Text

PR-072 - 63FR39526 - Expand Applicability of Part 72 to Holders of, and Applicants for, Certificates of Compliance and Their Contractors and Subcontractors
	ML23156A385
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Issue date:	07/23/1998
From:	Hoyle J; NRC/SECY
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	63FR39526, PR-072
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ADAMS Template: SECY-067 DOCUMENT DATE: 07/23/1998 TITLE: PR-072 - 63FR39526 - EXPAND APPLICABILITY OF PART 72 TO HOLDERS OF, AND APPLICANTS FOR, CERTIFICATES OF COMPLIANCE AND THEIR CONTRACTORS AND SUBCONTRACTORS CASE

REFERENCE:

PR-072 63FR39526 KEYWORD: RULEMAKING COMMENTS Document Sensitivity: Non-sensitive - SUNSI Review Complete

DOCKET NO. PR-072 (63FR39526)

In the Matter of EXPAND APPLICABILITY OF PART 72 TO HOLDERS OF, AND APPLICANTS FOR, CERTIFICATES OF COMPLIANCE AND THEIR CONTRACTORS AND SUBCONTRACTORS DATE DATE OF TITLE OR DOCKETED DOCUMENT DESCRIPTION OF DOCUMENT

07/21/98 07/16/98 FEDERAL REGISTER NOTICE - PROPOSED RULE 08/28/98 08/25/98 COMMENT OF FAWN SHILLI NG LAW ( 1) 10/06/98 10/06/98 COMMENT OF PRECISION COMPONENTS CORPORATION (GARRICK J. SOLOVEY, VICE PRESIDENT) ( 2) 10/07/98 10/06/98 COMMENT OF BNFL FUEL SOLUTIONS CORPORATION (E. D. FULLER, PRES IDENT AND CEO) ( 3) 10/07/98 10/06/98 COMMENT OF TRANSNUCLEAR, INC.

(ALAN S. HANSON, PRESIDENT & CEO) ( 4) 10/08/99 10/05/99 FEDERAL REGISTER NOTICE - FINAL RULE

DOCKET NUMBER PROPOSED RULE p I 1:l [7590-01-P)

'3FR 3'16~1, "99 OCT -8 A10 :Jo 0

NUCLEAR REGULATORY COMMISSION AC'.

10 CFR Part 72 RIN: 3150-AF93 Expand Applicability of Part 72 to Holders of, and Applicants for, Certificates of Compliance AGENCY: Nuclear Regulatory Com mi~sion.

ACTION: Final rule.

SUMMARY

The Nuclear Regulatory Commi$sion (NRC) is amending its regulations to clarify the obligations of holders of, and applicants for, Certificates of Compliance (CoCs). These amendments will enhance the *commission's ability to take enforcement action against these

persons when legally binding req uirements are violated. This action will emphasize the safety and regulatory significance associated with violations of the regulations. In addition, a new section identifies recordkeeping and reporting requirements for certificate holders and applicants for a Coe.

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EFFECTIVE DA TE: This final rule is effective on ~0 de~s frg~ tl=lo dote ef pt:Jblicatio11 i11 ti ,e

FOR FURTHER INFORMATION CONTACT: Anthon)' iJiPalo, telephone (301) 415-6191 ,

e-mail, ajd@nrc.gov, of the Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 .

SUPPLEMENTARY INFORMATION:

Background

The Commission's regulations at 10 CFR Part 72 were established to provide requirements for the issuance of licenses for the storage of spent nuclear fuel in an independent spent fuel storage installation (ISFSI) (45 FR 74693; November 12, 1980). In 1990, the Commission amended Part 72 to include a process for approving the design of spent fuel storage casks and issuance of a CoC (Subpart L) and for granting a general license to reactor licensees (Subpart K) to use NRG-approved casks for storage of spent nuclear fuel (55 FR 29181 ; July 18, 1990). In the past, the Commission has experienced performance problems in the areas of design, design control, fabrication and quality control with holders of, and applicants for, a CoC under Part 72. When the NRG identifies a failure to comply with

Part 72 requirements by these persons, the enforcement sanctions available have been limited to administrative actions.

The NRG Enforcement Policy 1 and its implementing program was established to support the NRC's overall safety mission in protecting public health and safety and the environment.

Consistent with this purpose, enforcement actions are used as a deterrent to emphasize the 1

NUREG-1600, Revision 1, "General Statement of Policy and Procedures for NRC Enforcement Actions," May 1998 (at 63 FR 26630; May 13, 1998).

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importance of compliance with requirements and to er.courage prompt identification and comprehensive correction of the violations. Enforcement sanctions consist of Notices of Violation (NOVs), civil penalties, and orders of various types. In addition to formal enforcement actions, the NRC also uses related administrative actions such as Notices of Nonconformance (NONs), Confirmatory Action Letters, and Demands for Information to supplement its enforcement program. The NRC expects licensees, certificate holders, and applicants for a Coe to adhere to any obligations and commitments that result from these actions and will not hesitate to issue appropriate orders to ensure that these obligations and commitments are met.

I The nature and extent of the enforcement action are intended to reflect the seriousness of the violation involved. An NOV is a written notice setting forth one or more violations of a legally binding requirement.

The Commission published a proposed rule in the Federal Register (63' FR 39526; July 23, 1998). The comment period ended on October 6, 1998, and four comment letters were received on the proposed rule.

Discussion In promulgating Subpart L, the NRC intended that selected Part 72 provisions would apply to spent fuel storage cask certificate holders and applicants for a CoC. For example,

§ 72.234(b) requires that, as a condition for approval of~ CoC, "[d]esign, fabrication, testing, and maintenance of spent fuel storage casks be conducted under a quality assurance program that meets the requirements of subpart G of this part." However, the quality assurance (QA) requirements in Subpart G refer only to licensees and applicants for lice!1ses, and not to certificate holders. Further, some Subpart L regulations apply explicitly to the applicant" (e.g.,§ 3

72.232) or to "the cask vendor (e.g.,§ 72.234(d~(1)). Some of these provisions are written in the passive voice so that it is not clear who is responsible for meeting the requirement (e.g.,

§ 72.236). Although CoCs are legally binding documents. certificate holders or applicants for a CoC have not clearly been brought within the scope of Part 72 requirements. Because the terms "certificate holder and "applicant for a certificate of compliance" do not appear in the above-cited Part 72 regulations, the NRC has not had a clear basis to cite these persons for violations of Part 72 requirements in the same way it treats licensees. When the NRC has identified a failure to comply with Part 72 requirements by these persons, it has issued an NON rather than an NOV.

Although an NON and an NOV appear to be similar, the Commission prefers the issuance of an NOV because: (1) the issuance of an NOV effectively conveys to both the person violating the requirement and the public that a violation of a legally binding requirement has occurred; (2) the use of graduated severity levels associated with an NOV allows the NRC to effectively convey to both the person violating the requirement and the public a clearer perspective on the safety and regulatory significance of the violation; and (3) violation of a regulation reflects the NRC's conclusion that potential risk to public health and safety could

exist.

Over the last 2 years, the Commission has observed repeated problems with the performance of several certificate holders. These problems have occurred in design, design control, fabrication and corrective action areas. Problems in these areas are typically covered under the QA program. In FY 1996, the NRC staff identified numerous instances when certificate holders and their contractors and subcontractors failed to comply with the requirements of Part 72. The Commission has concluded that use of the additional enforcement sanctions, which are available in the NRC Enforcement Policy, is required to address the 4

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performance problems that have occurred in the spent fuel storage industry. Therefore, the Commission is revising Part 72 to explicitly state that certificate holders and applicants for a CoC must comply ~ Part 72 regulations.

Summary of the Proposed Rule Amendments The following is a summary of the amendments that were discussed in the proposed rule (63 FR 39526; July 23, 1998). This summary does not include changes made in the final rule in response to public comments. A summary of the final amendments is discussed in a separate section in this notice.

Subpart A - General Provisions

§ 72.2 Scope.

The term spent fuel storage cask would be added to paragraph (b) of this section. This is a conforming amendment.

§ 72.3 *oefinitions.

The definitions for spent fuel storage cask, certificate holder, and certificate of compliance would be added to this section. The term spent fuel storage cask would be added to the existing definitions for design bases and structures, systems, and components (SSC) important to safety. The definition for design capacity would be revised to be consistent with the Commission's policy on use of metric units.

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§ 72.9 Information collection requirements: 0MB approval.

This section would be revised as a conforming amendment, because of the addition of new § 72.242.

§ 72.10 Employee protection and § 72.11 Completeness and accuracy of information.

The terms certificate h.older and applicants for a Commission license or a Coe would be added for clarification.

Subpart D - Records, Reports, Inspections, and Enforcement

§ 72.86 Criminal penalties.

Paragraph (b} currently includes those sections under which criminal sanctions are not issued. This paragraph has been revised to delete the reference to§ 72.236. This section is being revised to provide that failure to comply with the,~pecffic requirements f_or spent fuel storage cask approval would be subject to the criminal penalty provision of § 223 of the Atomic Energy Act. Similarly, certificate holders and applicants who fail to comply with the new

§ 72.242 (Recordkeeping and reports) would also be subject to criminal penalties. Therefore,

§ 72.242 will not be included in § 72.86(b).

Subpart G - Quality Assurance

§§ 72.140 through 72.176 In the proposed rule, the term "certificate holder and applicants for a Coe and their contractors and subcontractors" is added, as appropriate, to these sections to define explicitly 6

those responsibilities associated with QA requiremems. In 1990, when the Commission added Subparts K and L to Part 72 to provide a process for approving the design of a spent fuel storage cask, which would be used under a general license, the Commission's intent was that

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certificate holders and applicants. for a CoC follow the QA regulations of Part 72. Section 72.234(b) required that activities relating to the design, fabrication, testing, and maintenance of spent fuel storage casks must be conducted under a QA program that meets the requirements of Subpart G of Part 72. However, the 1990 amendments to Part 72 did not amend Subpart G to include certificate holders and applicants for a CoC. In addition, other changes have been made to individual sections of Subpart Gas described below.

In§ 72.140, paragraphs (a) and (b) have been revised to clarify the re~ponsibilities of a certificate holder and a licensee with respect to who is responsible for ensuring that the QA program is properly implemented. Paragraph {c) has been revised to provide milestones for a licensee and a certificate holder when the NRC must approve their QA program. Paragraph (d) has been revised to permit use of an NRG-approved QA program that satisfies the requirements of Subpart H to Part 71 and Subpart G of Part 72, as well as an approved program under Appendix B to Part 50. The notification requirement in paragraph {d) would be revised to.require

that the NRC be notified in accordance with the standard notification requirements contained in

§ 72.4.

To provide clarity,§ 72.142 has been rearranged. The new paragraph (a) has been revised to indicate that all of the persons associated with QA activities for an ISFSI or a spent fuel storage cask (i.e., the licensee, certificate holder, and applicants for a Coe or license, and in the proposed rule their contractors and subcontractors) are responsible for implementation of the QA program.

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In§ 72.144 paragraphs (a) and (b), § 72.154 paragraph (b), § 72.162, and§ 72.168 paragraph (a), the term spent fuel storage cask has been added to the terms ISFSI and MRS. '

Subpart L-Approval of Spent Fuel Storage Casks

§ 72.232 Inspection and tests.

This section has been reformatted by adding a new paragraph (b) and renumbering existing paragraphs (b) and (c). In paragraphs (a), (b), and (c), the term "applicant" has been replaced with "certificate holder and applicant for a CoC. 11 In paragraph (d), the term "applicant" would be replaced with "certificate holder and applicant for a CoC."

Paragraph (a) has been revised to permit the inspection of the premises and activities related to the design of a spent fuel storage cask as well as to the fabrication and testing of such casks. This change would be made to ensure completeness.

A new paragraph (b) includes a requirement to permit the inspection of records related to design, fabrication, and testing of spent fuel storage casks. This requirement would make clear the responsibility of certificate holders and applicants for a CoC to permit access to these records. This requirement is similar to the existing inspection and testing regulations in 10 CFR Parts 30, 40, 50, and 70. *

§ 72.234 Conditions of Approval.

This section has been revised to clarify who is responsible for accomplishing these requirements. The term "cask vendor has been replaced with "certificate holder." The term "cask user has been replaced with the licensee using the spent fuel storage cask." Although the replacement term in the proposed rule was "the general licensee using the cask" because a 8

specific licensee cannot utilize the provisions of Subparts K and L, it is conceivable that, in the Mure, a specific licensee could become a user of a certified cask. Accordingly, the NRC prefers the broader term. A similar change is made in § 72.240 as proposed. Further, edits would be made in §§ 72.234 and 72.236 to clarify that all references to "casks" are references to "spent fuel storage casks." In addition, the acronym "CoC" would be used in place of the term "Certificate of Compliance," where appropriate.

§ 72.236 Specific Requirements for Spent Fuel Storage Cask Approval. _

This section has been revised to clarify who is responsible for accomplishing these requirements. A new sentence would be added at the beginning of this section to specify who has responsibility for ensuring that each of the requirements cont,ained in paragraphs (a) ,:*

through (m) is met. This section has been reissued as being subject to the criminal penalty provisions of § 223 of the Atomic Energy Act. Applicants for a CoC would not be required to ensure that the requirements of paragraphs 0) and (k) were met because these requirements apply to activities that can only occur after a cask has been fabricated, and an applicant cannot begin fabrication of a cask until a Coe has been issued (see § 72.234(c)) .

§ 72.240 Conditions for Spent Fuel Storage Cask Reapproval.

This section has been revised to clarify who is responsible for accomplishing these requirements. The term "user of a cask" has been replaced with "the licensee using the spent fuel storage cask" and the term "cask "!1odel" has been r~placed with "design of a spent fuel storage cask." The term "representative of a cask user has been replaced with "the representative of the licensee using the spent fuel storage cask." In addition, the acronym "CoC" is used in place of the term "Certificate of Compliance" where appropriate.

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§ 72.242 Recordkeeping and Reports.

This new section identifies recordkeeping and reporting requirements for certificate holders and applicants for a CoC that are not already covered by the regulations in§ 72.234(d):

This includes records required to be kept by a condition of the CoC or records relating to design changes, nonconformances, QA audits, and corrective actions. Violations of this section are subject to the criminal penalty provisions of § 223 of the Atomic Energy Act of 1954.

Paragraphs (a), (b), and (c) are similar to the recordkeeping requirements imposed on licensees in § 72.80(a), (c), and (d)..

A new requirement has been established in paragraph (d) for certificate holders to submit written reports to the NRC when they identify design or fabrication deficiencies, in structures, systems, and components that are important to safety for spent fuel storage casks that have been delivered to licensees. This requirement would inform the NRC of deficiencies that may affect existing casks and thereby potentially affect public health and safety. This requirement would be similar to the event reporting requirement imposed on licensees in

§ 72.75(c)(2).

Summary of Public Comments on the Proposed Rule The NRC received four comment letters on the proposed rule. The commenters included a member of the public, one cask fabricator, and two Part 72 certificate holders. Three of the four commenters favored the proposed amendments, and one was opposed. Copies of the public comments are available for review in the NRC Public Document Room, 2120 L Street, NW (Lower Level), Washington, DC 20003-1527. One commenter, a member of the public, raised many issues unrelated to this rulemaking (e.g., issues that are being addressed in a 10

separate petition for rulemaking (i.e., PRM-72-3), the NRG Enforcement Policy, the NRG Inspection Program, and NRG oversight of the overall spent fuel storage program). The NRG believes these issues are beyond the scope of this rule.

_!. review of the comments and the Commission's responses follow:

1. Comment: One commenter, a certificate holder, recommended for clarity that in the proposed definition of "certificate holder" in § 72.3, the words "company" or "organization" replace the word "person," because a certificate of compliance is not issued to a specific person.

Response: The NRG disagrees with the comment. The definition of "person" in the rule has the same meaning as "person" defined in section 11 s. of the Atomic Energy Act of 1954.

This definition encompasses a wide range of entities (i.e., individuals, corporations, trusts, government agencies, states, and foreign governments) who may wish to apply for a Part 72 license or certificate. Therefore, no change has been made in the final rule.

2. Comment: One commenter, a certificate holder, agreed that design changes should have appropriate controls. However, the commenter stated that it is not clear whether design changes undertaken by the certificate holder require prior NRG approval.. Currently, § 72.48 identifies those changes that the licensee may make without prior NRG review, and § 72. 70 addresses the licensee's responsibility to update its Safety Analysis Report (SAR). But, the rule does not apply §§ 72.48 and 72. 70 to the certificate holders. The commenter stated that the rule did not address whether prior NRG approval is required for a design change made by a certificate holder th~t would necessitate a revision of the cask SAR, but would not specifically deviate from the CoC; and how the SAR will be updated to reflect these changes.

The commenter recommended that the proposed revision of§ 72.146(c) needs clarification pf when prior NRG approval is required for certificate holders and the means to 11

control changes to the SAR that do not require a change to the Coe. The commenter believed that the most direct method to address this concern is to revise Part 72 to apply §§ 72.48 and 72.70 to certificate holders. The commenter recognized that NRC intends to pursue changes to

§ 72.48 in the future. However, without changes to§§ 72.48 and 72.70 at this time, the commenter believes that some clarifications are necessary in order to implement the proposed revisions to§ 72.146(c).

Response: The NRC agrees in part with the comment. Revising the proposed rule to add provisions to permit a certificate holder to use the provisions of § 72.48 to make changes to the design of a spent fuel storage cask, without prior NRC approval, is beyond the scope of this rulemaking. However, the Commission has approved a separate final rule on "Changes, Tests, and Experiments" (64 FR 53582; October 4, 1999} that addresses the issues raised by ttie commenter. The "Changes, Tests, and Experiments" final rule revises § 72.48 to permit a certificate holder to make certain changes to the design of a spent fuel storage cask, without NRC prior approval. The "Changes, Tests, and Experiments" final rule also revises the requireme!lts in § 72. 70 on licensees in updating their SAR; and adds requirements in a new

§ 72.248 on certificate holders updating their SARs.

3. Comment: One commenter, a certificate holder, concurs with proposed changes for clarification, but believes that the Imposition of enforcement actions may not be necessary. If the NRC decides that enforcement actions are necessary, then the commenter believes that it should not apply to the subcontractors of certificate holders, because in the commenter's view, (1) it does not seem fair to extend enforcement actions to organizations which do not have a direct regulatory link to the NRC; and (2) subjecting such contractors and subcontractors to enforcement action exposes them to b1:_1siness risks which could cause them to refuse to 12

become contractors and subcontractors of certific.Jte holders or cause them to increase their prices. Another commenter believed that subjecting parties to NRC enforcement actions that have no formal regulatory connection presents severe business risks that have a real cost to

. small businesses and could prove detrimental to a "rather small and highly specialized group of fabricators."

Response: The NRC agrees with the '

commenters. The NRC. expects that persons involved in the manufacture of a spent fuel storage cask will take full responsibility for their obligations to implement the requirements of the P~rt 72 QA regulations. The NRC has reconsidered and now believes that the imposition of enforcement actions against contractors .

and subcontractors is not necessary. Section 72.148 requires that, to the extent necessary, the licensee, certificate holder, and applicants shall require contractors or subcontractors to provide a QA program consistent with Part 72. Licensees, certificate holders, and applicants are responsible for assuring that their contractors and subcontractors are implementing adequate QA programs. Therefore, the NRC has revised the final rute to remove reference.s to contractors and subcontractors .

4. Comment: One commenter, a certificate holder, raised a concern with the proposed extension of enforcement actions to cover § 72.236. Several paragraphs in this section, such as (a), (i), and (m), contain wording like "but not limited ton and "to the extent practicable" that the commenter believes are highly subjective. The commenter does not believe that certificate holders should be subject to enforcement actions based on someone's opinion regarding what is practicable.

Response: The NRC recognizes the use of wording "but not limited to" and "to the extent practicable," could be viewed as subjective, when interpreting the regulations; however, 13

the changes to paragraphs (a), (i), and (m) did not change the substance of§ 72.236. This wording is regularly used in statutes and regulations and the NRC believes this wording will be reasonably interpreted in enforcement actions.

5. Comment: One commenter, a member of the public, disagreed with the proposed language in§ 72.140(a) stating tqat she ... "did not like the term licensee and certificate holder being simultaneously responsible for implementing the quality assurance (QA) requirements for oversight of contractors and subcontractors activities." The commenter was concerned that imposing,dual responsibility for-the same activity was tantamount to implying that no one was responsible. The commenter believed there needed to be a clear cut line of responsibility to determine what the licensee is actually liable for.

Response: The NRC disagrees with the comment. The NRC intended that both licensees and Coe holders be held accountable for oversight of their contractor (i.e., fabricator) activities and that this redundant responsibility would ensure that the spent fuel storage casks are manufactured in conformance with the approved design and Part 72 QA requirements. The NRC believes that this appr6ach will have an overall positive effect on improving quality in the manufacture of spent fuel storage casks.

6. Comment: One commenter, a certificate holder, agreed with the proposed change in

_)

§ 72.140(c)(2) to require certificate holders to obtain NRC approval of its quality assurance

.,)

program prior to commencing fabrication or testing of a spent fuel storage cask. However, this commenter also noted that§ 72.140(d) states that a quality assurance program which satisfies Appendix B to Part 50 is acceptable for Part 72. The commenter also noted that a certificate holder may have a quality assurance program that has been approved by the NRC under 14

Part 71 or approved by the NRC for another Part 72 CoC application. The commenter suggested that§ 72.140(d) be revised to include a quality assurance program which has been previously approved for Part 71 or Part 72 as acceptable for new CoC applications under Part 72.

Response: The NRC agrees with the comment. The QA requirements contained in 10 CFR Part 50, Appendix B; 10 CFR Part 71, Subpart H; and 10 CFR Part 72, Subpart G, are essentially equivalent. The proposed rule revises§ 72.140(c), "Approval of Programs," to expand this paragraph to indicate that a certificate holder must have an NRG-approved QA program before commencing fabrication or testing of a spent fuel storage cask. The NRC

agrees that the definition of an "approved* QA program found in§ 72.140(d) should include other NRG-approved QA programs. This final rule is revised to allow for the use of all NRG-approved QA programs as satisfying the requirements of Subpart G.

Additionally, the language in§ 72.140(d) is revised to reflect: (1) the recordkeeping requirement in§ 72.174 and (2) the current location for submitting information to the NRC in

§ 72.4. These requirements were added to§ 72.140(d} by a different rulemaking.(see the final rule entitled wMiscellaneous Changes to Licensing Requirements for the Independent Storage of

Spent Fuel and High-Level Radioactive WasteD (64 FR 33178; June 22, 1999)). The language in§ 72.140(c) and (d) is revised to be consistent with paragraph (b) of this section to indicate that the requirements in these paragraphs appli to a licensee, applicant for a license, certificate I

I holder, and applicant for a certificate, as appropriate.

7. Comment: One commenter, a member of the public, expressed concern with the NRC's process for issuing exemptions to the requirement in § 72.234(c). (Note: § 72.234(c) 15

currently prohibits beginning cask fabrication before t~.e NRC issues a Certificate of Compliance.)

) Response: The NRC believes this comment is beyond the scope of this rulemaking.

While § 72.234, "Conditions for Approval, w was revised in this rulemaking, no change to para~raph (c) of this section was proposed. Rather, this section was revised to clarify who is responsible for implementing these requirements. The process for granting an exemption to Part 72 under the provisions of§ 72.7, including§ 72.234(c), is adequate. An amendment to

§ 72.234(c) specifically addressing the issue of beginning cask construction before a CoC is issued is addressed in a different rulemaking currently under development by the NRC staff (see proposed rulemaking on "Clarification and Addition of Flexibility to Part 72," RIN-AG15).

8. Comment: One commenter, a certificate holder, raised the issue that the added requirement in§ 72.242(d) requires a written report when the design or fabrication deficiency affects the ability of structures, systems, and components (SSCs) important to safety to perform their intended safety function. The commenter indicated that an individual SSC may perform more than one function. Some of these may be safety related while other functions may not serve a safety function. As an example, a coating may assist in heat removal as a function important to safety b*ut may also serve as an aesthetic function. For this example, the proposed rule could be interpreted to require a written report addressing a deficiency associated with an aesthetic function, even though the particular component would be capable of performing its safety function. It would be an unwarranted use of industry and NRC resources to report deficiencies that do not affect a safety function. The commenter further raised the issue that the deficiency may affect the safety function of such SSCs, but the deficiency may not prevent such structure, system, or component from performing its intended safety function. As an example, a 16

deficiency in a coating may be discovered such that the manufacturer lowers its peak heat transfer rating. However, the cask design as stated in the Safety Analysis Report may not rely upon such a high rating. It also would be an unwarranted use of industry and NRG resources to report deficiencies that do not affect the ability of the component to perform its intended safety function. The commenter suggested revising§ 72.242(d) to read as follows: " ... deficiency affects the ability of structures, systems, and components important to safety to perform-1hfilr intended safety function," (emphasis original).

Response:' The NRG agrees with the comment and the final rule has been revised to Incorporate the comment:-

rule.

9. Comment: One commenter, a cask fabricator, had two objections to the proposed First, the commenter was opposed to the potential for issuance of NOVs and civil penalties against cask fabricators because they have no responsibilities or involvement in developing the design configurations for the vario~s spent fuel packages. Second, the commenter indicated that the proposed changes to §72.146(a) and (b), "Design Control," were troublesome because, under the current procurement process for spent fuel packages, the.-*

commenter believes fabricators a're intentionally precluded from the development of front end '

design and licensing activities. The fabricator currently bases manufacturing planning documentation upon the* adequacy of a customer provided specification package .. The commenter indicated that the fabricator may or may not utilize customer provided drawings for manufacture and that where the fabricator generates the drawings the designer and/or licensee might require their review and approval, but that there is no accepted industry practice on this matter.

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Response: The NRC agrees that contractors m ,d subcontractors need not be included within the scope of the changes made in the final rule. See the response to comment number 3.

Licensees and certificate holders are responsible for QA requirements through their oversight of contractors and subcontractors, and fabricators are generally contractors or subcontractors.

However, if the contract calls for the fabricator to build according to a design provided by the certificate holder, the NRC expects the fabricator to do just that. The NRC needs assurance that the spent fuel storage casks are manufactured in accordance with the NRC approved design and will hold licensees and certificate holders and apP.licants responsible for meeting design and QA requirements. Regarding the commenter's concern on the subject of the use of civil penalties; i.e., whether a civil penalty is the appropriate response to a violation of Part 72,

(

the NRC notes that this rulemaking does not provide authority for issuing a civil penalty to nonlicensees, other than under the Deliberate Misconduct Rule. The final rule does allow the

use of issuance of NOV's or Orders, rather than administrative sanctions.

10. Comment: One commenter, a certificate holder, while agreeing with the purpose of the proposed rulemaking, raised a concern with the added requirement that identifies additional recordkeeping and reporting requirements for certificate holders. The NRC estimated the burden associated with these new requirements in the Paperwork Reduction Act Statement provided with the Supplementary Information in the proposed rule as 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months annually. The commenter notes that the annual burden for recordkeeping and reporting proposed by the revised Part 72 would far exceed 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months annually. The estimate of 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months for annual training would be sufficient to address the training of personnel to' implement these new requirements but would not be sufficient to address the actual recordkeeping and reporting. Of course, the actual burden any individual certificate holder would incur because of the required 18

recordkeeping and reporting would vary by certificate l1older. This commenter believes that the estimated burden is greater than 100 hours0.00116 days 0.0278 hours 1.653439e-4 weeks 3.805e-5 months annually but believes that the purpose of the final rule justifies this burden.

Response: The NRC agrees with the comment. The NRC has reevaluated the recordkeeping and reporting burden estimated for § 72.242 and concluded that the commenter's estimate of 100 hours0.00116 days 0.0278 hours 1.653439e-4 weeks 3.805e-5 months annually is reasonable. The NRC has verified with the Office of

~anagement and Budget (0MB) that burden increase is an extremely small percentage increase of the present total 21,454-hour burden for Part 72 .

Summary of Final Amendments The amended sections listed below have not changed from the proposed rule and are included in the final rule, some editorial changes to improve the organization and readability of the existing language have also been made. These are:§§ 72.2, 72.3, 72.9, 72.10, 72.86, 72.234, 72.236, 72.240, and 72.242(a), (b), and (c).

In the final rule, §§ 72.140, 72.142, 72.144, 72.146, 72.148, 72.150, 72.152, 72.154,.

72.156, 72.158, 72.160, 72.162, 72.164, 72.168, 72.170, 72.172, 72.174, 72.176, and 72.232 have been revised in response to comments, and the terms "contractor and subcontractor" are removed. However, this action has not been taken in § 72.1 0 and § 72.148, in part, because the current regulation contains those terms.

Additionally, in§ 72.148, text at the end of the first sentence in the current regulation was inadvertently omitted in the proposed rule. It has been restored and will read as follows: " ... for procurement of material, equipment, and services, whether purchased by the licensee, certificate holder, or by their contractors and subcontractors." (emphasis added) 19

In§ 72.140 of the final rule, paragraphs (c; and (d) are revised in response to comments received on the proposed rule as follows:

Section 72.140 (c) and (d): The QA requirements contained in 10 CFR Part 50, Appendix B; 10 CFR Part 71, Subpart H; and 10 CFR Part 72, Subpart G, are essentially equivalent. The proposed rule revised§ 72.140(c), "Approval of Programs," to expand this paragraph to indicate that a certificate holder must have an NRC-approved QA program before commencing

fabrication or testing of a spent fuel storage cask. The NRC agrees that the definition of an "approved" QA program found in§ 72.140(d) should include all other NRC-approved QA programs. The final rule is revised to allow for the use of all NRC-approved QA programs as satisfying the requirements of Subpart G. Additionally, the language in§ 72.140(d) is revised to reflect the recordkeeping requirement in§ 72.174 and the address for submitting information in

§ 72.4, which were added to this section by a different rulemaking (see Miscellaneous Changes to Licensing Requirements for the Independent Storage of Spent Fuel and High-Level Radioactive Waste (see 64 FR'33178; June 22, 1999). The language in§ 72.140(c) and (d) is revised to be consistent with paragraph (b) of this section to indicate that the requirements in these paragraphs apply to a licensee, applicant for a license, certificate holder, and applicant for a certificate, as appropriate.

In the final rule, § 72.242(d) is modified to accept the comment that written reports should be made when a design or fabrication deficiency affects the ability of SSCs important to safety to perform their intended safety function.

20

Criminal Penalties For the purposes of Section 223 of the Atomic Energy Act (AEA), the Commission is issuing the final rule to amend 10 CFR Part 72: § 72.10, 72.11, 72.140 through 72.176, 72.232, 72.234, 72.236, and 72.242, under one or more of sections 161 b, 161 i, or 161 o of the AEA.

Willful violations of the rule would be subject to criminal enforcement. I, Agreement State Compatibility Under the "Policy Statement on Adequacy and Compatibility of Agreement State Programs" approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as compatibility Category "NRC." Compatibility is not required for Category "NRC" regulations. The NRC program elements in this category are those that relate directly to areas of regulation reserved to the NRC by the AEA or the provisions of Trtle 10 of the Code of Federal Regulations, and although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its

- licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws, but does not confer regulatory authority on the State.

Voluntary Consensus Standards The National Technology Transfer Act of 1995 {Pub. L 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or 21

otherwise impractical. In this final rule, the NRC is expanding the applicability of Part 72 to holders of, and applicants for, certificates of compliance, and a voluntary consensus standard is not applicable.

Environmental Impact: Categorical Exclusion The NRC has determined that this final rule is the type of action described as a categorical exclusion in 10 CFR 51.22(c)(2) and (3). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this final rule .

Paperwork Reduction Act Statement

This final rule increases the burden on licensees by ex'panding the applicability of Part 72 to holders of, and applicants for, Certificates of Compliance. The public burden for this information collection is estimated to average 100 hours0.00116 days 0.0278 hours 1.653439e-4 weeks 3.805e-5 months annually. Because the burden for this information collection is insignificant by comparison with cu*rrent Part 72's overall burden, Office of Management and Budget (0MB) clearance is not required. Existing requirements were approved by the 0MB approval number 3150-0132.

Public Protection Notification If a means used to impose an 'information collection does not display a currently valid 0MB control number, the NRC may not conduct or sponsor, and a person is not required to respond to, the information collection.

22

Regulatory Ana:ysis Statement of the Problem The Commission's regulations at 10 CFR Part 72 were designed to provide specific licensing requirements for the storage of spent nuclear fuel in an independent spent fuel storage installation (ISFSI) (45 FR 74693; November 12, 1980). These requirements were later amended to include the storage of high-level waste (HLW) at a monitored retrieval storage (MRS) Installation. In 1990, the Commission amended Part 72 to Include a process for approving the design of spent fuel storage casks by issuance of a certificate of compliance (Subpart L) and for granting a general license to reactor licensees (Subpart K) to use NRC-approved casks for storage of spent nuclear fuel (55 ~R 29181; July 18, 1990). In the past; the Commission experienced performance problems in design, design control, fabrication and quality control with holders of, and applicants for, a CoC under Part 72.

When the NRG identifies a failure to comply with P~rt 72 requirements by these persons, the NRG has issued Notices of Nonconformance (NONs). The issuance of an NON does not effectively convey that a violation of a legally binding requirement has occurred. Because-the

~

current regulations do n_ot clearly impose requirements on these persons, the NRG has not taken e'nforcement action, such as a Notice of Violation (NOV), against certificate holders and applicants.

Some Part 72 provisions for cask storage of spent fuel (e.g., the quality assurance (QA) requirements) were intended to apply to cask certificate holders and applicants for cask CoCs, as well as to holders of licenses and applicants for a license to store spent nuclear fuel at an ISFSI. However, some of the Part 72 requirements intended to apply to certificate holders and applicants do not clearly bring these persons within the scope of the requirement. For this 23

reason, the NRC has not had a clear basis to cite certificate holders and applicants for a CoC for violations of those Part 72 requirements.

Additionally, broader requirements for recordkeeping and reporting for certificate holders and applicants for a CoC to include records required to be kept by a condition of the CoC, are needed. Therefore, the NRC is adding § 72.242. This will provide an enforcement basis equivalence to the recordkeeping and reporting regulations for licensees{§ 72.80).

Purpose of the Rulemaking

~e purpose of this rulemaking is to expand the applicability of Part 72 to holders of, and applicants for, CoCs. This would allow the NRC staff to take enforcement action in the form of NOVs or orders, rather than administrative

\

action in the form of ai, NON when requirements are violated. While it may appear that an NON and an NOV are similar, the NRC believes that the issuance of an NOV is preferred because: (1) the issuance-of an NOV effectively conveys to both the person violating the requirement and the public that a violation of a legally binding requirement-has occurred; (2) the use of graduated severity levels associated with an NOV allows the NRC to effectively convey to both the person violating the requirement and the public a clearer perspective on the safety and regulatory significance of the violation; and (3) violation of a regulation refle~s the NRC's conclusion that potential risk to public health and safety could exist.

Current Regulatory Framework and Proposed Changes In promulgating Subpart L, the NRC intended that selected Part 72 provisions would apply to cask certificate holders and applicants for a CoC. For example, § 72.234(b) requires that, as a condition for approval of a CoC, "[d]esign, fabrication, testing, and maintenance of 24

spent fuel storage casks be conducted under a QA program that meets the requirements of subpart G of this part." However, the QA requirements ;n Subpart G refer only to licensees and applicants for licenses and not to certificate holders. Some of the Subpart L regulations apply explicitly only to "the applicant" (e.g., § 72.232), or to "the cask vendor" (e.g., § 72.234(d)(1 )).

Some are written in the passive voice so that it is not clear who is responsible for meeting the requirement (e.g., § 72.236). Because of these regulatory deficiencies, certificate holders or applicants for a Coe have not clearly --,

been brought within the scope of Part 72 requirements, and the NRC has not had a clear basis to cite these persons for violations of Part 72 requirements. Presently, when the NRC has identified a failure to comply with Part 72

requirements by these persons, it has issued an administrative action under the NRC's Enforcement Policy.

The NRC Enforcement Policy and implementing program have been established to support the NRC's overall safety mission in protecting public health and safety and the environment. Consistent with *this purpose, enforcement actions are intended to be used as a deterrent to: (1) emphasize the importance of compliance with requirements; and (2) encourage prompt identification and comprehensive correction of the violations. Enforcement sanctions

consist of NOVs, civil penalties, and orders of various types. In addition to the formal enforcement actions, the NRC also uses related administrative actions such as NONs, Confirmatory Action Letters, and Demands for Information to supplement the NRC's enforcement program. The NRC expects licensees and holders of, and applicants for, a CoC to adhere to any obligations and commitments resulting from these actions and will not hesitate to issue appropriate orders to ensure that these obligations and commitments are met. The nature and extent of the enforcement action is intended to reflect the seriousness of the violation involved.

25

This rule revises the regulations in Part 72 to pl..:lce explicit requirements on certificate holders and applicants for a CoC. Additionally, terms contained in Subpart L, such as--cask user, representative of a cask user, cask model, and cask vendor, have been clarified.

Changes 1are made to § 72.10, "Employee Protection," and § 72.11, "Completeness and Accuracy of Information," to include certificate holders and applicants for a CoC. Section 72.3 is revised to: (1) incorporate definitions for "certificate holder," "certificate of compliance. and "spent fuel storage cask"; (2) amend the definitions for "design bases" and "structures, systems, and components important to safety" to include the term "spent fuel storage cask"; and (3) amend the definition for "design capacityl' to be consistent with the NRC's policy on the use of

'metric units. Section 72.236 is revised and reissued as being subject to the criminal penalty provisions of§ 223 of the Atomic Energy Act of 1954, and§ 72.86(b), "Criminal Penalties," is revised-to delete mention of§ 72.236 as a conforming change. Section 72.232 is reformatted by adding a new paragraph (b) and renumbering existing paragraphs (b) and (c). The term "applicant" is replaced by the term "certificate holder and applicant for a CoC." Requirements to permit inspection of records, premises, and activities related to the design, fabrication, and testing of spent fuel storage casks have been clarified. Lastly, a new§ 72.242 is added to Subpart L to address additional recordkeeping and reporting requirements for certificate holders and applicants for a Coe, in addition to those already required by§ 72.234(d). This new section is similar to the requirements imposed on licensees in § 72.80.

Alternatives This regulatory analysis considered three alternatives:

26

Alternative 1: Revise Part 72 to expand the applicabil:ty of certain provisions to certificate holders, applicants for a Coe, and their contractors and subcontractors.

The NRG believes that problems in the areas of quality assurance, quality control, fabrication control, and design control exist, are significant, and, in part, reflect the fact that certificate holders and applicants, and their contractors and subcontractors, have not been explicitly included in certain Part 72 requirements despite the NRC's intent that these persons follow these requirements. Contractors and subcontractors actually accomplish the manufacturing and testing of spent fuel storage casks.

Alternative 1 would allow the NRG to issue NOV's or orders against these persons, as 1

necessary, by allowing the issuance of an NOV when they fail to comply with the requirements of Part 72. Presently the NRG issues an NON in these instances.

The NRG has estimated that each certificate holder or applicant for a Coe, on average, has three contractors and subcontractors. Consequently, the NRG estimates that a total of 60 contractors and subcontractors would be affected by changes to Part 72 described in Alternative 1. Because certificate holders, applicants for a CoC, and their contractors and subcontractors, for the most part, hpve already been meeting the requirements of Part 72 as

either a condition of a CoC or as a condition of a contract between a certificate holder and its contractors and subcontractors, the burdens imposed by this alternative are not significantly increased.

The NRG believes that Alternative 1 would have enabled ihe NRC to make more effective use of the Enforcement Policy against the certificate holders, and their contractors and subcontractors of spent fuel storage casks.. However, holding contractors and subcontractors responsible as contemplated by the proposed rule would dilute the message that the Commission's regulations would otherwise make clear - that licensees and certificate holders 27

are ultimately responsible for assuring quality. FL*rthermore, the current regulations in§ 72.148 make clear that "[t]o the extent necessary, the licensee shall require contractors or subcontractors to provide a quality assurance program consistent with the applicable provisions of this subpart [Subpart G]."

Alternative 2: Revise Part 72 to expand the applicability of certain provisions to certificate holders and applicants for a CoC.

The difference between Alternatives 1 and 2 is that the latter does not include contractors and subcontractors in clarifying the responsibilities for compliance ~ith ~art 72.

Therefore, the NRC would not issue NOVs or orders against these persons under this alternative but would continue to use administrative actions. Several comments were received that were opposed to adding contractors and subcontractors to the regulations. Overall, the commenters felt this action was unnecessary and an excessive burden on small entities. The proposed rule to extend NRC's regulatory requirements under Part 72, Subpart G, to contractors and subcontractors would be* inconsistent with the way in which the NRC regulates quality assurance in other arenas, including reactor parts and equipment. In both instances, there is a potential that deficiencies in the quality assurance program co_uld lead to safety related problems. However, NRC's longstanding regulatory approach has been to make it clear that licensees are responsible for ensuring that the parts and equipment are safe.

Therefore, the NRC has reconsidered and concluded that contractors and subcontractors should not be included in these regulations. Consequently, Alternative 2 is adopted.

28

Alternative 3: No action.

This alternative was rejected, even though staff resources for rulemaking would have been conserved. Under this alternative, it is expected that the difficulties the NRC has observed in the past will continue.

Decision Rationale For Preferred Alternative Alternative 2 is the preferred choice. The major benefit of this alternative is to allow the NRC to issue NOVs or Orders against certificate holders and applicants for a Coe under the I

current NRC Enforcement Policy, without imposing an unnecessary burden on contractors and subcontractors; and ensures that quality assurance requirements imposed on contractors. and subcontractors are consistent for both reactor and material activities. This would enable both the person violating. the regulation and the public to clearly perceive the regulatory and safety significance and consequences of the violation.

I I ,

Because certificate h0lders and applicants for a Coe, for the mo.st part, already have been meeting the requirements of Part 72 as a condition of a CoC, the burdens imposed by. this . ,..*

amendment are not significantly increased. Additional requirements for recordkeeping and reporting for certificate holders are needed, to include records required to be kept by a condition of the Coe.. This will provide an enforcement basis equivalence to the record keeping and reporting regulations for licensees (§ 72.80). Therefore, the NRC is adding § 72.242. The new

§ 72.242 will add new burdens for recordkeeping and reporting requirements. The staff estimates this burden associated with the new§ 72.242 to be approximately 100 hours0.00116 days 0.0278 hours 1.653439e-4 weeks 3.805e-5 months annually.

This recordkeeping and reporting burden will vary by certificate holders. The NRC believes that I the purpose of the final rule justifies this burden on certificate holders. This burden is 29

insignificant by comparison with Part 72's overall burden which is ih excess of 21,000 hours0 days 0 hours 0 weeks 0 months . In I

addition, the current backfit regulation in § 72.62 applies only to Part 72 licensees and not to

\

holders of, and applicants for, a CoC. This rule adds recordkeeping and reporting requirements for holders of, and applicants for, CoCs. Therefore, a backfit analysis is not required for this rule.

Regulatory Flexibility Certification In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. The final rule amends the regulations to expand the applicability of 10 CFR Part 72 to holders of, and applicants for, CoCs. This requirement will enhance the Commission's ability to take enforcement action by issuing NOVs or orders rather than administrative action in the form of NONs when legally binding requirements are violated.

The final rule may appear to impose new requirements on some small entities on the assumption that could be a certificate holder or applicant able to qualify as a "small entity" .

However, these entities, for the most part, are already implementing the actions required by the final rule. Therefore, the NRC believes that this amendment will not have a significant economic impact on any such small entity.

Small Business Regulatory Enforcement Fairness Act 30

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

Back.fit Analysis The current back.fit regulation in § 72.62 applies only to Part 72 licensees and not to .

holders of, and applicants for, a CoC. This rule, in any event, adds only reporting and recordkeeping requirements for holders of, and applicants for, CoCs. The Commission has J

determined that reporting and recordkeeping requirements are not considered back.fits even though they may result in changes to procedures. If the reporting or recordkeeping requirements had to meet the standards for a backfit analysis, the Commission would have to find that the information would substantially increase publi(? health or safety or common defense and security without knowing the results of the request. In addition, the existence or non-existence of a record or report usually has no independent safety significance as compared to actions ta.ken by the licensee, certificate holder, or NRC as a result of the information contained in the record or report. It is this resulting action that affects public health and safety or the common defense or security that should be measured under the backfit standard and not the method for obtaining or maintaining the information.

However, the NRC has preµ.ared a regulatory analysis which sets forth the objectives of the rulemaking changes, the alternatives that were considered, and the expected costs and benefits associated with the rulemaking changes. The NRC regards this analysis as providing for a disciplined approach for evaluating the impacts of the proposed changes, which satisfies the underlying'purposes of the backfrtting requirements in§ 72.62.

31

List of Subjects in 10 CFR Part 72 Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, Spent fuel.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR Part 72.

PART 72-LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUl;:L AND HIGH-LEVEL RADIOACTIVE WASTE *

1. The authority citation for Part 72 is revised to read as follows:

AUTHORITY: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 954, 955, as amended, sec. 234, 83 Stat. 444, as .

amended(42U.S.C.2071,2073,2077, 2092,2093,2095,2099,2111,2201,2232,2233, 2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688, as amended (42 U.S.C.

2021); sec. 201, as amended, 202,206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.

5841, 5842, 5846); Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332);

Secs. 131,132,133,135,137,141, Pub. L.97-425, 96Stat.2229,2230,2232,2241, sec. 148, Pub. L 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 10155, 10157, 10161, L

10168).

32

Section 72.44(9) also issued under secs. 142(b) and 148(c), (d), Pub. L 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 10168{<-), (d)). Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134, Pub. L 97-425, 96 Stat. 2230 (42 U.S.C.

10154). Section 72.96(d) also issued under sec. 145(g), Pub. L__:~100-203, 101 Stat. 1330-235 (42 U.S.C. 10165(9)). Subpart J also issued under secs. 2(2), 2(15), 2(19), 117(a}, 141(h), Pub.

L.97-425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101, 10137(a), 10161(h)).

Subparts Kand Lare also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a}, 96 Stat. 2252 (42 U.S.C. 10198).,,

2. In§ 72.2, paragraph (b} is revised to read as follows:

§ 72.2 Scope.

(b} The regulations in this part pertaining to an independent spent fuel storage installation (ISFSI) and a spent fuel storage cask apply to all persons in the United States, including persons in Agreement States. The regulations in this part pertaining to a monitored

retrievable storage installation (MRS} apply only to DOE.

3. In § 72.3, the definitions of Certificate holder, Certificate of Compliance or CoC, and Spent fuel storage cask or cask are added in alphabetical order, and the definitions of Design bases, Design capacity, and Structures, systems, and components important to safety are revised to read as follows:

33

§ 72.3 Definitions.

Certfficate holder means a person who has been issued a Certificate of Compliance by the Commission for a spent fuel storag~ cask design.

Certfficate of Compliance or Coe means the certificate issued by the Commission that approves the design of a spent fuel storage cask in accordance with the provisions of Subpart L of this part.

pesign bases means that information that identifies the specific functions to be performed by astructure, system, or component of a facility or of a spent fuel storage cask and the specific values or ranges of values chosen for controlling parameters as reference bounds for design. These values may be restraints derived from generally accepted state-of-the-art practices for achieving functional goals or requirements derived from analysis (based on calculation or experiments) of the effects of a postulated event under which a structure, system, or component must meet its functional goals. The values for controlling parameters for external events include -

(1) Estimates of severe natural events to be used for deriving design bases that will be based on consideration of historical data on the associated parameters, physical data, or analysis of upper limits of the physical processes involved; and (2) Estimates of severe external man-induced events to be used for deriving design bases that will be based on analysis of human activity in the region, taking into account the site characteristics and the risks associated with the event. '--

Design qapacity means the quantity of spent fuel or high-level radioactive waste, the maximum bum up of the spent fuel in MWD/MTU, the terabequerel (curie) content of the waste, 34

and the total heat generation in Watts (btu/hour) that the storage installation is designed to accommodate.

Spent fuel storage cask or cask means all the components and syl?tems associated with the container in which spent fuel or other radioactive materials associated with spent fuel are stored in an ISFSI.

Structures, systems, and components imporlant to safety means those features of the ISFSI, MRS, and spent fuel storage cask whose functions are -

safely; (1) To maintain the conditions required to store spent fuel or high-level radioactive waste (2) To prevent damage to the spent fuel or the high-level radioactive waste container during handling and storage; or (3) To provide reasonable assurance that spent fuel or high-level radioactive waste can be received, handled,* packaged, stored, and retrieved without undue risk to the health and safety of the public.

4. Section 72.9 is revised to read as follows:

§ 72.9 lnfonnation collection requ'1reme,1ts: 0MB approval.

(a) The Nuclear Regulatory Commission has submitted the information collection requirements contained in this part to the Office of Management and Budget (0MB) for approval as required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). 0MB has L

35

approved the information collection requirements contained in this*part under control number

-)

3150-0132.

(b) The approved information collection requirements contained in this part appear in

§§ 72. 7, 72A 1, 7,.2.16, 72.19, 72.22 through 72.34, 72.42, 72.44, 72.48 through 72.56, 72.62,

72. 70 through 72.82, 72.90, 72.92, 72.94, 72.98, 72.100, 72.102, 72.104, 72.108, 72.120, 72.126, 72.140 through 72.176, 72.180 through 72.186, 72.192, 72.206, 72.212, 72.216, 72.218, 72.230, 72.232, 72.234, 72.236, 72.240, and 72.242.

5. In § 72.10, paragraph (a), the introductory text of paragraph (c), and paragraphs (c)(1) and (e){1) are revised to read as follows:

§ 72.1 0 Employee protection.

(a) Discrimination by a Commission licensee, certificate holder, an applicant for a Commission license or a Coe, or a contractor or subcontractor of any of these, against an employee for engaging in certain protected activities, is prohibited. Discrimination includes discharge and other actions that relate to compensation, terms, conditions, or privileges of employment. The protected activities are established in section 211 of the Energy Reorganization Act of 1974, as amended, and in general are related to the administration or enforcement of a requirement imposed under the Atomic Energy Act or the Energy Reorganization Act.

(c) A violation of paragraphs (a), (e), or (f) of this section by a Commission licensee, certificate holder, applicant for a Commission license or a CoC, or a contractor or subcontractor of any of these may be grounds for:

36

(1) Denia!, revocation, or suspension of the license or the CoC.

(e)(1) Each licensee, certificate holder, and applicant for a license or CoC must prominently post the revision of NRC Form 3, "Notice to Employees," referenced in 10 CFR 19.11(c). This form must be posted at locations sufficient to permit employees protected by this section to observe a copy on the way to or from their place of work. The premises must be posted not later than 30 days after an application is docketed and remain posted while the application is pending before the Commission, during the term of the license or Coe, and for 30 days following license or Coe termination.

6. Section 72.11 is revised to read as follows:

§ 72.11 Completeness and accuracy of infonnation.

(a) Information provided to the Commission by a licensee, certificate holder, or an applicant for a license or CoC; or information required by statute or by the Commission's regulations, orders, license or Coe conditions, to be maintained by the licensee or certificate holder, must be complete and accurate in all material respects.

(b) Each licensee, certificate holder, or applicant for a license or CoC must notify the Commission of information identified by the licensee, certificate holder, or applicant for a license or CoC as having, for the regulated activity, a significant implication for public health and safety or common defense and security. A licensee, certificate holder, or an applicant for a license or CoC violates this paragraph only if the licensee, certificate holder, or applicant for a license or

\

CoC fails to notify the Commission of information that the licensee, certificate holder, or 37

applicant for a license or CoC has identified as having a significant implication for public health and safety or common defense and security. Notification must be provided to the Administrator of the appropriate Regional Office within two working days of identifying the information. This requirement is not applicable to information which is already required to be provided to the Commission by other reporting or updating requirements.

7. In§ 72.86, paragraph {b) is revised to read as follows:

§ 72.86 Criminal penalties.

{b) The regulations in part 72 that are not issued under sections 161b, 161i, or 1610 for the purposes of section 223 are as follows:§§ 72.1, 72.2, 72.3, 72.4, 72.5, 72.7, 72.8, 72.9, 72.16, 72.18, 72.20, 72.22, 72.24, 72.26, 72.28, 72.32, 72.34, 72.40, 72.46, 72.56, 72.58, 72.60, 72.62, 72.84, 72.86, 72.90, 72.96, 72.108, 72.120, 72.122, 72.124, 72.126, 72.128, 72.130, 72.182, 72.194, 72.200, 72.202, 72.204, 72.206, 72.210, 72.214, 72.220, 72.230, 72.238, and 72.240.

8. Section 72.140 is revised to read as follows:

§ 72.140 Quality assurance requirements.

{a) Purpose. This subpart describes quality assurance requirements that apply to design, purchase, fabrication, handling, shipping, storing, cleaning, assembly, inspection, testing, operation, maintenance, repair, modification of structures, systems, and components, and decommissioning that are important to safety: As used in this subpart, "quality assurance" 38

comprises all those planned and systematic actions necessary to provide adequate confidence that a structure, system, or component will perform satisfactorily in service. Quality assurance includes quality control, which comprises those quality assurance actions related to control of the physical characteristics and quality of the material or component to predetermined requirements. The certificate holder and applicant for a CoC are responsible for the quality I

assurance requirements as they apply to the design, fabrication, and testing of a spent fuel storage cask until possession of the spent fuel storage cask is transferred to the licensee. The licensee and the certificate holder are also simultaneously responsible for these quality assurance requirements through the oversight of contractors and subcontractors.

(b) Establishment of program. Each licensee, applicant for a license, certificate holder, applicant for a CoC shall establish, maintain, and execute a quality assurance program satisfying each of the applicable criteria of this subpart, and satisfying any specific provisions which are applicable to the licensee's, applicant's for a license, certificate holder's, and applicant's for a Coe activities. The licensee, applicant for a license, certificate holder, and applicant for a Coe shall execute the applicable criteria in a graded approach to an extent that is commensurate with the quality assurance requirements' importance to safety. The quality assurance program must cover the activities identified in this subpart throughout the Jife of the activity. For licensees, this includes activities from the site selection through decommissioning prior to termination of the license. For certificate holders, this includes activities from development of the spent fuel storage cask design through termination of the CoC.

(c) Approval of program:

(1) Each licensee, applicant for a license, certificate holder, and applicant for a Coe shall file a description, in accordance with § 72.4, of its quality assurance program that includes a 39

discussion of which requirements of this subpart are applicable and the methodology used to satisfy these requirements.

(2) Each licensee shall obtain Commission approval of its quality assurance program prior to receipt of spent fuel at the ISFSI or spent fuel and high-level radioactive waste at the MRS.

(3) Each certificate holder shall obtain Commission approval of its quality assurance program prior to commencing fabricatior;i or testing of a spent fuel storage cask.

(d) Previously approved programs. A quality assurance program previously approved by the Commission and which is established, maintained, and executed with regard to an ISFSI or spent fuel storage cask will be accepted as satisfying the requirements of paragraph (b) of this section. Previously approved quality assurance programs that satisfy the requirements of Appendix 8 to part 50 of this chapter, subpart H to part 71 of this _chapter, or subpart G to this

. part are considered acceptable, except each licensee, applicant for a license, certificate holder, and applicant for a CoC who are using an Appendix B or subpart H quality assurance program ..

shall also meet the recordkeeping requirements of § 72.174. Prior to initial use of a previously approved program, each licensee, applicant for a license, certificate holder, and applicant for a CoC shall notify the NRC, in accordance with § 72.4, of its intent to apply its previously approved quality assurance program to ISFSI or spent fuel storage cask activities. The notification must I

identify the quality assurance program by date of submittal to the Commission, docket number, and date of Commission approval.

40

9. Section 72.142 is revised to read as follow~:

§ 72.142 Quality assurance organization.

(a) The licensee, applicant for a license, certificate holder, and applicant for a Coe shall be responsible for the establishment and execution of the quality assurance program. The licensee and certificate holder may delegate to others, such as contractors, agents, or consultants, the work of establishing and executing the quality assurance program, but the licensee and the certificate holder shall retain responsibility for the .program. The licensee, applicant for a license, certificate holder, and applicant for a Coe shall clearly establish and delineate in writing the authority and duties of persons and organizations performing activities affecting the functions of structures, systems, and components which are important to safety.

These activities include performing the functions associated with attaining quality objectives and the quality assurance functions.

(b) The quality assurance functions are --

(1) Assuring that an appropriate quality assurance program is established anc:! effectively executed; and (2) Verifying, by procedures such as checking, auditing, and inspection, that activities affecting the functions that are important to safety have been correctly performed. The persons and organizations performing quality assurance functions shall have sufficient authority and organizational freedom to identify quality problems; to initiate, recommend, or provide solutions; and to verify implementation of solutions.

(c) The persons and organizations performing quality assurance functions shall report to a management level that ensures that the required authority and organizational freedom, including sufficient independence from cost and schedule considerations when these 41

considerations are opposed to safety considerations, are provided: Because of the many variables involved, such as the number of personnel, the type of activity being performed, and the location or locations where activities are performed, the organizational structure for executing the quality assurance program may take various forms, provided that the persons and organizations assigned the quality assurance functions have the required authority and organizational freedom: Irrespective of the organizational structure, the individual(s) assigned the responsibility for assuring effective execution of any portion of the quality assurance program, at any location where activities subject to this section are being performed, must have direct access to the levels of management necessary to perform this function.

10. Section 72.144 is revised to read as follows:

§ 72.144 Quality assurance program.

(a) The licensee, applicant for a license, certificate holder, and applicant for a Coe shall establish, at the.earliest practicable time consistent with the schedule for accomplishing the activities, a quality assurance program which complies with the requirements of this subpart.

The licensee, applicant for a license, certificate holder, and applicant for a Coe shall document the quality assurance program by written procedures or instructions and shall carry out the program in accordance with these procedures throughout the period during which the ISFSI or MRS. is licensed or the spent fuel storage cask is certified. The licensee, applicant for a license, certificate holder, and _applicant for a CoC shall identify the structures, systems, and components to be covered by the quality assurance program, the major organizations participating in the program, and the designated functions of these or~anizations.

42

{b) The licensee, applicant for a license, ,certificate holder, and applicant for a CoC, through their quality assurance program{s), shall provide control over activities affecting the quality of the identified structures, systems, and components to an extent commensurate with the importance to safety and, as necessary, to ensure conformance with the approved design of each ISFSI, MRS, or spent fuel storage cask. The licensee, applicant for a license, certificate holder, and applicant for a Coe shall ensure that activities affecting quality are accomplished under suitably controlled conditions. Controlled conditions include the use of appropriate equipment; suitable environmental conditions for accomplishing the activity, such as adequate cleanliness; and assurance that all prerequisites for the given activity have been satisfied. The

licensee, applicant for a license, certificate holder, and applicant for a Coe shall take into account the need for special controls, processes, test equipment, tools and skills to attain the required quality and the need for verification of quality by inspection and test.

{c) The licensee, applicant for a license, certificate holder, and applicant for a CoC shall base the requirements and procedures of their quality assurance program(s) on the following considerations concerning the complexity and proposed use of the structures, systems, or components:

(1) The impact of malfunction or failure of the item on safety; (2) The design and fabrication complexity or uniqueness of the item; (3) The need for special controls and surveillance over processes and equipment; (4) The degree to which functional compliance can be demonstrated by inspection or test; and (5) The quality history and degree of standardization of the item.

43

(d) The licensee, applicant for a license, cert:ficqte holder, and applicant for a CoC shall provide for indoctrination and training of personnel performing activities affecting quality as necessary to ensure that suitable proficiency is achieved and maintained.

(e) The licensee, applicant for a license, certificate holder, and applicant for a CoC shall review the status and adequacy of the quality assurance program at established intervals.

Management of other organizations participating in the quality assurance program must regularly review the status and adequacy of that part of the quality assurance program which they are executing.

44

11. Section 72.146 is revised to read as followc,:

§ 72.146 Design control.

(a) The licensee, applicant for a license, certificate holder, and applicant for a Coe shall establish measures to ensure that applicable regulatory requirements and the design basis, as specified in the license or Coe application for those structures, systems, and components to which this section applies, are correctly translated into specifications, drawings, procedures, and instructions. These measures must include provisions to ensure that appropriate quality standards are specified and included in design documents and that deviations from standards

are controlled. Measures must be established for the selection and review for suitability of application of materials, parts, equipment, and processes that are essential to the functions of the structures, systems, and components which are important to safety.

(b) The licensee, applicant for a license, certificate holder, and applicant for a Coe shall establish measures for the identification and control of design interfaces and for coordination among participating design organizations. These measures must include the establishment of written procedures among participating design organizations for the review, approval, release,

distribution, and revision of documents involving design interfaces. The design control measures must provide for verifying or checking the adequacy of design by methods such as design reyiews, alternate or simplified calculational methods, or by a suitable testing program.

For the verifying or checking process, the l,:ensee and certificate holder shall designate individuals or groups other than those who were responsible for the original design, but who may be from the same organization. Where a test program is used to verify the adequacy of a specific design feature in lieu of other verifying or checking processes, the licensee and certificate holder shall include suitable qualification testing of a prototype or sample unit under 45

the most adverse design conditions. The license?., applicant for a license, certificate holder, and applicant for a Coe shall apply design control measures to items such as the following: criticality physics, radiation, shielding, stress, thermal, hydraulic, and accident analyses; compatibility of materials; accessibility for inservice inspection, maintenance, and repair; features to facilitate decontamination; and delineation of acceptance criteria for inspections and tests.

(c) The licensee, applicant for a license, certificate holder, and applicant for a CoC shall subject design changes, including field changes, to design control measures commensurate with those applied to the original design. Changes in the conditions specified in the license or CoC require prior NRC approval.

12. Section 72.148 is revised to read as follows: *

§ 72.148 Procurement document control.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures to assure that applicable regulatory requirements, design bases, and other requirements which are necessary to assure adequate quality are included or referenced in the documents for procurement of material, equipment, and services, whether purchased by the licensee, certificate holder, or by their contractors and subcontractors. To the extent necessary, the licensee, applicant for a license, certificate holder, and applicant for a CoC, shall require contractors or subcontractors to provide a quality assurance program consistent with the applicable provisions of this subpart.

46

13. Section 72.150 is revised to read as follows:

§ 72.150 Instructions, procedures, and drawings.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall prescribe activities affecting quality by documented instructions, procedures, or drawings of a type appropriate to the circumstances and shall require that these instructions, procedures, and drawings be followed. The instructions, procedures, and drawings must include appropriate I

quantitative or qualitative acceptance criteria for determining that important activities have been satisfactorily accomplished .

14. Section 72.152 is revised to read as follows:

§ 72.152 Document control.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures to control the issuance of documents such as instructions, procedures, and drawings, including changes, which prescribe all activities affecting quality. These measures

must assure that documents, including changes, are reviewed for adequacy, approved for release by authorized personnel, and distributed and used at the location where the prescribed activity is performed. These measures must ensure that changes to documents are reviewed and approved.

47

15. Section 72.154 is revised to read as follows:

§ 72.154 Control of purchased material, equipment, and services.

(a) The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures to ensure that purchased material, equipment, and services, whether purchased directly or through contractors and subcontractors, conforn:i to the procurement documents. These measures must include provisions, as appropriate, for source evaluation and selection, objective evidence of quality furnished by the contractor or subcontractor, inspection at the contractor or subcontractor source, and examination of products upon delivery.

(b) The licensee, applicant for a license, certificate holder, and applicant for a Coe shall have available documentary evidence that material and equipment conform to the procurement specifications prior to installation or use of the material and equipment. The licensee and certificate holder shall retain or have available this documentary evidence for the life of the .

ISFSI, MRS, or spent fuel storage cask. The licensee and certificate holder shall ensure that the evidence is sufficient to identify the specific requirements met by the purchased material and equipment.

(c) The licensee, applicant for a license, certificate holder, and applicant for a CoC, or a designee of either, shall assess the effectiveness of the control of quality by contractors and subcontractors at intervals consistent with the importance,. complexity, and quantity of the product or services.

48

16. Section 72.156 is revised to read as follows:

§ 72.156 Identification and control of materials, parts, and components.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures for the identification and control of materials, parts, and components. These measures must ensure that identification of the item is maintained by heat number, part number, serial number, or other appropriate means, either on the item or on records traceable to the item as required, throughout fabrication, installation, and use of the item. These identification and control measures must be designed to prevent the use of incorrect or defective materials, parts, and components.

17. Section 72.158 is revised to read as follows:

§ 72.158 Control of special processes.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures to ensure that special processes, including welding, heat treating, and nondestructive testing, are controlled and accomplished by qualified personnel using qualified procedures in accordance with applicable codes, standards, specifications, criteria, and other special requirements.

49

18. Section 72.160 is revised to read as follows:

§ 72.160 Licensee and certificate holder Inspection.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish and execute a program for inspection of activities affecting quality by or for the organization performing the activity to verify conformance with the documented instructions, procedures, and drawings for accomplishing the activity. The inspection must be performed by individuals other than those who performed the activity being inspected. Examinations, measurements, or tests of material or products processed must be performed for each work operation where necessary to assure *quality. If direct inspection of processed material or products cannot be carried out, indirect control by monitoring processing methods, equipment, and personnel must be provided. Both inspection and process r:nonitoring must be provided when quality control is inadequate without both. If mandatory inspection hold points that require witnessing or inspecting by the licensee's or certificate holder's designated representative, and beyond which work should not proceed without the consent of its designated representative, are required, the specific hold points must be indicated in appropriate documents.

19. Section 72.162 is revised to read as follows: *

§ 72.162 Test control.

The licensee, applicant for a lice*nse, certificate hol9er, and applicant for a CoC shall establish a test program to ensure that all testing, required to demonstrate that the structures, systems, and components will perform satisfactorily in service, is identified and performed in accordance with written test procedures that incorporate the requirements of this part and the 50

requirements and acceptance limits contained in the lSFSI, MRS, or spent fuel storage cask license or CoC. The test procedures must include provlsions to ensure that all prerequisites for the given test are met, that adequate test instrumentation is available and used, and that the test is performed unger suitable environmental conditions. The licensee, applicant for a license, certificate holder, and applicant for a CoC shall document and evaluate the test results to ensure that test requirements have been satisfied.

20. Section 72.164 is revised to read as follows:

§ 72.164 Control of measuring and test equipment.

\

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures to ensure that tools, gauges, instruments, and other measuring and testing devices used in activities affecting quality are properly controlled, calibrated, and adjusted at specified periods to maintain accuracy within necessary limits.

21. Section 72. 166 is revised to read as follows:

§ 72.166 Handling, storage, and shipping control.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall establish measures to control, in accordance with work and inspection instructions, the handling, storage, shipping, cleaning, and preservation of materials and equipment to prevent damage or deterioration. When necessary for particular products, special protective environments, such as inert gas atmosphere, and specific moisture content and temperature levels must be specified and provided.

51

22. Section 72.168 is revised to read as follow~:

§ 72.168 Inspection, -test, and operating status.

(a) The licensee, applicant for a license, certificate holder, and applicant for a Coe shall establish measures to indicate, by the use of markings such as stamps, tags, labels, routing cards, or other suitable means, the status of inspections and tests performed upon individual items of the ISFSI, MRS, or spent fuel storage cask. These measures must provide for the identification of items which have satisfactorily passed required inspections and tests where necessary to preclude inadvertent bypassing of the inspections and tests.

(b) The licensee shall establish measures to identify the operating status of structures, systems, and components of the ISFSI or MRS, such as tagging valves and switches, to prevent inadvertent operation.

23. Section 72.170 is revised to read as follows:

§ 72.170 Nonconfonning materials, parts, or components.

The licensee, applicant for a license, certificate holder, and applicant for a Coe shall establish measures to control materials, parts, or components that do not conform to their requirements in order to prevent their inadvertent use or installation. These measures must include, as appropriate, procedures for identification, documentation, segregation, disposition, and notification to affected organizations. Nonconforming items must be reviewed and accepted, rejected, repaired, or reworked in accordance with documented procedures.

52

24. Section 72.172 is revised to read as follow~:

§ 72.172 Corrective action.

The licensee, applicant for a license, certificate holder, and applicant for a Coe shall establish measures to ensure that conditions adverse to quality, such as failures, malfunctions, deficiencies, deviations, defective material and equipment, and nonconformances, are promptly identified and corrected. In the case of a significant condition identified as adverse to quali~,

the measures must ensure that the cause of the condition is determined and corrective action is taken to preclude repetition. The identification of the significant condition adverse to quality, the

cause of the condition, and the corrective action taken must be documented and reported to appropriate levels of management.

25. Section 72.174 is revised to read as follows:

§ 72.174 Quality assurance records.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall maintain sufficient records to furnish evidence of activities affecting quality. The records must include the following: design records, records of use, and the results of reviews, inspections, tests, audits, monitoring of work performance, and materials analyses. The records must include closely related data such as qualifications of personnel, procedures, and equipment.

Inspection and test records must, at a minimum, identify the inspector or data recorder, the type of observation, the results, the acceptability, and the action taken in connection with any noted deficiencies. Records must be identifiable and retrievable. Records pertaining to the design, fabrication, erection, testing, maintenance, and use of structures, systems, and components 53

important to safety must be maintained by or under the control of the licensee or certificate holder until the NRC terminates the license or CoC.

26. Section 72.176 is revised to read as follows:

§ 72.176 Audits.

The licensee, applicant for a license, certificate holder, and applicant for a CoC shall carry out a comprehensive system of planned and periodic audits to verify compliance with all aspects of the quality assurance program and to determine the effectiveness of the program .

The audits must be performed in accordance with written procedures or checklists by appropriately trained personnel not having direct responsibilities in the areas being audited.

Audited results must be documented and reviewed by management having responsibility in the area audited. Follow-up action, including reaudit of deficient areas, must be taken where indicated.

27. Section 72.232 is revised to read as follows:

§ 72.232 Inspection and tests.

(a) The certificate holder and applicant for a Coe shall permit, and make provisions for, the NRC to inspect the premises and facilities where a spent fuel storage cask is designed, I

fabricated, and tested.

(b) The certificate holder and applicant for a Coe shall make available to the NRC for inspection, upon reasonable notice, records kept by them pertaining to the design, fabrication, and testing of spent fuel storage casks.

54

(c) The certificate holder and applicant for a Coe shall perform, and make provisions that permit the NRC to perform, tests that the Commission deems necessary or appropriate for the administration of the regulations in this part.

(d) The certificate holder and applicant for a CoC shall submit a notification under§ 72.4 at least 45 days prior to starting fabrication of the first spent fuel storage cask under a Certificate of Compliance.

28. Section 72.234 is reviseq to read as follows:

§ 72.234 Conditions of approval.

(a) The certificate holder and applicant for a Coe shall ensure that the design, fabrication, testing, and maintenance of a spent fuel storage cas~ comply with the requirements in§ 72.236.

(b) The certificate holder and applicant for a*CoC shall ensure that the design, fabrication, testing, and maintenance of spent fuel storage casks are conducted under a quality \

assurance program that meets the requirements of subpart G of this part.

(c) The certificate holder and applicant for a CoC shall ensure that the fabrication of spent fuel storage casks under a CoC does not begin prior ttrreceipt of the CoC for the spent fuel storage cask.

(d)(1) The certificate holder shall ensure that a record is established and maintained for each spent fuel storage cask fabricated under the CoC.

(2) This record must include:

{i) The NRC Coe number; (ii) The spent fuel storage cask model number; 55

(iii} The spent fuel storage cask identification number; (iv) Date fabrication was started;

{v) Date fabrication was completed; (vi) Certification that the spent fuel storage cask was designed, fabricated, tested, and repaired in accordance with a quality assurance program accepted by NRC; (vii) Certification that inspections required by § 72.2360) were performed and founq satisfactory; and (viii) The name and address of the licensee using the spent fuel storage cask.

(3) The certificate holder shall supply the original of this record to the licensees using the spent fuel storage cask. A current copy of a composite record of all spent fuel storage casks manufactured under a CoC, showing the information in paragraph (d){2) of this section, must be initiated and maintained by the certificate holder for each model spent fuel storage cask. If the certificate holder permanently ceases production of spent fuel storage casks under a CoC, the certificate holder shall send this composite record to the Commission using instructions in

§ 72.4.

(e} The certificate holder and the licensees using the spent fuel storage cask shall ensure that the composite record required by paragraph (d) of this section is available to the Commission for inspection.

(f) The certificate holder shall ensure that written procedures and appropriate tests are established prior to 1,Jse of the spent fuel storage casks. A copy of these procedures and tests must be provided to each licensee using the spent fuel storage cask.

56

29. Section 72.236 is revised to read as follows:

§ 72.236 Specific requirements for spent fuel storage cask approval and fabrication.

The certificate holder shall ensure that the requirements of this section are met. An applicant for a Coe shall ensure that the requirements of this section are met, except for paragraphs 0) and (k).

(a) Specifications must be provided for the spent fuel to be stored in the spent fuel storage cask, such as, but not limited to, type of spent fuel (i.e., BWR, PWR, both), maximum allowable enrichment of the fuel prior to any irradiation, bum-up (i.e., megawatt-days/MTU),

minimum acceptable cooling time of the spent fuel prior to storage in the spent fuel storage cask, maximum heat designed to be dissipated, maximum spent fuel loading limit, condition of the spent fuel (i.e., intact assembly or consolidated fuel rods), the inerting atmosphere requirements.

(b) Design bases and design criteria must be provided for structures, systems, and components important to safety.

(c) The spent fuel storage cask must be designed and fabricated so that the spent fuel is

maintained in a subcritical condition under credible conditions.

(d) Radiation shielding and confinement features must be provided sufficient to meet the requirements in §§ 72.104 and 72.106.

(e) The spent fuel storage cask must be designed to provide redundant sealing of confinement systems.

(f) The spent fuel storage cask must be designed to provide adequate heat removal capacity without active cooling systems.

57

(g) The spent fuel storage cask must be designed to store the spent fuel safely for a minimum of 20 years and permit maintenance as required.

(h) The spent fuel storage cask must be compatible with wet or dry spent fuel loading and unloading facilities.

(i) The spent fuel storage cask must be designed to facilitat~ decontamination to the extent practicable.

U) The spent fuel storage cask must be inspected to ascertain that there are no cracks, pinholes, uncontrolled voids, or other defects that could significantly reduce its confinement effectiveness.

(k) The spent fuel storage cask must be conspicuously and durably marked with -

(1) A model number; (2) A unique identification number; and (3) An empty weight.

(I) The spent fuel storage cask and its systems important to safety must be evaluated, by appropriate tests or by other means acceptable to the NRC, to demonstrate that they will reasonably maintain confinement of radioactive material under normal, off-normal, and credible accident conditions.

(m) To the extent practicable in the design of spent fuel storage casks, consideration should ~ given to compatibility with removal of the stored spent fuel from a reactor site, transportation, and ultimate disposition by the Department of Energy.

58

30. Section 72.240 is revised to read as follows:

§ 72.240 Conditions for spent fuel storage cask reapproval.

(a) The certificate holder, a licensee using a spent fuel storage cask, or the representative of a licensee using a spent fuel storage cask shall apply for reapproval of the design of a spent fuel storage cask.

(b) The application for reapproval of the design of a spent fuel storage cask must be submitted not less than 30 days prior to the expiration date of the Coe. When the applicant has submitted a timely application for reapproval, the existing CoC will not expire until the application for reapproval has been determined by the NRC. The application must be accompanied by a safety analysis report (SAR). The new SAR may reference the SAR originally submitted for the approved spent fuel storage cask design.

(c)

The design of a spent fuel storage cask will be reapproved if the conditions in

§ 72.238 are met, and the application includes a demonstration that the storage of spent fuel has not significantly adversely affected structures, systems, and components important to safety .

31. Section 72.242 is added to read as follows:

§ 72.242 Recordkeeplng and reports.

(a) Each certificate holder or applicant shall maintain any records and produce any reports that may be required by the conditions of the Coe or by the rules, regulations, and orders of the NRC in effectuating the purposes of the Act.

59

(b) Records that are required by the regulatic:,c; in this part or by conditions of the CoC must be maintained for the period specified by the appropriate regulation or the Coe conditions.

If a retention period is not specified, the records must be maintained until the NRC terminates the CoC .

., (c) Any record maintained under this part may be either the original or a reproduced copy by any state-of-the-art method provided that any reproduced copy is duly authenticated by authorized pe~onnel and is capable of producing a clear and legible copy after storage for the period specified by NRC regulations.

(d) Each certificate holder shall submit a written report to the NRC within 30 days of discovery of a design or fabrication deficiency, for any spent fuel storage cask which has been delivered to a licensee, when the design or fabrication d,eficiency affects the ability of structures, systems, and components important to safety to perform their intended safety function. The written report shall be sent to the NRC in accordance with the requirements of § 72.4. The report shall include the following:

(1) A brief abstract describing the deficiency, including all component or system failures that contributed to the deficiency and corrective action taken or planned to prevent recurrence; (2) A clear, specific, narrative description of what occurred so that knowledgeable readers familiar with the design of the spent fuel storage cask, but not familiar with the details of a particular cask, can understand the deficiency. The narrative description shall include the following specific information as appropriate for the particular event:

(i) Dates and approximate times of discovery; (ii) The cause of each component or system failure, if known; (iii) The failure mode, mechanism, and effect of each failed component, if known; 60

(iv) A list of systems or secondary functions that were also affected for failures of components with multiple functions; (v) The method of discovery of each component or system failure; (vi) The manufacturer and model number (or other identification) of each component that failed during the event; (vii) The model and serial numbers of the affected spent fuel storage casks; (viii) The licensees that have affected spent fuel storage casks; (3) An assessment of the safety consequences and implications of the deficiency. This

assessment shall include the availability of other systems or components that could have performed the same function as the components and systems that were affected; (4) A description of any corrective actions planned as a result of the deficiency, including those to reduce the probability of similar occurrences in the future; (5) Reference to any previous similar deficiencies at the same facility that are known to the certificate holder; and (6) The name and telephone number of ,a person within the ceruiicate holder's organization who is knowledgeable about the deficiency and can provide additional information.

.,. \

. Dated at Rockville, Maryland,.this ~- --- day of October, 1999.

For the Nuclear Regulatory Commission.

£~-if!~,._ j . /3 0-'£_

Andrew L. Bates, Acting Secretary of the Commission.

I '

61

TRANSNUCLEAA, INC.

October 6, 1998 Mr. John C. Hoyle Secretary U.S. Nuclear Regulatory Commission DOC KE f NUMBER 0

ROPOSED RULE_____7,;i. -

( 1,3 FR-3 -, 5-~I, Washington, DC 20555-0001

Subject:

10CFR Part 72, Proposal Rule to Expand Applicability of Regulations to Holders of, and Applicants for, Certificates of Compliance and Their Contractors and Subcontractors (Federal Register, Volume 63, November 141,

July 23, 1998)

Dear Mr. Hoyle:

Transnuclear, Inc. is both a current certificate holder and an applicant for a cask certificate of compliance (CoC) under 10CFR Part 72. Therefore, Transnuclear will be affected by changes to Part 72 promulgated by the NRC.

Transnuclear commends the NRC for its effort to bring more clarity to Subpart L of Part 72. Those portions of the proposed rule which define "certificate holder" and then make clearer the responsibility of the certificate holder to comply with applicable regulations are welcome and needed. In the proposed definition of certificate holder in Sec. 72.3, Transnuclear recommends that the word "person" be replaced by "company" or "organization" since a Certificate of Compliance is not issued to a specific person.

While generally supportive of the proposed changes, Transnuclear has some concerns regarding those proposed changes with respect to enforcement actions. It is true that, in the past, problems in the areas of quality assurance, quality control, fabrication control and design control for spent fuel storage systems have been identified by the NRC. The NRC has taken aggressive administrative actions to correct these problems.

NRC actions have been both draconian and effective. There is no doubt that certificate

'~ holders, applicants, and users of general licenses have taken notice of deficiencies identified by the NRC and have moved to correct those deficiencies. As a result of this,

...ml:

en :

a, ~

the level of performance by participants in the dry fuel storage industry, both suppliers and users, appears to be improving. Therefore, Transnuclear does not necessarily agree with the NRC that if no action is taken to change the enforcement provisions of Part 72,

~I t "the difficulties the NRC has experienced in the past will continue".

i If the NRC decides that it must extend the use of enforcement actions under Part 72, then Transnuclear believes that this should apply to holders of, and applicants for, Certificates of Compliance but not to their contractors and subcontractors. The reasons for this are twofold. First, it does not seem fair to extend enforcement actions to 0

j FOUR SKYLINE DRIVE

HAWTHORNE, NEW YORK 10532-2176 TELEPHONE: 914-347-2345

FAX: 914-347-2346

.S. UCLEAR REGU RULEMAKINGS &

OFFICE OF OF THE COMIIBUON

organizations which do not have a direct regulatory link to the NRC. It is the responsibility of certificate holders to assure that their contractors and subcontractors comply with quality assurance requirements imposed on them by the certificate holders in accordance with NRC requirements. Second, subjecting contractors and subcontractors to enforcement actions by an agency with which they have no formal regulatory connection exposes them to business risks which have a real cost. It is possible that this provision would lead some organizations to refuse to serve as a subcontractor to certificate holders, and others organizations would likely demand higher prices to compensate for the risk of civil penalties. Either action would be detrimental to what is a rather small and highly specialized group of fabricators.

Transnuclear also has a specific concern with the proposed extension of enforcement actions to cover Sec. 72.236. Several subparagraphs in this section such as (a), (i) and (m) contain wording like "but not limited to" and "to the extent practicable" which are highly subjective. Transnuclear does not believe that certificate holders should be subject to enforcement actions based on someone's opinion regarding what is practicable.

In summary Transnuclear concurs with proposed changes for clarification but believes that imposition of enforcement actions may not be necessary. If the NRC decides that enforcement actions are necessary, then Transnuclear believes that it should not apply to the subcontractors of certificate holders.

Despite reservations concerning the proposed rule, Transnuclear is committed to strict compliance with all NRC requirements and will adhere to the final rule in whatever form promulgated.

A;,.incerely<::;,

, ~ Hans President & CEO 2

BNFL Fuel Solutions Corp.

0 BNFL ,, 1 Vi ctor Square Fuel Solutions Corporation oc - 7 AUL Scotts Vall ey, CA 95 066 Tel : (408) 438-6444

\ ADJ Fax: (408) 438-52 06

\

October 6, 1998 DOCKET BFS/NRC 98-017 0

RO 1~ Docket No. 72-1023 3'J5;2&>> 72-1007 File No. SNC-109 Secretary US Nuclear Regulatory Commission Washington, D.C. 20555-0001 Attn: Rulemakings and Adjudications Staff

Subject:

Proposed Amendment to 10 CFR Part 72, Expanded Applicability of Regulations to Holders of, and Applicants for, Certificates of Compliance and Their Contractor and Subcontractors

Dear Sir,

In Federal Notice dated July 23, 1998, a proposed amendment to 10 CFR Part 72 was published which would expand its applicability to holders of, and applicants for, Certificate of Compliance and their contractors and subcontractors. BFNL Fuel Solutions (BFS), which is doing business as Sierra Nuclear Corporation, provides the following general comments below and provides more specific comments and recommendations to improve individual sections of the proposed rule in the attachment to this letter.

GENERAL COMMENT

S In summary, BFS supports the intent of the proposed revisions to 10 CFR Part 72. The purpose is to enhance the NRC's ability to take enforcement action against certificate holders and their contractors and subcontractors when legally binding requirements are violated. This expanded enforcement action is intended to enhance the safety and regulatory significance associated with the violations of the regulations. These changes should afford the NRC a graduated means to enforce the regulations.

BFS also finds that the proposed amendment improves the regulatory expectations for certificate holders, which should provide each certificate holder the opportunity to enhance its own safety and regulatory performance.

OCT - 9 1998 Acknowledged by card ..___............. .........

U.S. NUCLEAR REGULATORY COMMISSIO RULEMAKINGS &ADJUDICATIONS STAFF OFACE OF THE SECRETARY OF THE COMMISSIO Doclln8nt statl~

Postmartc Da C ReoEwed 4J,_~ I0/4/1 g

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U. S. Nuclear Regulatory Commission BFS/NRC 98-017 Page2 If any questions exist relative to this submittal, please contact me at (831) 438-6444.

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E. . Fuller President & CEO cc) Mr. Ray Pate Ms. Marilyn Meigs Portland General Electric BNFL Inc.

71760 Columbia River Hwy. 900 17th Street NW. Suite 1050 Rainier, OR 97048 Washington, DC 20006-2501 Mr. Dan Gildow Mr. John Broschak Portland General Electric Consumers Energy 71760 Columbia River Hwy. Palisades Nuclear Plant Rainier, OR 97048 27780 Blue Star Memorial Hwy.

Covert, MI 49043 Mr. Mike Holzmann Mr. Ray Kellar

Wisconsin Electric Power Co.

Point Beach Nuclear Plant 6610 Nuclear Road Two Rivers, WI 54241 Entergy Operations, Inc.

1448 State Road 333 Russellville, AR 72801

Attachment BFS/NRC 98-017 Page 1 ATTACHMENT BFS respectfully provides the following specific comments to the proposed amendment to 10 CFR Part 72.

§72.146(c) currently reads: "The licensee shall subject design changes, including field changes, to design control measures commensurate with those applied to the original design. Changes in the conditions specified in the license require NRC approval." The proposed rulemaking would apply this requirement to certificate holders and applicants for the Certificate of Compliance (CofC).

Comment: BFS agrees that design changes should have appropriate controls.

However, it is not clear whether design changes undertaken by the

certificate holder require prior NRC approval. Currently, 10CFR72.48 identifies those changes that the licensee may make without prior NRC review, and 10CFR72. 70 addresses the licensee's responsibilities to update their Safety Analysis Report (SAR). But the proposed rulemaking does not apply 10CFR 72.48 and 72. 70 to the certificate holders. The proposed rule does not address whether prior NRC approval is required for a design change made by a certificate holder that would necessitate a revision of the cask SAR but would not specifically deviate from the CofC, and how the SAR will be updated to reflect these changes.

Recommendation: The proposed revision of 10CFR72.146(c) needs clarification of when prior NRC approval is required for certificate holders and the

means to control changes to the SAR that do not require a change to the CofC.

The most direct method to address this comment is to revise Part 72 to apply 10 CFR 72.48 and 72. 70 to certificate holders. BFS recognizes that NRC intends to pursue changes to 10CFR72.48 in the future. However, without changes to 10 CFR 72.48 and 72.40 at this time, some clarifications are necessary in order to implement the proposed revisions to 72.146(c).

§72.242 is added to require a written report when the design or fabrication deficiency affects the ability of structures, systems and components important to safety to perform their function.

Comment: An individual structure, system or component may perform more than one function. Some of these may be safety-related while other functions may not serve a safety function. As an example, a coating

Attachment BFS/NRC 98-017 Page2 may assist in heat removal as a function important to safety, but may also serve as aesthetic function. For this example, the proposed rule could be interpreted to require a written report addressing a deficiency associated with an aesthetic function, even though the particular component would be capable of performing its safety function. It would be an unwarranted use of industry and NRC resources to report deficiencies that do not affect a safety function.

Further, the deficiency may affect the safety function of such structures, systems, or components, but the deficiency may not prevent such structure, system, or component from performing its intended safety function. As an example, a deficiency in a coating may be discovered such that the manufacturer lowers its peak heat

transfer rating. However, the cask design as stated in the Safety Analysis Report may not rely upon such a high rating. It would also be an unwarranted use of industry and NRC resources to report deficiencies that do not affect the ability of the component to perform its intended safety function.

Recommendation: Revise the proposed rulemaking to read as follows: 11 *** deficiency affects the ability of structures, systems, and components important to safety to perform their intended safety function. 11

§72.242 is added which identifies additional record keeping and reporting requirements for certificate holders. The NRC estimates the burden associated with these new requirements in the Paperwork Reduction Act Statement provided with the

Supplementary Information. The burden is estimated as 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months annually.

Comment: BFS agrees with the purpose of the proposed rulemaking. However, the annual burden for record keeping and reporting proposed by the revised Part 72 would far exceed 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months annually. The estimate of 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months annual would be sufficient to address the training of personnel to implement these new requirements, but would not be sufficient to address the actual record keeping and reporting. Of course, the actual burden any individual certificate holder would incur due the required record keeping and reporting would vary by certificate holder. BFS believes that the estimated burden is greater than 100 hours0.00116 days 0.0278 hours 1.653439e-4 weeks 3.805e-5 months annually. However, BFS believes that the purpose of the final rule justifies this burden.

Recommendation: Recognize the more realistic burden associated with the proposed record keeping and reporting and document that the burden is justified by the intended purpose of the proposed rule.

Attachment BFS/NRC 98-017 Page 3

§72.140(c)(2) was added to require certificate holders to obtain Commission approval of its quality assurance program prior to commencing fabrication or testing of a spent fuel storage cask.

Comment: 72.1 40(d) states that a quality assurance program which satisfies Appendix B to Part 50 is acceptable for Part 72. A certificate holder may have a quality assurance program that has been approved by the NRC under Part 71 or approved by the NRC for another Part 72 Cote application.

Recommendation: Revise 72.140(d) to include a quality assurance program which has been previously approved for Part 71 or Part 72 as a previously

approved program acceptable for new Cote applications under Part 72 .

PRECISION COI\IPONENTS CORPORATION 500 LINCOLN STREET YORK, PENNSYLVANIA I 7 404 7 I 7-848- I I 26 FAX: 7 I 7-846-6282 October 6, 1998 Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Attention: Rulemakings and Adjudications Staff Re: Proposed Rule 10CFR Part 72 RIN 3150-AF93 Gentlemen:

Precision Components Corporation, a leading fabricator of spent fuel storage and transportation packages, has reviewed your proposed rule and offers the following comments:

GENERAL Most fabricators are never involved in the licensing process for spent fuel equipment. Fabricators typically provide equipment on a "build to print" basis in accordance with a specification package provided by the equipment designer. We certify that the equipment was manufactured in strict accordance with the technical and quality requirements. Fabricators usually agree to some defined warranty provisions relating to workmanship and materials, however, performance guarantees are not part of the contractual arrangements As a fabricator, PCC is generally opposed to the potential of NOV's and penalties issued by the NRC. We typically have no responsibilities and involvement in developing the design configurations for the various spent fuel packagings. Further, we are audited by the licensee, designer and NRC for conformance with all applicable quality specifications. Our relationship with our customers (e.g.designer) is an arms length business relationship where our selection is based purely on our competitiveness in the marketplace.

SPECIFIC Section 72.146 (a) and (b)

The most troublesome paragraph of the proposed rule is Section 72.146 (a) and (b). The current procurement process for spent fuel packagings intentionally precludes the involvement of the fabricator in the development of specifications, drawings, procedures and instructions that might strictly conform to the front end design OCT - g 1998 nowteog by card ...................................

U. UCL.EAR REGU JOR COMMISSIO u, FM01KINGS &ADJUDICATIONS STAFF OFRCE T+IE SECRETARY OF THE COMMISSION tStatis.

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Secretary Page2 October 6, 1998 and licensing act1V1tles. The fabricator currently bases his manufacturing planning documentation upon the adequacy of a customer provided specification package. For instance, the fabricator may or may not utilize customer provided drawings for manufacture. In case where the fabricator generates his own drawings, the designer and licensee might require their review and approval. Currently, there is no typical or common approach bet\veen the designers and licensees with regard to the development and approval of manufacturing documents.

In summary, the fabricator develops a competitive pricing proposal based upon a designer provided specification/drawing package. He is requested to provide a firm fixed price proposal. This is generally the first time the fabricator sees this documentation and has had minimal previous interaction with the designer.

Therefore, by the nature of this business and the method of procurement the proposed rule cannot be practically or effectively applied. The designer has typically avoided bringing in the manufacturer until he receives a firm contract from the licensee. On this basis, it becomes the responsibility of the designer to communicate the intent of the packaging requirements through the specification/drawing package to the eventually selected fabricator.

CLOSING REMARKS PCC understands the intent of this proposed rule, but does not understand how the fabricator can be held to the same standards as the designer. The fabricator has very little influence over the design or licensing process. Furthermore, we find this to be a significant liability in cases where the designer can attempt to push their responsibility down to the fabricator. Specifically, a situation could arise where the designer has not completed a meaningful manufacturability and design review of his product. Finally, this market tends to be significantly price driven by the licensee forcing a vendor relationship between the designer and fabricator. This is a significant barrier to early communications and involvement by the manufacturer.

Please contact me with any questions.

Form PCC-MI.Al50'90 PRECISION COMPONENTS CORP.

BOX 15101

YORK, PENNSYLVANIA 17405-7101 717/848-1126

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NUCLEAR REGULA TORY COMMISSION

'98 JUL 21 P3 :25 10 CFR Part 72 OH*

RIN: 3150-AF93 RUu: * -.:..,

ADJUDI /\Fr-:

Expand Applicability of Part 72 to Holders of, and Applicants for, Certificates of Compliance and Their Contractors and Subcontractors AGENCY: Nuclear Regulatory Commission.

ACTION: Proposed rule.

SUMMARY

The Nuclear Regulatory Commission (NRC) is proposing to amend its regulations to expand the applicability of its regulations to holders of, and applicants for, Certificates of Compliance and their contractors and subcontractors. This amendment would enhance the Commission's ability to take enforcement action against these persons when

- legally binding requirements are violated . The intent of this action is to emphasize the safety and regulatory significance associated with violations of the regulations.

10/1, /"l[Y DATES: The comment period expires (insert 75 days from date of publication). Comments received after this date will be considered if it is practical to do so, but the Commission is able to assure consideration only for comments received on or before this date.

ADDRESSES: Comments may be sent to: Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 , Attn: Rulemakings and Adjudications Staff. Hand deliver i/)

, ~ . tfo-1 I 1-1 l°I~

comments to 11555 Rockville Pike, Rockville, MD, between 7:45 am and 4: 15 pm on Federal workdays.

You may also provide comments via the NRC's interactive rulemaking web site through the NRC's home page (http://www.nrc.gov). This site provides the availability to upload comments as files (any format) if your web browser supports that function. For information about the interactive rulemaking site, contact Ms. Carol Gallagher, (301) 415-5905; e-mail CAG@nrc.gov.

Certain documents related to this rulemaking, including comments received by the NRC, may be examined at thi= NRC Public Document Room, 2120 L Street NW., (Lower Level),

Washington, DC. These same documents also may be viewed and downloaded electronically via the interactive rulemaking website established by NRC for this rulemaking.

FOR FURTHER INFORMATION CONTACT: Anthony DiPalo, telephone (301) 415-6191 ,

e-mail, ajd@nrc.gov, or Philip Brachman, telephone (301) 415-8592, e-mail, pgb@nrc.gov, of the Office of Nuclear Materials Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001 .

SUPPLEMENTARY INFORMATION:

Background

The Commission's regulations at 10 CFR Part 72 were originally established to provide specific licenses for the storage of spent nuclear fuel in an independent spent fuel storage installation (ISFSI) (45 FR 74693; November 12, 1980). Later, Part 72 was amended to include 2

the storage of high-level waste (HLW) at a monitored retrieval storage (MRS) installation. In 1990, the Commission amended Part 72 to include a process for approving the design of spent fuel storage casks by issuance of a certificate of compliance (Subpart L) and for granting a general license to reactor licensees (Subpart K) to use NRG-approved casks for storage of spent nuclear fuel (55 FR 29181; July 18, 1990). In the past, the Commission has noted performance problems with holders of, and applicants for, a certificate of compliance under Part 72. When the NRC identifies a failure to comply with Part 72 requirements by these persons, the enforcement sanctions available under the current NRC Enforcement Policy have been limited to administrative actions.

The NRC Enforcement Policy1 and its implementing program have been established to support the NRC's overall safety mission in protecting public health and safety and the environment. Consistent with this purpose, enforcement actions are intended to be used as a deterrent to emphasize the importance of compliance with requirements and to encourage prompt identification and prompt, comprehensive correction of the violations. Enforcement sanctions consist of Notices of Violation {NOV), civil penalties, and orders of various types. In addition to formal enforcement actions, the NRC ~:llso uses related administrative actions such

- - as Notices of Nonconformance (NON), Confirmatory Action Letters, and Demands for Information to supplement the NRC's enforcement program. The NRC expects licensees and holders of, and applicants for, a certificate of compliance to adhere to any obligations and commitments resulting from these actions and will not hesitate to issue appropriate orders to ensure that these obligations and commitments are met. The nature and extent of the 1 NUREG-1600, "General Statement of Policy and Procedures for NRC Enforcement Actions," July 1995 (60 FR 34381; dated June 30, 1995).

3

enforcement action is intended to reflect the seriousness of the violation involved. An NOV is a written notice setting forth one or more violations of a legally binding requirement.

Discussion In promulgating Subpart L, the Commission intended that selected Part 72 provisions would apply to cask certificate holders and applicants for a cask certificate of compliance (CoC). For example, § 72.234(b) requires that, as a condition for approval of a CoC, "[d]esign, fabrication, testing, and maintenance of spent fuel storage casks oe conducted under a quality assurance program that meets the requirements of Subpart G of this part." However, the quality assurance requirements in Subpart G do not refer to certificate holders, but only to licensees and applicants for licenses. Further, some Subpart L regulations apply* explicitly only to the applicant" (e.g.,§ 72.232) or to the cask vendor" (e.g.,§ 72.234(d)(1)). Some of these provisions are written in the passive voice so that it is not clear who is responsible for meeting the requirement (e.g.,§ 72.236). Although certificates of compliance are legally binding documents, certificate holders or applicants for a CoC and their contractors and subcontractors have not clearly been brought within the scope of Part 72 requirements. Because the terms "certificate holder," and "applicant for a certificate of compliance" do not appear in the above-cited Part 72 regulations, the NRC has not had a clear basis to cite these persons for violations of Part 72 requirements in the same way it treats licensees. When the NRC has identified a failure to comply with Part 72 requirements by these persons, it has issued a NON rather than NOV.

Although a NON and a NOV appear to be similar, the Commission prefers the issuance of a NOV because: (1) the issuance of a NOV effectively conveys to both the person violating 4

the requirement and the public that a violation of a legally binding requirement has occurred; (2) the use of graduated severity levels associated with a NOV allows the NRC to effectively convey to both the person violating the requirement and the public a clearer perspective on the safety and regulatory significance of the violation; and (3) violation of a regulation reflects the NRC conclusion that potential risk to public health and safety could exist. This evidence can then be used to support the issuance of further enforcement sanctions such as orders.

Over the last 2 years, the Commission has observed problems with the performance of several certificate holders and their contractors and subcontractors. These problems have occurred in design, design control, faoncation and corrective action areas. Problems in these areas are typically covered under the quality assurance program. In FY 1996, the NRe staff identified numerous instances of nonconformance by certificate holders and their contractors and subcontractors failing to comply with requirements. The Commission has concluded that use of the additional enforcement sanctions which are available in the NRC Enforcement Policy are required to address the performance problems which have occurred in the spent fuel storage industry. Consequently, the Commission would revise Part 72 to explicitly make certificate holders and applicants for a Coe, and their contractors and subcontractors, ~ubject to those requirements and thereby allow the use of enforcement sanctions against these persons, rather than administrative sanctions. The Commission believes that these amendments will have the effect of allowing both the public and those persons designing and building spent fuel storage casks to clearly understand the expectations which have been placed on them.

The proposed rulemaking will primarily focus on amending regulations in Subpart G to explicitly include certificate holders, applicants for a Coe, and their contractors and subcontractors. Further, in Subpart L, this proposed rulemaking would also revise §§ 72.232, 5

72.234, and 72.236 to clarify who is responsible for ensuring that these requirements are met.

Terms such as cask user, cask model, cask vendor, and representative of a cask user used in these sections are not defined and would be replaced with defined terms. Additionally, changes would also be made to § 72.10, "Employee Protection," and § 72.11, "Completeness and Accuracy of Information," to include certificate holders and applicants for a certificate.

Section 72.3 would be revised to (1) incorporate definitions for "certificate holder," "certificate of compliance," and "spent fuel storage cask," (2) revise the definitions for "design bases" and "structures, systems, and components important to safety" to include the term "spent fuel storage cask," and (3) revise the definition for "design capacity to be consistent with the Commission's policy on the use of metric units. Section 72.236 would be revised and would be reissued as being subject to the criminal penalty provisions of § 223 of the Atomic Energy Act and§ 72.86(b), "Criminal Penalties," would be revised to delete mention of§ 72.236 as a conforming change.

Lastly, a new § 72.242 would be added to Subpart L to identify record keeping and reporting requirements for certificate holders and applicants for a CoC. Paragraphs (a), (b),

and (c) would require the certificate holder or applicant for a CoC to maintain any records or make any reports which are required by the conditions of a Coe or by the rules, regulations, and orders of the Commission. Paragraph (d) would require that a certificate holder submit a 0 written report to the NRC within 30 days when the certificate holder identifies certain deficiencies in the design or fabrication of a spent fuel storage cask which has been delivered to a licensee. This requirement would apply when the deficiency affects the ability of structures, systems, and components which are important to safety to perform their function. This requirement is intended to address instances where the deficiency does not rise to the level of a "substantial safety hazard" which 10 CFR Part 21 requires certificate holders and applicants to 6

report to the NRG. The Commission believes that by requiring this information, it will be in a position to more effectively evaluate the scope of any potential impacts on public health and safety from cask deficiencies and to ensure that a licensee (who is responsible for evaluating and resolving the problem) completes those actions in a timely manner. The Commission believes that this regulation need only apply to casks which have been delivered to licensees (i.e., they are out of the control of the certificate holder). Any deficiencies identified in casks over which the certificate holder still has custody would be identified in accordance with the certificate holder's quality assurance program. Overall, this new section would be similar to the reporting and recordkeeping requirements imposed on licensees in §§* 72. 75 and 72.80.

Discussion of Proposed Amendments by Section Subpart A - General Provisions

§ 72.2 Scope.

The term spent fuel storage cask would be added to paragraph (b) of this section. This

- is a conforming amendment.

§ 72.3 Definitions.

Definitions for spent fuel storage cask, certificate holder, and certificate of compliance would be added to this section. The term spent fuel storage cask would be added to the existing definitions for design bases and structures, systems, and components important to safety. The definition for design capacity would be revised to be consistent with the Commission's policy on use of metric units.

7

§ 72.10 Employee protection, and § 72.11 Completeness and accuracy of information.

The terms certificate holder and applicants for a Coe would be added.

Subpart D - Records, Reports, Inspections, and Enforcement

§ 72.86 Criminal penalties.

Paragraph (b) currently includes those sections under which criminal sanctions are not issued. This paragraph would be revised to delete reference to§ 72.236, because this section is being reissued as being subject to the criminal penalty provision of § 223 of the Atomic Energy Act. Similarly, certificate holders and applicants who fail to comply with the new

§ 72.242 would also be subject to criminal penalties. Therefore, § 72.242 will not be included in § 72.86(b).

Subpart G - Quality Assurance

§§ 72.140 through 72. 176 The term "certificate holder and applicants for a CoC and their contractors and subcontractors" would be added, as appropriate, to these sections to explicitly define responsibilities associated with quality assurance requirements. In 1990, when the Commission added Subparts K and L to Part 72 to provide a process for approving the design of a spent fuel storage cask, which would be used under a general license, the Commission's intent was that certificate holders and applicants for a Coe follow the quality assurance regulations of Part 72.

Section 72.234-(b) required that activities relating to the design, fabricatiun, testing, and maintenance of spent fuel storage casks shall be conducted under a quality assurance program 8

that meets the requirements of Subpart G of Part 72. However, the 1990 amendments to Part 72 did not amend Subpart G to include certificate holders and applicants for a CoC. In addition, other changes would be made to individual sections of Subpart G as described below.

In § 72.140, paragraphs (a) and (b) would be revised to clarify the responsibilities of a certificate holder and a licensee with respect to who is responsible for ensuring that the quality assurance program is properly implemented. Paragraph (c) would be revised to provide milestones for a licensee and a certificate holder when the NRG must approve their quality assurance program. The notification requirement in paragraph (d) would be revised to require that the NRG be notified in accordance with the standard notification requiremenk contained in§ 72.4.

To provide ~arity, § 72.142 would be rearranged. The new paragraph (a) would be revised to indicate that all of the persons associated with quality assurance activities for an ISFSI or a spent fuel storage cask (i.e., the licensee, certificate holder, applicants, and their contractors and subcontractors) are responsible for implementation of the quality assurance program.

In§ 72.144 paragraphs (a) and (b), § 72.154 paragraph (b), § 72.162, and§ 72.168

- paragraph (a) the term spent fuel storage cask would be added to the terms ISFSI and MRS.

Subpart L - Approval of Spent Fuel Storage Casks

§ 72.232 Inspection and tests.

This section would be reformatted by adding a new paragraph (b) and renumbering existing paragraphs (b) and (c). In paragraphs (a), (b), and (c) the term "applicant" would be replaced with "certificate holder, applicant for a CoC, and their contractors and subcontractors."

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In paragraph (d), the term "applicant" would be replaced with "certificate holder and applicant for a CoC." Contractors and subcontractors would not be added to Paragraph (d) because the Commission holds the certificate holder or applicant for a CoC responsible for meeting this requirement.

Paragraph (a) would be revised to permit the inspection of premises and activities related to the design of a spent fuel storage cask as well as to the fabrication and testing of such casks. This change is made for the sake of completeness.

New paragraph (b) would include a requirement to permit the inspection of records related to design, fabril..dtion, and testing of spent fuel storage casks. This requirement is intended to make clear the responsibility of certificate holders, applicants for a CoC, and their contractors and subcontractors to permit access to these records. This requirement is similar to the existing inspection and testing regulations in 10 CFR Parts 30, 40, 50, and 70.

§ 72.234 Conditions of approval.

This section would be revised to clarify who is responsible for accomplishing these requirements. The term "cask vendor would be replaced with "certificate holder." The term "cask user would be replaced with "a general licensee using a cask." The term "general licensee" has been used because a site-specific licensee cannot utilize the provisions of Subparts Kand L. In addition, the acronym "CoC" is used in place of the term "Certificate of Compliance" where appropriate.

§ 72.236 Specific requirements for spent fuel storage cask approval.

This section would be revised to clarify who is responsible for accomplishing these requirements. A new sentence has been added at the beginning of this section which indicates 10

who has responsibility for ensuring that each of the requirements contained in paragraphs (a) through (m) is met. This section also would be reissued as being subject to the criminal penalty provisions of § 223 of the Atomic Energy Act. Applicants for a CoC would not be required to ensure that the requirements of paragraphs 0) and (k) were met because these requirements apply to activities which can only occur after a cask has been fabricated; and an applicant cannot begin fabrication of a cask until a CoC has been issued and an applicant has become a certificate holder (see§ 72.234(c)).

§ 72.240 Conditions for spent fuel storage cask reapproval.

The term "user of a cask" would be replaced by "a general licensee using a cask" and the term "cask model" would be replaced by "design of a spent fuel storage cask." The term "representative of a cask user" would be replaced with the representative of a general licensee using a cask." In addition, the acronym "CoC" is used in place of the term "Certificate of Compliance" where appropriate.

§ 72.242 Recordkeeping and reports.

- This new section identifies additional recordkeeping responsibilities for certificate holders and applicants for a CoC and reporting requirements for certificate holders. This section is intended to provide for any other recordkeeping responsibilities which are not already covered by the regulations in § 72.234(d). This would include records required to be kept by a condition of the Coe or records relating to design changes, nonconformances, quality assurance audits, and corrective actions. Violations of this section would be subject to the criminal penalty provisions of§ 223 of the Atomic Energy Act. Paragraphs (a), (b) and (c) are similar to the recordkeeping requirements imposed on licensees in§ 72.B0(a), (c), and (d).

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A new requirement would be established in paragraph (d) for certificate holders to submit written reports to the NRG when they identify design or fabrication deficiencies, in structures, systems, and components which are important to safety, for casks which have been delivered to licensees. This requirement is intended to inform the NRG of deficiencies which may affect existing casks and thereby potentially affect public health and safety. This requirement is similar to the event reporting requirement imposed on licensees in§ 72.75(c)(2).

Criminal Penalties For the purposes of Section 223 of the Atomic Energy Act (AEA), the Commission is issuing the proposed rule to amend 10 CFR 72: 72.10, 72.11, 72.140 through 72.176, 72.232, 72.234, 72.236, and 72.242, under one or more of sections 161 b, 161 i, or 161 o of the AEA Willful violations of the rule would be subject to criminal enforcement.

Compatibility of Agreement State Regulations Under the "Policy Statement on Adequacy and Compatibility of Agreement State Programs" approved by the Commission on June 30, 1997, and published in the Federal Register September 3, 1997 (62 FR 46517), this rule is classified as compatibility Category "NRG." Compatibility is not required for Category "NRG" regulations. The NRG program elements in this category are those that relate directly to areas of regulation reserved to the NRG by the AEA or the provisions of Trtle 10 of the Code of Federal Regulations, and although an Agreement State may not adopt program elements reserved to NRG, it may wish to inform 12

its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws, but does not confer regulatory authority on the State.

Environmental Impact: Categorical Exclusion The NRC has determined that this proposed rule is the type of action described as a categorical exclusion in 10 CFR 51.22(c)(2) and (3). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this proposed rule.

Paperwork Reduction Act Statement This proposed rule contains a new or amended information collection requirement subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.). However, the burden from this proposed rule is insignificant as compared to the existing information collection burden of Part 72. The section added by this amendment (§ 72.242) will add new burdens for recordkeeping and reporting requirements. The staff estimates this burden as six hours

- annually. Therefore, the Commission believes that this burden is insignificant by comparison with Part 72's overall burden which is in excess of 21,000 hours0 days 0 hours 0 weeks 0 months . Existing requirements were approved by the Office of Management and Budget, approval numbers 3150-0017, 3150-0151, 3150-0127, 3150-0135, 3150-0009, 3150-0132, 3150-0036, and 3150-0032. The amendments i of the proposed rule currently fall under the existing approval numbers unless 0MB decides otherwise. Therefore, under the Paperwork Reduction Act of 1995, a new clearance submittal is not required.

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Public Protection Notification If an information collection does not display a currently valid 0MB control number, the NRC may not conduct or sponsor, and a person is not required to respond to, the information collections.

Regulatory Analysis Statement of the Problem The Commission's regulations at 10 CFR Part 72 were originally designed to provide specific licensing requirements for the storage of spent nuclear fuel in an independent spent fuel storage installation (ISFSI) (45 FR 74693, November 12, 1980). Later, these requirements were amended to include the storage of high-level waste {HLW) at a monitored retrieval storage (MRS) installation. In 1990, the Commission amended Part 72 to include a process for approving the des.ign of spent fuel storage casks by issuance of a certificate of compliance (Subpart L) and for granting a general license to reactor licensees (Subpart K) to use NRC-approved casks for storage of spent nuclear fuel (55 FR 29181, July 18, 1990). In the past, the Commission experienced performance problems with holders of and applicants for a certificate of compliance under Part 72. In FY 1996, the NRC staff identified numerous instances of nonconformance by certificate holders and their contractors and subcontractors failing to comply with requirements.

When the NRC identifies a failure to comply with Part 72 requirements by these persons, the NRC has issued Notices of Nonconformance (NON). The* issuance of a NON does not effectively convey that a violation of a legally binding requirement has occurred.

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Because the current regulations do not clearly impose requirements on these persons, the NRC has not taken enforcement action such as a Notice of Violation (NOV) against certificate holders and applicants and their contractors and subcontractors.

Some Part 72 provisions for cask storage of spent fuel (e.g., the quality assurance requirements) were intended to apply to cask certificate holders and applicants for cask certificates of compliance, as well as to holders of licenses and applicants for a license to store spent nuclear fuel at an ISFSI. However, some of the Part 72 requirements intended to apply to certificate holders and applicants do not clearly bring these persons within the scope of the requirement. For this reason, the NRC has not had a clear basis to cite certificate holders and applicants for violations of those Part 72 requirements.

Purpose of the Rulemaking The purpose of this rulemaking is to expand the applicability of Part 72 to holders of, and applicants for, certificates of compliance and their contractors and subcontractors. This would allow the NRC staff to take enforcement action in the form of NOVs rather than administrative action in the form of a NON when requirements are violated. While it may appear that a NON and a NOV are similar, the Commission believes that the issuance of a NOV is preferred because: (1) the issuance of a NOV effectively conveys to both the person violating the requirement and the public that a violation of a legally binding requirement has occurred; (2) the use of graduated severity levels associated with a NOV allows the NRC to effectively convey to both the person violating the requirement and the public a clearer perspective on the safety and regulatory significance of the violation; and (3) violation of a regulation reflects the NRC conclusion that potential risk to public health and safety could exist 15

and this evidence can then be used to support the issuance of further enforcement sanctions such as orders.

Current Regulatory Framework and Proposed Changes In promulgating Subpart L, the Commission intended that selected Part 72 provisions would apply to cask certificate holders and applicants for a certificate of compliance (CoC). For example,§ 72.234(b) requires that, as a condition for approval of a certificate of compliance,

"[d]esign, fabrication, testing, and maintenance of spent fuel storage casks be conducted under a quality assurance program that meets the requirements of subpart G of this part." However, the quality assurance requirements in Subpart G do not refer to certificate holders, but only to licensees and applicants for licenses. Some of the Subpart L regulations apply explicitly only to "the applicant" (e.g.,§ 72.232), or to the cask vendor (e.g.,§ 72.234(d)(1)). Some are written in the passive voice so that it is not clear who is responsible for meeting the requirement (e.g.,

§ 72.236). Because of these regulatory deficiencies, certificate holders or applicants for a CoC and their contractors and subcontractors have not clearly been brought within the scope of Part 72 requirements; and the NRC has not had a clear basis to cite these persons for violations of Part 72 requirements. Presently, when the NRC has identified a failure to comply with Part 72 requirements by these persons, it has issued an administrative action under the NRC's Enforcement Policy.

The NRC Enforcement Policy and its implementing program h~ve been established to support the NRC's overall safety mission in protecting public health and safety and the environment. Consistent with this purpose, enforcement actions are intended to be used (1) as a deterrent to emphasize the importance of compliance with requ,rements and (2) to encourage prompt identification and prompt, comprehensive correction of the violations.

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Enforcement sanctions consist of Notices of Violation (NOV), civil penalties, and orders of various types. In addition to the formal enforcement actions, the NRC also uses related administrative actions such as Notices of Nonconformance (NON), Confirmatory Action Letters, and Demands for Information to supplement the NRC's enforcement program. The NRC expects licensees and holders of and applicants for a certificate of compliance to adhere to any obligations and commitments resulting from these actions and will not hesitate to issue appropriate orders to ensure that these obligations and commitments are met. The nature and -

extent of the enforcement action is intended to reflect the seriousness of the violation involved.

A NOV is a written notice setting forth one or more violations of a legally binding , cquirement.

While it may appear that a NON and a NOV are similar, the Commission believes that the issuance of a NOV is preferred because: (1) the issuance of a NOV effectively conveys to both the person violating the requirement and the public that a violation of a legally binding requirement has occurred; (2) the use of graduated severity levels associated with a NOV allows the NRC to effectively convey to both the person violating the requirement and the public a clearer perspective on the safety and regulatory significance of the violation; and (3) violation of a regulation reflects the NRC conclusion that potential risk to public health and safety could

- exist. This evidence can then be used to support the issuance of further enforcement sanctions such as orders.

The proposed rulemaking will primarily focus on amending regulations in Subparts G and L to make certificate holders/applicants explicitly subject to those requirements.

Some of the Subpart L regulations apply explicitly only to the applicant," e.g., § 72.232, or to

the cask vendor," e.g., § 72.234(d)(1}, or are written in the passive voice so that it is not clear who is responsible for meeting the requirement, e.g.,§ 72.236. This proposed rule would revise the regulations to place explicit requirements on certificate holders and applicants and 17

their contractors and subcontractors. Additionally, terms contained in Subpart L such as cask user, cask model, cask vendor, and representative of a cask user are not defined and would be replaced with defined terms. Changes would be made to§ 72.10, "Employee Protection," and

§ 72.11, "Completeness and Accuracy of Information," to include certificate holders and applicants for a Coe. Section 72.3 would be revised to (1) fncorporate definitions for "certificate holder," "certificate of compliance," and "spent fuel storage cask," (2) to revise the definitions for "design bases" and "structures, systems, and components important to *safety" to include the term "spent fuel storage cask," and (3) to revise the definition for "design capacity" to be consistent with the Commission's policy on the use of metric units. Section 72.236 would be revised and would be reissued as being subject to the criminal penalty provisions of§ 223 of the Atomic Energy Act and§ 72.86(b), "Criminal Penalties," would be revised to delete mention of § 72.236 as a conforming change. Section 72.232 would be reformatted by adding a new paragraph (b) and renumbering existing paragraphs (b) and (c). The term "applicant would be replaced by the terms "certificate holder, applicant for a Coe, and their contractors and subcontractors" or "certificate holder and applicant for a CoC" as appropriate. Requirements to permit inspection of records, premises, and activities related to the design, fabrication, and testing of spent fuel storage casks have been clarified. Lastly, a new§ 72.242 would be added It to Subpart L to address additional recordkeeping and reporting requirements for certificate holders and applicants for a Coe, in addition to those already required by§ 72.234(d). This new section would be similar to the requirements imposed on licensees in§§ 72.75 and 72.80.

Alternatives This regulatory analysis considered three alternatives:

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Alternative 1: Revise Part 72 to expand the applicability of certain provisions to certificate holders, applicants for a CoC, and their contractors and subcontractors.

The Commission believes that problems in the areas of quality assurance, quality control, fabrication control and design control exist, are significant, and in part reflect the fact that certificate holders and applicants, and their contractors and subcontractors, have not been explicitly included in certain Part 72 requirements despite the NRC's intent that these persons follow these requirements. In the past, the Commission has been unable to take enforcement action against these persons when they did not comply with the regulations, because they have not been explicitly subject to the requirements of Part 72. However, the Commission believes that the need to be able to take enforcement action to the level of contractors and subcontractors is important because these persons actually accomplish the manufacturing and testing of spent fuel storage casks. These contractors and subcontractors have typically established quality assurance programs as a consequence of their contracts with the certificate holder.

Alternative 1 would allow the NRC to take enforcement actions against these persons, as necessary, by allowing the issuance of a NOV when they fail to comply with the requirements of Part 72. Presently the NRC issues a NON in these instances. While it may appear that a NON and a NOV are similar, the Commission believes that the issuance of a NOV is preferred because: (1) the issuance of a NOV effectively conveys to both the person violating the requirement and the public that a violation of a legally binding requirement has occurred; (2) the use of graduated severity levels associated with a NOV allows the NRC to effectively convey to both the person violating the requirement and the public a clearer perspective on the safety and regulatory significance of the violation; and (3) violation of a regulation reflects the NRC conclusion that potential risk to public health and safety could exist.

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This evidence can then be used to support the issuance of further enforcement sanctions such as orders.

The NRG has estimated that each certificate holder or applicant for a CoC, on average, has three contractors and subcontractors. Consequently, the NRG estimates a total of 60 contractors and subcontractors would be affected by these changes to Part 72 described in Alternative 1. Because certificate holders, applicants for a CoC, and their contractors and subcontractors for the most part have already been meeting the requirements of Part 72, as either a condition of a certificate of compliance or as a condition of a contract between a certificate holder and their contractors and subcontractors, the burdens imposed by this alternative are not significantly increased. Alternative 2 would not impose these impacts.

The Commission believes that alternative 1 will enable the NRG to make more effective use of the Enforcement Policy against the designers, fabricators, and testers of spent fuel storage casks and that this will lead to an overall improvement in the safety and quality of spent fuel storage casks.

Alternative 2: Revise Part 72 to expand the applicability of certain provisions to certificate holders and applicants for a Coe.

The difference between alternatives 1 and 2 is that the latter does not include contractors and subcontractors in clarifying the responsibilities for compliance with Part 72.

Therefore, the NRG would not be able to take enforcement actions against these persons under this alternative, but would be forced to continue to use administrative actions. The NRG believes that by taking enforcement actions against these people, it will be able to enhance the protection of public health and safety. Consequently, alternative 2 was rejected.

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Alternative 3: No action.

This alternative was rejected, even though staff resources for rulemaking would have been conserved. Under this alternative it is expected that the difficulties the NRC has experienced in the past will continue.

Decision Rationale For Preferred Alternative Alternative 1 is the preferred choice. The major benefit of this alternative is to allow the NRC to take more effective enforcement actions against certificate holders, applicants for a CoC, and their contractors and subcontractors under the current NRC Enforcement Policy.

This would enable both the person violating the regulation and the public to clearly perceive the regulatory and safety significance and consequences of the violation.

Because certificate holders, applicants for a CoC, and their contractors and subcontractors for the most part already have been meeting the requirements of Part 72, as either a condition of a certificate of compliance or as a condition of a contract between a certificate holder and their contractors and subcontractors, the burdens imposed by this amendment are not significantly increased. The new section added by this amendment 9 (72.242) will add new burdens for recordkeeping and reporting requirements. The staff estimates this burden associated with the new§ 72.242 to be 6 hours6.944444e-5 days 0.00167 hours 9.920635e-6 weeks 2.283e-6 months annually. Therefore, the Commission believes that this burden is insignificant by comparison with Part 72's overall burden which is in excess of 21,000 hours0 days 0 hours 0 weeks 0 months .

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Regulatory Flexibility Certification In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the Commission certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities. The proposed rule would amend the regulations to expand the applicability of 10 CFR Part 72 to holders of, and applicants for, Certificates of Compliance (CoC) and their contractors and subcontractors. This requirement would enhance the Commission's ability to take enforcement action in the form of Notices of Violation rather than administrative action in the form of Notices of Nonconformance when legally binding requirements are violated. The proposed rule may appear to impose new requirements on a significant number of small entities (i.e., the contractors and subcontractors associated with certificate holders and applicants for a CoC). These requirements would involve actions such as compliance with quality assurance program requirements in Subpart G of Part 72. However, these entities, for the most part, are already implementing the actions required by Subpart G as a condition of their contracts with the certificate holder or applicant for a Coe. Therefore, the

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NRC believes that this amendment will not have a significant economic impact on these small Backfit Analysis The NRC staff has determined that the backfit rule, 10 CFR 72.62, does not apply to this proposed rule because these amendments do not involve any provisions that would impose backfits as described in 10 CFR 72.62(a). Therefore, a backfit analysis is not required.

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List of Subjects in 10 CFR Part 72 Criminal penalties, Manpower training programs, Nuclear materials, Occupational safety and health, Reporting and recordkeeping requirements, Security measures, Spent fuel.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C.

553, the NRC is proposing to adopt the following amendments to 10 CFR Part 72.

PART 72 - LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE WASTE

1. The authority citation for Part 72 is revised to read as follows:

AUTHORITY: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934,935,948, 953, 954. 955, as amended, sec. 234, 83 Stat. 444, 9 as amended (42 U.S.C. 2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L.86-373, 73 Stat. 688, as amendea (42 U.S.C.

2021); sec. 201, as amended, 202,206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C.

5841, 5842, 5846); Pub. L.95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L.91-190, 83 Stat. 853 {42 U.S.C.

4332);Secs. 131,132,133,135,137, 141,Pub.L.97-425, 96Stat.2229,2230,2232,2241, sec. 148, Pub. L. 100-203, 101 Stat 1330-235 (42 U.S.C. 10151, 10152, 10153, 10155, 10157, 10161, 10168).

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Section 72.44(g) also issued under secs. 142(b) and 148(c}, (d), Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 10168(c), (d)). Section 72.46 also issued under sec. 189, 68 Stat. 955 (42 U.S.C. 2239); sec. 134, Pub. L.97-425, 96 Stat. 2230 (42 U.S.C.

10154). Section 72.96(d} also issued under sec. 145(g), Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C.10165(g)). SubpartJ also issued under secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub.

L.97-425, 96 Stat. 2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101, 10137(a}, 10161{h}).

Subparts Kand Lare also issued under sec. 133, 98 Stat. 2230 (42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C. 10198).

2. In§ 72.2, paragraph (b) is revised to read as follows:

§ 72.2 Scope.

(b) The regulations in this part pertaining to an independent spent fuel storage installation (ISFSI) and a spent fuel storage cask apply to all persons in the United States, including persons in Agreement States. The regulations in this part pertaining to a monitored retrievable storage installation (MRS) apply only to DOE. tit

3. In § 72.3, the definitions of Certificate holder, Certificate of Compliance or CoC. and Spent fuel storage cask or cask are added in alphabetical order, and the definitions of Design bases, Design capacity, and Structures, systems, and components important to safety are revised to read as follows:

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§ 72.3 Definitions.

Certificate holder means a person who has been issued a Certificate of Compliance by the Commission for a spent fuel storage cask design.

Certificate of Compliance or Coe means the certificate issued by the Commission that approves the design of a spent fuel storage cask in accordance with the provisions of Subpart L of this part.

Design bases means that information that identifies the specific functions LO be performed by a structure, system, or component of a facility or of a spent fuel storage cask and the specific values or ranges* of values chosen for controlling parameters as reference bounds for design. These values may be restraints derived from generally accepted state-of-the-art practices for achieving functional goals or requirements derived from analysis (based on calculation or experiments) of the effects of a postulated event under which a structure, system, or component shall meet its functional goals. The values for controlling parameters for external events include -

(1) Estimates of severe natural events to be used for deriving design bases that will be based on consideration or historical data on the associated parameters, physical data, or analysis of upper limits of the physical processes involved; and (2) Estimates of severe external man-induced events to be used for deriving design bases that will be based on analysis of human activity in the region, taking into account the site characteristics and the risks associated with the event.

Design capacity means the quantity of spent fuel or high-level radioactive waste, the maximum bum up of the spent fuel in MWD/MTU, the terabequerel (curie) content of the waste, 25

and the total heat generation in Watts (btu/hour) that the storage installation is designed to accommodate.

Spent fuel storage cask or cask means all the components and systems associated with the container in which spent fuel or other radioactive materials associated with spent fuel are stored in an ISFSI.

Structures, systems, and components important to safety means those features of the ISFSI, MRS, and spent fuel storage cask whose function is -

(1) To maintain the conditions required to store spent fuel or high-level radioactive waste safely; (2) To prevent damage to the spent fuel or the high-level radioactive waste container during handling and storage; or (3) To provide reasonable assurance that spent fuel or high-level radioactive waste can be received, handled, packaged, stored, and retrieved without undue risk to the health and safety of the public.

4. Section 72.9 is revised to read as follows:

§ 72.9 Information collection requirements: 0MB approval.

(a) The Nuclear Regulatory Commission has submitted the information collection requirements contained in this part to the Office of Management and Budget (0MB) for approval as required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). 0MB 26

has approved the information collection requirements contained in this part under control number 3150-0132.

(b) The approved information collection requirements contained in this part appear in

§§ 72.7, 72.11, 72.16, 72.19, 72.22 through 72.34, 72.42, 72.44, 72.48 through 72.56, 72.62, 72.70through72.82, 72.90, 72.92, 72.94, 72.98, 72.100, 72.102, 72.104, 72.108, 72.120, 72.126, 72.140 through 72.176, 72.180 through 72.186, 72.192, 72.206, 72.212, 72.216, 72.218, 72.230, 72.232, 72.234, 72.236, 72.240, and 72.242 ..

5. In§ 72.10, paragraph (a), the introductory text of paragraph (c), and paragraphs (c)(1) and (e)(1) are revised to read as follows:

§ 72.10 Employee protection.

(a) Discrimination by a Commission licensee, certificate holder, applicant for a Commission license or a Coe, or a contractor or subcontractor of any of these against an employee for engaging in certain protected activities is prohibited. Discrimination includes discharge and other actions that relate to compensation, terms, conditions, or privileges of employment. The protected activities are established in section 211 of the Energy Reorganization Act of 1974, as amended, and in general are related to the administration or enforcement of a requirement imposed under the Atomic Energy Act or the Energy Reorganization Act.

(c) A violation of paragraphs (a), (e), or (f) of this section by a Commission licensee, certificate holder, applicant for a Commission license or a CoC, or a contractor or subcontractor of any of these may be grounds for:

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(1) Denial, revocation, or suspension of the license or the CoC.

(e)(1} Each licensee, certfficate holder, and applicant for a license or Coe shall prominently post the revision of NRC Form 3, "Notice to Employees," referenced in 10 CFR 19.11 (c). This form shall be posted at locations sufficient to permit employees protected by this section to observe a copy on the way to or from their place of work. Premises shall be posted not later than 30 days after an application is docketed and remain posted while the application is pending before the Commission, during the term of the license or CoC, and for 30 days following license or Coe termination.

6. Section 72.11 is revised to read as follows:

§ 72.11 Completeness and accuracy of information.

(a) Information provided to the Commission by a licensee, certificate holder, or an applicant for a license or CoC; or information required by statute or by the Commission's regulations, orders, 'license or Coe conditions, to be maintained by the licensee or certificate 4I holder, shall be complete and accurate in all material respects.

(b) Each licensee, certificate holder, or applicant for a license or CoC shall notify the Commission of information identified by the licensee, certificate holder, or applicant for a license or CoC as having for the regulated activity a significant implication for public health and safety or common defense and security. A licensee, certfficate holder, or an applicant for a license or CoC violates this paragraph only if the licensee, certfficate holder, or applicant for a license or Coe fails to notify the Commission of information that the licensee, certificate holder, or 28

applicant for a license or CoC has identified as having a significant implication for public health and safety or common defense and security. Notification shall be provided to the Administrator of the appropriate Regional Office within two working days of identifying the information. This requirement is not applicable to information which is already required to be provided to the Commission by other reporting or updating requirements.

7. In§ 72.86, paragraph (b) is revised to read as follows:

§ 72.86 Criminal penalties.

(b) The regulations in par:t 72 that are not issued under s"ections 161b, 161i, or 1610 for the purposes of section 223 are as follows: §§ 72.1, 72.2, 72.3, 72.4, 72.5, 72. 7, 72.8, 72.9, 72.16, 72.18, 72.20, 72.22, 72.24, 72.26, 72.28, 72.32, 72.34, 72.40, 72.46, 72.56, 72.58, 72.60, 72.62, 72.84, 72.86, 72.90, 72.96, 72.108, 72.120, 72.122, 72.124, 72.126, 72.128, 72.130, 72.182, 72.194, 72.200, 72.202, 72.204, 72.206, 72.210, 72.214, 72.220, 72.230, 72.238, and 72.240.

8. Section 72. 140 is revised to read as follows:

§ 72.140 Quality assurance requirements.

(a) Purpose. This subpart describes quality assurance requirements that apply to design, purchase, fabrication, handling, shipping, storing, cleaning, assembly, inspection, testing, operation, maintenance, repair, modification of structures, systems, and components, and decommissioning that are important to safety. As used in this subpart, "quality assurance" 29

comprises all those planned and systematic actions necessary to provide adequate confidence that a structure, system, or component will perfonn satisfactorily in service. Quality assurance includes quality control, which comprises those quality assurance actions relate~ to control of the physical characteristics and quality of the material or component to predetennined requirements. The certificate holder, applicant for a CoC, and their contractors and subcontractors are responsible for the quality assurance requirements as they apply to the design, fabrication, and testing of a spent fuel storage cask until possession of the spent fuel storage cask is transferred to the licensee. The licensee and the certificate holder are also simultaneously responsible for these quality assurance requirements via the oversight of contractors and subcontractors.

(b) Establishment of program. Each licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish, maintain, and execute a quality assurance program satisfying each of the applicable criteria of this subpart, and satisfying any specific provisions which are applicable to the licensee's, applicant's for a license, certificate holder's, applicant's for a CoC, and their contractor's and subcontractor's activities. The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall execute the applicable criteria in a graded approach to an extent that is commensurate with the importance to safety. The quality assurance program shall cover the activities identified in this subpart throughout the life of the activity. For licensees, this includes activities from the site selection through decommissioning prior to tennination of the license. For certificate holders, this includes activities from development of the spent fuel storage cask design through tennination of the CoC.

(c) Approval of program:

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( 1) The licensee shall obtain Commission approval of its quality assurance program prior to receipt of spent fuel at the ISFSI or spent fuel and high-level radioactive waste at the MRS.

(2) The certificate holder shall obtain Commission approval of its quality assurance program prior to commencing fabrication or testing of a spent fuel storage cask.

(3) Each licensee or certificate holder shall file a description of its quality assurance program, including a discussion of which requirements of this subpart are applicable and how they will be satisfied, in accordance with§ 72.4.

(d) Previously approved programs. A Commission-approved quality assurance program which satisfies the applicable criteria of Appendix B to part 50 of this chapter and which is established, maintained, and executed with regard to an ISFSI will be accepted as satisfying the requirements of paragraph (b) of this section. Prior to initial use, the licensee shall notify the Director, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington, DC 20555, of its intent to apply its previously approved Appendix B program to ISFSI activities. The licensee shall identify the program by date of submittal to the Commission, docket number, and date of Commission approval.

9. Section 72.142 is revised to read as follows:

§ 72.142 Quality assurance organization.

(a) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall be responsible for the establishment and execution of the quality assurance program. The licensee and certificate holder may delegate to others, such as contractors, agents, or consultants, the work of establishing and executi11g the quality assurance program, but the licensee and the certificate holder shall retain responsibility for the 31

program. The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall clearly establish and delineate in writing the authority and duties of persons and organizations performing activities affecting the functions of structures, systems and components which are important to safety. These activities include performing the functions associated with attaining quality objectives and the quality assurance functions.

(b) The quality assurance functions are -

(1) Assuring that an appropriate quality assurance program is established and effectively executed; and (2) Verifying, by procedures such as checking, auditing, and inspection, thc:1t activities affecting the functions that are important to safety have been correctly performed. The persons and organizations performing quality assurance functions shall have sufficient authority and organizational freedom to identify quality problems; to initiate, recommend, or provide solutions; and to verify implementation of solutions.

(c) The persons and organizations performing quality assurance functions shall report to a management level that ensures that the required authority and organizational freedom, including sufficient independence from cost and schedule considerations when these considerations are opposed to safety considerations, are provided. Because of the many -

variables involved, such as the number of personnel, the type of activity being performed, and the location or locations where activities are perform~, the organizational structure for executing the quality assurance program may take various forms, provided that the persons and organizations assigned the quality assurance functions have the required authority and organizational freedom. Irrespective of the organizational structure, the individual(s) assigned the responsibility for assuring effective execution of any portion of the quality assurance 32

program at any location where activities subject to this section are being performed must have direct access to the levels of management necessary to perform this function.

10. Section 72.144 is revised to read as follows:

§ 72.144 Quality assurance program.

(a) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish, at the earliest practicable time consistent with the schedule for accomplishing the activities, a quality assurance program which complies with the requirements of this subpart. The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall document the quality assurance program by written procedures or instructions and shall carry out the program in accordance with these procedures throughout the period during which the ISFSI or MRS is licensed or the spent fuel storage cask is certified. The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall identify the structures, systems, and components to be covered by the quality assurance program, the e major organizations participating in the program, and the designated functions of these organizations.

(b) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors, through their quality assurance program(s}, shall provide control over activities affecting the quality of the identified structures, systems, and components to an extent commensurate with the importance to safety, and as necessary to ensure conformance to the approved design of each ISFSI, MRS, or spent fuel storage cask. The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors 33

and subcontractors shall ensure that activities affecting quality are accomplished under suitably controlled conditions. Controlled conditions include the use of appropriate equipment; suitable environmental conditions for accomplishing the activity, such as adequate cleanliness; and assurance that all prerequisites for the given activity have been satisfied. The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall take into account the need for special controls, processes, test equipment, tools and skills to attain the required quality and the need for verification of quality by inspection and test.

(c) The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall base the requirements and procedures of their quality assurance program(s) on the following considerations concerning the complexity and proposed use of the structures, systems, or components:

(1) The impact of malfunction or failure of the item on safety; (2) The design and fabrication complexity or uniqueness of the item; (3) The need for special controls and surveillance over processes and equipment; (4) The degree to which functional .compliance can be demonstrated by inspection or test; and (5) The quality history and degree of standardization of the item.

(d) The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall provide for indoctrination and training of personnel performing activities affecting quality as necessary to ensure that suitable proficiency is achieved and maintained.

(e) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall review the status and adequacy of the quality assurance 34

program at established intervals. Management of other organizations participating in the quality assurance program shall regularly review the status and adequacy of that part of the quality assurance program which they are executing.

11. Section 72.146 is revised to read as follows:

§ 72.146 Design control.

(a) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish measures to ensure that applicable regulatory requirements and the design basis, as specified in the license or Coe application for those structures, systems, and components to which this section applies, are correctly translated into specifications, drawings, procedures, and instructions. These measures shall in~lude provisions to ensure that appropriate quality standards are specified and included in design documents and that deviations from standards are controlled. Measures shall be established for the selection and review for suitability of application of materials, parts, equipment, and processes that are essential to the functions of the structures, systems, and components which are important to safety.

(b) The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall establish measures for the identification ar,d control 'of design interfaces and for coordination among participating design organizations. These measures shall include the establishment of written procedures among participating design organizations for the review, approval, release, distribution, and revision of documents involving design interfaces. The design control measures shall provide for verifying or checking the adequacy of design, by methods such as design reviews, alternate or simplified calculational 35

methods, or by a suitable testing program. For ttie verifying or checking process, the licensee and certificate holder shall designate individuals or groups other than t~ose who were responsible for the original design, but who may be from the same organization. Wher~ a test program is used to verify the adequacy of a specific design feature in lieu of other verifying or checking processes, the licensee and certificate holder shall include suitable qualification testing of a prototype or sample unit under the most adverse design conditions. The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall apply design control measures to items such as the following: criticality physics, radiation, shielding, stress, thermal, hyd~ulic, and accident analyses; compatibility of materials; accessibility for in-service inspection, maintenance, and repair, features to facilitate decontamination; and delineation of acceptance criteria for inspections and tests.

(c) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall subject design changes, including field changes, to design control measures commensurate with those applied to the original design. Changes in the conditions specified in the license or Coe require prior NRG approval.

12. Section 72.148 is revised to read as follows:

§ 72.148 Procurement document control.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish measures to assure that applicable regulatory requirements, design bases, and other requirements which are necessary to assure adequate quality are included or referenced in the documents for procurement of material, equipment, and services. To the extent necessary, the licensee, applicant for a license, certificate holder, 36

and applicant for a CoC, shall require contractors or subcontractors to provide a quality assurance program consistent with the applicable provisions of this subpart.

13. Section 72.150 is revised to read as follows:

§ 72.150 Instructions, procedures, and drawings.

The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall prescribe activities affecting quality by documented instructions, procedures, or drawings of a type appropriate to the circumstances and shall require that these instructions, procedures, and drawings be followed. The instructions, procedures, and drawings shall include appropriate quantitative or qualitative acceptance criteria for determining that important activities have been satisfactorily accomplished.

14. Section 72.152 is revised to read as follows:

§ 72.152 Document control.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall ~tablish measures to control the issuance of documents such as instructions, procedures, and drawings, including changes, which prescribe all activities affecting quality. These measures shall assure that documents, including changes, are reviewed for adequacy, ~pproved for release by authorized personnel, and distributed and used at the location where the prescribed activity is performed. These measures shall ensure that changes to documents are reviewed and apprpved.

37

15. Section 72.154 is revised to read as follows:

§ 72.154 Control of purchased material, equipment, and services.

(a) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish measures to ensure that purchased material, equipment and services, whether purchased directly or through con!ractors and ~ubcontractors, conform to the procurement documents. These measures shall include provisions, as appropriate, for source evaluation and selection, objective evidence of quality furnished by the contractor or subcontractor, inspection at the contractor or subcontractor source, and examination of products upon delivery.

(b) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall have available documentary evidence that material and equipment conform to the procurement specifications prior to installation or use of the material and equipment. The licensee and certificate holder shall retain or have available this documentary evidence for the life of ISFSI, MRS, or spent fuel storage cask. The licensee and certificate holder shall ensure that the evidence is sufficient to identify the specific requirements met by the purchased material and equipment. -

(c) The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors or a designee of either shall assess the effectiveness of the control of quality by contractors and subcontractors at intervals consistent with the importance, complexity, and quantity of the product or services.

38

16. Section 72.156 is revised to read as follows:

§ 72.156 Identification and control of materials, parts, and components.

The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall establish measures for the identification and control of materials, parts, and components. These measures shall ensure that identification of the item is maintained by heat number, part number, serial number, or other appropriate means, either on the item or on records traceable to the item as required, throughout fabrication, installation, and use of the item. These identification and control measures shall be designed to prevent the use of incorrect or defective materials, parts, and components.

17. Section 72.158 is revised to read as follows:

§ 72.158 Control of special processes.

The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall establish measures to ensure that special processes,

- including welding, heat treating, and nondestructive testing, are controlled and accomplished by qualified personnel using qualified procedures in accordance with applicable codes, standards, specifications, criteria, and other special requirements.

39

18. Section 72.160 is revised to read as follows:

§ 72.160 Licensee and certificate holder inspection.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish and execute a program for inspection of activities affecting quality by or for the organization performing the activity to verify conformance with the documented instructions, procedures, and drawings for accomplishing the activity. The inspection shall be performed by individuals other than those who performed the activity being inspected. Examinations, measurements, or tests of material or products processed shall be performed for each work operation where necessary to assure quality. If direct inspection of processed material or products cannot be carried out, indirect control by monitoring processing methods, equipment, and personnel shall be provided. Both inspection and process monitoring shall be provided when quality control is inadequate without both. If mandatory inspection hold points, which require witnessing or inspecting by the licensee's or certificate holder's designated representative and beyond which work should not proceed without the consent of its designated representative, are required, the specific hold points shall be indicated in appropriate documents.

19. Section 72.162 is revised to read as follows:

§ 72.162 Test control.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish a test program to ensure that all testing required to demonstrate that the structures, systems, and components will perform satisfactorily in 40

service is identified and performed in accordance with written test procedures that incorporate the requirements of this part and the requirements and acceptance limits contained in the ISFSI, MRS, or spent fuel storage cask license or CoC. The test procedures shall include provisions for assuring that all prerequisites for the given test are met, that adequate test instrumentation is available and used, and that the test is performed under suitable environmental conditions. The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall document and evaluate the test results to ensure that test requirements have been satisfied.

20. Section 72. 164 is revised to read as follows:

§ 72.164 Control of measuring and test equipment The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall establish measures to ensure that tools, gauges, instruments, and other measuring and testing devices used in activities affecting quality are properly controlled, calibrated, and adjusted at specified periods to maintain accuracy within

- necessary limits.

21. Section 72.166 is revised to read as follows:

§ 72.166 Handling, storage, and shipping control.

The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall establish measures to control, in accordance with work and inspection instructions, the handling, storage, shipping, cleaning, and preservation of 41

materials and equipment to prevent damage or deterioration. When necessary for particular products, special protective environments, such as inert gas atmosphere, and specific moisture content and temperature levels shall be specified and provided.

22. Section 72.168 is revised to read as follows:

§ 72.168 Inspection, test, and operating status.

(a) The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish measures to indicate, by the use of markings such as stamps, tags, labels, routing cards, or other suitable means, the status of inspections and tests performed upon individual items of the ISFSI, MRS, or spent fuel storage cask.

These measures shall provide for the identification of items which have satisfactorily passed required inspections and tests where necessary to preclude inadvertent bypassing of the inspections and tests.

(b) The licensee shall establish measures to identify the operating status of structures, systems, and components of the ISFSI or MRS, such as tagging valves and switches, to prevent inadvertent operation.

23. Section 72.170 is revised to read as follows:

§ 72.170 Nonconfonning materials, parts, or components.

The licensee, applicant for a license, certificate holder, applicant for a Coe, and their contractors and subcontractors shall establish measures to control materials, parts, or components that do not conform to their requirements in order to prevent their inadvertent use 42

or installation. These measures shall include, as appropriate, procedures for identification, documentation, segregation, disposition, and notification to affected organizations.

Nonconforming items shall be reviewed and accepted, rejected, repaired, or reworked in accordance with documented procedures.

24. Section 72.172 is revised to read as follows:

§ 72.172 Corrective action.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall establish measures to ensure that conditions adverse to quality, such as failures, malfunctions, deficiencies, deviations, defective material and equipment, and nonconformances, are promptly identified and corrected. In the case of a significant condition identified as adverse to quality, the measures shall ensure that the cause of the condition is determined and corrective action is taken to preclude repetition. The identification of the significant condition adverse to quality, the cause of the condition, and the corrective action taken shall be documented and reported to appropriate levels of management.

25. Section 72.174 is revised to read as follows:

§ 72.174 Quality assurance records.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall maintain sufficient records to furnish evidence of activities affecting quality. The records shall include the following: design records, records of use and the results of reviews, inspections, tests, audits, monitoring of work performance, and materials 43

analyses. The records shall include closely related data such as qualifications of personnel, procedures, and equipment. Inspection and test records shall, at a minimum, identify the inspector or data recorder, the type of observation, the results, the acceptability, and the action taken in connection with any noted deficiencies. Records shall be identifiable and retrievable.

Records pertaining to the design, fabrication, erection, testing, maintenance, and use of structures, systems, and components important to safety shall be maintained by or under the control of the licensee or certificate holder until the Commission terminates the license or CoC.

26. Section 72.176 is revised to read as follows:

§ 72.176 Audits.

The licensee, applicant for a license, certificate holder, applicant for a CoC, and their contractors and subcontractors shall carry out a comprehensive system of planned and periodic audits to verify compliance with all aspects of the quality assurance program and to determine the effectiveness of the program. The audits shall be performed in accordance with written procedures or checklists by appropriately trained personnel not having direct responsibilities in the areas being audited. Audited results shall be documented and revi~wed by management -

having responsibility in the area audited. Follow-up action, including re-audit of deficient areas, shall be taken where indicated.

44

27. Section 72.232 is revised to read as follows:

§ 72.232 Inspection and tests.

(a) The certificate holder, applicant for a CoC, and their contractors and subcontractors shall permit, and make provisions for, the Commission to inspect the premises and facilities at which a spent fuel storage cask is designed, fabricated, and tested.

(b) The certificate holder, applicant for a Coe, and their contractors and subcontractors shall make available to the Commission for inspection, upon reasonable notice, records kept by any of them pertaining to the design, fabrication, and testing of spent fuel storage casks.

(c) The certificate holder, applicant for a Coe, and their contractors and subcontractors shall perform, and make provisions that permit the Commission to perform, tests that the Commission deems necessary or appropriate for the administration of the regulations in this part.

(d) The certificate holder and applicant for a Coe shall submit a notification under§ 72.4 at least 45 days prior to starting fabrication of the first spent fuel storage cask under a Certificate of Compliance.

28. Section 72.234 is revised to read as follows:

§ 72.234 Conditions of approval.

(a) The certificate holder and applicant for a CoC shall ensure that the design, fabrication, testing, and maintenance of a spent fuel storage cask comply with the requirements in§ 72.236.

45

{b) The certificate holder and applicant for a CoC shall ensure that the design, fabrication, testing, and maintenance of spent fuel storage casks be conducted under a quality assurance program that meets the requirements of subpart G of this part.

(c) The certificate holder and applicant for a CoC shall ensure that the fabrication of casks under a CoC does not begin prior to receipt of the Coe for the spent fuel storage cask.

(d)(1) The certificate holder shall ensure that a record is established and maintained for each cask fabricated under the CoC.

(2) This record shall include:

(i) The NRG Coe number, (ii) The cask model number, (iii) The cask identification number; (iv) Date fabrication was started; (v) Date fabrication was completed; (vi) Certification that the cask was designed, fabricated, tested, and repaired in accordance with a quality assurance program accepted by NRG; (vii) Certification that inspections required by § 72.236(j) were performed and found satisfactory; and (viii) The name and address of the general licensee using the cask.

(3) The certificate holder shall supply the original of this record to the general licensee using the cask. A current copy of a composite record of all casks manufactured under a Coe, showing the information in pa~graph (d)(2) of this section, shall be initiated and maintained by the certificate holder for each model cask. If the certificate holder permanently ceases production of casks under a CoC, the certificate holder shall send this composite record to the Commission using instructions in § 72.4.

46

(e) The certificate holder and the general licensee using the cask shall ensure that the composite record required by paragraph (d) of this section is available to the Commission for inspection.

(f} The certificate holder shall ensure that written procedures and appropriate tests are established prior to use of the casks. A copy of these procedures and tests shall be provided to each general licensee using the cask.

29. Section 72.236 is revised to read as follows:

§ 72.236 Specific requirements for spent fuel storage cask approval.

The certificate holder shall ensure that the requirements of this section are met. An applicant for a CoC shall ensure that the requirements of this section are met, except for paragraphs (j) and (k)

(a) Specifications shall be provided for the spent fuel to be stored in the cask, such as, but not limited to, type of spent fuel (i.e., BWR, PWR, both), maximum allowable enrichment of the fuel prior to any irradiation, bum-up (i.e., megawatt-days/MTU), minimum acceptable

- cooling time of the spent fuel prior to storage in the cask, maximum heat designed to be dissipated, maximum spent fuel loading limit, condition of the spent fuel (i.e., intact assembly or consolidated fuel rods), the inerting atmosphere requirements.

(b) Design bases and design criteria shall be provided for structures, systems, and components important to safety.

(c) The cask shall be designed and fabricated so that the spent fuel is maintained in a subcritical condition under credible conditions.

47

(d) Radiation shielding and confinement features shall be provided sufficient to meet the requirements in §§ 72.104 and 72.106.

(e) The cask shall be designed to provide redundant sealing of confinement systems.

(f) The cask shall be designed to provide adequate heat removal capacity without active cooling systems.

(g) The cask shall be designed to store the spent fuel safely for a minimum of 20 years and permit maintenance as required.

(h) The cask shall be compatible with wet or dry spent fuel loading and unloading facilities.

(i) The cask shall be designed to facilitate decontamination to the extent practicable.

0) The cask shall be inspected to ascertain that there are no cracks, pinholes, uncontrolled voids, or other defects that could significantly reduce its confinement effectiveness.

(k) The cask shall be conspicuously and durably marked with -

(1) A model number; (2) A unique identification number; and (3) An empty weight.

(I) The cask and its systems important to safety shall be evaluated, by appropriate tests -

or by other means acceptable to the Commission, to demonstrate that they will reasonably maintain confinement of radioactive material under normal, off-normal, and credible accident conditions.

(m) To the extent practicable in the design of storage casks, consideration should be given to compatibility with removal of the stored spent fuel from a reactor site, transportation, and ultimate aisposition by the Department of Energy.

48

30. Section 72.240 is revised to read as follows:

§ 72.240 Conditions for spent fuel storage cask reapproval.

(a) The certificate holder, a general licensee using a spent fuel storage cask, or the representative of a general licensee using a spent fuel storage cask shall apply for reapproval of the design of a spent fuel storage cask.

(b) The application for reapproval of the design of a spent fuel storage cask shall be submitted not less than 30 days prior to the expiration date of the CoC. When the applicant has submitted a timely app11cation for reapproval, the existing Coe will not expire until the application for reapproval has been finally determined by the Commission. The application shall be accompanied by a safety analysis report (SAR). The new SAR may reference the SAR originally submitted for the approved spent fuel storage cask design.

(c) The design of a spent fuel storage cask will be reapproved if the conditions in

§ 72.238 are met, and the application includes a demonstration that the storage of spent fuel has not, in fact, significantly adversely affected structures, systems, and components important to safety.

31. Section 72.242 is added to read as follows:

§ 72.242 Recordkeeping and reports.

(a) Each certificate holder or applicant shall maintain any records and produce any reports that may be required by the conditions of the Coe or by the rules, regulations, and orders of the Commission in effectuating the purposes of the Act.

49

(b) Records that are required by the regulations in this part or by conditions of the CoC shall be maintained for the period specified by the appropriate regulation or the CoC conditions.

If a retention period is not specified, the records shall be maintained until the Commission terminates the Coe.

(c) Any record that shall be maintained under this part may be either the original or a reproduced copy by any state of the art method provided that any reproduced copy is duly authenticated by authorized personnel and is capable of producing a clear and legible copy after storage for the period specified by Commission regulations.

(d) Each certificate holder shall submit a written report to the NRC within 30 days ot discovery of a design or fabrication deficiency, for any spent fuel storage cask which has been delivered to a licensee, when the design or fabrication deficiency affects the ability of structures, systems, and components important to safety to perform their function. The written report shall be sent to the NRC in accordance with the requirements of§ 72.4. The report shall include the following:

(1) A brief abstract describing the deficiency, including all component or system failures that contributed to the deficiency and corrective action taken or planned to prevent recurrence; (2) A clear, specific, narrative description of what occurred so that knowledgeable readers familiar with the design of the spent fuel storage cask, but not familiar with the details of a particular cask, can understand the deficiency. The narrative description shall include the following specific information as appropriate for the particular event (i) Dates and approximate times of discovery; (ii) The cause of each component or system failure, if known; (iii) The failure mode, mechanism, and effect of each failed component, if known; 50

(iv) A list of systems or secondary functions that were also affected for failures of components with multiple functions; (v) The method of discovery of each component or system failure; (vi) The manufacturer and model number (or other identification) of each component that failed during the event; (vii) The model and serial numbers of the affected casks; (viii) The licensees that have affected casks; (3) An assessment of the safety consequences and implications of the deficiency. This

assessment shall include the availability of other systems or components that could have performed the same function as the components and systems that were affected; (4) A description of any corrective actions planned as a result of the deficiency, including those to reduce the probability of similar occurrences in the Mure; (5) Reference to any previous similar deficiencies at the same facility that are known to the certificate holder; and (6) The name and telephone number ofa person within the certificate holder's organization who is knowledgeable abqut the deficiency and can provide additional information.

Dated at Rockville, Maryland, this day of July, 1998.

For the Nuclear Regulatory Commission.

John C: Hoyle, /

Se~tary of the Commission.

51

0 TRANSNUCLEAR, INC.

FOUR SKYLINE DRIVE, HAWTHORNE, NEW YORK 10532 Phone: 914-347-2345

Fax: 914-347-2346

E-mail: TRANSNCLR@AOL.COM FACSIMILE COVER PAGE From: Afa1t l/4#Jo ~

Company: U 5_ A<' If C, Pages: Cover + o'.(

Fax No.: *30/- L/15- /k 7.,;l.. Date: ~/4/t?g Phone No.: cc:

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= :: :F'"age !]

From: Philip Brachman To: OWFN_DO.owf5_po.ATB1 Date: Tue, Oct 6, 1998 7:45 AM

Subject:

Close of Comment Period on Part 72 Rule Adria, the comment period for a Part 72 rulemaKing (63 FR 39526) closes on 10/6; however, Tony DiPalo was contacted yesterday by an individual you was just preparing his comment As Tony will be on vacation starting on Friday, can you wait until 10/14 assemble the comment package before you forward it to he and I.

Thanks. ... phil brochman CC: TWD2.TWP9.AJD

ML23156A385

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Dear Sir,

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ML23156A385

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REFERENCE:

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Dear Mr. Hoyle:

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Dear Sir,

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