission. Dated at Washington, D.C., thts 13th day of June 1984 For the Nuclear Regulatory Conrnission ~~~ Robert F. Burnett, Director Divisj~n of Safeguards

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, 0. C. 20555 !MAY 1 6 1984 00tK£TEr* USNRC

• a4 JUN -4 P 3 :27 Samuel J. Chilk, Secretary Office of the Secretary U.S. Nuclear Regulatory CoJ11T1i ssion Washington, D. C.

20555

Dear Mr. Chilk:

In a letter dated February 22, 1984, Mr. Martin G. Malsch, Deputy General Counsel, solicited the views of the NRC Staff on whether a final rule for improvement of special nuclear material control and accounting procedures along the lines of the proposal published in the Federal Register on February 2, 1984, (49 F.R. 4091) would be compatible with the NFS-Erwin joint motion of April 6, 1983, for suspending and eventually terminating the hearing. - See_, J.o.tn_t ~otion to Suspend the Proceeding, Nuclear Fuel Services Inc. (ErwTii; Tennessee) Docket No. 70-143, CLI-83-12, 17 NRC 735 (1983). The Joint motion was accepted by the Commission on May 11, 1983. Paragraph 14 of the joint motion states as follows: "14. NRC reserves the right to further strengthen the material control and accounting and physical security requirements for SNM License 124, NFS-Erwin, in accordance with new generic requirements or otherwise, but the requirements will not otherwise be changed except as provided in paragraphs 1-9 above." (17 NRC 735, 739). It is the NRC Staff's understanding of this provision of the joint motion that improvements in the capability of the material control and accounting system at NFS-Erwin required by a final effective generic rule or by a properly issued order may be implemented at the plant whenever the generic rule or order-becmne-s*- eff~t;i.ve. The purpose of paragraph 14 is to allow strengthening improvements to be made to the material control and accounti ng system in the interests of the common defense and security. In the absence of such improvements, however, changes in the material control and accounting system are limited while the joint motion is in effect to those enumerated in paragraphs 1 to 9 of the joint motion. In the opinion of the NRC Staff the generic regulation published for corrment will significantly strengthen the material control and accounting capabilities at the NFS-Erwin plant. The NRC staff concludes, therefore, that a final rule along the lines of the proposed rule would be compatible with the joint motion. cc: NFS-Erwin service 1 i st Martin G. Malsch, OGC Robert Burnett, ONMSS-SG Sincerely, ..-;t.-i :. J :. *.:.. 1,_....., I Robert L. Fonner Counsel for NRC Staff

U. S. Cc* /\. Spc~i,

GAIL MeGREEVY HARMON ELLYN R. WEISS WILLIAMS..JORDAN, Il l DIANE CURRAN HARMON, WEISS & JORDAN 172!5 I STREET, N.W. SUITE !506 WASHINGTON,D.G.20006 OOCKETEfl USNRC

• a4 JUN -4 P 3 :27 TELEPHONE

,tt..,flid~> 833 - 9070

& SER'J !1 NCH DEAN R. TOUSLEY April 9, 1984 Martin Malsch, Esq. Office of The General Counsel United States Nuclear Regulatory Commission Washington, D.C. 20555 RE: NFS-ERWIN, Docket No. 70-143, SNM Li cense No. 124

Dear Mr. Malsch,

Tom Cochran and I had a productive exhange of views and information concerning the substance of the proposed material control and accounting rules changes with NRC Staff safeguards experts on March 20, 1984. It is NRDC's view that the concepts embodied in the proposed rule generally represent a significant improvement in material control and accounting methods and we endorse the philosophy that stronger emphasis should be placed on the timeliness of detection and clear resolution of the cause of significant *1osses* or

• gains* of SNM.

We understand that reducing the frequency of inventories from bimonthly to biannually is essentially an effort to optimize the value-impact of the proposed amendment. It is our understanding that, i f adopted, the new rule would be implemented by the Staff in step-wise fashion. That is, the plants could immediately begin accounting and controlling SNM according to *process units* rather than on a whole p l ant basis, but that b imonthly inventories and the whole-plant shutdown criteria would stay in place until the Staff determined that the new system is fully operational and reliable. We believe that this is a prudent way to proceed. our concerns with the NFS-ERWIN plant are 1) to ensure that there is an *overlap period* of suff icient length such that one can be sure that the new system is, in fact, reliable and 2) that there are reasonably objective criteria in place to define the point at which full implementation of the new rule (i.e. reduction of the frequency of invent ories and the removal of the whole-plant shutdown criteria ) is appropriate.

HARMON, WEISS & JORDAN Martin Malsch, Esq. Page TWO To accomodate these concerns, we believe that the NFS-Erwin license should provide for operation of the plant for a year under the *process unit* provisions of the new rule, but continuing with the current bimonthly whole plant inventories during that period. At the end of the year, the 6 bimonthly inventories taken during that period should be compared with those of the prior 2 years. If the staff determines that the inventory differences are reasonabl y comparable - i.e., if the year under the new system shows no substantial degradation, then the new rule could be fully implemented. As you are aware, paragraph 14 of the agreement among the parties endorsed by the Commission in the NFS-Erwin case provides as follows: NRC reserves the right to further strengthen the material control and accounting and physical security requir ements for SNM License 124 NFS-Erwin, in accordance with new generic requirements or otherwise, but the requirements will not otherwise be changed except as provided in paragraphs 1 through 9 above. ( emphasis added) It is NRDC's view that, if the condition outlined above is adopted, application of the proposed rule to NFS-Erwin would constitute a

• strengthening* of the requirements.

ERW:cpk Very truly yours, ~ Ellyn R. Weiss Counsel for Natural Resources Defense Council

JUC' H N"UM3ER p R" _r-/ A 0 R0POSED RULE / u.. (_ //-9 fl!. 4~? I GATechnologies --------------------- In Reply GA TechnoloQJes Inc. P.O. BOX ~ ~4', 0// SAN DIEGO, CALIFORNIA 921 (619) 455-3000 Secretary

• a4 MAY 29 P 3 :09 r I v

JCY. rtNG & S BRANC~ 25 May 1984 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attn: Docketing & Service Branch

• Refer To: GEN-6012

Subject:

NRC Proposed Rule FR Docket 84-2879; Request for Extension of Comment Period. Gentlemen: The NRC published in the February 2, 1984 Federal Register a proposed rule changing SNM material control and accounting requirements forcer-tain NRC licensed facilities. An extension of the comment period by at least three (3) months is re-quested, thus allowing us more time to fully review and comment con-structively on the contents of the rule as well as the published ac-ceptance criteria. During this extension period, we would like to study and analyze in greater depth certain aspects of the proposed rule and its impact on the operation of GA Technologies' (GA) HEU fuel fabrication operations. For our analysis, we need additional time to consult and seek further guid-ance from NRC staff, as well as requesting and reviewing for guidance other specific documents issued in connection with work performed leading to the proposed rule.

1.

Loss Detection Testing Requirements (70.83(b) and (c) o the effect of non-normal material loss distributions. In our processing, we have found that loss data cannot be always modeled using a simple normal distribution, and a heterogeneous mixture of two or more normal distributions may be required. This can cause the alarm frequencies to exceed those predicted assuming normality. o the effect of treating material balances independently. With frequent material balances, sequential statistical analysis of material balances may need to be performed, rather. than treating them independently, as is done with the current system. This greatly increases the number and complexity of statistical analyses that need to be performed.

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Secretary, NRC GEN-6012 o the need and complexities associated with doing two-sided tests to record and correct for unusual gains. Even if the NRC staff is not concerned about unusual gains, the licensee's system should be able to detect and correct for anomalies resulting from gains.

2.

Item Monitoring Requirements (70.85)

3.

4.

o We have concerns about material control tests required for item monitoring on unique items in storage, including the custody and surveillance requirements of non-tampersafed items. o For the above purpose, more specific guidance needs to be pro-vided on what constitutes "secure storage." QA and Accounting Requirements (70.89) o The subject of Near-Real-Time Accounting versus the requirements of the conventional physical inventories required under 70.89(e) need to be evaluated in greater depth to determine if indeed the proposed in-process monitoring system can meet the requirements of NRTA, thus making conventional PI's redundant for safeguards purposes. o The Quality Control requirements under 70.89(d)(3) appear unduly restrictive. We would like to be able to determine if indeed they can be met for our facility. Computerized System o The proposed change to a more timely accounting system would not be practical without the inclusion of an efficient computer sys-tem with a variety of features, especially in view of the complex statistical analyses that will have to be performed, as well as the increase in the number of computations that will be required. We would like to analyze in more detail requirements for such a system.

5.

Cost-Benefit Analyses (Enclosure C of Supporting Documents) o In our opinion, the cost-benefit analyses provided need to be re-evaluated. We would like to have the opportunity to do a detailed study of cost issues relating to our particular facility and mode of operation.

Secretary, NRC GEN-6012

6.

"Directly Usable SSNM" [70.4(cc)] o In our opinion, there is still a question as to what constitutes "directly usable" SSNM. Since this definition directly affects the frequency and sensitivity of the material control test re-quirements, a more specific and consistent determination needs to be made as to what constitutes, for purposes of loss detection requirements, "directly usable" SSNM. In addition to the above technical and cost issues requiring detailed study, we have found apparent inconsistencies between the language of the rule and the discussion contained in the "Standard Format and Content/Ac-ceptance Criteria" document supporting the proposed rule. We need addi-tional time to explore these apparent inconsistencies with the NRC staff. We look forward to your early approval of the extension of comment period. WRM:hc Very truly yours, v-J_~R~~ William R. Mowry Licensing Administrator

~ NFS Nuclear Fuel Service$, Inc. ERWIN, TENNESSEE 37650 CERTIFIED MAIL

• a4 MAY 15 A10:Q7 RETURN RECEI PT REQUESTED May 11, 1984 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention:

Mr. S. J. Chilk. OFfl(.;f Ot SELHt

• DOCKETING & SER V'*

BRANCH

Reference:

(1) Docket 70-143; SNM License 124 Gentlemen: (2) Federal Register/Vol. 49, No. 23 dated 2/2/84 10 CFR Part 70 MC&A Reform Amendment Referenced proposed rule requests comments from the effected licensees and public on or before June 5, 1984. It is the opinion of NFS, as a result of (615) 743-91 41 a review of the proposed rule-making and attendance at a May 3-4, 1984 meeting (INMM sponsored) among the effected licensees and NRC representatives that the comment period be extended from June 5, 1984 until September 5, 1984. NFS offers the following justification regarding this recommendation. (1) The issues involved in the advanced safeguards techniques involve complex statistical treatment of a very large amount of process, quality and material control data. An inadequate review of these data will have an affect on the quality and constructiveness of comments. (2) Loss detection levels, excessive IDs/plant shutdown, near real-time accountability versus physical inventory and retention requirements concerning Parts 70.57 and 70.58 need to be addressed. (3) Additional time is needed to respond to guidance documents as well as the proposed rule. (4) NRC staff vists and an additional meeting of the effected licensees is desirable prior to formalizing documents. (5) Information regarding cost benefit/effectiveness requires evaluation and review. Please advise your disposition of this request as soon as possible. KDH/mle Sincerely, t'/.:~Y, Manager Licensing & Safeguards

U.S p ' (' s/;1/F4-I 2-ll°Jb5, em~,-,h~

unc nAVAL PRODUCTS Division of United Nuclear Corporation A unc RESOURCES Company 67 Sandy Desert Road Telephone 203/848-1511 Uncasville, ConnfflYtWef!'tf May 8, 1984 Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D. C. 20555 USNRC 984 HAY 11 A11 :59 Off IC!: Of 51:Lrk,...,. DOCKETING & SEf<Vlf BRANCH Attention: Docketing and Service Branch

Dear Mr. Chilk:

ciJC,\.:. r,, O\f)ll,J StD f v' LE [ij</ ~IJ-This is a request for extension of the connnent date from June 5, 1984 to Septem-ber 5, 1984 for response to the proposed rule "10 CFR 70 Material Control and Accounting Requirements; Facilities Possessing Formula Quantities of Strategic Special Nuclear Material (49FR4091) February 2, 1984. This request for an extended comment date is based on the detailed technical considerations which must be evaluated relative to both near real time accountabil-ity (NRTA) and changing material control and accounting requirements from rule oriented safeguards requirements to performance oriented safeguards requirements. UNC Naval Products personnel have evaluated data provided by NRC as well as attended INMM sponsored meetin~relative to the proposed rule. The extended connnent date will allow our personnel to (1) respond to guidance documents as well as the proposed rule, (2) respond to the four points especially solicited by NRC, namely,

a.

loss detection levels

b.

excessive inventory differences/plant shutdown

c.

NRTA vs physical inventory

d.

retention of 70.57 and 70.58 or changed to performance oriented safeguards. and (3) respond to the overall effect of the proposed rule on existing and future contractural requirements with our customers. This later item is of great concern to UNC Naval Products personnel since the concept of NRTA and the resulting cost savings from fewer or no physical inventories and fewer records in the future will probably not be compatible with financial SNM management and will probably not therefore result in the projected cost savings. I solicit your concurrence for the requested extension of the comment date in order to provide to you the detailed technical response UNC Naval Products personnel believes appropriate and necessary at this time. Sincerely yours, T. J. Collopy Manager Nuclear Safeguards UNCNaval Products TJC/jl AL!,!tC. I

"( '!_',,/,f/:j' I Sf/'l7/' --z.. / ~:!fo/r ?.gArIIRa ~lJT oxopspJ1 uo~ ~PGLG{OLG LGenr~ l" ~p& bxo~sc~ 0 q 1 coa~ 01 c::;, I n

Babcock & Wilcox a McDermott company Mr. Samuel J. Chilk Secretary of the Catmission u.s. Nuclear Regulatory Catmission Washington, D.C. 20555

Dear Mr. Chilk:

DOCKETED !.-'>NRC Maffl40,H~~1 Al 1 :53 OFF.._ ~ OF SE. 1..:i,._ OOC1'.E. TING & Sf !"VI.r BRANCH I Naval Nuclear Fuel Division P. 0. Box 785 Lynchburg, Virginia 24505-0785 (804) 522-6000 '!he Federal Register, Volune 49, Nunber 23, dated February 2, 1984, contained a proposed rule fran 10 CFR 70 entitled "Material Control and Accounting Requirements; Facilities Possessing Formula Quantities of Strategic Special Nuclear Material." Accanpanying the proposed rule were instructions concerning the sul::mittal of ccmnents and the date by which the carmants must be received by the Catmission's Office - June 5, 1984. Babcock and Wilcox requests that the referenced date for carrnents be extended until September 5, 1984, for the following reasons:

1.

B&W understands after recent meetings with the NRC that the caunents should not only cover the proposed rule but also the "Standard Format/Acceptance Criteria" doctment. To formulate these catments will necessitate deriving methods of canplying with the proposed rule as well as, where required, methods of canpliance other than those proposed. This approach will require input fran all facets of our Nuclear Material Control Department, as well as other departments within the Naval Nuclear Fuel Division, and will be a ti.me-conslllling process.

2.

B&W is not knowledgeable of all the statistics necessary to support the required material tests at this time. '!here is no IOOdel currently available, for example, to calculate the AIARA goal quantities for multiple time/single space and multiple tirne,nnultiple space losses. The NRC has advised B&W that additional guidances are presently being prepared, which will aid in the statistical canputations. B&W believes that the additional information would be very helpful in formulating ccmnents which would reflect valid limits, thresholds, etc., rather than arbitrary limits set without this information which would be too conservative and easily attainable. I'

Babcock & Wilcox Page 2 ***

3.

B&W considers the time frame allO!llt'ed for subnitting ccmnents to be rather restrictive. While the proposed rule was posted in the Federal Register on February 2, 1984, the "Standard Fonnat/Acceptance Criteria" was not received by B&W until March 1, 1984. This gave B&W only three (3) rocmths to carment on a proposed rule and acceptance criteria that differed in language and scope fran anything previously reviewed. NAR/khw Also, B&W has found that the meetings with NRC and discussions with the other licenses to be roost enlightening. Subsequent meetings of this type, however, to monitor progress and review any later developnents (additional guidances, etc.) would be precluded if the June 5, 1984 date is maintained. Sincerely, BABCOCK & WILCOX ~- ~ N. A. Regan Nuclear Safety & Licensing Officer

JU K(T NU~BER p -1/J ~ POSE P. JLE UNITED STATES NUCLEAR REGULATORY COMMISSION WASHING TON, 0. C. 20555 ( 44 Pll ~q I Ellyn Weiss Attorney Harmon & Weiss 1725 I Street NW, Suite 506 Washington, DC 20006

Dear Ms. Weiss:

February 22, 1984 DOCKETED USNRC 114 FEB 22 p 4 :21 The purpose of this letter is to advise you of the Nuclear Regulatory Commission's publication for public comment of a proposed rule which is intended to significantly strengthen material control and accounting requirements at certain fuel cycle faciliti~s. The proposed rule, which evolved from the Advance Notice of Proposed Rulemaking on this subject published on September 10, 1981, will apply to all fuel cycle facilities authorized to possess and use formula quantities of strategic special nuclear material, including reprocessing plants but not nuclear reactors or waste disposal operations. The current licensees to which the rule would apply include United Nuclear Corporation, Nuclear Fuel Services, Babcock and Wilcox and GA Technologies. Taking into account the steps required in the rulemaking process, the projected tim~ for publication of a final rule is early 1986. Because of this time schedule, the implemen-tation at NFS-Erwin Tennessee will not occur before the end date established by the joint motion agreement of April 6, 1982. We would appreciate your views on whether this action is compatiolQ...with the agreement. Please direct your comments to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Docketing and Service Branch. cc (w/encl.) : Sincerely, 1ttv;LL Martin G. Malsch Deputy General Counsel Dr. Thomas Cochran, NRDC C.W. Erneigh, NMSS, USNRC Robert Burnett, NMSS, USNRC Walter Engel, Naval Reactors, DOE

Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules 4091 obllgatlon has been unposed or Is sought to be imposed under an order; (i) The term "proceeding" means a proceeding before the Secretary arising under Section 118{a) of the Act;

• - U) The term "hearing" means that part of the proceeding whlch involves the submission of evidence; (le) The term party" includes the Department; (1) The term "hearing clerk" means the hearing clerk. U.S. Department of Agriculture, Washington. D.C.;

(m) The term presiding officer"

• means the administrative law judge conducting a proceeding under the Act; Secretary consider, setting forth clearly and concisely the nature of the petitioner' businese and the manner in which petitioner claims to be affected by the terms or provision11 of the order or the interpretation or application
• thereof, which are complained ~f; (4) A statement of the grounds on which the terms or-p_rovisiona of the order or the Interpretation or application thereof, which are complained of, are challenged as not ln accordance with law; and (5) Requests for the specific relief which the petitioner desires the Secretary to grant.

[c) An application to dismiss petition-Filing, contents, and responses thereto. If the Administrator is of the opinion that the petition. or any portion (n) The term "presiding officer's report" means the presiding officer's report to the Secretary and Includes the presiding officer's proposed (1) findings offset and conclusions with reepecMo all material issues of fact, law of discretion. ae well as the reasons or baais therefor, (2) order, and (3) rulings on findings, conclusions and orders submitted by the parties; (1t) The term "petition" includes an amended petition. f 1150.252 lnstttutlon of proceeding. _ thereof, does not substantially comply, In form or content, with the Act or with the requirements of paragraph (b) of this section. the Administrator may, within 30 days after the filing of the petition. file with the hearing clerk an application to dismiss the petition. or any portion thereof, on one or more of the grounds [aj Filing and service of petitions. Any person subject to an order desiring to complain that any order or any provision of any such order or any, obligation imposed In conneciton therewith is not in accordance with law, shall file with the hearing clerk. five copies of a petition In writing addressed to the Secretary, requesting a modification of such order or to.be exempted from such order. Promptly upon receipt of the petition. the Hearing Cleric shall transmit a true copy thereof to the Administrator and the .Department's General Counsel, resyectlvely. (b) Contents of petitions. A petition shall contain: (1) The correct name, address, and principal place of business of the

• petitioner. If the petitioner la a corporation. such fact shall be stated, together with the name of the State of
• Incorporation. the date of incorporation.

and the names, addresses, and respective positions held by its officers and directors; if an unincorporated - association. the names and addressee of Its officers, and the respective positions held by them; if a partnership, the name and address of each partner; (2) Reference to the specific terms or ' provisions of the order, or the interpretation or application thereof, which are complained of; (3) A full statement of the facts (avoiding a mere repetition of detailed evidence) upon which the petition Is based, and which it is desired that the stated In this paragraph. Such application shall specify the grounds of objection to the petition and if based. in whole or in part, on allegations of fact not appearing on the face of the petition. shall be accompanied by appropriate affidavits or documentary evidence substantiating such allegations of fact. The -application may be accompanied by a memorandum of law. Upon recefpt of such application. the hearing clerk shall cause a copy thereof to be served upon the petitioner, together with a notice stating that all papers to be submitted in opposition of such application. including any memorandum of law, must be filed by the petitioner with the hearing clerk not later than 20 days after the service of such notice upon the petitioner. Upon the expiration of the time specified in such notice, or upon receipt of such papers from the-petitioner, the hearing clerk shall transmit all papers which have been filed in connet;tion with the application to the Secretary for his considera tlon. (d) Further proceedings. Further proceedings on petitions to modify or to be exempted from any order shall be governed by § § 900.52[c)(2) through 900.71 of this title (Rules of Practice Governing Proceedings on Petitions To Modify or To Be Exempted From Marketing Orders) and as may hereafter be amended, and the same are incorporated herein and made a part hereof by reference. However each reference to marketing order" in the title shall mean "order." Signed at Washington. D.C.. on: January 2:7, 1984. Wllllam T. Manley, Deputy Administrator, Marketing Prosram Operatlon& [l"R Doc. IM-Z197 F1Jeci"1-~ 1:45 am( IIIUING C0m Mff-OZ-11 NUCLEAR REGULATORY COMMISSION 10 CfR Part 70 Material Control and Accounting Requlrementa; Facflltlea Poaesslng Formula Ouantltlea of Strategic Special Nuclnr llaterlal AGENCY: Nuclear Regulatory Commission. ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission is proposing to amend the Material Control and Accounting

[MC&A) regulations that apply to facilities authori%ed to possess and use formula quantities of strategic special nuclear material (SSNM). These amendments would apply to fuel cycle facilltlea, including reprocessing plants. but not to waste disposal operations or nuclear reactors. These amendments will significantly strengthen MC&A capabilities at the affected facilities by requiring more timely detection of possible SSNM losses and by providing for more rapid and conclusive resolution of discrepancies. The operational cost impact for these proposed requirements should be approximately the same as for current MC&A requirements. This is because the amendments relax or eliminate current requirements that are not cost-effective and take advantage of existing process control, production control, and quality control information. DATES: Comments must be received on or before June 5, 1984. Comments received after June 5, 1984 will be considered if it is practlcal to do eo, but assurance of consideration cannot be given ~xcept aa to comments received on or before that date. ADOMBSU: The Commission has prepared a draft Standard Format/ Acceptance Criteria document as preliminary guidance to help explain the proposed rule, and a draft summary Regulatory Analysis which examines the Incremental costs and benefits of the proposed rule. These two documents are available for examination and copying

• for a fee at the NRC Public Document Room at 1717 H Street NW.,

Washington. OC. Written comments or suggestions on the proposed rule, the

4092 Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules Standard Format/ Acceptance Criteria document, or the Regulatory Analysis should be sent to the Secretary of the Commission. U.S. Nuclear Regulatory Commission. Washington,, DC 20555, Attention: Docketing and Service Branch. Comments may also be hand-delivered to Room 1121, 1717"H Street NW., Washington. DC, between 8:15 a.m. and 5:15 p.m. Comments received will be available for examination and copying for a fee al the NRC Public Document Room at 1717 HStreet NW., Washington. DC. - l"OR l'URTMEI INFORMATION CONTACT: Mr. C. W. &neigh. Fuel Facility Safeguards Llcensing Branch. Division of SafegUards. Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone 301-427-4040. SUPPLEMENTARY INFORMATION:

Background

The focus of current domestic MC&A regftlations for high enriched uranium and plutonium le on bimonthly inventories. Comparison of the , inventory difference (ID) with percent of throughput does not occur until nearly - 30.days after the beginning of the physical inventory. Thus, a thorough investigation of an anomaly might not start until nearly 90 days after its cause occurred. The usefulness of these bimonthly inv~tories fn providing the public with assurance that significant quantities of SSNM have not been diverted bas been limited by difficulty in conclusively resolving large inventory differences. necessitating reliance instead on plant security and material control records and intelligence information for the desired assurance. On August 20, 1981, the Commission approved the publication of an Advance Notice of Proposed Rulemaldng (ANPRM) to solicit public comment on, bow to revise the MC&A regulations for SSNM capable of being made into fission explosives. The ANPRM was published in the Federal Register on September 10, 1981 (46 FR 45144), and included goals of the rulemaldng and options for achieving the goals. The primary goals included (a) timely and localized detection of a possible loss, (b) rapid determination of whether an actual lose occurred. and (c) availability of information to aid in the recovery of lost material in the event of an actual lose. Two of the options for achieving these goals retained the current emphasis on periodic physical inventories. The other three options introduced requirements for more timely use of process monitoring information for safeguards purposes and deempJ?.asized the importance and frequency of physical inventories. Proposed Action The proposed rule contains much of the substance of Options 3 and 4 of the ANPRM, but it has been totally rewritten to remove unnecessarily preacriptive requirements, to reduce the number of plans and programs required, and to improve its clarity. Capabilities have been included to protect against insider adversaries. The proposed rule allows licensees to select the most cost-effective ways of achieving the desired performance. It also gives more credit for secure containment of SSNM and re?>&Dizes differences between processing SSNM in bulk form and machining encapsulated SSNM The proposed amendments would apply to all fuel cycle facilities authorized to po88888 and use formula quantities of strategic special nuclear material, including reprocessing plants but not waate disposal operations or nuclear reactors. For facilities authorized to possess and use less than

• a formula quantity of SSNM and for nuclear reactors and operations involved in waste disposal of sealed sources,-the proposed amendments would retain, for the time being, the existing MC&A requirements in 10 CFR Part 70. A proposed rule to reform the MC&A requirements for low enriched uranium (LEU) facilities was previously published (47 FR 55951). It is envisioned that domestic MC&A requlrements for all facilities eventually will be r~vised and codified under a new Part 74, much as Part 73 contains all physical security requirements. The Commission solicits comments on this ap{lr.oach.

The prov~ioris of tb,e rule snd its associated guidance involve several significant departures from current regulations, including:

1. Providing more timely SSNM lo11e alarms through use of production and quality control data instead of less timely comparisons of plant-wide ID and its limit of error:

2: Increasing the ability to confidently resolve MC&A alarms by:

a. Decreasing the area and material quantity subject to an alarm,

b. Decreasing the number of persons who potentially could provide information about the cause of an alarm.

and

c. Decreasing the length of time between a lose (or mistake) and its detection and resolution;

3. Basing detection criteria on quantities less than those necessary to construct a clandestine fission explosive rather than on throughput of SSNM at a facility;

4. Basing criteria for interruption of

• proceeslng activities on an a11&essment of whether such interruption would facilitate the rapid resolution of a localized alarm involving a significant quantity of SSNM rather than on the inability to resolve an imbalance resulting from the taking of a periodic inventory;

5. Specifically requiring that the MC~ system design include protection against an insider threat

6. Using tlie total variance of ID for ID analysis, not just the measurement errors; and

7. Phased reduction in the frequency of ID determinations. from bimonthly to as long as semiannually. during phased implementation of the revised MC&A system.

Relative to the rule provisions cited above, the Commission is especially soliciting public comment on the following points:

1. With respect to loss detection levels, should they be plant specific and to what extent would area loss detection levels greater than five formula kilograms*facilitate area detection within material access areas (MAAs) rather than within subdivisions of MAAs?

2. On the subfect of physical inventories, should the current practice of automatic plant shutdown when.an inventory difference (ID) exceeds a specified threshold be continued and. if so, what should the threshold be?

3. To what extent would the combined effectiveness of (1) the in-process monitoring requirements in § 70.83. in particular the 60-day area detection capability in § 70.83(c)(4); and (2) the item monitoring requirements of§ 70.85, suffice as a near real-time physical inventory? To facilitate a Commission determmation as to whether both the near real-time physical inventory capabilities of H 70.73 and 70.85 and the semiannual inventory capabilities of

§ 70.89(e)(1) are required, the Commission also solicits comments on (1) the extent to which the semiannual physical inventory is a repetition of the near real-time inventory; (2) the extent to which the ~mlannual physical inventory provides an overcheck on the near real-time physical inventory, with slgnificantly different characteristics which provide enhanced safeguards capabilities; and (3) what additional requirements. if any, should be placed on near real-time physical inventories If semiannual physical inventories are not to be required.

PederaJ Register / Vol 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules 409a Response lo Public Comments In response to the ANPRM. 14 comments were received. Seven were from iruluatry, five from private individuals and a publlc interest group, and two from the Department of Energy. Key issues were:

1. Retention of the Siatus Quo. 0( the 14 comments received, dx were fn favor of main faining the status quo. However, none of the commentera showed how this would meet the stated goa1a-of the,

rulemaking; Because of poor lGsa localization, reaolution of large IDs is too often inconclusive. Without adequate resolution. the ID canuot be used to determine whether or not a true 10&1 occurred. 2, Procluciian Stoppeye Under Process Monitoring Options. Concerns were expressed that a.high rate of false

• alarms leading to costly production stoppages would result from the proceaa A monitoring_ options-published with the 9ANPRM. The proposed rule has been modified to mitigate-thaf ~ncern by:

a. Specifying tbat operafiom can be resumed upon-completion of planned alarm resolution activities instead of requirlni;i Commission authori%ation;

b. Excluding from shutdown those operations for which shutdown would not contribute po11itively to_alarm resolution, such aa operations where shutdownand restart would genel'Bte large quantitie11 of poorly characterized scrap;

c. Providing a 24-hour time delay in which to correct mistahs before.

shutdows of continuous processes; and

d. Modifying the reaming loss detection requirement and exempting it from the shutdown pro.vision.

3. Measurement State of the Art Some Acommentera felt that the process Wmonitoring options would-require nondestructive assay (NOA) techniques that are beyond the current state of the art. Thia.contention fails to recognize that most of the Ion detectlCJlt.required by the proposed rule can be accomplished by weight and volume measurements. Further, fndependent experts have reported that supplemental assays which may be required can be completed without the use of NDA equipment In less than 24 hours, well within the minimum detection time of three days. hi. some cases off-the-shelf NDA equipment would be sufficient to meet some of these supplemental data needs. In any event, the--proposed rule providea sufficient licensee flexibility to achieve required performance. without improving measurement systems, through better and more careful material handling practices; reduction In-the frequency of process upsets, spills, and leaks; fewer transcription or arithmetic errors; and reduction of the span of a material control test.

4. Phase-In Period. Some commenters, have raised the point that the process monitoring concept is new and to some extent untried. and that it should be demonstreted before being imposed through regulationa. Despite the fact that process monitoring ia to some extent already being demonstrated in DOE and in aome NRC-licenaed facilities, the Commission agrees that 10JDe of the 1pecific performance requirements have not been tried In all situations. The Commission also agrees that experience

-with some of these requirements will, enhance ~ overall likelihood of a. smooth and 1ucceas£ol implementation of the new requirements. For theae reasons the proposed rule incorporates an extended phase-in period.

5. Bac/cflttirrg, Option 5 of the ANPRM would han limited the application of MC&A re.forms to new facilities and major modificatiom tn existing facilities.

Five commenters specifically opposed this option, while three recommended its adoption. Shadle& performed for the NRC conclude that implementation of the proposed rule at existing licensed facilities is feasible and that the cost impact of implementation could be offset by cost savinga fn operation. Given this information. the Commission sees no valid reason why the rule should not be applied uniformly to both existing and new fuel manufacturing and reprocessing facilities.

6. Collusion Protection. Comment waa divided between those favoring the option in which MC&A data would be required to be protected again11t falsification by a conspiracy threat and the option in which the threat waa limited to a lingle insider. The requirements of the proposed rule 'l'eflect a compromise position which haa been -

designed to function in an integrated fashion with Physical Protection and which should result in improved cost effectiveness compared to Options 3 and 4 of the ANPRM Protection of MC&A data is only required against falsification by a single insider, providing that the insider does not have authority within the Physical Protection iystem. If an MC&A individual does have duar authority within both systems, then the MC&A data ii required to be protected against - collusion of-that individual with any other individual with MC&A responsibilttres. This approach assures that the MC&A system provides additional capability for deterring and detecting collusion. over and above that provided by 10 CFR Part 73, without doubling the-size of the design basis threat for the integrated safeguards system.

7. Reprocessing. As currently written.

the propoaed rule would a11ply to fuel reprocessing facilities. Although the scope of the ANPRM excluded such facilities. comments were invited on the possible applicability of the proposed rulemaldng to these plants. The two industry commentera who responded to this invitation were favorably Inclined toward the general approach of the process monitoring optiona. No other comments were received on thia topic. Since the ANPRM, senral aigni.ficaut changes have been made in the

• proposed rule. In view of this fact, the Commission la again soliciting comment& on whether or not this rule should apply to reprocessing plants.

International Comiderations It should be noted th/lt the goals,-, stated previously are domestic goals

• and are considered to be appropriate for a subnational level threat For-~n U.S.

licensees, the detection and response capabilities of the proposed rule have. been determined to be llllfficient to adequately protect the public health and safety for a subnational threat On the other hand, the International Atomic Energy Agency (IAEA), whfch is responsible for applying international safeguards, must fudge whether a significant diversion has occurred in the _ face of a possible national level conspiracy. In order to reach its conclusion with the required level of certainty, the IARA may find it necessary to receive plant-wide physical inventory data more frequently than semiannually. Other elements of these proposed regulations may 1imilarly need to differ depending on whether or not national aa well as 1ubnational diversion threats need to be considered. The NRC is coordinating with the Department of State regarding these issues and their proper reflection in domestic U.S. regulations. Paperwork Reducthm Act Statement The reporting and recordkeeping requirement& contained in the propQsed amendments have been evaluated and a clearance paclcage haa been submitted to the Office of Management and Budget aa required by Pub. L. 96-511. Four high enriched fuel cycle facilities will be affected and possibly one fuel reprocessing facility in the future. A,lso, these amendments will not result in an increase in total requirements for the affected licensees due to the trade-off that will occur between the new prompt accountabillt1

4094 Federal R.eglster / Vol 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules requirementa and the relaxed physical inventory requirements. ReaulatorJ Analysi8 Resultl of analyies performed by staff and by contractors in 1upport of the proposed MC&A Reform Amendments indicate that significant benefits would accrue from implementation of these. amendments at a relatively moderate tncreaae in cost the first year followed

• by significant aavµigs in subsequent years.

The Commission has prepared a draft aummary Regulatory Analysis on thia proposed regulation that ~are* the costs and benefits of the proposed rule to the ltatua quo. The draft analysis la available for examination and copying for a fee in the NRC Public Document Room. 1111 H Street NW., Washington. DC20555. Rezulatory Plexiblllty Certification In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605[bJ). the Commission hereby certifies that thia rule will not. if promulgated, have a significant economic impact on a substantial number of small entities. Thia proposed rule would affect four fuel cycle facilities that use SSNM. The companies that own tliese four facilities. United Nuclear Corporation, Nuclear Fuel Service, Babcock and Wilcox, and - GA Technologies, do not'fall within the definition of.. small entitles" set forth in the Regulatory Flexibility Act or by the Small Businea Administration in 13 CPR Part 121. Liat of Subjects in 10 CFR. Part 70 Hazardous materials-transportation. Nuclear materials. Packaging and containers. Penalty, Radiation protection, Reporting and recordkeeping requirementa, Scientific equipment, Security measures. Special nuclear material. PART 70-00MESTIC LICENSING OF SPECIAL NUCLEAJ'I MATERIAL For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954. 88 amended, the Energy Reorganintion Act of 1974. u amended, and 5 U.S.C. 553, notice la hereby given that the NRC la proposing to adopt the following amendments to 10 CFRPart70.

1. The authority citation for Part 70 is revised to read as followa:

Authority: Seca. 51, 63, 161, 182, 183, 68 StaL 929,930.948. 953, 9M. 81 emended. see. 234, 83 Stat. 444. u amended (42 U.S.C. 2071. Z073, 2201, 2232, 2233. 2282); secs. 201, as amended. 202. 20t. 206. 811 Stat. 1242, u amended. 1244. 1245. 1246 (42 U.S.C. 5641. 6842. 5846, 5846). Section 70.7 also luued under Pub. L 95- [1) Its dimensions are large enough (at 801., ec 10, 92 Stal 2951 (42 U.S.C. 68&1). least 2 meters in length] to preclude Section 70.21(g) allo inued under sec. 122. 68 hiding the item on an individual; StaL 939 (42 U.S.C. 2152). Section 70.31 also (2) The weight of 5 formula kilograms lseued under sec. 57d, Pub. L. 93--377, 88 Stal al l ( 1 t 50 Ln) 475 c42 u.s.c. 207?), Section, 70.36 and 70.-44 of the materi ta 10 arge at eu ~ aJ.ao luued under sec. 181, 68 Stat. 954. 111 that one person cannot carry it amended (42.U.S.C. 2234). Section 70. 61 also inconspicuously: or iuued under sec,, 186. 181, 98 StaL 956 (42 (3)' The quantity of 8SNM in the item U.S.C. 2236. 2237). Section 70.82 also laued LI ao small [leaa than OJ>5 formula under MC-108. es Stal 939. ** amended {42 kilograms) that a large number of U.S.C. Z138}. diversions are needed to accumulate 5 For the purpolHII of IIM!. 223. 88 Slat. 988. u formula kilograms; lllD8Dded (42 U.S.C. a273): H 70.3. 70.19(c). rials'" 70.21(c). 70.22(a). (b), (d)-{k), 70.Z4(a) and [b), (dd) "Category m mate means 70.32(a)(3), (5). (8), (d), and (I), 70.38, 70.39(b) all SSNM material other than Category and (c), 70.71.(a). 7M2(a), and (cJ, 70.58, IA. 70.57(b]. (c}. and (d), ro.S8{a}-(g)(3), and (h)-{J) (ee) "Unit process" meana,,an are iseued under sec. 161b. 68 Stal 948, 81 '

• identifiable 1egment or 11egments of IIJD8Dded (42 U.S,C. 2201(b)): II 70.7, processing activities for which the 70..20a(a), and (d). 70.20b. (c). and (e), 70.21(c),

amounts of primary input and output 70.H{b), 70.32(a)(6}. (c), {d), (e). and (g),,0."38, SSNM Bows are based on '10.lt( c Hg), 10.56; 70.57(b) and ( d), 70.58( a J-(8)(3} and (h)-0) a.re I11ued nnder sec. 1811, 88 , Stat. 9flJ. u amended (42 U.S.C. 2201(1)): and II 70.20b{d) and (e). 70.St(b) and (1), 70.5Z. 70.53, 70.M. 10.ss: 70.58(g){4), (k.J, and (I), ' 70.59. and 70.00(b) and (c) are luued under Sec. 1610, 88 Stal 950. u amended (42 U.S.C. 2201(0))

2. In I 70.4, paragraphs [w) through

{oo) are added to read 88 follows: I 70.4 Definition&. (w) "MC&A Alarm" m~ a situation in whicl:\ there la: (1) An out-of-location or compromised Item; (2) an indication of a fiow of SSNM where there should be none; or (3) a difference beween a measured or observed amount or property of material and its corresponding predicted or property value that exceed a threshold ~tabliahed to provide the detection performance required by I 70.83. (x) "Power of detection" means the probability that the critical value or threshold of a statistical test will be exceeded when there I.a an actual los11 of material. (y) "Abrupt" means the time interval betweensequentlalperformancesofa material control test that covers the material in question or a 4-hour intarval. whichever ia longer. . (z) Recurring" means a time interval greater than abrupt. (aa) "Strategic Special Nuclear Material" (SSNM) has the same meaning aa in I 73.2(aa}. (bb) Formula Kilogram" mea.na SSNM in any combination in a quantity of 1,000 grams computed by the formula, grams= {grams contained U-235) + 2.5 (grams U-233+grams plutonium). (cc) "Category IA material" meana SSNM directly useable in the manufacture of a nuclear explosive device, except if: measurements. (ff) "Administratively controlled - areas" means portions of the plant arrived at by subdividing the plant into groups of unit processes. (gg) 'lAcceaslble location"'means a process location at which SSNM could _ be acquired without the need for visible puncturing, breaking. or otherwise violating the integrity of the process equipment containing the SSNM. (hh).. Controlled access area" has the same meaning aa in 173..Z(z). (ii) "'Material access area (MAA)" has the same meaning as in 1 73.2U), (jj) "Vault" baa the same meaning as in I 73.2(n). (kk) "Inventory Difference" (ID) means the sum of the ending inventory and removals from inventory BUbtracted from th!! sum of the beginning inventory and additions to Inventory. [ll) "Estimator" means a mathematical expreaslon that is used as the tool to estimate an unknown true value. (mm] Eltimate" meana a specific numerical value arrived at by application of an estimator. (nn) "Active inventory" means the sum of additions to Inventory, beginning inventory, ending inventory, and removals from inventory, after all common terms have been excluded. Common terms are any material values that appear to the active inventory calculation more than once and come from the same measurement. (oo) "Continuous proce88. means a unit process in which fei:!d material must be continually entered into the process in order to maintain the equilibrium conditions required by the procen.

3. In I 10.22, paragraph (b) la revised to read as follows:

f 70.22 Contents of appBcatlon.

Federal Register / Vol. 49, No. 23 / Thursday, February 2. 1984 / Proposed Rules 4095 (b) Each application for a license to possess at any one time and location special nuclear m.aterfal in a quantity exceeding one effective kilogram of special nuclear material and to use such specfal nuclear material excapt thoae uses involved In the operation oI a ' nuclear reactor licensed pursuant to Part 50 of this chapter or those Involved in a waste disposal operation. or as sealed sources, shall contain a full description of the applicant's program for control of and accounting for special nuclear material which will be in th'e applicant's possession under license, to-show how compliance with the-requirements of § 70.56 or § 70.81, as applicable, will be accomJllished.

4. In § 70.32, the introductory text of paragraph (c) is revised to read as follows:

§ 70.32 CondlUonl ot llcenAL (c) Each license authorizing the pos88$Sion at any one time and location of special nuclear material in a quantity exceeding one effective kilogram of special nuclear material and the use of such special nuclear material except those uses involved in the operations of a nuclear reactor licensed pursuant to Part 50 of this chapter and those involved In a waste disposal operation and In sealed sources, shall contain and be subject tq a condition requiring the licensee to maintain and follow (1) the program for control and accounting for special nuclear material and fundamental material controls described . pursuant to § § 70.22(.b}, 70.56{1), or 70.81(c), as appropriate, (2) the II!easurement control program for special nuclear materials control and accounting described pursuant to. § 70.57. if appropriate, and (3) such other material control procedures as the Commission determines to be essential for the safeguarding of special nuclear material and providing that the licensee shall make no change which would decrease the effectiveness of the material control and accounting program prepared pursuant to U 70.22(b), 70.58(1}, 70.51(g) or 70.81(c), as appropriate, and the measurement control program prepared pursuant to § 70.57, if appropriate, without the prior approval of the Commission; A licensee desiring to make such changes shall submit an application for amendment to Its license plll'l!luant to § 70.34. The licensee shall maintain records of changes to the material control and accounting program made without prior Commission approval for a period of three years from the date of the change. and shall fumlsh to the Director of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Com.mission. Washington. D.C. 20555, with a copy to the appropriate NRC Regional Office shown in Appendix A of Part 73 of this chapter, a report containing a dncription of each chaQge within:

5. In I 70.51, paragraph (d) and the introductory text of paragraph (e) are revised to read as follows:

§ 70.51 Material balance, lnwntory, and ~ requirements. (d) Except as required by paragraph* ( e) of this section or by § 70-89{ e}. each licensee who is authorized to possess at any one time and l.ooa.tion special nuclear material 1n a quantity totaling more than 350 grams of contained uraninm-235, uranlum-233. or plutonium. or any combination thereof. shall conduct a physical inventory of all special nuclear material In it11 possession under license at Intervals not to exceed twelve months. (e) Kach licensee who is authorized to possess at any one time special nuclear material In a quantity exceeding one effective kilogram of special nuclear material, but less than five formula kilograms, and to use such special *

• nuclear material for activities other than those involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those involved In a waste disposal operation; or as sealed sources; or as reactor irradiated fuels Involved in research, development, or evaluation programs In facilities other than Irradiated fuel reproceHing plants.

shall:

6. In I 70.57, the introductory text of paragraph (b) fs revised to read as follows:

§ 70.57 Meuurement contra, program fof' l!lf)4tCtlll l'IUdeer' fflllterial control Ind accounting.. (b} In accordance with I 70.58(f), each licensee who la anthomed to possel!l8 at any one time and location special nuclear material in a quantity exceeding one effective kilogram of special nuclear material, but le111 than five formula kilograms, and to use such special nuclear material for activitiea otker than those involved in the o~ration of a nuclear reactOf' licen~d pursuant to Part 50 of this chapter. those lsivolved in a waste disposal operation, or as sealed sources, shall establish and maintain a measurement controL program for special m1clear material control and accounting measurements. Each program function shall be identified and assigned in the licensee organization in accordance with§ 70.58(b)(2) and functjonaI and organizational relatfonships shall be set forth In writing In accordance with I 70.58{b)(3}. The program shall be described in a manual . which shall contain the procedures, ins.tructlons, and forms prepared to meet* the requirements of this paragraph, Including procedurea for the preparation, review. approval, and prompt diaseminatlon of any program modification of changes. The licensee's program shall include the-following:

7. In I 70.58. paragraph (al is revised lo read as follows:

§ 70.A Fundwnentllf nuotNr mater1al con1rol&.l (a) Each licensee who is authorlzsd to posslJss at any one time and location special nuclear material In a quantity exceeding one effective kilogram of special nuclear material, but leu than five formula kilogramJ!I, and to use such special nuclear material except those uses involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those involved In a waste disposal operation. or as sealed sources, shall establish, maintain, and follow written material Control and accounting procedures in compliance with the fundamental nuclear material co~trols requirements specified in . paragraphs. (b) through (k) of this section and such other controls as the Commission determines lo be essential for the control of and accounting for special nuclear material.

8. Sections 70.81, 70.83, 70.85, 70 87.

and 70.89 are added to read as follows: S 70.11 Nucflltr' material control aid accounUng for strategic spedaa nuclear material: general~ requlnlmentL (a) General performance objectives. Each licensee who is authorized to possess five or more formula kilograms of strategic special nuclear material (SSNM) and to use such material at any site, other than a nuclear reactor, licensed pursuant to Part 50 of this chapter, or in o~ratlons involved in waste disposal shall establish, implement, and maintain a Commisaion approved material control and accounting (MC&A) system that will achieve the following objectives: (1) Timely detection of the possible loss of five or more formula kilograms of strategic special nuclear material; (2) Rapid determination of ?"'hether an actual loss of five or more formula kilograms occUIT8d; and

4096 Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Pro-posed Rules (3) Generation of Information to aid in the recovery of lost material in the event of an actual loss. (b) System capabilities. To achieve the general performance objectives specified in§ 70.81(aJ, the MC&A system must provide the capabilities described in § § 70.83, 70.85, 70.87, end 70.89, end must Incorporate checks and balances that are sufficient to detect falsification of date and reports that could cotrceal diversion by: (1) An individual, including an employee (in any position); or (2) Collusion between an individual who has responsibility or control within both the physical protection and the

• MC&A systems and another individual with MC&A responsibilities.

(c) Implementation dates. Each licensee subject to the requirements of paragraph (a) of this section: (1) No later than 150 days after the effective date of these amendments.

• shall submit a fundamental nuclear material control plan describing how the licensee will comply with the requirements of paragraph (b).of this section; and (2) Within 380 days of the effective date of these amendments or 90 days after the plan submitted pursuant to paragraph (c)(l) of this section is approved, whichever is later, shall implement the approved plan.

(3) Notwithstanding paragraphs (c)(l) and (c)(2) of this section, a licensee may delay for an additional 18 months implementation of portions of its plans and p~dures involving shutdown of a process for resolution of an MC&A alarm. However. during this delay a licensee shall conduct physical inventories at the intervals specified in § 70.51(e)(3). (4) Notwithstanding § 70.B9(e)(1), shall conduct physical inventories at the intervals specified in§ 70.51(e)(3) until after the licensee has satisfactorily qemonstrated, for a period of 6 months, adequate performance of all commitments in its plan and has received Commission approval. § 70.83 In-process monitoring. (a) Licensees subject to § 70.81 shall monitor internal transfers, storage, and processing of SSNM. This in-process monitoring must achieve the detection capabilities described in paragraphs (b) and (c) of this section for all SSNM except: (1) SSNM that qualifies to come.under the item loss detection requirements of § 70.85; (2) Scrap or waste in the form of small pieces, cuttings, chips. "Solutions or in other forms that result from a manufacturing process, contained In 30 gallon or larger containers, with an SSNM content of less than 0.25 grams per II ter; and (3) SSNM which is not readily separable from other radioactive material and which has a total external radiation dose rate in excess of 100 rem per hour at a distance of three feet from ~ny accessible surface without i';itervening shielding. (b) Unit Process Detection Capability. (1) The licensee shall detect any abrupt loss of SSNM from any unit process . using any statistical test that has 99 percent pow&r of detecting the loss of five formula kilograms. The detection shall occur within: (I) Three working days of a loss of Category IA material from any accessible location; and (II) Seven calendar days of a loss of Category m material from any accessible location. (2) For each unit process, at least every seven calendar days the licensee shall evaluate measurement data accumulated since the last cleanout of the unit proceB-S. This evaluation must be able to detect a recurring loss with 90 percent power of detection. The amount to be detected for each unit process must be as low as reasonably achievable, but need not be less than 50 grams of SSNM. (c) Area Detection Capability. The licensee shall: (1) Detect any abrupt loss of SSNM accumulated from the unit processes within the plant or within any administratively controlled area, using a statistical rpethod that has 90 percent power of detecting the loss of five formula kilograms; (2) If detection within administratively controlled areas is elected. provide administrative or physical measures to protect against diversion of five formula kilograms from being accumulated from two oi:: more administratively controlled areas; (3) If the statistical method used for paragraph (c)(l) of this section involves a test in addition to the tests required by paragraph (b) of this section, perform that test at leasl every seven calendar days; and, (4) For the entire plant or for each administratively controlled area, at least every seven calendar days evaluate measurement data accumulated over the most recent 60 days of operation. This evaluation must be able to detect a recurring loss with 90 percent power of detection. The amount to be detected must be as a low as reasonably achie-vable, but need not be less than 50 grams of SSNM. § 70.85 Item monitoring; (a) Licensees subject to § 70.81 shall provide the detection capability described in paragraph (bl of this section for any uniquely identified items of SSNM that have been quantitatively measured and the validity of that measurement independently confirmed, and that additionally have been either:_ - (1) Tamper-safed or placed In a vault that provides protection at least equivalent to tamper-safing; or (2) Constructed such that removal of SSNM would be readily and permanently apparent (e.g., encapsulated). (b) The licensee shall verify the presence a[!d integrity of selected SSNM items. The item selection method must be statistically sound and have at least a 99 percent power of detecting the loss of items that total five formula kilograms plant-wide within: (1) For items in a vault or in a permanently controlled access area isolated from the rest of the material access area (MAA), one month from loss of Category IA Items and two months from loss for Category IB items; (2) For items elsewhere in the MAA, - three working days from loss for Category IA items and seven calendar days from loss for Category m Items. § 70.87 Alarm resolution.. (a) Licensees subject to § 70.81 shall provide the MC&A alarm resolution capabilities described in paragraph's (b) through (g) of this section. (b) The licensees shall promptly resolve the nature and cause of any MC&A alarm. (c) Each licensee shall notify immediately, by telephone, the appropriate NRC Regional Office listed in Appendix A of Part 73 of this chapter of any MC&A alarm that remains unresolved beyond the time period specified for Its resolution in the licensee's fundamental nuclear material control plan. The licensee may consider an alarm to be resolved if, based on additional information: (1) Clerical or computational error is found that clearly was the cause of the alarm; or_ (2) There Is relevant evidence that substantiates the cause of the alarm or that substantiates that no loss has occurred. (d) If a loss has occUJTed, the licensee shall determine the amount of SSNM losl (e) The licensee shall take corrective action to: (1) Return out-of-place SSNM, If possible, to an appropriate place;

Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules 4097 (2) Update and correct appropriate records; and (3) Modify the MC&A system, if appropriate, to prevent similar occurrences in the future. (f) The licensee shall provide an

• ability to respond rapidly to alleged thefts.

(g) In the event that an abrupt loss detection estimate exceeds five formula kilograms of SSNM: (1) Material processing operations related to the alarm must be suspended until completion of planned alarm resolution activities, unless the suspension of operations will negatively affect the ability to resolve the alarm. ' However, operations of continuous processes may continue for a 24-hour period during whic;h checks are made for mistakes. (2) The licensee shall notify within 24 hours, by telephone, the appropriate

• NRC Regional Office that an MC&A alarm resolution procedure has been initiated S 70.89 Qualtty aaurance and accounting f9qUlrernenta.

(a) Licensees subject to § 70.81 shall provide the quality auurance and accounting capabilities described in paragraphs (b) through (g) of this section. (b) Management Structure. The licensee shall establish and maintain a management structure that includes

• clear overall responsibility for MC&A functions, independence from production responsibilities, and adequate review and use of those MC&A procedures identified in the approved plan as being critical to the effectiveness of the described system.

(c) Personnel Qualification and Training. The licensee shall assure that key personneL who work. in positions involving tasks where mistakes could directly degrade the safeguards capabilities of the MC&A system, are trained to maintain a high level of safeguards awareness and are qualified to perform their jobs. (d) Quality Control. The licensee shall: (1) Assure that the quality of SSNM measurment systems and material processing is continually controlled to a level of effectiveness sufficient to-satisfy the capabilities required for detection, response, and accounting. (2) Incorporate checks and balances in the MC&A system sufficient to control the rate of human errors in material control and accounting information to as low as reasonably achievable. (3) Assure that SSNM measurements used in satisfying § 70.89(&) are so controlled that: (i) The total contribution of measurement systems' Uhcertaintiee to the standard deviation of the inventory difference estimator is Iese than 0.1 percent of active inventory for SSNM processing facilities or 0.2 percent of active inventory for reprocessing facilities; (ii) Bias corrections for measurement systems are applied if their bias estimates exceed the larger of twice the standard deviations of their estimators or 50 grams of SSNM; - (iii) The impacts of any uncorrected biases are* accounted for in the inventory differences; and (iv) H. for like material, shipper-receiver differences accumulated over an inventory period exceed the larger of one formula kilogram or 0.1 percent of the total amount shipped, then the licensee shall investigate and take corrective action, as appropriate, to identify and reduce measurement biases. (e) Accounting. The licensee shall: (1) Except as required by Part 75 of this chapter, perform a physical inventory at least every six months and, within 60 days of the start of the inventory, reconcile and adjust the book inventory to the phfeical inventory. (2) Resolve, or report an inability to resolve, any inventory difference estimate greater than 200 grams of plutonium or U-233 or 300 grams of U-235, that exceeds: (i) Twice the standard deviation of the inventory difference estimator: or, (ii) One-half percent of the active inventory. (3) Resolve on an individual container or lot basis, as appropriate, and when required by Part 75 of this chapter on a batch basis, any shipper-receiver difference that exceeds both: (i) Twice the standard deviation of the difference; and (ii) The larger of 0.5 percent of the amount of SSNM in the container or lot, as appropriate, or SO grams of SSNM. (4) In addition to any measurements and/or recovery of scrap used in meeting detection and response reguiremen ts: (i) Assure that recovered scrap is segregated from the scrap of other licensees or contractors and that any scrap measured with a standard deviation greater than 5% of the measured amount is recovered so that the results are segregated by inventory period and received within six months of the end of the inventory period In which the scrap was generated; or (ii) Demonstrate that the total scrap measurement uncertainty will not cause noncompliance, with § 70.89(d)(3). (5) Keep accounts of all additions to and removals from pro.cese based on. , measurements for plutonium element and for uranium element and isotopes. (f) Independent Assessment The licensee shall: (1) At least every 12 months, independently assess the past performance of the MC&A system and review its effectiveness; and (2) Document management's action on prior assessment recommendations. (g) Recordkeeping. The licensee shall establish auditable records sufficient to demonstrate that the requirements of H 70.83, 70.85, 70.87, and 70.89 have been met and maintain those records for at least three years unless a longer retention time is required by Part 75 of this chapter. - Dated at Washington, DC, this 27th day of January 1984. For the Nuclear Regulatory Commission. Samuel J. Chllk, Secretary of the C0111111isaion. [FR Doc. IK-2179 Filed 1-l-M: lt45 am) D.LJNQ coca 7ACl-41-M DEPARTMENT OF TRANSPORTATION Federal Aviation AdmlnlstratJon 14 CFR Part 39 [Docket No.13-NM-116-ADJ Alrworthlnas Directives; Boeing Model 747 Serles Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTIOH: Notice of proposed rulemaking (NPRM).

SUMMARY

Thie notice proposes a new airworthiness directive (AD) which would require structural inspections-and repairs or replacements, as necessary on certain high time Boeing Model 747 series airplanes to assure continued airworthiness. Some Boeing Model 747 series airplanes are approaching and exceeding the manufacturer's original objective fatigue design life. These older airplanes are the ones most lilcely to develop cracks in the structure, if fatigue cracking does occur. The manufacturer has completed a structural reevaluation to identify significant structural components that, if cracking does develop and is permitted to grow undetected, may result in an inability to carry the required loads specified in FAR 25.571. This AD defines structural maintenance requirements for the identified components necessary to preclude this potentially catastrophic condition.

UOt:;KET NUMBER p R' rl() 0 ROPOSEfl RU!.f / 1 UNITED STATES C,t/9 /=£. 4h 9-/-- NUCLEAR REGULATOR Y COMMISSION DOCKET O WASHI NGTON, D. C. 20555 USNRC February ~, R:'E821'2 p 4 :21 Leon Silverstrom Assistant General Counsel U.S. Department of Energy 6B 256 1000 Independence Ave., SW , Forrestal Building Washington, DC 20585

Dear Mr. Silverstrom:

r FF C:

• • ::.,.. lt. -

OOC~E. ING & SEtN L 8RANC~! The purpose of this letter is to advise you of the Nuclear Regulatory Commission's publication for public comment of a proposed rule which is intended to significantly strengthen material control and accounting requirements at certain fuel cycle facilities. The proposed rule, which evolved from the Advance Notice of Proposed Rulernaking on this subject published on September 10, 1981, will apply to all fuel cycle facilities authorized to possess and use formula quantities of strategic special nuclear material, including reprocessing plants but not nuclear reactors or waste disposal operations. The current licensees to which the rule would apply include United Nuciear Corporation, Nuclear Fuel Services, Babcock and Wilcox and GA Technologies. Taking into account the steps required in the rulemaking process, the projected time for publication of a final rule is early 1986. Because of this time schedule, the implemen-tation at NFS-Erwin Tennessee will not occur before the end date established by the joint motion agreement of April 6, 1982. We would appreciate your views on whether this action is compatible with the agreement. Please direct your comments to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Docketing and Service Branch. cc Cw/encl.): Sincerely, ~V;;:JJ1;)l. Martin G. Malsch Deputy General Counsel Dr. Thomas Cochran, NRDC C.W. Emeigh, NMSS, USNRC Robert Burnett, NMSS, USNRC Walter Engel, Naval Reactors, DOE

Federal Register / Vol. 49, No. 23 /. Thursday, February 2, 1984 / Proposed Rules .4091 obligation has been imposed or is sought Secretary consider, setting forth clearly to be imposed under an order;. and concisely the nature of the (i) The term "proceeding" means a petitioner's bUBiness and the manner 1n proceeding before the Secretary arising whic!J petitioner claims to be affected under Section 118(a) of the Act; by the terms or provisions of the order

• U) The term "hearing" means that part or the interpretation or application of the_ proceeding which Involves the thereof, which are complained qf; submission of ~ytden~.e; (4) A statement 9f the grounds on Ck) The term party includes the which the terms or R_rovisions of the De_p)artmTh ent t; "h cl.

1... th

• order or the interpretation or application

(!: e enn eanng er-. means e

• th f

hi'ch I

• d f hearing clerk, U.S. Department of
• ereo,_w are comp ame o, are Agriculture, Washington, D.C.;

challenged as not inaccordanc~ with (m) The term presiding officer*:., law; and ineane the administrative law judge (5) ~ques~ for the specific N:_lief conducting a proceeding under the Act; . which the petitioner desires the (n) The term "presiding officer's Secretary to grant. -1 report means the presiding officer's (c) An <;rPPlication to dismiss report to* the Secretary and includes the. petltion-J.Fihng,.contents, and responses presiding officer's proposed (1) findings thereto. II the Administrator ls of the of fact and conchµ!ions with respecMo opinion that the petition, or any portion all material issues of fact. law of thereof, does not substantiall:si comply, discretion, as well as the reasons or in form or content. with the Act or with basis therefor, (2) order, and (3) rulings the requlren,.ents of p1Ir8graph (b) of this on findings,-conclusions and orders-. section, the Administrator may, within submitte_d by the parties: 30 days after the filing of the petition, . (oj The term "petition" includes 8.11 file with the hearing clerk an application amended petition. to dismiss the petition, or any portion* f 1150.252 1pst1tut1on of proceeding. thereo~, on one ?r more of the ~unds. ( ). F':l:nn d An stated m this paragraph. Such a i,.,_,'l!, an serv_1ct1 o1 petlti_ons. )' application shall specify the grounds of person subject to an order desiring to _ _ objection to the petition and if based. in compli:un thaLany order or any whole or in part. on allegations *of fact p~vis~on of any Bil~ order or any ' not appearing on the face of.the petition, . o liga on imposed m.conneciton shall be accompanied by appropriate therewith ia,not in acc~rdance with law, affidavits or documentary evidence shall file,with the1Iea.n,ng clerk, five b *--ti

• ch all ti ff t.

-copies of a petition fn writing addressed su s........ at:il:B su ega 008 0 ac, to the Secretary, rQquesting a, The-applical:!on may*be accompanied by modification of such order or to-be a memorandum oflaw. U~on. receipt of exempted from such order. ~ptly such application, the heanng clerk shall upon receipt of the petition, the Hearing cause ~ copy thereof to b? served upon Cleric shall transmit a true copy thereof the petitioner, together with a no~ce to the Administrator and the stating !hat all papers to b~ su~tn1tted in .Department's General Counael, opposition of such application, including re~ectively. any memorandum of law, must be filed [b) Contents of petitions. A petition _ by the petitioner with the hearing cl~rk aha.I) contain: not later than 20 days after the service.

• (1) The corroot name address, and of such notice upon the petitioner. Upon principal place of bUB~ess of the
• th~ exp~tion of the time_ specified in petitioner. If the petitioner ts a such notice, or upon receipt of such corporation, such fact-shall be stated.*
• papers from thlfpetitioner, the hearing together with the name of the State of
• clerk shall transmit all papers which incorporation, the date of incorporation, have been filed in connection with the and the names addresses and application to the Secretary for his respective positions' held by its officers -

consideration. and directors: if an uriincorporated *, {d) Further proceedings. Further association, the names and addresses of proceedings on petitions to modify or to Its officers, and the respective positions be exempted from any order shall be held by them: if a partnership, the name governed by U 900.52[c)(2) through and address of each partner; 900.71 of this title (Rules of Practice, . (2) Reference to the specific terms or ' Governing Proceedings on Petitions To provisions of the order, or the Modify or To Be Exempted From interpretation or application thereof, Marketing Orders] and as may hereafter which are complained of; be amended, and the same are (3) A full statement of the facts incorporated herein and made a parl (avoiding a mere repetition of detailed hereof by reference. However each evidence) upon which the petition is reference to "marketing order" in the based, and which it is desired that the title shall mean "order." Signed at Washington. D.C~ on: January 27, 1984. WID1am T. Manley, _ Deputy Administrator, Marketing Program Operotlona. (PR Doc M-27!17 Ftled 2-1-34. H6 IUXI] 811.UNQ CODI! 141CI-OI-II NUCLEAR REGULATORY COMMISSION 10 CFR Part 70 Material Control and Accounting Requirements; FacllHles Possesalng Formula Quantities of Strategic. Special Nuclear Materlal ACHNCY: Nuclear Regulatory Comm!ssion. ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission is proposing to amend the Material Control and Accounting*

(MC&A} regulations that apply to facilities authorized to possess and use formula quantities of strategic spe'cial nucle~ material (SSNM). These amendments would apply to fuel cycle facilltiea, including reprocessing plants, but not to waste disposal operations or nuclear reactors. These amendments will significantly strengthen MC&A capabilities at the affected facilities by reqwri.ng more timely detection of possible SSNM losses and by providing for more rapid and conqhµlive resolution of discrepancies. The operational cost* impact for these proposed requirements should be approximately the saJDe as for current MC&A requirements. This is because the amendments relax or elimlnate current requirements that are not cost-effective and take advantage of existing process control. production control, and quality control information. DAffS: Comments mu.st be received on or before June 5, 1984. Comments received after June 5, 1984 will be co~idered if it is practicaj to do so, but assurance of consideration cannot b1;1 given ~xceptas to comments received on or before that date. ADDRl!SSU: The Commission has prepared a draft Standard Form.at/ Acceptance Criteria document as preliminary guidance to lielp explain the proposed rule, and a draft summary Regulatory Analysis which examines the incremental costs ani:l benefits of the proposed rule. These two documents are available for examination and copying

• for a fee at the NRC Public Document Room at 1717 H Street NW.,

Washington. DC. Written comments or suggestions on the proposed rule, the

4092 Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Pr~posed Rules Standard Format/ ~eptance Criteria monitoring information for safeguards rather than on throughput of SSNM at a document, or the Regulatory Analysis

• purposes and deemphasized the facility;

_should be sent to the Secretary of the importance and frequency of physical . 4. Basing criteria for interruption of *

• Commission, U.S. Nuclear Regulatory.

inventoria~. processlng activities on an assessment Commission, Washington., DC 20555, Proposed Action of whether such interruption would Attention: Docketing and Service The proposed rule contains much of facilitate the rapid resolution of a Branch. Comments may also be hand-localized alarm involving a significant delivered to Room 1121, 171rH Street* ll:ie substance of Options 3 and 4 of the quantity of SSNM rather than on the NW., Washingtpn, DC. between 8:15 *

• ANPRM, but it has been totally inability to resolve an imbalance a.m. and 5:15 p.m. Comments received rewritten to remove unne!'.=essarily resulting from the taklng of a periodic will be available for examination and pres.criptive requirements, to reduce the inventory; copying for a fee al the NRC Public number of plans and programs required,

5. Specifically requiring that the Document Room at tn.7 H.Street NW.,.

and to improve its clarity. Capabilities MCµ system design include protection Washington. DC. have been included to protect against against,an insider threat;

• FOR FURTHER INFORMATION CONTACT:

insider adversaries. The proposed rule

6. Using tl:ie total variance of ID for ID Mr. C. W. Emeigh. Fuel Facility -

allows licensees to select the most cost-Safeguards Licensing Branch, Division effective ways nf achieving the desired,- analysis, not just the measurement of Safeguards, Office of Nuclear*_ * - performance. It also gives more credit errors; and Material Safety and Saieguards, U.S. for secure containment of SSNM and

7. Phased reduction in tha frequency Nuclear Regulatory Commission, re~ognlzes differences between of ID determinations, from bimonthly to Washington, DC 20555, telephone 301-processing SSNM in bulk form and as long a11 semiannually. during phased machining encapsulated SSNM implementation of the revised MC&A 427-4040.

The proposed amendments would system. SUPPU91ENTARY INFORMATION: apply to all fuel cycle facilities Relative to the rule provisions cited

Background

authorized to possess and use formula above, the Commission is especially The focus of current domestic MC&A quantities of strategic special nuclear soliciting public comment on the regalations for high enriched uranium material. including reprocessing plants following points: but not waste disposal operations or

1. With respect to loss detection and plutonium is on bimonthly nuclear reactors. For facilities inventories, Comparison of the authorized to possess and use less than levels, should they be plant specific and

, inventory difference (ID) with percent of a formula quantity ofSSNM and for to what extent would area loss detection throughput -does not occur until nearly

• nuclear reactors and operations levels greater than five formula 30.days after the beginning of the involved -in waste disposal of sealed kilograms'f,acllitate area detection physical inventory. Thus, a tliorough sources,-the proposed amendments within material access areas (MA.As) investigation of an anomaly might not,

would retain. for the time being. the rather than within subdivisions of start until nearly 00 days after its cause existing MC&.A requirements in 10 CFR -MAAs? occurred. The usefulness of these Part 70. A proposed rule to reform the

2. On the subfect of physical bimonthly inve11tories in providing the MC&A requirements for low enriched inventories, should the current practice public wi!}i assurance ~at significant uranium (LEU) facilities was previously of automatic plant shntdown when an quanlities of SSNM have not been published (47 FR 55951). It is envisioned inventory difference (ID) exceeds a diverted has been limited by difficulty in that domestic M~ requirements for specified threshold be continued and, if concl"\15ively reso~ving large inventory all facilitie~ eventually will be ravised so, what should the threshold be?

differenC01!, necessitating reliance and codified under a new Part 74, much-

3. To what extent would the combined instead on plant security and material_

as Part 73. contains all physical security effectiveness of (1) the in-process control records and intelligence requirements. ~e Commission solicits monitoring requirements in § 70.83~ in information for the desired assurance. comments on this a{ /kroach. particular the 60-day area detection On August 20, 1981, the Commission The provisions o e rule and its capability in § 70.83(c)(4); and (2] the approved the pulilfcatlon of an Advance, associated guidance involve several item monitoring requirements of § 70.85; Notice of Proposed Rulemaldng significant departures from current suffice as a near real-time physical (ANPRM) to solicit public comment on, regulations, including: inventory? To facilitate a Commission how to revise the MC&.A regulations for

1. Providing more timely SSNM loss determination as to whether both the SSNM capable of being made into alarms through use of production and near real-time physical inventory fission'explbsives. The ANPRM w,as quality control data instead of less capabilities of §§ 70.73 and 70.85 and

' published in the Federal Register on timely comparisons of pJant-wide ID and the semiannual inventory capabilities of September 10, 1981 (46 FR 45144), and its limit of error; § 70.89(e)(1) are required, the included goals of the rulemaking and 2! Increasing ttie ability to confidently Commission also solicits comments. on options for achieving the goa!B. The res,olve MC&A alarms by: (1) the extent to which the* semiannual primary goals included (a) timely and

a. Decreasing the area and material physical inventory is a repetition of the localized detection of a possible loss, (b) quantity subject to an alarm.

near real-time inventory; (2) the extent / rapid determination of whether an

b. Decreasing the number of persons to which the semiannual physical actual loss occurred, and (c) availability who potentially could provide inventory provides an overcheck on the of inf5>rmation to aid in-the recovery of information about the cause of an alarm.

near real-time physical inventory, with lost material in the event ~ an actual and significantly different characteristics loss.

c. Decreasing the length of time which provide enhanced safeguards Two of the options for achieving these-between a loss (or mistake) and its cJ:1pabilitles; and (3) what additional goals retained the current emphasis on detection and resolution; requirements, if any, should be placed periodic physical inventories. The other

3. Basing detection criteria on on near real-time physical inventories if three options introduced requirements quantities less than those necessary to semiannual physical inventories are not for more timely use of process construct a clandestine fission explosive to be required.

Federal Register / Vol 49, *No. 23' / Thurs-day, February 2. 1984 / Proposed Rules-4093 Response to Publlc-Comments leaks; fewer transcription or-arithmetic errors; and reduction of ilie-span of a , In response to the ANPRM. 14 material control test.

• comments were received. Seven were

4. Phase-In Period Some commenters*

from industry, five from private have raised the point that the process individuals and a public Interest group, monitoring concept is new and to some and two from the Department of Energy. extent untried. and that it should be Key Issues were: demonstreted.before being imposed

1. Retention of the Status Quo. 0( the throagh regulations. Despittt the fact that 14 comments received. efx were m favor-process monitoring is to some extent

. of mainfaining the status quo. How.ever, already being demonstrated in DOE and - none of the conmienters showed* how iB wme NRC-licensed faci:lities, the this would meet the stated goals of the, Commission agrees that some of the rulemaldng. Because of poor loss specific performance requirements have localization. 1'830lution of large-IDs is not been tried in all situations. The too.often inconclusive. Without yomm.ission also agrees_ that experience adequate resolution, the ID ~ot be 'With some of t.tiese reqwrements will - used to determine whether or not a true

• enhance tbtt overall likelihood.of a.

loss occurred. smooth and successfw Implementation

2. Productimi.stoppage Under Process _ of the new requirements.. For these'

• Monitoring Options. Concerns were reasons the proposed ruie incorporates expressed that a.Jtlgh rate of false ~

an extended phase-in period. alarms leading. to costly production

5. Backfitting. Option-~ of the ANPRM stoppages would result from the process *

• would have limited the application of A

monitoring_o~published with the

• MC&A reforms to new facilities and W ANPRM The proposed rule has been.

major modifl.catloos to. exiating facilities.

• modified to.mitigate that concem by:--

Five commenters specifically opposed a.. Specifying thatoperafioos can be this *option. while three recommended its resumed upOft-C()mple~?n of planned:. adoption. _Studies, performed for-the ~C alarm resolution actiVltie& Instead of conclude that implementation of the requiring Commission authorization; proposed rule at existing licensed

b. Excluding from shutdown those facilities is feasible and thaf the cost operations for whicn shutdown would impact of impmmentation could be not co~trlbute P?sitively f?.alarm.

offset by cost aavinge inope:ration.. resolutio11_t;.such as o~ona where Given this information,. the ~ss10n shutdown and restart ~ottld gene~te sees :no-valid reason why the-rule should large ~titles of pootly characterizaj

• nQt be applied uniformfy to both existing scrap:

and new fuel mannfactwing and

c. Providing a 24-hour time del~y in reprocessing facilfties.

which to correct mistaiilll before --

6. CollUBion Protection. Comment was shutdoWB of contfnuoua processes: and divided between those. favoring the

d. Modifying the recumng loss.

option In which MC&A data would be

• detection requiremsnt and exempting if required to be protected against' from the shutdown p~ion.

falsification by a conspiracy threat and-

3. Measurement State of the Art: Some the option in which the threat was A

commenters felt that the process. limited to a single. Insider. The _ ~ monitoring options would-require requirements of the: proposed rule reflect nondestructive assay{NVA} techniques a compromise position which has been ~ that are beyond*the current state of the designed to function in an integrated art. This.contention fails to recognize . fashion with Physical Protection B!ld that most of the lou detection:reqtrl;red which should result In improved cost by the proposed rule-can be ' effectiveness compaxed to Options 3 and. accomplished by weight anchoiume _ 4 of the ANPRM. Proteci:ion of MC&A measurements. Further, independent data is only required against experts have reported that supplemental falsiflca tion by a single Insider, assays-which may be re-quired can b.e

• providing that the insider does not have completed without the use of NUA,

authority within the ~.sical Protection equipment In less than 24 holll'8, well .11ystem. If an MC&A individual does within the minimum detection tfme of have duar authority within both three days. In some cases off-the-shelf systems, then the MC&A dat,a Is, NDA equipment would be sufficient to required to be protected agamst meet some *or these supplementm data collusion of.tlratinclividual with any needs. In any event. the-proposed rule other individual with MC&A provides 8Ufficient licensee flexibility to responBibilttres. This approach assures achieve required performance, without that the MC&A system provides improving measurement systems, additional capability for deterring and through better and more careful material detecting collusion. over-and above that handling practices~ reduction in the provided by 1~ CFR Part 73.. without frequency of process upsets, spills, and doubling the-size of the design basis threat for the integrated safeguards system.

7. Reprocessing. As currently written, the proposed rule would a~ply to fuel reprocessing facilft!es. Although the scope of the ANPRM excluded such facilities, comments were invited on the possible applicability of the proposed rulemaldng to these plant& The two Industry commenters-who respon~ed to this invitation were favorably fnclmed toward the general approach of the*

procasa monitoring 9ptio.ns. No oth& _ comments were received on thia topic.. Since the ANPRM. several significant* changes have-been mada in the

• proposed rule. In view of this fact,. the Commission ls again soliciting com.men ta on whether or not this rule-should apply to reprocessing plants.

International Considerations It should be noted th13t tlie goals,~~ stated prevfonsl.y are domestic go_als \ and *are considered to be appropnate-for a subnational level threat Poral!U.S: licensees. the detection and response capabilities of the proposed rule have. been determined to be sufficient to adequately protect the public health and safety for a subnational threat On the other hand, the International Atomic Energy*Agency (IAEA], whfch ls responsible for applying international safeguards. must judge whether a significant diversion has occurred in the. face of a possible national level conspiracy. In order to reach its

• conclusion with the required level of certainty, the IAEA may find it necessary to receive plant-wide physical inventory data more frequently than semiannually. Other* elements of these proposed regulations may similarly need to differ depending on whether or not national as well u subnational diversion threats need to be considered.

The NRC ls coordinating with the Department of Sta!e regarding the~e issues and their proper reflection m domestic U.S. regulations. Pape~orlc. Reduction Act Statement The reporting and recordkeeping requirements contained In the propQsed amendments have been evaluated and a clearance package has been submitted to the Office of Management and Budget as required by Pub. L. 96-5.11.. Four high enriched fuel cycle facilities. will be affected and possibly one fuel reprocessing facility in the future. Also; these amendments will not result in an increase in total requirements for the affected licensees due to the trade-off that will occur between the new prompt accountability

4094 Federal Register / Vol 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules requirements and the relaxed physical' Section 70.7 also Issued under Pub. L 95-(1) Its dimensions are large enough (at inventory requirements.. 601, MIO 10. 92 Stal 2951 (42 U.S.C. 5851). least 2 meters in length) to preclude Section 70.21.(g) also issued under aec.122, 68 hiding the item on an individual; Regulatory Analysis Stal 939.[,U U.S.C. 21~). Section 70.31 also (2) The weight of 5 formula kilograms Relllllts of analyses perform.ad by staff lssued under sec. ~7d. Pub. L 93-377, 88 Stal of the material is so large (at least 50 kg) and by contractors in llllpport of the 475 (42 U.S.C. 2077). Sectiona 70.36 end 70.44 that one pe' rson cannot carry it also issued under sec. 184, 68 Stal 954, as proposed MC&A Reform Amendments amended [42us.c. 22341. Section 70. 61 also inconspicuously; or

• indicate that significant benefits would.

tsaued under 9eCII. l86, 197, 68 Stal 955 (42 (3) The quantity of SSNM in the item accrue from implementation of these. U.S.C. 2236. 2237). Sectfon 70.62 also !uued is 10 small (less than 0.05 formula amendments at a relatively moderate under aeo. 108, 68 Stal 939, u amended (42 lcilograms) that a large number of

• increase In cost the first year followed
• _U.S.C. 2138):

diversions are needed to accumulate 5 by aignifl~~ sa$gs in subsequent. For the purposes of aec. 223. 68 Stal9{968,) aa

• formula kilograms; Years.
• /

amended (42 u.s.c. 2273); II 7'0.3, 70.1 c, (dd) "Ca*""' m t rial,. The Commfssion has prepared a draft* 70.21.(c). 70.22(a), (b), (d)-(k). 70.24{a) end (b), "'8 ory ma e 8 means 70.32{a)[3). (5), (6), (d), end [I), 70.35, 70.39{b) all SSNM material other than Category tl11lDDl8l'y' Regulatory Analysis on this* end (c), 70.7l[a). 70.42{a), end (cl, 70.58, 1/2-- proposed regulatiOb that _£OIDpares the 70.S7(b), (c}, end (d). 70.58(a)-{g)(3), and [h)-{j). (ee) "Unit process" means,an * ~ts and benefits of the proposed rule* are is1111ed under sec. 161b, 68 Stal 948, u

• *
• identlflable segment or segments of

'to the status quo. The draft analysis is amended (42 U.S.C. 2201(b)); H 70.7, processing activities for which the

orvailaa ~eebleinforthexamine NRC PuatibonllcanDodcumcopeyingnt 70.20a(a), end [d), 70.20b, (c;:}, and (e), 70.21.(c).

amounts of primary input and output 1' 1' . 70.24{b). 70.32{a)[B). (c), (d). (e). and (g}, 70."36,. SSNM*flows are based on Room, 1717 H Street NW., Washington, 70.51(c)-{g), 70.56, 7M7(b} end (d), 70.58{a)- measurements. DC 20555. ~ (g)(3} and [h}-{j} are Inued under sec.-161i, 68 , Stal 949, a.a amended (42 U.S.C. 2201(1)); and .(ff) "Administratively controlled ~to'ry Plexibility ~tion :.. :. H 70.20b{d) end (el, 70.51{b) and (1). 70.52. - areas" means portions of,the plant

• Jn accordance with'the Regulatory
• 70.!13, 70.54, 70.~5: 70.58(g)(4), (k), end (1),
• arrived at by subdividing the plant into Flexibility Act of 1980 (S U.S.C. 605{b)),

' 70.59. end 70.00(b} end (c) ire ~ed under groups of unit processes. the-Commission-hereby certifies that Seo. 1610. 68 Stal 960. as amen~ed (42 U.S.C. - (gg) 'iAccessible location"'means a this rule y.rill not, if promulgated, have a 2201(o)} process location at which SSNM could

• signi.fican~ economic.impact on a

. 2. In I 70.4, paragraphs (w) through be acquired with~ut the need for visible-substantial number of small entitles. (oo) are added to-read as follows: puncturing, breaking, or otherwise*

• - -Thia propos84 rule would affect four fue!

f 70.4 Definition&. violating the integrity of the process cycle facilities that nae SSNM. The *. * ~r equipment containing the SSNM.. companies tha~QJW11 tliese four facilities,.. (hh) "Controlled access area" has the United Nuclear CQrporation, Nuclear., * (w) "MC&A Alarm" m~ans a sftuation same meaning as in § 73.2(z). Fuel Services, Babcoclc and Wilcox, and-in which there is: (1) An out-of-location (ii) "Material access area CMAAr has - GA TechnologieS: do notfall within the,*' or compromised item; (2),an indication the same meaning as In 1 73.2(j), definition of "small entities" set forth* in oh flow of SSNM where there should UD Vault" has the same-meaning as the.Regulatory Flexibility Act or by the be none; or (3) a difference beween a in § 73.2(n). Small Busineu Admirilstration in 13

• measured or observed 8Dl0unt or (kk) "Inventory Difference" (ID) tFR Part-121.

property of material and its means the sum of the ending inventory corresponding predicted or property and removals from inventory subtracted ~ of S~jects in 10 CFR Pait 70

• value that exceeds a threshold from thj! sum of the beginning inventory Hazardous materials-transportation,

.., established to provide ~e detection and additions to inventory. Nuclear materials; Packaging !llld performance required by I 70.83. (ll) "Estimator" means a mathematical containers, Penalty, Radiation (x) "Bower of detection" means the expression that is used as the tool to protection. Reporting and recordkeeping probability that the critical,value or estimate an unknown true value. requirements;Scientific equipment, threshold of a statistical test will be (mm) "Estimate" means a spetific Security measures, Special nuclear exceeded*when there is an actual loss of nUJDerical value arrived at by. material. material., application.of an estimator. PART 70-0011ESTIC LICENSING OF (y) "Abrupt" means the time interval * (on). H Active inventory means* the SPECIAL NUCLEAR MATERIAL ~etween sequential performances of a sum of additions to inventory, beginning For the reasons set out in the * * *- preamble and under the authority of the Atomic Energy Act of 1964, as-amended. the ~ Reorganization Act of 1974, as amended. and S U.S.C. 553, notice is hereby given that the NRC is proposing to adopt the following amendments to 10 CFRPart70..

1. The authority citation for Part 70 is revised to re{ld as follows:

Authority: Secs. 51, 53. 161, 182, 183, 68 Stal 929,930,948. 953. 9M, 89 amended, sec. 234, 83 Stal 444, 89 amended (42 U.S.C. 2071, %073, 2201. 2232, 2233, 2282); secs. 201, a.a amended. 202, 204. 206, 88 Stat. 1242. a.a 8.lllended. 1244. 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846). material control test that covers the inventory, ending inventory, and mat(lrial in question or a 4-hour interval, removals from inventory, after all whichever is longer. common terms have been excluded. , (z) "Recurring" means a time interval Common terms are any material values greater than 'abrupt. that appear to the active inventory (ea) "Strateg!c Special Nuclear

• calculation more than once and come Material" (SSNM) has the same meaning- _from the same measurement.

as in I 73.2(aa). (oo) "Continuous process. means a (bb) "Formula Kilogram" means* unit process in which feed material must SSNM in any combination in a quantity be continually entered into the process of 1,000 grams computed by the formula, in order to maintain the equilibrium grams=(grams contained U-235)+2.5 conditions required by the procell'!I. (grams U-233+grams plutonium).

3. In§ 70.22, paragraph (b) is revised (cc) "Category IA material" means to read as follows:

SSNM directly useable in the

• manufacture of a nuclear explosive device, except if:

§ 70.22 Contents o1 application.

Federal Register / Vol. 49, No.. 23- / Thursday, February 2.- 1!:184 / Proposed Rules

• 4095 (b) Each application for a license to possess at any one time and location speci,µ nucleru: material in a quantity exceeding one effective kilogram of special nuclear material and to use such spectal nuclear material except those uses involved in the operation of e *.

nuclear reactor lfcensed pursuant to Part 50 of this chapter or those Involved in a. waste disposal operation. or as. sealed sources, shall contain a full deacrlptfon . of the applicant's program for contr.ol of and accounting for special nuclear materiai whfch will be in th'e applicant's possession under license, to-show how compliance with the-requirements of § 70.58 or § 70.81, as applicable, will be accomJ!lis~ed.

4. In § 70.32, the Introductory text of

. paragrapn (c) is revised to read as follows: § 70.32 Condttlona of llcenMa. and shall furnish to the Director of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington. D.C. 20555. with a copy to the appropriate NRG Regional Office shown in Appendix A of Part 73 of this chapter, a report containing a description of each change within: / *

5. ln I 70.51, paragraph (d):and the introductory text of paragraph (e) are

..revised to read as follows: § 70.51 Material belance, Inventory, lll'ld records requlrementa. ( d] Except as required by paragraph ' ( e) of this section or by § 7o.89{ e }, each UceI188e who is authorized to possess at any one time and location special nuclear material 'in a quantity totaling ,. more than 350 grams of contained uraninm-235", uranhnn-23:J. or plutonium, or any combination thereof. shall. < conduct a physical inventury of all special nuclear material In its posaession nuder-license at intervals not to exceed twelve months. '(c} Each license authorizing the possession at any one time and location of specia[ nuclear material in a quantity ' exceeding one effeetive kilogram of special nuclear material and the-UBe of such special-nuclear material except {e) Kach licensee who is authorized to possess at any oue time special nuclear-material In a quant;ity exceeding one effective kilogram of special nuclear materiaL hut less than five formula kilograms, and to use-such special nuclear material for activities other than those involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those i.n"lolved in a those uses involved tn the operations of a nuclear reactor licensed pursuant to ,Part 50 of this chapter and those involved in a waste--disposal operatiQn and in B'8aled sources, shall contain.and -be subject to a condition requiring the Ucen~e.e to maintain and foijow [1) the program for controt and accounting for special nuclear material and fun'd.amental material controls described pursuant to U 70.22(b}, 70.58{1},-or 70.Bl(c), as appropriate, (2) the Il}eaaurement control program for special nuclear materials-control and accounting deaaibed pUl'Stlant to. § 70.57. ihpproptiate, and (3) such oth:er material control procedures as the--

• Commission detenninea to be essential for*the safeguarding of special nucleat' material and providing that the licensee shall make-no change: which would
• decrease-the effectiveness of the material control and accounting program prepared pursuant to U 70.22(b ),

70.58(1), 70.51(g} or 70.81(c), as appropriate, and the meaauremeni. control program prepared pursuant to § 70.57, if appropriate-without the prior approval of the-Cammissio11; A licensee desiring to *make such changes shall submit an application. for amendment to Its license pursuant to- § 70.34*, The licensee shall maintain records of changes to the material control and accounting program made without prior Commission approval.. for a period of tliree years from the date of the change. ' waste disposal operation; or as.sealed sources; or as reactor i.rradlated fuels involved In researoh, development. or evaluation programs In facilities other, than irradiated fuel reprocessing plants, shall:

8. In § 70.57, th~ introductory text of paragraph (b} fs reviaed to reed as follows;

§ 70.57 Menurement control program for apectal nuclear-material control and accounting. . * (b} In accordance with § 70.58(f). each llcansee who 1B anthorized to* possess at any one time and location special nuclear material ~ a quantity exceeding one effective kilogram of special nuclear material, but less than five formula kilograms, and to ustt such special nucleB.l' material for activities other than those.involved.in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter, those ~volved in a waste disposal operation, or as sealed sources, shall establish and maintain a measurement control pregram for special nuclear material control and accounting measurements. Each I pi:ogram function shall be-Identified and assigned !n the licensee. organization in accordance with § 70.58(b)(2) and funcijonal and organizational

• relatfonahips shall be set forth in writing in accordance with.§ 70.58(b)(3}. The program shall be described in a manual

. which shall contain the procedures, Instructions, and forms prepared to meet* the requirements of this: paragraph, including procedures for the preparation, re.view, approval, and prompt dissemination of any program modificatimrof changes. 'The licensee's program shall include the-following:, 7, In§ 70.58. paragraph (aJ is revised to read as follows: § 70.58 Fundamental nuolear material controla.1 (a) Each licensee who is authorlzsd to possl!ss at any one time and location special mrclear material in a quantity exceeding*one effective kilogram of special nuclear material, but less than five formula kilogram.a, and to use such special nuclear material except those uses involved In the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those involved in a waste disposal operation, or as sealed sources, shall establish, maintain, and follow written material control and acconnting procedures in compliance with the fundamental nuclear material controls requireme_nts specified in - paragraphs. (b) through (k) of this section and such other controls as the Commission determines to be essential-for the contr-9I df and accounting for special nuclear material.

8. Sections 70.81, 7Cl.83, 70.85; 70.87, and 70.89 are added to read as follows:

§ 70.8f Nuctearmatenar control and accounting for lltraaglc apectaJ nuclear matanal: general performanc:. requlrementa. (a) General performance objectives. Each licensee who is authorized to possess five or more formula kilograms of strategic-special nuclear material (SSNM) and to use such materia) at any site, other than a nuclear reactor

• licenaed pursuant to Part 50 of this chapter, or in operations involved in waste disposal shall establish, implement. and maintain a Commission.

approved material control and accounting (MC&A) system that will achieve the following objectives: (1) Timely detection. of the possible loss of five or more formula kilograms of strategic special nuclear material; (2) Rapid determination of '1'hether an actual loss of five-or more formula kilograms occurred; and

4000 Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Pro.posed Rules (3) Generation of information to aid in the recovery of lost material in the event of an actual loss. (b) System capabilities. To achieve the general performance objectives specified in§ 70.81(aJ, the MC&A system must provide the capabilities described in § § 70.83, 70.85, 70.87, and 70.89, and must incorporate checks and balances that are sufficient to detect falsification of data and reports that could. conceal diversion by: . (1) An individual, including an employee (in any position); or (2) Collusion between an individual who ha!i responsibility or control within both the physical protection and the

• MC&A systems and another individual with MC&A resp(!_nsibilities.

(c) Implementation dates. Each licensee subject to the requirements of. paragraph (a) of this sectioh: {1) No later than 150 days after the. effective date of these amendments,

• shall submit a fundamental nuclear materi'al control plan describing how the licensee wlll comply with the

- requirements of paragraph (b).of this section;and (2) Within 360 days of the effective date -of these amendments or 90 days after the plan submitted gursuant to paragraph (c)(l) of this section ls approved, whichever is later, shall implement the approved plan. (3) Notwithstanding paragraphs (c)(1) and (c)(2) oflhis section, a licensee may delay for an additional 18.months implementation of portions of its plans and prQiedures involving shutdown of a process for resolution of an MC&A alarm. However, during this delay a licensee sha!l conduct physical inventories at the intervals specified in § 70.51(e)(3). (4) Notwithstanding § 70.89{e)(1), shall conduct physical inventories at the intervals specified in § 70.51(e)(3) until after the licensee has satisfactorily. qemonstrated, for a period of 6 months, adequate performance of all commitments In its plan and has received Commission approval. § 70.83 In-process monitoring. (a) Licensees subject to § 70.81 shall monitor internal transfers, storage, and processing of SSNM. Thia in-process monftoring must achieve the detection capabilities described in paragraphs (b) and (c] of this section for all SSNM except (1) SSNM that qualifies to come,under the item loss detection requirements of § 70.85; , (2) Scrap or waste in the form of small pieces, cuttings, chips;*solutlons or in other forms*that result from a manufacturing process, contained In 30 gallon or larger containers, with an SSNM content of less than 0.25 grams per ll ter; and (3) SSNM which is not readily separable from other radioactive material and which has a total external radiation dose rate in excess of 100 rem per hour at a distance of three feet from f/FY accessible surface without Intervening shielding. ' (b) Unit Proc~ss Def;ction Capability. (1) The licensee shall detect any abrupt loss of SSNM from any unit pro,cess . using any statistical teat that has 99 percent power of detecting the loss.of five formula kilograms. The detection shall occur within: (i) Three working days of a loss of Category IA material from any accessible location: and (ii) Seven calendar days of a loss of Category m material from any accessible location. (2) For each unH process, at least* every seven calendar days the licensee shall evaluate measurement data accumulated since the last cleanout of the unit process. This evaluation must be able to detect a recurring loss with 90 percent power of detection. The amount to be detected for each unit process - must be as low as reasonably achievable, but need not be less than 50 grams of SSNM. (c) Area Detection Capability. The licensee shall:-(1) Detect any*abrupt loss of SSNM accumulated from the unit processes within the plant or within any administratively controlled area, using a statistical i:p.ethod that has 90 percent power of detecting the loss of five formula kilograms; (2) If detection within administratively controlled areas is elected, provide administrative or physical measures to" protect against diversion of five formula kilograms from being accumulated from two mi more administratively controlled areas; (3) If the statistical method used for paragraph {c)(ll of this section involves a test in addition to the tests required by paragraph.(b) of this section, perform that test at least.every seven calendar days; and, (4) For the entire plant or for each administratively controlled area, at least every seven calendar days evaluate measurement data accumulated over the most recent 60 days of operation. This evaluation must be able to detect a

• recurring loss with 90 percent power of detection. The amount to be detected must be as a low as reasonably achie-vable, but need not be less than 50 grams of SSNM.

§ 70.85 Item monitoring., (a) Licensees subject to § 70.81 shall provide the detection capability described in paragraph (b) of this section for-any uniquely identified items of SSNM that have been quantitatively measured and the validity of that measurement Independently confirmed, and that additionally have been either:.* (1) Tamper-safed or placed in a vault that provides protection at least equivalent to tamper-safing; or (2) Constructed such that removal of SSNM would be readily and permanently apparent ( e.g., encapsulatedr, (b) The licensee shall verify the presence and integrity of selected SSNM items. The item selection method must be statistically sound and have at least a 99 percent power of detecting the loss of items that total five formula kilograms plant-wide within: (1) For items in a vault or in a permanently controlled access area isolated from the rest of the material access area (MAA), one month from loss of Category IA items and two months from loss for Category IB items: (2) For items elsewhere in the MAA, - three.working days from loss for Category IA items and seven.calendar days from loss for Category IB items. * § 70.87 Alarm resolution. (a) Licensees subject to § 70.81 shall provide the MC&A alarm resolution capabilities described in paragraph's (b) through (g) of this section. (bl The licensees shall promptly resolve the nature and cause of any MC&A alarm. (c) Each licensee shall notify immediately, by telephone, the appropriate NRC Regional Office listed in Appendix A of Part 73 of this chapter of any MC&A alarm that remains unresolved beyond the time period specified for its resolution In the licensee's fundamental nuclear material control plan. The licensee may consider an alarm to be resolved if, based on additional information: (1) Clerical or computational error is found that clearly was the cause of the alarm; or, (2) There is relevant evidence that substantiates the cause of the alarm or that substantiates that no loss has occurred. (d) If a loss has occurred, the licensee shall determine the amount of SSNM lost. (e) The licensee shall take corrective action to: (1) Return out-of-place SSNM, if possible, to an appropriate place;

Federal Register / Vol 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules 4097 (2) Update andcorrect appropriate records; and. (3) Modify the MCM system, if appropriate, to prevent similar

• occurrences in the future.

(f) The licensee shall provide an

• ability to respond rapidly to alleged thefts.

(g) In the event that an abrupt loss detection estimate exceeds five formula kilograms of SSNM: (1) Material processing operations related to the alarm must be SUBpended until completion of planned alarm resolution activities,,unleaa the suspension of operations will negatively affect the ability to resolve the alarm.

• However, operatiom of continuous processes may continue for a 24-hour period during which checks are made for mistakes.

(2) The licensee shall notify within 24 hours. by telephone, the appropriate - .NRC Regional Office that an MC&A alarm resolution procedure has been-inltiaJed.-. s 70.lt QuatHy aaurance and accounting *

• requhmenta.

-. (a) Llceruiees subject~-§ 70.81 shall - provide the quality assurance and accounting capab~ties described in paragraphs (b) through'(g) of1his section. (b) Management Structure. The licensee shall establish and maintain a .

• management structure that includes
• clear overall responsibility for MC&A functions, indeJ>i!ndence from production responsibilities, and adequate review and use of those MC&A procedures identified in the approved plan as being critical to the effectiveness of the described system. *

(c) Personnel Qualipcation and Troiniilg. _The licensee shall assure that key personnel, who work in positions involving taaks where mistakes could directly degrade the safeguards capabilities-of the MC&A eys'tem, are trained to maintain a high level of safeguards awareness and are qualified _ to perfonn their jobs. (d) Quality Control. The licensee shall: (1) As8lll'8 that the quality of SSNM measurment systems and material processing ls continually

• controlled to a level of effectiveness sufficient to-satisfy the capabilities required for detection. response, and accounting.

(2) Incorporate checks and balances in the MC&A system sufficient to control the rate of human errors in material control and accounting information to as low as reasonably achievable.

• (3) Assure that SSNM measurements-used in satisfying§ 70.89(e] are so controlled that:

(!) The total contribution of measurement systems' uncertainties to the standard deviation of the inventory difference estimator is less than 0.1 percent of active inventory for SSNM processing facilities or 0.2 percent of active inventory for reprocessing facilities; (ii) Bias* coITeCtlons for measurement systems are applied if their bias estimates exceed the larger of twice the standard deviations of their estimators ;_ .or 50 grams of SSNM; - (iii) The impacts_ of any uncorrected biases are accounted for in the inventory differences; and (iv) If. for like material, shipper-

• receiver differences accumulated over an inventory period exceed the larger of one formula kilogram or 0.1 percent of the total ~ount shipped. then the licensee shall investigate and take '

corrective action. as appropriate, to identify and reduce measutement biases. (e) Ar;cpunting. The lice_nsee shall: (1] Except as required by Part 75 of this chapter, perform a physical inventory at least every six month.a and. ~thin 60

• days of the start of the inventory, reconcile and adjust the book inventory' to the physical inventory.

(2)-Resolve, or report an inability to resol'Vi!, any inventory difference estimate greater than 200 gr~ of plutonium or U--233 or 300 grams. of U- . 235, that expeeds: {i) Twice the standard deviation of the inventory difference estimator; or, (ii) One-half percent of the active inventory. (3) Resolve on an individual container or_ lot basis, as appropriate, and when required by Part 75 of this chapter on a batch basis; any shipper-receiver difference that exceeds both: (i) Twice the standard deviation of the difference: and {ii] The larger of 0.5 percent of the amount of.SSNM in the container or lot, 4 as appropriate, or 50 grams of SSNM. * (4) In addition to any measurements . and/ or recovery of scrap use~ in meeting detection and response requirements: (i) Assure that recovered scrap is segregated from the scrap of other licensees or contractors and that any. scrap mea8Ul'8d with a standard deviation greater than 15% of the meal!Ul'8d amount is recovered so that

• the results are segregated by inventory period and received within six months of the end of the inventory period in which the scrap was generated; or (ii) Demonstrate that the total scrap measurement uncertainty will not cause noncompliance, with §*70.89{d)(3).

(5) Keep accounts of all additions to and removals from process based on _ . measurements for plutonium element and for uranium element and isotopes. (f) Independent Assessment The licensee shall: (1) At least every 12 months, independently assess the past performance of the MC&A system and review its effectiveness; and, (2) Document management's action on prior assessment recommendations. (g) Recordkeeping. The licensee shall establish auditable records sufficient to demomtrate that the requirements of

• H 70.83, 70.815, 70.87, and 70.89 have been met and maintain those records for at least three years unless a longer i'etention time is required by Part 75 of this chapter.

Dated at Was~ DC, thit 27th day of January 1984. For the Nuclear Regulatory Commimon. 8an:rQel J. Chlik, Secretary of ths Cammission. [FR Doc. llW:ll:l!I F1led 3-1-M: 8:'5 am) aLUN1.1 cooa 111MM1-11 DEPARTMENT OF TRANSPORTATION Federal Aviation Aclmlnlatratfon 14 CFR Part 39 .[Docket No. 83-Nll-11&-AO] AJrworthlneu Directives; Boetng Model 747 Ser1N AJrplann AGl!NCY: Federal Aviation Administration (FAA)(DOT. ACTION: Notice of proposed rulemaking (NPRM).

SUMMARY

This notice proposes a new airworthiness directive (AD) which would require structural inspections-and repairs or replaC81llents. as necessary on certain high time Boeing Model 747 series airplanes to assure continued airworthiness. Some Boeing Model 747 -

series airplanes are approaching and e_xceeding the manufacturer's original objective fatigue design life. These older airplanes are the ones most likely to develop cracks in the structure, if fatigue cracking does occur. The manufacturer

• has completed a structural reevaluation to identify significant structural components that. if cracking does develop and is permitted to grow undetected, may result in an inability to carry the required loads specified in FAR 2.5.571. This AD defines structural maintemmce requirements for the identified components necessary to preclude this potentially catastrophic condition.

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 February 22, l984 DOCKETED USNRC

• a4 FEB 22 P 4 :21 Robert Fonner Counsel for NRC Staff OELD/NRC

Dear Mr. Fonner:

The purpose of this letter is to advise you of the Nuclear Regulatory Commission's publication for public comment of a proposed rule which is intended to significantly strengthen material control and accounting requirements at certain fuel cycle facilities. The proposed rule, which evolved from the Advance Notice of Proposed Rulemaking on this subject published on September 10, 1981, will apply to all fuel cycle facilities authorized to possess and use formula quantities of strategic special nuclear material, including reprocessing plants but not nuclear reactors or waste disposal operations. The current licensees to which the rule would apply include United Nuclear Corporation, Nuclear Fuel Services, Babcock and Wilcox and GA Technologies. Taking into account the steps required in the rulemaking process, the projected time for publication of a final rule is early 1986. Because of this time schedule, the implemen-tation at NFS-Erwin Tennes*see will not occur before the end date established by the joint motion agreement of April 6, 1982. We would appreciate your views on whether this action is compatible with the agreement. Please direct your comments to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Docketing and Service Branch. cc (w/encl.): Sincerely, Martin G. Malsch Deputy General Counsel Dr. Thomas Cochran, NRDC c.w. Erneigh, NMSS, USNRC Robert Burnett, NMSS, USNRC Walter Engel, Naval Reactors, DOE

Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules .4091 obligation has been unpoeed or is sought to be Imposed under an order; [i) The term "proceeding" means a proceeding before the Secretary arising under Section 118{a) of the Act;

• * (j) The term "hearing" means that part of the proceeding which involves the submission of evidence;

[k) The term "party" includes the De_partment; [I) The term "hearing cleric" means the hearing clerk, U.S. Department of Agriculture, Washington, D.C.; (m) The term "presiding officer"

• means the administrative law judge conducting a proceeding under the Act;

[n) The term "presiding officer's report" means the presiding officer's report to the Secretary and includes the presiding officer's proposed [1) findings of fact and conclusions with respecMo all material issues of fact, law of discretion. as well as the reasons or basis therefor, [2) order, and (3) rulings on findings, conclusions and orders submitted by the parties; (o) The term "petition" includes an amended petition. I 1150.252 Institution ot proceeding. (aj Filing and service.of petitions. Any person subject to an order desiring to complain that any order or any provision of any such order or any, obligation Imposed in conneciton therewith is not in accordance with law, shall file with the hearing clerk. five copies of a petition in writing addressed to the Secretary, requesting a modification of such order or to.be exempted from such order. Promptly upon receipt of the petltlon, the Hearing Cleric shall transmit a true copy thereof to the Administrator and the .Department's General Counsel. ree_pectively. [b) Contents of petitions. A petition shall contain: (1) The correct name, address, and principal place of business of the

• petltloner. If the petitioner is a corporation. such fact shall be stated.

together with the name of the State of incorporation. the date of incorporation. and the names, addresses, and respective positions held by Its officers and directors; if an unincorporated - association, the names and addresses of ita officers, and the respective positions held by them; if a partnership, the name and address of each partner; (2) Reference to the specific terms or provisions of the order, or the Interpretation or application thereof, which are complained of; (3) A full statement of the facts (avoiding a mere repetition of detailed evidence) upon which the petition le based, and which Lt is desired that the Secretary consider, setting forth clearly and concisely the nature of the petitioner's business and the manner in which petitioner claims to be affected by tlie terms or provisions of the order or the interpretation or application thereof, which are complained ~f: (4) A statement of the grounds on which the terms or* 11.rovisions of the order or the interpretation or application thereof, which are complained of, are challenged as not iD accordance with law; and (5) Requests for the specific relief which the petitioner desires the Secretary to grant. (c) An application to dismiss petition-Filing, contents, and responses thereto. If the Administrator is of the opinion that the petition. or any portion thereof, does not substantially comply, in form or content, with the Act or with the requirements of pm-agraph (b) of this section. the Administrator may, within 30 days after the filing of the petition. file with the hearing clerk an application to dismiss the petition. or any portion thereof, on one or more of the grounds stated in this paragraph. Such application shall specify the grounds of objection to the petition and if based. in whole or in part, on allegations of fact not appearing on the face of the petition, shall be accompanied by appropriate affidavits or documentary evidence substantiating such allegations of fact. The-application may be accompanied by a memorandum of law. Upon receipt of such application, thQ hearing clerk shall cause a copy thereof to be served upon the petitioner, together with a notice stating that all papers to be submitted in opposition of such application, including any memorandum of law, must be filed by the petitioner with the hearing clerk not later than 20 days after the service of such notice upon the petitioner. Upon the expiration of the time specified in such notice, or upon receipt of such papers from the-petitioner, the hearing clerk shall transmit all papers which have been filed in connection with the application to the Secretary for his consideration. ( d) Further proceedings. Further proceedings on petitions to modify or to be exempted from any order shall be governed by § § 900.52[c)(2) through 900.71 of this title (Rules of Practice ' Governing Proceedings on Petitions To Modify or To Be Exempted From Marketing Orders) and as may hereafter be amended. and the same are incorporated herein and made a part hereof by reference. However each reference to "marketing order" in the title shall mean "order." Signed at Waahington. D.C.. on: January 'l:l, 198-1. Wllllam T. Manley, Deputy Administrator, Morlceting f'rosrom Operotlon1. [FR Doc. M-Z7ll7 Filel:1-1--M: 8:48 am)

• LUNQ COD£ M~

NUCLEAR REGULATORY COMMISSION 10 CFR Part 70 Material Control and Accounting Requirements; FacUltlea Poaealng Formuia Ouant1t1es of Strategic Sf)eclal Nuclear lllaterlal AGENCY: Nuclear Regulatory Commission. ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission i1 proposing to amend the Material Control and Accounting (MC&A) regulations that apply to facilities authorized to poseess and use formula quantities of strategic special nuclear material [SSNM). These amendmenta would apply to fuel cycle facilitiea, including reprocessing plants, but not to waste disposal operations or nuclear reactors. These amendments will significantly strengthen MC&A capabilities at the affected facilities by requiring more timely detection of poBSible SSNM losses and by providing for more rapid and conclusive resolution of discrepancies. The operational cost Impact for these proposed requirements should be approximately the same as for current MC&A requirements. This le because the amendmenta relax or eliminate current requirements that are not cost-effective and take advantage of existing process control. production control. and quality control information.

DATES: Comments must be received on or before June 5, 1984. Comments received after June 5, 1984 will be considered if it is practical to do so, but aeaurance of consideration cannot be given except as to comments received on or before that date. ADORESSU: The Commission has prepared a draft Standard Format/ Acceptance Criteria document as preliminary guidance to help explain the proposed rule, and a draft summary Regulatory Analysis which examines the incremental costs and benefits of the proposed rule. These two documents are available for examination and copying

• for a fee at the NRC Public Document Room at 1717 H Street NW.,

Washington. DC. Written comments or suggestions on the proposed rule, the

4092 Federal Register /. Vol. 49, No. Z3 / Thursday, February 2, 1984 / Proposed Rules Standard Format/ Acceptance Criteria document. or the Regulatory Analysis should be sent to the Secretary of the Commission. U.S. Nuclear Regulatory Commission. Washington,. DC 20555, Attention: Docketing and Service Branch. Comments may also be hand-delivered to Room 1121, 1717 H Street NW., Washington, DC, between 8:15 a.m. and 5:15 p.m. Comments received will be available for examination and copying for a fee al the NRC Public Document Room at 1717 HStreet NW., Washington, DC. - FOfl FURTHER INFORMATION CONTACT: Mr. C. W. &neigh. Fuel Facility Safeguards Ucensing Branch. Division of Safeguards, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission. Washington. DC 20555, telephone 301-427~. SUPPl.lllmNTAftY lNFORMATION:

Background

The focus of current domestic MC&A reg!llationa for high enriched uranium and plutonium is on bimonthly inventories. Comparison of the , inventory difference (ID) with percent of throughput does not occur until nearly

• 30.days after the beginning of the physical inventory. Thllll, a thorough inve!ltigation of an anomaly might not,

start until nearly 90 days after its cause occurred. The usefulness of these bimonthly inve~tories in providing the public with assurance that significant quantities of SSNM have not been diverted has been limited by difficulty in conclllllively resolving large inveqtory differences, necessitating reliance instead on plant security and material control records and intelligence information for the desired assurance. On August 20, 1981, the Commission approved the publication of an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on, how to revise the MC&A regulations for SSNM capable of being made into fissfon explosives. The ANPRM was published in the Federal Register on September 10, 1981 (46 FR 45144), and included goals of the rulemak!ng and options for achieving the goals. The primary goals included (a) timely end localized detection of a possible loss, (b) rapid determination of whether an actual loss occurred, and (c) availability of information to aid in the recovery of lost material in the event of an actual loss. Two of the options for achieving these goals retained the current emphasis on periodic physical inventories. The other three options introduced requlttments for more timely use of process monitoring information for safeguards purposes and deemp~asized the importance and frequency of physical invantor!es. Propoaed Action The proposed rule contains much of the substance of Options 3 and 4 of the

• ANPRM. but it has been totally rewritten to remove unneces&arlly prescriptive requirements. to reduce the number of plans and programs required, and to Improve lts clarity. Capabilities have been included to protect against insider adversaries. The proposed rule allows licensees to select the most cost-effective ways of achieving the desired
• performance. It also gives more credit for secure containment of SSNM and re~s differences between processing SSNM in bulk form and machining encapsulated SSNM.

The proposed amendments would apply to all fuel cycle facilities authorized to posseu and use formula quantities of strategic special nuclear material. including reprocessing plants but not waste disposal operations or nuclear reactors. For facilities authorized to possess and use less than a formula quantity of SSNM and for nuclear reactors end operations involved m waste disposal of sealed sources, the proposed amendments would retain. for the time being. the existing MC&A requirements in 10 CFR Part 70. A proposed rule to reform the MC&A requirements for low emiched uranium (LEU) facilities was previously published (47 FR 55951). It is envisioned that domestic MC&A requirements for all facilities eventually will be ravised and codified under a new Part 74. much as Part 73 contains all physical security requirmnents. Tlle Commission solicits comments on this appr.oach. The provisions of tb,e rule and its associated guidance involve several significant departures from current regulations, including:

1. Providing more timely SSNM loRs alarms through use of production and quality control data instead of Iese timely comparisons of plant-wide ID and its limit of error:

2. Increasing the ability to confidently resolve MC&A alarms by:

a. Decreasing the area and material quantity subject to an alarm.

b. Decreasing the number of persons who potentially could provide information about the cause of an alarm, and

c. Decreasing the length of time between a loss (or mistake) and its detection and resolution:

3. Basing detection criteria on quantities less than those necessary to construct a clandestine fission explosive rather than on throughput of SSNM at a facility;

• 4. Basing criteria for interruption of -

proceuing activities on an assessment of whether such interruption would facilitate the rapid resolution of a localized alarm involving a significant quantity of SSNM rather than on the inability to resolve an imbalance resulting from the taking of a periodic inventory;

5. Specifically requiring that the MC(kA system design include protection against an insider threat;

6. Using tlie total variance of ID for ID analysis, not just the measurement en'Ors; a:J:ld

7. Phased reduction in the frequency of ID determinations, from bimonthly to as long as semiannually, during phased implementation of the revised MC&A system.

Relative to the rule provisions cited above, the eomm1s*s1on is especially soliciting public comment on the following points:

1. With respect to loss detection levels, should they be plant specific and to what extent would area loss detection levels greater than five formula ldlograms*facilitate area detection within material access areas [MAAs) rather than within subdivisions of MAAs?

2. On the subfect of physical inventories, should the current practice of automatic plant shntdown when an inventory difference (ID) exceeds a specified threshold be continued and, if so, what should the threshold be?

3. To what extent would the combined effectiveness of (1) the in-process monitoring requirements in § 70.83, in particular the 60-day area detection capability in I 70.83(c){4); and (2) the item monitoring requirements of § 70.85, suffice ae a near real-time physical inventory? To facilitate a Commission determination as to whether both the near real-time physical inventory capabillties of § § 70.73 and 70.85 and the semiannual inventory capabilities of I 70.89(e)(1) are required, the Commission also solicits comments on (1) the extent to which the semiannual physical inventory is a repetition of the near real-time inventory: (2) the extent to which the semiannual physical inventory provides an overcheck on the ne11r real-time physical inventory, with significantly different characteristics which provide enhanced safeguards capabilities; and (3) what additional requirements, if any, should be placed on near real-time physical inventories if semiannual physical inventories are not to be required.

federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules 4093 Respon-. to Public Comments - In response to the ANPRM, 14 comments were received. Seven were ll'Om hiaustry, five from private individuals and a public interest group, and two from the Department of Energy. Key ~sues were: 1, Retention of the Status Quo. 0( the 14 comments received. me were in favor-of main faining the status quo. However,

• none of the commenters 1howed how this would meet the stated goat. of the,

rulemaldng. Because of poor loss localization, resolution of large IDs ia too often inconclusive. Without adequate resolution. the ID cannot be used to determine whether or not a true lol!IS occurred. 2, Production Stoppage Under Process Monitoring Options. Concerns were expressed that a.high rate of false - alarms leading to c:oatly production stoppages would result from the process monitoring.options-published with the A ANPRM. The proposed rnle has been modified to mitigate that ~ncem by:

a. Specifying that openttlona can be resumed upon-completion of planned alarm resolution activities instead of requiring Commission authorization;

b. Excluding from shutdown those operations for which shutdown would not contribute positively to.alarm resolution, such aa operations where shutdown and restart would generate Iarae quantities of poorly characterized scrap;

c. Providing a 24-bour time delay in which to correct mistak88 before shutdown of continuous processes; and

d. Modifying the recmring loss detection requirement and exempting it from the shutdown pro.vision.

3, Measurement State of the ArL Some A commenters felt that the process W' monitoring options would-require nondestructive assay (NDA) techniques that are beyond the current state of the art. This.contention fails to recognize that most of the Ion detection required by the proposed rule can be accomplished by weight and volume measurements. Further, independent experts have reported that supplemental assays which may be required can be completed without the 1,1se of NDA equipment in less than 24 hours, well within the minimum detection time of three days. hi some caes off-the-shelf NDA equipment would be sufficient to meet some of these supplemental data needs. In any event. the-proposed rule provides l!IUfficlent licenset! flexibility to achieve required performance, without improving meosurement systems, through better and more careful material handling practices; reduction in the frequency of process upsets, spills, and leaks; fewer transcription or arithmetic errors; and reduction of the span of a material control test.

4. Phase-In Period. Some commenters-have raised the point that the process monitoring concept Is new and to some extent untried. and that ft should be demonatrt>ted before being Imposed thro'llgb regulations. Despite the fact that process monitoring a to l!l0mB extent already being demonstrated in DOE and ill Mme NRC-.J.icenaed facilities, the Commission agrees that 110IDe of the specific performance requirements have not been tried in all situations. The

<;:ommission al8'I agrees that experience "With some of these requirements will, enhance the overall likelihood of a smooth and auccessful implementation of the new requiremen~ For these reasons the proposed rule incorporates an extended phase-in period.

5. Baclcfitting. Option & of the ANPRM would have limited the application of MC&A reforms to new facilities and major modifications tn existing fa.cllities.

Five commenters speclflca.Ily opposed this option. while three recommended its adoption. Studies performed for the NRC conclude that implementation of the proposed rule at existing licensed facilities is feasible and that the cost impact of implementation could be offset by cost savfngl!I in operation. Given this information. the Commission sees no valid re880Il why the rule should not be applied uniformly to both existing and new fuel manufacturfng and reprocessing facllftles.

6. Collusion Protection. Comment was divided ~een those favoring the option in which MC&A data would be required to be protected againat

• falsification by a conspiracy threat and the option in which the threat was limited to a single insider, The requirements oi the proposed rule -reflect a compromise position which baa been -

designed to function in an integrated fashion with Physical Protection and which should result in improved cost effectiveness compared to Options 3 and 4 of the ANPRM Protection of MC&A data is only required against falsification by a single Insider, providing that the insider does not have authority within the Physical Protection 4yatem. If an MC&A individual does have dual-authority within both systems, then the MC&A data is required to be protected against - collusion of-that individual with any other individual with MC&A responsibilitf'ea. This approach asslll'8s that the MC&A system provides additional capability for deterrloi and detecting collusion, over and above that provided by 10 CFR Part 73, without doubling the-size of the design basis threat for the integrated safeguards system.

7. Reprocessina, Aa currently writtan.

the proposed rule would aQply to fuel reprocessing facilities. Although the l!ICOpe of the ANPRM excluded such facilities, comments were invited on the possible applicabillty of the proposed rulemaldng to these plants. The two industry commenten who responded to this fnvitation were favorably fncllned toward the general approach of the procesa monitoring options. No other comments were received on thia topic. Since the ANPRM, several significant changes have-been made in the

• proposed rule. In view of thia fact. the Commisaion is again soliciting comments on whether or not this rul1r should apply to reprocessing plants.

International Considerations It shoulibe noted that the goals' stated previonsly are domestic goals -. and are considered to be appropriate for a subnational level threat For-all U.S. licensees, the detection and response capabilities of the proposad rule have. been determined to be sufficient to adequately protect the public health and safety for a subnational threat. On the other hand. the International Atomic Energy Agency (IAEA), which is responsible for applying international safeguards. m11St fudge whether a significant diversion baa occurred in the _ face of a possible national level conspiracy. In order to reach Its conclusion with the required level of certainty, the IARA may find it necessary to receive plant-wide physical inventory data more frequently than semiannually. Other element, of these propQsed regulations may similarly need to differ depending on whether or not national as well as subnational diversion threats need to be considered. The NRC Is coordinating with the Department of State regarofng these issues and their proper reflection in domestic U.S. regulations. Paperwork Raducthm Act Statement The reporting and record.keeping requirements contained in the propQsed amendments have been evaluated and a clearance package has been submitted to the Office of Management BJ1d Budget as required by Pub. L. 96-511. Four high enriched fuel cycle facilities will be affected and possibly one fuel reprocessing facility in the future. Also, these amendments will not result in an Increase in total requirements for the affected licensees due to the trade-off that will occur between the new prompt accountabiliq

4094 Federal Register / Vol 49, No. 23 / Thursday, February 2. 1984 / Propoaed Rules requirement, and the relaxed physical inventory requirements. Regulatory Au1ysia Results of analyies performed by staff and by contractors in support of the proposed MC&A Reform Amendments indicate that significant benefits would accrue &om Implementation of thesa amendments at a relatively moderate increase in coat the first year followed by lignificant savings in subsequent years. The Commlaslon bu prepared a draft smnmary Regulatory Analysis on this proposed regulation that _c;ompares the coats and benefits of the proposed rule to the status quo. The draft analysis ii available for examination and copying for a fee In the NRC Public Document Room, 1717 H Street NW.. W aahington, DC20555.. Regulatory Flexihllity Certlflcation In accordance with the Regulatory Ftexibility Act of1980 (5 U.S.C. 606{b]}. the Commission hereby certifies that this rule will not. if promulgated, have a

!!biificant economic Impact on a stantial number of small entities.

This proposed rule would affect four fuel cycle facilities that UBe SSNM. The companies that m.wn tlie.se four facilitiea. United Nuclear Corporation, Nuclear Fuel Services. Babcock and Wilcox. and - GA Technologies, do nol'fall within the definition of "small entities" set forth in the Regulatory Flexibility Act or by the Small Bwrinesa Administration In 13 CFR Part 121. List of Subjecta In 10 CFR Part 70 Hru:a.rdows materials-transportation, Nuclear materials, Pack.aging and containers. Penalty, Radiation protection, Reporting and recordkeeping requirementa, Scientific equipment. Security measures. Special nuclear material. PART 70-00MESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL 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. MS. notice la hereby given that the NRC is proposing to adopt the following amendments to 10 CFRPart70.

1. The authority citation for Part 70 Is revised to read aa follows:

Autbodty: Sea,. !51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, 954, as amended, sec. 234. 83 Stat. 444. aa amended (42 U.S.C. 2071. 2073, 2201, 2232, 2233, 2282); tees. 201, IU amended. 202. 204,206, 88 Stat. 1242. aa amended. 123/4 1245. 1246 (42 U.S.C. 5841. 5842, 5845. 5846). Section 70.7 alao luued under Pub. L ~ (1) Its dimensiona are large enough (at 601, nc 10, 92 Stat. 2931 (42 U.S.C. 5851). least 2 mekn in length} to preclude Section ~[s) also luued under sec. 12.2. 68 biding the i1am on an individual; Stat. 939 (42 U.S.C. 2152). Section 70.31 also (2) The weight of 5 formula kilograms laaued under aec. 57d. Pub. L 93-377, 68 Stat. of the matedal 18 10 large (at least 50 kg) 475 (42 U.S.C. 2077). Sections 70.36 and 70.44 alao laaued under MC. 184, 68 Stat 954. as that one penilOD. cannot carry it BDllltlded (42 u.s.c. 2234). Sectionro. 61 also inconspicuomir. or ilaued under MCa. 186. 187, 68 Stat. 9M (42 (3) The qmmtity of SSNM in the item U.S.C. Z2S8. 2237). Section 70.82 also laaued ia so amall (less than 0.015 formula under sec.108, 68 Stat. 939, as emended (42 kilograms) that a large number of u.s.c. 2138). divemone are needed to aooumulate 5 For the purposes of aec. 22.3. IS8 Stat. 968. a1 formul ~-e* amended (42 U.S.C. 2273); II 70.3. 70.19{c), a~.........; 70.21(c). 70.Z2(a). (b). (d)-(k). ro.24(a) and (b), {dd) "c.atagory m materials'~means 70.32(a}(8). (5). (6). (d). and (l), 70.88. ro.39(b) all SSNM Plllterial other than Category and (c), 70.71(a). 7M2{a). and (c), 70.58. IA. 10.57(b). (c}, and (d). 70Jl8(a}-{g)(SJ, and (h}-0) (ee) '1Jnit process" means.an are iasued under aec. 16th, 68 Stat. 948. u '

• identifiable aegment or segments of amended (42 U.S,C. 2201(b)): H 70.7, procesatns ecttvities for which the 10.20a(a). and (d), 70.20b. (c). and (e). 70.21(c).

amounts of primary input and output 70.24{b), 70.82{a)(6}, (c). (d), (e). and (g), 70.36, SSNM flowi, are based on 70.51(cHg). 70.116. 70.57(b) and [d), 10.58(.a)- measurement& [s)(3) and{hJ*Ol are wued under aec. t61i. 68 , StaL 949, aa amended (4.2 U.S.C. 2201(!)}: and (ff).. Administratively controlled H 70.20b{d) and (e). 70.Sl(b) and {1). ro.sz. areas" tmSnS portions of the plant 70.53, 70.M, 70.55; 70.58(g)(4). (k), and (I), arrived at by subdividing the plant into ' 70Ji8, and 70.00(b) and (c) are iNued under groups of-.dt procesaea. Sec.1610. ea Stat. 950. u amended (42 U.S.C.

• (gg) 'lAccasaible location'"means a 2201(0))

process location at which SSNM could _ be acquired without the need for visible puncturfnl, breaking. or otherwise violating the Integrity of the proceas equipment containing the SSNM.

2. In I 70,4, paragraphs (w) through

{oo} are added to read as follows: f 70.4 Definitions. (w) "MC&A Alarm" m~w a situation in which there is: (1) An out-of-location or compromised item: (2) an indication of a flow of SSNM where there should be none; or (3} a difference beween a measured or observed amount or property of material and its corresponding predicted or property value that exceeds a threshold established to provide the detection performance required by I 70.83. (x] "Power of detection" mean.a the probability thpt the critical value or threshold of a statistical test will be exceeded when there ia an actual loss of materlaL (y) MAbrupt" means the time interval between sequential performances of a material control teat that covers the material in question or a 4-hour interval, whichever is longer. . (z) Recurring" means a time interval greater than abrupt (aa) "Strat8g!c Special Nuclear Material" (SSNM) has the same meaning aa In I 73.2(aa}. (bb) "Formula Kilogram" means SSNM In any combination in a quantity of 1,000 grams computed by the formula, gnuna== (grams contained U-235)+ 2.5 (grams U-233+gram.a plutonium). (cc) "Category IA material" meana SSNM directly useable in the manufacture of a nuclear explosive device, except if: (hh} "Can!rolled access area" has the aame meaning as in I 73.2{.z). (ii) "Matmial acceaa area (MAA)" has the same meaning as in I 73.2{f ). cm "Vault'4 bu the same meaning as in I 73.2{n). (kk) '1mentory Difference" (ID) means the IU1D of the ending inventory and removals from inveqtory subtracted &om thi3 Am of the beginning inventory and additions to inventory. (ll) F.atimator" means a mathematical expressim that ls used as the tool to estimate an unknown true value. (mm] "'Estimate" means a specific nwnerical value arrived at by application of an estimator. (nn) "Active inventory" means the sum of additions to mventory, beginning inventOZ'J, ending inventory, and removals from inventory, after all common mrma have been excluded. Common f8rma are any material values thet appear to the active inventory calculation more than once and come &om theume measuremenL (oo) "Continuous process. means a unit process in which feed material must be conmmally entered into the process in order to maintain the equilibrium conditima required by the procen. 3, In § 70.22, paragraph {b) ia rsvised to read u follows:

• 70.22 Contenta of application.

Federal Register / Vol. 49, No. 23 / Thursday, February 2.,. 1004 / Proposed Rules 4095 [b) Each application for a license to possesa at any one time and location special nucle.ar material In a quantity exceeding one effective kilogram of special nuclear material and to uae such specral nuclear material except those uses involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those Involved In a waste disposal operatlo~ or as sealed sources, shall contain a full description of the applicant's program for control of and accounting for special nuclear material which will be in the applicant's possession under license, to-show how compliance with the-requirements of § 70.58 or § 70.81, as applicable, will be accomplished.

4. In § 70.32, the Introductory text of paragraph (c) Is revised fo read as follows:

170.32 Condltlone of 11cer1Sn. (c) Each license authorizing the po88ession at any one time and location of special nuclear material in a quantity exceeding one effootive kilogram of special nuclear material and the 1111e of such special nuclear material except those uses Involved In the operations of a nuclear reactor licensed pursuant to Part 50 of this chapter and those involved in a waste disposal operation and in sealed sources, shall contain and be subject to a condition requiring the licensee to maintain and follow (1) the program for control and accounting for special nuclear material and fundamental material controls described pursuant to § § 70.22(b}, 70.58{1), or 70.Bl(c), as appropriate, (2) the measurement control program for special nuclear materials control and accounting de>>crlbed pursuant to. § 70.57, If appropriate, and (3) such other material control procedures as the Commission determines to be essential for the safeguarding of special nuclear material and providing that the licensee shall make no change which would decrease the effectiveness of the material control and accounting program prepare<t pursuant to U 70.22(b ), 70.58(1), 70.51{g} or 70.Bl{c), as appropriate, and the measurement control program prepared pursuant to § 70.57, If appropriate, without the prior approval of the Commission; A licensee desiring to *make such changes shall submit an application far amendment to its license pursuant to § 70.34. The licensee shall maintain records of changes to the material control and accounting program made without prior Commission approval for a period of three years from the date of the change. and shall furnish to the Director of Nuclear Material Safety and Safeguards. U.S. Nuclear Regulatory Commission, Washington, D.C. 20555. with a copy to the appropriate NRC Regional Office shown In Appendix A of Part 73 of this chapter, a report containing a description of each change within:

5. In I 70.51, paragraph (d) and the Introductory text of paragraph (e) are revised to read as toirows:

I 70.51 Material balance, lmteftto1 y, and ~~ (d) Except as required by paragraph * ( e) of this section or by § 70.89{ e), each licensee who Is authorized to possesa at any one time and location special nuclear material 'in a quantity totaling more than 350 grams of contained uranium-235', uranium-233'. or plutonium, or any combination thereof. sha:11 conduct a physical lnventmy of all special nuclear material in its ponession under license at intervals not to exceed twelve months. (e) E'ach licensee who is authorized to possess at any one time special nuclear material in a quantity exceeding one effective kilogram of special nuclear material. but less than five fonnula kilograms, and to use such special nuclear material for activities other than those Involved In the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter 01 those involved In a waste disposal operation; or as sealed sources; or as reactor irradiated fuels Involved In research, development, or evaluation programs in facilities other than Irradiated fuel reprocessing plants. shall:

6. In § 70.57, the introdnctory text of paragraph [b) fs revised to read as follows:

I 70.57 lleaunmtent control program for apecNII nucleer materlal controf and accounting. [b) In accordance with§ 70.58(f}, each licensee who Is authorized to possess at any one time and location special nuclear material In a quantity exceeding one effective kilogram of special nuclear materiaL but less than five formula kilograIDB, and to use such special nuclear material for activities other than those Involved In the operation of a nuclear reactor licenM!d pursuant to Part 50 of this chapter. those iil.volved in a waste disposal operation. or as sealed sources, shall Qftabliah and maintain a measurement control program for special nuclear material control Blld accounting measurements. Each program function shall be identrl'ied and assigned m the licensee orga.nfzation in accordance with § 70.68(b)(2) and funcijonal and organ.batlonal relatfonshipe shall be sat forth in writing In accordance with.§ 70.58(b)(3). The program shall be ducribad in a manual . which shall contain the procedmes. Instructions, and forms prepared to meet the requirements of this paragraph, including procedures for the prep8f8tion. re.view, approval. and prompt di38emination of any program modification of changes. The licensee's program shall include the-followfng:,

7. In § 70.58. paragraph (aJ ls revised to read as follows:

§ 70.58 Fundamental nuclNr mater1at con1rOILI (a) Each licensee who is authorized to poss-ess at any one time and location special nul:iear material in a quantity exceeding one. effective kilogram of special nuclear material, but less than five fonnula kilograms, and to use such special nuclear material except those uses Involved in the operation of a nuclear reactor licensed pursuant to Part 50 of thJs chapter or those involved In a waste disposal operation. or as sealed sources, shall establish, maintain, and follow written material control and accounting procedures In compliance with the fundamental nuclear material controls requirements specified In - paragraphs [b} through (k} of this section and such other controls as the Commission determines to be essential for the contt.ol of and accounting for special nuclear material.

8. Sections 70.81, 70.83, 70.85, 70 87.

and 70.89 are added to read as follows: S 70.91 Nucleer materfat control and accounting fof strategic apeclal nuclMr materiel: general pertormance requlrementa.. (a) General performance objectives. Each licensee who is authorized to possess five or more formula kilograms of strategic special nuclear material (SSNM) and to use such material at any site, other than a nuclear reactor

• licensed pursuant to Part 50 of this chapter, or in operatlona involved in waste disposal shall establish, implement. and maintain a Commi.llslon approved material control and accounting [MC&A} system that will achJeve the following objectives:

(1) Timely detection of the possible loss of five or more formula ldlograms of strategic special nuclear material; (2) Rapid determination of ~hether an actual loss of five or more formula kilograms occurred: and

4096 Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules (3) Generation of information to aid In the recovery of lost material in the event of an actual loss. (b) System capabilities. To achieve the general perforlnance objectives specified in§ 70.81(a), the MC&A system must provide the capabilities described in U 70.83, 70.85, 70.87, and 70.89, and must incorporate checks and balances that are sufficient to detect falsification of data and reports that could conceal diversion by: (1) An Individual, including an employee (in any position); or (2) Collusion between an individual who hafl responsibility or control within both the physical protection and the

• MC&A systems and another individual with MC&A responsibilities.

[c) Implementation dates. Each licensee subject to the requirements of paragraph (a) of this section: (1) No later than 150 days after the effective date of these amendments,

• shall submit a fundamental nuclear material control plan describing how the licensee will comply with the requirements of paragraph (b).of this section; and (2) Within 360 days of the effective date of these amendments or 90 days after the plan submitted pursuant to paragraph (c){l) of this section ls approved, whichever is later, shall Implement the approved plan.

(3) Notwithstanding paragraphs (c)(l) and (c}(2) of this section, a licensee may delay for an additional 18 months implementation of portions of its plans and prQ1;8dures involving shutdown of a process for resolution of an MC&A alarm. However, during this delay a licensee shall conduct physical inventories at the intervals specified in § 70.51{e)(3). (4) Notwithstanding § 70.89(e)(1), shall conduct physical inventories at the intervals specified in§ 70.51(e)(3) until after the licensee has satisfactorily £!emonstrated, for a period of 6 months. adequate performance of all commitments in its plan and has received Commission approval. § 70.83 ln-procesa monitoring. (a) Licensees subject to § 70.81 shall monitor Internal transfers, storage, and processing of SSNM. This in-process monftoring must achieve the detection capabilities described in paragraphs (b) and (c) of this section for all SSNM except: (1) SSNM that qualifies to come.under the item loss detection requirements of § 70.85; . (2) Scrap or waste in the form of small pieces, cuttings, chips, *solutions or in other forms that result from a manufacturing process. contained In 30 gallon or larger containers, with an SSNM content of less than 0.25 grams per liter; and (3) SSNM which is not readily separable from other radioactive material and which has a total external radiation dose rate In excess of 100 rem per hour at a distance of three feet from qp.y accessible surface without intervening shielding. (b) Unit Process Detection Capability. (1) The licensee shall detect any abrupt loss of SSl\TM from any unit process . using any statistical test that has 99 percent pow&r of detecting the loss of five formula kilograms. The detection shall occur within: (i) Three working days of a loss of Category IA material from any accessible location; and (ii) Seven calendar days of a loss of Category IB material from any accessible location. (2) For each unit process, at least every seven calendar days the licensee shall evaluate measurement data accumulated since the last cleanout of the unit process. Thia evaluation must be able to detect a recurring loss with 90 percent power of detection. The amount to be detected for each unit process must be as low as reasonably achievable, but need not be less than 50 grams of SSNM. (c) Area Detection Capability. The llcensee shall: (1) Detect any abrupt loss of SSNM accumulated from the unit processes within the plant or within any administratively controlled area, using a statistical method that has 90 percent power of detecting the loss of five formula kilograms; (2) If detection within administratively controlled areas is elected, provide administrative or physical measures to* protect against diversion of five formula kilograms from being accumulated from two o~ more administratively controlled areas; (3) If the statistical method used for paragraph (c)(l) of this section involves a test in addition to the tests required by paragraph (b} of this section, perform that test at least every seven calendar days; and, (4) For the entire plant or for each administratively controlled area, at least every seven calendar days evaluate measurement data accumulated over the most recent 60 days of operation. This evaluation must be able to detect a recurring loss with 90 percent power of detection. The amount to be detected must be as a low as reasonably achhwable, but need not be leas than 50 grams of SSNM. § 70.85 Item monitoring. (a) Licensees subject to § 70.81 shall provide the detection capability described in paragraph (b) of this section for any uniquely identified items of SSNM that have been quantitatively meas\ll'ed and the validity of that measurement independently confirmed. and that additionally have been either:_* (1) Tamper-safed or placed in a vault that provides protection at least equivalent to tamper-safing; or (2) Constructed such that removal of SSNM would be readily and permanently apparent [e.g., encapsulated). (b) The licensee shall verify the presence a[!d Integrity of selected SSNM items. The item selection method must be statistically sound and have at least a 99 percent power of detecting the loss of items that total five formula kilograms plant-wide within: (1) For items in a vault or in a permanently controlled access area isolated from the rest of the material access area (MAA), one month from loss of Category IA Items and two months from loss for Category m items; (2) For Items elsewhere in the MAA,

• three working days from loss for Category IA Items and seven calendar days from loss for Category m items.

§ 70.87 Alarm ntsolutlon. (a) Licensees subject to § 70.81 shall provide the MC&A alarm resolution capabilities described in paragraphs (b) through fg) of this section. (b) The licensees shall promptly resolve the nature and cause of any MC&A alarm. (c) Each licensee shall notify immediately, by telephone, the appropriate NRC Regional Office listed in Appendix A of Part 73 of this chapter of any MC&A alarm that remains unresolved beyond the ti.me period specified for its resolution in the licensee's fundamental nuclear material control plan. The licensee may consider an alarm to be resolved if, based on additional information: (1) Clerical or computational error Is found that clearly was the cause of the alarm: or. (2) There ls relevant evidence that substantiates the cause of the alarm or that substantiates that no loss has occurred. ( d) If a loss has occurred, the licensee shall determine the amount of SSNM lost. (e) The licensee shall take corrective action to: (1) Return out-of-place SSNM. if possible, to an appropriate place;

Federal Register / Vol. 49, No. 23 / Thursday, February 2, 1984 / Proposed Rules 4097 (2) Update and correct appropriate records; and (3) Modify the MC&A system, if appropriate, to prevent similar occurrences in the future. (f) The licensee shall provide an

• ability to respond rapidly to alleged thefts.

(g) In the event that an abrupt loas detection estimate exceeds five fonnula kilograms of SSNM: (1) Material prooessing operations related to the alarm must be auapended until completion of planned alarm resolution activities, unleBt the suspension of operatiOD8 will negatively effect the ability to resolve the alarm.

• However, operations of continuoua processes may continue for a 24-hou.r period during which checks are made for mistakes.

(2) The licensee shell notify withln 24 hours, by telephone, the appropriate

• NRC Regional Office that an MC&A alarm resolution procedure has been initiated.

§ 70.89 OIMllty.....-..ce and aocountlng l'llqUNfflenta. (a) Llcensees 111bject tot 70.81 shall provide the quality a11urance and accounting capabilities described in paragraphs (b) through (g) of this section. (b) Management Structure. The li~nsee shall establish and maintain a management structure that includes

• clear overall reaponsibility for MC&A functions, independence from production responsibilities, and adequate review and UBe of those MC&A procedures identified in the approved plan as being critical to the effectiveness of the described system.

(c] Penonnel Qualification and Trainins. The licensee shall assure that key per&onnel. who work in positions involving task.a where mistakes could directly degrade the safeguards capabilities of the MC&A system. are trained to maintain a high level of safeguards awareness and are qualified to p_erfonn their jobs. (d) Quality Control. The licensee shall: (1) Assure that the quality of SSNM measurment systems end material processing Is continually controlled to a level of effectiveness sufficient to*aatisfy the capabilities required for detection. reaponae, and accounting. (2) Incorporate checks and balances in the MC&A system sufficient to control the rate of human errors in material control and accounting information to as low es reaaonably achievable. (3) Assure that SSNM measurements used in satisfying I 70.89(&) are so controlled that: [i) The total contribution of measurement systems' uncertainties to the atanderd deviation of the inventory difference estimator 18 less than 0.1 percent of active inventory for SSNM processing facilities or 0.2 percent of active inventory for reproca811ing facilities; (Ii) Bias corrections for measurement aystems ere applied if their bias estimates exceed the larger of twice the standard deviations of their estimators :... or 50 grams of SSNM: - (ill) The impacts of any uncorrected biases are* accounted for in the inventory differences; and (iv) If, for like material. ahippet-receiver differences accumulated over an inventory period exceed the larger of one formula kilogram or 0.1 percent of the total amount shipped. then the licensei! shall investigate and take corrective action, as appropriate, to identify and reduce measurement biases. (e) AccountJns. The licensee shall: (1) Except a.a required by Part 75 of thi8' chapter, perform a physical inventory at least every six months and. within 60 days of the start of the inventory, reooncile and adjust the book inventory to the physical inventory. (2) Resolve, or report an inability to resolve, any inventory difference estimate greater than 200 grams of plutonium or U-233 or 300 grams of U-235, that exceeds: (i) Twice the standard deviation of the inventory difference estimator; or, (ii] One-half percent of the active inventory. (3] Resolve on an individual container or lot basis, as appropriate, and when required by Part 75 of this chapter on a batch basis, any shipper-receiver difference that exceeds both: (i) Twice the standard deviation of the difference; and (HJ The larger of 0.5 percent of the amount of SSNM in the container or lot,

• as appropriate, or 50 grams of SSNM.

(4) In addition to any measurements and/ or recovery of scrap used in meeting detection and response requirements: (l) Assure that recovered scrap 18 segregated from the scrap of other licensees or contractors and that any scrap measured with a standard deviation greater than 59£. of the measured amount Js recovered so that the results are segregated by inventory period and received within six months. of the end of the inventory period in which the scrap was generated; or (Ii) Demonstrate that the total scrap measurement uncertainty will not cause noncompliance, with t 70.89(d)(3). (5) Keep accounts of all additions to and removals from process based on _ , measurements for plutonium element and for uranium element and Jsotopes. (f) Independent Assessment The licensee shall: (1) At least every 12 months, independently assess the past performance of the MC&A system and review its effectiveness; and (2) Document management's action on prior assessment recommendations. (g) Recordkeeping. The licensee shall establish auditable records sufficient to demonstrate thst the requirements of H 70.83, 70.85, 70.87, and 70.89 have been met and maintain those records for at least three years unless a longer retention time ia required by Part 75 of this chapter.

• Dated at Washington, DC, this 27th day of January 19&4..

For the Nuclear Regulatory CommiesiOD. Samuel J. Cbllk, Secretary of the Commlulon. (Fil Doc. M-D7!I Ftltld 1-:1-64111:41111111) at.LING COOi! 7'IO-OHI DEPARTMENT OF TRANSPORTATION Federal Aviation A.dmlnlatratJon 14 CFR Part 39 [Docket No. 13-NM-111-ADJ AJrworthlnea Dlrecllves; Boeing Model 747 Series Airplanes AGENCY: Federal Aviation Administration (FAA), DOT. ACTION: Notice of proposed rulemaking (NPRM). SUMMAJll't': Thie notice proposes a new airworthinen directive (AD) which would require structural inspections-and repairs or replacements, as necessary on certain high time Boeing Model 747 series airplanes to assure continued airworthiness. Some Boeing Model 747 series airplanes are approaching and exceeding the manufacturer's original objective fatigue design life. These older airplanes are the ones most likely to develop cracks in the structure, If fatigue cracking does occur. The manufacturer has completed a structural reevaluation to identify significant structural components that, if cracking does develop and is permitted to grow undetected. may result in an inability to carry the required loads specified in FAR 25.571. This AD defines structural mainteffllilce requirements for the identified components necessary to preclude this potentially catastrophic condition.

NUCLEAR REGULATORY COMMISSION 10 CFR PART 70 [7s9o-oiJ 'led. t DOCKETED USNRC Material Control and Accounting Requirements for Facilities Possessing Formula Quantities of Strategic Special Nuclear Material AGENCY: Nuclear Regulatory Commission. ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission is proposing to amend the Material Control and Accounting (MC&A) regulations that apply to facili-ties authorized to possess and use formula quantities of strategic special nuclear material (SSNM). These amendments would apply to fuel cycle facilities, including reprocessing plants, but not to waste dis-posal operations or nuclear reactors. These amendments will signifi-cantly strengthen MC&A capabilities at the affected facilities by requir-

• ing more timely detection of possible SSNM losses and by providing for more rapid and conclusive resolution of discrepancies.

The operational cost impact for these proposed requirements should be approximately the same as for current MC&A requirements. This is because the amendments relax or eliminate current requirements that are not cost-effective and take advantage of existing process control, production control, and qual-ity control information. DATES: Comments must be received on or before JUN 5 Comments received after JU;} 5 193/411 l be considered if 1

[7590-01] to do so, but assurance of consideration cannot be given except as to comments received on or before that date. ADDRESSES: The Commission has prepared a draft Standard Format/Acceptance Criteria document as preliminary guidance to help explain the proposed rule, and a draft summary Regulatory Analysis which examines the incre-mental costs and benefits of the proposed rule. These two documents are available for examination and copying for a fee at the NRC Public Docu-ment Room at 1717 H Street NW., Washington, DC. Written comments or suggestions on the proposed rule, the Standard Format/Acceptance Criteria document, or the Regulatory Analysis should be sent to the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555, Attention: Docketing and Service Branch. Comments may also be hand-delivered to Room 1121, 1717 H Street NW., Washington, DC, between 8:15 a.m. and 5:15 p.m. Comments received will be available for examina-tion and copying for a fee at the NRC Public Document Room at 1717 H Street NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Mr. C. W. Emeigh, Fuel Facility Safe-guards Licensing Branch, Division of Safeguards, Office of Nuclear Mate-rial Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555, telephone 301-427-4040. SUPPLEMENTARY INFORMATION:

Background

The focus of current domestic MC&A regulations for high enriched uranium and plutonium is on bimonthly inventories. Comparison of the 2

[7590-01] inventory difference (ID) with percent of throughput does not occur until nearly 30 days after the beginning of the physical inventory. Thus, a thorough investigation of an anomaly might not start until nearly 90 days after its cause occurred. The usefulness of these bimonthly inventories in providing the public with assurance that significant quantities of SSNM have not been diverted has been limited by difficulty in conclusively resolving large inventory differences, necessitating reiiance instead on plant security and material control records and intelligence information for the desired assurance. On August 20, 1981, the Commission approved the publication of an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on how to revise the MC&A regulations for SSNM* cap-able of being made into fission explosives. The ANPRM was published in the Federal Register on September 10, 1981 (46 FR 45144), and included goals of the rulemaking and options for achieving the goals. The primary goals included (a) timely and localized detection of a possible loss, (b) rapid determination of whether an actual loss occurred, and (c) avail-ability of information to aid in the recovery of lost material in the event of an actual loss. Two of the options for achieving these goals retained the current emphasis on periodic physical inventories. The other three options introduced requirements for more timely use of process monitoring infor-mation for safeguards purposes and deemphasized the importance and fre-quency of physical inventories. 3

[7590-01] Proposed Action The proposed rule contains much of the substance of Options 3 and 4 of the ANPRM, but it has been totally rewritten to remove unnecessarily prescriptive requirements, to reduce the number of plans and programs required, and to improve its clarity. Capabilities have been included to protect against insider adversaries. The proposed rule allows licensees to select the most cost-effective ways of ach{eving the desired performance. It also gives more credit for secure containment of SSNM and recognizes differences between processing SSNM in bulk form and machining encapsulated SSNM. The proposed amendments would apply to all fuel cycle facilities authorized to possess and use formula quantities of strategic special nuclear material, including reprocessing plants but not waste disposal operations or nuclear reactors. For facilities authorized to possess and use less than a formula quantity of SSNM and for nuclear reactors and operations involved in waste disposal or sealed sources, the proposed amendments would retain, for the time being, the existing MC&A require-ments in 10 CFR Part 70. A proposed rule to reform the MC&A requirements for low enriched uranium (LEU) facilities was previously published (47 FR 55951). It is envisioned that domestic MC&A requirements for all facil- - ities eventually will be revised and codified under a new Part 74, much as Part 73 contains all physical security requirements. The Commission solicits comments on this approach. The provisions of the rule and its associated guidance involve several significant departures from current regulations, including: 4

[7590-01]

1.

Providing more timely SSNM loss alarms through use of produc-tion and quality control data instead of less timely comparisons of plant-wide ID and its limit of error;

2.

Increasing the ability to confidently resolve MC&A alarms by:

a.

Decreasing the area and material quantity subject to an alarm,

b.

Decreasing the number of persons who potentially could provide information about the cause of an alarm, and

c.

Decreasing the length of time between a loss (or mistake) and its detection and resolution;

3.

Basing detection criteria on quantities less than those necessary to construct a clandestine fission explosive rather than on throughput of SSNM at a facility;

4.

Basing criteria for interruption of processing activities on an assessment of whether such interruption would facilitate the rapid resolution of a localized alarm involving a significant quantity of SSNM rather than on the inability to resolve an imbalance resulting from the taking of a periodic inventory;

5.

Specifically requiring that the MC&A system design include protection against an insider threat;

6.

Using the total variance of ID for ID analysis, not just the measurement errors; and

7.

Phased reduction in the frequency of ID determinations, from bimonthly to as long as semiannually, during phased implementation of the revised MC&A system. Relative to the rule provisions cited above, the Commission is especially soliciting public comment on the following points: 5

[7590-01]

1.

With respect to loss detection levels, should they be plant specific and to what extent would area loss detection levels greater than five formula kilograms facilitate area detection within material access areas (MAAs) rather than within subdivisions of MAAs?

2.

On the subject of physical inventories, should the current practice 'of automatic plant shutdown when an inventory difference (ID) exceeds a specified threshold be continued and, if so, what should the threshold be?

3.

To what extent would the combined effectiveness of (1) the in-process monitoring requirements in Section 70.83, in particular the 60-day area detection capability in Section 70.83(c)(4); and (2) the item monitoring requirements of Section 70.85, suffice as a near real-time physical inventory? To facilitate a Commission determination as to whether both the near real-time physical inventory capabilities of Sec-tions 70.83 and 70.85 and the semiannual inventory capabilities of Sec-tion 70.89(e)(l) are required, the Commission also solicits comments on (1) the extent to which the semiannual physical inventory is a repeti-tion of the near real-time inventory; (2) the extent to which the semi-annual physical inventory provides an overcheck on the near real-time physical inventory, with significantly different characteristics which provide enhanced safeguards capabilities; and (3) what additional require-ments, if any, should be placed on near real-time physical inventories if semiannual physical inventories are not to be required. 6

[7590-01] Response to Public Comments In response to the ANPRM, 14 comments were received. Seven were from industry, five from private individuals and a public interest group, and two from the Department of Energy. Key issues were:

1.

Retention of the Status Quo. Of the 14 comments received, six were in favor of maintaining the status quo. However, none of the com-menters showed how this would meet the stated goals of the rulemaking. Because of poor loss localization, resolution of large IDs is too often inconclusive. Without adequate resolution, the ID cannot be used to determine whether or not a true loss occurred.

2.

Production Stoppage Under Process Monitoring Options. Concerns were expressed that a high rate of false alarms leading to costly produc-tion stoppages would result from the process monitoring options published with the ANPRM. The proposed rule has been modified to mitigate that concern by:

a.

Specifying that operations can be resumed upon completion of planned alarm resolution activities instead of requiring Commission authorization;

b.

Excluding from shutdown those operations for which shutdown would not contribute positively to alarm resolution, such as operations where shutdown and restart would generate large quantities of poorly characterized scrap;

c.

Providing a 24-hour time delay in which to correct mistakes before shutdown of continuous processes; and

d.

Modifying the recurring loss detection requirement and exempting it from the shutdown provision. 7

[7590-01]

3.

Measurement State of the Art. Some commenters felt that the process monitoring options would require nondestructive assay (NOA) tech-niques that are beyond the current state of the art. This contention fails to recognize that most of the loss detection required by the pro-posed rule can be accomplished by weight and volume measurements. Further, independent experts have reported that supplemental assays which may be required can be completed without the use of NOA equipment in less than 24 hours, well within the minimum detectiop time of three days. In some cases off-the-shelf NOA equipment would be sufficient to meet some of these supplemental data needs. In any event, the proposed rule provides sufficient licensee flexibility to achieve required performance, without improving measurement systems, through better and more careful material handling practices; reduction in the frequency of process upsets, spills, and leaks; fewer transcription or arithmetic errors; and reduction of the span of a material control test.

4.

Phase-In Period. Some commenters have raised the point that the process monitoring concept is new and to some extent untried, and that it should be demonstrated before being imposed through regulations. Despite the fact that process monitoring is to some extent already being demonstrated in DOE and in some NRC-licensed facilities, the Commission agrees that some of the specific performance requirements have not been tried in all situations. The Commission also agrees that experience with some of these requirements will enhance the overall likelihood of a smooth and successful implementation of the new requirements. For these reasons the proposed rule incorporates an extended phase-in period. 8

[7590-01]

5.

Backfitting. Option 5 of the ANPRM would have limited the application of MC&A reforms to new facilities and major modifications to existing facilities. Five commenters specifically opposed this option, while three recommended its adoption. Studies performed for the NRC conclude that implementation of the proposed rule at existing licensed facilities is feasible and.that the cost impact of implementation could be offset by cost savings in operation. Given this information, the Commission sees no valid reason why the rule should not be applied uni-formly to both existing and new fuel manufacturing and reprocessing facilities.

6.

Collusion Protection. Comment was divided between those favor-ing the option in which MC&A data would be required to be protected against falsificqtion by a conspiracy threat and the option in which the threat was limited to a single insider. The requirements of the proposed rule reflect a compromise position which has been designed to function in* an integrated fashion with Physical Protection and which should result in improved cost effectiveness compared to Options 3 and 4 of the ANPRM. Protection of MC&A data is only required against falsification by a single insider, providing that the insider does not have authority within the - Physical Protection system. If an MC&A individual does have dual author-* ity within both systems, then the MC&A data is required to be protected against collusion of that individual with any other individual with MC&A responsibilities. This approach assures that the MC&A system provides additional capability for deterring and detecting collusion, over and above that provided by 10 CFR Part 73, without doubling the size of the design basis threat for the integrated safeguards system. 9

[7590-01]

7.

Reprocessing. As currently written, the proposed rule would apply to fuel reprocessing facilities. Although the scope of the ANPRM excluded such facilities, comments were invited on the possible appli-cability of the proposed rulemaking to these plants. The two industry commenters who responded to this invitation were favorably inclined toward the general approach of the process monitoring options. No other comments were received on this topic. Since the ANPRM, several significant changes have been made in the proposed rule. In view of this fact, the Commission is again soliciting comments on whether or not this rule should apply to reprocessing plants. International Considerations It should be noted that the goals stated previously are domestic goals and are considered to be appropriate for a subnational level threat. For all U.S. licensees, the detection and response capabilities of the proposed rule have been determined to be sufficient to adequately protect the public health and safety for a subnational threat. On the other hand, the International Atomic Energy Agency (IAEA), which is responsible for applying international safeguards, must judge whether a significant diver-sion has occurred in the face of a possible national level conspiracy. In order to reach its conclusion with the required level of certainty, the IAEA may find it necessary to receive plant-wide physical inventory data more frequently than semiannually. Other elements of these proposed regulations may similarly need to differ depending on whether or not national as well as subnational diversion threats need to be considered. 10

[7590-01] The NRC is coordinating with the Department of State regarding these issues and their proper reflection in domestic U.S. regulations. PAPERWORK REDUCTION ACT STATEMENT The reporting and recordkeeping requirements contained in the pro-posed amendments have been evaluated and a clearance package has been submitted to the Office of Management and Budget as required by Pub. L. 96-511. Four high enriched fuel cycle facilities will be affected and possibly one fuel reprocessing facility in the future. Also, these amendments will not result in an increase in total requirements for the affected licensees due to the trade-off that will occur between the new prompt accountability requirements and the relaxed physical inventory requirements. REGULATORY ANALYSIS Results of analyses performed by s~aff and by contractors in support of the proposed MC&A Reform Amendments indicate that significant benefits would accrue from implementation of these amendments at a relatively moderate increase in cost the first year followed by significant savings in subsequent years. The Commission has prepared a draft summary Regulatory Analysis on this proposed regulation that compares the costs and benefits of the proposed rule to the status quo. The draft analysis is availab1e for examination and copying for a fee in the NRC Public Document Room, 1717 H Street NW., Washington, DC 20555. 11

[7590-01] REGULATORY FLEXIBILITY CERTIFICATION In accordance with the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the Commission hereby certifies that this rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. This proposed rule would affect four fuel cycle facilities that use SSNM. The companies that own these.four facilities, United Nuclear Corporation, Nuclear Fuel Services, Babcock and Wilcox, and GA Technologies, do not fall within the definition of 11 small entities 11 set forth in the Regulatory Flexibility Act or by the Small Business Administration in 13 CFR Part 121. LIST OF SUBJECTS IN 10 CFR PART 70 Hazardous materials-transportation, Nuclear materials, Packaging and containers, Penalty, Radiation protection, Reporting requirements, Scientific equipment, Security measures, Special nuclear material. 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, notice is hereby given that the NRC is proposing to adopt the following amendments to 10 CFR Part 70. PART 70 - DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

1.

The authority citation for Part 70 is revised to read as follows: AUTHORITY: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 953, 954, 12

[7590-01] as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2071, 2073, 2201, 2232, 2233, 2282); secs. 201, as amended, 202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846). Section 70.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Section 70.21(9) also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 57d, Pub. L. 93-377, 88 Stat. 475 (42 U.S.C. 2077). Sections 70,.36 and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 70.61 also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C. 2236, 2237). Section 70.62 also issued under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138). For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273); §§ 70.3, 70.19(c), 70.21(c), 70.22(a), (b), (d)-(k), 70.24(a) and (b), 70.32(a)(3), (5), (6), (d), and (i), 70.36, 70.39(b) and (c), 70.41(a), 70.42(a), and (c), 70.56, 70.57(b), (c), and (d), 70.58(a)- (g)(3), and (h)-(j) are issued under sec. 161b, 68 Stat. 948, as amended (42 U.S.C. 2201(b)); §§ 70.7, 70.20a(a), and (d), 70.20b, (c), and (e), 70.21(c), 70.24(b), 70.32(a)(6), (c), (d), (e), and (g), 70.36, 70.Sl(c)-(g), 70.56, 70.57(b) and (d), 70.58(a)-(g)(3) and (h)-(j) are issued under sec. 16li, 68 Stat. 949, as amended (42 U.S.C. 2201(1)); and§§ 70.20b(d) and (e), 70.51(b) and (i), 70.52, 70.53, 70.54, 70.55, 70.58(g)(4), (k), and (1), 70.59, and 70.60(b) and (c) are issued under sec. 1610, 68 Stat. 950, as amended (42 U.S.C. 2201(0)).

2.

In§ 70.4, paragraphs (w) through (oo) are added to read as follows: 13

[7590-01] § 70.4 Definitions. (w) 11MC&A Alarm 11 means a situation in which there is: (1) an out-of-location or compromised item; (2) an indication of a flow of SSNM where there should be none; or (3) a difference between a measured or observed amount or property of material and its corresponding predicted or property value that exceeds a threshold established to provide the detection performance required by§ 70.83. (x) 11 Power of detection 11 means the probability that the critical value or threshhold of a statistical test will be exceeded when there is an actual loss of material. . (y) 11Abrupt 11 means the time interval between sequential perform-ances of a material control test that covers the material in question or a 4-hour interval, whichever is longer. (z) 11 Recurring 11 means a time interval greater than abrupt. (aa) 11Strategic Special Nuclear Material 11 (SSNM) has the same mean-ing as in§ 73.2(aa). (bb) "Formula kilogram 11 means SSNM in any combination in a quantity of 1,000 grams computed by the formula, grams= (grams contained U-235) + 2.5 (grams U-233 + grams plutonium). (cc) "Category IA material 11 means SSNM directly useable in the manu-facture of a nuclear explosive device, except if: (1) its dimensions are large enough (at least 2 meters in length) to preclude hiding the item on an individual; (2) the weight of 5 formula kilograms of the material is so large (at least 50 kg) that one person cannot carry it inconspicuously; or 14

[7590-01] (3) the quantity of SSNM in the item is so small (less than 0.05 formula kilograms) that a large number of diversions are needed to accumulate 5 formula kilograms; (dd) 11 Category IB materials 11 means all SSNM material other than Category IA. (ee) 11Unit process 11 means an identifiable segment or segments of processing activities for which the amounts of primary foput and output SSNM flows are based on measurements. (ff) "Administratively controlled areas 11 means portions of the plant arrived at by subdividing the plant into groups of unit processes. (gg) 11Accessible location 11 means a process location at which SSNM could be acquired without the need for visible puncturing, breaking, or otherwise violating the integrity of the process equipment containing the SSNM. (hh) 11 Controlled access area 11 has the same meaning as in § 73.2(z). (ii) 11Material access area (MAA) 11 has the same meaning as in § 73.2(j). (jj) 11 Vault 11 has the same meaning as in§ 73.2(n). (kk) 11 Inventory Difference 11 (ID) means the sum of the ending inven-tory and removals from inventory subtracted from the sum of the beginning-inventory and additions to inventory. (11) 11 Estimator 11 means a mathematical expression that is used as the tool to estimate an unknown true value. (mm) 11 Estimate 11 means a specific numerical value arrived at by appli-cation of an estimator. (nn) 11Active inventory 11 means the sum of additions to inventory, beginning inventory, ending inventory,and removals from inventory, after 15

[7590-01] a11 common terms have been excluded. Common terms are any material values that appear in the active inventory calculation more than once and come from the same measurement. (oo) "Continuous process" means a unit process in which feed mate-rial must be continually entered into the process in order to maintain the equilibrium conditions required by the process.

3.

In§ 70.22, paragraph (b) is revised to read as follows: § 70.22 Contents of application. (b) Each application for a license to possess at any one time and location special nuclear material in a quantity exceeding one effective kilogram of special nuclear material and to use such special nuclear material except those uses involved in the operation of a nuclear reac-tor licensed pursuant to Part 50 of this chapter or those involved in a waste disposal operation, or as sealed sources, shall contain a full description of the applicant's program for control of and accounting for special nuclear material which will be in the applicant's possession under license, to show how compliance with the requirements of§ 70.58 or§ 70.81, as applicable, will be accomplished.

4.

In§ 70.32, the introductory text of paragraph (c) is revised to read as follows: 16

[7590-01] § 70.32 Conditions of licenses. (c) Each license authorizing the possession at any one time and location of special nuclear material in a quantity exceeding one effec-tive kilogram of special nuclear material and the use of such special nuclear material except those uses involved in the operations of a nuclear reactor licensed pursuant to Part 50 of this chapter and those involved in a waste disposal operation and in sealed sources, shall contain and be subject to a condition requiring the licensee to maintain and follow (1) the program for control and accounting for special nuclear material and fundamental material controls described pursuant to§§ 70.22(b), 70.58(1), or 70.81(c), as appropriate, (2) the measurement control pro-gram for special nuclear materials control and accounting described pur-suant to§ 70.57, if appropriate, and (3) such other material control procedures as the Commission determines to be essential for the safeguard-ing of special nuclear material and providing that the licensee shall make no change which would decrease the effectiveness of the material control and accounting program prepared pursuant to§§ 70.22(b), 70.58(1), 70.Sl(g) or 70.8l(c), as appropriate, and the measurement control program prepared pursuant to§ 70.57, if appropriate, without the prior approval of the Commission. A licensee desiring to make such changes shall submit an application for amendment to its license pursuant to§ 70.34. The licensee shall maintain records of changes to the material control and accounting program made without prior Commission approval, for a period of three years from the date of the change, and shall furnish to the Director of Nuclear Material Safety and Safeguards, U.S. Nuclear Regula-tory Commission, Washington, O.C. 20555, with a copy to the appropriate 17

[7590-01] NRC Regional Office shown in Appendix A of Part 73 of this chapter, a report containing a description of each change within:

5.

In§ 70.51, paragraph (d) and the introductory text of paragraph (e) are revised to read as follows: § 70.51 Material balance, inventory, and records requirements. (d) Except as required by paragraph (e) of this section or by § 7D.89(e), each licensee who is authorized to possess at any one time and location special nuclear material in a quantity totaling more than 350 grams of contained uranium-235, uranium-233, or plutonium, or any combination thereof, shall conduct a physical inventory of all special nuclear material in its possession under license at intervals not to exceed twelve months. (e) Each licensee who is authorized to possess at any one time special nuclear material in a quantity exceeding one effective kilogram of special nuclear material, but less than five formula kilograms, and to use such special nuclear material for activities other than those involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those involved in a waste disposal operation; or as sealed sources; or as reactor irradiated fuels involved in research, development, or evaluation programs in facilities other than irradiated fuel reprocessing plants, shall: 18

[7590-01]

6.

In§ 70.57, the introductory text of paragraph (b) is revised to read as follows: § 70.57 Measurement control program for special nuclear material control and accounting (b) In accordance with§ 70.SB(f), each licensee who is authorized to possess at any one time and location special nuclear material in a quantity exceeding one effective kilogram of special nuclear material, but less than five formula kilograms, and to use such special nuclear material for activities other than those involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter, those involved in a waste disposal operation, or as sealed sources, shall estab-lish and maintain a measurement control program for special nuclear mate-rial control and accounting measurements. Each program function shall be identified and assigned in the licensee organization in accordance with§ 70.58(b)(2) and functional and organizational relationships shall be set forth in writing in accordance with§ 70.58(b)(3). The program shall be described in a manual which shall contain the procedures, instructions, and forms prepared to meet the requirements of this para-graph, including procedures for the preparation, review, approval, and prompt dissemination of any program modification of changes. The licensee 1 s program shall include the following: 19

[7590-01]

7.

In§ 70.58, paragraph (a) is revised to read as follows: § 70.58 Fundamental nuclear material controls. 1 (a) Each licensee who is authorized to possess at any one time and location special nuclear material in a quantity exceeding one effective kilogram of special nuclear material, but les~ than five formula kilo-grams, and to use such special nuclear material except those uses involved in the operation of a nuclear reactor licensed pursuant to Part 50 of this chapter or those involved in a waste disposal operation, or as sealed sources, shall establish, maintain, and follow written material control and accounting procedures in compliance with the fundamental nuclear mate-rial controls requirements specified in paragraphs (b) through (k) of this section and such other controls as the Commission determines to be essential for the control of and accounting for special nuclear material.

8.

Sections 70.81, 70.83, 70.85, 70.87, and 70.89 are added to read as follows: § 70.81 Nuclear Material Control and Accounting for Strategic Special Nuclear Material: General Performance Requirements. (a) General performance objectives. Each licensee who is author-ized to possess five or more formula kilograms of strategic spec1al nuclear material (SSNM) and to use such material at any site, other than a nuclear reactor licensed pursuant to Part 50 of this chapter, or in 20

[7590-01] operations involved in waste disposal shall establish, implement, and maintain a Commission approved material control and accounting (MC&A) system that will achieve the following objectives: (1) Timely detection of the possible loss of five or more formula kilograms of strategic special nuclear material; (2) Rapid determination of whether an actual loss of five or more formula kilograms occurred; and (3) Generation of information to aid in the recovery of lost mate-rial in the event of an actual loss. (b) System capabilities. To achieve the general performance objec-tives specified in§ 70.Bl(a), the MC&A system must provide the capabil-ities described in§§ 70.83, 70.85, 70.87, and 70.89, and must incorporate checks and balances that are sufficient to detect falsification of data and reports that could conceal diversion by: (1) An individual, including an employee (in any position); or (2) Collusion between an individual who has responsibility or control within both the physical protection and the MC&A systems and another individual with MC&A responsibilities. (c) Implementation dates. Each licensee subject to the require-ments of paragraph (a) of this section: (1) No later than 150 days after the effective date of these amend-ments, shall submit a fundamental nuclear material control plan describing how the licensee will comply with the requirements of paragraph (b) of this section; and (2) Within 360 days of the effective date of these amendments or 90 days after the plan submitted pursuant to paragraph (c)(l) of this 21

[7590-01] section is approved, whichever is later, shall implement the approved plan. (3) Notwithstanding paragraphs (c)(l) and (c)(2) of this section, a licensee may delay for an additional 18 months implementation of por-tions of its plans and procedures involving shutdown of a process for resolution of an MC&A alarm. However, during this delay a licensee shall conduct physical inventories at the intervals specified in§ 70.51(e)(3). (4) Notwithstanding§ 70.89(e)(l), shall conduct physical inven-tories at the intervals specified in§ 70.51(e)(3) until after the licensee has satisfactorily demonstrated, for a period of 6 months, ade-quate performance of all commitments in its plan and has received Commis-sion approval. § 70.83 In-process monitoring. (a) Licensees subject to§ 70.81 shall monitor internal transfers, storage, and processing of SSNM. This in-process monitoring must achieve the detection capabilities described in paragraphs (b) and (c) of this section for all SSNM except: (1) SSNM that qualifies to come under the item loss detection requirements of§ 70.85; (2) Scrap or waste in the form of small pieces, cuttings, chips, solutions or in other forms that result from a manufacturing process, containeq in 30 gallon or larger containers, with an SSNM content of less than 0.25 grams per liter; and (3) SSNM which is not readily separable from other radioactive material and which has a total external radiation dose rate in excess of 22

[7590-01] 100 rem per hour at a distance of three feet from any accessible surface without intervening shielding. (b) Unit Process Detection Capability. (1) The licensee shall detect any abrupt loss of SSNM from any unit process using any statistical test that has 99 percent power of detecting the loss of five formula kilograms. The detection shall occur within: (i) Three working days of a loss of Category IA material from any accessible location; and (ii) Seven calendar days of a loss of Category IB material from any accessible location. (2) For each unit process, at least every seven calendar days the licensee shall evaluate measurement data accumulated since the last clean-out of the unit process. This evaluation must be able to detect a recurr-ing loss with 90 percent power of detection. The amount to be detected for each unit process must be as low as reasonably achievable, but need not be less than 50 grams of SSNM. (c) Area Detection Capability. The licensee shall: (1) Detect any abrupt loss of SSNM accumulated from the unit pro-cesses within the plant or within any administratively controlled area, using a statistical method that has 90 percent power of detecting the loss of five formula kilograms; (2) If detection within administratively controlled areas is elected, provide administrative or physical measures to protect against diversion of five formula kilograms from being accumulated from two or more administratively controlled areas; 23

[7590-01] (3) If the statistical method used for paragraph (c)(l) of this sec-tion involves a test in addition to the tests required by paragraph (b) of this section, perform that test at least every seven calendar days; and*, (4) For the entire plant or for each administratively controlled area, at least every seven calendar days evaluate measurement data accumu-l~ted over the most recent 60 days of operation. This evaluation must be able to detect a recurring loss with 90 percent power of detection. The amount to be detected must be as low as reasonably achievable, but need not be less than 50 grams of SSNM. § 70.85 Item monitoring. (a) Licensees subject to§ 70.81 shall provide the detection capa-bility described in paragraph (b) of this section for any uniquely identi-fied items of SSNM that have been quantitatively measured and the valid-ity of that measurement independently confirmed, and that additionally have been either: (1) Tamper-safed or placed in a vault that provides protection at least equivalent to tamper-safing; or (2) Constructed such that removal of SSNM would be readily and permanently apparent (e.g., encapsulated). (b) The licensee shall verify the presence and integrity of selected SSNM items. The item selection method must be statistically sound and have at least a 99 percent power of detecting the loss of items that total five formula kilograms plant-wide within: 24

[7590-01] (1) For items in a vault or in a permanently controlled access area isolated from the rest of the material access area (MAA), one month from loss for Category IA items and two months from loss for Category IB items; (2) For items elsewhere in the MAA, three working days from loss for Category IA items and seven calendar days from loss for Category IB items. § 70.87 Alarm resolution. (a) Licensees subject to§ 70.81 shall provide the MC&A alarm resolu-tion capabilities described in paragraphs (b) through (g) of this section. (b) The licensees shall promptly resolve the nature and cause of any MC&A alarm. (c) Each licensee shall notify immediately, by telephone, the appro-priate NRC Regional Office listed in Appendix A of Part 73 of this chapter of any MC&A alarm that remains unresolved beyond the time period specified for its resolution in the licensee 1s fundamental nuclear material control plan. The licensee may consider an alarm to be resolved if, based on addi-tional information: (1) Clerical or computational error is found that clearly was the cause of the alarm; or (2) There is relevant evidence that substantiates the cause of the alarm or that substantiates that no loss has occurred. (d) If a loss has occurred, the licensee shall determine the amount of SSNM lost. (e) The licensee shall take corrective action to: (1) Return out-of-place SSNM, if possible, to an appropriate place; 25

[7590-01] (2) Update and correct appropriate records; and (3) Modify the MC&A system, if appropriate, to prevent similar occurrences in the future. (f) The licensee shall provide an ability to respond rapidly to alleged thefts. (g) In the event that an abrupt loss detection estimate exceeds five formula kilograms of SSNM: (1) Material processing operations related to the alarm must be suspended until completion of planned alarm resolution activities, unless the suspension of operations will negatively affect the ability to resolve the alarm. However, operations of continuous processes may continue for a 24-hour period during which checks are made for mistakes. (2) The licensee shall notify within 24 hours, by telephone, the appropriate NRC Regional Office that an MC&A alarm resolution procedure has been initiated. § 70.89 (a) Quality Assurance and Accounting Requirements. Licensees subject to§ 70.81 shall provide the quality assur-ance and accounting capabilities described in paragraphs (b) through (g) of this section. (b) Management Structure. The licensee shall establish and main-tain a management structure that includes clear overall responsibility for MC&A functions, independence from production responsibilities, and adequate review and use of those MC&A procedures identified in the approved plan as being critical to the effectiveness of the described system. 26

[7590-01] (c) Personnel Qualification and Training. The licensee shall assure that key personnel, who work in positions involving tasks where mistakes could directly degrade the safeguards capabilities of the MC&A system, are trained to maintain a high level of safeguards awareness and are qualified to perform their jobs. (d) Quality Control. The licensee shall: (1) Assure that the quality of SSNM measurement systems and mate-rial processing practices is continually controlled to a level of effec-tiveness sufficient to satisfy the capabilities required for detection, response, and accounting. (2) Incorporate checks and balances in the MC&A system sufficient to control the rate of human errors in material control and accounting information to as low as reasonably achievable. (3) Assure that SSNM measurements used in satisfying§ 70.89(e) are so controlled that: (i) The total contribution of measurement systems' uncertainties to the standard deviation of the inventory difference estimator is less than 0.1 percent of active inventory for SSNM processing facilities or 0.2 percent of active inventory for reprocessing facilities; (ii) Bias corrections for measurement systems are applied if their bias estimates exceed the larger of twice the standard deviations of their estimators or 50 grams of SSNM; (iii) The impacts of any uncorrected biases are accounted for in the inventory differences; and (iv) If, for like material, shipper-receiver differences accumulated over an inventory period exceed the larger of one formula kilogram or 27

[7590-01] 0.1 percent of the total amount shipped, then the licensee shall investi-gate and take corrective action, as appropriate, to identify and reduce measurement biases. (e) Accounting. The licensee shall: (1) Except as required by Part 75 of this chapter, perform a physical inventory at least every six months and, within 60 days of the start of the inventory, reconcile and adjust the book inventory to the physical inventory. (2) Resolve, or report an inability to resolve, any inventory difference estimate greater than 200 grams of plutonium or U-233 or 300 grams of U-235, that exceeds: (i) Twice the standard deviation of the inventory difference esti-mator; or, (ii) One-half percent of the active inventory. (3) Resolve on an individual container or lot basis, as appro-priate, and when required by Part 75 of this chapter on a batch basis, any shipper-receiver difference that exceeds both: (i) Twice the standard deviation of the difference; and (ii) The larger of 0.5 percent of the amount of SSNM in the con-tainer or lot, as appropriate, or 50 grams of SSNM. (4) In addition to any measurements and/or recovery of scrap used in meeting detection and response requirements: (i) Assure that recovered scrap is segregated from the scrap of other licensees or contractors and that any scrap measured with a stan-dard deviation greater than 5% of the measured amount is recovered so that the results are segregated by inventory period and received within 28

[7590-01] six months of the end of the inventory period in which the scrap was generated; or (ii) Demonstrate that the total scrap measurement uncertainty will not cause noncompliance with§ 70.89(d)(3). (5) Keep accounts of all additions to and removals from process based on measurements for plutonium element and for uranium element and isotopes. (f) Independent Assessment. The licensee shall: (1) At least every 12 months, independently assess the past perform-ance of the MC&A system and review its effectiveness; and (2) Document management 1s action on prior assessment recommendations. (g) Recordkeeping. The licensee shall establish auditable records sufficient to demonstrate that the requirements of§§ 70.83, 70.85, 70.87, and 70.89 have been met and maintain those records for at least three years unless a longer retention time is required by Part 75 of this chapter. Dated at Washington, DC, this day *j of.~ 1984. Fof the Nuclear Regulatory Commission. I II I I I l e Commission 29}}