ML23156A018

PR-052 - 57FR24394 - Standard Design Certification Rulemaking Procedures; Public Workshop

ML23156A018
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Issue date:	06/09/1992
From:	Chilk S NRC/SECY
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PR-052, 57FR24394
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ADAMS Template: SECY-067 DOCUMENT DATE: 06/09/1992 TITLE: PR-052 - 57FR24394 - STANDARD DESIGN CERTIFICATION RULEMAKING PROCEDURES; PUBLIC WORKSHOP CASE

REFERENCE:

PR-052 57FR24394 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

STATUS OF RULEMAKING PROPOSED RULE: PR-052 OPEN ITEM (Y/N) N RULE NAME: STANDARD DESIGN CERTIFICATION RULEMAKING PROCEDURES; PUBLIC WORKSHOP PROPOSED RULE FED REG CITE: 57FR24394 PROPOSED RULE PUBLICATION DATE: 06/09/92 NUMBER OF COMMENTS: 8 ORIGINAL DATE FOR COMMENTS: 08/20/92 EXTENSION DATE: I I FINAL RULE FED. REG. CITE: FINAL RULE PUBLICATION DATE: I I NOTES ON FILE LOCATED ON 16-G.

STUVS F RULE TO FIND THE STAFF CONTACT OR VIEW THE RULEMAKING HISTORY PRESS PAGE DOWN KEY HISTORY OF THE RULE PART AFFECTED: PR-052 RULE TITLE: STANDARD DESIGN CERTIFICATION RULEMAKING PROCEDURES; PUBLIC WORKSHOP

• .ttOPOSED RULE PROPOSED RULE DATE PROPOSED RULE SECY PAPER: 92-170 SRM DATE: 04/30/93 SIGNED BY SECRETARY: 06/02/92 FINAL RULE FINAL RULE DATE FINAL RULE SECY PAPER: 92-381 SRM DATE: I I SIGNED BY SECRETARY: I I STAFF CONTACTS ON THE RULE CONTACTl: GEARY S. MIZUNO MAIL STOP: 15-B-11 PHONE: 504-1639 CONTACT2: MAIL STOP: PHONE:

DOCKET NO. PR-052 (57FR24394)

DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT 11/19/93 01/13/93 COMMENT OF THE NUCLEAR MANAGEMENT AND RESOURCES COUNCIL (NUMARC) ON SECY-92-381 (RULEMAKING PROCEDURES FOR DESIGN CERTIFICATION) 02/09/93 01/26/93 LTR FROM THE SECRETARY TO JOE COLVIN, PRESIDENT, NUCLEAR MANAGEMENT AND RESOURCES COUNCIL (NUMARC)

REGARDING NUMARC'S COMMENTS ON SECY 92-381.

W ASHINGTON , D .C . 20555 _ht.; i ;: 1

.) NhC January 26, 1993 OFFICE OF THE *93 FEB -9 Pl2

51 SECRETARY Mr. Joe F. Colvin, President and Chief Executive Officer Nuclear Management and Resources Council 1776 I Street NW, Suite 300 Washington D.C. 20006

Dear Mr. Colvin:

Thank you for your January 13, 1993 letter enclosing detailed comments on SECY 92-381, Rulemaking Procedures for Design Certification. As you know, this rulemaking is currently pending before the Commission. NUMARC' s comments have been provided to the Commission for its consideration.

Sincerely, Sa ~::r::"'Chilk sei~'t..ry of the Commission

NUCLEAR MANAGEMENT AND RESOURCES COUNCIL JoeF. Colvtn President & c~ '=' January 13, 1993 Exec . . mve Ci',s<

Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 A'ITENTION: Docketing and Services Branch RE: NUMARC Comments on SECY-92-381 Rulemaking Procedures for Design Certification

Dear Mr. Chilk:

The Nuclear Management and Resources Council, Inc. (NUMARC)1, on behalf of the nuclear industry, has reviewed SECY-92-381, Rulemaking Procedures for Design Certification. Enclosed for the Commission's consideration are detailed comments (Enclosure 1) on the final recommendations of the Office of the General Counsel (OGC) in SECY-92-381 and discussed at the November 23, 1992 public briefing of the Commission. These comments are intended to supplement our August 19, 1992 comments on OGC's preliminary recommendations in SECY-92-170 and an October 14, 1992 letter and accompanying position paper regarding proprietary information issues from Marcus A. Rowden to Martin Malsch.

Generally, we believe that the procedures and policy judgments contained in SECY-92-381 reflect thoughtful analysis and we agree with many of the final recommendations based thereon. We are concerned, however, that certain of the OGC recommendations will result in a judicialization of design certification rulemaking, thereby undermining a major Part 52 objective. Most notably, OGC recommendations regarding a modified Full Magistrate role for the hearing board, according it sua sponte 1

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

Mr. Samuel J. Chilk January 13, 1993 Page 2 powers, granting the board authority to submit recommendations to the Commission and applying separation of furictions constraints, depart.sharply from the informal_rulemaking approach that the Commission deliberately chose for Part 52 design certification.

Indeed, a major stated reason for prescribing rulemaking rather than licensing for design certification was a desire to avoid "formal adjudicatory devices." Compounding the judicialization that would flow from adoption of these recommendations is their creation of an added, and wholly unnecessary, layer of design certification review -- one superimposed on the multiple reviews of the staff, the ACRS and the Commission itself.

We also are troubled by the cumulative impact of OGC recommendations*

lengthening the time within which various hearing-related actions can be taken. Each* of these recommendations is addressed in our detailed comments. -While extending the time for an individual action may seem non-consequential when viewed separately; the cumulative effect is to lengthen significantly the overall _rule making proceeding.

The matter of proprietary information also warrants special note. Our detailed comments address access to and the rulemaking use of proprietary information in a design certification proceeding. We believe the Commission can and should abide by the principle it established in 10 CFR § 52.51(c), Le., that proprietary information is to be _

protected in the same manner and to the same extent* as proprietary information submitted in connection with Part 50 license applications. As explained in our detailed

-comments, this principle can be satisfied in a manner which meets legal requirements, sound public policy and considerations of practicability. The course we recommend as respects hearing access to such information and its subsequent use in a rulemaking proceeding fairly balances the policy considerations supporting protection of proprietary information and effective public participation in design certification rulemaking and in later combined license proceedings.

The nuclear industry appreciates the thoughtful consideration the Commission* is giving to these important design certification issues and welcomes the opportunities afforded for contribution of our vie~s.

Sincerely, rr< -:f. ~ L-..;:___~

F.-Colvin JFC/RWB:bjb Enclosure

Mr. Samuel J. Chilk January 13, 1993 Page 3 cc: Chairman Ivan Selin Commissioner Kenneth C. Rogers Commissioner James R. Curtiss Commissioner Forrest J. Remick Commissioner E. Gail de Planque William C. Parler, Esq., General Counsel Martin q. Malsch, Esq., Deputy General Counsel

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I ENCLOSURE 1 NUMARC COMMENTS ON SECY-92-381 RULEMAKING PROCEDURES FOR DESIGN CERTIFICATION JANUARY 13, 1993.

TABLE OF CONTENTS I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1*

II. GENERAL POLICY MATTERS ........................ ; . . . . . . . . . . 1 A. USE OF PROPRIETARY INFORMATION * . . . . . . . . . . . * . . . . . . . . 1 B. ACCESS TO PROPRIETARY INFORMATION IN A DESIGN CERTIFICATION RULEMAKING ................ ~ . . . . . . . . . . 5 C. MECHANISMS FOR EARLY PUBLIC PARTICIPATION . . . . . . . . . . 8 D. FUNDING OF PUBLIC PARTICIPANTS IN RULEMAKING ACTMTIES .......................... ~ . . . . . . . . . . . . . . . . . 10 E. GENERIC VERSUS CASE-BY-CASE DETERMINATION OF RULEMAKING AND HEARING PROCEDURES ....... : . . . . . . . . 11 III. DISCUSSION OF DESIGN CERTIFICATION RULEMAKING PROCEDURAL ISSUES .... ; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 A. DOCKETING .............. ~ ... *......................... 12 B. NOTICE OF PROPOSED RULEMAKING . . . . . . . . . . . . . . . . . . . . 12

1. FDA Issuance and Publication of NPR . *. . . . . . . . . . . . . . . . . 12

2. Concurrent Notice of Opportunity to Submit Written Comments and Opportu:nity for Requestina: Hearing . . . . . . . . 12

3. Lenl:fh of Period for Submittina: Comments and/or Requests for Hearina: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 C. LICENSING BOARD AUTHORI1Y IN HEARINGS . . . . . . . . . . . . . 15 D. COMPOSITION OF LICENSING BOARD . . . . . . . . . . . . . . . . . . . . 19 E. CONDUCT OF HEARINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

1. Consolidation of Parties and Issues and Scope of Parties' Participation ....................................... *. 19

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2. Status of Applicant * ********** 0 **************** * .**** 20 Party Status of NRC Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

4. Separation of Functions and Ex Parte Commission Limits . . . 21

5. Location of Hearin2s: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 F. INFORMAL HEARING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

1. Threshold for Reguest/Standin2 . . . . . . . . . . . . . . . . . . . . . . . 23

2. Denial of Hearin2 Reguest . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

3. Written and Oral Presentations and Questioning . . . . . . . . . . 25

4. Opportunity for Response/Rebuttal . . . . . . . . . . . . . . . . . . . . . 25 G. ADDITIONAL HEARING PROCEDURES AND FORMAL HEARINGS............................................. 25

1. Ba_sis and Timing of Request ......................... . 25

2. Sua Sponte Authority of Licensin2 Board to Utilize Additional Hearing Procedures or Conduct Full Formal H ear1n2 ........................................ . 26 H. POST-HEARING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

1. Findings of Fact and Conclusions . . . . . . . . . . . . . . . . . . . . . . 26

2. Reliance on Extra-Hearing Information in Final Rule . ; . . . . . 28

3. .Judicial Review and Exhaustion of Administrative Remedies 28 11

I. INTRODUCTION The Nuclear Management and Resources Council (NUMARC), on behalf of the nuclear power industry, is pleased to provide cominents on the issues raised in SECY-92-381, "Rulemaking Procedures For Design Certification," and during the November 23, 1992 public meeting at which the Office of the General Counsel (OGC) briefed the Commission on such procedures. Our comments follow the general format

_* used by OGC in Enclosure 1 to SECY-92-381 and address the final recommendations made by OGC therein. Unless otherwise indicated, we have set forth OGC's final recommendations and then presented our comments on those recommendations. These comments are in addition to our August 19, 1992 comments on OGC's preliminary recommendations set forth in SECY-92-170 and in our October 14, 1992 letter and accompanying paper from Marcus A. Rowden to Martin Malsch.

II. GENERAL POLICY MATTERS A. USE OF PROPRIETARY INFORMATION FINAL OGC RECOMMENDATIONS: OGC proposes two alternatives for addressing the issue of incorporation of proprietary information in a design

• certification rule. The "first alternative" is that "all important design information in Tiers 1 and 2 'be non-proprietary, although proprietary information could be referenced as a basis for both tiers." The "second alternative" is "to seek a formal opinion from the Office of the Federal Register on incorporation by reference of proprietary information into Tier 2."

INDUSTRY COMMENT: Industry supports the two "alternatives" recommended by OGC, as clarified by its explanatory statements at the Commission briefing on November 23, 1992. We believe, however, that these "alternatives" should

not be viewed as mutually exclusive choices but rather as-sequential steps; only in the event that the* so-called "first alternative" proves unworkable should NRC seek a formal opinion from the Office of the Federal Register. In the latter regard, the ipdustry maintains, as set forth in our August 19, *1992 comments at Enclosure 2, pages 5-6, 19-21, and our October 14, 1992 letter to Martin Malsch, that the incorporation-by-reference course is both legally permissible and sound from a policy standpoint.

The industry believes that the "first alternative" provides a practicable basis e for resolution of this aspect of the proprietary information issue. To facilitate mutual understanding, it would be useful to restate the elements of the "first alternative," as proposed in the NUMARC submission to NRC of October 14, 1992, and as further discm;sed in SECY-92-381 and at the _Commission briefing on November 23, 1992:

0 The NRC Staff would* review the information contained in an application for design certification, including proprietary information

. submitted in connection therewith.

0 Each design certification applicant would undertake an additional review to make certain the proprietary information contained in its Standard Safety Analysis Report (SSAR) submission to what the applicant believes is a commercially irreducible minimum, and if not, to take appropriate action (i.e., deproprietorize ).

0 The certification applicant would thereafter submit non-proprietary descriptions in substitution for the residual proprietary information in the SSAR where needed for design control purposes. The Staff 2

would review such non-proprietary descriptions and accept them if they were adequate for design control purposes.1/

0 All information in Tier 1 and Tier 2 of the design certification rule would be non-propriet~ry, published and generally available to the public. Proprietary information could, however, be listed as source references, as would be the case for non-proprietary source references. Further, as the OGC recommendations make clear, proprietary information in the application which is subsequently included in the rulemaking record could form the basis for elements

. of a design certification rule without being incorporated in the rule itself and without losing its proprietary protection. Should the Commission so decide, this proprietary information could be limited to co~irmatory material (i.e., the two tiers of the rule would contain sufficient information to provide a-non-proprietary* basis for the rule's. requirements).

0 As discussed more fully in section 11.B. infra, we believe proprietary information should be made available only to qualifying party-requesters in the design certification rulemaking hearing under the conditions recommended infra. It should also be made available to

. 1/ In some instances, the Staff may conclude that the subject proprietary information is not needed for design control purposes and, therefore, can be removed from the SSAR (and Design Control Document) without the need for a non-proprietary substitution.

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qualifying party-requesters in COL proceedings wherein the certified design was referenced.

0 Where requested by an applicant, acceptance of "a" proprietary method (not "the"_ exclusive method) for meeting the rule's requirements would be obtained through Staff approval of a Topical Report rather than NRC approval in the certification rulemaking.

While such Topical Report approval would not confer method approval finality in subsequent COL proceedings (i.e., it would not preclude the Commission or its licensing boards from reaching a different conclusion), it would commit the Staff to the safety

. determination regarding the method(s) it had approved. Such Staff acceptance should be modifiable only if there later exists significant new information which jus~ifies a Staff imposed backfit. 2./

Implementation of this approach should be on a design-by-design basis, e with practicability of implementation tested by formulation of non-proprietary design control substitutes for current proprietary descriptions.

2./ The proposed use of Topical Reports is based upon Part 50 licensing practice.

Where, however, the Staff has reviewed and approved the methods information as part of its Safety Evaluation Report (SER) on the Final Design Approval (FDA),

such review and approval need not be duplicated; rather, it could be reflected in the SER for the FDA but not be incorporated in the proposed design certification rule.

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B. ACCESS TO PROPRIETARY INFORMATION IN A DESIGN CERTIFICATION RULEMAKING FINAL OGC RECOMMENDATIONS: (1) Access should initially be sought from the design certification applicant and may be conditioned by , .

the applicant upon execution of a reasonable non-disclosure agreement;

. (2) if a person is unable to obtain information from the applfcant or

• believes that the terms of the applicant's non-disclosure agreement are

• unreasonable, OGC recommends that the Commission establish procedures whereby that person can seek a board or Commission order resolving the disclosure issue; and (3) access to proprietary information would not be provided during the Staffs review but would await initiation of the rulemaking proceeding. See SECY-92-381, Enclosure 1 at 16-17.

In addition, OGC offers three alternatives:

Alternative 1:

Proprietary Information would be made available to all persons who provide notice to the Commission, within a set period which would elapse about midway through the comment period on the proposed rule, that they

.wish to hav~ access in order to prepare written comments or to participate in a later certification hearing. Id. at 17.

Alternative 2:

Same as alternative 1 except that persons seeking access would be required to provide an affidavit which: (1) explains why the non-proprietary information is not adequate to prepare comments; and (2) shows that the person has the expertise to use the information and contribute significantly to the rulemaking record. Id.

Alternative 3:

Similar to the NUMARC proposal. Only persons admitted as parties to the informal or formal hearing could be granted access. Such access would be granted by the, board (subject to immediate Commission appeal) only upon a showing by the party that: (1) non-proprietary information in the docket is not adequate to prepare for the hearing; (2) the information sought is relevant to issues to be considered at hearing; and (3) the party has the expertise to use the information and contribute significantly to the hearing record. Id. at 17-18.

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INDUSTRY COMMENT: 10 C.F.R; § 52.51(c) provides that "proprietary information will be protected in the same manner and to the same extent as proprietary information submitted in connection with applications for construction permits and operating licenses under 10 C.F.R. Part 50 ...." Past Part 50 practice reflects the Commission's ability to accommodate the public policy interest in malang agency records reasonably available to the public with the public policy, as well as commercial, interest in protecting proprietary information submitted by persons seeking licensing or other

- regulatory action. See, ~ . Wisconsin Electric Power Company. (Point Beach Nuclear Power Plant, Units 1 and 2), LBP 82-42, 15 NRC 1307, 1322 (1982). Moreover, Congress has recognized the significant public policy interest which "disfavors disclosure of proprietary information." Westinghouse Blee. Corp. v. NRC, 555 F.2d 82, 92 (3d Cir.

1977).

This public policy recognizes that third-party access to proprietary information, except under appropriate, enforceable, non-disclosure agreements or board

- orders could significantly harm the competitive position of U.S. reactor designers as respects their domestic and foreign competitors. Failure to adhere rigorously to such a policy would discourage the initiation and completion of research and development by private parties, and limit knowledge of the existence of such information by discouraging its reporting to the Commission and encouraging the submission to the NRC of only enough information to obtain regulatory approvals.

On the basis of these policy considerations, the industry generally supports OGC's final recommendations and proposed third alternative, with the following 6

clarifications. Consistent with the explicit language of§ 52.Sl(c) and relevant Part 50.

licensing practice, proprietary information should be made available only to "parties" after initiation of the_ design certification rulemaking hearing, and then only to such-_

parties who demonstrate that: (1) the proprietary information is relevant to the issue(s) the party has raised; (2) the information is necessary for the proper resolution of the issue(s); and (3) the party has the capability to use the information to contribute significantly to the hearing record. Access to proprietary information in a design certification rulemaking hearing should initially be sought from the applicant upon execution of a non-disclosure .

agreement tailored to the specific drcumstances and the relevant proprietary information. If such voluntary agreements cannot be made, then access may be obtained _upon the issuance of an appropriate order by the hearing board which protects such proprietary information from public disclosure and use. All protectiv~ agreements or board orders would be enforceable by appropriate sanctions.

In no event should proprietary. information be made available to third 4t parties during the application review or the comment phase of the rulemaking proceeding, as suggested by OGC in alternatives 1 and 2. Section 52.Sl(c), by its very use of the terms "parties" and "hearings," does not contemplate providing access to proprietary information to persons other than parties in the hearing context. Further, the non-proprietary SSAR that supports, and the non-proprietary SER that sanctions, Final Design Apprnval issuance will be available to the public well in advance of the issuance of the notice of proposed rulemaking (NPR). The entire content of the proposed design certification rule will be non-proprietary, published and available for 7

public review and comment. This material will contain sufficient information to enable the formulation of meaningful comments during the notice and comment phase of the rulemaking. Indeed, under Part 50 practice -- the standard prescribed in 52.Sl(c) --

proprietary information is obtained only by parties at the .licensing stage and only if

• needed to resolve a specific contested material issue. That same principle should apply here to implement the mandate of§ 52.Sl(c). Moreover, we find no precedent in other Commission rulemakings for making proprietary information available to comm.enters.

There is thus neither a policy nor legal basis for making proprietary information available -- as alternatives 1 and 2 would provide -- to other than parties in a design certification rulemaking proceeding.

Should the Commission, nonetheless,* determine that proprietary information will be made available to comm.enters on the proposed design certification

• rule, as well as to parties, then access should be allowed only upon a showing comparable to that required for party access. Qualification criteria should be specified

.- to assure the bona £ides of the requested access (i.e., the need for access to proprietary information in order to formulate comments on the proposed design certification rule or bases therefor); and non-disclosure requirements should be imposed that will adequately

• protect against access abuse.

C. MECHANISMS FOR EARLY PUBLIC PARTICIPATION FINAL OGC RECOMMENDATIONS: OGC recommends that the Commission: (1) should publish a periodic notice (at a minimum annually) inviting interested persons to be placed on a distribution list for SECY papers; (2) should publish in the Federal Register a notice of availability of the final SER; (3) may wish to consider establishing a public information "hotline" or monthly newsletter setting forth upcoming events, meetings, 8

and deadlines; and (4) consider the use of alternative means of dispute resolution (ADR) on a case-by-case basis for each design certification. See SECY-92-381, Enclosure 1 at 19-25. OGC believes that the use of advance

. notices of proposed rulemaking (ANPR) is not practical for the GE

• ABWR or ABB/CE System 80+ because of the advanced state of the2 Staffs review of those designs. However, OGC believes that ANPRs are the most practical formal mechanism for obtaining public coniments oh important technical and policy issues relevant to the Westinghouse AP-600 and subsequent designs. This should be determined on a case-by-case basis. Id. at 21.

I INDUSTRY COMMENT: .The industry agrees that significant value can be realized by early public participation as set forth in SECY-92-381 (i.e., notice of availability of SECY papers, availability of SERs, public information hotline/newsletter, and public workshops). The industry also agrees with OGC that ANPRs, while a potential mechanism for later use, are impracticable in the first two design certification proceedings, given the present advanced state of the Staffs review of those designs; any such future use should be determined on a case-by-case basis, based on the experience gained in the first two proceedings.

Regarding ADR, the industry stresses that a distinction must be drawn between negotiated nilemaking and other ADR techniques. Consistent with OGC's preliminary recommendations in SECY-92-170, the industry believes that use of negotiated rulemaking in design certification proceedings is neither appropriate nor desirable. Negotiated rulemaking in such a context fails to satisfy the fundamental criteria that are necessary for its application. J/ Part 52, moreover, was designed to JI As OGC stated in SECY-92-170, "negotiated rulemaking will not be possible because the interests affected cannot be reasonably limited or known in advance."

SECY-92-170, Attachment 1 at 9. OGC also further questiqned whether the (continued... )

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bring about greater stability and predictability in the licensing process than in Part 50 licensing. To impose on -an already complex design certification rulemaking an additional (arid indeterminate) public process in the form of negotiated rulemaking would reintroduce the very type of uncertainty which Part 52 was designed to eliminate.

• Finally, and importantly, decisions on safety issues cannot be appropriately resolved through negotiation or consensus building. Other ADR mechanisms, however, could be explored in the context of specific design certification rulemakings where such techniques could facilitate orderly and timely decisionmaking. Use of any ADR method would, of course, require the consent of all parties involved. We believe, however, that the implementing procedures for these other ADR mechanisms could not be formulated and refined to the point of being beneficial for the current set of ALWR design certification applications.

D. FUNDING OF PUBLIC PARTICIPANTS IN RULEMAKING ACTIVITIES FINAL OGC RECOMMENDATION: The Commission should consider developing appropriate mechanisms for funding private participants prior to the initiation of the formal design certification rulemaking (i.e., prior to publication of the NPR). Id. at 26-27. As clarified by OGC remarks at the November 23, 1992 Commission briefing on rulemaking procedures for design certification under Part 52, such funding would be limited to providing funds "to attend meetings or things of this sort." See Transcript (Tr.) at 71. Funds would not be used to help prepare private parties on substantive issues. Id. at 72-74. However, because of the advanced state of the GE and ABB/CE designs, OGC does not believe it is practical to consider funding of private participants in these cases. SECY-92-381, Enclosure 1 at 27 n.16.

J/ (...continued) criteria that no party will have to compromise a fundamental value, and that the parties view it in their interest to use the negotiated rulemaking process, can be satisfied. Id. We agree.

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INDUSTRY COMMENT: NRC is prohibited by law from providing any funds* to private participants, whether prior to or during a design certification rulemaking hearing. No statute authorizes funding of private persons for participation in activities centered on and leading to design certification and, as stated by OGC in Attachment 1 to SECY-92-170, every NRC appropriation act since fiscal year 1981 has prohibited any financial support for -private participants in regulatory or adjudicatory proceedings. See,

~ ' Energy and Water Development Appropriations Act, 1992, Pub. L. No. 102-104, e § 502, 105 Stat. 510, 536 (1991). Funding such as that suggested by OGC would violate the letter of the law and patently disregard the Congressional policy underlying the prohibition contained within the appropriations legislation. That policy is premised on the principle that public monies should not be used to fund participation by private parties in regulatory proceedings. The policy is no. less compelling -- indeed, perhaps' moreso -- given the fact that the cost of regulatory proceedings is now borne by the industry. That is, the money to fund the NRC comes 100% from user fees levied on the

• - industry. In effect, the funding of intervenors would involve taking funds from the industry and passing them through the NRC, _as a conduit, to support intervenor groups who are opposed to the action proposed by those who were forced to supply such funds.

E. GENERIC VERSUS CASE-BY-CASE DETERMINATION OF RULEMAKING AND HEARING PROCEDURES FINAL OGC RECOMMENDATION: The Commission should delay.

codification of generic procedures for conducting design certification rulemakings until the first two rulemakings have been conducted. SECY-

.92-381, Enclosure 1 at 27-28 .

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INDUSTRY COMMENTS: The industry supports OGC's final recommendation that generic procedures should be considered only after the

. Commission. has had the benefit of experience with the first two design certification rulemakings ..

III. DISCUSSION OF DESIGN CERTIFICATION RULEMAKING PROCEDURAL ISSUES DOCKETING FINAL OGC RECOMMENDATION: The Staff should continue its practice -of docketing design certification applications and publishing a notice of docketing in the Federal Register. Id. at 29.

• INDUSTRY COMMENT:* The industry agrees with OGC's recommendation that the Staff should docket design certification applications and publish notice of such docketing in the Federal Register. The notice of docketing also could be used to inform the public of future rulemaking activities.

B. NOTICE OF PROPOSED RULEMAKING

1. FDA Issuance and Publication of NPR FINAL OGC RECOMMENDATION: The Commission (and Staff) should aim to publish a NPR approximately 90 days after Federal Register Notice of FDA issuance. Id. at 30.

INDUSTRY COMMENT: The industry believes this to be an area where the design certification time period can be reduced. Accordingly, the* industry encourages formulation and publication of the proposed rule as early as possible.

Concurrent Notice of Opportunity to Submit Written Comments and Opportunity for Requestin2 Hearin&

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FINAL OGC RECOMMENDATION: OGC continues to recommend that the written comment period and the period for requesting an informal hearing run concurrently. Id. at 31.

INDUSTRY COMMENT: The industry supports OGC's final recommendation. The written comment and informal hearing request period should run concurrently.

3. Lenw;h of Period for Submittin2 Comments and/or Reguests for Hearin2 FINAL OGC RECOMMENDATION: OGC recommends that 120 days should be provided for the written comment and informal hearing request period._ Members of the public can request extensions of the time from the Commission for good cause ~ . failure to obtain reasonably timely access to proprietary information of demonstrable relevance and significance to the issues which the person wishes to comment on, or seek a hearing).

a OGC stresses that the 120 day period should be viewed as starting point, with the Commission having the discretion to modify the length of the period based upon circumstances not anticipated and discussed in this memorandum. Id. at 34.

INDUSTRY COMMENT: The industry believes that a 90-day comment and informal hearing request period, as recommended by OGC in SECY-92-170, is

• 4t appropriate and should not be extended to 120 days as OGC now recommends. The comment period can, of course, always be extended upon a showing of good cause in -

particular circumstances.

Neither the Atomic Energy Act (AEA) nor the Administrative Procedure Act (APA) establish any minimum comment period; rather, such decisions are left' to an agency's discretion. Given the early and numerous Federal Register notices on a wide array of NRC meetings. and actions associated with Part 52 implementation, as well as individual FDA/design certification applications -- all of which have made significant 13

information available well in advance of the formal comment period on a specific proposed design certification rule -- and the Commission's ability to extend the period upon a showing of good cause, the industry believes. a 90-day comment period is reasonable and adequate.

Part 52 implementation has provided a number of opportunities for early public access to and comment on various aspects of the design approval rulemaking process and on individual application reviews as they have developed: To date, these have included multiple public workshops on both substantive and process issues; public meetings betweeµ the NRC Staff, the industry and individual* applicants; and access to FDA/ design certification application submissions and NRC review documents over a multi-year period. With respect to the lead application, the content of the SSAR has progressively been made available to the public beginning in 1987. In actuality, moreover, there will be a longer period of time available for those intending to participate in the design certification rulemaking proceeding to review the rulemaking

- record. OGC projected in both SECY-92-170 and SECY-92-381 that there will be a 90-day period after FDA issuance before ah NPR can and should be published. While, as stated supra, we believe this interim period can and should be reduced, some part of it will remain, thus giving the public additional time to review the record and prepare

.comments or request ahearing. Thus, in reality, the complete FDA upon which the design certification will be based will be available for public comment for at least 180 days.

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In sum, absent a showing of good cause, 90 days constitutes a reasonable period of time for members of the public to file comments or request an informal hearing. Should good cause exist for extending the period beyond 90 days, based on fact-specific circumstances brought to the Commission's attention, the Commission may then provide additional time in its discretion.

c. LICENSING BOARD AUTHORI1Y IN HEARINGS FINAL OGC RECOMMENDATION: A "modified Full Magistrate" model should be used whereby the board has the discretion to submit recommendations on controverted issues to the Commission. Id. at 38. If the board chooses not to prepare a recommendatfon, it can certify the record to the Commission. immediately after the close of the record (in which case parties would submit their findings directly to the Commission rather than the board). Id. at 40.. OGC also recommends that a board be afforded the discreiion to seek sua sponte authority from the Commission if a significant safety issue is identified. The board would have two options if it identifies a significant safety issue not controverted by the parties: (a) seek authority from the Commission to compile a record on the issue, and*

make recommendations at the discretion of the board; or (b) identify the matter to the Commission along with any recommendations on controverted issues that the board may wish to make after the close of the *.

hearing. Id. at 43. *

• INDUSTRY COMMENT: The industry favors the Limited Magistrate model for a hearing board, as preliminarily recommended by OGC in SECY-92-170, and

• opposes OGC's final reconimendation of a "modified Full Magistrate" model. Further, the industry strongly opposes the hearing board being afforded the discretion to seek sua sponte authority from the Commission. In addition to ignoring precedent in other Commission rulemaking hearings and undermining the rightful responsibiiity of the Commission as primary decisionmaker on policy issues of first impression, authorizing the hearing board to make recommendations to the Commission and granting it sua 15

sponte powers would add a wholly unnecessary additional layer of review, :which would needlessly complicate and further delay the design certification process.

-Under the AEA and APA, a design certification rulemaking can be accomplished through notice and comment with no hearing. Part- 52 establishes a discretionary rulemaking hearing above and beyond the notice and comment requirements for informal rulemaking; The purpose of such* a discretionary hearing is _

limited: to ensure development of an adequate hearing record on issues raised by

• :persons meeting the participation threshold for consideration by the ultimate decision-maker on the proposed rule -- the Commission. The role assigned to the hearing board should be consistent with this fundamental purpose.

In five of the previous six rulemakings where the Commission has convened hearing boards, the Commission has assigned a Limited Magistrate role to the -

hearing board. A./ Hearings in these rulemaking proceedings used both informal and adjudicatory-type hearing procedures. Utilization of a Limited Magistrate role in the

,- present case would be fully in keeping with this rulemaking policy and practice. Indeed, these precedents have particular force in connection with design certification, where the

~/ See Acceptance Criteria for Emergency Core Cooling Systems for Light-Water-Cooled Nuclear Power Reactors (Docket No. RM.:.50-1); Effluents from Light-Water-Cooled Nuclear Power Reactors (Docket No. RM-50-2); Environmental Effects of the Uranium Fuel Cycle (Docket No. RM-50-3); Environmental Effects

• of Transportation of Fuel and Waste To and From Nuclear Power Reactors (Docket No. RM-50-4); Generic Environmental Statement on Mixed Oxide Fuel (GESMO) (Docket No. RM-50-5); Authority for Access to or Control over Special Nuclear Material (Docket No. RM-50-7). In the last-mentioned rulemaking- hearing, the Commission first assigned a Limited Magistrate role for the hearing board but later asked the board to provide recommendations on specified issues only.

16

Commission has been involved actively throughout the Part 52 implementation and design certification application review process.

There have been, and will continue to be, significant policy issues of first impression that arise throughout the design certification process. Their resolution is singularly the province of the Commission, without need for intermediaries.

Functionally, the Commission is best suited to make such decisions; it has played a critical role in shaping the implementation of Part 52 and it will already be familiar with

• a substantial portion of the design certification rulemaking record as a result of its active involvement throughout the application review process. The Commission will have provided policy guidance and oversight throughout the design review phase, will* have reviewed the draft SER -and final SER prior to issuance, and will have considered and approved, prior to publication, the proposed rule and statement of considerations. In .

short, the Commission, as a result of its early, continuing and substantial involvement, will have a detailed knowledge of the issues involved in design certification which transcends that which a hearing board might develop. In contrast to Part 50 proceedings, wherein the Commission's role was substantially that of an appellate adjudicatory tribunal, the Commission will have no need of board recommendations in Part 52 rulemaking.

The Limited Magistrate role for the hearing board is singularly appropriate here and fully adequate to serve the Commission's need for the compilation of a coherent and complete hearing record on controverted issues. Satisfying that need will be a demanding responsibility. Similar to the GESMO proceeding, a Limited Magistrate

- 17

hearing board for design certification would have the power, among others, to rule on offers of proof and receive evidence, ask questions of witnesses and parties,* order consolidation of parties, regulate the course of the hearing and conduct of the parties, and certify questions or refer rulings to the Commission for its determination. This*

panoply of significant functions refutes the assertion that a Limited Magistrate model relegates the hearing board* to a "potted plant" role.

In light of these responsibilities and the effective use of the Limited e Magistrate model in other rulemaking hearings, the additional functions of the "modified Full Magistrate" are neither warranted nor compatible with the Part 52 rulemaking process. They would simply create an additional layer of review -- a layer which is unnecessary in light of the massive underlying Staff, ACRS and Commission reviews associated with issuance of an FDA for the design and issuance of the proposed rule.

Relatedly, the industry strongly objects to OGC's recommendation that the board be empowered to seek sua sponte authority from the Commission if the board

- identifies a significant safety issue not raised by the parties. Section 52.51 explicitly identifies the parties as those who are to place issues in controversy in the design certification hearing. No such authority is given to the hearing board -- nor has such authority been given a hearing board in any of the previous Commission rulemaking hearings. As with the use of the "modified Full Magistrate" model, affording the board

• sua sponte authority implicates an additional layer of technical review, which unnecessarily expands the rulemaking hearing and is directly contrary to the limited purpose of the design certification hearing. Such a grant also presents the potential for 18

significant delay in the completion of the proceeding and could undermine the predictability and stability of the process.

D. COMPOSITION OF LICENSING BOARD FINAL OGC RECOMMENDATION: The Commission should consider appointing a special hearing board following its review of any hearing requests that may be submitted. SECY-92-381, Enclosure 1 at 45.

INDUSTRY COMMENT: Absent fact;.specific, unique circumstances warranting the use of special case management techniques, the appointment* of a special e hearing board is unnecessary in order to carry out the functions under any of the models concerning the role of the hearing board.

CONDUCT OF HEARINGS

1. .. Consolidation of Parties and Issues and Scope of Parties' Participation FINAL OGC RECOMMENDATIONS: (1) OGC continues to recommend that the Commission provide the board with explicit authority to consolidate parties and issues in an informal design certification hearing.

(2) OGC also continues to recommend that parties should not be permitted to participate as parties on issues which they did not controvert; .

however, the board should have the discretion to permit such parties to act as "amici." Id. at 46. Parties acting as "amici" would have the opportunity to submit information and arguments to the board on issues which they do not controvert, but would not have the right either to make oral .

presentations or submit questions to the board on such issues. Id. at 47.

INDUSTRY COMMENT: The Commission should provide the hearing board with explicit authority to consolidate parties and issues. The industry further agrees with OGC's final recommendation that the parties should not be permitted to participate as parties on issues which they did not controvert. The industry, however, opposes affording the board the discretion to permit such parties to act as "amici" with 19

the opportunity to submit information and arguments on issues which they do not controvert. Allowing parties to so participate on issues not controverted by them would be inconsistent with the proposed threshold for hearing, is wholly unnecessary and would .*

add still further to the length and complexity of the hearing without countervailing contributory benefits.

2. Status of Anplicant FINAL*OGC RECOMMENDATION: OGC continues to recommend that

a. design certific~tion applicant be deemed to be a party in any informal hearing. OGC also continues to recommend that the applicant be afforded an opportunity to respond to requests for .an informal hearing, as well as initial requests for additional hearing procedures or a formal hearing. Id.

at 50.

• INDUSTRY COMMENT: The industry supports OGC's final recommendation that a design certification applicant be deemed to be a party in any informal hearing. As the. developer and proponent of the subject design, the applicant has a self-evident and unique interest in the certification rulemaking and a singular ability .to contribute to the rulemaking record on controverted issues. Therefore, the applicant should be a party to the proceeding. In addition, because the applicant is the proponent of the design, it makes sense substantively as well as procedurally to conclude the process of allegation and response. on controverted issues with the applicant's (and, for the reasons set forth in 3, below, the Staffs) responsive submittals.

3. Party Status of NRC Staff FINAL OGC RECOMMENDATION: The Staff should be deemed to be a party in both formal an*d informal hearings with an opportunity to respond to commenting parties' motions, requests, and presentations, and the Staff should be afforded the opportunity to respond to requests for informal 20

hearings and requests for additional procedures or formal hearings. Id. at 51-52.

INDUSTRY COMMENT: The industry agrees with OGC's final recommendation that the Staff should be deemed to be a party in both formal and informal hearings with an opportunity to respond to commenting parties' motions, requests, presentations, informal hearing requests, and requests for additional procedures or formal hearings. As preparer of the SER, which constitutes one of the bases for*

design certification, the Staff clearly would be in a position to contribute significantly to the development of the rulemaking record and resolution of controverted hearing issues.

Further, because of its SER role and its role as preparer of the proposed certification rule issued by the Commission, the Staff would be a proponent of the proposed rule and a necessary party to the design certification hearing.

4. Separation of Functions and Ex Parte Commission Limits FINAL OGC RECOMMENDATIONS: As respects separation of functions, OGC recommends that the Commission require all communications between the Commission and the Staff to be public if a hearing is granted ti by the Commission. Id. at 56. Ex parte prohibitions are recommended to apply, however, from the issuance of the NPR regardless of whether a hearing request has been granted and, where a hearing has been granted, to apply to uncontroverted as well as controverted matters. Id. at 57.

INDUSTRY COMMENT: The industry continues to believe that, for both legal and policy reasons, separation of functions constraints should not be imposed in the design certification proceeding.

The APA's requirements concerning separation of functions apply only to rulemakings or adjudications required by statute to be determined "on the record" after an opportunity for hearing. Since NRC rulemakings under the AEA, including those 21

under Part 52, are not required to be made on the record after an opportunity for hearing, there is no legal requirement for imposing separation of functions restrictions in design certification rulemaking.

Moreover, as a matter of sound policy, the Commission should be able to obtain the* most knowledgeable advice from the Staff without unnecessarily restricting and formalizing Commissfon-Staff communications. This can be accomplished most J

effectively by exercising the communication latitude deliberately afforded by the APA --

9 a latitude grounded on the policymaking character of rulemaking. .

There is, in short, no legal requirement for imposing separation of function

• controls, and these are sound policy reasons for not jeopardizing the rulemaking process in this manner.

Should the Commission choose to adopt separation of functions constraints, it should do so in a manner entailing the least cumbersome procedures and causing the

• least possible delay in the conduct of the rulemaking proceeding. OGC set forth an appropriate framework for separation of functions constraints in the November 23, 1992 briefing of the Commission. As we understand that OGC presentation, Commission communication with so-called "separated-Staff' would be permissible (i.e., not prohibited) if a summarized written record thereof was thereafter prepared, included in the rulemaking docket and made available to the :hearing parties. Further, separation of functions restrictions would not apply before the beginning of the informal hearing and would apply thereafter only to issues controverted in the rulemaking hearing. Tr. at 47.

22

Although ex patte restrictions (i.e., communication restraints applicable to parties other than the Staff) do not apply, as a matter of law, to the present type of tulemaking, the industry believes that their application would enhance the credibility of the decisionmaking process. Consistent, however, with established Commission regulations and practice, ex parte restrictions should apply only after a hearing is granted, and then only to controverted matters. See 10 C.F.R. §§ 2.780(a), (b). OGC's recommendation that ex parte restrictions should apply throughout the entire rulemaking

- process is more restrictive than existing NRC regulations for on-the-record rulemaking and licensing proceedings. There is no sound reason why these constraints should be more restrictive for informal rulemaking, and OGC has provided none.

5. Location of Hearings:

FINAL OGC RECOMMENDATION: OGC continues to recommend that design certification hearings be held in the Washington, D.C. metropolitan area, but that requests for hearing sessions in other locations should be considered by the Commission upon a demonstration of special circumstances by a requester or in the Commission's discretion. Id. at 58-59.

INDUSTRY COMMENT: The industry agrees with OGC's final recommendation.

F. INFORMAL HEARING

1. Threshold for Request/Standing FINAL OGC RECOMMENDATION: OGC recommends a two-part threshold for a requester obtaining an informal hearing and participation as a party therein: (a) if the requester submits written comments in the public comment period, it will be sufficient to identify that portion of the

• written comments that the requester wishes to submit in the informal hearing; and (b) requesters must demonstrate that they (or persons they intend to represent thein at the hearing) have appropriate knowledge or 23

qualifications to enable them to contribute sigmficantly to the development of the hearing record on the issues upon which they seek a hearing. In the latter regard, the Commission should make clear that a person seeking a hearing need not satisfy a judicial "expert witness" standard in order to meet the qualifications criterion. Id. at 62-63. OGC also recommends that the hearing procedures established by the Commission include a provision similar to 10 C.F.R. § 2.715 to allow interested states to participate.

• INDUSTRY COMMENT: The industry generally supports OGC's final recommendations on the appropriate threshold for granting a request for an informal hearing and party participation therein. The industry recommends, however, that hearing requesters additionally be required to specify the portions of the proposed rule or supporting bases which are challenged, the proposed revisions, the bases for their revisions, and references to all sources and documents upon which the requester relies.

Since an informal hearing is not a matter of right and entails time and resource expenditures, it is reasonable to require hearing requesters to supply enough information to permit an informed decision _on the merits of a request for hearing and participation as a party therein. The recommended additions will further the establishment of an

- effective and efficient hearing process.

2. Denial of Hearing Request FINAL OGC RECOMMENDATION: OGC continues to recommend that the Commission rule on informal hearing requests (as well as board

• recommendations for use of formal procedures) and specify the matters for hearing consideration. If, however, the Commission decides that the board should rule on informal hearing requests, OGC recommends that a board denial should be immediately appealable to the Commission. Id. at 65 n.48.

• INDUSTRY COMMENTS: The industry agrees with OGC's final recommendations.

24

3. Written and Oral Presentations and Ouestionin&:

FINAL OGC RECOMMENDATIONS: OGC continues to recommend that: (a) the parties be allowed to make oral presentations and submit

• questions for consideration by the hearing board without any further

• showing of need; (b) that the board retain the authority to question parties at the hearing on issues in the hearing without further finding; (c) outlines of the oral presentations and questions which the parties would like to be asked by the board.be submitted 30 days before the hearing; and (d) the board have authority to grant extensions to the schedule upon a showing or good cause. Id. at 67-68.

INDUSTRY COMMENTS: The industry agrees with the final

e. recommendations.

4. Opportunity for Response/Rebuttal FINAL OGC RECOMMENDATIONS: OGC continues to recommend that the applicant and Staff be provided an opportunity to respond to other parties' written and oral presentations. Id. at 69-70.

INDUSTRY COMMENTS: The industry agrees with OGC's final recommendations that the applicant and the Staff be provided the opportunity to respond in writing to other parties' written presentations, and to respond orally to other

- parties' oral presentations. In addition, as discussed in Section 111.E.2, supra, the process of rebuttal on controverted issues should conclude with applicant and Staff responses.

G. ADDITIONAL HEARING PROCEDURES AND FORMAL HEARINGS

1. Basis and Timina= of Reguest FINAL OGC RECOMMENDATION: (1) OGC continues to recommend against a serial process for requesting additional hearing procedures and a formal hearing; (2) OGC continues to recommend adoption of the criteria for requesting additional procedures or formal hearing proposed in SECY-92-170, and the requirement for board memorialization of the basis for its decision on such requests; (3) OGC recommends that parties should file their requests for additional procedures or a formal hearing at the conclusion of the oral phase of the hearing, with the 'exception of requests 25

for discovery (which would be filed with the board within 15 days of the Commission's grant of the. informal hearing request, and which must explain why the information* currently available to the party is insufficient);

and (4) OGC recommends that the rule making procedures require the board to specify the basis for the board's recommendation that discovery should be authorized. Id. at 72-73.

INDUSTRY COMMENTS: The industry supports OGC's final recommendations. The industry further suggests that if the Commission grants additional procedures involving discovery or a formal hearing on certain issues, consideration should be given to conducting a parallel proceeding (with a special board) on these

• issues.*

2. . Sua Sponte Authority of Licensina= Board to Utilize Additional Hearin&: Procedures or Conduct Full Formal Hearin&:

FINAL OGC RECOMMENDATION: OGC continues to r_ecommend that the board not be provided with sua sponte authority to request additional hearing pr~cedures or a full hearing. Id. at 74 ..

INDUSTRY COMMENTS: Consistent with our ~arlier comments r~garding sua sponte authority, the industry believes that the board should not be

- provided with sua sponte authority to request additional hearing procedures or a full hearing.*.

H. POST-HEARING MATTERS.

1. Findina:s of Fact and Conclusions FINAL OGC RECOMMENDATIONS: (1) All parties should file findings directly with the Commission 30 days after the board closes the record; (2) the board should have 30 days after the record is closed to certify the record to the Commission along with any recommendations it may wish to make; (3) the commenting party should file its findings in* the form a of proposed final rule and statement of considerations (SOC) with respect to

• that party's controverted issues. According to OGC's comments in the November 23 briefing, this could be in the form of a-mark-up of the 26

proposed rule identifying how the party would change the rule. *Tr. at 59-

60. The design certification applicant should be required to file a proposed final rule and SOC which address hearing issues as well as issues raised in written comments; and (4) OGC continues to recommend that failure to file findings on a controverted issue should not result in "dismissal". of that issue from the rulemaking. SECY-92-381, Enclosure 1 at 75-76.

INDUSTRY COMMENTS: The industry disagrees with OGC's final .

recommendations in the following respects: (1) increasing the time from 5 to 30 days after the record is closed in which the board must certify the record to the Commission; and (2) allowing the board (pursuant to OGC's newly proposed "modified Full Magistrate" model) to make recommendations to the Commission. The industry bases its disagreement on the following.

As to timing considerations_ under a Full Magistrate model, given the historical ineffectiveness of the 35-day period set forth iri 10 C.F.R. Part 2, App. A.Vl(d)

(i.e., for transmitting a licensing board's initial decision and certified record to the Commission in construction permit and operating license hearings), m no event should certification of the record, along with any recommendations by the board, exceed 30 days. In the event the hearing* board submits no recommendatioris within the 30-day period, it should be deemed that the board has no recommendations.

As discussed in* Section m.c, supra, we believe the hearing board should have no authority to_ make recommendations to the Commission. Rather, we urge adoption of the Limited Magistrate model with respect to timing considerations. Under the Limited Magistrate model, five days for record certification to the Commission is fully adequate.

27

2. Reliance on Extra-Hearin1: Information in Final Rule FINAL OGC RECOMMENDATION:. OGC continues to recommend that a final design certification rule be based only upon information in the design certification _rulemaking docket. Mt at 76.

• INDUSTRY COMMENT: 'J?e industry agrees with OGC's final recommendation.

3. .Judicial Review and Exhaustion of Administrative Remedies FINAL OGC RECOMMENDATION: OGC recommends that the Commission not take the position on any judicial appeal of a design certification rule that a petitioner for review has not exhausted its administrative remedies becaus_e it either did not request an informal hearing, or did not participate fully in a requested hearing. Id. at 78.

INDUSTRY COMMENT: Whether to oppose a petition for judicial review on the ground of failure: to exhaust administrative remedies is fact-specific and should not -- indeed cannot -- be generally determined in advance of the conduct of individual design certification proceedings* and the circumstances attendant the* raising, consideration and disposition of particular issues. We see no sound basis for the 4I Commission to pre-judge the exhaustion question; jnstead, it should make any such determinations on a case-by-case basis.

Exec/Legal/Counsel/92-381.RWB 28

DOCKET NUMBER,*

PROPOSED RULE R~ -' __s ,.

C57 F fl J_'--/ 3CJ'i)

DOCKETED NUCLEAR REGULATORY COMMISSION us~mc 10 CFR Part 54

• 92 DEC - 7 P3 :48 Standard Design Certification Rulemaking Procedures; Notice of Availability AGENCY: Nuclear Regulatory Commission.

ACTION: Notice of Availability.

SUMMARY

The Nuclear Regulatory Commission (NRC) is making available to the public a paper, SECY 92-381 (November 10, 1992),

prepared by the Office of the General Counsel (OGC) which provides final recommendations to the Commission on design certification rulemaking procedures for the initial design certification rulemaking.

ADDRESSES: Requests for copies of SECY 92-381 should be sent to Geary S. Mizuno, Off ice of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, D.C. 20555. Copies of SECY 92-381 may be examined, along with comments received on the draft OGC paper (SECY-92-170), and the transcript of a July 20, 1992 workshop on design certification procedures, at the NRC Public Document Room at 2120 L Street, NW (Lower Level), Washington, D.C. between the hours of 7:45 a.m. and 5:15 p.m. on Federal workdays.

FOR FURTHER INFORMATION CONTACT: Geary s. Mizuno, Office of the General Counsel, U.S. Nuclear Regulatory Commission, D.C. 20555, telephone: (301) 504-1639.

- 2 -

SUPPLEMENTARY INFORMATION: Under 10 CFR Part 52, designs for nuclear power plants are to be certified through rulemaking, in which the public has an opportunity to submit written comments on the proposed design certification rule, as required by the Administrative Procedure Act (APA). However, Part 52 goes beyond the requirements of the APA by providing the public an opportunity to request a hearing before an Atomic Safety and Licensing Board

- (Licensing Board) in the design certification rulemaking. Although hearings in NRC rulemakings are not unprecedented, ~-, the rulemaking associated with proposed adoption of the Generic Environmental Statement on Mixed Oxide Fuel (GESMO), they have been extremely rare and sui generis, and therefore provide no compelling precedent on what procedures should be followed here.

To assist the Commission in preparing for the first design certification rulemaking proceeding, OGC prepared a draft paper, SECY 92-170 (May 8, 1992) which identified and analyzed issues relevant to establishing procedures to govern design certification rulemaking. SECY 92-170 was made public by the Commission (57 FR 24394; June 9, 1992), and a Commission meeting on the paper was held on June 1, 1992. Thereafter, in SECY 92-185 (May 19, 1992),

OGC proposed holding a public workshop for the purpose of facilitating public discussion on the issues raised in SECY 92-170, and to obtain the comments of the public on those issues. Notice of the workshop was published in the Federal Register (57 FR 24394; June 9, 1992). A 30-day period following the workshop was provided

for the public to submit written comments on SECY 92-170. The workshop was held on July 20, 1992. A transcript was kept of the workshop proceedings and placed in the Public Document Room.

Approximately 46 persons outside of the NRC attended the workshop; an additional 8 persons requested copies of the SECY paper and workshop materials, but did not attend. Eleven written comments were received following the workshop.

After consideration of the panel discussions at the public workshop and the written comments received after the workshop, OGC has prepared SECY 92-381 which identifies and analyzes the issues relevant to design certification rulemaking procedures, and provides final recommendations to the Commission. Five principal issues on design certification rulemaking procedures were identified in SECY-92-170. SECY 92-381 now provides final recommendations on each of these issues, as described below.

The first issue is the scope of the Atomic Safety and Licensing Board's responsibilities in a design certification rulemaking hearing. OGC recommended preliminarily that the Licensing Board act as "limited magistrate" to compile a record on controverted issues and certify the record to the Commission for resolution. After consideration of written public comments and the discussions at the public workshop, OGC now recommends an approach similar to that of a "full magistrate." Under this approach, the

Licensing Board would have the option of, but not be required to, prepare recommendations on controverted hearing issues.

The second issue is whether the Commission should apply~

parte and/or separation of function limitations to the Commission (and Licensing Board, as applicable) in the design certification rulemaking proceeding. OGC recommended preliminarily that where hearings are held in design certification rulemakings, that the Commission apply limited separation of functions. This would allow the Commission to obtain the advice and assistance of the staff members who participated in the review of the design certification application and any hearing, but that such communications would occur in a public process, ~ - , preparation of SECY papers in response to commission SRMs, and public meetings between the Commission and the staff. In the absence of a hearing, the Commission could obtain the advice and assistance of the staff the same as in any ordinary rulemaking. In SECY 92-381, OGC continues to recommend this approach. OGC also recommends in SECY 92-381 that regardless of whether hearing requests are received, that ex parte limitations be followed from the time that an NPR is published, so that all Staff and Commission communications with persons outside the NRC on all substantive rulemaking matters (not just controverted issues) be docketed.

Third, SECY 92-170 discussed whether a threshold should be adopted by the Commission for a hearing request submitted by an

- 5 -

interested member of the public in a design certification. OGC recommended preliminarily that a person requesting an informal hearing be required to: (a) submit written comments in the written comment period; (b) submit the written presentations proposed to be included in the informal hearing; and (c) demonstrate that they, or persons they intend to retain to represent them in the informal hearing, have the qualifications to contribute significantly to the development of the hearing record on the controverted issues. OGC now recommends in SECY 92-381 that a person requesting an informal hearing need only: (a) submit the written presentations proposed to be included in the informal hearing; and (b) demonstrate that they, or persons they intend to retain to represent them in the informal hearing, have the qualifications to contribute significantly to the development of the hearing record on the controverted issues. OGC no longer recommends the proposed third requirement for submission of written comments, since it is largely duplicative of the requirements to submit the written presentations. OGC also recommends that the Commission make clear that a person need not meet the test of an "expert witness" in order to satisfy the qualifications requirement. Rather, the person must demonstrate that, because of knowledge, experience, education or training, he or she can contribute signficantly to the development of the record on the controverted issue.

The structure and timing of the hearing, including the time for filing informal hearing requests and requests for additional

procedures, is the fourth area requiring Commission guidance. OGC recommended preliminarily that informal hearing requests be filed concurrently with the time for submitting written comments, which OGC preliminarily recommends be set normally at 90 days. If the Commission grants the informal hearing requests, OGC recommended preliminarily that parties be provided the opportunity to make oral presentations before the Licensing Board, and that the Licensing e Board be permitted to ask questions at the oral hearing without any special finding by the Licensing Board. Requests for additional procedures or full formal hearings under 10 CFR Part 2, Subpart G, would normally be submitted at the time the outlines of the oral presentations are due, which OGC preliminarily recommended should be filed 30 days before the oral hearing. Thereafter, a special showing would have to be made for an untimely request for additional hearing procedures or a full formal hearing. As a result of additional consideration following the public comments, OGC now recommends that a 120-day period be provided for submitting written comments and requests for informal hearings. OGC also has changed its recommendation with respect to the timing of requests for additional procedures or full formal hearings. OGC now recommends that parties should file their requests for additional procedures or a formal hearing at the conclusion of the oral phase of the hearing, with the exception of requests for discovery.

Discovery requests would be filed with the Licensing Board within 15 days of the Commission's grant of an informal hearing. The

- 7 -

Licensing Board would refer meritorious requests to the Commission for final determination.

Finally, the use of, and access to, proprietary information in the design certification rulemaking was discussed in SECY 92-170.

OGC recommended preliminarily that both "Tier 1 11 and "Tier 2 11 design certification information should not contain any proprietary information. In addition, OGC recommended preliminarily that access to proprietary information be provided following docketing of the design certification application, and that non-disclosure agreements be used in order to obtain access to proprietary information from the NRC's public document room (PDR). In SECY 92-381 OGC now proposes two alternatives for addressing the incorporation of proprietary information into a design certification rulemaking. The first alternative is that all important design information in Tiers 1 and 2 be non-proprietary, although proprietary information could be referenced as a basis for both tiers. The second alternative is to seek a formal opinion from the Off ice of the Federal Register on incorporation by reference of proprietary information into Tier 2. With respect to public access to proprietary information, OGC proposes three alternatives for Commission consideration. The first alternative would require potential commenters and parties in any design certification hearing to seek access to proprietary information directly from the design certification applicant. Disputes over access would be resolved by the commission or the Licensing Board,

- 8 -

as appropriate. Access to proprietary information would await the initiation of the formal rulemaking proceeding (publication of an NPR). Access would be provided to all persons who would sign a non-disclosure statement. The second alternative would be the same as the first, except the that persons seeking access would have to provide an affidavit explaining why access to proprietary information is necessary to provide comments and shows that the person has the necessary expertise to use the information and contribute significantly to the rulemaking record. The final alternative would grant access only to parties in any rulemaking hearing which the commission authorizes. Access would be granted only to parties who can show that the proprietary information is relevant to the issues at the hearing, the non-proprietary information is insufficient to adeauately address the issues in the hearing, and that the party seeking access has the necessary expertise to use the information and contribute significantly to the rulemaking record.

The Commission is making SECY 92-381 available to the public to enhance public awareness of the design certification rulemaking process. The Commission will establish the procedures to be followed in the first design certification rulemaking proceeding (expected to be for the General Electric (GE} Advanced Boiling Water Reactor (ABWR}) in the notice of proposed rulemaking for that design certification.

Dated at Rockville, MD this 1~ day of ~M 1992.

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• 0 I I 0 TEUX,1187606 October 14, 1992 Martin Malsch, Esq.

Deputy General Counsel Nuclear Regulatory commission/OGC 11555 Rockville Pike Rockville, Maryland 20555

Dear Marty:

Bob Bishop has asked that I furnish you with a copy of the enclosed paper addressing the treatment of proprietary information in design certification rulemaking and subsequent Part 52 licensing proceedings. The paper, as explained therein, is supplementary to the views on this matter contained in the NUMARC comment letter of August 19, 1992 on SECY-92-170, and elaborates on an alternative approach we discussed at the September 18 meeting of NUMARC representati ves with senior NRC Staf f.

As stated at the aforementioned meeting, we remain of the view that the incorporation-by-reference course supported in NUMARC's comments on SECY-92-170 is both legally permissible and sound from a policy standpoint and that the acceptabil ity of that course should be further pursued with the Office of Federal Register. We believe, however, that the practicabi l ity o f the approach discussed in the enclosed paper merits exploration with the Staff on a vendor-by-vendor basis.

Si ncerely, MAR:fa Enclosure

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r 10-14-92 Proprietary Information in Design Certification Rulemaking: An Alternative Approach I. OGC Preliminary Recommendations and Industry Disagreement Among the preliminary recommendations of the Office of the General Counsel in SECY-92-170 was the following: Tier 2 as well as Tier 1 of a design certification rule should contain no proprietary information, either directly or through incorporation

- by reference. The same recommendation was made in SECY-92-287 for the newly-proposed Design Control Document. OGC' s position is apparently driven by "informal advice" from the Office of the Federal Register (OFR) that a rule will not be published in the Federal Register unless the rules's entire content, including material incorporated by reference, is publicly available. As explained by OGC, OFR's informal advice is based upon its application of provisions of the Administrative Procedure Act (APA) regarding Federal Register publication of agency rules and the pre-conditions therefor (5 U.S.C. 552(a)).

NUMARC's comments on SECY-92-170 stated strong disagreement with this preliminary OGC recommendation and its ostensible legal underpinning. The industry believes that proprietary information can be incorporated by reference in a design certification rule, since it later would be "reasonably available to the class of persons affected thereby" (i.e., COL proceeding parties) and thus qualify for incorporation by reference under an exception contained in the cited APA provisions.

__J

2 Nonetheless, the NUMARC comments proposed a more restrictive course to meet OGC/OFR concerns. Under that NUMARC proposal, there would be no proprietary information in Tier 1 of the rule; and proprietary information would not be used in Tier 2 to establish generically applicable requirements. Proprietary information would only be referenced as SSAR, i.e., Tier 2, source documents (similar to references of non-proprietary documents in the SSAR), and for establishing methods approved in the design certification rulemaking -- for meeting the rule's non-proprietary generically applicable requirements. The latter is based on treatment accorded such proprietary methods in the ECCS rulemaking, which culminated in a published Commission rule that expressly incorporated by reference approved proprietary methods for meeting generically applicable ECCS requirements.

Despite the ECCS precedent, we are advised by NRC-OGC that OFR will likely take the position that it will not publish a rule incorporating proprietary information by reference even if such information relates only to approved methods for meeting non-proprietary generically applicable requirements. In light thereof, the industry has explored an alternative approach to this matter which would obviate the legal concerns raised in SECY-92-170. The constituent elements of that approach are set forth below.

3 II. Alternative Industry Approach

1. Treatment of Proprietary Information in the Course of NRC Staff Technical Review of a Design Proposed for Certification.

The NRC Staff would review all information contained in an application for design certification, including proprietary information submitted in connection therewith. The Staff's SER would contain only non-proprietary information; and there would be no proprietary information contained in what SECY-92-287 calls the Design Control Document.!'

In implementation of the foregoing:

o Each design certification applicant would reduce the proprietary information contained in its SSAR submission to what the applicant believes is a commercially irreducible minimum.

o The certification applicant would thereafter submit non-proprietary descriptions in substitution for the residual proprietary information, where needed for design control purposes.

e The Staff would review such non-proprietary descriptions and accept them for inclusion in the Design Control Document if they were adequate for design control purposes.

o Proprietary information, including that which comprised the basis for non-proprietary descriptions in the Design Control Document, would not be unrestrictedly available in the Public Document Room. Such proprietary information would, however, be made available to qualifying party-requesters in the design l' NUMARC will be submitting separate comments on the Design Control Document proposal of SECY-92-287.

- - - - -- - - - -- ~

4 certification rulemaking hearing, and it would also be made available to qualifying party-requesters in COL proceedings wherein the certified design was referenced, as described in 3, below.

o Approval of proprietary methods for meeting generically applicable requirements would be obtained through Staff approval of Topical Reports rather than through NRC approval in the certification rulemaking. While Topical Report approval would not confer issue finality in subsequent COL proceedings (i.e., it would not preclude the Commission or its licensing boards from reaching different conclusions as respect methods acceptability), it would commit the Staff to accept the safety adequacy of the methods it had approved. Such Staff acceptance should be modifiable only if there later exists significant new information which substantially affects the earlier Staff determinations. 'l/

Implementation of this approach would be discussed with the NRC staff on a vendor-by-vendor basis, with the practicability of implementation tested by formulation of non-proprietary substitutes for proprietary descriptions in two design areas identified in industry/Staff discussions: I & C architecture; and fuel design.

Y The proposed use of Topical Reports is based upon Part 50 licensing practice. Where, however, the Staff has reviewed and approved the methods information as part of its SER on the FDA, such review and approval need not be duplicated; rather, it could be reflected in the SER for the FDA but not be incorporated in the proposed design certification rule.

5

2. Treatment of Proprietary Information in the Design Certification Rule All information in Tier 1 and Tier 2 of the design certification rule (i.e., the contents of the so-called Design Control Document) would be non-proprietary, published and generally available to the public. Tier 1 of the rule (the certified design) would be published in Chapter 1 of 10 C.F.R. If too lengthy for publication, Tier 1 would be incorporated by reference, in whole or in part, in the Federal Register issuance. Tier 2 of the rule would be incorporated by reference in Chapter 1 of 10 C.F.R. and would be generally available to the public.

3. Treatment of Proprietary Information in Subsequent COL Proceedings Referencing the Design Certification Rule A COL applicant and the parties to a COL proceeding would be entitled to access to relevant proprietary information contained in the Docket of the subject design certification rulemaking upon meeting the access requirements and complying with the protective arrangements specified in 10 C.F.R. Sections 2.740, 2.744 and 2.790. Such access would give parties to the COL proceeding the same hearing use rights as respects that proprietary information as they would have with respect to non-proprietary information which is not contained in the design certification rule. To wit: There would be COL finality for an application that meets the requirements of the referenced design certification, whether or not particular issues or information (proprietary or non-proprietary) had been specifically considered in the design certification rulemaking; and any exception to such finality would require

6 Commission approval in response to a Section 2.758 petition, as specified in Section 52.63(a) (4).

The industry believes that the approach outlined above appropriately accommodates both the public policy considerations supporting the protection of proprietary information and effective participation by interested persons in design certification rulemaking and combined license proceedings.

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September 28, 1992 Mr. Geary Mizuno Office of the General Counsel U.S. Nuclear Regulatory Commission Washington, DC 20555

Dear Mr. Mizuno:

These are the comments of the Ohio Citizens for Responsible Energy, Inc. ( "OCRE") on the NUMARC comments, dated August 19, 1992, on SECY-92-170, "Rulemaking Procedures for Design Certifi-cation."

Treatment of Proprietary Information NUMARC's position regarding the availability of proprietary information is that such information should only be available to persons qualifying as parties in the design certification hear-ing; it should not be available to persons submitting comments but not requesting a hearing. For access to be granted by the NRC, parties would be required to make a demonstration of need, derived from 10 CFR Sections 2.740 and 2.744. NUMARC advocates the use of both civil and criminal sanctions for the breach of non-disclosure agreements or orders.

It is OCRE's position that all participants in the design certi-fication rulemaking, both parties to the informal hearing and those persons merely submitting comments, must have access to such proprietary information as is necessary for meaningful participation in the rulemaking proceeding. The proprietary information must be protected by use of an appropriate non-disclosure agreement, preferably executed by the requester and the owner of the information, but with provisions for access through the NRC, if attempts to make arrangements with the owner have failed. OCRE hopes that such provisions will not need to be utilized. OCRE agrees with the NUMARC comments at p. 29 which describe how the NRC should issue a notice informing the public how access to proprietary information may be obtained.

The NUMARC position, that proprietary information should only be available to parties in the hearing, will have the following results. First, there will be many more requests for hearings than would otherwise be filed. Many people, who might otherwise be

• satisfied with submitting written comments, will request a 1

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hearing simply to gain access to the proprietary information they need to participate meaningfully. Second, the hearings will be delayed because the "intervenor" parties will have to review the proprietary information, for the first time, after the hearing has begun; the other parties (Staff and applicant) of course do not suffer such a disadvantage.

Moreover, it appears that NUMARC is contemplating the availabili-ty of discovery procedures in the informal hearing. 10 CFR 2.740 and 2.744, referenced by NUMARC, are discovery rules applicable to Subpart G proceedings. Discovery is not available in informal hearings.

NUMARC asserts that the information which will be publicly avail-able "will be adequate to put the public on notice of the contem-plated design certification action and the bases therefor and will contain sufficient information to enable the formulation of comments during the notice and comment phase of the rulemaking."

NUMARC comments at 15-16. Unfortunately, this assertion has already been proven wrong. It is OCRE's understanding that the Westinghouse AP-600 application which is publicly available from the Public Document Room has all drawings, even the most general plant layouts, and the entire PRA redacted as proprietary. An application with such fundamental information withheld will not provide a sufficient basis for the formulation of intelligent comments in the rulemaking proceeding.

The AP-600 situation appears to be an instance in which material claimed to be proprietary is being freely and openly distributed through other channels. For example, the cover of the January-March 1992 issue of Nuclear Safety is graced by "an artist's cut-away rendering of the AP-600. The accompanying article, written by Westinghouse engineers, contains still more drawings and a table titled "Calculated Core Damage Frequency," undoubted-ly taken from the PRA. Other publications including general drawings of the AP-600 include: "Worldwide Advanced Nuclear Power Reactors with Passive and Inherent Safety: What, Why, How, and Who," ORNL/TM-11907, Forsberg and Reich, Oak Ridge National Laboratory; Popular Science. April 1990, pp. 69-77; Scientific American, April 1990, pp. 82-88; and Advanced Reactor Study, prepared for the Union of Concerned Scientists by MHB Technical Associates, July 1990. This situation illustrates the need for the industry to challenge itself as to whether information really is proprietary.

OCRE believes that the use of criminal sanctions for breech of non-disclosure agreements is excessive and extreme, particularly since there could be cases of inadvertent disclosure. Criminal 2

penalties would likely create a chilling effect on public partic-ipation and have the potential for abuse. Given the industry's own inconsistent treatment of information claimed to be proprie-tary, as shown in the example of the AP-600, it is possible for a signatory to a non-disclosure agreement to be blamed for violating the agreement when in fact the information in question was made available through other sources. The appropriate remedy for breech of a non-disclosure agreement lies in civil, not criminal, sanctions. NUMARC in fact notes that "the most effective sanctions are those which flow from requester agreements with the vendor, which agreements create private causes QZ. action" (emphasis added). NUMARC also observes, correctly, that under a properly structured and implemented access regime, it is unlikely that any sanctions will be actually needed. NUMARC comments at pp. 23-24.

Adequacy of the 90 Day Comment Period In defense of the proposed 90 day comment period, NUMARC claims that "applications for a design certification will be reasonably complete at the time of docketing . . . " (p. 30). Again, with the AP-600, this has not been the case. The September 9, 1992 Federal Register notice, "Westinghouse Electric Corp.; Receipt of Application for Design Certification" (57 FR 41155) states that "the application is incomplete in several important respects, and cannot, therefore, be accepted formally at this time for docket-ing as a rulemaking petition for design certification."

Separation of Functions and Ex Parte Constraints On one hand NUMARC states that the credibility and objectivity of the decisionmaking process will be enhanced by excluding "commu-nications by a party (other than the Staff) to the Commission and those who advise the Commission . . . " (p. 43). On the other hand, NUMARC acknowledges that "the Staff is in every sense a proponent of the proposed rule" (p. 42; see also p. 54). This is precisely why ex parte and separation of functions constraints should be applied. It is OCRE's position that the solution proposed in SECY-92-170 is necessary and appropriate, and emi-nently reasonable and workable.

Availability of SECY Papers Related to the Implementation of Part 52 NUMARC states, "we support the NRC's practice of releasing SECY papers associated with the implementation of Part 52 to elicit additional public comment" (executive summary at p. 3). However, as discussed at the July 20 workshop, the availability of these 3

SECY papers has not been noticed .in the Federal Register or otherwise made known to the general public. OCRE recognizes that publication of all SECY papers in the Federal Register, or even just a notice of their availability, could amount to a signifi-cant and costly burden upon the NRC. OCRE does have a solution:

that the NRC periodically (at least annually) publish a notice in the Federal Register, and issue a news release, inviting inter-ested persons to request that they be placed on a distribution list for SECY papers. The SECY papers would then be directly distributed only to those persons actually interested in receiv-ing them.

Threshold for Request/Party Participation in Informal Hearings In response to discussion at the July 20 workshop that SECY 170 was recommending an "expert witness" standard as a prerequi-site for requesting an informal hearing, NUMARC indicates that "the industry shares OGC's belief that what was intended is demonstration of an ability to contribute meaningfully to deve l-opment of the rulemaking record on the controverted issues with respect to which an informal hearing is sought. This is not the same as an *expert witness* standard" (p. 50, footnote 15). OCRE agrees wholeheartedly that it is appropriate to require the requester to demonstrate "an ability to contribute meaningfully to development of the rulemaking record on the controverted issues with respect to which an informal hearing is sought. " But if this is all that was meant, then this is the exact language which should be used. The standard as articulated in SECY 170

("demonstrate that they . . . have the appropriate qualifications or expertise to contribute . . . ") does imply an expert witness standard, and it is highly likely that it would be interpreted as such by a Licensing Board, a future Commission, or a reviewing court. If the NRC does not mean to imply an expert witness standard, then it should not use language which strongly suggests such a standard. It is important to use precise language, as these words will be interpreted, both within the agency and by the courts, and such decisions build upon one another and often end up at a place quite removed from the original intentions. It is not far - fetched to envision interpretations of the OGC's proposed language which would require use of the Rules of Evi-dence in an informal hearing on standard design certification.

Additional Hearing Procedures and Formal Hearings NUMARC suggests that "if the Commission grants additional proce-dures including discovery, or a formal hearing, on certain issues, consideration be given to conducting a parallel proceed-ing on these issues. This could shorten the rulemaking proceed-4

ing's overall duration without unreasonable burden to the par-ties" (p. 56). OCRE disagrees. Conducting parallel proceedings could impose a significant burden on small nonprofit public interest organizations.

Judicial Review and Exhaustion of Administrative Remedies NUMARC observes that the determination of whether administrative remedies have by exhausted by a petitioner will be made by the reviewing court (p. 58). This is true. However, as discussed in the July 20 workshop, the administrative impact of the OGC pre-liminary position on this matter is that persons who would other-wise be satisfied with providing written comments will now re-quest a hearing just to preserve their options to seek judicial review.

Respectfully submitted, Susan L. Hiatt Director, OCRE 8275 Munson Road Mentor, OH 44060 (216) 255-3158 5

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• 92 OCT -5 P5 :58 October 1, 1992 Mr. Geary Mizuno Office of the General Counsel U.S. Nuclear Regulatory Commission Washington, DC 20555

Dear Mr. Mizuno:

I am writing to correct an inadvertent misstatement in my letter dated September 28, 1992 which provided OCRE's comments on NU-MARC's August 19, 1992 comments on SECY-92-170.

On page 2 of my letter I stated: "It is OCRE's understanding that the Westinghouse AP-600 application which is publicly available from the Public Document Room has all drawings, even the most general plant layouts, and the entire PRA redacted as proprie-tary." This statement was based on information provided by another source. I have since performed a cursory review of the AP-600 application myself, and I have found that this statement is not entirely accurate. While much information has indeed been redacted as proprietary, the application does contain some draw-ings and a conclusory summary of the PRA methods and results.

The publicly available version of the application is not com-pletely devoid of this information, as I had been led to believe.

Thus, the discussion in the third full paragraph on page 2 of my September 28 letter may not be applicable.

However, my review of the AP-600 application indicated that so much detailed information has been redacted as proprietary that the publicly available version will not support the level of independent, critical review of the design necessary to enable the formulation of meaningful comments or participation in a hearing. Therefore, the fundamental positions and conclusions of my September 28 letter remain unchanged.

Moreover, OCRE is concerned with the copyright notice contained in the AP-600 application. This notice states, "With regard to the non-proprietary versions of these reports, the NRC is permit-ted to make the number of copies beyond those necessary for its internal use which are necessary in order to have one copy avail -

able for public viewing in the appropriate docket files in the public document room in Washington, D.C. and in local public document rooms as may be required by NRC regulations if the number of copies submitted is insufficient for this purpose. The 1

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NRC is not authorized to make copies for the personal use of members of the public who make use of the NRC public document rooms." If the NRC considers itself bound by these provisions, this will create a significant burden on persons who wish to review the application, especially if such persons do not reside near a public document room. It also raises a new issue to consider in the implementation of Part 52: handling of copyright-ed information, particularly when such information is to be submitted as exhibits in the hearing or as part of written com-ments. While OCRE appreciates the commercial and public policy reasons for the protection of intellectual property, it appears that the Westinghouse position is rather extreme and perhaps was established to discourage public scrutiny of the design and public participation in the design certification proceeding.

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

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

AECL D.R. Shiflett AECL Technologies 9210 Corporate Boulevard Vice-President and General Manager

• 92 SEP 11 P3 :39 Suite 410 Rockville Maryland 20850 USA 1-800-USA-AECL (301) 417-0047 Fax(301)417-0746 Telex 403-442 September 9, 1992 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention: Docketing and Services Branch Re: SECY-92-170 -- Rulemaking Procedures for Design Certification

Dear Mr. Chilk:

AECL Technologies has reviewed SECY-92-170 and the comments which the Nuclear Management and Resources Council (NUMARC) submitted on behalf of the nuclear power industry. We agree with NUMARC that, in general, the process and policy judgments preliminarily recommended in SECY-92-170 represent a thoughtful analysis and well-reasoned approach to the implementation of Part 52.

We share, however, NUMARC's serious concerns with the preliminary recommendations in SECY-92-170 relating to the treatment of proprietary information. We believe that NUMARC's proposals are legally and functionally sound. They effectively address the publication requirements of the Office of the Federal Register and meet the need for necessary access to proprietary information, while ensuring proper safeguarding of the information.

In this regard, AECL Technologies presents a unique situation in the management of access to proprietary information related to design certification. For the CANDU 3 design, access to proprietary information which is submitted as part of an application for design certification under Part 52 must usually be in accordance with the terms of an Export Permit from the Canadian Department of External Affairs and the Atomic Energy Control Board.

As such, access to proprietary information related to the CANDU 3, if subjected to the balancing test governing release of proprietary information to the public pursuant to 10 CFR

§ 2.790, could be in contradiction to the Export Permit. Accordingly, AECL Technologies believes it is desirable that any access procedures specific to design certification presently

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Mr. Samuel J. Chilk Secretary of the Commission Page 2 September 9, 1992 under development be sufficiently flexible to accommodate the particular circumstances presented by review of the CANDU 3 design. This could include a process for withdrawing information that would be in violation of the Export Permit or providing for an opportunity to determine if a special Export License could be obtained.

Presently, the CANDU 3 design is undergoing a pre-application review by the NRC Staff in order to identify CANDU 3-specific issues and the information which AECL Technologies will need to submit as part of its application for certification of the CANDU 3 design. As such, the pre-application review will have a direct bearing on resolution of proprietary information questions unique to NRC review of the CANDU 3 design. Following the pre-application review, AECL Technologies may want to propose additional mechanisms for resolving access questions specific to the CANDU 3 design.

AECL Technologies appreciates the opportunity afforded to review the preliminary recommendations in SECY-92-170 and to contribute our views for Staff and Commission consideration prior to final NRC action.

Sincerely,

/J. £ Ljee,6' D.R. Shiflett Vice President/General Manager AECL Technologies cc: J. L. Kennedy, NRR

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• 92 SEP -8 P4 :39 August 31, 1992 LD-92-093 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Wc'.shington, D. c. 10555 Attention: Docketing and Servicing Branch

Subject:

SECY 92-170 Rulemaking Procedures for Design Certification

Dear Mr. Chilk:

As you know, Combustion Engineering, Inc., through its ABB Combustion Engineering Nuclear Power unit ("ABB-CE"), is a current applicant for design certification under Part 52 for its System 80+' advanced evolutionary pressurized water reactor.

- ABB-CE has reviewed SECY-92-170, "Rulemaking Procedures for Design Certification," and has participated in the public workshop held by NRC on July 20 on the same subject. ABB-CE appreciates the opportunity to comment on NRC's proposed procedures and t.he 1r.at.ters :ralsed in the *w orkshop.

ABB-CE participated with the Nuclear Management and Resources Council ("NUMARC") in formulating NUMARC's detailed written comments on SECY-9 2-1 7 O and we support those comments. We believe that the recommendations made by OGC in SECY-92-170 are generally sound and well-reasoned, subject to the few specific qualifications and exceptions noted in the NUMARC comments.

While we support public participation in the rulemaking process, in the expectation that this will strengthen public SEP 18 1S92

• Acknowledged by card Httttfflfflftrihmlilith'lft'lft ABB Combustion Engineering Nuclear Power Comb ustion Engineering, Inc . 1000 Prosp ect Hill Road Tele phone (203) 688 -1 911 Post Off ice Box 500 Fax (203) 285-9512 Windsor. Connecticut 06095-0500 Telex 99297 COMBEN WSOR

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Mr. Samuel J. Chilk LD-92-093 August 31, 1992 Page 2 acceptance of, and confidence in, new reactor technology, we are hopeful that NRC will ensure that the rulemaking procedures adopted for design certification do not become needlessly complicated and formalistic, contrary to the clear intent and rulemaking history of Part 52.

Very truly yours, Charles B. Brinkman Acting Director, Nuclear Systems Licensing

/lw cc: Chairman Ivan Selin Commissioner Kenneth c. Rogers Commissioner James R. Curtiss Commissioner Forrest J. Remick Commissioner E. Gail de Plaque James M. Taylor, Executive Director for Operations William c. Parler, Esq., General Counsel

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• ET-NRC-92-3733 Nuclear and Advanced Technology Division Electric Corporation Box 355 Pittsburgh Pennsylvania 15230-0355 August 19, 1992 Mr. Samuel Chilk, Secretary U.S. Nuclear Regulatory Commission Washington, DC 20555 Attention: Docketing and Services Branch

Subject:

SECY-92-170: Rulemaking Procedures for Design Certification Westinghouse Electric Company (Westinghouse) has reviewed SECY-92-170 and the issues and preliminary recommendations of the Office of General Counsel (OGC) contained in that document.

Westinghouse also attended and participated in the public workshop conducted by the Commission on those issues and recommendations. We appreciate the opportunity afforded by the Commission to comment on the matters raised in SECY-92-170.

Westinghouse supports the comments filed by the Nuclear Management and Resources Council, Inc.

(NUMARC) on behalf of the nuclear power industry. We agree with NUMARC that generally the recommendations by OGC in SECY-92-170 represent sound and well-reasoned approaches to the procedures necessary for implementing design certification rulemaking under 10 C.F .R. Part 52.

However, along with NU MARC, we disagree with the preliminary recommendations in the SECY for the treatment of proprietary information. The recommendations, if adopted, would make it very difficult, if not impossible, to adequately protect valuable proprietary information_ Moreover, the recommendations do not comport with the provisions of Part 52.5l(c), which provide that in design certification rulemakings, proprietary information will be protected "in the same manner and to the same extent" as proprietary information submitted in licensing proceedings under Part 50.

In the Westinghouse application for design certification for the AP600, we have attempted to restrict the amount of proprietary information and have requested proprietary protection only where necessary to protect our commercial position. Our submittals in this regard have been made, and will continue to be made, in accordance with long-standing Westinghouse policies and procedures for the treatment of proprietary information. Those procedures are familiar to the Commission and have been the basis for proprietary protection accorded Westinghouse information in NRC licensing proceedings and in connection with submittals of generic topical reports .

The preliminary proposals for treatment of proprietary information in SECY-92-170 would differ substantially from the procedures previously utilized by the Commission. On the other hand, the NUMARC recommendations for treatment of proprietary information would continue to provide protection to such information while meeting the appropriate needs of members of the public for 0490C-BZC-l :082092 Acknowl S£P 18 J99Z edged by card 1rn1nne, SHUIICcJtU:-=::;

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access to such information in connection with standard design certification rulemaking proceedings.

Thus, we endorse the NUMARC proposals.

We also want to call specific attention to the NUMARC comments which support the OGC preliminary recommendations regarding the proposal to use negotiated rulemaking for design certifications. Westinghouse does not believe that negotiated rulemaking is desirable or appropriate in connection with design certifications for either evolutionary or advanced reactors. Utilization of such procedures would, in our judgment, introduce substantial uncertainties in the design certification rulemaking process and would bring about the unpredictability and instability which Part 52 was design to cure. We agree with the NUMARC comments that negotiating the design of future plants and the resolution of issues with respect to those plants is unsound public and regulatory policy.

Again, we appreciate the substantial effort being undertaken by the Commission to implement design certification under Part 52 and the opportunity which has been afforded for public input on the design certification rulemaking process.

s'.IKi

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Nuclear Safety and Regulatory Activities BZC/p cc: Chairman Ivan Selin Commissioner Kenneth C. Rogers Commissioner James R. Curtiss Commissioner Forrest J. Remick Commissioner E. Gail de Planque James M. Taylor, Executive Director for Operations William C. Parler, Esq., General Counsel 0490C*BZC*2:082092

DOCKET NUMBER 5 2.

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August 15, 1992 "92 AUG 20 A10 :51 COMMENTS OF OHIO CITIZENS FOR RESPONSIBLE ENERGY. ~:~ / 1 ,J,/f~~\;tf>

ON STANDARD DESIGN CERTIFICATION PROCEDURES (57 FED. REG t:~4394, JUNE 9, 1992)

OCRE is submitting these additional comments as a supplement to the remarks made at the public workshop conducted on July 20, 1992.

1. Impropriety of Establishing Time Limits for Licensing Board Actions The NOMARC proposal (Attachment B to SECY-92-170) would establish time limits within which the Atomic Safety and Licensing Board (and in some cases, the Commission) would be required to take certain actions. (These are discussed in OCRE's March 1992 com-ments, Attachment C to SECY-92-170). OCRE would note that com-pelling arguments against such limits have been made by the NRC in its consideration of comments on the recently approved final rule "Revisions to Procedures to Issue Orders: Challenges to Orders That Are Made Immediately Effective," 57 Fed. Reg. 20194 (May 12, 1992). On page 20197 of the Federal Register notice, the NRC addresses a comment which "suggested the need for specific time limits for reaching a decision on a motion to set aside immediate effectiveness . . . . the Commission . . . con-cluded that such an inflexible rule would not be workable . .

the rule without a fixed deadline for decision is necessary to provide presiding officers and the Commission with the necessary time to adjust to the number and complexity of the issues that may arise in the proceeding . . . " A standard design certifica-tion proceeding is certainly not less complex than the proceed-ings contemplated in that final rule.

2. Intervenor Funding in Negotiated Rulemakings SECY-92-170 suggests that the Congressional prohibition on inter-venor funding may not apply to negotiated rulemakings or other mechanisms for public participation prior to the institution of the actual rulemaking proceeding. OCRE recognizes that interven-or funding will not be a popular topic in an age of deficits and budget cuts. Nonetheless, significant public policy benefits could accrue from an investment in intervenor funding.

OCRE believes that one of the most important insights to be gained from the July 20 workshop is the potential and power of 1

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negotiated rulemaking and other alternative dispute resolution techniques. However, the industry representatives expressed skepticism that such mechanisms could work given the polarized nature of the debate on nuclear energy.

I used to believe that the most compelling argument against intervenor funding was that public money should not be used to advance what are essentially private, minority interests. (1)

Upon further reflection, however, I believe that intervenor funding may be the necessary vehicle for enabling the success of consensus-building processes.

I have attached for background a recent essay by columnist Wil-liam Raspberry; his column, while largely focusing on the abor-tion issue, discusses the bitterness and contentiousness which characterize many issues in American politics. Nuclear energy is certainly no exception. Raspberry observes, correctly, that common ground on such issues isn*t that hard to find, but no one is looking for it, because people in the middle don't own these issues. Rather, these issues are owned by "organizations whose power comes not from the truce but from the fighting. . "

Raspberry closes with the question: "Can it be the trouble with our public debate is a simple lack of courage?"

For small organizations such as OCRE, the issue is not lack of courage; rather it is the highly pragmatic matter of financial survival. To put it bluntly, we have to pander to a constituen-cy: the 20% of the American public that is strongly anti-nuclear.

Public opinion research has shown that there is a 20-60-20 split on nuclear power issues. 20% of the population is strongly pro-nuclear; they want to build more plants. Another 20% is strongly anti-nuclear; they want to shut existing plants down. The 60% in the middle is neither pro nor anti; they are concerned about safety, they would prefer not to build more nuclear plants, but they would not close operating plants. Unfortunately. this middle 60% is not involved in the issue. The issue is owned by the 20% factions at the extremes.

(1) This argument clearly carries little weight in other govern-ment programs, e.g., the National Endowment for the Arts. In the nuclear field, the Department of Energy is providing public money to support the development of advanced reactor designs, even though the vendors are private interests capable of obtaining their own financing. It would only seem fair to provide the critics of these designs with public financing as well.

2

As nonprofit organizations, special interest groups depend on the voluntary contributions of members and supporters. An organiza-tion which alienates its constituency by seeking common ground with the enemy may soon cease to exist.

Public funding of intervenor groups would enable them to enter the realm of statesmanship. If such organizations received their funding from the majority of Americans, they would then be free to take reasonable and responsible positions which reflect the views of the majority of Americans .

It should not be inferred that funding is the only factor pre-venting interest groups from participating in consensus process-es. Clearly some groups would continue their intransigence even if public funding were provided, and of course that is their prerogative . But intervenor funding may enable the representa-tion of the majority of Americans in the debate over nuclear safety.

There is another factor favoring intervenor funding as a matter of fairness. In order to protect its interests, an interested party would have to participate in every standard design certi-fication proceeding, as any one of them may be utilized at any site in the U.S. In addition, there are at least 12 standard designs being pursued. To participate in multiple complex pro-ceedings, quite possibly being conducted simultaneou ly, would strain the resources of even the most affluent organization.

Respectfully submitted, Susan L. Hiatt Director, OCRE 8275 Munson Road Mentor, OH 44060- 2406 (216) 255-3158 3

Is there a middle ground in abortion war?

WASHJNGTON - How abortion illegal. But that clinic now houses an adopti,og have we come to tbe point doesn't mean we have to de- agency.

where we prefer inconclusive monize each other. If this is That's not much in the graQ(j political warfare *1 0 peace not to become the Vietnam of scheme of things, but it's a far based on compromise? Indeed, the 1990s, we have to learn to cry from mindless shouts _of the very word compromise, sit down and talk to each oth- "baby killer" or accusatiaying the slightest bit of Community," published by the tion debate.

attentwn knows the damage :Washington-based Center for Compromise isn't really the And not just on the quest~<i?

our contentiousness - our un- Po lief Research: right word. On many public of abortion. I recall .wlieri willingness to work things out *_~In -~t. Louis, the director of issues, where the truth {or at Maryland's* 'Prince Gcorge~s

._,.. is causing. Qiu. politi.cs, th~ state's large~t abortion any rate, the public interest) Co.unty NAACP worked out a from Congress to campus, cliruc'Tegularly rrieets with the may indeed lie nearer to the compromjse,.Jlnder whicq .!~!.,.

have 1ost their civility, as each foi:m'lr president of Missouri's center than to either extreme, untarily mtegrated ~oinmuniJ faction tries to drive the other right-to-life group, looking for true compromise is possible. ties woµld be.exempted from-' 4 to the wall. Our courts are ways- fo help. women with un- On the abortion question, county-:}Y.iji~ },_~sin~ ptan;~Th~;

, clogged with suits that needn't wanted pregnancies,." there is no middle ground.' comprom1~ was disallowed by have been brought at all. Our No, they haven't modified Still; a handful of committed the national NAACP, even litigig_µsness has sent medical their views. They've only activists on both sides have though integration was its malprac~ice insurance costs agreed to search for common summoned up the courage to stated objective. Once* aga1rif through the roof, and the re- ground. look for common ground, even the fear 9f yielding ground/of sult is not just a squandering "No one is ever going to con- while conc_eding nothfog of being criticized by friends;".""of.

of goodwill and money but vince me that it's all right to principle; And not just for the giving credibility to the _e1_1:-.

also of vital services. kill unborn babies," Loretto sake of civility. Right-t_p-lifer emy.:

It isn't so much that com- Wagner, past president of Mis- Wagner has raised money to Can it be the trouble with mon ground is hard to *11as souri Citizens for Life is care for a young girl who in- our public debate is a simple that nobody seems int d quoted as saying, "<lnd I'm go- 6{ed on carrying her preg- lack of courage?

-Washington l)oat Writers Group in looking for it. The oh b- ing to go on working to make 9,cy to term. Isaacson-Jones'

• NUCLEAR MANAGEMENT AND RESOURCES COUNCIL 1776 Eye Street NW.

• Suite 300

• Washington. DC 20Xl6-3706 (202) 872-1280 *92 AUG 20 A8 :42 Joe F. Colvin President & Chief Executive Officer r t August 19, 1992 Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555 ATTENTION: Docketing and Services Branch RE: SECY-92-170 Rulemaking Procedures for Design Certification

Dear Mr. Chilk:

The Nuclear Management and Resources Council, Inc. (NUMARC) 1, on behalf of the nuclear power industry, has reviewed SECY-92-170, Rulemaldng Procedures for Design Certification. An Executive Summary (Enclosure 1) and detailed comments (Enclosure 2) on the identification of issues and preliminary recommendations of the Office of the General Counsel ("OGC') are provided for NRC consideration in the development of OGC's final recommendations and action thereon by the Commission.

In general, we believe that the process and policy judgments contained in SECY-92-170 represent a thoughtful analysis and well-reasoned approach to the implementation of Part 52. The one area in which we have serious concerns with the recommendations in SECY-92-170 relates to the treatment to be accorded proprietary information.

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

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Mr. Samuel J. Chilk August 19, 1992 Page 2 Five principal areas were identified for comment in SECY-92-170 and described more fully in its Attachment 1, OGC Preliminary Paper for Comment on Design Certification Rulemaldng Procedures. In addition to those five general areas, a sixth area emerged in the course of the July 20, 1992 workshop on SECY~92-170: the applicability and advisability of employing alternative dispute resolution techniques in the course of a design certification proceeding, particularly mechanisms for early public participation.

Of the six areas, NUMARC believes that resolution of issues associated with the treatment of proprietary information is critical to the sound and timely completion of the design certification process. Therefore, our comments on the legal and policy aspects of that issue are very detailed in order to lay out the basis for our position comprehensively and clearly. Our comments in the other areas are intended to provide additional information on those subjects for NRC consideration.

In preparing our comments, we have been guided by the following principles:

• the need for faithful adherence to the provisions of 10 C.F.R. § 52.51, and the underlying policy articulated in the Statement of Considerations for Part 52;

• the need to ensure that interested members of the public are afforded early access to information and appropriate opportunity to participate in the certification process; *

• the need to ensure that procedures for access to proprietary information fairly balance the public policy considerations supporting the protection of proprietary information and the appropriate participation of interested persons in a design certification rulemaking proceeding;

• the need to judge the legal adequacy of design certification rulemaking procedures "against the requirements for notice and comment rulemaking in Section 553 of the Administrative Procedure Act;

• the need to keep the purpose of a design certification rulemaking hearing foremost in determining what procedures to adopt -- ensuring the development of a record adequate for the Commission to resolve the issues placed in controversy by the parties; and

• the Commissions's past successes in the conduct of hybrid rulemaking proceedings.

Mr. Samuel J. Chilk August 19, 1992 Page 3 The nuclear industry appreciates. the opportunity to participate in the NRC's workshop and to provide comments for NRC consideration regarding the important issues associated with Part 52 implementation discussed in SECY-92-170. The challenge before the NRC, the nuclear power industry and interested members of the public is to fashion a regulatory process that facilitates sound safety judgment, that is predictable and stable, that is effective in producing timely results, and that provides appropriate opportunity for interested persons to have their views considered by the NRC.

NUMARC and its members are committed to assisting in the development of a viable design certification rulemaking process through constructive and open discussion on Part 52 implementation.

Sincerely, rt-1-~

~ Joe F. Colvin JFC/RWB:bjb Enclosures cc: Chairman Ivan Selin Commissioner Kenneth C. Rogers Commissioner James R. Curtiss Commissioner Forrest J. Remick Commissioner E. Gail de Planque Mr. James M. Taylor, Executive Director for Operations William C. Parler, Esq., General Counsel

Enclosure 1 NUMARC COMMENTS ON SECY-92-170 Executive Summary The following is a synopsis of the key points contained in the detailed comments in Enclosure 2. The subjects covered relate to the proper treatment to be accorded proprietary information, public participation in the design certification process, design certification procedural issues, and issues associated with informal hearings, including the role of the hearing board, procedures governing the conduct of the hearing, and the threshold for participation. The full description of the background and the reasons for the industry's position on these and related subjects is provided in our detailed comments.

Treatment of Proprietary Information in the Implementation of Part 52

• The treatment to be accorded proprietary information is one of the critical issues associated with the proper implementation of Part 52 but, we believe, is not properly dealt with in SECY-92-170. Resolution of this matter requires the proper balancing of important policy issues. Principally, there is a strong public policy interest in protecting proprietary information against unauthorized disclosure. That public policy interest is reflected in the provisions of the Atomic Energy Act, the Administrative Procedure Act, the Freedom of Information Act, and other federal laws and regulations. At the same time, there is a similar public policy interest that must be accommodated that is associated with providing opportunities for meaningful public participation in federal agency rulemaking proceedings. The appropriate treatment for proprietary information in the context of design certification rulemaking under Part 52 must achieve consonance between these two very importa~t public policy interests.

There are four distinct time frames and contexts in which proprietary information issues must be resolved: (1) treatment of proprietary information in the course of NRC staff technical review of a design proposed for certification; (2) access to proprietary information in the course of the design certification proceeding; (3) treatment of proprietary information in the design certification rule; and (4) treatment of proprietary information in subsequent combined operating license proceedings referencing the design certification rule. SECY-92-170, and the NRC workshop related to it, focused primarily on issues associated with access during design certification rulemaking proceedings themselves. Our comments address that aspect as well as the other contexts in which this issue must be resolved.

In considering protection to be accorded proprietary information in the context of design certification, the key regulatory provision is 10 C.F.R. § 52.51(c), which provides that proprietary information is to be protected "in the same manner and to the same extent" as in a Part 50 licensing proceeding. Thus, proprietary information should be made available only to "parties" in the design certification rulemaking "hearing" who demonstrate that the proprietary information sought is relevant to the issue(s) the party has raised and is necessary to the proper resolution of the issue(s). Those parties would

obtain access to pertinent proprietary information through executing non-disclosure ~-;: *

• agreements with the information's owner, or through an NRC hearing board order if a suitable vendor /party arrangement cannot be reached. The PDR access approach described in SECY-92-170 does not protect proprietary information "in the same manner and to the same extent as in Part 50 licensing proceedings, and hence should not be utilized. Functionally, moreover, the PDR approach is not workable and does not provide the adequate protection from disclosure to which proprietary information is entitled.

In our view, Section 52.51(c), by its very terms (i.e., "parties" and "hearings"), does not contemplate providing access to proprietary information other than in the hearing context ( e.g., not during the review of the application by NRC staff or during the public comment period following publication of the proposed design certification rule). H, however, despite the plain meaning of Section 52.51(c) and past Commission licensing and rulemaking practice, the NRC determines as a matter of policy that proprietary information should be made available to commenters on a proposed design certification rule, as well as to parties in the design certification rulemaking hearing, access should be allowed only upon a showing comparable to that required for party access. That is, qualification criteria should be specified to ensure that the requested access to the proprietary information will be necessary for that individual to formulate comments relevant to the stated bases for the proposed design certification rule. To ensure that the proprietary information is adequately protected, non-disclosure agreements with the owners of the proprietary information, or if unsuccessful through an NRC process, also should be required to achieve compliance with the provisions of Section 52.51(c).

As to the treatment of proprietary information in the design certification rule, the following four principles will satisfy both the legal and policy issues raised in SECY 170. First, all information in Tier 1 of the rule will be non-proprietary. Second, it is anticipated that the generically applicable requirements of Tier 2 will also be non-proprietary. Third, Tier 2 may additionally incorporate by reference proprietary means which have been approved in the rulemaking proceeding as methods for meeting generically applicable requirements. This is what was done by the Commission in the ECCS rulemaking and is consistent with the publication and related requirements of the Administrative Procedure Act (5 U.S.C. § 552). Fourth, Tier 2 may also cite proprietary information, without incorporating such information by reference, where the cited information constitutes only supporting or source documentation. This is consistent with SSAR drafting practice, which typically cites additional detailed information at the end of chapters or sections. Such references do not implicate the publication and related requirements of 5 U.S.C. § 552.

Negotiated Rulemaking and Other Mechanisms for Public Participation We believe that the mechanisms for public participation in the design certification process mandated by Part 52, and as recommended for implementation in SECY-92-170, 2

are significantly in excess of those required by law; they reflect a reasonable public policy determination by the Commission to provide certain additional opportunities for public participation. Consistent with the objective of facilitating such participation, we agree with the recommendation in SECY-92-170 that notice of docketing should be provided, and we support the NRC's practice of releasing SECY papers associated with the implementation of Part 52 to elicit additional public comment. The NRC is also to be commended for conducting a workshop on SECY-92-170 and for having other public meetings throughout the Part 52 implementation discussion process to provide additional opportunities for public input.

We believe consideration should be given to the possible use of a variety of means of ensuring effective public participation in the course of Part 52 implementation, particularly on process issues, when all parties agree that the issue can be promptly and effectively resolved through those means and when safety determinations are not involved. However, we strongly oppose any brokered" resolution of complex technical issues, that relate to assuring adequate protection of public health and safety. Decisions associated with safety issues cannot be appropriately resolved through negotiation or consensus building. Further, it is unlikely that an effective consensus will be able to be achieved on individual technical issues within an enormously complex design. Although there may be opportunities in Part 52 implementation for the exercise of one or more alternative dispute resolution mechanisms, the NRC's responsibility for assuring adequate protection of public health and safety should not be jeopardized or compromised through the use of any of those mechanisms. In addition, the NRC's goals of achieving regulatory stability and predictability that underlie the NRC's adoption of Part 52 would be compromised by engrafting additional procedures (e.g., negotiated rulemaking) onto the already elaborate Part .52 process.

Design Certification Procedural Issues In general, we agree with the preliminary recommendations contained in SECY-92-170 on these issues. With respect to the appropriate period of time for public comment on a proposed design certification rule, it is important to recognize that neither the Administrative Procedure Act nor the Atomic Energy Act establish any minimum comment period; rather, such decisions are left to an agency's discretion. In practice, the NRC and other federal agencies have generally established a comment period that varies, depending on the nature and complexity of the issue of concern. Consistent with that practice, we believe that the 90-day period proposed for public comments in SECY-92-170 is reasonable. Even though the amount of information involved with the proposed rule will be voluminous, the Part 52 process provides a number of opportunities for earlier public participation and comment on various aspects of the design and the rulemaking process as they develop. These include noticed public meetings between the NRC staff, the industry and individual applicants and docketing of the application and associated NRC correspondence in the Public Document Room.

Thus, information concerning the design will be available to interested parties 3

throughout the final design review and approval process, and the NRC staff projects that there will be a 90-day period after design approval issuance before a proposed design certification rule will be published. The result is that the final design approved in accordance with 10 C.F.R. Part 50 Appendix O will be available for public comment for at least 180 days in the design certification process. We believe that the NRC's process strikes an appropriate balance between the need for meaningful public participation and the need for a timely decision to be made.

The preliminary recommendation in SECY-92-170 regarding the concurrent submission of comments and requests for a hearing is an appropriate step to prudently use the resources of the NRC, the design certification applicant, and interested parties.

Role of the Hearing Board in Informal Hearings We agree with the recommendation in SECY-92-170 that a hearing board should have a "Limited Magistrate" role in a design certification rulemaking hearing. That hearing should not add another layer of review to the in-depth, extensive reviews of the design conducted by NRC staff, the Advisory Committee on Reactor Safeguards, and the Commission itself. The establishment of a "Full Magistrate" or "Initial Decisionmaker" role for the hearing board, as well as a grant of sua sponte authority, would violate that principle.

The Commission has effectively used the Limited Magistrate format in five of the six other rulemaking proceedings in which hearings have been held. For example, both the ECCS and GESMO hearings substantiate the important and demanding role that hearing boards have played in exercising a Limited Magistrate authority.

Further, the Part 52 process is unique in the agency's experience. There have been and will continue to be significant policy issues of first impression that arise throughout the process (e.g., the development and implementation of the inspection,

• tests, analyses, and acceptance criteria concept) that require direct and unfiltered Commission involvement. In fact, the Commission has been extensively involved, on both policy and substantive issues, throughout the final design approval/ design certification application review process for applications currently docketed. A hearing board is not needed to formulate initial or recommended decisions as it might be in areas where the board has or develops experience significantly greater than that of the Commission.

Conduct of Hearings We agree with the preliminary recommendations in SECY-92-170 regarding the scope of participation of parties and the status of applicants and the NRC staff as parties to the proceeding. We also agree with the policy decision that all design certification hearings should be held in the Washington, D.C. metropolitan area unless the 4

\

Commission determines that special circumstances require one or more hearings, or some aspect of a hearing, to be held in a different location.

The industry agrees with the preliminary recommendation in SECY-92-170 to apply ex parte constraints to parties as a matter of policy, but we have significant reservations concerning the imposition of separation of function constraints on Commission communications with NRC staff. The Administrative Procedure Act requirements concerning ex parte constraints and separation of functions apply only to rulemakings or adjudications required by statute to be determined on the record after an opportunity for a hearing and thus are not required in a design certification rulemaking context. A balance must be struck between satisfying concerns regarding public openness and the substantive need to ensure that sound decisions are made. We believe that it would be unwise to impose procedural obstacles on discussions between the Commission and NRC staff members who have the best* technical advice to offer because of their technical knowledge and in-depth participation in the evaluation. Moreover, the Commission and staff have been and will be discussing these issues freely during the final design approval and design certification application review period. To impose separation of function constraints at the later stages in the rulemaking proceeding makes little sense. However, if the separation of function recommendation is adopted, it should be implemented so as to minimize the delay caused in the conduct of the rulemaking proceeding. The restriction should not apply until after the comment period has ended, and should apply only to technical issues that are subject to a hearing. Moreover, individual Commissioners and their staffs should be able to communicate, without restriction, with NRC technical staff at any time to ensure that information necessary for that Commissioner to make informed decisions is provided in a thorough and timely manner.

Informal Hearing Threshold

- Neither the Administrative Procedure Act nor case law requires an opportunity for a hearing to be provided in a rulemaking proceeding. We agree with the preliminary recommendation contained in SECY-92-170 that it is an appropriate exercise of the agency's discretion to establish a threshold for participation in an informal hearing. We believe the recommended threshold is reasonable and sound and is consistent with the purpose of the hearing, which is to contribute to the development of a record on controverted issues in a manner neither wasteful of agency resources nor unfairly restrictive of participation by those interested in the rule, including members of the public. We also agree with the preliminary recommendation that parties participating in the hearing should be limited to the issues that they each raise. Because the applicant and the NRC staff have an "interest" in all controverted issues, it naturally follows that they should be "parties" with respect to all issues and should be allowed to participate fully in the consideration of those issues.

5

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With respect to the role of interested States, we believe it is within the Commission's discretion to allow State participation in a manner similar to that provided by Section 2.715 in a licensing context if the NRC concludes that such State participation would contribute to the process.

Regarding oral presentations, the person requesting the opportunity to make an oral presentation should be required to provide a statement of qualifications, identify the precise issue of concern, provide an outline of their presentation (including specific references to the challenged portion of the rule), and explain why an oral presentation is necessary to the development of an adequate record or would be the most expeditious way to resolve controversies. It is vitally important that this, and all other aspects of the .

proceeding, be conducted in a manner that contributes to a sound regulatory environment in which decisions can be made in a timely and efficient manner.

6

ENCLOSURE 2 NUMARC COMMENTS ON RULEMAKING PROCEDURES FOR DESIGN CERTIFICATION AUGUST 19, 1992

TABLE OF CONTENTS I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 II. GENERAL POLICY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A. TREATMENT OF PROPRIETARY INFORMATION IN THE*

IMPLEMENTATION OF PART 52 ........................... 2

1. Introduction and Summary of Conclusions . . . . . . . . . . . . . . . . 3

2. Applicable NRC Regulations and Relevant Regulatory Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. Treatment of Proprietary Information in the Course of NRC Staff Technical Review of a Design Proposed for Certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

4. Access to Proprietary Information in the Course of the Design Certification Proceeding . . . . . . . . . . . . . . . . . . . . . . 15

5. Treatment of Proprietary Information in the Design Certification Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

6. Treatment of Proprietary Information in Subsequent COL Proceedings Referencing the Design Certification Rule . . . . . 21

7. Answers to Questions Posed in SECY-92-170 . . . . . . . . . . . . 23

8. ALTERNATIVE DISPUTE RESOLUTION ............ ~ . . . . . . . 25 Ill. OVERVIEW OF A DESIGN CERTIFICATION RULEMAKING . . . . . . . . . . . 28 IV. DISCUSSION OF DESIGN CERTIFICATION PROCEDURAL ISSUES . . . . 28 A. DOCKETING AND ADVANCE RULEMAKING ACTIVITIES . . . . . . . 28

8. NOTICE OF PROPOSED RULEMAKING . . . . . . . . . . . . . . . . . . . . 29

- i-

C. LICENSING BOARD AUTHORITY IN HEARINGS . . . . . . . . . . . . . . 32 D. COMPOSITION OF LICENSING BOARD . . . . . . . . . . . . . . . . . . . . 39 E. CONDUCT OF HEARINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

1. Scope of Party's Participation . . . . . . . . . . . . . . . . . . . . . . . . 40

2. Status of Applicant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

3. Party Status of NRC Staff , .................. * . . . . . . . 42

4. Separation of Functions and Ex Parte Constraints . . . . . . . . . 43

5. Funding of Public Participants . . . . . . . . . . . . . . . . . . . . . . . 46

6. . Location of Hearings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

7. Consolidation of Parties and Issues . . . . . . . . . . . . . . . . . . . 47 F. INFORMAL HEARINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

• 1'. Threshold for Request/Party Participation. . . . . . . . . . . . . . . . 48

2. Appeals from Denial of Informal Hearing . . . . . . . . . . . . . . . . 52

3. Written and Oral Presentations and Questioning . . . . . . . . . . 52

4. Opportunity for Response/Rebuttal . . . . . . . . . . . . . . . . . . . . 53 G. ADDITIONAL HEARING PROCEDURES AND FORMAL HEARINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 H. POST-HEARING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

1. Findings of Fact and Conclusions ... _. ... ~ ..... -~ . . . . . . . 56

2. Reliance on Extra-Hearing Information in Final Rule . . . . . . . 57

3. Judicial Review and Exhaustion of Administrative Remedies . 58

- ii -

I. INTRODUCTION The Nuclear Management and Resources Council (NUMARC), on behalf of the nuclear power industry, is pleased to provide comments on the issues raised in SECY-92-170, "Rulemaking Procedures for Design Certification," and during the July 20, 1992 NRC workshop on the same subject. Our comments follow the order in which the preliminary recommendations of the Office of General Counsel (OGC) were presented in Attachment 1 to SEcv.:92-170. For each topical area discussed in the OGC paper, unless otherwise indicated, we have first set forth OGC's preliminary recommendations and then presented our comments on those recommendations.

In preparing our comrnents, we have been guided by the following considerations:

0 the need for faithful adherence to the provisions of 10 C.F.R. § 52.51, and the underlying policy articulated in the Statements of Consideration for Part 52 (54 Fed. Reg. 15,372, April 18, 1989);

0 the need to judge the legal adequacy of design certification rulemaking procedures against the requirements for notice and comment rulemaking in section 553 of the Administrative Prooedure Act (APA) (rather than the requirements for on-the-record adjudication in section 554 of the APA); 1!

0 the need to keep foremost, in determining what procedures to adopt, the*

purpose of a design certification rulemaking hearing -- ensuring the development of a record adequate for the Commission to resolve the issues placed in controversy by the parties;

• 1! Beyond the mere legal correctness of this distinction, the practical and policy significance is that, in implementing the hybrid procedures prescribed in 1o C.F.R. § 52.51, it must be recognized that the Part 52 procedures represent an addition to, and not a mere satisfaction of, what is legally required.

Moreover, in promulgating Part 52, the Commission explicitly considered the degree of formality needed in order to accomplish the purpose of a hearing on a proposed design certification rule.

0 the need to ensure that procedures for access to proprietary information fairly balance the public policy considerations supporting protection of proprietary information and appropriate participation of interested persons in a design certification rulemaking proceeding; 0

the need to ensure that interested members of the public are afforded timely access to information and appropriate opportunity for participation in the certification proce~s; and 0

the desirability of applying the procedural experience of past, successful Commission hybrid rulemaking proceedings.

II. GENERAL POLICY MATTERS In Section II of Attachment 1 to SECY-92-170, OGC addresses two general policy matters: the treatment of proprietary information and the advisability of using negotiated rulemaking as part of the design certification proceeding. Since they represent two discrete matters, -1nvolving both legal and policy considerations, they will be next addressed in these comments in two separate -- Sections II.A and B, respectively.

A. TREATMENT OF PROPRIETARY INFORMATION IN THE IMPLEMENTATION OF PART 52 This section sets forth the industry's views on the treatment of proprietary information. The section begins with an introduction and summary of conclusions (Section 11.A.1 ). It continues with a discussion of the legal and policy underpinnings for the industry's views (Section 11.A.2). Next, the industry's views on the treatment of proprietary information at each of four stag~s in the development and use of a design certification rule are set forth; namely: (1) during the NRC Staff's technical review of a design proposed for certification; (2) during a design certification rulemaking proceeding; (3) in the resulting design certification rule; and (4) in any subsequent combined construction and operating license (COL) proceeding referencing the rule (Sections 11.A.3 through 6). This section also provides responses to the specific questions posed in SECY-92-170 on the treatment of proprietary information (Section 11.A.7).

1. Introduction and Summary of Conclusions OGC'S PRELIMINARY VIEWS: (1) Tier 1 of the Design Certification Rule, including material incorporated by reference, should not include any proprietary information; (2) no proprietary information should be set forth in Tier 2; (3) a "PDR approach" to making proprietary information available to prospective commenters should be developed, but with NRC assuming no responsibility for policing or enforcing the non-disclosure agreements or assuring the accuracy of representations made in the

• non-discrosure agreements; and, (4) there should be no prior review of the individual non-disclosure agreements by the vendors.

INDUSTRY COMMENT: This section summarizes the industry's views on the treatment of proprietary information in a Part 52 design certification proceeding.

The bases for the industry's position are discussed in Sections I1.A.2 through 11.A.6, (1) Treatment of Proprietary Information In the Course of NRC Staff Technical Review of a Design Proposed for Certification

• The NRC St_aff is entitled to review, as a basis for its Safety Evaluation *Report {SER}, the entire Standard Safety Analysis Report {SSAR), including any proprietary information contained in the SSAR or referenced therein as supporting documentation.

• The information reviewed by the Staff to make its safety determinations relative to the proposed design and the requirements for and circumstances in which such information will be afforded proprietary protection are two distinctly different matters.

• 5 U.S.C. § 552 does not alter the ability of the Staff to review proprietary information and does not alter the Staff's ability to utilize proprietary information in reaching its safety determinations.

(2). Access to Proprietary Information In the Course of the Design Certification Proceedir:'~ *.

• As provided in 1o _C.F.R. § 52.51 (c}, persons qualifying as "parties;' in the design certification rulemaking "hearing" can obtain acce~s to proprietary information "in the same manner and to the same extent" as such *persons would be entitled to access to proprietary information in a licensing proceeding under 10 C.F.R. Part 50. See, in the latter regard, 10 C.F.R. §§ 2.740, 2.744 and 2.790.

• Proprietary information should be made available to third parties only after if'!itiatiori of the design certification rulemaking hearing and not during the application review or the comment phase of the rulemaking proceeding.

• Hearing party-requesters should first seek to obtain access directly from the information's owner, and may seek proprietary information from the NRC, through the hearing board, only if attempts to make arrangements with the owner have failed.

• Acce~s should be afforded by the NRC only after a party has made. a specific demonstration of need. The requirements of .

need, derived from§§ 2.740 and 2.744, include a showing that the exempt material sought is: (1) relevant to the subject of the proceeding and to i.ssue(s} properly raised by the party- requester; (2) necessary to a proper decision in t~e proceeding; and (3) not reasonably obtainable from another source.

• Wher.e access to proprietary information is obtained through voluntary arrangements with the owner, the party obtaining access a

must execute non-disclosure agreement with the owner tailored to the specific circumstances and sensitivity of the proprietary information. If voluntary arrangements cannot be made by the parties, then access may be obtained only upon an appropriate NRC order which protects such proprietary information from public

disclosure and use. There should be both civil and criminal @&,

18 U.S.C. § 1001} sanctions for breach of any such non-disclosure agreement or order.

• If, despite the plain meaning of 1o C.F.R. § 52.51 (c} and past Commission licensing and rulemaking practice, the NRC determines as *a matter of policy that proprietary information should be made available to commenters on the proposed design certification rule, as well as parties, then access should be allowed only upon a showing comparable to that required for party access.

Qualification criteria should be specified to assure the bona fides of_ the requested *access (i.e., the need for access to.proprietary information in order to formulate comments.on the proposed design certification rule or bases therefor}; and non-disclosure requirements should be imposed that will adequately protect against access abuse. .

(3) Treatment of Proprietary Information in the Design Certification Rule

• . The certified design (i.e., Tier 1) will be published in Chapter 1 of Title 1o of t_ he Code of Federal Regulations. (If Tier 1 is too lengthy for publication in the Federal Register, it may be incorporated by reference in whole or in part.) All information in Tier 1 will be non-proprietary.

• . The rule published in the Federal Register will incorporate by reference Tier 2. It is anticipated that Tier 2 will include the SSAR, w.hich may be modified, where appropriate, following the FDNSER review and the design certification rulemaking.

• It is anticipated that the generically applicable requirements of Tier 2 will be published, non-proprietary, and generally available to the public. As a matter of law, and in light of the COL access regime discussed infra, we believe that incorporation within the rule of generically applicable proprietary requiremenls meets the statutory requirements for Federal Register publication and

• subseqLJent licensing applicability as "matter reasonably available to the class of persons aff_ected thereby/ 5 U.S.C. § 552(a). At least one NRC precedent suggests the ability to incorporate by reference published material that contains generically applicable requirements which are proprietary. See 10 C.F.R. § 72.214.

• Tier 2 may also incorporate by reference, as appropriate, proprietary means which have been approved in the rulemaking

. proceeding as methods for meeting generically applicable and publicly available requirements. Adoption, publication and application of the rule with such proprietary incorporation is consistent with the provisions of 5 U.S.C. § 552.

• Tier 2 may also merely cite proprietary information, without incorporating such information by reference, where the cited information constitutes only supporting or source documentation.

This will accommodate SSAR drafting practice, which typically cites additional detailed informati9n at the end of Chapters or Sections. Such references do not implicate the requirements of 5 u.s.c. § 552.

(4) Treatment of Proprietary Information In Subsequent COL Proceedings Referencing the Design Certification Rule

• The COL applicant and parties to a COL proceeding would be entitled to access to any proprietary portion of a design certification rule (i.e., proprietary means which have been approved a*s methods for meeting generically applicable requirements) under the protective arrangements contemplated by

§§ 2.740, 2.744 and 2.790. Such parties would, in fact, have "actual and timely notice of the full terms. of the rule and thus be able to exercise the identical hearing rights they would have had if the subject information had been published. Such party access would also be afforded to proprietary sources cited in the SSAR upon the requisite showing of relevance and need. The process by which parties to a COL proceeding could be given "actual and timely notice" of such proprietary info.rmation and the attendant

§ 2.758 procedural rights could be specified in the Statement of Considerations for the design certification rule.

• The proprietary portions of the referenced design certification rule

-- like the non-proprietary portions - could be challenged in COL proceedings in the same manner that other Commission rules are susceptible to challenge, namely, by a request for a waiver or exception under 1O C.F.R. § 2.758.

2. Applicable NRC Regulations and Relevant Regulatory Practice

a. Applicable Regulations 10 C.F.R. § 52.51 ("Administrative Review of Applications") prescribes the process for initiating, conducting and deciding a design certification rulemaking.

Section 52.51 (c) provides that "proprietary information will be protected in the same manner and to the same extent as proprietary information submitted in connection with applications for construction permits and operating licenses under 10 C.F.R. Part 50, provided that the design certification shall be published in Chapter I of this title."

(Emphasis supplied).

At the time the Commission adopted Part 52, it was keenly aware of the need to afford appropriate protection to vendor furnished proprietary information.

Industry comments on the proposed Part 52 rule strongly objected that the proposed provisions ~ gave inadequate protection to proprietary information. The industry urged that the final rule offer vendors the same protections accorded to NRC license,es. In response, the final rule was revised to read as quoted above. As explained in the accompanying Statements of Consideration, the Commission adopted the final version of§ 52.51, "In order to give the vendor more opportunity to treat

~ The earlier-proposed version of Part 52 provided:

During the rulemaking, the treatment of proprietary information will be governed by 10 C.F.R. § 2.790 and applicable Commission case law....

53 Fed. Reg. 32,060, 32,074 (Aug. 23, 1988).

elements of the design as trade secrets .... " 54 Fed. Reg. 15,372, 15,375 (April 18, 1989).

The industry's willingness to rely on past practice reflected a confidence in NRC's historic ability to accommodate the public policy interest in making agency records reasonably available to the public, with the public policy (as well as commercial) interest in protecting proprietary information submitted by persons seeking licensing or other regulatory action. See, ~ . Wisconsin Electric Power Company, (Point Beach Nuclear Power Plant, Units 1 and 2), LBP-82-42, 15 NRC 1307, 1322 (1982). Congress has traditionally recognized the significant public policy interest which "disfavors disclosure of proprietary information." Westinghouse Electric Corporation v. U.S. Nuclear Regulatory Commission, 555 F.2d 82, 92 (3d Cir., 1977).

This public policy is reflected in Section 103(b) of the Atomic Energy Act of 1954, as amended, as well as in other generally applicable statutory provisions.

This public policy recognizes that public disclosure of proprietary information, except under appropriate proprietary agreements or board orders, could:

(1) discourage the initiation and completion of research and development by private parties; (2) limit the knowledge of the existence of such information by discouraging its reporting to the Commission and encouraging the dissemination of only enough information to obtain Commission approvals; (3) impair the Commission's_ independent review process by creating an incentive for those seeking NRC approval of a design to copy or mimic those that have already obtained such approval; and (4) endanger the position of the United States as a world leader in nuclear power reactor technology, and cause harm to the competitive position of U.S. reactor vendors. See LBP-82-42, supra, at 1322.

The treatment of proprietary information in the manner preliminarily recommended in SECY-92-170 would make such information, developed with substantial capital investment, very difficult to protect. Thus, the information could become available to competitors for the trivial cost of making copies in ttie Commission's Public Document Room. This would make it difficult, if not impossible, for U.S. firms to sell or license the technology underlying their certified designs.

The protection sought by industry is neither new nor novel. The protection of trade secrets is a long standing principle of common law. In a majority of states, the courts have specifically recognized trade secrets. Many of .these states have enacted statutes embodying and adding criminal law sanctions to common law protection in recognition of the strength of the public policy interests favoring their protection. The Supreme Court has recognized the validity of the public policy interests behind protection of trade secrets on many occasions. See, g&, Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974). Congress has likewise recognized these public policy interests and has enacted many statutes, the thrust of which is protection of proprietary information as a matter of U.S. policy. See,-~' Freedom of Information Act (5 U.S.C. §§ 552(b)(3), (4)), Section 15 of OSHA of 1970 (29 U.S.C.

§ 664), Section 4 of the Flammable Fabrics Act (15 U.S.C. § 1193(c)), the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 3310)), and the Trade Secrets Act (18 u.s.c. § 1905).

The pertinent Commission regulatory requirements as respects the treatment .of proprietary information in licensing proceedings -- the standards specified in§ 52.51 (c) -- are set forth in 10 C.F.R. §§ 2.740, 2.744 and 2.790 (concerning "General provisions governing discovery," "Production of NRC records and documents," and "Public inspections, exemptions, requests for withholding,"

respectively).

In particular, under Subsection 2.790(b,), a person may propose that a document be withheld in whole or in part from public disclosure on the ground that it contains trade secrets or privileged or confidential commercial or financial information.

Subsection (b)(6) provides, however, that "withholding from public inspection shall not affect the right, if any, of persons properly and directly concerned to inspect the document." That subsection further provides "trade secret or privileged or c_onfidential commercial or financial information to be subject to inspection: ... (ii) by the presiding officer in a proceeding; and (iii) under protective order, by parties to a proceeding .... "

b. Applicable Past Practice Part 50 licensing practice, implementing the above-cited regulations, also gives content to the mandate of § 52.51 (c) that proprietary information in design certification rulemaking be protected "in the same manner and to the same extent" as proprietary information submitted in connection with Part 50 license applications. Part 50 license applicants have historically submitted non-proprietary Final Safety Analysis Reports (FSARs) supplemented by proprietary information in complementary submittals. The non-proprietary FSAR was placed in the NRG Public Document Room (PDR} and made available for public inspection, it being clearly indicated in the publicly available FSAR where supplementary proprietary information had been provided by, for example, cross-references thereto. The proprietary information included results of research and development programs and engineering studies, including test and analytical data, as well as details of systems, structures and components. Proprietary information also included analytical tools, such as computer programs and correlations embodying the results of the programs and studies, which were provided to demonstrate and confirm that generic requirements were met by a particular design.

For its part, the Staff made its SER publicly available without disclosing proprietary information considered in its preparation. Regardless of whether intervenors availed themselves of the opportunity to review proprietary information, the NRG Staff reviewed proprietary information supplied and, where relevant, relied upon it to make safety findings ultimately reflected in the SER. Moreover, this information formed part of the licensing basis of the plant, binding both the NRG and the licensee.

Past practice thus accommodated the need for the NRG Staff to review a safety analysis encompassing relevant proprietary, as well as non-proprietary information, while making available to the public the non-proprietary FSAR. Additionally, the SER gave the public a non-proprietary view of the FSAR and the supplementary proprietary information upon which the Staff relied in its review.

c. Application of Part 50 Precedent to Part 52 Precedent makes clear that proprietary information submitted in support of a Part 50 license was routinely protected from disclosure in both the course of the Staff's initial review and also during any subsequent hearing. In the latter context, Part 2 procedures afforded parties to licensing proceedings an opportunity to review proprietary information and address it, if *relevant to disputed issues, under specified protective arrangements designed to preserve the confidentiality of the proprietary information. Custom non-disclosure agreements were executed by the vendor and parties afforded access, tailored to the specific circumstances in each case. This was done, in the main, without hearing board involvement or, where special circumstances required, with the involvement ~f the board. In short, applying the requirements of

§§ 2.740, 2.744 and 2.790 to a design certification rulemaking "in the same manner and to the same extent" as in a Part 50 licensing proceeding, leads to the conclusion that access to proprietary information should only be granted to parties in the hearing phase of the rulemaking upon a showing that:

(1) The proprietary document or information therein is relevant to a disputed issue; *

(2) Its disclosure is necessary to a proper decision in the proceeding; and (3) The document or the information therein is not reasonably obtainable from another source.

• See 10 C.F.R. § 2.744(c).

Section 52.51 (c) recognizes that a design certification is a rule and, therefore, will be published in the Code of Federal Regulations. The publication proviso in that section implements a publication requirement of the Administrative Procedure Act, 5 U.S.C. § 552 et seq., which states, in relevant part:

Each agency shall separately stat~ and publish in the Federal Register for the guidance of the public ...

substantive rules of general applicability adopted as authorized by law ... (emphasis supplied). 5 U.S.C.

§ 552(a)(1 )(D). .

Section 552{a) further provides:

Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published. For the purpose of this paragraph, matter reasonably available to the class of persons affected thereby is deemed published in the Federal Register wh~n incorporated by reference therein with the approval of the Director of the Federal Register.

In prior rulemaking proceedings, the Commission has accommodated its obligation to publish generally applicable rules with its requirements for the protection of proprietary information. These proceedings provide guidance on resolution of the proprietary information issue in the context of design certification. For example -- and on point here -- in the emergency core cooling system (ECCS) rulemaking, the Commission published generically applicable acceptance criteria in 10 C.F.R. § 50.46

• and, in the accompanying Appendix K, incorporated by ref~rence proprietary correlations of individual vendors that were approved in conjunction with the .

rulemaking *as acceptable, but not exclusive, means of meeting the generic acceptance criteria. In the ECCS case, the Commission reasoned that the individual company correlations -- which were treated as proprietary -- were "more akin to matters involved in individual licensing proceedings," and thus were distinct from generally applicable generic requirements. See, In the Matter of Rulemaking Hearing (Acceptance Criteria for Emergency Core Cooling Systems for Light Water Reactors),

CLl-73-39, 6 AEC 1085, 1089 (December 28, 1973).

Moreover, in 10 C.F.R. § 72.214, the Commission *has also approved by regulation the designs for spent fuel storage casks, under the conditions specified in their Certificates of Compliance. Both § 72.214 and the Certificates of Compliance reference Safety Analysis Reports (SARs) submitted in support of the design review leading to the rulemaking, which SARs contain extensive proprietary information. That proprietary information is redacted from copies of the SARs referenced in the rule which are available in the PDR.

3. . Treatment of Proprietary Information in the Course of NRC Staff Technical Review of a Design Proposed for Certification The NRC Staff should review and rely upon any proprietary information that is needed to reach its safety findings and is used as a basis for its SER leading to issuance of a Final Design Approval (FDA). This includes any proprietary information submitted by the proponent of the design, whether contained in the SSAR or referenced in the SSAR. However, the information reviewed by the Staff to make its safety determinations relative to the proposed design, and the requirements for and circumstances iii which information will be accorded proprietary protection, are two distinctly different matters. The provisions of 5 U.S.C. § 552 respecting publication of rules and the requirements for their later being accorded binding effect (discussed infra) do not alter the need for the Staff to review proprietary information and do not alter the Staff's ability to utilize proprietary information in its safety review. As demonstrated by the practice followed in the fuel cask design certification rulemakings, the technical staff need not be limited in its review of proprietary technical information in the course of issuing design approvals which are eventually codified in rules. In those certification rulemakings, the technical staff reviews proprietary information in the SARs referenced in the rules even though the proprietary information is redacted from the versions of the SARs available in the PDR. There is no reason why a similar practice should not be followed in design certification rulemakings.

4.

• Access to Proprietary Information in the Course of the Design Certification Proceeding Consistent with the express terms of§ 52.51 {c) and relevant Part 50 licensing practice, proprietary information should be made available to third parties only after initiation of the design certification rulemaking hearing, i.e., after parties have been admitted to an informal hearing and not during the application review or comment phase of the rulemaking proceeding. The SER, resulting FDA, and non-proprietary SSAR (i.e., an SSAR which contains, as needed, non-proprietary references to or descriptions of proprietary portions of design information) will be available in the PDR at, or well in advance of, the issuance of the notice of proposed design certification rulemaking. Moreover, all of Tier 1, including the ITAAC, will be non-proprietary, published and available for public review and comment. This material will be adequate to put the public on notice of the contemplated design certification action and the bases therefor and will contain sufficient information to enable the formulation of comments during the notice and comment phase of the rulemaking. We can find no Commission precedent for making proprietary information available to members of the general public during the Staff review or comment phases of rulemaking, or in other than the hearing phase of licensing proceedings. Indeed, the opposite is the case: under Part 50 practice, proprietary information is usually obtained only at the licensing stage if it is needed to resolve a specific material dispute in a contested proceeding. It is not clear whether the more expansive access recommendations in SECY-92-170 {i.e., access afforded during the course of Staff review and during the comment period) are based on policy considerations or some unstated legal interpretation. In any event, there is neither a policy nor a legal basis for making proprietary information available to other than parties to a design certification rulemaking.

The means preliminarily recommended in SECY-92-170 for making proprietary information available to non-parties (i.e., merely signing a PDR non-disclosure agreement with no vendor involvement and no NRC enforcement) are unworkable and insufficient from the standpoint of safeguarding proprietary interests.

There was a clear workshop consensus on that point. Further, the preliminary OGC recommendations relative to the treatment of proprietary information represent a sharp and unjustifiable departure from NRC practice in licensing proceedings, and simply do not protect proprietary information "in the same manner anq to the same extent" as in those proceedings. Most notably, the recommended approach would allow competitors to obtain proprietary information, eliminate involvement of the information's I

owner, and provide no mechanism for enforcement of non-disclosure commitments.

Moreover, so many persons could obtain information under the process recommended in SECY-92-170 that there would be no effective way of monitoring, let alone preventing, unauthorized disclosures.

In contrast to those merely seeking to comment on the proposed rule, persons qualifying as "parties" to the* design certification rulemaking "hearing" should be afforded access to proprietary information under ~rrangements paralleling those in licensing proceedings. Specifically, to satisfy to § 52.51 {c), parties to a design certification hearing submitting qualifying requests, discussed in Section IV.F.1, infra, would be afforded access to proprietary information under protective agreements with the information's owner {with oversight, ~s appropriate, by the hearing board); and in camera proceedings would accommodate consideration of such information in the design certification hearing itself.

Protection of Part 52 proprietary information "in the same manner and to the same extent" as in Part 50 proceedings dictates not only that "parties" alone be given access to proprietary information, bu~ also that such access be afforded only after a party has satisfied the requirements that pertain in licens]ng proc~edings. First, hearing party-requesters should initially seek to obtain access directly from the information's owner, and only seek proprietary information from the NRC, through the hearing board, if efforts to make reasonable access arrang~ments with the owner have failed. In the latter event, the party-requester should comply with the requirements found in 10 C.F.R. §§ 2.740 and 2.744, which include a showing that the proprietary material sought is: (1) relevant to the subject matter of the proceeding and the issue(s) therein properly raised by the party-requester; (2) necessary to a proper decision in the proceeding; and (3) not reasonably obtainable from another source.

Moreover, any party seeking access to proprietary information in a Part 52 proceeding should be required to execute a non-disclosure agreement with the information's owner tailored to the specific circumstances and sensitivity of the information covered thereby. In the absence of such an agreement, a party could be accorded access to proprietary information under a suitable protective order issued by the board conducting the rulemaking hearing. Use of the PDR or "form" protective agreements are wholly inappropriate and impracticable means for providing access to proprietary information. Finally, to better assure that the public interest is satisfied, all protective agreements or orders should be enforceable by appropriate civil and criminal ~ .

18 u.s.c. § 1001) sanctions.

If, despite the plain meaning of 10 C.F.R. § 52.51 (c) and past Commission licensing and rulemaking practice, the NRC determines as a matter of policy that proprietary information should be made available to commenters, then access should be allowed only upon a showing comparable to that required for party access. Qualification criteria should be specified to assure the bona tides of the requested access (i.e., the need therefor in formulating comments relevant to the stated bases for the proposed design certification rule), and non-disclosure requirements should be imposed that will adequately protect against abuse.

Mechanisms for effecting such a determination are discussed infra in Section IV.A.

5. Treatment of Proprietary Information in the Design Certification Rule As indicated supra in Section I1.A.2.c, the NRC and Office of the Federal Register have, in the past, published both: (1} rules which incorporate by reference proprietary, non-public means to comply with a public, generically applicable rule e (ECCS); and (2} rules which incorporate by _reference published material which, in

• turn, references proprietary, non-public information (spent fuel cask design}. See 10 C.F.R. Part 50, Appendix K, § I.C.4.b.(3} and§ 72.214. Plainly, those avenues would be available in design certification rulemakings where the circumstances are appropriate. ~

Even in those rulemaking circumstances where publication is otherwise required by 5 U.S.C. § 552(a), non-publication does not, as a consequence, make the rule invalid, as suggested in SECY-92-170. In point of law, 5 U.S.C. § 552{a) provides an exception to ~his general rule. Specifically, a person with "actual and timely notice" of a rule, even though unpublished, is bound by the terms of the.rule. See Tearney v. NTSB, 868 F.2d 1451, 1454 (5th Cir.}, reh'g denied, 875 F.2d 859 (en bane}, and cert: denied, 493 U.S. 937 (1989) (rule enforceable against persons with actual notice despite failure of publication of the rule in the Federal Register): Mada-Luna v. Fitzpatrick, 813 F~2d 1006, 1018 (9th Cir. 1987) ("The FOIA explicitly provides that an individual cannot object to the application of an unpublished rule in his case if he has 'actual and timely notice of [its] terms."' Id.}; see also United States v. Anaconda Co., 445 F. Supp. 486, 497 (D.D.C. 1977}. Thus, contrary to the statement in SECY-92-170, an unpublished rule is only unenforceable against a person who has no "actual and timely notice" of the terms of the rule. Even in Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977), the case cited in SECY 110; the court noted that actual notice "is in a sense a substitute for publication; (continued ... }

_The publication treatment of proprietary information in connection with the foregoing appears to be at odds with the informal advice received by OGC from the Office of the Federal Register'as characterized in SECY-92-170 (i.e., that the Office of the Federal Register "would not publish a rule in which proprietary information was incorporated by reference"). & at 4 n.7. Further discussion with NRC (and the Office of the Federal Register) is necessary to better understand this position and its foundation, both in administrative law and in light of past practice.~

If the informal position of the Office of the Federal Register is maintained, measures must be applied by desig*n certification applicants and the NRC to accommodate this publication limitation in the formulation of Tier 2 of the certification rule. We believe there are means for doing so which are consistent with even the restrictive reading of 5 U.S.C. § 552 which underlies the preliminary recommendations in SECY-92-170. Specifically, as recognized by Part 52, the certified design (i.e., Tier 1) will be published in Chapter 1 of Title 10 of the Code of Federal Regulations. If Tier 1 is too lengthy, it is possible that portions of it may be incorporated by reference. All information in Tier 1 will be non-proprietary. Tier 2 of

- ( ... con t*mue d) .

31 one who has actual notice of an unpublished regulation is bound by it even though the regulationwas required to be published." .!!!. at 456.

~ In such discussion, there should be further exploration of whether incorporation by reference of proprietary information in a design certification rule would be approved by the Office of the Federal Register as meeting the criterion for material "deemed to be published in the Federal Register" (i.e., "matter reasonably available to the class of persons affected thereby", 5 U.S.C.

§ 552(a)), in light of the COL access regime discussed in Section 11.A.6, infra.

the rule published in the Federal Register will incorporate by reference the SSAR, modified where appropriate following the SER/FDA review and the design certification rulemaking. The generally applicable requirements in Tier 2 will be published, non-proprietary, and available to the public. Tier 2 may also incorporate by reference, as appropriate, proprietary means which have been approved in the rulemaking proceeding as methods for meeting generically applicable requirements. As earlier described, this is what was done in the ECCS rulemaking. Adoption, publication and application of the rule with such proprietary information is consistent with the provisions of 5 U.S.C. § 552.

Tier 2 may also merely reference proprietary information (without incorporating such information by reference) where it constitutes only supporting or source documentation. For example, the design of a system or component may be described in Tier 2, and that tier may also reference a proprietary report which provides source documentation or further detail. Such proprietary references will not comprise part of the rule and, therefore, will not implicate the considerations in 5 U.S.C. § 552.

6. Treatment of Proprietary Information in Subsequent COL Proceedings Referencing the Design Certification Rule The remaining question is the treatment in subsequent COL proceedings of the two ca~egories of proprietary information described above: i.e., approved proprietary means for complying with a design certification rule's generically applicable requirements; and supporting or source documentation which is referenced in, but not a part of, Tier 2.

As to the former, approved proprietary means for meeting a design certification rule's generic requirements can bind parties in subsequent COL proceedings that reference the certified design. This conclusion is reinforced by a reading of 5 U.S.C. § 552(a) in light of the workings of the Part 52 COL process.

- . -.~ .::

First, approved proprietary means for meeting a design certification rule's generic requirements are not themselves "rules of general applicability" and, therefore, the publication requirements of§ 552(a) are not app,licable. The ECCS rulemaking provides precedent for this conclusion. As to the further provisions of§ 552(a), since the parties to a COL proceeding would be afforded access to any proprietary information incorporated by refe'rence in Tier 2 (under the protective arrangements contemplated by Part 2), they would, in fact, have "actual and timely notice" thereof and thus be able to exercise the identical hearing rights they would have had if the subject information had been published. It should be emphasized, however, that the e proprietary portions of a referenced design certification rule -- like the non-proprietary portions - could only be challenged in the same manner that other Commission rules .

are susceptible to challenge, namely, by a request for a waiver or exception under 10 C.F.R. § 2.758.

Tier 2 proprietary references which constitute only supporting or source documentation are not part of the rule. Thus, the requirements of 5 U.S.C. § 552(a) are not implicated.

7. Answers to Questions Posed in SECY-92-170 Responses to the specific proprietary information questions posed on page 6 of SECY-92-170 are set forth in this section.

i} Should the NRC be responsible for policing violations of the non-disclosure agreements?

It is not clear how NRG could "police" the non-disclosure agreements under the PDR scheme contemplated by SECY-92-170, and thi~ underscores the industry's position that such an approach is unworkable. The industry's position regarding the respective roles of the vendor-owner of the information and the NRG in enforcing non-disclosure agreements is set forth in Section 11.A.4, supra, and in the further responses below. Consistent with our recommended resolution of access issues, the vendor would be responsible for enforcing compliance with the terms of the non-disclosure agreement and, where access is afforded under NRG auspices, enforcement sanctions would also be applicable under 18 U.S.C. § 1001.

ii} What sanctions are available to the NRC for enforcing such agreements, and should the NRC as a matter of policy employ

• them?

Where proprietary information is available under the auspices of NRG, the traditional sanctions codified in 10 C.F.R. § 2.713 (reprimand, censure or suspension from a proceeding) could be utilized; however,. such-*sanctions may not be effective deterrents against violation of a non-disclosure agreement. Certifications by access requesters should be required to be included in NRG non-disclosure agreements to make applicable enforcement sanctions under 18 U.S.C. § 1001. For the reasons set forth more fully, supra, the most effective sanctions are those which flow from requester agreements with the vendor, which agreements create private causes of action. As discussed above, under a properly structured and implemented access regime, it is unlikely that any sanctions will need to be employed.

Iii} Can a non-disclosure agreement system be developed which allows

• [such] information brokers to obtain proprietary information and provide it to their principals or other subscribers of their service?

As a fundamental proposition, no person -- whether a party or a commenter -- should be afforded access to proprietary informati'on in a Part 52 proceeding unless the use is in connection with that person's contribution to the rulemaking record. Access by information brokers for dissemination to their subscribers bears no relationship to that purpose. Indeed, it is at odds with an effective non-disclosure regime, which both law and policy require.

iv} Does the NRC have an obligation to assure that individuals seeking access to proprietary information have made accurate representations in their executed non-disclosure agreements?

The NRC has an obligation to assure the integrity and fairness of its rulemaking process. The suggested PDR approach to making available proprietary information, preliminarily recommended in SECY-92-170, does not satisfy that obligation. Where access to such information is provided by the NRC, or under the auspices of a hearing board, access should not be granted if the NRC (<_:>r the board) has obtained knowledge that the certifications of a requester in support of access are not accurate. As to the means for obtaining such knowledge, see the answer to question v, infra. Also, we believe that certification in an NRC non-disclosure agreement that the statements are accurate, such that the sanctions of 18 U.S.C.

§ 1001 would apply, is appropriate for its deterrent effect, as well as to allow referral to the U.S. Department of Justice for prosecution in particularly egregious circumstances.

v} Should the applicant be permitted an opportunity to review the executed non-disclosure agreement prior to disclosure of the information, in order to provide an opportunity for the applicant to

. advise the NRC of its objection to disclosure to the individual seeking disclosure?

Since we believe that the non-disclosure agreement must be with the applicant-information owner, the applicant will have such opportunity. If disclosure is authorized by the NRC, the applicant must be accorded the opportunity to advise the NRC of its objections to disclosure.

vi} To what extent should the NRC protect proprietary information c::ontained in col'Tlments submitted to the NRC in the public comment phase of the rulemaking?

The NRC should protect proprietary information contained in comments to the same extent and in the same manner as proprietary information submitted in connection with Part 50 proceedings .

• B. ALTERNATIVE DISPUTE RESOLUTION OGC'S PRELIMINARY VIEWS: __ Negotiated rulemaking is not feasible for design certification proceedings because the interests affected-cannot be reasonably limited* or known in advance. It was further noted that negotiated rulemaking is not possible for the GE-ABWR and ABB/CE--

System 80+, in view of the advanced state of the Staff's review of the underlying FDA.

INDUSTRY COMMENT: The Industry agrees with the conclusions stated in OGC's preliminary recommendations. Negotiated rulemaking for design certification itself is neither desfrable nor appropriate.

Section 52.51, which establishes the Commission rulemaking procedures for design certification, was adopted in April, 1989 as the culmination of a lengthy rulemaking process with opportunity for extensive public participation. That process involved a thorough and detailed consideration of the appropriate procedures for design certification, including such issues as whether the design certification should be by license or rulemaking; whether, if by rulemaking, it should be by notice and comment or should have additional procedures; and whether any such additional procedures should involve legislative or adjudicatory proceedings. One of the major criticisms of the old two-step licensing process was that it lacked stability and predictability. Part 52, recently upheld in NIRS v. NRC, _F.2d_ No. 89-1381 (D.C: Cir., en bane, July 17, 1992), was designed to bring about such stability. To impose on design certification rulemaking yet an additional (and indeterminate) public process in the form of negotiated rulemaking would reintroduce the type of uncertainty which Part 52 was supposed to eliminate and, thus, would have the potential to create the very unpredictability and instability which Part 52 was designed to cure.

• The subject of negotiated rulemaking in SECY-92-170 was significantly expanded by discussions about Alternative Dispute Resolution .(ADR) during the July 20 Commission Workshop. §! Selective application of alternative dispute resolution techniques to specific policy or process issues {such as those which were the subject of the SECY-92-170 Workshop) may have some benefit in the context of design certification and should be explored further. ~

Several workshop participants commenting on the use of ADR techniques in the design certification process view the techniques as means for permitting earlier public participation: In our comments on OGC's preliminary views on docketing and advance rulemaking activities and the notice of proposed rulemaking, we discuss mechanisms which allow for early and appropriate participation. See Sections IV.A and B, infra. Some of the commenters also appeared to favor public participation in the Staff's safety review of a design certification application as part of making its FDA determination. The industry thinks it unsound regulatory policy to institute a process to broker "consensus" resolution of safety issues as part of the FDA review.

ADR techniques include, but are not limited to, mediation, early, Qeutral evaluation, mini-trials, non-binding arbitration, and negotiated rulemaking.

Since the workshop, NRC has issued a policy statement regarding the use of ADR to resolve controversial issues concerning NRC administrative programs.

57 Fed. Reg. 36,678 {Aug. 14, *1~92). The policy statement recognizes that "a

. number of [NRC- programs] may give rise to disputes that provide opportunities for the use of ADR in their resolution," and that the "use of ADR may be appropriate: {1) where the parties to a dispute, including the NRC, agree that ADR could result in a prompt, equitable negotiated resolution of the dispute."

12:_at 36,679.

Ill. OVERVIEW OF A DESIGN CERTIFICATION RULEMAKING In the corresponding section of Attachment 1 to SECY-92-170, OGC provided an overview of the design certification rulemaking process and a summary of its preliminary views on various aspects of that process. Industry comments on those OGG views are provided infra in the sections of this paper that correspond to the sections in the OGC paper where OGC discussed its preliminary views in detail.

IV. DISCUSSION OF DESIGN CERTIFICATION PROCEDURAL ISSUES A. DOCKETING AND ADVANCE RULEMAKING ACTIVITIES

. OGC'S PRELIMINARY VIEWS: OGC provisionally recommended that (1) the Staff continue its practice of docketing design certification applications and publishing a notice of docketing in the Federal Register; (2) the Commission assess the need for an ANPR on a case-by-case basis; and (3) the Commission delay codification of generic procedures for conducting design certification rulemakings until the first two design certification rulemakings have been conducted.

INDUSTRY COMMENT: The industry agrees that the Staff should continue docketing and noticing the docketing of design certification applications in order to provide early notice to the public of the impending design certification rulemaking proceeding. Additionally, we believe that the notice of docketing could be used to inform the public about the future rulemaking and about key milestones before issuance of a proposed design certification rule, as well as mechanisms whereby the public may receive information on the progress of the design review and otherwise remain informed. Among the mechanisms are opportunitie~ for public attendance at meetings between the design certification applicant and the NRC Staff, and at meetings of the Advisory Committee on Reactor Safeguards and the Commission on design certification matters, and the use of service lists to receive correspondence between the applicant and the Staff about the application.

As discussed above in Section II.A, if the Commission decides to afford access to proprietary information to interested persons who intend to participate in a design certification rulemaking proceecfing prior to their becoming parties in a rulemaking hearing, the industry recommends that simultaneous with Staff issuance of its Final Design Approval (FDA) for the design seeking certification, the Commission should issue an Advance Notice of Proposed Rulemaking (ANPR) or other Federal Register Notice setting forth the conditions for access. Specifically, the notice would

~

inform the public that the Commission expects to issue a proposed design certification rule in the near future and describe how interested members of the public who intend to participate in the design certification proceeding may obtain access to proprietary (as well as non-proprietary) information prior to publication of the proposed rule.

We agree with OGC that it is premature to further codify generic design certification rulemaking procedures until after the Commission has had experience with implementation of the process in actual proceedings ~ . after the first two certification proceedings).

B. NOTICE OF PROPOSED RULEMAKING OGC'S PRELIMINARY VIEWS: OGC provisionally recommended that (1) a person who desires a hearing should be required to request one by the close of the written comment period; and (2) a 90-day comment period should be provided only if (a) the FDA/design certification application is reasonably complete; {b) reasonable, early notice is provided of the pendency of the applications; {c) the draft SERs for the design certification/FDA are noticed and made available; and (d) there is reasonable access by interested members of the public to proprietary information prior to issuance of the Notice of Proposed Rulemaking.

{NPR). (SECY-92-170, page 21).

INDUSTRY COMMENT: The industry supports OGC's recommendation of a 90-day period for commenting on the proposed design certification rule and requesting an informal hearing. As relevant backgrou~d, we note that neit~er the, Atomic Energy Act nor the Administrative Procedure Act sets a minimum period for the opportunity for public comment on a proposed rule. Also relevant, is the fact that there have been and will continue to be ample opportunities for public participation well in advance of issuance of the proposed design certification rule.

Accordingly, we b~lieve that the subject 90-day period is reasonable and adequate. Interested persons will have been on notice since docketing of a design certification application that a safety review of the design is to be conducted by the NRC Staff, followed by issuance of an FDA and proposed design certification rule .

. With respect to the first condition for a 90-day comment period, we note that applications for design certification will be reasonably complete at the time of docketing and that this information will be supplemented during the course of the Staff's safety review in response to Staff questions.

With respect to the second condition (early noti~e of the pendency of the applications), as discussed above in Section IV.A, a notice of docketing can be used to inform the public of the future rulemaking and key milestones before issuance of the proposed design certification rule and additional mechanisms can be established for

enhancing access to information and input by the public prior to issuance of the design certification NPR.

With respect to the third condition, the publication in the Federal Register of Notices of Availability of key documents, such as the draft and final SERs and the FDA, would permit interested persons to know, well in advance of issuance of the design certification NPR, what will be in the rulemaking record and enable them to begin an early review of the record.

• Also, issuanc.e of the FDA m*ust be noticed in the .

Federal Register, thus further informing interested members of the public of the impending design certification rulemaking proceeding.

Concerning the fourth condition, as discussed above in Section II.A, the industry is opposed to access to proprietary information by persons who are not admitted as parties in a design certification hearing. If, however, the Commission decides to grant such access, the industry suggests that contemporaneously with issuance by the Staff of the FDA for a particular design, the Commission issue an ANPR or other Federal Register notice informing interested members of the public of the Commission's intention to issue a proposed design certification rule and describing the procedures to be followed for access to proprietary information about the design. .

In sum, absent a showing of good cause, 90 days .is a reasonable period of time and represents an effective application of resources. Should good cause exist for extending the period beyond 90 days in light of fact-specific circumstances brought to the Commission's attention, the Commission can always_provide additional time.

Furthermore, as OGC points out in SECY-92-170, there is a much longer period of time actually available for those who intend to .participate in the design certification rulemaking proceeding to review the rulemaking record. OGC expects

~here to be at least a 90-day period between issuance of the FDA and issuance of the proposed design certification rule, thus giving a minimum period of at least 180 days in which interested persons can review._ tbe record and prepare comments or request a hearing.

C. LICENSING BOARD AUTHORITY IN HEARINGS OGC'S PRELIMINARY VIEWS: Jhe "Limited Magistrate" approach should be selected. If the Commission selects this alternative, guidance should be provided in the rulemaking procedures with respect to the nature, content and timing of the Licensing Board's "certification." The Licensing Board should have no sua sponte authority. To assure that there is. no uncertainty with respect to the Licensing Board's authority in this matter, the design certification rulemaking *procedures should clearly indicate whether the Licensing Board possesses sua sponte authority in the informal or formal hearings, or both.

INDUSTRY COMMENT: The industry agrees with OGC's preliminary view that the "Limited Magistrate" model is the appropriate one for a hearing board in a design certification rulemaking hearing. Under the Atomic Energy Act and the Administrative .

Procedure Act,. a design certification rulemaking could be accofTl_plished through notice and comment, with no involvement by a hearing board. The discretionary rulemaking hearing established in Part 52 has a limited purpose: to ensure development of an adequate hearing record on issues raised by persons meeti~g the participation threshold for consideration by the body which must ultimately act on the proposed rule

-- namely, the Commission. The hearing board_'s functions should match this purpose.

In keeping with basic concepts of administrative law, the Commission has historically reserved to itself sole decisional responsibility for rulemaking. l! In the vast majority of its rulemakings, the Commission has relied on the NRC Staff to prepare proposed rulemaking packages, analyze public comments and submit final rulemaking recommendations for Commission consideration and decision. In a limited number of cases, the Commission has provided for hearings before specially constituted boards. ~ The Commission has maintained its exclusive decisional role in l! . In only Umited instances, where the proposed rule is of a minor or ministerial nature, has the Commission delegated rulemaking authority to the Executive Director for Operations.* *see NRC Management Directive 9.17.

The Commission has used board hearings in the following rulemaking proceedings:

(1) . Acceptance Criteria for Emergency Core Cooling Systems for Light-Water-Cooled Nuclear Power Reactors {Docket No. RM-50-1 );

(2) Effluents from Light-Water-Cooled Nuclear Power Reactors (Docket No. RM-50-2);

(3) Environmental Effects of the Uranium Fuel Cycle (Docket No.

RM-50~3};

(4) Environmental Effects of Transportation of Fuel and Waste To and From Nuclear Power Reactors (Docket No. RM-50-4);*

(5) Generic Environmental Statement on Mixed Oxide Fuel (GESMO)

(Docket No. RM-50-5);

(6) Authority for Access to or Control over Special Nuclear Material (Docket No. RM-50-7).

every rulemaking proceeding where it has provided for a board hearing and has done so whether those hearings used formal or informal procedures. ~ A Limited Magistrate role for a design certification hearing board would be fully in keeping with this rulemaking policy and practice. jEf The background of and strong policy content to design certification are additional reasons for prescribing a Umit~d Magistrate role for a board in Part 52 rulemaking hearings. The Commission will already be familiar with a substantial portion of the design certification rulemaking record as a result of its active involvement in the Part 52 implementation process -- including its policy guidance and oversight throughout the design review phase and its consideration and approval for publication of the proposed rule and accompanying statement of considerations. {See the attached flow chart from SECY-90-065, illustrating the Commission's ongoing review activity during the Final Design Approval {FDA) review and certification processes.) Thus, much of the rulemaking record will already have been developed The Commission's directions to the hearing boards in both the legislative-type GESMO hearing and the formal-type ECCS hearing are explicit on this point:

• See, M.:., the GESMO hearing notice which directs:

... Following completion of the hearing ... , the hearing board will certify the hearing record to the c*ommiss*ion for decision without rendering any decision or making any recommendation of its own with regard thereto. (41 Fed. Reg. 1,133, 1,135,

• (January 6, 1976)).

jEf In all of the aforementioned rule.making hearings, save one, the Commission assigned a Limited Magistrate role to the hearing board. For the Access Authorization rulemaking hearing, the Commission first assigned a Limited Magistrate role, but later asked the hearing board to provide recommendations.

and be known to the Commission as a result of these activities. Therefore, the Commission does not need a hearing board to integrate the record by means of a recommended or initial decision. In short, the "Limited Magistrate" hearing model is singularly appropriate here. This is quite unlike nuclear power plant licensing where, as a matter of both NRC regulations and practice, the bulk of the review and related licensing activity takes place without the Commission's direct involveme~t.

Functionally, a Limited Magistrate role for the hearing board will be fully adequate to serve the Commission's need for the board to compile a coherent and complete hearing on controverted issues. As in the case of the legislative-type hearing in the GESMO proceeding, we assume that the hearing board will "have the duty to conduct a fair and impartial hearing and develop a record that will contribute to informed decisionmaking by the Commission" and adequate authority to execute its duty. 41 Fed. Reg. 1,133, 1,134 (January 6, 1976). As further reflected in the designated responsibilities of that hearing board, Limited Magistrate functions are hardly passive or inconsequential.

As with the GESMO Hearing Board, a Limited Magistrate hearing board for design certification would have the power to:

(a) Rule on offers of proof and receive evidence:

(b) Dispose of procedural requests or similar matters; (c) Ask questions of witnesses; (d) Order consolidation of parties;

{e) Establish an order of presentation by the parties which, if appropriate, may provide for an order of presentation on the basis of subject matter; (f)

• Hold conferences before or during the hearing for consolidation of parties,* establishing an order of presentation, or any other proper purpose;

{g) Establish reasonable time limits for the conduct of the proceeding; (h) Pose its own que.stions to the parties and entertain suggestions from the parties as to questions which the ~card should ask of witnesses for the other parties if the board finds such questions necessary for the creation of an adequate record on the controverted issues or the most expeditious way to resolve controversies; (i) Limit the number of witnesses for parties whose testimony may be cumulative;

0) Strike cumulative or irrelevant evidence of parties; (k) Certify questions or refer rulings to the Commission for its determination; .11! and (I) Regulate the course of the hearing and the conduct of the parties.

121 41 Fed. Reg. 1,344. In short, the industry rejects the assertion that a Limited

.11! Section 52.51 makes provision for a hearing board to request additional procedural authority from the Commission or the convening of a formal hearing ..

~ Following the pattern of other hybrid rulemaking proceedings, the GESMO hearing procedures allowed for limited appearances. While we believe that such appearances have limited potential to add to the hearing record, the industry is not opposed to allowihg such appearances and suggests that discretionary power be given to a design certification hearing board to allow

• therefor. The GESMO Board also had power to rule on discovery matters and

• to rule on adqitional requests to become a participant in the hearing. See 41 Fed. Reg. 1344. A design certification hearing board would not need such powers .. Under§ 52.51 a hearing board would have_to request authority to rule

,. on discovery matters from the Commission. The industry believes that the (continued ... )

Magistrate format would relegate a design certification hearing board to a "potted plant" role.

The functions of a "Full Magistrate" or "Initial Decisionmaker" are not needed, nor are they compatible with the design certification rulemaking process established in Part 52. Among the reasons therefor are the following:

{1) A Full Magistrate or Initial Decisionmaker role would create an additional layer of technical review, which *is wholly unnecessary in light of the massive underlying Staff, ACAS and Commission reviews associated with issuance of an FDA for the design and issuance of the proposed rule.

(2) As stated in SECY-92-170, under either the Full Magistrate or Initial Decisionmaker model, design certification would move too far in the direction of adjudicatory licensing -- an approach which the Commission specifically rejected when it formulated and adopted Part 52. See 54 Fed. Reg. at 15,375-76.

(3) Because of the significant policy aspects of design certification

• rulemaking, a meaningful recommended or initial decision would necessarily have to address significant legal, technical and policy matters of first impression -~ matters which the Commission has properly and traditionally reserved as its exclusive province.

As respects sua sponte authority, § 52.51 provides that the issues in a design certification hearing are to be those placed in controversy by the parties.

Functionally, moreover, sua sponte authority implicates an additional layer of technical*

review which is directly at odds with the purpose of the design c:ertificatiQn hearing. It is worth emphasizing that in no prior Commission rulemaking hearing has the hearing board been given sua sponte authority.

_g,( ... continued)

Commission, not the board, should rule on the admission of participants, as well as issues to be heard, when it rules on requests for an informal hearing.

The Chief Counsel of the Atomic Safety and Licensing Board Panel advocates a more expansive role for a hearing board than that provided under the Limited Magistrate model. The Chief Counsel argues that a Limited Magistrate role, as opposed to a Full Magistrate or Initial Decisionmaker role, would make the Commission's job of finalizing the design certification rule more difficult because the Commission would have to review an unorganized record de nova. Several of the Workshop participants also preferred a broader role for the Board, for essentially the same reasons. As discussed above, however, a primary responsibility of the hearing board under the Limited Magistrate model will be to use its defined authority to ensure the orderly conduct of the hearing and the development of an* adequate, as well as an organized, hearing record on matters put in issue by the parties. That hearing record will be certifie.d to the Commission for its consideration, along with all other components of the rulemaking* record, in reaching a final rulemaking determination.

Further, the recommendation ignores the role of the parties, including the NRG Staff, in marshalling the record to prepare proposed findings and conclusions to aid the Commission in formulating the final rule.

The Chief Counsel also argues that the Full Magistrate or Initial Decision maker. model is more appropriate than the Limited Magistrate model because the design certification rulemaking proceeding may resemble the more complex litigation conducted in the traditional licensing process. The Commission, however, expressly rejected the licensing mode for design certificatio~ and made informal rather than formal procedures the design certification rulemaking hearing norm -- a norni.

which was successfully applied in prior complex NRC rulemaking hearings. It is worth noting, in this connection, that in the ECCS and Appendix I rulemakings, which were conducted with formal procedures, the hearing boards were given Limited Magistrate functions only.

Finally, the Chief Counsel argues that a design certification hearing board should do more because it is capable of doing more. While it is, of course, true that a hearing board could do more, in each of the prior NRC rulemaking hearings the Commission mandated a Limited Magistrate role . .l!' The industry believes that the purpose of the design certification hearing should dictate the role of the hearing board.

As we stated above in Section I, we believe that purpose is to ensure the development of a record adequate for the Commission to resolve the issues placed in controversy by the parties. The procedures prescribed by§ 52.51 and a Limited Magistrate role for the hearing board are appropriate for fulfilling the design certification hearing's purpose, while at the same time ensuring fairness to the participants and achieving necessary rulemaking efficiency in keeping with the 4t principles underlying Part 52.

D. COMPOSITION OF LICENSING BOARD OGC'S PRELIMINARY VIEWS: Establishment of a special Licensing Board would possess merit if the Licensing Board is responsible for preparing either a proposed or initial decision on controverted issues

.l!' In only the Access Authorization rulemaking proceeding did the Commission subsequently empower the Hearing Board to prepare recommendations for the Commission's consideration.

(especially policy issues) for the design certification hearing.

Establishment of a special Licensing Board would not be necessary if the Licensing Board acts only as a "Limited magistrate."

INDUSTRY COMMENT: The industry agrees with OGC that appointment of a special hearing board is not necessary in order to carry out the functions under the "Limited Magistrate" model (as well as under the "Full Magistrate" or "Initial Decision Maker" model). The utility of a special hearing board would be highly fact-specific and turn on the value of the board as a case management device.

E. CONDUCT OF HEARINGS

1. Scope of Party's Participation OGC'S PRELIMINARY VIEWS: A person requesting a hearing should not be allowed to participate in issues other than those raised by that person.

INDUSTRY COMMENT: The industry agrees with this OGC recommendation.

Participation by a party on issues upon which it did not seek a hearing and justify its participation will add to the length and complexity of the hearing without countervailing contributory benefits. Such participation would not be consistent with the proposed threshold for hearing, which requires participants to identify with specificity the issues

• as to which the record is believed to be inadequate and to be able to contribute significantly to the creation of an adequate record for Commission decisio_n on those issues.

2. Status of Applicant OGC'S PRELIMINARY VIEWS: Since the applicant has the most concrete interest in the design certification rulemaking, it would seem entirely natural to regard the applicant as a "party" in an informal rulemaking with a right to respond to motions, requests and presentations of commenting parties.

• INDUSTRY COMMENTS: The industry agrees with OGC that an applicant for design certification should be regarded as a party with a right to respond to the motions, requests and presentations of commenting parties. As OGC points out, the applicant has the most concrete interest in the design certification rulemaking proceeding and, therefore, it is entirely appropriate for the applicant to be a party in the proceeding. The applicant is the proponent of the design and has had the burden of demonstrating the adequacy of the design throughout the Staff's safety review leading to issuance of the FDA. The applicant's FSAR is part of the bases for the proposed rule. Thus, the applicant, as the developer and proponent of the design to be certified, is singularly equipped to contribute significantly to development of the rulemaking record on controverted issues within the hearing's scope.

At the Workshop the issue was raised as to who should have the right of last rebuttal. Since the process of rebuttal of controverted positions must end somewhere, and since, as indicated above, the applicant is the propone_nt of the design and has the burden of demonstrating its adequacy, it is entirely reasonable to terminate with the applicant (and Staff's) response.

3. Party Status of NRC Staff OGC'S PRELIMINARY VIEWS: The staff should be considered a party in any informal hearing.

INDUSTRY COMMENT: The industry agrees with OGC's reasoning as to why

• the Staff should be a participant in an informal hearing; namely, that the Staff would be a party in any formal hearing, pursuant to § 52.51 (b), and that the Staff, as preparer of the SER, which is one of the bases for design certification, would be I

plainly in a position to contribute significantly to the development of an adequate e record and the resolution of controverted hearing issues. Moreover, it is likely that the Staff will prepare for the Commission's consideration the draft design certification rule.

Thus, the Staff is in every sense a proponent of the proposed rule. It is significant that the Commission required participation by the Staff in three other hybrid rulemaking proceedings to "explain the considerations underlying the proposed amendments and to answer questions by participants." 36 Fed. Reg. 22,775 (November 30, 1971 ) . .1!' It is entirely appropriate for the Staff to be a participant in a design certification hearing as well.

.1!I See "Acceptance. Criteria for Emergency Core Cooling Systems for Light-Water-cooled Nuclear Power Reactors," 36 Fed. Reg. 22,774 (November 30, 1971);

"Effluents from Light-Water-Cooled Nuclear Power Reactors," 36 Fed. Reg.

22,775 (November 30, 1971 ); "Environmental Statement Mixed Oxide Fuel,"

41 Fed. Reg. 1,133, 1,134 (January 6, 1976).

4. Separation of Functions and Ex Parte Constraints

. OGC'S PRELIMINARY VIEWS: (ON EX PARTE): OGC believes preliminarily fhat there is considerable merit in applying ex parte rules in terms of the perceptions of an impartial and open process. If the Commission agrees, the NPR could set forth the details on the application of such limitations. (ON SEPARATION OF FUNCTIONS):. It is OGC's preliminary recommendations that: (1) if there are no hearings, separation of functions requirements not be applied in a design certification rulemaking; and (2) in the event there is a hearing, a form of separation of functions limitations .be adopted which would allow the Commission to obtqin Staff advice and/or assistance in a manner -that assures both an open public process and Commission access to the most knowledgeable members of the Staff.

INDUSTRY COMMENT: The industry supports the ex parte constraints that OGC proposes. We believe that it will enhance the credibility and objectivity of the decisionmaking process to exclude communications by a party (other than the Staff) to the Commission and those who. advise the Commission, once the Commission has determined that a hearing will be held. Although ex parte restrictions do not, as a matter of law, app-ly to rulemaking of the subject type, we agree with OGC's view that application of such restrictions could enhance perceptions of an impartial and open

- _ process.

SECY-92-170 is silent, however, as to when ex parte restrictions should apply and what should be their scope. We believe that ~ parte restrictions should be effective upon issuance of a Commission Order which grants a party's hearing request and identifies the issues each party will address in the hearing. Moreover, the restrictions should apply only to ex parte communications "relevant to the merits of the proceeding." 1o C.F.R. §§ 2.780(a), (b). Therefore, as is the case in licensing proceedings, ex parte restrictions should not apply to other matters which may be part of the rulemaking but which are not controverted issues identified for hearing consideration in the Commission Order initiating the rulemaking hearing.

As to separation of functions limitations, the industry agrees with OGC's first preliminary recommendation that such limitations should not be applied where there is no rulemaking hearing. OGC states correctly that the APA's requirements concerning separation of functions apply only to rulemakings or adjudications required by statute to be determined "on the record" after opportunity for agency hearing.

Since NRC rulemakings under the AEA, including those under Part 52, are not required to be made on the record after opportunity for public hearing, imposing separation of functions restrictions where there is not even a hearing would unnecessarily restrict and formalize Commission-Staff communications with no countervailing benefit.

The industry does not agree with OGC's second preliminary recommendation on separation of functions, i.e., that, if a hearing is held, a form of separation of functions constraints should be adopted that would allow the Commission to obtain expert Staff advice only through a formalized process that requires advance public notice and communication in public proceedings. We believe

• that separation of functions constraints should not be imposed in the design certification proceeding.

The industry has serious reservations about applying a constraint on intra-agency communication that unnecessarily hobbles the .Commission in making safety determinations. The Commission, in our view, should be able to obtain the most knowledgeable advice from the members of the Staff without being unduly fettered in such communication. Mr. Crutchfield, an NRC Staff panelist during the July 20 Workshop, summarized well the reasons for allowing the Commissioners to have unfettered access to the regulatory staff when considering design certification applications:

MR. CRUTCHFIELD: The availability of the technical staff provides the Commission with some expertise that -**

they don't already have. For example, a great deal of the design information that we are reviewing deals with new

_- instrumentation control systems, digitally based systems.

The staff, itself, is having a problem with resources

- and I am sure the Commission is having a problem with

• resources there, also. So the availability of the staff for the

_Commission provides to them a source for questions, answers, understanding and learning that they don't have traditionally right now. To cut them off from that, I think, would be a disservice to the Commission.

Transcript of July 20 Workshop at p. 222.

The design certification process is one in which the Commission has been continuously consulting with the NRC Staff, on a very close basis, from the inception of the FDA/design certification process -- consulting on process issues, on policy issues and on technical issues, in_ the Staff's review of the final design approval:

We presume that such consultation will also occur in the formulation of the proposed

_rule. To impose constraints on such consultation at a time in the decisional process when it may be most important for the Commission to have unfettered communication with the Staff seems to us to be unwise as a matter of policy. We think that the OGC recommendation should be re-examined in the light of all of these considerations.

If, however, the Commission does decide to adopt separation of functions constraints, it should be done in a way which causes the least possible impact on the conduct of the proceeding. We would urge that the timing of and process for Commission-Staff interactions and the attendant public process therefor be structured so as to cause minimum delay in the conduct of the rulemaking proceeding.

The NRC should also make explicit that which is implicit in SECY-92-170 with respect to the timing and scope of the separation of functions requirements: namely, separation of functions requirements should not apply until the Commission grants a hearing request and identifies the issues to be addressed in the hearing; and, at that point, the separation of functions constraints should apply only to the issues which are the subject of the hearing.

5. Funding of Public Participants OGC'S PRELIMINARY VIEWS: The language of NRC appropriations acts prohibits NRC funding of parties in informal or formal hearings.

INDUSTRY COMMENT: We agree that NRC is prohibited by law from providing such funding. Funding of private persons for participation in activities centered on and leading to design certification hearings would be a patent circumvention of these statutory prohibitions. The central intent of these*

Congressional prohibitions is clear. Public funds are not to be expended for private advocacy.

6. Location of Hearings OGC'S PRELIMINARY VIEWS: The NPR should state that design

• certification hearings will be held in the Washington, D.C. metropolitan area, but that requests for hearing sessions in other locations will be considered by the Commission, based upon a statement of need submitted by the requestor, or on the Commission's own judgment.

INDUSTRY COMMENT: The industry agrees with OGC's preliminary recommendation. The industry believE:1.sJhat *hearings should be held in.the Washington, D.C. metropolitan area,*but that the Commission should consider other locations that might be appropriate upon a demonstration of special circumstances by a requester.

7. Consolidation of Parties and Issues OGC'S PRELIMINARY VIEWS: The Commission should explicitly

• provide the Licensing Board with the authority to consolidate parties and

• issues when it establishes the procedures for an informal hearing in a design certification rulemaking proceeding.

INDUSTRY COMMENT: The industry agrees with OGC's preliminary recommendation to give a hearing board explicit authority to consolidate issues and/or parties. Consolidation does not offend due process or fairness considerations.

Consolidation of parties has been effected in prior rulemaking proceedings where the Commission has held hearings; §.:.9..:., the hearing board consolidated partlcipants in the aforementioned ECCS, Appendix I and GESMO rulemaking hearings. There was also

• consolidation of parties in the Waste Confidence Proceeding. See "Rulemaking Proceeding on the Storage and Disposal of Nuclear Wastes," CLl-84-15, 20 NRC 288 (1984). Such an approach clearly makes sense in design certification proceedings as well.

F. INFORMAL HEARINGS INDUSTRY COMMENT: The industry believes that OGC's preliminary recommendations for the conduct of an. informal hearing (set out at the beginning of each of the next two sub-sections) are reasonable, fair and well:supported by the reasons set forth in SECY-92--170. Moreover, OGC's preliminary recommendations are consistent with the Commission's use of hearing boards in other rulemaking proceedings and with the Commission's decision, set forth in 1O C.F.R. § 52.51, to limit the use of adjudicatory procedures to "specific and substantial disputes of fact, necessary for the Commission's decision, that cannot be resolved with sufficient accuracy except in a formal hearing."

1. Threshold for Request/Party Participation

- OGC'S PRELIMINARY VIEWS: Providing an informal hearing in a design certification rulemaking proceeding to any person who requests one would be wasteful *of agency resources and would delay the proceeding. *Therefore, standards or criteria should be adopted which would limit informal hearings to persons who can demonstrate that they will be able to participate in a meaningful manner. A person's request for an informal hearing could be judged* by whether that person's participation in an informal hearing will significantly contribute to deve_lopment of an adequate rulemaking record. OGC therefore recommends that persons requesting an informal hearing should be reqLJired to: (a) show that they have submitted written comments in the

. public phase of the rulemaking, (b) submit the written presentations they wish to have included in the record of the informal hearing, which identifies the specific portion of the proposed rule or supporting bases

.. 48 -

which are challenged and proposed corrections, the bases for their position, and references to all sources and documents which are relied upon, and (c) demonstrate that they (or persons they intend to retain and present _their position at the hearing) have the appropriate qualifications or expertise to contribute significantly to the development of the hearing record on the controverted issue.

• INDUSTRY COMMENT: The industry agrees with OGC's preliminary recommendations on the appropriateness of a threshold for granting a request for and participating in an informal hearing. _Neither the APA nor case law requires the Commission to afford an opportunity for an evidentiary hearing in a design certification rulemaking proceeding. The Commission is doing so as a matter of discretion. It is entirely appropriate, therefore, for the Commission to establish a purpose for the hearing and to set a threshold for determining whether that purpose will be achieved.

We believe that each of OGC's preliminary recommendations on the threshold for an informal hearing is reasonable and sound. First, the recommendations are consistent with the established purpose for the hearing; namely, to contribute to the development of the rulemaking record on controverted issues in a manner neither wasteful of agency resources nor unfairly restrictive of participation by members of the public.

Second, the recommendations are reasonable for achieving the hearing's purpose:

(1) The recommendations allow any member of the public to participate in the design certification rulemaking process by filing written comments on the rule.

- 49 *

{2} The recommendations allow anyone participating to propose issues for consideration in an informal hearing; that is, to identify, with requisite specificity and support, those issues with respect to which the rulemaking record could be significantly enhanced through the informal hearing process.

(3) The recommendations require that the issues be identified in a particular manner. Specifically, the portion(s) of the proposed rule or supporting bases which are challenged, and any proposed corrections, would be identified in a written presentation submitted under oath or affirmation, which would also identify the bases for the position and references to all sources and documents which are relied upon.

Since an informal hearing is not a matter of right, it is entirely reasonable to require those requesting a hearing to supply enough information to permit an informed decision on the request to be made; indeed, this would be proper even if hearing participation were a matter of right.

(4) The recommendations require that those who would make presentations at the hearing show that they are able to contribute significantly to the development of the hearing record on the issue(s) that they contest. j!/ This is reasonable, particularly when considered in the context of OGC's preliminary j!/ Some of the Workshop participants expressed concern that OGC was recomm~nding that "an expert witness" standard be applied as a prerequisite of participation. The industry shares OGC's belief that what was intended is demonstration of an ability .to contribute meaningfully* to development of the rulemaking record on the controverted issues with respect to which an informal hearing is sought. This is not the same standard as an "expert witness" requirement.

recommendation that parties to any hearing be permitted to make oral presentations and that the hearing board be permitted to ask questions on controverted issues.

(5) Should the request for an informal hearing not be granted, the information supplied as part of the request for hearing would become part of the rulemaking record and be considered by the Commission in the development of a final rule. Thus, none of the information submitted in the written presentations would be lost to the rulemaking record or to Commission consideration. * .

With respect to whether the Commission or a hearing board should act on requests for an informal hearing and specify the issues on which the hearing board is to compile a record, the industry agrees with OGC's preliminary view that these matters should be determined by the Commission. The Commission's involvement in policy and other issues throughout the FDA review process and in the formulation of the proposed rule that is the subject of the rulemaking hearing (see the functional flow chart from SECY-90-065), make the Commission far more knowledgeable as to its rulemaking needs than a hearing board that has hitherto not been involved in these

- matters. Moreover, if a hearing board is not appointed until after the determination is made to hold an informal hearing, the Commission would necessarily have to determine the subject matter of the hearing.

With respect to whether the informal hearing should automatically include an oral phase, the industry favors OGC's preliminary view that it should, believing that orijl presentations and questioning will likely enhance the quality of the hearing record on controverted issues without unduly burdening the process .

.

• 51 *

2. Appeals from Denial of Informal Hearing OGC'S PRELIMINARY VIEWS: The Commission should decide whether a hearing should be held and should specify the controverted matters on which the Licensing Board shall compile a record in the informal hearing.

INDUSTRY COMMENT: As discussed in the preceding section (IV.F.1 ), we agree with OGC's recommendation that the Commission should decide whether a hearing should be held and should decide the controverted issues within the scope of the hearing.

3. Written and Oral Presentations and Questioning OGC'S PRELIMINARY VIEWS: Persons admitted to the proceeding should be ab!e to make oral presentations and submit questions for consideration by the Licensing Board without any further showing of need, and the Licensing Board should be able to question parties at the hearing on issues in the hearing. Outlines of the oral presentations and questions_ which the parti~s would like to be asked by the Licensing Board should be submitted 30 days before the hearing. Alternatively, if the Commission determines that o"ral presentations and board question-ing should not be routinely allowed in informal hearing, then the

• requirements

. proposed by industry (NUMARC Proposed Rule, pp. 18-19) must be satisfied before the Licensing Board determines to permit oral presentations. Such requests should be submitted to the Licensing Board within 30 days of notice of the formation of the Licensing Board. If there are special circumstances justifying deviation from the Commission-established hearing schedule, the Licensing Board has the authority to grant extensions upon a showing of good cause. The authority of the Licensing Board to do so should be set forth explicitly in the hearing procedures established by the Commission.. OGC does not recommend a process by which the Commission acts on any requests for extensions of time.

INDUSTRY COMMENT: The industry agrees with OGC that an informal hearing should include oral presentations, opportunity to su~mit questions to the board without further showing, and board questioning of parties. This is consistent with

longstanding precedent -- oral presentations have been allowed in every hybrid rulemaking proceeding conducted by the Commission.

We also agree that outlines of oral presentations should be pre-filed and served on the parties prior to the start of the oral phase of the hearing. The pre-filing of outlines of oral presentations is a standard procedure in administrative hearings.

Such pre-filing is particularly useful in NRC practice where, given the technical nature of the subject matter, having access to the outlines assists in the formulation of meaningful questions, the answers to which will contribute to development of an adequate decision record. We further agree with OGC that the hearing board should have the authority to grant extensions of time for good cause. Such authority is consistent with its other powers and is necessary to ensure the efficiency of the proceeding.

4. Opportunity for Response/Rebuttal OGC'S PRELIMINARY VIEWS: The commenting party, who is the proponent of a controverted issue, would first file its written presentation on that issue as part of its hearing request (see "Informal Hearing:

Threshold for Request/Standing," above). If the hearing requ,est is

• granted, the applicant and Staff would file written responses. As part of the oral phase ofJhe hearing, the applicant and Staff would be permitted an opportunity to respond orally to th~* oral presentations or answ_ers to "

. questions posed by. the hearing board. No further opportunity would be

• provided for rebuttal by any party (unless pursuant to a request to use additional hearing procedures or for a formal hearing).

INDUSTRY COMMENT: The industry agrees with OGC's recommendation that the applicant and Staff have the opportunity to respond to requests for an informal hearing. Requests for hearing would be accompanied by written presentations which would identify the specific portion of the proposed rule or supporting bases which are challenged and proposed corrections, the bases for the requester's position, and references to all sources and documents relied upon. We believe that applicant and Staff responses to hearing requests will assist the Commission in framing the issues for hearing and in eliminating issues which are irrelevant or for which the rulemaking record is sufficient for Commission decision.

As we discussed in Section IV.E.2, infra, we also agree that the applicant and Staff should have the opportunity to address matters raised by a party in the oral phase of the hearing which question any aspect of the acceptability of the design.

This approach, as OGC indicates, will ensure the completeness of the responses to the issues covered by that party's presentation. The applicant is the proponent of the design and the Staff conducted the NRC's safety review of the design and documented the reasons for the acceptability of the design in the SER. As indicated in Section IV.E.3, infra, the SER is one of the bases for the proposed design certification rule, of which the Staff may be considered a proponent.

G. ADDITIONAL HEARING PROCEDURES AND FORMAL HEARINGS OGC'S PRELIMINARY VIEWS: A party seeking additional hearing prpcedures should be given an opportunity to demonstrate why tile use

. of either all or selected St,1bpart G procedures is necessary. OGC provisionally sees no need for separate party requests and hearing board recommendations on use of selected Subpart G procedures, and the use

. of all Subpart G procedures (i.e., a full formal hearing). However, OGC provisionally supports the industry's suggestion that the rulemaking procedures require (a) a party seeking additional hearing procedures or a full formal hearing to explain why such procedures are necessary, and

• (b) require the hearing board to issue a decision explaining whether the criteria have been met. Some modification of the industry criteria may be required depending upon the Commission's approach to the nature and scope of the formal hearing. OGG preliminarily recommends that requests for additional procedures or a formal hearing be required to be

• filed 30 days before the start of the oral phase of the hearing, and that the hearing board should determine expeditiously whether to refer such requests to the Commission .. Thereafter, any subsequent request for a formal hearing must not only address the criteria for requesting additional procedures or a formal hearing, but must also explain what specific information developed in the oral phase of the informal hearing has led to the party's conclusion that additional procedures or a formal hearing is necessary to assure a sufficient record on that issue. Such requests must also be made in a timely fashion, i.e., as soon as evidence

• developed by another party is such that a party realizes that a formal hearing is necessary to assure a sufficient record. Thereafter, parties should be required to demonstrate why such requests could not have been filed sooner. In the absence O{ a party's request for additional procedures or a full formal hearing, there is no reason for the Licensing Board to sua sponte request the Commission for such authority. If none of the parties feels that it needs to utilize additic:mal procedures up to a full formal hearing, then there is no reason for the Licensing Board to request that the parties be permitted to* use these additional procedures.

INDUSTRY COMMENT:

• The industry agrees with OGC's preliminary recommendation that requests for additional procedures should be filed at the time outlines of the oral presentations are filed, rather than at the time of requesting an informal hearing. We recognize that an accommodation must be struck between potentially adding to the hearing's duration by delaying the submission of requests that are likely ultimately to be granted and potentially adding to the hearing's duration by prematurely and needlessly granting requests for addition9:I procedures or a formal hearing. While we are concerned that it may be premature to consider additional procedures*at the time outlines of oral presentations are filed, on balance we believe that course to be reasonable. A "good cause" provision such as OGG suggests,

• 55

• would be appropriate for consideration of such requests that are filed during or upon completion of the informal hearing.

We further agree with OGC's recommendation that those persons requesting additional procedures or a formal hearing should be required to show why such procedures are necessary. The requirement of a showing is fully consistent with the _hearing process described in 1O C.F.R. § 52.51.

We suggest that, if the *commission grants additiona*1 procedures involving discovery, or a formal hearing, on certain issues, consideration be given to conducting a parallel proceeding on these issues. This could shorten the rulemaking proceeding's overall duration without unreasonable burden to the parties.

H. POST-HEARING MATTERS

1. Findings of Fact and Conclusions OGC'S PRELIMINARY VIEWS: An opportunity to file findings should be provided, but ,;dismissal" of an issue from the hearing for failing to file findings of fact is riot practical. All parties should file findings 30 days

• after the close of the hearing. The hearing board should certify the record 5 days after receiving the last rebuttal. The findings should be filed directly with the Commission.

INDUSTRY COMMENT: The industry agrees with OGC's preliminary recommendation that the hearing record should be closed and certified to the Commission upon completion of the hearing, absent conside_ration of any late-filed request(s) for additional procedures or a formal hearing. As OGC points out, assuming that the board acts as a Limited Magistrate, the proposed findings of the parties are not necessary to and in no way can affect the ministerial act of transmitting

• 56

• the record to the Commission. Certification of the record without recommendations has been used in five of the six rulemaking hearings conducted by a hearing board . .!§'

We believe that the filing of proposed findings and conclusions can assist in integrating the full rulemaking record for the Commission, as it is very likely that each party's submission would include a recommended final rule and statement of considerations for the rule, with specific citations to the rulemaking record. Filing proposed findings and conclusions has been used in fiv~ of the rulemaking proceedings in which boards have conducted hearings. In the sixth proceeding -- the ECCS proceeding -- conclusions were submitted by the parties, but not relied on by the Commission because they were considered outside of the scope of the rulemaking record. See "Acceptance Criter_ia for [ECCS] for Light-Water-Cooled Nuclear Power Rea_ctors," CLl-73-39, 5 AEC 1085, 1088 (1973). We agree that proposed findings and conclusions should be filed directly with the Commission .

• 2. Reliance on Extra-Hearing Information In Final Rule OGC'S PRELIMINARY VIEW: A final design certification must be based upon information in the design certification rulemaking docket.

INDUSTRY COMMENT: We agree with OGC's position .

.!§' Only in the Access Authorization rulemaking did the hearing board make recommendations.

3. Judicial Review and Exhaustion of Administrative Remedies OGC'S PRELIMINARY VIEWS: Persons should be required to have requested an informal hearing, and if granted participated fully in the hearing, in order for persons to be deemed to have exhausted their administrative remedies for purposes of review by the Commission as well as the courts.

INDUSTRY COMMENT: If a person who only comments on a proposed design certification rule, but does not participate in an informal hearing,_ seeks j_udicial review, the reviewing court will make the determination as to whether the administrative remedy provided by the Commission must have been exhausted before judicial review may lie.

r ATTACHMENT SECY-90-065 FLOW CHART ILLUSTRATING THE COMMISSION'S ONGOING REVIEW ACTIVITY DURING THE

• FINAL DESIGN APPROVAL REVIEW AND CERTIFICATION PROCESSES

. '-I _D_E_S_I_G_N_G_E_;__R_T_IF_I_C_A_T_IO_N_ _

~-A-ND-~#-----------

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

EPRI APPLICANT OSER STAFF REVIEW :trlll'Y REQ'TS DESIGN OF APPLICATION COMPAftlSON o,-

EPl'II l'lf:Cl"TS COMPARISON o,-

ISSUED EPl'II ftf:Q°TS TO FOR DC W/ST~ POSITION APPLICANT DalON APPLICANT N'PUCANTOOALS COMPARES AT 00 011!:SIGN W/EPPtl BrYOND REQ'TS 111:0ULAnONS .

DRAFT SER V V V SUBMITTED TO DRAFT SER~~ COMMISSION APPLICANT LRB SUBMITTED c.-OI ISSU!:S lt!:SOLVED STAFF L- REVIEW ACRS t c - - t FINAL

.---~ PREPARED SER STAP'F" COMM!NT1 ftECOMMENDAnON COMMISSION S~TO COMMISSION P'OR INFORMATION ACRS COMMISSION

• DRAFT RULE ISSUED BY.

LRB COMMISSION ISSUED STAl"I" PINAL LJUI F"INAL RULE ISSUED BY COMMISSION I<

~

PUBLIC COMMENT I

DC HEARINGS

FREDERICK H. WINS10N (1853-1886) 1400 L STREET, N.W. CHICAGO OFFICE SILAS H. STRAWN (1891-1946) WASHINGTON, D.C. 20005-3502 35 WEST WACKER DRIVE CHICAGO, ILLINOIS 60601 (312) 558-5600 (202) 371-5700

- - ; 'J: ~ 1 *

• U:ff: H .

• M NEW YORK OFFICE FACSIMILE (202) 371-5950 175 WATER STREET WRITER'S DIRECT DIAL NUMBER NEW YORK, NY 10038-4981

• 92 AUG 19 P3 :57 (212) 269-2500 August 19, 1992

~o Mr. Samuel J. Chilk AUG 19 1992 Secretary of the Commission OOCKETINGl U.S. Nuclear Regulatory Commission SERVICE BAANCH Washington, D.c. 20555 sECV-NRC Attention: Docketing and Service Branch '<>

Subj: Notice of Proposed Rulemaking:

standard Design certification Rulemaking Procedures 57 Fed. Reg. 24,394 (June 9, 1992)

Dear Mr. Chilk:

In response to the above-referenced Notice of Proposed Rulemaking, we hereby submit these comments on behalf of the following NRC licensees: Northeast Utilities and TU Electric.

We believe that the rulemaking procedures adopted to certify standard designs of nuclear power plants are important to the future of the commercial nuclear power industry. By engineering nuclear power plants of a standard design, vendors have introduced a new generation of plants incorporating state of the art technology. It is imperative that the certification of advanced plants be both timely and systematic so that the country can benefit from technological advances in plant design and construction. Therefore, the process adopted ultimately must afford an opportunity to investigate fully the proffered design, yet simultaneously avoid unnecessary delay. It is with these overriding goals in mind that we submit the following comments, and respectfully request that the commission consider them.

Attachment 1 to SECY-92-170, "OGC Preliminary Paper For Comment On Design Certification Rulemaking Procedures," sets forth a vast array of procedural and policy issues pertinent to the design certification rulemaking process. Additional issues were raised during round-table discussions at a July 20, 1992, public workshop. Our comments do not address each and every issue identified to date. Rather, we focus generally on what we perceive to be the most important questions facing the NRC at the present time: (1) the use and treatment of proprietary information in the SEP 18 1992 Acknowledged by card"'""'"'-***~

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 2 design certification rulemaking; (2) the application of alternative dispute resolution ( "ADR") techniques and negotiated rulemaking procedures, including the funding of public participants; (3) the role of Atomic Safety and Licensing Boards ("ASLB") in a design certification rulemaking hearing; (4) the applicability of ex parte and/or separation of function limitations to the Commissioners and ASLB in the design certification rulemaking proceeding; and (5) the duration of the public comment period applicable to the design certification rulemaking.

Discussion

1. Proprietary Information Should Not Be Published in Design certification Rules and Access to the Material Must Be controlled by the NRC staff In recognition that NUMARC is preparing a paper addressing the subject of proprietary information in greater detail, our comments on this issue are general in nature. We await the release of this paper and anticipate providing an assessment, as necessary, of the analysis presented therein.

In general, however, the two primary issues regarding proprietary information presented in the SECY are: (1) whether to use such material in the certified design rule itself; and (2) how to provide access to the information in a design certification rulemaking. As to the first issue, the Office of the General Counsel ("OGC") recommends preliminarily that design certification information should not contain any proprietary information.Y We agree with this position. Regarding the second issue, OGC has suggested that the information be located in the Public Document Room ("PDR"), physically segregated from non-protected material, and interested members of the public who wish to review proprietary portions of the record execute a non-disclosure agreement with the PDR prior to being granted access.I' Because of the importance of proprietary information, we recommend that the staff assume greater responsibility for the protection of proprietary material and that the material be treated with the dignity and seriousness it deserves.

l' See SECY-92-170, Att. 1 at 3-4.

l:.' Id. at 6-7

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 3 Concerning the use of proprietary information in design certification rulemakings, we support the OGC position detailed in SECY-92-170. Specifically, we agree that § 553 of the Administrative Procedure Act ("APA") requires publication of a design certification rulemaking in the Federal Register. In addition, we accept OGC's conclusion that the Federal Register will not publish a rule that contains redacted information not readily availablel' or otherwise incorporates by reference proprietary information.~' We recognize as well, however, that specific engineering features of a proprietary nature will be contained within a design certification rule. Such information must be protected from disclosure to both foreign and domestic competitors.

Thus, on the one hand, proprietary information must be revealed if it is part of the rulemaking. On the other hand, vendors offering the design must be protected from the unwarranted loss of their intellectual property rights. Therefore, we believe that a prudent policy accommodating both of these concerns is to exclude all proprietary information from the portions of the rulemaking that must be published, namely Tier 1 and Tier 2, as OGC has recommended in SECY-92-170.

Public access to proprietary information should also be provided as proposed preliminarily by the OGC. Both the OGC and Ohio Citizens for Responsible Energy ("OCRE") recommend that non-disclosure agreements be used to protect companies from unauthorized disclosure of their proprietary data. We support the use of these agreements. In our opinion, however, the critical issue concerns the administration and enforcement of these agreements. In this regard, we disagree with the OGC proposal to rely heavily on the PDR to protect proprietary information.

In SECY-92-170, OGC acknowledges that the NRC Staff has been awarded responsibility for administering non-disclosure agreements, for example, during the Emergency Core Cooling System

("ECCS") rulemaking and the Comanche Peak operating license proceeding. OGC rejects this approach, however, stating that, because there will be more intervenors in this rulemaking than in either of the above proceedings, it would be overly burdensome for the Staff to be responsible for obtaining non-disclosure agreements 11 See id. at 4.

1

~ See Appalachian Power Co. v. Train, 566 F.2d 451, 455-57 (4th Cir. 1977).

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 4 and to distribute protected manuscripts, see SECY-92-170, Att. 1 at

5. Because of the extreme value of the information contained within the design certification proposals, the staff can ill afford not to take an active role in maintaining and protecting the proprietary status of information contained in design certification documents.

Unless the matter of protecting proprietary information is treated seriously and with dignity, persons may obtain such information without appreciating that the paperwork they have signed to obtain it obligates them to protect it. This would lead to carelessness and inadvertent disclosure by recipients.

Inadvertent disclosure of proprietary information could injure grievously a vendor submitting a design. In addition, such disclosure could be anticompetitive. Therefore, the Staff should be actively involved in protecting these companies' valuable information. Staff participation should include the identification of proprietary information, the policing of the validity of nondisclosure agreements, and the vigorous enforcement of violations. Moreover, all available sanctions should be available to the agency to ensure compliance. Without a credible deterrent, competitors might be enticed to misuse the access system for their companies' gain. The access system should offer sufficient protection and remedies to prevent its misuse as a source of industrial espionage. Therefore, we must object to the OGC's proposal to leave the administration of nondisclosure agreements in the hands of the PDR.

2. The Design Certification Process is Not Amenable to Negotiated Rulemakinq Techniques Although OCRE recommends that negotiated rulemaking be employed, OGC opines correctly that, for numerous reasons, these procedures would be inappropriate,~ SECY-92-170, Att. 1 at 9.

A brief analysis of the conditions identified by the Administrative Conference of the United States ("ACUS") to be conducive to negotiation techniques reveals how unsuited such an approach would be to the design certification process. Of these conditions, several stand out as particularly insurmountable to the successful use of negotiation to reach consensus over a certified design.

Foremost among these obstacles is the fact that many issues regarding nuclear power "rise to the level of 'faith'" for

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 5 some parties.~ It is likely that groups opposed to the construction and operation of additional commercial nuclear power reactors would not be interested or cooperative in participating in negotiations aimed at certifying an advanced reactor design; rather, their primary intent arguably would be to use such a proceeding to delay and inhibit the certification of an otherwise safe plant. In addition, the NRC has yet to establish definitive criteria governing the imposition of sanctions against parties who unreasonably obstruct, delay, or impede negotiated rulemakings.~

In addition, as OGC points out, many interests will be significantly affected by the certification of a design. Because these interests would include presently unidentified persons, it is quite possible that these interests could not be effectively represented during a design certification hearing. It would be inappropriate to allow others to negotiate away the interests of a significant, unidentifiable group of citizens. Therefore, due to its national scope, design certification is not amenable to negotiation.

Note that these comments should not be interpreted as constituting an all-encompassing commentary on the utility of negotiated rulemaking procedures and ADR techniques. Rather, they address the use of such procedures within the design certification context. Should the NRC Staff identify other rulemaking or adjudicatory activities amenable to negotiation, we suggest that the consent of any interested parties be obtained prior to the initiation of negotiations.

Finally, we agree with the OGC's conclusion that the NRC is prohibited from funding public participants in either an informal or a formal hearing, see SECY-92-170, Att. 1 at 35. The clear and consistent language of NRC appropriation acts makes this point unambiguous. The purpose of this restriction is to ensure

~ SECY-92-170, Att. 1 at 8 (citing Negotiated Rulemaking Sourcebook, at 37).

§/ On August 14, 1992, the NRC issued a policy statement on the use of alternative means of dispute resolution within the agency. See 57 Fed. Reg. 36,678 {1992). Although effective immediately, the Commission will consider public comments submitted prior to September 28, 1992. We will comment on this policy statement, as necessary, at a later date. In particular, such comments could address the sanction issue identified above.

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 6 that intervenors in an NRC proceeding fund their own participation.

Therefore, we believe both the language and the policy underlying NRC appropriations preclude the agency from funding participants in a negotiated rulemaking.

3. The Role of the ASLB in a Design certification Rulemaking Hearing Should Be That of a "Limited Magistrate" With Authority to Request Additional Procedures or a Full Adjudicatory Hearing During his opening address to the Design Certification Workshop participants on July 20, 1992, Chairman Ivan Selin identified this as being one of the most important issues arising in connection with the certified design rulemaking process.

Specifically, the Chairman asked the public to submit comments defining the appropriate role of the ASLB in a design certification hearing; i.e., provide the Commission with a hearing record in combination with or absent a recommended decision.

Sub-sections 52.51(b)-(c) of existing NRC regulations do not directly address this issue. While it is clear from § 52. 51 (b) that the ASLB is responsible for the "creation of an adequate record," the regulations do not require that the ASLB offer a recommendation to the Commission and assist it in making an ultimate decision. Thus, for the reasons specified by OGC in its preliminary position paper and by NUMARC in the draft proposed rule and accompanying statement of considerations appended as the second attachment to the OGC document, we agree that the role of the ASLB should be that of a "Limited Magistrate."

There have been several other rulemaking hearings in which the ASLB has served as a "Limited Magistrate," thereby adding to the efficiency and effectiveness of the decisionmaking process.

These include the Waste Confidence and GESMO rulemakings. In addition, it is evident that the Commission has been and will remain directly involved in the design certification process. As such, there is no need to add another level of review to an already detailed review process by requiring the ASLB to draft a recommended decision, the Commission could invite parties to submit proposed findings of fact and conclusions of law.

In rejecting the OCRE position that such a role is inconsistent with§ 554(d) of the APA, OGC notes that the statutory provision is "applicable only to adjudications or rulemakings

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 7 required by statute to be held on the record. 11 Z' OGC then proceeds to cite authority supporting the precept that NRC rulemakings, conducted pursuant to the Atomic Energy Act of 1954 (the "Act" or "AEA") , are not required to be made on the record after opportunity for public hearing. Id. As explained below, it also is important to note that NRC adjudications, conducted pursuant to the AEA, are not required to be formal, on the record, trial-type proceedings.

Section 189(a) of the AEA provides an opportunity for a hearing in connection with any proceeding under the Act for the granting of any license or issuance of rules and regulations dealing with the activities of licensees. 42 u.s.c. § 2239(a) (1)

(1988). This language encompasses the design certification rulemaking processes at issue. The AEA further requires that such hearings be subject to the APA. Id. § 2231.1' The trial-type hearing procedures of§ 556 of the APA apply to agency adjudications specified in§ 554 thereof; i.e., "in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing "

5 U. s. c. §§ 554 ( a) , 556 ( a) ( 1988) ; see also Attorney General's Manual on the Administrative Procedure Act at 41 (same). The United States Court of Appeals for the District of Columbia Circuit repeatedly has ruled that§ 189(a) of the AEA does not prescribe "either in terms or by clear implication," that hearings held under that section be "on the record." Siegel v. Atomic Energy Comm'n, 400 F.2d 778, 795 (D.C. Cir. 1968); see also Philadelphia Newspapers v. Nuclear Regulatory Comm'n, 727 F.2d 1195 (D.C. Cir.

1984) (same). Recently, the D.C. Circuit reaffirmed its interpretation of§ 189(a) in Nuclear Information Resource Serv. v.

Nuclear Regulatory Comm'n, No. 89-1381, slip op. at 9 (D.C. Cir.

July 17, 1992) ( stating that § 189 ( a) "provides no unambiguous instruction as to how the 'hearing' is to be held").

Y SECY-92-170, Att. 1 at 23.

1' Section 181 of the AEA makes the APA applicable to all "agency actions," as that term is used in Section 551 of the APA, namely, to include "the whole or part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act . ." 5 u.s.c. § 551(13)

(1988). Based on this definition, the design certification rulemaking process is a form of "agency action" subject to the APA.

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 8 Thus, it is reasonable to conclude that§ 554(d) of the APA does not require the NRC to empower the ASLB with decisionmaking power in agency adjudications. Combining this conclusion with OGC's analysis of§ 52.51(c), one must conclude that the NRC is not required by law to bestow decisionmaking authority upon the ASLB in the context of a design certification rulemaking hearing. A Commission decision to confer "Limited Magistrate" status upon the ASLB would, therefore, be a policy determination that may be made in accordance with the agency's reasoned discretion.

As explained above, however, the ASLB is responsible for the "creation of an adequate record." 10 C.F.R. § 52.5l(b). As such, it should be accorded authority to request additional procedures or a full adjudicatory hearing from the Commission.

Even if the parties to a proceeding do not believe that additional hearing procedures are necessary, the ASLB may conclude that the record is insufficient. In the latter event, there should be a mechanism available by which the ASLB can fulfill it's legal obligation specified in § 52.51(b) and further develop the record.2'

4. Ex Parte and/or Separation of Function Limitations Should Apply to the commission and to the ASLB During the Design Certification We concur in the OGC's position regarding separation of functions limitations during design certification hearings and limitations on ex parte communications. We agree with the OGC's conclusion that the APA does not impose an absolute restriction on ex parte communications or mandate complete separation of functions. Nevertheless, we believe that the task for the NRC staff is not only to comply with the APA, but also to ensure public confidence in the resulting certified design and process.

Therefore, we believe the OGC has struck an appropriate balance between fostering a positive public perception of the certification process by restricting inter- and intra-agency communications with and within the NRC while simultaneously maximizing the Commission's ability to marshall the resources at its command and ensure a complete review of designs proposed for certification.

2' NUMARC has proposed that ASLB requests for additional procedures and formal hearings be governed be made in accordance with a strict two-stage process described in Attachment B to SECY-92-170, Attachment 1. We support this NUMARC proposal and urge that it be adopted by the NRC.

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 9 The principle of separation of functions was developed to enhance public confidence in the actions of executive agencies by ensuring that agency decisions are rendered by independent, unbiased policymakers. The APA's requirements on separation of function applies only to adjudications or rulemakings required by statute to be determined on the record after opportunity for agency hearing.~' Because NRC rulemakings under the AEA are not required to be made on the record after public hearing, see Siegel v. Atomic Energy Comm'n, 400 F.2d 778, 785-86 (D.C. Cir. 1968), there is no APA requirement for separation of functions. A party may, however, request that separation of functions requirements be applied by requesting additional hearing procedures under § 52. 51 (b) and showing good cause for the relief requested.

If APA separation principles are applied, the Commission would be unable to rely on the advise and assistance of Staff responsible for review of the design certification application.

Because of the technical nature of a design certification rulemaking, it would be foolhardy to exclude those most qualified to advise the NRC during its deliberations from providing such assistance. Therefore, we believe that the OGC' s proposal allowing NRC Staff participation through publicly available communications to the Commission provides both the openness necessary to instill public confidence and the access to the experts that is required to adequately evaluate the technical merits of a proposed design.

For a similar reason, we support the OGC's proposal to limit ex parte communications. As with separation of functions, the APA imposes no restrictions on ex parte communications made in informal hearings.llf However, with so much at stake for vendors, the utility industry, and opposition groups, unfettered unilateral communications between interested parties and the agency could undermine the perception of agency impartiality and openness. This perception is critical if the NRC is to foster public confidence in the design certification process. There are instances, however, where "nonpublic candid contacts between the agency and interested W See SECY-92-170, Att. 1 at 31 (citing 5 u.s.c. §§ 556, 553 (c), 554 (a) (1988)).

ll! See Sierra Club v. Castle, 657 F.2d 298 (D.C. Cir. 1981);

see also ACUS, A Guide to Federal Agency Rulemaking 223 (2d ed. 1991).

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 10 parties can be useful in working out tentative and compromise positions. 11 11/

To accommodate these conflicting demands, we propose that written ex parte communications be allowed; however, once submitted they become part of the record of the hearing. Oral ex parte communications should also be permitted; however, only a brief notation of the time, place, and subject discussed should be provided. The entire content of the oral communication need not be memorialized on the record. In this manner, all parties would have access to the written positions of all other participants and the Commission would be free to pursue nonpublic accommodations between the parties.

s. A Ninety Day comment Period is Sufficient for the Design certification Rulemaking Section 52.51(b) of NRC regulations provides the public with an opportunity to submit written comments and request a hearing in connection with the certification of reactor designs.

It does not, however, specify the length of the comment period or the period of time during which one must request a hearingll'. In its Preliminary Paper, OGC correctly points out that neither§ 553 of the APA nor the AEA define a minimum comment period for a proposed rule, see SECY-92-170, Att. 1 at 19 .

• Absent specific binding legal requirements, OGC has proposed a 90 day period for public comment on a proposed design certification rule. In assessing the adequacy of this proposal, we note that reviewing courts appear to be more concerned with the overall adequacy and reasonableness of the opportunity to comment

-- the length of the comment period being just one factor under consideration. See Florida Power & Light Co. v. United States, 846 F.2d 765, 772 (D.C. Cir. 1988), cert. denied, 490 U.S. 1045 (1989)

(holding a 15 day comment period not unreasonable in circumstances); Connecticut Light & Power co. v. Nuclear Regulatory 11/ A Guide to Federal Agency Rulemaking, supra note 10, at 229.

ll' We agree with OGC that the time period available to request an informal hearing be coterminous with the proposed 90 day public comment period. It is reasonable to expect that by the end of the written comment period, all interested parties should be able to determine whether they believe an informal hearing is necessary. Allowing parties to delay that decision for a longer time period likely would cause unnecessary delay.

WINSTON & STRAWN Mr. Samuel J. Chilk August 19, 1992 Page 11 Comm'n, 673 F.2d 525, 534 (D.C. Cir.), cert. denied, 459 U.S. 835 (1982) (holding 30 days not unreasonable in light of industry familiarity with the problem).

Guided by considerations of reasonableness and case-specific circumstances, we agree that a 90 day comment period is sufficient for a design certification rule if the public is accorded reasonable and timely access to proprietary portions of the proposed design and accompanying SER. We believe the latter two qualifications to the proposed 90 day period are necessary to satisfy the tests of cases such as Florida Power & Light Co., supra by providing for meaningful public review and comment.

Very Truly Yours,

~

• Knotts, Esq.

M. Kalowsky, Esq *

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?jR. C!i The Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, D.C. 20555

Dear Sir:

The Federal Register on June 9, 1992, invited comments on the Rulemaking Procedures for Design Certification prepared as a draft in SECY-92-170. The Department of Energy is pleased to provide the following comments on this draft.

First, we would like to emphasize the importance of the design certification process. It is a key element in the revitalization of the nuclear option since it is expected that new nuclear plants will not be ordered until certified designs are available.

For this reason, it is essential that the certification rulemaking procedures be both efficient and fair.

In general, the Department believes that the process described in the Office of General Counsel's (OGC) preliminary recommendations in SECY-92-170 meets these criteria. In particular, we support the recommendation that the Atomic Safety and Licensing Board act as a limited magistrate in design certification rulemaking hearings to compile a record on controverted issues and certify the record to the Commission for resolution. This approach provides the greatest flexibility to the Commission in reviewing the hearing record and developing a rulemaking, and is consistent with general rulemaking procedures when the Ccmmission is the only decision-maker.

OGC's preliminary recommendation was that Tier 2 design certification information contain no proprietary information. It is our understanding, however, tha~ although the current Light Water Reactor Design Certification applicants are making every effort to limit their proprietary information in Tier 2, it will not be possible to exclude it entirely. Consequently, we believe that it will be necessary for some Tier 2 information to be designated proprietary, in order to protect the applicants' significant investments in certain design details, analytical methods, and tests through prevention of improper disclosure to competitors. Protection of this information would be consistent with current reactor licensing procedures. Nonetheless, we Acknowt S£P 18 1992 adg,ed by card1,w111*..*....*****...,Hn11,

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2 understand that the Office of the Federal Register (OFR) has informally advised OGC that it will not publish a rule that contains redactions intended to protect proprietary information or otherwise incorporates such material by reference. As the resolution of this problem appears to us to be critical to the viability of the design certification process, we recommend that OGC delineate the issues involved in a formal request for an opinion by OFR as soon as possible.

OGC also made a preliminary recommendation that Public Document Rooms be responsible for administering public access to proprietary information for use in preparing comments or requesting an informal hearing. We believe the proposed method would be unworkable since a self-policing nondisclosure agreement would be based only on the threat of liability for breaching the confidentiality agreement. This is not very effective with individuals having limited resources. A method of providing such public access, similar to that used for providing access to proprietary information in nuclear plant licensing hearing procedures, could be used during both the comment stage and informal hearing process.

Finally, we suggest the addition of a provision in the proposed procedures for informal rulemaking hearings confirming that the hearing board has the authority to remove some or all of the issues from the hearing process at the unanimous request of the participants. A provision could also be added to encourage the participants to attempt to reach resolution of contested issues during the 30-day period between filing of oral presentation outlines and the commencement of oral hearings. If the participants report that a resolution of an issue has been reached, it would not be necessary for the board to proceed with oral hearings on that issue.

We would be pleased to discuss our comments in greater detail with the Commission staff.

Sincerely, E. C. Brol in Deputy Assistant Secretary for Civilian Reactor Development Office of Nuclear Energy

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SPRINGFIELD, IL 62704 (217) 785-9900 THOMAS W. 0RTCIGER JIM EDGAR D IRECTOR GOVERNOR August 4, 1992 The Secretary of the Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Re: 10 CFR Part 52, Standard Design Certification Rulemaking Procedures; Public Workshop

Dear Sir:

The Illinois Department of Nuclear Safety {Department) hereby submits its comments on the referenced proposed rulemaking procedures as presented in the Public Workshop held July 20, 1992 in Washington, D.C.

Use of, and Access to. Proprietary Portions of the Design Cert jfjcation Application The Department agrees with several other participants that the use of the NRC Public Document Room as proposed by OGC is infeasible. The Department also agrees that industry should make every effort to reduce as much as possible the amount of information to be protected as proprietary.

Based on experience in previous reactor licensing proceedings, industry apparently has had very few problems providing proprietary information to public interest groups and States subject to non-disclosure agreements. Such agreements have satisfactori ly protected proprietary information while, at the same time, allowed important public access to the information. The Department recommends t hat the continued use of such agreements be the preferred procedure fo r the use of, and access to, proprietary portions of the design certification applications. NRC should retain discretion to oversee such agreements, to impose restrictions to avoid clearly unwarranted expenditure of resources, and to provide other procedures if the use of such agreements proves unwor kable.

Time for Submission of Written Comments and Requests for Informal Hearing The Department is uncertain what OGC has actually recommended. The recommendati on of a 90-day comment period appears to be subject to four

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Secretary U.S. Nuclear Regulatory Commission Page 2 conditions. SECY-92-170, p. 21. Taken in isolation, a 90-day comment period for a rulemaking of the magnitude and complexity of a standard design certification rulemaking is clearly inadequate. However, as discussed at the workshop and shown on the "Timeline For Design Certification Rulemaking" distributed at the workshop, the 90-day comment period would follow an earlier 90-day period between the NRC staff's completion of the final Safety Evaluation Report (SER) and issuance of the Final Design Approval (FDA) and the issuance of the Notice of Proposed Rulemaking (NPR). The SER and FDA would be publicly noticed and available. The earlier 90-day period would follow an even earlier time period of unspecified length during which the draft SER and the draft FDA would be available for public review.

The Department recommends that the standard design rulemaking procedures specifically require: I) Federal Register notice of submission of a design certification application; 2) access to proprietary information in the application, subject to execution of non-disclosure agreements, within a short period of time after notice of the application's submission; 3) Federal Register notice of the issuance of the draft SER and the draft FDA, which would include NRC's best estimate of the period of time expected to be necessary to finalize the SER and the FDA; 4) public availability of the draft SER and the draft FDA; 5) public notice of the issuance of the SER and the FDA; 6) public availability of the SER and the FDA; and 7) publication of NPR in the Federal Register, which publication shall occur no sooner than 90 days after public availability of the SER and the FDA. If these provisions are included in the design certification rulemaking procedures, a period of 90 days for comments on the NPR would seem adequate. As a final assurance that adequate time for comments is allowed, NRC presumably has existing authority to grant an extension should the completely unexpected arise and the public interest necessitate such an extension.

Mechanisms for Early Public Participation The Department favors early public participation as in the interest of all concerned. The discussion at the workshop focused on alternate dispute resolution (ADR) mechanisms. The Department has had insufficient experience with ADR mechanisms to make any recommendations in this area. The Department stresses that NRC should make no compromises on important safety issues.

Informal Hearings The Department agrees that some threshold for requesting an informal hearing is appropriate. The Department questions the need for the submission of a written presentation at the same time that written comments are submitted. The requirement appears duplicative. Additionally, it may be unnecessarily burdensome to require that the full written presentation be submitted with the request for an informal hearing. Identification of the issues that the requester believes should be heard should be sufficient.

Secretary U.S. Nuclear Regulatory Commission Page 3 The Department agrees with OGC's provisional position that the Commission should decide whether a hearing should be held and specify the issues to be heard. At the workshop, the Department's representative offered the opinion that the Licensing Board should be allowed to raised issues sua sponte. Upon further consideration, the better procedure would be to allow the Licensing Board to identify specific issues that it believes warrant attention in the hearing and to request the Commission for authority to add those specific issues to the issues previously specified by the Commission.

Reguests for Additional Hearing Procedures and Formal Hearings The Department agrees with the OGC's preliminary recommendation of the "second option." SECY-92-170, p. 48.

Scope of Licensing Board Authority The Department disagrees with OGC's preliminary recommendation of the "limited magistrate" approach. The Department recommends the "full magistrate" alternative instead.

Section 52.51 {b) requires rulemaking procedures for design certification to provide for an informal hearing before a Licensing Board. It does not make sense to use a Licensing Board to perform clerical, or at best, paraprofessional duties. The Commission must have decided to involve the Licensing Board to have the benefit of the expertise and judgment of the panel members.

In SECY-92-170, OGC discussed the advantages and disadvantages of the "limited magistrate" model. OGC stated that its "primary feature" is that the design certification rulemaking decision rests solely with the Commission.

OGC recognized that the "full magistrate" model also honors this primary feature. Significantly, OGC did not identify any disadvantages of the "full magistrate" model.

Although not addressed in SECY-92-170, NRC apparently has used Licensing Boards as "limited magistrates" in other rulemaking proceedings. That experience should be fully considered in deciding which model to select for the design certification rulemaking. Since that experience does not appear to be widely known {even the OGC representative on the panel at the workshop was not aware of all of the other rulemakings that employed Licensing Boards as "limited magistrates"), the Department recommends that the NRC staff prepare a background paper on the prior use of Licensing Boards in rulemakings and the lessons learned therefrom. Additionally, it might be advisable to receive input from other parties who participated in the other rulemakings.

At the workshop, the Department's representative stated that he was left with the impression after reading the OGC paper that OGC did not trust the

Secretary U.S. Nuclear Regulatory Commission Page 4 skills and judgment of the Licensing Board members regarding a design certification rulemaking hearing. This impression was refuted by OGC.

There seems to be a concern that if a Licensing Board is given any more responsibility than merely assembling a record, the Board might delay the design certification rulemaking process or open immaterial issues. The Department agrees that the informal hearing should not be an interminable free-for-all, however, the Commission would not have involved the Licensing Board in the process at all if the overriding concern was avoiding all possible delays. As stated above, the Commission should specify the issues to be heard and should be able to give appropriate instructions to ensure that the informal hearing is timely and serves the public interest. Concerns about the possibility of the Licensing Board simply taking too long should not result in the Commission selecting an option that does not serve the public interest best in the long run.

As Chairman Selin stated in his keynote address at the workshop, "it is simply common sense to identify troublesome issues and to solicit expert advice before, not after, crucial decisions are made." Public Workshop on Standard Design Certification Rulemaking Procedures, Official Transcript of Proceedings, p. 18. If the Licensing Board has suitable expertise and judgment, it is very difficult to understand why the Commission would not want the Board's considered recommendation, as would occur with use of the "full magistrate" model.

Conduct of Hear ing The Department disagrees with OGC's provisional recommendation that a person requesting a hearing not be allowed to participate in issues other than those raised by that person. If a person in such a situation can make a meaningful contribution (and presumably the Licensing Board has authority to limit repetitive testimony and questions), it would seem to be in the public interest to allow the participation.

The Department agrees with OGC's preliminary recommendation that the applicant and the Staff be considered parties in the informal hearing. The Department also agrees with OGC's preliminary recommendations regarding separation of functions, ex parte communication limits, location of hearings, and consolidation of parties and issues.

y;c;r*1; /.,

~ nJ.-Engw Chief Legal Counsel SJE:cjg

1 OOCKEi£0 USNRC

[7590-01]

NUCLEAR REGULATORY COMMISSION '92 JUN -3 P3 :30 10 CFR Part 52 ;r '!CE ~F 5[~HfT,".R; i'. ;,:;l<;l ! 1r,s *, "t ,. If.

Standard Design Certification Rulemaking Procedures: i*P ,I' ll Public Workshop AGENCY: Nuclear Regulatory Commission.

ACTION: Notice of Workshop.

SUMMARY

The Nuclear Regulatory Commission (NRC) is announcing a public workshop concerning the procedures to be followed in the first design certification rulemaking proceeding. To facilitate understanding of the issues concerning the establishment of design certification rulemaking procedures, the Commission is making available to the public a paper (SECY-92-170) prepared by the Office of the General Counsel (OGC) which provides a preliminary identificat ion and assessment of important issues related to procedures for design certification rulemaking proceedings.

Advance notice of desire to attend the workshop is requested. A 30-day period following the workshop to submit written comments on issues relating to design certification rulemaking procedures is also being provided. Following this workshop and receipt of any written comments the Commission will establish the procedures to b e used in the first des i gn certification rulemaking proceeding in the notice of p roposed rulemaking (NPR) for that proceeding.

DATES: The workshop will be held on July 20, 1992. Notification of intent to attend the workshop should be received no later than July 1, 1992. Written comments on the topics discussed at the workshop should be received by August 19, 1992.

ADDRESSES: The workshop will be held at the Capitol Hyatt, 400 New Jersey Ave. NW, Washington DC. Requests for copies of the OGC paper (SECY-92-170), NUMARC's submission and OCRE comments, and notification of intent to attend the workshop should be sent to Geary s. Mizuno, Off ice of the General counsel, U. s. Nuclear Regulatory Commission, Washington, DC 20555. Send post-workshop comments to: The Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555. Deliver post-workshop comments to: The Office of the secretary, One White Flint North, 11555 Rockville Pike, Rockville, Maryland between 7:30 a.m. and 4: 15 p.m. on Federal workdays. Copies of comments received and the transcript of the workshop may be examined at the NRC Public Document Room at 2120 L street, NW (Lower Level), Washington, DC between the hours of 7:45 a.m. and 5:15 p.m. on Federal workdays.

FOR FURTHER INFORMATION CONTACT: Geary s. Mizuno, Office of the General Counsel, U.S. Nuclear Regulatory commission, Washington, D.C. 20555, telephone: (301) 504-1639.

SUPPLEMENTARY INFORMATION:

Introduction 10 CFR Part 52 establishes general procedures and requirements for certification of standard nuclear power plant designs through rulemaking. Under Part 52, the public will have an opportunity to submit written comments on the proposed design certification rule, as required by the Administrative Procedure Act (APA). However, Part 52 goes beyond the requirements of the APA by providing in a

- design certification rulemaking the opportunity to request a hearing before an Atomic Safety and Licensing Board. Although hearings in an NRC rulemaking are not unprecedented, ~-, the rulemaking associated with the proposed adoption of the Generic Environmental Statement on Mixed Oxide Fuel (GESMO) (see 40 FR 53056; November 14, 1975, 41 FR 1133; January 5, 1976), the NRC has had little experience with rulemaking hearings.

The Commission has received applications for standard design certifications under 10 CFR Part 52 for the GE Nuclear Energy (GE)

Advanced Boiling Water Reactor (ABWR) (57 FR 9749; March 20, 1992) and the ABB Combustion Engineering Nuclear Power (CE) System 80+

(56 FR 21395; May 8, 1991, modified, 56 FR 23602; May 22, 1991).

The NRC also expects to receive a design certification application from Westinghouse Electric (Westinghouse) for the AP-600 in early summer 1992.

In anticipation of the first design certification rulemakings, the Commission directed OGC to prepare a preliminary paper which identifies and analyzes the major procedural steps and associated issues for the notice of rulemaking for the initial design

certification proceedings. The OGC paper (SECY-92-170) was prepared after consideration of proposed rulemaking procedures submitted by NUMARC, and comments on NUMARC' s proposals provided by OCRE 1

• The Commission now wishes to receive comments on OGC' s preliminary paper from the public and the industry, and is making OGC's paper, NUMARC's submission2 , and OCRE's comments available to the public.

The Commission will hold a workshop to provide for public discussion of the significant issues that should be considered in establishing design certification rulemaking procedures, and to provide an opportunity for the public to present their views on design certification rulemaking procedures. In addition, the Commission is providing a 30-day period after the workshop for the public to submit written comments on certification rulemaking procedures. More detailed information will be mailed to all individuals and organizations who notify NRC of their intent to attend and to others who request it.

Following the workshop and receipt of any written comments, the Commission will establish the procedures to be followed in the design certification proceeding in the notice of proposed rulemaking (NPR) for that proceeding.

1 NUMARC's and OCRE's submissions are attached to OGC's paper, SECY-92-170.

2 The Commission is not requesting public comments on Enclosure 2 of the NUMARC submission, "Part 52 Implementation: General Principles," nor will the workshop discuss Enclosure 2 of the NUMARC submission, since that enclosure discusses substantive aspects of design certification rather than procedures for the conduct of design certification rulemaking proceedings.

A tentative agenda and structure for the conduct of the workshop are set forth below. A final agenda and description of the workshop will be provided to all individuals and organizations who notify the NRC of their intent to attend the workshop and to others who request it.

Tentative Workshop Agenda 8:00-9:00 am Registration 9:00-9:05 am Welcome 9:05-9:45 am Address: Chairman Selin 9:45-10:00 am BREAK 10:00-10:10 am Brief description of design certification under 10 CFR Part 52 10:10-10:12 am Introduction of Panel Members 10:12-12:00 pm Panel Discussion, Session 1 PUBLIC COMMENT/HEARING REQUEST PERIOD Adequacy of 90-day period Concurrent Period for Submission of Written Comments and Requests for Hearings THRESHOLD FOR INFORMAL HEARING REQUEST Desirability of Threshold for Requesting an Informal Hearing Criteria for Requesting an Informal Hearing Who makes Decision on Informal Hearing Request: Commission or Licensing Board?

12:00-1:00 pm LUNCH 1:00-2:45 pm Panel Discussion, Session 2

SCOPE OF LICENSING BOARD AUTHORITY IN INFORMAL HEARING "Limited Magistrate," "Full Magistrate," or "Initial Decisionmaker" Sua Sponte Authority of the Licensing Board CONDUCT OF INFORMAL HEARING Oral Presentations; Questions by Licensing Board Role and Responsibilities of the Commenting parties, the Applicant, and the NRC Staff 2:45-3:00 pm BREAK 3:00-4:45 pm Panel discussion, Session 3 REQUESTS FOR ADDITIONAL HEARING PROCEDURES AND FORMAL HEARINGS USE OF, AND ACCESS TO, PROPRIETARY PORTIONS OF THE DESIGN CERTIFICATION APPLICATION SEPARATION OF FUNCTIONS AND EX PARTE LIMITATIONS NEGOTIATED RULEMAKING 4:45-4:55 pm BREAK 4:55-5:15 pm Questions from audience; other topics which panelists wish to discuss 5:15-5:25 pm Panelists' recommendations 5:25-5:30 pm Closing remarks 5:30 pm Adjournment Tentative Workshop structure A "roundtable panel discussion" is currently being considered for the workshop. The panelists will be chosen by the NRC to represent a wide range of interests, in order to assure that a

broad perspective is obtained from the public on the issues associated with establishing design certification rulemaking procedures. The NRC is arranging to have the following organizations represented on the panel: an individual from OGC and an individual representing the NRC Staff, a representative from the nuclear industry, a representative from the U.S. Department of Energy (DOE), three public interest groups, and an individual representing the states. A moderator will preside over the panel discussion.

The panel discussions will be divided into three sessions for administrative purposes. Before the first session, an OGC representative will provide a brief overview of design certification under Part 52. Panel discussion on each topic would begin with a concise description by OGC of the topic based upon OGC's paper. Each panelist would then have up to two minutes to present a concise statement of position. Thereafter, there would be a general dialogue between the panelists on the topic. At least five minutes before the time allotted to the topic expires, the moderator would ask for questions from the audience, or read questions from the audience which are presented in written form.

cards will be provided to the audience for written questions, which will be periodically collected and provided to the moderator.

Following the final panel discussion session, an opportunity will be provided for the audience to raise any other matters not discussed by the panel, or to ask further questions of the panel on issues previously discussed in the panel sessions. Each panelist (except the OGC representative) will then be afforded a brief

(approximately two minute) opportunity to present final recommendations.

Other Information A final agenda and list of panel members will be available two weeks before the workshop and will be mailed to all individuals and organizations who notify the NRC of their intent to attend the workshop, and to others who request it.

A transcript will be made of the workshop, which will be available for public inspection in the NRC Public Document Room five days after the workshop.

Dated at Rockville, MD this "2.-i day of l,e, 1992.

ear Regulatory Commission.

~~

lk, the Commission.