Text

Draft Rule Text Table for Preliminary Information for Public Meeting on August 28, 2018
	ML18233A387
Person / Time
Issue date:	08/28/2018
From:	; Office of Nuclear Material Safety and Safeguards
To:	;
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References
	SRM-SECY-08-0059
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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 The draft final rule is limited to revising and consolidating the MC&A regulations in 10 CFR Part 74 (SRM-SECY-08-0059, February 5, 2009). The information in the table shows the sections in 10 CFR Part 74 that are being changed and the conforming changes that are being made in 10 CFR Parts 40, 60, 63, 70, 72, and 150.

Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

PART 40 -- DOMESTIC LICENSING OF SOURCE MATERIAL Records, Reports, and Inspections

§ 40.64 Reports. 2, In § 40.64, revise paragraphs (b)(1) and [In § 40.64, revise paragraphs (b)(1) and (2) to read as follows: (2) and (d)(3) to read as follows:]

(b) Except as specified in paragraphs (d) (b) * * * (b) * *

and (e) of this section, each licensee who:

(1) Possesses, or had possessed in the (1) Possesses, or had possessed (1) Possesses, or had possessed in previous reporting period, at any one time in the previous reporting period, at any the previous reporting period, at any one and location, one kilogram or more of one time and location, one kilogram or time and location, one kilogram or more of uranium or thorium source material with more of uranium or thorium source uranium or thorium source material with foreign obligations as defined in this part, material with foreign obligations as defined foreign obligations as defined in this part, shall document holdings as of September in this part, shall document holdings as of shall document holdings as of September 30 of each year and submit to the September 30 of each year and submit to 30 of each year and submit to the Commission within 30 days, a statement the Commission within 30 days, a Commission within 30 days, a statement of its source material inventory with foreign statement of its source material inventory of its source material inventory with foreign obligations as defined in this part. with foreign obligations as defined in this obligations as defined in this part.

Alternatively, this information may be part. Alternatively, this information may be Alternatively, this information may be submitted with the licensees material submitted with the licensees material submitted with the licensees material status reports on special nuclear material status reports on SNM filed under part 74 status reports on SNM special nuclear filed under part 72 or 74 of this chapter, as of this chapter, as a statement of its material filed under part 74 of this chapter, a statement of its source material source material inventory with foreign as a statement of its source material inventory with foreign obligations as obligations as defined in this part. This inventory with foreign obligations as defined in this part. This statement must statement must be submitted to the defined in this part. This statement must be submitted to the address specified in address specified in the reporting be submitted to the address specified in the reporting instructions in NUREG/BR- instructions in NUREG/BR-0007, and the reporting instructions in NUREG/BR-0007, and include the Reporting include the Reporting Identification Symbol 0007, Instructions for the Preparation and Identification Symbol (RIS) assigned by (RIS) assigned by the Commission to the Distribution of Material Status Reports, the Commission to the licensee. licensee. Final Draft (DOE [U.S. Department of Energy]/NRC Forms 742 and 742C) and, and include the Reporting Identification Symbol (RIS) assigned by the Commission to the licensee.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

(2) Possesses, or had possessed in the (2) Possesses, or had possessed (2) Possesses, or had possessed in previous reporting period, one kilogram or in the previous reporting period, one the previous reporting period, one more of uranium or thorium source kilogram or more of uranium or thorium kilogram or more of uranium or thorium material pursuant to the operation of source material pursuant to the operation source material pursuant to the operation enrichment services, downblending of enrichment services, downblending of enrichment services, downblending uranium that has an initial enrichment of uranium that has an initial enrichment of uranium that has an initial enrichment of the U235 isotope of 10 percent or more, or the U-235 isotope of 10 percent or more, the U uranium-235 isotope of 10 percent in the fabrication of mixed-oxide fuels shall or in the fabrication of mixed-oxide fuels or more, or in the fabrication of mixed-complete and submit, in computer- shall complete and submit, in computer- oxide fuels shall complete and submit, in readable format, Material Balance and readable format, Material Balance and computer-readable format, Material Physical Inventory Listing Reports Physical Inventory Listing Reports Balance and Physical Inventory Listing concerning all source material that the concerning all source material that the Reports concerning all source material licensee has received, produced, licensee has received, produced, that the licensee has received, produced, possessed, transferred, consumed, possessed, transferred, consumed, possessed, transferred, consumed, disposed of, or lost. Reports must be disposed of, or lost. Reports must be disposed of, or lost. Reports must be submitted for each Reporting Identification submitted for each RIS account including submitted for each RIS account including Symbol (RIS) account including all holding all holding accounts. Each licensee shall all holding accounts. Each licensee shall accounts. Each licensee shall prepare and prepare and submit these reports as prepare and submit these reports as submit these reports as specified in the specified in the instructions in specified in the instructions in instructions in NUREG/BR-0007 and NUREG/BR-0007 and NMMSS Report D- NUREG/BR-0007 and NMMSS Report D-NMMSS Report D-24, Personal 24, Personal Computer Data Input for 24, Personal Computer Data Input for Computer Data Input for NRC Licensees. NRC Licensees. These reports must NRC Licensees. These reports must These reports must document holdings as document holdings as of September 30 of document holdings as of September 30 of of September 30 of each year and must be each year and must be submitted to the each year and must be submitted to the submitted to the Commission within 30 Commission within 30 days. Alternatively, Commission within 30 days. Alternatively, days. Alternatively, these reports may be these reports may be submitted with the these reports may be submitted with the submitted with the licensees material licensees material status reports on licensees material status reports on status reports on special nuclear material special nuclear material filed under part 74 special nuclear material filed under part 74 filed under parts 72 or 74 of this chapter. of this chapter. Copies of the reporting of this chapter. Copies of the reporting Copies of the reporting instructions may instructions may be obtained either by instructions may be obtained either by be obtained either by writing to the U.S. writing to the U.S. Nuclear Regulatory writing to the U.S. Nuclear Regulatory Nuclear Regulatory Commission, Division Commission, Division of Fuel Cycle Safety Commission, Division of Fuel Cycle of Fuel Cycle Safety and Safeguards, and Safeguards, Washington, DC 20555- Safety, and Safeguards, and Washington, DC 20555-0001, or by e-mail 0001, or by e-mail to Environmental Review, Washington, DC to RidsNmssFcss@nrc.gov. Each licensee RidsNmssFcss.Resource@nrc.gov. Each 20555-0001, or by e-mail to required to report material balance, licensee required to report material RidsNmssFcse.Resource@nrc.govRidsN 2

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) inventory, and/or foreign obligation balance, inventory, and/or foreign mssFcss.Resource@nrc.gov. Each information, as detailed in this part, shall obligation information, as detailed in this licensee required to report material resolve any discrepancies identified during part, shall resolve any discrepancies balance, inventory, and/or foreign the report review and reconciliation identified during the report review and obligation information, as detailed in this process within 30 calendar days of reconciliation process within 30 calendar part, shall resolve any discrepancies notification of a discrepancy identified by days of notification of a discrepancy identified during the report review and the NRC. identified by the NRC. reconciliation process within 30 calendar

* * *

days of notification of a discrepancy identified by the NRC.

(d) * * *

(3) Chemical catalysts containing uranium depleted in the Uuranium-235 isotope to 0.4 percent or less, if the uranium content of the catalyst does not exceed 15 percent by weight; or PART 60DISPOSAL OF HIGH-LEVEL RADIOACTIVE WASTES IN GEOLOGIC REPOSITORIES Subpart DRecords, Reports, Tests, and Inspections

§ 60.78 Material control and accounting [In § 60.78, remove the reference , 72.74, records and reports. 72.76, and 72.78 and add in its place the reference and 72.74.]

4. Revise § 60.78 to read as follows:

DOE shall implement a program of DOE shall implement a program of material control and accounting (and material control and accounting (and accidental criticality reporting) that is the accidental criticality reporting) that is the same as that specified in §§ 72.72, 72.74, same as that specified in §§ 72.72, 72.74, 72.76, and 72.78 of this chapter. 72.76, and 72.78 of this chapter.

PART 63-DISPOSAL OF HIGH-LEVEL RADIOACTIVE WASTES IN A 3

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

GEOLOGIC REPOSITORY AT YUCCA MOUNTAIN, NEVADA Subpart DRecords, Reports, Tests, and Inspections

§ 63.78 Material control and accounting [In § 63.78, remove the reference , 72.74, records and reports. 72.76, and 72.78 and add in its place the reference and 72.74.]

6. Revise § 63.78 to read as follows:

DOE shall implement a program of DOE shall implement a program of material control and accounting (and material control and accounting (and accidental criticality reporting) that is the accidental criticality reporting) that is the same as that specified in §§ 72.72, 72.74, same as that specified in §§ 72.72, 72.74, 72.76, and 72.78 of this chapter. 72.76, and 72.78 and 72.74 of this chapter.

PART 70-DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL Subpart ELicenses

§ 70.32 Conditions of licenses. [In § 70.32, revise paragraphs (c)(1)(i), (ii), [In § 70.32, revise paragraphs (c)(1)(i) and (iii) to read as follows:] through (iii) to read as follows:]

(c)(1) (c)(1) * * * (c)(1) * * *

(i) The program for control and accounting (i) The program for control and (i) The program for control and of uranium source material at an uranium accounting of uranium source material at a accounting of uranium source material at a enrichment facility and special nuclear uranium enrichment facility and SNM at all uranium enrichment facility and SNM material at all applicable facilities as applicable facilities as implemented special nuclear material at all applicable implemented pursuant to § 70.22(b), or §§ pursuant to § 70.22(b), or §§ 74.31(b), facilities as implemented pursuant to 74.31(b), 74.33(b), 74.41(b), or 74.51(c) of 74.33(b), 74.41(b), or 74.51(b) of this § 70.22(b), or §§ 74.31(b), 74.33(b),

this chapter, as appropriate; chapter, as appropriate; 74.41(b), or 74.51(b) of this chapter, as appropriate; (ii) The measurement control program for (ii) The measurement control (ii) The measurement control uranium source material at an uranium program for uranium source material at a program for uranium source material at a enrichment facility and for special nuclear uranium enrichment facility and for SNM at uranium enrichment facility and for SNM material at all applicable facilities as all applicable facilities as implemented special nuclear material at all applicable implemented pursuant to §§ 74.31(b), pursuant to §§ 74.31(b), 74.33(b), facilities as implemented pursuant to 4

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) 74.33(b), 74.45(c), or 74.59(e) of this 74.45(c), or 74.59(e) of this chapter, as §§ 74.31(b), 74.33(b), 74.45(c), or chapter, as appropriate; and appropriate; and 74.59(e) of this chapter, as appropriate; and (iii) Other material control procedures as (iii) Other material control (iii) Other material control the Commission determines to be procedures as the Commission procedures as the Commission essential for the safeguarding of uranium determines to be essential for the determines to be essential for the source material at an uranium enrichment safeguarding of uranium source material safeguarding of uranium source material facility or of special nuclear material and at a uranium enrichment facility or of SNM at a uranium enrichment facility or of SNM providing that the licensee shall make no and providing that the licensee shall make special nuclear material and providing that change that would decrease the no change that would decrease the the licensee shall make no change that effectiveness of the material control and effectiveness of the material control and would decrease the effectiveness of the accounting program implemented accounting program implemented material control and accounting program pursuant to § 70.22(b), or §§ 74.31(b), pursuant to § 70.22(b), or §§ 74.31(b), implemented pursuant to § 70.22(b), or 74.33(b), 74.41(b), or 74.51(c) of this 74.33(b), 74.41(b), or 74.51(b) of this §§ 74.31(b), 74.33(b), 74.41(b), or chapter, and the measurement control chapter, and the measurement control 74.51(b) of this chapter, and the program implemented pursuant to §§ program implemented pursuant to measurement control program 74.31(b), 74.33(b), 74.41(b), or 74.59(e) of §§74.31(b), 74.33(b), 74.41(b), or 74.59(e) implemented pursuant to §§74.31(b),

this chapter without the prior approval of of this chapter without the prior approval of 74.33(b), 74.41(b), or 74.59(e) of this the Commission. A licensee desiring to the Commission. A licensee desiring to chapter without the prior approval of the make changes that would decrease the make changes that would decrease the Commission. A licensee desiring to make effectiveness of its material control and effectiveness of its material control and changes that would decrease the accounting program or its measurement accounting program or its measurement effectiveness of its material control and control program shall submit an control program shall submit an accounting program or its measurement application for amendment to its license application for amendment to its license control program shall submit an pursuant to § 70.34. pursuant to § 70.34. application for amendment to its license

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pursuant to § 70.34.

PART 72LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF SPENT NUCLEAR FUEL, HIGH-LEVEL RADIOACTIVE WASTE, AND REACTOR RELATED GREATER THAN CLASS C WASTE Subpart AGeneral Provisions 5

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

§ 72.9 Information collection requirements: OMB approval.

[Amended]

[In § 72.9(b), remove the numbers 72.76 and 72.78.]

(b) The approved information collection (b) The approved information collection requirements contained in this part appear requirements contained in this part appear in §§ 72.7, 72.11, 72.16, 72.22 through in §§ 72.7, 72.11, 72.16, 72.22 through 72.34, 72.42, 72.44, 72.48 through 72.56, 72.34, 72.42, 72.44, 72.48 through 72.56, 72.62, 72.70, through 72.80, 72.90, 72.92, 72.62, 72.70, through 72.8072.75, 72.77, 72.94, 72.98, 72.100, 72.102, 72.103, 72.79, 72.80, 72.90, 72.92, 72.94, 72.98, 72.104, 72.108, 72.120, 72.126, 72.140 72.100, 72.102, 72.103, 72.104, 72.108, through 72.176, 72.180 through 72.186, 72.120, 72.126, 72.140 through 72.176, 72.192, 72.206, 72.212, 72.218, 72.230, 72.180 through 72.186, 72.192, 72.206, 72.232, 72.234, 72.236, 72.240, 72.242, 72.212, 72.218, 72.230, 72.232, 72.234, 72.244, 72.248. 72.236, 72.240, 72.242, 72.244, 72.248.

Subpart DRecords, Reports, Inspections, and Enforcement

§ 72.72 Material balance, inventory, and [Revise § 72.72 to read as follows:]

records requirements for stored § 72.72 Material control and accounting materials. requirements for source material and special nuclear material.

(a) Each licensee shall keep records (a) Each licensee shall follow the showing the receipt, inventory (including requirements of § 40.61 and § 40.64 of location), disposal, acquisition, and this chapter for source material.

transfer of all special nuclear material with quantities as specified in § 74.13(a) of this chapter and for source material as specified in § 40.64 of this chapter. The records must include as a minimum the name of shipper of the material to the ISFSI or MRS, the estimated quantity of radioactive material per item (including special nuclear material in spent fuel and reactor-related GTCC waste), item 6

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) identification and seal number, storage location, onsite movements of each fuel assembly or storage canister, and ultimate disposal. These records for spent fuel and reactor-related GTCC waste at an ISFSI or for spent fuel, high-level radioactive waste, and reactor related GTCC waste at an MRS must be retained for as long as the material is stored and for a period of 5 years after the material is disposed of or transferred out of the ISFSI or MRS.

(b) Each licensee shall conduct a physical (b) Each licensee shall follow the inventory of all spent fuel, high-level requirements of 10 CFR part 74, subparts radioactive waste, and reactor-related A and B, for special nuclear material.

GTCC waste containing special nuclear material meeting the requirements in paragraph (a) of this section at intervals not to exceed 12 months unless otherwise directed by the Commission. The licensee shall retain a copy of the current inventory as a record until the Commission terminates the license.

§ 72.74 Reports of accidental criticality [Revise § 72.74 to read as follows:]

or loss of special nuclear material. § 72.74 Reports of accidental criticality.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

(a) Each licensee shall notify the NRC (a) Each licensee shall notify the (a) Each licensee shall notify the Operations Center1 within one hour of NRC Headquarters Operations Center NRC Headquarters Operations Center discovery of accidental criticality or any within one hour of discovery of accidental within one hour of discovery of accidental loss of special nuclear material. criticality. criticality. The commercial telephone (b) This notification must be made to the (b) Each licensee shall make the number of the NRC Operations Center is NRC Operations Center via the notifications required by paragraph (a) of (301) 816-5100.

Emergency Notification System if the this section to the NRC Headquarters (b) Each licensee shall make the licensee is party to that system. If the Operations Center via any available notifications required by paragraph (a) of Emergency Notification System is telephone system to ensure that a report is this section to the NRC Headquarters inoperative or unavailable, the licensee received within one hour. Operations Center via any available shall make the required notification via (c) Reports required under § 73.71 telephone system to ensure that a report is commercial telephonic service or any of this chapter need not be duplicated received within one hour.

other dedicated telephonic system or any under the requirements of this section. (c) Reports required under § 73.71 other method that will ensure that a report of this chapter need not be duplicated is received by the NRC Operations Center under the requirements of this section.

within one hour. The exemption of § 73.21(g)(3) of this chapter applies to all telephonic reports required by this section.

(c) Reports required under § 73.71 of this chapter need not be duplicated under the requirements of this section.

1. Commercial telephone number of the NRC Operations Center is (301) 816-5100.

§ 72.76 Material status reports. [Remove and reserve §§72.76 and 72.78.]

§ 72.76 [Removed and Reserved]

§ 72.78 Nuclear material transaction § 72.78 [Removed and Reserved]

reports.

PART 74--MATERIAL CONTROL AND ACCOUNTING OF SPECIAL NUCLEAR MATERIAL Subpart A--General Provisions 8

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

§ 74.2 Scope. [In § 74.2, revise the last sentence in In § 74.2, revise paragraph (a) to read as paragraph (a) to read as follows:] follows:

(a) The general reporting and (a) * * * (a) The general reporting and recordkeeping requirements of subpart B recordkeeping requirements of subpart B of this part apply to each person licensed of this part apply to each person licensed under this chapter who possesses special under parts 50, 52, 60, 63, 70, and 72 of nuclear material in a quantity of one gram this chapter who possess special nuclear or more of contained uranium-235, material in a quantity of one gram or more uranium-233, or plutonium; or who of contained uranium-235, uranium-233, or transfers or receives a quantity of special plutonium; or who transfers or receives a nuclear material of one gram or more of quantity of one gram or more of contained contained uranium-235, uranium-233, or uranium-235, uranium-233, or plutonium.

plutonium. The general reporting and The general reporting and recordkeeping * * * *

recordkeeping requirements of subpart B requirements of subpart B of this part also of this part do not apply to licensees apply to licensees who possess spent whose MC&A reporting and recordkeeping nuclear fuel at independent spent fuel requirements are covered by §§ 72.72, storage installations.

72.76, and 72.78 of this chapter. * * * * *

[Add § 74.3 to read as follows:]

§ 74.3 General performance objectives.

In addition to any other In addition to any other requirements in this part, each licensee requirements in this part, each licensee who is authorized to possess or use SNM who is authorized to possess or use SNM in a quantity greater than 350 grams of in a quantity greater than 350 grams of contained uranium-235, uranium-233, or contained uranium-235, uranium-233, or plutonium, or any combination thereof, at a plutonium, or any combination thereof, at a fixed site, shall implement and maintain a fixed site, shall implement and maintain a material control and accounting program material control and accounting program that enables the licensee to achieve the that enables the licensee to achieve the following general performance objectives following general performance objectives in a timely manner: in a timely manner:

(a) Maintain accurate, current, and (a) Maintain accurate, current, and reliable information on, and confirm the reliable information on, and confirm the quantities and locations of SNM in its quantities and locations of SNM in its 9

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) possession; possession; (b) Detect, respond to, and resolve (b) Detect, respond to, and resolve any anomaly indicating a possible loss, any an anomaly indicating a possible loss, theft, diversion, or misuse of SNM; theft, diversion, or misuse of SNM; (c) Permit rapid determination of whether an actual loss, theft, diversion, or c) Permit rapid determination of misuse of SNM has occurred; whether an actual loss, theft, diversion, or (d) Provide information to aid in the misuse of SNM has occurred; investigation and recovery of missing SNM (d) Provide information to aid in the in the event of an actual loss, theft, investigation and recovery of missing SNM diversion, or misuse; and in the event of an actual loss, theft, (e) Control access to MC&A diversion, or misuse; and information that might assist adversaries (e) Control access to MC&A to carry out acts of theft, diversion, information that might assist adversaries misuse, or radiological sabotage involving to carry out acts of to preclude loss, theft, SNM. diversion, or misuse oftheft, diversion, misuse, or radiological sabotage involving SNM.

§ 74.4 Definitions. [In § 74.4: [In § 74.4:

a. Remove the definition for Effective a. Remove the definition for Effective kilograms of special nuclear material; kilograms of special nuclear material;

b. Add the definitions Accounting, b. Add the definitions Accounting, Custodian, Item control system, Item Custodian, Item control system, Item control area, Material balance area, and control area, Material balance area, Material control and accounting in Material control and accounting, Material alphabetical order; and custodian, and Storage installation in alphabetical order; and

c. Revise the definitions for Formula c. Revise the definitions for Formula quantity, Special nuclear material of low quantity, Special nuclear material of low strategic significance, and Special nuclear strategic significance, and Special nuclear material of moderate strategic material of moderate strategic significance. significance.

The additions and revisions read as The additions and revisions read as follows:] follows:]

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

Accounting means a system that documents the quantities of special nuclear material (SNM) held on current inventory by the licensee, and includes tracking of receipts, shipments, and measured discards, and transfers of SNM.

Custodian means an individual Custodian means an individual authorized and qualified by the licensee authorized and qualified by the licensee who is responsible for controlling the who is responsible for controlling the movement of all SNM into, out of, and movement of all SNM into, out of, and within a material balance area. within a material balance area.

Formula quantity means strategic special Formula quantity means strategic Formula quantity means strategic nuclear material in any combination in a special nuclear material (SSNM) in any special nuclear material (SSNM) in any quantity of 5,000 grams or more computed combination in a quantity of 5,000 grams combination in a quantity of 5,000 grams by the formula, grams=(grams contained or more computed by the formula, grams = or more computed by the formula, grams =

U235)+2.5 (grams U233+grams plutonium). (grams contained U-235) + 2.5 (grams (grams contained U-235) + 2.5 (grams U-233 + grams plutonium). This class of U-233 + grams plutonium). This class of material is also referred to as a Category I material is also referred to as a Category I quantity of material as shown in appendix quantity of material as shown in appendix A to this part. A to this part.

Item control area (ICA) means a designated administrative area within the controlled access area, in which SNM is maintained in such a way that, at any time, a count of the items and the related material quantities can be obtained using the accounting system. Control of items moving into, out of, and within an ICA is by the identity of an item and its assigned material quantity.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

Item control system means a system tracking the creation, identity, element and isotopic content, location, and disposition of all items, which enables the licensee to maintain current knowledge of each item.

Material balance area (MBA) Material balance area (MBA) means a designated contiguous area in means a designated contiguous area in which the control of SNM is such that the which the control of SNM is such that the quantity of material being moved into, out quantity of material being moved into, out of, and within the MBA is an assigned of, and within the MBA is an assigned value based on measurements of both the value based on measurements of both the element content and the isotopic content. element content and the isotopic content.

Material control and accounting Material control and accounting (MC&A) means a program to control and (MC&A) means a program to control and account for certain types of nuclear account for certain types of nuclear material used at a licensed facility, material used at a licensed facility, including SNM and source material, and including SNM and source material., and which controls and accounts for which controls and accounts for unauthorized use of equipment capable of unauthorized use of equipment capable of producing enriched uranium. The purpose producing enriched uranium. The of an MC&A program is to deter and purpose of an MC&A program is serves to detect any loss, theft, diversion, misuse, or deter and detect any loss, theft, diversion, unauthorized production of nuclear misuse, or unauthorized removal, material. production, or enrichment of nuclear

* * *

material.

Material custodian means an individual authorized and qualified by the licensee who is responsible for controlling the movement of all SNM into, out of, and 12

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) within a material balance area.

Special nuclear material of low strategic Special nuclear material of low Special nuclear material of low significance means: strategic significance means: strategic significance means:

(1) Less than an amount of special nuclear (1)(i) Less than an amount of SNM (1)(i) Less than an amount of SNM material of moderate strategic of moderate strategic significance, but of moderate strategic significance, but significance, but more than 15 grams of more than 15 grams of uranium-235 more than 15 grams of uranium-235 uranium-235 (contained in uranium (contained in uranium enriched to 20 (contained in uranium enriched to 20 enriched to 20 percent or more in the percent or more in the U-235 isotope) or percent or more in the Uuranium-235 U235 isotope) or 15 grams of uranium-233 15 grams of uranium-233 or 15 grams of isotope) or 15 grams of uranium-233 or 15 or 15 grams of plutonium or the plutonium or the combination of 15 grams grams of plutonium or the combination of combination of 15 grams when computed when computed by the equation, grams = 15 grams when computed by the equation, by the equation, grams=grams contained grams contained U-235 + grams plutonium grams = grams contained U-235 + grams U235+grams plutonium+grams U233; or + grams U-233; or plutonium + grams U-233; or (2) Less than 10,000 grams but more than (ii) Less than 10,000 grams but (ii) Less than 10,000 grams but 1,000 grams of uranium-235 (contained in more than 1,000 grams of uranium-235 more than 1,000 grams of uranium-235 uranium enriched to 10 percent or more, (contained in uranium enriched to 10 (contained in uranium enriched to 10 but less than 20 percent in the U235 percent or more, but less than 20 percent percent or more, but less than 20 percent isotope); or in the U-235 isotope); or in the Uuranium-235 isotope); or (3) 10,000 grams or more of uranium-235 (iii) 10,000 grams or more of (iii) 10,000 grams or more of contained in uranium enriched above uranium-235 contained in uranium uranium-235 contained in uranium natural, but less than 10 percent in the enriched above natural, but less than 10 enriched above natural, but less than 10 U235 isotope. percent in the U-235 isotope. percent in the Uuranium-235 isotope.

(2) This class of material is also (2) This class of material is also referred to as a Category III quantity of referred to as a Category III quantity of material as shown in appendix A to this material as shown in appendix A to this part. part.

Special nuclear material of moderate Special nuclear material of Special nuclear material of strategic significance means: moderate strategic significance means: moderate strategic significance means:

(1) Less than a formula quantity of (1)(i) Less than a formula quantity (1)(i) Less than a formula quantity strategic special nuclear material but more of SSNM but more than 1,000 grams of of SSNM but more than 1,000 grams of than 1,000 grams of uranium-235 uranium-235 (contained in uranium uranium-235 (contained in uranium (contained in uranium enriched to 20 enriched to 20 percent or more in the U- enriched to 20 percent or more in the percent or more in the U235 isotope) or 235 isotope) or more than 500 grams of Uuranium-235 isotope) or more than more than 500 grams of uranium-233 or uranium-233 or plutonium or in a 500 grams of uranium-233 or plutonium or 13

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) plutonium or in a combined quantity of combined quantity of more than 1,000 in a combined quantity of more than 1,000 more than 1,000 grams when computed grams when computed by the equation, grams when computed by the equation, by the equation, grams=(grams contained grams=(grams contained U-235)+2 (grams grams = (grams contained U-235) + 2 U235)+2 (grams U233+grams plutonium); U-233+grams plutonium); or (grams U-233 + grams plutonium); or or (ii) 10,000 grams or more of (ii) 10,000 grams or more of (2) 10,000 grams or more or uranium-235 uranium-235 (contained in uranium uranium-235 (contained in uranium (contained in uranium enriched to 10 enriched to 10 percent or more but less enriched to 10 percent or more but less percent or more but less than 20 percent than 20 percent in the U-235 isotope). than 20 percent in the Uuranium-235 in the U235 isotope). (2) This class of material is also isotope).

referred to as a Category II quantity of (2) This class of material is also material as shown in appendix A to this referred to as a Category II quantity of part. material as shown in appendix A to this

* * *

part.

Storage installation means an independent spent fuel storage installation or monitored retrievable storage installation for spent fuel and radioactive waste, as defined under part 72 of this chapter.

Subpart B--General Reporting and Recordkeeping Requirements

§ 74.11 Reports of loss or theft or [In § 74.11, revise paragraph (b) to read attempted theft or unauthorized as follows:]

production of special nuclear material.

(b) This notification must be made to the (b) Each licensee shall make the NRC Operations Center via the notifications required by paragraph (a) of Emergency Notification System if the this section to the NRC Headquarters licensee is party to that system. If the Operations Center via any available Emergency Notification System is 14

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) inoperative or unavailable, the licensee telephone system to ensure that a report is shall make the required notification via received within 1 hour1.157407e-5 days 2.777778e-4 hours 1.653439e-6 weeks 3.805e-7 months .

commercial telephonic service or other * * * *

dedicated telephonic system or any other method that will ensure that a report is received by the NRC Operations Center within one hour. The exemption of § 73.22(f)(3) applies to all telephonic reports required by this section.

§ 74.13 Material status reports. [Revise § 74.13 to read as follows:]

§ 74.13 Material status reports.

(a) Each licensee, including nuclear (a) All licensees who possess or who had (a) All licensees who possess, or reactor licensees as defined in §§ 50.21 possessed in the previous reporting period who had possessed, in the previous and 50.22 of this chapter, possessing, or one gram or more of irradiated or non- reporting period one gram or more of who had possessed in the previous irradiated special nuclear material are irradiated or non-irradiated special nuclear reporting period, at any one time and required to submit both a Material Balance material are required to submit both a location, special nuclear material in a Report and a Physical Inventory Listing Material Balance Report and a Physical quantity totaling one gram or more of Report of these materials to the Nuclear Inventory Listing Report of these materials contained uranium-235, uranium-233, or Materials Management and Safeguards to the Nuclear Materials Management and plutonium shall complete and submit, in System (NMMSS) in accordance with the Safeguards System (NMMSS) in computer-readable format Material instructions in paragraph (b) of this section accordance with the instructions in Balance Reports concerning special and according to the following schedule: paragraph (b) of this section and nuclear material that the licensee has (1) Commercial power reactor licensees, according to the following schedule:

received, produced, possessed, authorized under part 50 or part 52 of this (1) Commercial powerNuclear transferred, consumed, disposed, or lost. chapter shall submit both reports within 60 reactor licensees, authorized under part This prescribed computer-readable report calendar days of the start of the inventory 50 or part 52 of this chapter, shall submit replaces the DOE/NRC form 742 which covered by the reports; both reports within 60 calendar days of the has been previously submitted in paper (2) Research and test reactors, authorized start of the inventory covered by the form. The Physical Inventory Listing under part 50 of this chapter shall submit reports; Report must be submitted with each both reports within 60 calendar days of the (2) Research and test reactors, Material Balance Report. This prescribed start of the inventory covered by the authorized under part 50 of this chapter computer-readable report replaces the reports; shall submit both reports within 60 DOE/NRC Form 742C which has been (3) Independent spent fuel storage calendar days of the start of the inventory previously submitted in paper form. installation (ISFSI) licensees, authorized covered by the reports; 15

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

Reports must be submitted for each under part 50 or part 72 of this chapter (32) Independent spent fuel Reporting Identification Symbol (RIS) shall submit both reports within 60 sStorage installation (ISFSI) licensees, account including all holding accounts. calendar days of the start of the inventory authorized under part 50 or part 72 of this Each licensee shall prepare and submit covered by the reports. chapter, shall submit both reports within the reports described in this paragraph as (4) Licensees subject to § 74.31 shall 60 calendar days of the start of the specified in the instructions in submit both reports within 60 calendar inventory covered by the reports;.

NUREG/BR-0007 and NMMSS Report D- days of the start of the inventory covered (43) Licensees subject to § 74.31 24 Personal Computer Data Input for by the reports; shall submit both reports within 60 NRC Licensees. Copies of these (5) Licensees operating uranium calendar days of the start of the inventory instructions may be obtained from the U.S. enrichment facilities shall submit both covered by the reports; Nuclear Regulatory Commission, Division reports within 60 calendar days of the start (54) Licensees operating uranium of Fuel Cycle Safety, and Safeguards, and of the inventory providing a total plant enrichment facilities shall submit both Environmental Review, Washington, DC material balance as described in § reports within 60 calendar days of the start 20555-0001, or by e-mail to 74.33(c)(4)(i). of the inventory providing a total plant RidsNmssFcss@nrc.gov. Each licensee (6) Licensees subject to subpart D of this material balance as described in § subject to the requirements of § 74.51 part shall submit both reports within 60 74.33(c)(4)(i);.

shall compile a report as of March 31 and calendar days of the start of the inventory (65) Licensees subject to subpart September 30 of each year and file it covered by the reports; D of this part shall submit both reports within 30 days after the end of the period (7) Licensees subject to subpart E of this within 60 calendar days of the start of the covered by the report. Licensees subject part shall submit both reports within 30 inventory covered by the reports; to the requirements of §§ 74.19(c), calendar days of the start of the inventory (76) Licensees subject to subpart 74.31(c)(5), 74.33(c)(4), or 74.43(c)(6) covered by the reports; E of this part shall submit both reports shall submit a report within 60 calendar (8) All other licensees who possess, or within 30 calendar days of the start of the days of the beginning of the physical had possessed in the previous reporting inventory covered by the reports; and inventory. All other licensees shall submit period, one gram or more of irradiated or (87) All other licensees who a report no later than March 31 of each non-irradiated special nuclear material possess, or had possessed in the previous year. The Commission may permit a shall submit both reports between January reporting period, one gram or more of licensee to submit the reports at other 1 and March 31 of each year. irradiated or non-irradiated special nuclear times for good cause. Each licensee material shall submit both reports between required to report material balance, and January 1 and March 31 of each year.

inventory information, as detailed in this part, shall resolve any discrepancies identified during the report review and reconciliation process within 30 calendar days of notification of a discrepancy identified by NRC.

16

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(b) Any licensee who is required to submit (b) Each licensee shall prepare and submit (b) Each licensee shall prepare routine Material Status Reports pursuant the reports described in paragraph (a) of and submit the reports described in to § 75.35 of this chapter (pertaining to this section as follows: paragraph (a) of this section as follows:

implementation of the US/IAEA (1) Reports must be submitted for each (1) Reports must be submitted for Safeguards Agreement) shall prepare and Reporting Identification Symbol (RIS) each Reporting Identification Symbol (RIS) submit these reports only as provided in account, including all holding accounts, account, including all holding accounts, that section (instead of as provided in concerning special nuclear materialSNM concerning special nuclear materialSNM paragraph (a) of this section). that the licensee has received, produced, that the licensee has received, produced, possessed, transferred, consumed, possessed, transferred, consumed, disposed, or lost. disposed, or lost.

(2) Each licensee shall prepare and submit (2) Each licensee shall prepare the reports described in this section as and submit the reports described in this specified in the instructions in both section as specified in the instructions in NUREG/BR-0007 and NMMSS Report D- both NUREG/BR-0007, Instructions for 24 Personal Computer Data Input for the Preparation and Distribution of NRC Licensees. Material Status Reports, Final Draft (DOE (i) This prescribed computer-readable [U.S. Department of Energy]/NRC Forms report replaces the DOE/NRC Form 742, 742 and 742C), and NMMSS Report D-Material Balance Report, and DOE/NRC 24 Personal Computer Data Input for Form 742C, Physical Inventory Listing NRC Licensees.

Report, which have been previously (i) This prescribed computer-submitted in paper form. readable report replaces the DOE/NRC (ii) Copies of these instructions may be Form 742, Material Balance Report, and obtained from the U.S. Nuclear Regulatory DOE/NRC Form 742C, Physical Inventory Commission, Division of Fuel Cycle Safety Listing Report, which have been and Safeguards, Washington, DC 20555- previously submitted in paper form.

0001 or by e-mail to (ii) Copies of these instructions RidsNmssFcss.Resource@nrc.gov. may be obtained from the U.S. Nuclear Regulatory Commission, Division of Fuel Cycle Safety, and Safeguards, and Environmental Review, Washington, DC 205550001 or by email to:

RidsNmssFcss.Resource@nrc.gov RidsNmssFcse.Resource@nrc.gov.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

(c) The Commission may permit a licensee (c) The Commission may permit a to submit the reports at other times for licensee to submit the reports at other good cause. Such requests must be times for good cause. Such requests must submitted in writing to Chief, Material be submitted in writing to Chief, Material Control and Accounting Branch, Division Control and Accounting Branch, Division of Fuel Cycle Safety and Safeguards, of Fuel Cycle Safety, and Safeguards, and Office of Nuclear Material Safety and Environmental Review, Office of Nuclear Safeguards, U.S. Nuclear Regulatory Material Safety and Safeguards, U.S.

Commission, Washington, DC 20555. The Nuclear Regulatory Commission, licensee must continue to report as Washington, DC 20555. The licensee required until such request is granted. must continue to report as required until (d) Any licensee who is required to submit such request is granted.

routine Material Status Reports under § (d) Any licensee who is required to 75.35 of this chapter (pertaining to submit routine Material Status Reports implementation of the US/IAEA under § 75.35 of this chapter (pertaining to Safeguards Agreement) shall prepare and implementation of the US/IAEA submit these reports only as provided in Safeguards Agreement) shall prepare and that section (instead of as provided in submit these reports only as provided in paragraphs (a) through (b) of this section). that section (instead of as provided in (e) Each licensee subject to the paragraphs (a) through (b) of this section).

requirements of this section shall resolve (e) Each licensee subject to the any discrepancies identified during the requirements of this section shall resolve report review and reconciliation process any discrepancies identified during the within 30 calendar days of notification of a report review and reconciliation process discrepancy identified by NRC. within 30 calendar days of notification of a discrepancy identified by NRC.

§ 74.15 Nuclear material transaction [In § 74.15, revise paragraph (b)(2) to read reports. as follows:]

(b) Each licensee who receives 1 gram or (b) * *

more of contained uranium-235, uranium- (2) Perform independent tests to assure 233, or plutonium from a foreign source the accurate identification and shall: measurement of the material received, (1) Complete in computer-readable format including its weight and enrichment; both the supplier's and receiver's portion except that a licensee authorized under 18

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) of the Nuclear Material Transaction parts 50 or 52 of this chapter receiving Report; unirradiated fuel rods or unirradiated fuel (2) Perform independent tests to assure assemblies or a licensee authorized under the accurate identification and part 70 of this chapter receiving special measurement of the material received, nuclear material contained in a sealed including its weight and enrichment; and source that will not be opened need not (3) Indicate the results of these tests on perform such tests; and the receiver's portion of the form. * * * * *

§ 74.19 Recordkeeping. [In § 74.19, revise paragraph (b),

redesignate paragraph (d) as paragraph (e), and add a new paragraph (d) to read as follows:]

§74.19 Recordkeeping, procedures, item controls, and physical inventories.

(b) Each licensee that is authorized to (b) Each licensee authorized to (b) Each licensee authorized to possess special nuclear material in a possess special nuclear material, at any possess special nuclear material, at any quantity exceeding one effective kilogram one time and site location, in a quantity one time and site location, in a quantity at any one time shall establish, maintain, greater than 350 grams of contained greater than 350 grams of contained and follow written material control and uranium-235, uranium-233, or plutonium, uranium-235, uranium-233, or plutonium, accounting procedures that are sufficient or any combination thereof, shall establish, or any combination thereof, shall establish, to enable the licensee to account for the maintain, and follow written material maintain, and follow written material special nuclear material in its possession control and accounting procedures that control and accounting procedures that under license. The licensee shall retain are sufficient to enable the licensee to are sufficient to enable the licensee to these procedures until the Commission account for the SNM in its possession account for the SNM in its possession terminates the license that authorizes under the license. The licensee shall under the license. The licensee shall possession of the material and retain any retain these procedures until the retain these procedures until the superseded portion of the procedures for 3 Commission terminates the license that Commission terminates the license that years after the portion is superseded. authorizes possession of the special authorizes possession of the special nuclear material and retain any nuclear material and retain any superseded portion of the procedures for 3 superseded portion of the procedures for 3 years after the portion is superseded. years after the portion is superseded.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

(d) Records that must be maintained (d) Production or utilization (d) Production or utilization pursuant to this part may be the original or facilities licensed under part 50 or 52 of Nuclear reactor facilities licensed under a reproduced copy or a microform if the this chapter and independent spent fuel part 50 or 52 of this chapter and reproduced copy or microform is duly storage installations licensed under part independent spent fuel storage authenticated by authorized personnel and 72 of this chapter shall establish, installations licensed under part 72 of this the microform is capable of producing a document, implement, and maintain an chapter shall establish, document, clear and legible copy after storage for the item control system as defined in § 74.4. implement, and maintain an item control period specified by Commission system as defined in § 74.4.

regulations. The record may also be * * * *

stored in electronic media with the capability for producing legible, accurate, and complete records during the required retention period. Records such as letters, drawings, or specifications must include all pertinent information such as stamps, initials, and signatures. The licensee shall maintain adequate safeguards against tampering with and loss of records.

(e) Records that must be maintained pursuant to this part may be the original or a reproduced copy or a microform if the reproduced copy or microform is duly authenticated by authorized personnel and the microform is capable of producing a clear and legible copy after storage for the period specified by Commission regulations. The record may also be stored in electronic media with the capability for producing legible, accurate, and complete records during the required retention period. Records such as letters, drawings, or specifications must include all pertinent information such as stamps, initials, and signatures. The licensee shall maintain adequate 20

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) safeguards against tampering with and loss of records.

Subpart C--Special Nuclear Material of Low Strategic Significance

§ 74.31 Nuclear material control and [In § 74.31, revise paragraphs (a), (b), and accounting for special nuclear material (c) to read as follows:]

of low strategic significance.

(a) General performance objectives. Each (a) General performance objectives. (1) (a) General performance licensee who is authorized to possess and Each licensee who is authorized to objectives. (1) Each licensee who is use more than one effective kilogram of possess and use a quantity greater than authorized to possess and use SNM of low special nuclear material of low strategic 350 grams of contained uranium-235 or strategic significance (as defined in § 74.4 significance, excluding sealed sources, at SNM of low strategic significance (as and shown in appendix A to this part), or a any site or contiguous sites subject to defined in § 74.4 and shown in appendix A quantity greater than 350 grams of control by the licensee, other than a to this part) at any site or contiguous sites contained uranium-235, uranium-233, or production or utilization facility licensed subject to control by the licensee is subject plutonium, or any combination thereof, or pursuant to part 50 or 70 of this chapter, or to the performance objective requirements SNM of low strategic significance (as operations involved in waste disposal, stated in § 74.3. defined in § 74.4 and shown in appendix A shall implement and maintain a to this part) at any site or contiguous sites Commission approved material control subject to control by the licensee is subject and accounting system that will achieve to the performance objective requirements the following objectives: stated in § 74.3.

(1) Confirm the presence of special nuclear material; (2) Resolve indications of missing (2) Production or utilization (2) Production or utilization Nuclear material; and facilities licensed under part 50 or 52 of reactor facilities licensed under part 50 or (3) Aid in the investigation and recovery of this chapter, independent spent fuel 52 of this chapter, independent spent fuel missing material. storage installations licensed under part storage installations licensed under part 72 of this chapter, and operations 72 of this chapter, and operations involving waste disposal are not subject to involving waste disposal are not subject to the requirements of subpart C of this part. the requirements of subpart C of this part.

(b) Implementation: Each applicant for a (b) Implementation. Each applicant for a license, and each licensee that, upon license, and each licensee that, upon 21

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) application for modification of its license, application for modification of its license, would become newly subject to the would become newly subject to paragraph performance objectives of paragraph (a) of (a) of this section shall submit for approval this section, shall submit a fundamental an MC&A plan describing how the nuclear material control (FNMC) plan performance objectives of § 74.3 and the describing how the requirements of requirements of paragraph (c) of this paragraph (c) of this section will be met. section will be met. The MC&A plan shall The FNMC plan shall be implemented be implemented when a license is issued when a license is issued or modified to or modified to authorize the activities being authorize the activities being addressed in addressed in paragraph (a) of this section, paragraph (a) of this section, or by the or by the date specified in a license date specified in a license condition. condition.

(c) System capabilities. To meet the (c) Program capabilities. To (c) Program capabilities. To general performance objectives of achieve the § 74.3 performance achieve the § 74.3 performance paragraph (a) of this section, the material objectives, the MC&A plan must include objectives, the MC&A plan program must control and accounting system must the capabilities described in paragraphs include the capabilities described in include the capabilities described in (c)(1) through (10) of this section, and paragraphs (c)(1) through (10) of this paragraph (c) (1) through (8) of this require the licensee to: section, and require the licensee to:

section. The licensee shall:

(1) Establish, document, and maintain a (1) Establish, document, and management structure which assures maintain a management structure that clear overall responsibility for material assures clear overall responsibility for control and accounting functions, material control and accounting functions, independence from production independence from production responsibilities, separation of key responsibilities, separation of key responsibilities, and adequate review and responsibilities, and adequate review and use of critical material control and use of critical material control and accounting procedures; accounting procedures; (2) Establish and maintain a measurement (2) Establish and maintain a (2) Establish and maintain a system which assures that all quantities in measurement system, which assures that measurement systemprogram, which the material accounting records are based all quantities in the material accounting assures that all quantities in the material on measured values; records are based on measured values; accounting records are based on measured values; 22

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

(3) Follow a measurement control program (3) Follow a measurement control which assures that measurement bias is program, which assures that measurement estimated and significant biases are bias is estimated and significant biases eliminated from inventory difference are eliminated from inventory difference values of record; values of record; (4) In each inventory period, control total (4) In each inventory period, (4) In each inventory period, material control and accounting control total material control and control total material control and measurement uncertainty so that twice its accounting measurement uncertainty so accounting measurement uncertainty so standard error is less than the greater of that twice its standard error of the that twice its standard error of the 9,000 grams of U-235 or 0.25 percent of inventory difference (SEID) is less than the inventory difference (SEID) is less than the the active inventory, and assure that any greater of 9,000 grams of U-235 or 0.25 greater of 9,000 grams of Uuranium-235 measurement performed under contract is percent of the active inventory, and assure or 0.25 percent of the active inventory, and controlled so that the licensee can satisfy that any measurement performed under assure that any measurement performed this requirement; contract is controlled so that the licensee under contract is controlled so that the can satisfy this requirement; licensee can satisfy this requirement; (5) Unless otherwise required to satisfy (5) Unless otherwise required to part 75 of this chapter, perform a physical satisfy part 75 of this chapter, perform a inventory at least every 12 months and, physical inventory at least every 12 within 60 days after the start of the months and, within 60 calendar days after inventory, reconcile and adjust the book the start of the inventory, reconcile and inventory to the results of the physical adjust the book inventory to the results of inventory, and resolve, or report an the physical inventory, and resolve, or inability to resolve, any inventory report an inability to resolve, any inventory difference which is rejected by a statistical difference that is rejected by a statistical test which has a 90 percent power of test that has a 90-percent power of detecting a discrepancy of a quantity of detecting a discrepancy of a quantity of uranium-235 established by NRC on a uranium-235 established by the NRC on a site-specific basis; site-specific basis; (6) Maintain current knowledge of items (6) Establish, document, (6) Establish, document, when the sum of the time of existence of implement, and maintain an item control implement, and maintain an item control an item, the time to make a record of the system as defined in § 74.4. Store and system as defined in § 74.4. Store and item, and the time necessary to locate the handle or subsequently measure items in handle or subsequently measure items (as item exceeds 14 days. Store and handle, a manner such that unauthorized removals defined in § 74.4) in a manner such that or subsequently measure, items in a of individual items or any quantity of SNM unauthorized removals of individual items 23

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) manner so that unauthorized removals of from items will be detected. Exempted or 500 grams or more of uranium-235 from substantial quantities of material from from this requirement are items in solution one or more any quantity of SNM from items will be detected. Exempted are with a concentration of less than 5 grams items will be detected. Exempted from items individually containing less than 500 of uranium-235 per liter and items of waste this requirement are grams of U235 up to a total of 50 kilograms destined for burial or incineration; (i) Solutions with a concentration of of U235, solutions with a concentration of less than 5 grams per liter of plutonium or less than 5 grams of U235 per liter, and uranium-233 or uranium-235 or a items of waste destined for burial or combined concentration thereof of less incineration; than 5 grams per liter; (ii) Laboratory samples and reference standards maintained in the laboratory material management system and containing uranium enriched to less than 10 percent in uranium-235; (iii) Items existing less than 3 calendar days and containing less than 100 grams of uranium-235, or; (iv) Items of waste destined for burial or incineration.

(7) Resolve, on a shipment basis and (7) Conduct and document when required to satisfy part 75 of this shipper-receiver difference comparisons chapter, on a batch basis, shipper/receiver for all SNM receipts on a total shipment differences that exceed both twice the basis, and on an individual batch basis combined measurement standard error for when required by part 75 of this chapter, that shipment and 500 grams of U235; and and ensure that any shipper-receiver difference that is statistically significant and exceeds twice the estimated standard deviation of the difference estimator and 500 grams of uranium-235 is investigated and resolved; (8) Independently assess the effectiveness (8) Independently assess the (8) Independently assess the of the material control and accounting effectiveness of the MC&A program at effectiveness of the MC&A program at system at least every 24 months, and least every 24 months, and document least every 24 months, and document 24

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) document management's action on prior management's action on prior assessment management's action on prior assessment assessment recommendations. recommendations. recommendations; (9) Maintain and follow procedures (9) If tamper-safe seals are to be for tamper-safing (as defined in § 74.4) of used, Mmaintain and follow procedures for containers or vaults (as defined in § 74.4) tamper-safing (as defined in § 74.4) of containing SNM, which include control of containers or vaults (as defined in § 74.4) access to, and distribution of, unused containing SNM, which include control of seals and records; access to, and distribution of, unused seals and records; and (10) Designate material balance (10) Designate one or more areas and item control areas and assign material balance areas, and or a custodial responsibility for each of these combination of one or more material areas in a manner that ensures that such balance areas and one or more item responsibility can be effectively executed control areas, or acombination of such for all SNM possessed under license. areas, and assign custodial responsibility

* * *

for each of these areas in a manner that ensures that such responsibility can be effectively executed for all SNM possessed under license.

§ 74.33 Nuclear material control and [Revise § 74.33 to read as follows:]

accounting for uranium enrichment facilities authorized to produce special nuclear material of low strategic significance.

(a) General performance objectives. Each (a) General performance (a) General performance licensee who is authorized by this chapter objectives. Each licensee who is objectives. Each licensee who is to possess equipment capable of enriching authorized to possess equipment capable authorized to possess equipment capable uranium or operate an enrichment facility, of enriching uranium or operate an of enriching uranium or operate an and produce, possess, or use more than enrichment facility, and produce, possess, enrichment facility, and produce, possess, one effective kilogram of special nuclear or use a quantity greater than 350 grams or use SNM of low strategic significance material of low strategic significance at of contained uranium-235 or SNM of low (as defined in § 74.4 and shown in 25

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) any site or contiguous sites, subject to strategic significance (as defined in § 74.4 appendix A to this part) or a quantity control by the licensee, shall establish, and shown in appendix A to this part) at greater than 350 grams of contained implement, and maintain a NRC-approved any site or contiguous sites, subject to uranium-235, uranium-233, or plutonium, material control and accounting system control by the licensee, is subject to the or any combination thereof,or SNM of low that will achieve the following objectives: performance objective requirements stated strategic significance (as defined in § 74.4 in § 74.3 and to the following performance and shown in appendix A to this part) at objectives: any site or contiguous sites, subject to control by the licensee, is subject to the performance objective requirements stated in § 74.3 and to the following performance objectives:

(1) Maintain accurate, current, and reliable (1) Maintain accurate, current, and (1) Maintain accurate, current, and information of and periodically confirm the reliable information on, and confirm the reliable information on, and confirm the quantities and locations of source material quantities and locations of source material quantities and locations of source material and special nuclear material in the (SM) in its possession; (SM) in its possession; licensee's possession; (2) Detect, respond to, and resolve (2) Detect, respond to, and resolve (2) Protect against and detect production any anomaly indicating a possible loss, any an anomaly indicating a possible loss, of uranium enriched to 10 percent or more theft, diversion, or misuse of SM; theft, diversion, or misuse of SM; in the isotope U235; (3) Permit rapid determination of (3) Permit rapid determination of (3) Protect against and detect whether an actual loss, theft, diversion, or whether an actual loss, theft, diversion, or unauthorized production of uranium of low misuse of SM has occurred; misuse of SM has occurred; strategic significance; (4) Provide information to aid in the (4) Provide information to aid in the (4) Resolve indications of missing investigation and recovery of missing SM investigation and recovery of missing SM uranium; in the event of an actual loss, theft, in the event of an actual loss, theft, (5) Resolve indications of production of diversion, or misuse; and diversion, or misuse; and uranium enriched to 10 percent or more in (5) Provide information to aid in the (5) Provide information to aid in the the isotope U235 (for centrifuge enrichment investigation of any unauthorized investigation of any unauthorized facilities this requirement does not apply to production of uranium, including production of uranium, including each cascade during its start-up process, unauthorized production of uranium unauthorized production of uranium not to exceed the first 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months ); enriched to 10 percent or more in the enriched to 10 percent or more in the (6) Resolve indications of unauthorized isotope U-235. (For centrifuge enrichment isotope Uuranium-235. (For centrifuge production of uranium of low strategic facilities this requirement does not apply to enrichment facilities, this requirement does significance; each cascade during its start-up process, not apply to each cascade during its start-(7) Provide information to aid in the not to exceed the first 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months .) up process, not to exceed the first 24 investigation of missing uranium; hours.)

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(8) Provide information to aid in the investigation of the production of uranium enriched to 10 percent or more in the isotope U235; and (9) Provide information to aid in the investigation of unauthorized production of uranium of low strategic significance.

(b) Implementation dates. Each applicant (b) Implementation. Each (b) Implementation. Each for a license who would, upon issuance of applicant for a license who would, upon applicant for a license who would, upon a license pursuant to any part of this issuance of a license under any part of this issuance of a license under any part of this chapter, be subject to the requirements of chapter, be subject to the requirements of chapter, be subject to the requirements of paragraph (a) of this section shall: paragraph (a) of this section shall: paragraph (a) of this section shall:

(1) Submit a fundamental nuclear material (1) Submit for approval an MC&A (1) Submit for approval an MC&A control plan describing how the plan describing how the performance plan describing how the performance performance objectives of § 74.33(a), the objectives of §§ 74.3 and 74.33(a), the objectives of §§ 74.3 and 74.33(a), the system features and capabilities of § program capabilities of § 74.33(c), and the program capabilities of § 74.33(c), and the 74.33(c), and the recordkeeping recordkeeping requirements of § 74.33(d) recordkeeping requirements of § 74.33(d) requirements of § 74.33(d) will be met; will be met; and will be met; and and (2) Implement the NRC-approved (2) Implement the NRC-approved (2) Implement the NRC approved plan MC&A plan submitted under paragraph MC&A plan submitted under paragraph submitted pursuant to paragraph (b)(1) of (b)(1) of this section prior to: (b)(1) of this section prior to:

this section prior to: (i) The cumulative receipt of 5,000 (i) The cumulative receipt of 5,000 (i) The cumulative receipt of 5,000 grams grams of U-235 contained in any grams of Uuranium-235 contained in any of U235 contained in any combination of combination of natural, depleted, or combination of natural, depleted, or natural, depleted, or enriched uranium or enriched uranium; or enriched uranium; or (ii) NRC's issuance of a license to test or (ii) The NRC's issuance of a (ii) The NRC's issuance of a operate the enrichment facility; whichever license to test or operate the enrichment license to test or operate the enrichment occurs first. facility, whichever occurs first. facility, whichever occurs first.

(c) System features and capabilities. To (c) Program capabilities. To (c) Program capabilities. To meet the general performance objectives achieve the general performance achieve the general performance of paragraph (a) of this section, the objectives stated and referenced in objectives stated and referenced in Material Control and Accounting (MC&A) paragraph (a) of this section, the MC&A paragraph (a) of this section, the MC&A system must include the features and plan must include the capabilities plan program must include the capabilities capabilities described in paragraphs (c) (1) described in paragraphs (c)(1) through described in paragraphs (c)(1) through 27

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) through (8) of this section. The licensee (10) of this section. The licensee shall (10) of this section. The licensee shall shall establish, document, and maintain: establish, document, implement and establish, document, implement and maintain: maintain:

(1) A management structure that ensures: (1) A management structure that (i) Clear overall responsibility for MC&A ensures:

functions; (i) Clear overall responsibility for (ii) Independence of MC&A management MC&A functions; from production responsibilities; (ii) Independence of MC&A (iii) Separation of key MC&A management from production responsibilities from each other; and responsibilities; (iv) Use of approved written MC&A (iii) Separation of key MC&A procedures and periodic review of those responsibilities from each other; and procedures; (iv) Use of approved written MC&A procedures and periodic review of those procedures; (2) A measurement program that ensures (2) A measurement program that that all quantities of source material and ensures that all quantities of SM and SNM special nuclear material in the accounting in the accounting records are based on records are based on measured values; measured values; (3) A measurement control program that (3) A measurement control (3) A measurement control ensures that: program that ensures that: program that ensures that:

(i) Measurement bias is estimated and (i) Measurement bias is estimated (i) Measurement bias is estimated minimized through the measurement and minimized through the measurement and minimized through the measurement control program, and any significant control program, and any significant control program, and any significant biases are biases are eliminated from inventory biases are eliminated from inventory eliminated from inventory difference difference values of record; difference values of record; values of record; (ii) All MC&A measurement (ii) All MC&A measurement (ii) All MC&A measurement systems are systems are controlled so that twice the systems are controlled so that twice the controlled so that twice the standard error standard error of the inventory difference standard error of the inventory difference of the inventory difference, based on all (SEID), based on all measurement error (SEID), based on all measurement error measurement error contributions, is less contributions, is less than the greater of contributions, is less than the greater of than the greater of 5,000 grams of U235 or 5,000 grams of U-235 or 0.25 percent of 5,000 grams of Uuranium-235 or 0.25 0.25 percent of the U235 of the active percent of the Uuranium-235 of the active 28

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) inventory for each total plant material the U-235 of the active inventory for each inventory for each total plant material balance; and total plant material balance; and balance; and (iii) Any measurements performed under (iii) Any measurements performed (iii) Any measurements performed contract are controlled so that the licensee under contract are controlled so that the under contract are controlled so that the can satisfy the requirements of paragraphs licensee can satisfy the requirements of licensee can satisfy the requirements of (c)(3) (i) and (ii) of this section; paragraphs (c)(3)(i) and (ii) of this section; paragraphs (c)(3)(i) and (ii) of this section; (4) A physical inventory program that (4) A physical inventory program (4) A physical inventory program provides for: that provides for: that provides for:

(i) Performing, unless otherwise required (i) Performing, unless otherwise (i) Performing, unless otherwise to satisfy part 75 of this chapter, a required to satisfy part 75 of this chapter, a required to satisfy part 75 of this chapter, a dynamic (nonshutdown) physical inventory dynamic (nonshutdown) physical inventory dynamic (nonshutdown) physical inventory of in-process (e.g., in the enrichment of in-process (e.g., in the enrichment of in-process (e.g., in the enrichment equipment) uranium and U235 at least equipment) uranium and U-235 at least equipment) uranium and Uuranium-235 at every 65 days, and performing a static every 65 calendar days, and performing a least every 65 calendar days, and physical inventory of all other uranium and static physical inventory of all other performing a static physical inventory of all total U235 contained in natural, depleted, uranium and total U-235 contained in other uranium and total Uuranium-235 and enriched uranium located outside of natural, depleted, and enriched uranium contained in natural, depleted, and the enrichment processing equipment at located outside of the enrichment enriched uranium located outside of the least every 370 calendar days, with static processing equipment at least every 370 enrichment processing equipment at least physical inventories being conducted in calendar days, with static physical every 370 calendar days, with static conjunction with a dynamic physical inventories being conducted in conjunction physical inventories being conducted in inventory of in-process uranium and U235 with a dynamic physical inventory of in- conjunction with a dynamic physical so as to provide a total plant material process uranium and U-235 so as to inventory of in-process uranium and balance at least every 370 calendar days; provide a total plant material balance at Uuranium-235 so as to provide a total and least every 370 calendar days; and plant material balance at least every 370 (ii) Reconciling and adjusting the book (ii) Reconciling and adjusting the calendar days; and inventory to the results of the static book inventory to the results of the static (ii) Reconciling and adjusting the physical inventory and resolving, or physical inventory and resolving, or book inventory to the results of the static reporting an inability to resolve, any reporting an inability to resolve, any physical inventory and resolving, or inventory difference that is rejected by a inventory difference that is rejected by a reporting an inability to resolve, any statistical test which has a 90 percent statistical test that has a 90-percent power inventory difference that is rejected by a power of detecting a discrepancy of a of detecting a discrepancy of a quantity of statistical test that has a 90-percent power quantity of U235, established by NRC on a U-235, established by the NRC on a site- of detecting a discrepancy of a quantity of site-specific basis, within 60 days after the specific basis, within 60 calendar days Uuranium-235, established by the NRC on start of each static physical inventory; a site-specific basis, within 60 calendar 29

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) after the start of each static physical days after the start of each static physical inventory; inventory; (5) A detection program, independent of (5) A detection program, (5) A detection program, production, that provides high assurance independent of production, which provides independent of production, which that of detecting: high assurance of detecting and resolving: provides high assurance of detecting and (i) Production of uranium enriched to 10 (i) Production of uranium enriched resolving:

percent or more in the U235 isotope, to the to 10 percent or more in the U-235 (i) Production of uranium enriched extent that SNM of moderate strategic isotope, to the extent that SNM of to 10 percent or more in the Uuranium-235 significance could be produced within any moderate strategic significance (as isotope, to the extent that SNM of 370 calendar day period; defined in § 74.4) could be produced moderate strategic significance (as (ii) Production of uranium enriched to 20 within any 370 calendar day period; defined in § 74.4) could be produced percent or more in the U235 isotope; and (ii) Production of uranium enriched within any 370 calendar day period; (iii) Unauthorized production of uranium of to 20 percent or more in the U-235 (ii) Production of uranium enriched low strategic significance; isotope; and to 20 percent or more in the Uuranium-235 (iii) Unauthorized production of isotope; and uranium of low strategic significance (as (iii) Unauthorized production of defined in § 74.4); uranium of low strategic significance (as defined in § 74.4);

(6) An item control program that ensures (6) An item control system (as (6) An item control system (as that: defined in § 74.4). The system must defined in § 74.4). The system must (i) Current knowledge is maintained of ensure that items are stored and handled ensure that items (as defined in § 74.4) items with respect to identity, uranium and or subsequently measured in a manner are stored and handled or subsequently U235 content, and stored location; and such that unauthorized removal of any measured in a manner such that (ii) Items are stored and handled, or quantity of U-235, as individual items or as unauthorized removal of individual items subsequently measured, uranium contained in items, will be or 500 grams or more of uranium-235 from in a manner so that unauthorized removal detected. Exempted from this requirement one or more itemsany quantity of U 235, of 500 grams or more of U235, as individual are items in solution with a concentration as individual items or as uranium items or as uranium contained in items, of less than 5 grams of uranium-235 per contained in items, will be detected.

will be detected. Exempted from the liter and items of waste destined for burial Exempted from this requirement are requirements of paragraph (c)(6) (i) and (ii) or incineration; (i) Solutions with a concentration of of this section are licensed-identified items less than 5 grams per liter of plutonium or each containing less than 500 grams U235 uranium-233 or uranium-235 or a up to a cumulative total of 50 kilograms of combined concentration thereof of less than 5 grams per liter; 30

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U235 and items that exist for less than 14 (ii) Laboratory samples and calendar days; reference standards maintained in the laboratory material management system and containing uranium enriched to less than 10 percent in uranium-235; (iii) Items existing less than 3 calendar days and containing less than 100 grams of uranium-235, or; (iv) Items of waste destined for burial or incineration; (7) A resolution program that ensures that (7) A system for conducting and (7) A system for conducting and any shipper-receiver differences are documenting shipper-receiver difference documenting shipper-receiver difference resolved that are statistically significant comparisons for all source material and comparisons for all source materialSM and and exceed 500 grams U235 on: SNM receipts on a total shipment basis, SNM receipts on a total shipment basis, (i) An individual batch basis; and and on an individual batch basis when and on an individual batch basis when (ii) A total shipment basis for all source required by part 75 of this chapter, to required by part 75 of this chapter, to material and special nuclear material; ensure that any shipper-receiver ensure that any shipper-receiver difference that is statistically significant difference that is statistically significant and exceeds twice the estimated standard and exceeds twice the estimated standard deviation of the difference estimator and deviation of the difference estimator and 500 grams of uranium-235 is investigated 500 grams of uranium-235 is investigated and resolved; and resolved; (8) An assessment program that: (8) An assessment program that:

(i) Independently assesses the (i) Independently assesses the effectiveness of the MC&A effectiveness of the MC&A program at system at least every 24 months; least every 24 months; (ii) Documents the results of the above (ii) Documents the results of the assessment; above assessment; (iii) Documents management's findings on (iii) Documents management's whether the MC&A system is currently findings on whether the MC&A program is effective; and currently effective; and (iv) Documents any actions taken on (iv) Documents any actions taken recommendations from prior assessments. on recommendations from prior assessments; 31

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(9) Procedures for tamper-safing (9) Procedures for tamper-safing (as defined in § 74.4) of containers or (as defined in § 74.4) of containers or vaults (as defined in § 74.4) containing vaults (as defined in § 74.4) containing SNM, which include control of access to, SNM, which include control of access to, and distribution of, unused seals and and distribution of, unused seals and records; records, if tamper-safe seals are to be used; (10) Material balance areas and (10) One or more material balance item control areas, and shall assign areas, and or a combination of material custodial responsibility for each of these balance areas and one or more item areas in a manner that ensures that such control areas, or a combination of such responsibility can be effectively executed areas, and shall assign custodial for all SM and SNM possessed under responsibility for each of these areas in a license. manner that ensures that such responsibility can be effectively executed for all SM and SNM possessed under license.

(d) Recordkeeping. (1) Each licensee shall (d) Recordkeeping.

establish records that will demonstrate that (1) Each licensee shall establish the performance objectives of paragraph records that will demonstrate that the (a) of this section and the system features performance objectives stated and and capabilities of paragraph (c) of this referenced in paragraph (a) of this section section have been met and maintain these and the program capabilities of paragraph records in an auditable form, available for (c) of this section have been met and inspection, for at least 3 years, unless a maintain these records in an auditable longer retention time is required by part 75 form, available for inspection, for at least 3 of this chapter. years, unless a longer retention time is (2) Records that must be maintained required by part 75 of this chapter.

pursuant to this part may be the original or (2) Records that must be a reproduced copy or a microform if such maintained pursuant to this part may be reproduced copy or microform is duly the original or a reproduced copy or a authenticated by authorized personnel and microform if such reproduced copy or 32

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) the microform is capable of producing a microform is duly authenticated by clear and legible copy after storage for the authorized personnel and the microform is period specified by Commission capable of producing a clear and legible regulations. The record may also be copy after storage for the period specified stored in electronic media with the by Commission regulations. The record capability for producing, on demand, may also be stored in electronic media legible, accurate, and complete records with the capability for producing, on during the required retention period. demand, legible, accurate, and complete Records such as letters, drawings, and records during the required retention specifications must include all pertinent period. Records such as letters, drawings, information such as stamps, initials, and and specifications must include all signatures. pertinent information such as stamps, (3) The licensee shall maintain adequate initials, and signatures.

safeguards against tampering with and (3) The licensee shall maintain loss of records. adequate safeguards against tampering with and loss of records.

Subpart D--Special Nuclear Material of Moderate Strategic Significance

§ 74.41 Nuclear material control and [In § 74.41, revise paragraphs (a), (b), and [Revise § 74.41 to read as follows:]

accounting for special nuclear material (c) to read as follows:]

of moderate strategic significance.

(a) General performance objectives. Each (a) General performance (a) General performance licensee who is authorized to possess objectives. (1) Each licensee who is objectives. (1) Each licensee who is special nuclear material (SNM) of authorized to possess and use SNM of authorized to possess and use SNM of moderate strategic significance or SNM in moderate strategic significance (as moderate strategic significance (as a quantity exceeding one effective defined in §74.4 and shown in appendix A defined in §74.4 and shown in appendix A kilogram of strategic special nuclear of this part) or 1 kilogram or more but less of this part), or SSNM in a quantity of more material in irradiated fuel reprocessing than 5 kilograms of SSNM (as defined in than 1 kilogram or more but less than 5 operations other than as sealed sources § 74.4 and shown in appendix A to this kilograms of SSNM (as defined in § 74.4 and to use this material at any site other part) in irradiated fuel reprocessing and shown in appendix A to this part) in than a nuclear reactor licensed pursuant to operations at any site or contiguous sites irradiated fuel reprocessing operations, at part 50 of this chapter; or as reactor subject to control by the licensee, is any site or contiguous sites subject to irradiated fuels involved in research, control by the licensee, is subject to:

33

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) development, and evaluation programs in subject to the performance objective (i) Tthe performance objective facilities other than irradiated fuel requirements stated in § 74.3. requirements stated in § 74.3.; and reprocessing plants; or an operation (ii)The performance objective involved with waste disposal, shall requirement to permit rapid determination establish, implement, and maintain a of whether an actual loss of a significant Commission-approved material control quantity of SNM has occurred, with and accounting (MC&A) system that will significant quantity being either more than achieve the following performance one formula kilogram of SSNM, or 10,000 objectives: grams or more of uranium-235 contained (1) Maintain accurate, current, and reliable in uranium enriched up to 20 percent.

information on, and confirm, the quantities (2) Production or utilizationNuclear and locations of SNM in the licensee's (2) Production or utilization reactor facilities licensed under part 50 or possession; facilities licensed under part 50 or 52 of 52 of this chapter; storage installations (2) Conduct investigations and resolve any this chapter; licensees using reactor licensed under part 72 of this chapter; anomalies indicating a possible loss of irradiated fuels involved in research, licensees using reactor irradiated fuels special nuclear material; development, and evaluation programs in involved in research, development, and (3) Permit rapid determination of whether facilities other than irradiated fuel evaluation programs in facilities other than an actual loss of a significant quantity of reprocessing plants; and operations irradiated fuel reprocessing plants; and SNM has occurred, with significant involving waste disposal, are not subject to operations involving waste disposal, are quantity being either: the requirements of subpart D of this part. not subject to the requirements of subpart (i) More than one formula kilogram of D of this part.

strategic SNM; or (ii) 10,000 grams or more of uranium-235 contained in uranium enriched up to 20.00 percent.

(4) Generate information to aid in the investigation and recovery of missing SNM in the event of an actual loss.

(b) Implementation schedule. Each (b) Implementation. Each (b) Implementation. Each applicant for a license, and each licensee applicant for a license, and each licensee applicant for a license, and each licensee that, upon application for modification of its that, upon application for modification of its that, upon application for modification of its license, would become newly subject to license, would become newly subject to license, would become newly subject to the requirements of paragraph (a) of this paragraph (a) of this section shall submit paragraph (a) of this section shall submit section shall: for approval an MC&A plan describing how for approval an MC&A plan describing how the performance objectives of § 74.3 and the performance objectives of § 74.3 and 34

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(1) Submit a fundamental nuclear material the requirements of paragraph (c) of this paragraph (a) of this section will be control (FNMC) plan describing how the section will be met. The MC&A plan shall achieved, and how the requirements of performance objectives of § 74.41(a) will be implemented when a license is issued paragraph (c) of this section will be met.

be achieved, and how the system or modified to authorize the activities being The MC&A plan shall be implemented capabilities required by § 74.41(c) will be addressed in paragraph (a) of this section, when a license is issued or modified to met; and or by the date specified in a license authorize the activities being addressed in (2) Implement the NRC-approved FNMC condition. paragraph (a) of this section, or by the plan submitted pursuant to paragraph date specified in a license condition.

(b)(1) of this section upon the Commission's issuance or modification of a license or by the date specified in a license condition.

(c) System capabilities. To achieve the (c) Program capabilities. To (c) Program capabilities. To performance objectives specified in § achieve the § 74.3 performance achieve the § 74.3 general performance 74.41(a), the MC&A system must include objectives, the MC&A plan must include objectives specified in § 74.3 and the capabilities described in §§ 74.43 and the capabilities described in §§ 74.43 and paragraph (a) of this section, the MC&A 74.45, and must incorporate checks and 74.45, and must incorporate checks and plan program must include the capabilities balances that are sufficient to detect balances that are sufficient to detect described in §§ 74.43 and 74.45, and must falsification of data and reports that could falsification of data and reports that could incorporate checks and balances that are conceal diversion of SNM by: conceal diversion of SNM by: sufficient to detect falsification of data and (1) A single individual, including an (1) A single individual, including an reports that could conceal diversion of employee in any position; or employee in any position; or SNM by:

(2) Collusion between two individuals, one (2) Collusion between two (1) A single individual, including an or both of whom have authorized access individuals, one or both of whom have employee in any position; or to SNM. authorized access to SNM. (2) Collusion between two individuals, one or both of whom have authorized access to SNM.

§ 74.43 Internal controls, inventory, and [In § 74.43, revise paragraphs (b)(3), [In § 74.43, revise paragraphs (b)(3),

records. (b)(5), (b)(6), (b)(7), and (c)(3); add new through (b)(5), (b)(6), (b)(7)(b)(8), and paragraph (c)(9); and revise paragraph (c)(3) and (d)(5); and add new paragraph (d)(5) to read as follows:] (c)(9); and revise paragraph (d)(5) to read as follows:]

(b) Internal controls. (b) * * * (b) * *

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(3) The licensee shall provide for the (3) The licensee shall provide for (3) The licensee shall provide for adequate review, approval, and use of the adequate review, approval, and use of the adequate review, approval, and use of written MC&A procedures that are written MC&A procedures that are written MC&A procedures that are identified in the approved FNMC plan as identified in the approved MC&A plan as identified in the approved MC&A plan as being critical to the effectiveness of the being critical to the effectiveness of the being critical to the effectiveness of the described system. described system. described systemprogram.

(4) The licensee shall assure that * * * * * (4) The licensee shall assure that personnel who work in key positions personnel who work in key positions where mistakes could degrade the where mistakes could degrade the effectiveness of the MC&A system are effectiveness of the MC&A system trained to maintain a high level of program are trained to maintain a high safeguards awareness and are qualified to level of safeguards awareness and are perform their duties and/or responsibilities. qualified to perform their duties and/or responsibilities.

(5) The licensee shall establish, document, (5) The licensee shall establish, (5) The licensee shall establish, and maintain an item control program that: document, implement, and maintain an document, implement, and maintain an (i) Provides current knowledge of SNM item control system as defined in § 74.4. item control system as defined in § 74.4.

items with respect to identity, element and The system must ensure that items are The system must ensure that items are isotope content, and stored location; and stored and handled or subsequently stored and handled, or subsequently (ii) Assures that SNM items are stored and measured in a manner such that measured, in a manner such that handled, or subsequently measured, in a unauthorized removals of individual items unauthorized removals of individual items manner such that unauthorized removal of or any quantity of material (as defined in or 200 grams or more of plutonium or 200 grams or more of plutonium or § 74.4) from items will be detected. uranium-233, or 300 grams or more of uranium-233 or 300 grams or more of uranium-235, from one or more items any uranium-235, as one or more whole items quantity of material (as defined in § 74.4) and/or as SNM removed from containers, from items will be detected.

will be detected. (6) Exempted from the (6) Exempted from the (6) Exempted from the requirements of requirements of paragraph (b)(5) of this requirements of paragraph (b)(5) of this paragraph (b)(5) of this section are items section are items in solution with a section are:

that exist for less than 14 calendar days concentration of less than 5 grams of (i) Solutions with a concentration and licensee-identified items each U-235 per liter, and items of waste of less than 5 grams per liter of plutonium containing less than 200 grams of destined for burial or incineration. or uranium-233 or uranium-235 or a plutonium or uranium-233 or 300 grams or combined concentration thereof of less more of uranium-235 up to a cumulative than 5 grams per liter; total of one formula kilogram of strategic (ii) Laboratory samples and SNM or 17 kilograms of uranium-235 reference standards maintained in the 36

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) contained in uranium enriched to 10.00 laboratory material management system percent or more but less than 20.00 and containing uranium enriched to less percent in the uranium-235 isotope. than 20 percent in uranium-235; (iii) Items existing less than 3 calendar days and containing less than 75 grams of plutonium or uranium-233 or 100 grams of uranium-235, or; (iv) Items of waste destined for burial or incineration.

(7) Conduct and document shipper- (7) Conduct and document (7) Conduct and document receiver comparisons for all SNM receipts, shipper-receiver difference comparisons shipper-receiver difference comparisons both on an individual batch basis and a for all SNM receipts, for all SNM receipts, total shipment basis, and ensure that any * * * * * * * * *

shipper-receiver difference that is statistically significant and exceeds twice the estimated standard deviation of the difference estimator and 200 grams of plutonium or uranium-233 or 300 grams of uranium-235 is investigated and resolved; and (8) Perform independent assessments of (8) Perform independent the total MC&A system, at intervals not to assessments of the total MC&A exceed 18 months, that assess the systemprogram, at intervals not to exceed performance of the system, review its 18 months, that assess the performance of effectiveness, and document the systemprogram, review its management's action on prior assessment effectiveness, and document recommendations and identified management's action on prior assessment deficiencies. These assessments must recommendations and identified include a review and evaluation of any deficiencies. These assessments must contractor who performs SNM include a review and evaluation of any accountability measurements for the contractor who performs SNM licensee. accountability measurements for the licensee.

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(c) Inventory control and physical (c) * * * (c) * *

inventories.

(3) Maintain and follow procedures for (3) Maintain and follow procedures (3) If tamper-safe seals are to be tamper-safing of containers or vaults for tamper-safing (as defined in § 74.4) of used, mMaintain and follow procedures for containing SNM, if tamper-safe seals are containers or vaults (as defined in § 74.4) tamper-safing (as defined in § 74.4), of to be used for assuring the validity of prior containing SNM which include control of containers or vaults (as defined in § 74.4) measurements, which include control of access to, and distribution of, unused containing SNM which include control of access to, and distribution of, unused seals and records; access to, and distribution of, unused seals and to records showing the date and * * * *

seals and records; time of seal application; * * * * *

(9) Designate material balance (9) Designate one or more material areas and item control areas, and assign balance areas, and or a combination of custodial responsibility for each of these one or more material balance areas and areas in a manner that ensures that such one or more item control areas, and responsibility can be effectively executed assign custodial responsibility for each of for all SNM possessed under license. these areas in a manner that ensures that

* * *

such responsibility can be effectively executed for all SNM possessed under license.

(d) Recordkeeping. The licensee shall: (d) * * *

(5) Establish records that will demonstrate (5) Establish records that will (5) Establish records that will that the performance objectives of § demonstrate that the performance demonstrate that the performance 74.41(a)(1) through (4), the system objectives of § 74.3 and § 74.41(a)(1), the objectives of § 74.3 and § 74.41(a)(1), the capabilities of paragraphs (b) and (c) of system capabilities of paragraphs (b) and system program capabilities of paragraphs this section and § 74.45(b) and (c) have (c) of this section, and § 74.45(b) and (c) (b) and (c) of this section, and § 74.45(b) been met, and maintain these records in have been met, and maintain these and (c) have been met, and maintain an auditable form, available for inspection, records in an auditable form, available for these records in an auditable form, for at least 3 years, unless a longer inspection, for at least 3 years, unless a available for inspection, for at least 3 retention time is specified by § 74.19(b), longer retention time is specified by § years, unless a longer retention time is part 75 of this chapter, or by a specific 74.19(b), part 75 of this chapter, or by a specified by § 74.19(b), part 75 of this license condition. specific license condition. chapter, or by a specific license condition.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

§ 74.45 Measurements and [In § 74.45, revise paragraph (c)(4) to read measurement control. as follows:]

(c) Measurement control. To maintain (c) * * * (c) * *

measurement quality and to estimate measurement uncertainty values, the licensee shall:

(4) Establish and maintain a (4) Establish and maintain a (4) Establish and maintain a measurement measurement control system so that for measurement control system program so control program so that for each inventory each inventory period the standard error of that for each inventory period the standard period the SEID is less than 0.125 percent the inventory difference (SEID) is less than error of the inventory difference (SEID) is of the active inventory, and assure that 0.125 percent of the active inventory, and less than 0.125 percent of the active any MC&A measurements performed assure that any MC&A measurements inventory, and assure that any MC&A under contract are controlled so that the performed under contract are controlled so measurements performed under contract licensee can satisfy this requirement. that the licensee can satisfy this are controlled so that the licensee can requirement. satisfy this requirement.

Subpart E--Formula Quantities of Strategic Special Nuclear Material

§ 74.51 Nuclear material control and [Revise § 74.51 to read as follows:]

accounting for strategic special nuclear material.

(a) General performance objectives. Each (a) General performance (a) General performance licensee who is authorized to possess five objectives. (1) Each licensee who is objectives. (1) Each licensee who is or more formula kilograms of strategic authorized to possess and use five or authorized to possess and use five or special nuclear material (SSNM) and to more formula kilograms of strategic more formula kilograms of strategic use such material at any site, other than a special nuclear material (SSNM), as special nuclear material (SSNM), as nuclear reactor licensed pursuant to part defined in § 74.4 and shown in appendix A defined in § 74.4 and shown in appendix A 50 of this chapter, an irradiated fuel to this part, at any site or contiguous sites to this part, at any site or contiguous sites reprocessing plant, an operation involved subject to control by the licensee is subject subject to control by the licensee is subject with waste disposal, or an independent to the performance objective requirements to the performance objective requirements spent fuel storage facility licensed stated in § 74.3, and to the following stated in § 74.3, and to the following pursuant to part 72 of this chapter shall performance objectives: performance objectives:

39

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) establish, implement, and maintain a (i) Ongoing confirmation of the (i) Ongoing confirmation of the Commission-approved material control presence of SSNM in assigned locations; presence of SSNM in assigned locations; and accounting (MC&A) system that will (ii) Timely detection of the possible (ii) Timely detection of the possible achieve the following objectives: abrupt loss of five or more formula abrupt loss of five or more formula (1) Prompt investigation of anomalies kilograms of SSNM from an individual unit kilograms of SSNM from an individual unit potentially indicative of SSNM losses; process; and process; and (2) Timely detection of the possible abrupt (iii) Rapid determination of whether (iii) Rapid determination of whether loss of five or more formula kilograms of an actual loss of five or more formula an actual loss of five or more formula SSNM from an individual unit process; kilograms of SSNM occurred. kilograms of SSNM occurred.

(3) Rapid determination of whether an (2) Production or utilization (2) Production or utilization Nuclear actual loss of five or more formula facilities licensed under part 50 or 52 of reactor facilities licensed under part 50 or kilograms occurred; this chapter, independent spent fuel 52 of this chapter, independent spent fuel (4) Ongoing confirmation of the presence storage installations licensed under part storage installations licensed under part of SSNM in assigned locations; and 72 of this chapter; and any licensee 72 of this chapter; , and any licensee (5) Timely generation of information to aid operations involving waste disposal, are operations involving waste disposal, are in the recovery of SSNM in the event of an not subject to the requirements of subpart not subject to the requirements of subpart actual loss. E of this part. E of this part.

(b) System capabilities. To achieve the (b) Implementation. Each general performance objectives specified applicant for a license, and each licensee in § 74.51(a), the MC&A system must that, upon application for modification of its provide the capabilities described in §§ license, would become newly subject to 74.53, 74.55, 74.57 and 74.59 and must paragraph (a) of this section shall submit incorporate checks and balances that are for approval an MC&A plan describing how sufficient to detect falsification of data and the performance objectives of § 74.3 and reports that could conceal diversion by: paragraph (a) of this section will be (1) An individual, including an employee in achieved, and how the requirements of any position; or paragraph (c) of this section will be met.

(2) Collusion between an individual with The MC&A plan shall be implemented MC&A responsibilities and another when a license is issued or modified to individual who has responsibility or control authorize the activities being addressed in within both the physical protection and the paragraph (a) of this section, or by the MC&A systems. date specified in a license condition.

(c) Implementation dates. Each applicant (c) Program capabilities. To (c) Program capabilities. To for a license, and each licensee that, upon achieve the general performance achieve the general performance 40

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) application for modification of a license, objectives specified in § 74.3 and objectives specified in § 74.3 and would become newly subject to paragraph paragraph (a) of this section, the MC&A paragraph (a) of this section, the MC&A (a) of this section, shall submit a plan must provide the capabilities plan program must provide the capabilities fundamental nuclear material control described in §§ 74.53, 74.55, 74.57 and described in §§ 74.53, 74.55, 74.57, and (FNMC) plan describing how the MC&A 74.59 and must incorporate checks and 74.59 and must incorporate checks and system shall satisfy the requirement of balances that are sufficient to detect balances that are sufficient to detect paragraph (b) of this section. The FNMC falsification of data and reports that could falsification of data and reports that could plan shall be implemented when a license conceal diversion of SNM or SSNM by: conceal diversion of SNM or SSNM by:

is issued or modified to authorize the (1) A single individual, including an (1) An individual, including an activities being addressed in paragraph (a) employee in any position; or employee in any position; or of this section, or by the date specified in a (2) Collusion between two (1) A single individual, including an license condition. individuals, one or both of whom have employee in any position; or authorized access to SNM or SSNM. (2) Collusion between an individual with MC&A responsibilities and another individual who has responsibility or control within both the physical protection and the MC&A programs.

(2) Collusion between two individuals, one or both of whom have authorized access to SNM or SSNM.

(d) Inventories. Notwithstanding § (d) Inventories. Notwithstanding 74.59(f)(1), licensees shall perform at least § 74.59(f)(1), licensees shall perform at three bimonthly physical inventories after least 3 physical inventories at intervals not implementation of the NRC approved to exceed 65 calendar days after FNMC Plan and shall continue to perform implementation of the NRC-approved bimonthly inventories until performance MC&A plan and shall continue to perform acceptable to the NRC has been such inventories at intervals not to exceed demonstrated and the Commission has 65 calendar days until performance issued formal approval to perform acceptable to the NRC has been semiannual inventories. Licensees who demonstrated and the Commission has have prior experience with process issued formal approval to perform physical monitoring and/or can demonstrate inventories at intervals not to exceed 185 acceptable performance against all Plan calendar days. Licensees who have prior commitments may request authorization to experience with process monitoring and/or can demonstrate acceptable performance 41

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) perform semiannual inventories at an against all MC&A plan commitments may earlier date. request authorization to perform inventories at intervals not to exceed 185 calendar days at an earlier date.

§ 74.53 Process monitoring. [In § 74.53, revise the introductory text of [In § 74.53, revise paragraphs (a) paragraph (a), and paragraphs (a)(3), introductory text, (a)(3), (a)(4), and (c)(1)

(a)(4), and (c)(1) to read as follows:] to read as follows:]

(a) Licensees subject to § 74.51 shall (a) Licensees subject to § 74.51 monitor internal transfers, storage, and shall monitor internal transfers, storage, processing of SSNM. The process and processing of SSNM. The process monitoring must achieve the detection monitoring must achieve the detection capabilities described in paragraph (b) of capabilities described in paragraph (b) of this section for all SSNM except: this section for all SSNM except:

(3) SSNM with an estimated measurement (3) SSNM with an estimated standard deviation greater than five measurement standard deviation greater percent that is either input or output than 5 percent that is either input or output material associated with a unit that material associated with a unit that processes less than five formula kilograms processes less than five formula kilograms over a consecutive three-month period; over a period of 95 calendar days; and and (4) SSNM involved in research and (4) SSNM involved in research and development operations that process less development operations that process less than five formula kilograms during a period than five formula kilograms during any of seven calendar days.

seven-consecutive-day period. * * * * *

(c) (c) * * * (c) * * *

(1) Perform material balance tests on a lot (1) Perform material balance tests (1) Perform material balance tests or a batch basis, as appropriate, or on a lot or a batch basis, as appropriate, on a lot or a batch basis, as appropriate, monthly, whichever is sooner, and or at intervals not to exceed 30 calendar or at intervals not to exceed 30 calendar investigate any difference greater than 200 days, whichever is sooner, and investigate days, whichever is sooner, and investigate grams of plutonium or U-233 or 300 grams any difference greater than 200 grams of any difference greater than 200 grams of of U-235 that exceeds three times the plutonium or U-233 or 300 grams of U-235 plutonium or Uuranium-233 or 300 grams of Uuranium-235 that exceeds three times 42

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) estimated standard error of the inventory that exceeds three times the estimated the estimated standard error of the difference estimator; standard error of the inventory difference; inventory difference estimator;

§ 74.57 Alarm resolution. [In § 74.57, revise the introductory text of [In § 74.57, paragraph (c) to read as follows:] a. Revise paragraph (c) introductory text to read as follows; and in paragraph (d)(3),

remove the word system and add in its place the word program.]

(c) Each licensee shall notify the NRC (c) Each licensee shall notify the (c) Each licensee shall notify the Operations Center by telephone of any NRC Headquarters Operations Center by NRC Headquarters Operations Center by MC&A alarm that remains unresolved telephone of any MC&A alarm that any available telephone system of any beyond the time period specified for its remains unresolved beyond the time MC&A alarm that remains unresolved resolution in the licensee's fundamental period specified for its resolution in the beyond the time period specified for its nuclear material control plan. Notification licensee's MC&A plan. Notification must resolution in the licensee's MC&A plan.

must occur within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months except when a occur within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months except when a Notification must occur within 24 hours2.777778e-4 days 0.00667 hours 3.968254e-5 weeks 9.132e-6 months holiday or weekend intervenes in which holiday or weekend intervenes in which except when a holiday or weekend case the notification must occur on the case the notification must occur on the intervenes in which case the notification next scheduled workday. The licensee next scheduled workday. The licensee must occur on the next scheduled may consider an alarm to be resolved if: may consider an alarm to be resolved if: workday. The licensee may consider an

* * *

alarm to be resolved if:

(d) If a material loss has occurred, the (d) * *

licensee shall determine the amount of SSNM lost and take corrective action to:

(1) Return out-of-place SSNM, if possible, to its appropriate place; (2) Update and correct associated records; and (3) Modify the MC&A system, if (3) Modify the MC&A systemprogram, if appropriate, to prevent similar future appropriate, to prevent similar future occurrences. occurrences.

§ 74.59 Quality assurance and [In § 74.59, revise paragraph (e)(7), the In § 74.59, revise paragraphs (b)(2), (c),

accounting requirements. introductory text of paragraph (f)(1), and (e)(7), (f)(1) introductory text, (f)(2)(i),

43

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) paragraphs (f)(2)(i), (h)(2)(ii), and (h)(5) to (h)(2)(ii), and (h)(3) through (5) to read as read as follows:] follows:

(b) Management structure. The licensee * * * * * * * * *

shall:

(2) Provide for the adequate review, (b) * *

approval, and use of those material control and accounting procedures that are (2) Provide for the adequate identified in the approved FNMC plan as review, approval, and use of those being critical to the effectiveness of the material control and accounting described system. procedures that are identified in the approved FNMC MC&A plan as being critical to the effectiveness of the described systemprogram.

(c) Personnel qualification and training. (c) Personnel qualification and The licensee shall assure that personnel training. The licensee shall assure that who work in key positions where mistakes personnel who work in key positions could degrade the effectiveness of the where mistakes could degrade the material control and accounting system effectiveness of the material control and are trained to maintain a high level of accounting system program are trained to safeguards awareness and are qualified to maintain a high level of safeguards perform their duties and/or responsibilities. awareness and are qualified to perform their duties and/or responsibilities.

(e) Measurement control. (e) * * * (e) * * *

(7) Investigate and take corrective action, (7) Investigate and take corrective (7) Investigate and take corrective as appropriate, to identify and reduce action, as appropriate, to identify and action, as appropriate, to identify and associated measurement biases when, for reduce associated measurement biases reduce associated measurement biases like material types (i.e., measured by the when, for like material types (i.e., when, for like material types (i.e.,

same measurement system), the net measured by the same measurement measured by the same measurement cumulative shipper/receiver differences system), the net cumulative system), the net cumulative shipper/-

accumulated over a six-month period shipper/receiver differences accumulated receiver differences accumulated over a exceed the larger of one formula kilogram over a period not to exceed 185 calendar period not to exceedmore than 185 days results in a value greater than one calendar days results in a valueexceed the 44

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) or 0.1 percent of the total amount formula kilogram or 0.1 percent of the total greater than of one formula kilogram or 0.1 received. amount received. percent of the total amount received.

(8) Establish and maintain a statistical * * * * * * * * *

control system designed to monitor the quality of each type of program measurement. Control limits must be established to be equivalent to levels of significance of 0.05 and 0.001. Control data exceeding the 0.05 limits must be investigated and corrective action taken in a timely manner. Whenever a single data point exceeds the 0.001 control limit, the measurement system in question must not be used for material control and accounting purposes until it has been brought into control at the 0.05 level.

(f) Physical inventory. The licensee shall: (f) * * *

(1) Except as required by part 75 of this (1) Except as required by part 75 of Chapter, perform a physical inventory at this chapter, perform a physical inventory least every six calendar months and within at least every 185 calendar days and 45 days after the start of the ending within 45 calendar days after the start of inventory: the ending inventory:

(2) Implement policies, practices, and (2) * *

procedures designed to ensure the quality of physical inventories. These must (i) Development of procedures for include: tamper-safing of containers or vaults (i) Development of procedures for tamper- containing SSNM not in process that safing of containers or vaults containing include adequate controls to assure the SSNM not in process that include validity of assigned SSNM values and that adequate controls to assure the validity of include control of access to, and assigned SSNM values; distribution of, unused seals and records; 45

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018)

(h) Internal control. (h) * * * (h) * * *

(2) Establish a scrap control program that (2) * * * (2) * *

assures that:

(ii) Any scrap measured with a standard (ii) Any scrap measured with a deviation greater than five percent of the standard deviation greater than 5 percent measured amount is recovered so that the of the measured amount is recovered so results are segregated by inventory period that the results are segregated by and recovered within six months of the inventory period and recovered within 185 end of the inventory period in which the calendar days of the end of the inventory scrap was generated except where it can period in which the scrap was generated be demonstrated that the scrap except where it can be demonstrated that measurement uncertainty will not cause the scrap measurement uncertainty will noncompliance with § 74.59(e)(5). not cause noncompliance with

§ 74.59(e)(5).

(3) Incorporate checks and (3) Incorporate checks and balances in the balances in the MC&A system program MC&A system sufficient to control the rate sufficient to control the rate of human of human errors in material control and errors in material control and accounting accounting information. information.

(4) Perform independent (4) Perform independent assessments at assessments at least every 12 months that least every 12 months that assess the assess the performance of the MC&A performance of the MC&A system, review systemprogram, review its effectiveness, its effectiveness, and document and document management's action on management's action on prior assessment prior assessment recommendations.

recommendations. Assessments must Assessments must include an evaluation include an evaluation of the measurement of the measurement control program of control program of any outside contractor any outside contractor laboratory laboratory performing MC&A performing MC&A measurements for a measurements for a licensee, unless the licensee, unless the contractor is also contractor is also subject to the subject to the requirements of § 74.59(e).

requirements of § 74.59(e). (5) Designate one or more material (5) Assign custodial responsibility in a (5) Designate material balance balance areas, and or a combination of manner that ensures that such areas and item control areas and assign one or more material balance areas and 46

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Draft Final Rule (08/2018) responsibility can be effectively executed custodial responsibility for each of these one or more item control areas, and for all SSNM possessed under license. areas in a manner that ensures that such assign custodial responsibility for each of responsibility can be effectively executed these areas in a manner that ensures that for all SSNM possessed under license. such responsibility can be effectively executed for all SNM possessed under license.

[Add appendix A to part 74 to read as follows:]

Appendix A to Part 74 -- Categories of Special Nuclear Material.

Notes:

1. The quantities in the table below are applied on a facility-wide basis and are the total quantities at the facility except for sealed sources. Sealed sources as defined in § 74.4 are excluded from the quantities in the table.

2. Irradiated fuel, which by virtue of its original fissile material content is included as Category I or II before irradiation, is reduced one category level, during the period of time that the radiation level from the fuel exceeds 1 Sv per hour (100 rads per hour) at 1 meter, unshielded.

The formulae to calculate a quantity of SSNM as defined in § 74.4 are as follows:

Category I, 5000 grams or more of SSNM o grams = grams contained U-235 + 2.5 (grams U-233 + grams Pu)

Category II, less than 5000 grams but more than 1000 grams of SSNM o grams = grams contained U-235 + 2 (grams U-233 + grams Pu)

Category III, 1000 grams or less but more than 15 grams of SSNM o grams = grams contained U-235 + grams U-233 + grams Pu.

3. Irradiated fuel, which by virtue of its original fissile material content is included as Category I or II before irradiation, is reduced one category level, during the period of time that the radiation level from the fuel exceeds 1 Gy per hour (100 rad per hour) at 1 meter, unshielded.

Isotopic Material Category I (Subpart E) Category II (Subpart D) Category III (Subpart C)

CompositionForm All plutonium 2,000 grams or more Less than 2,000 grams, 500 grams or less, but Plutonium (element)Unirradiated but more than 500 grams more than 15 grams Uranium-233 UnirradiatedAll U-233 2,000 grams or more Less than 2,000 grams, 500 grams or less, but 47

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 enrichments but more than 500 grams more than 15 grams Unirradiated Uranium Less than 5,000 grams, 1,000 grams or less, but enriched to 20% or more in 5,000 grams or more but more than 1,000 grams more than 15 grams isotope U-235 Unirradiated Uranium Less than 10,000 grams, enriched to 10%, but less 10,000 grams or more Uranium-235 but more than 1,000 grams than 20%, in isotope U-235 Unirradiated Uranium enriched above 0.711%,

10,000 grams or more but less than 10%, in isotope U-235 Notes:

1. The quantities in the table are applied on a facility-wide basis and are the total quantities at the facility except for sealed sources.

Sealed sources as defined in § 74.4 are excluded from the quantities in the table.

2. The formulae to calculate a quantity of SSNM as defined in § 74.4 are as follows:

Category I, 5,000 grams or more of SSNM o grams = grams contained U-235 + 2.5 (grams U-233 + grams Pu)

Category II, less than 5,000 grams but more than 1,000 grams of SSNM o grams = grams contained U-235 + 2 (grams U-233 + grams Pu)

Category III, 1,000 grams or less but more than 15 grams of SSNM o grams = grams contained U-235 + grams U-233 + grams Pu.

3. Irradiated fuel, which by virtue of its original fissile material content is included as Category I or II before irradiation, is reduced one category level (e.g., from Category I to Category II), during the period of time that the radiation level from the fuel exceeds 1 gray per hour (100 rad per hour) at 1 meter, unshielded.

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Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Final Rule (08/2018)

PART 150--EXEMPTIONS AND CONTINUED REGULATORY AUTHORITY IN AGREEMENT STATES AND IN OFFSHORE WATERS UNDER SECTION 274 Continued Commission Authority in Agreement States

§ 150.17 Submission to Commission of [In § 150.17 revise paragraphs (a) and (b) nuclear material status reports. to read as follows:]

(a) Except as specified in paragraph (d) of (a) Except as specified in paragraph (d) of (a) Except as specified in this section and § 150.17a, each person this section and § 150.17a, all licensees paragraph (d) of this section and possessing, or who had possessed in the who possess or who had possessed in the § 150.17a, all licensees who possess or previous reporting period, at any one time previous reporting period, under an who had possessed in the previous and location, under an Agreement State Agreement State license, one gram or reporting period, under an Agreement license, special nuclear material in a more of irradiated or non-irradiated special State license, one gram or more of quantity totaling one gram or more of nuclear material are required to submit irradiated or non-irradiated special nuclear contained uranium-235, uranium-233, or both a Material Balance Report and a material are required to submit both a plutonium, shall complete and submit, in Physical Inventory Listing Report of these Material Balance Report and a Physical computer-readable format Material materials to the NMMSS in accordance Inventory Listing Report of these materials Balance Reports concerning special with the instructions in paragraph (a)(1) of to the NMMSS in accordance with the nuclear material that the licensee has this section. Both reports shall be instructions in paragraph (a)(1) of this received, produced, possessed, submitted between January 1 and March section. Both reports shall be submitted transferred, consumed, disposed of, or 31 of each year. between January 1 and March 31 of each lost. This prescribed computer-readable (1) Each licensee shall prepare year.

report replaces the DOE/NRC Form 742 and submit the reports described in this (1) Each licensee shall prepare which has been previously submitted in section as follows: and submit the reports described in this paper form. The Physical Inventory Listing (i) Reports must be submitted for section as follows:

Report must be submitted with each each Reporting Identification Symbol (RIS) (i) Reports must be submitted for Material Balance Report. This prescribed account, including all special nuclear each Reporting Identification Symbol (RIS) computer-readable report replaces the material that the licensee has received, account, including all special nuclear DOE/NRC Form 742C which has been produced, possessed, transferred, material that the licensee has received, previously submitted in paper form. Each consumed, disposed, or lost. produced, possessed, transferred, licensee shall prepare and submit the consumed, disposed, or lost.

49

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Final Rule (08/2018) reports described in this paragraph as (ii) Each licensee shall prepare and (ii) Each licensee shall prepare and specified in the instructions in submit the reports described in this section submit the reports described in this section NUREG/BR-0007 and NMMSS Report D- as specified in the instructions in both as specified in the instructions in both 24 Personal Computer Data Input for NUREG/BR-0007 and NMMSS Report D- NUREG/BR-0007, Instructions for the NRC Licensees. Copies of these 24, Personal Computer Data Input for Preparation and Distribution of Material instructions may be obtained from the U.S. NRC Licensees. Status Reports, Final Draft (DOE [U.S.

Nuclear Regulatory Commission, Division (iii) This prescribed computer- Department of Energy]/NRC Forms 742 of Fuel Cycle Safety and Safeguards, readable report replaces the DOE/NRC and 742C), and NMMSS Report D-24, Washington, DC 20555-0001, or by e-mail Form 742, Material Balance Report, and Personal Computer Data Input for NRC to RidsNmssFcss@nrc.gov. Each person DOE/NRC Form 742C, Physical Inventory Licensees.

subject to this requirement shall submit a Listing Report, which have been (iii) This prescribed computer-report no later than March 31 of each year. previously submitted in paper form. readable report replaces the DOE/NRC The Commission may, when good cause (iv) Copies of these instructions Form 742, Material Balance Report, and is shown, permit a licensee to submit may be obtained from the U.S. Nuclear DOE/NRC Form 742C, Physical Inventory Material Balance Reports and Physical Regulatory Commission, Division of Fuel Listing Report, which have been Inventory Listing Reports at other times. Cycle Safety and Safeguards, previously submitted in paper form.

Each licensee required to report material Washington, DC 20555-0001 or by e-mail (iv) Copies of these instructions balance, and inventory information, as to RidsNmssFcss.Resource@nrc.gov. may be obtained from the U.S. Nuclear described in this part, shall resolve any (2) The Commission may permit a Regulatory Commission, Division of Fuel discrepancies identified during the report licensee to submit the reports at other Cycle Safety, and Safeguards, and review and reconciliation process within 30 times for good cause. Such requests must Environmental Review, Washington, calendar days of notification of a be submitted in writing to Chief, Material DC 20555-0001 or by e-mail to discrepancy identified by NRC. Control and Accounting Branch, Division RidsNmssFcss.Resource@nrc.govRidsN of Fuel Cycle Safety and Safeguards, mssFcse.Resource@nrc.gov.

Office of Nuclear Material Safety and (2) The Commission may permit a Safeguards, U.S. Nuclear Regulatory licensee to submit the reports at other Commission, Washington, DC 20555. The times for good cause. Such requests must licensee must continue to report as be submitted in writing to Chief, Material required until such request is granted. Control and Accounting Branch, Division (3) Any licensee who is required to of Fuel Cycle Safety, and Safeguards, and submit routine Material Status Reports Environmental Review, Office of Nuclear under § 75.35 of this chapter (pertaining to Material Safety and Safeguards, U.S.

implementation of the U.S./IAEA Nuclear Regulatory Commission, Safeguards Agreement) shall prepare and Washington, DC 20555. The licensee submit these reports only as provided in must continue to report as required until that section (instead of as provided in such request is granted.

50

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Final Rule (08/2018) paragraphs (a) through (b) of this section). (3) Any licensee who is required to (4) Each licensee subject to the submit routine Material Status Reports requirements of this section shall resolve under § 75.35 of this chapter (pertaining to any discrepancies identified during the implementation of the U.S./IAEA report review and reconciliation process Safeguards Agreement) shall prepare and within 30 calendar days of notification of a submit these reports only as provided in discrepancy identified by the NRC. that section (instead of as provided in paragraphs (a) through (b) of this section).

(4) Each licensee subject to the requirements of this section shall resolve any discrepancies identified during the report review and reconciliation process within 30 calendar days of notification of a discrepancy identified by the NRC.

(b) Except as specified in paragraph (d) of (b) Except as specified in (b) Except as specified in this section and § 150.17a, each person paragraph (d) of this section and paragraph (d) of this section and possessing, or who had possessed in the § 150.17a, each person possessing, or § 150.17a, each person possessing, or previous reporting period, at any one time who had possessed in the previous who had possessed in the previous and location, under an Agreement State reporting period, at any one time and reporting period, at any one time and license: location, under an Agreement State location, under an Agreement State (1) One kilogram or more of uranium or license: license:

thorium source material with foreign (1) One kilogram or more of (1) One kilogram or more of obligations, shall document holdings as of uranium or thorium source material with uUranium or thorium source material in September 30 of each year and submit to foreign obligations, shall document quantities of 1 kilogram or more with the Commission within 30 days. holdings as of September 30 of each year foreign obligations, shall document Alternatively, these reports may be and submit the material status reports to holdings as of September 30 of each year submitted with the licensees material the Commission within 30 days. and submit the material status reports to status reports on special nuclear material Alternatively, these reports may be the Commission within 30 days.

filed under part 72 or 74 of this chapter. submitted with the licensees material Alternatively, these reports may be This statement must be submitted to the status reports on special nuclear material submitted with the licensees material address specified in the reporting filed under part 74 of this chapter. This status reports on special nuclear instructions in NUREG/BR-0007, and statement must be submitted to the materialSNM filed under part 74 of this include the Reporting Identification Symbol address specified in the reporting chapter. This statement must be submitted (RIS) assigned by the Commission. instructions in NUREG/BR-0007, and to the address specified in the reporting (2) One kilogram or more of uranium or include the RIS assigned by the instructions in NUREG/BR-0007, and thorium source material in the operation of Commission.

51

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Final Rule (08/2018) enrichment services, downblending (2) One kilogram or more of include the RIS assigned by the uranium that has an initial enrichment of uranium or thorium source material in the Commission.

the U235 isotope of 10 percent or more, or operation of enrichment services, down (2) One kilogram or more of in the fabrication of mixed-oxide fuels shall blending uranium that has an initial uUranium or thorium source material in complete and submit, in computer- enrichment of the U-235 isotope of 10 quantities of 1 kilogram or more used in readable format, Material Balance and percent or more, or in the fabrication of the operation of enrichment services, Physical Inventory Listing Reports mixed-oxide fuels shall complete and down blending uranium that has an initial concerning source material that the submit, in computer-readable format, enrichment of the U-235 isotopeuranium-licensee has received, produced, Material Balance and Physical Inventory 235 of 10 percent or more, or in the possessed, transferred, consumed, Listing Reports concerning source material fabrication of mixed-oxide fuels shall disposed, or lost. Reports must be that the licensee has received, produced, complete and submit, in computer-submitted for each Reporting Identification possessed, transferred, consumed, readable format, Material Balance and Symbol (RIS) account including all holding disposed, or lost. Reports must be Physical Inventory Listing Reports accounts. Each licensee shall prepare and submitted for each RIS account including concerning source material that the submit these reports as specified in the all holding accounts. Each licensee shall licensee has received, produced, instructions in NUREG/BR-0007 and prepare and submit these reports as possessed, transferred, consumed, NMMSS Report D-24, Personal specified in the instructions in disposed, or lost. Reports must be Computer Data Input for NRC Licensees. NUREG/BR-0007 and NMMSS Report D- submitted for each RIS account including These reports must document holdings as 24, Personal Computer Data Input for all holding accounts. Each licensee shall of September 30 of each year and NRC Licensees. These reports must prepare and submit these reports as submitted to the Commission within 30 document holdings as of September 30 of specified in the instructions in days. Alternatively, these reports may be each year and be submitted to the NUREG/BR-0007 and NMMSS Report D-submitted with the licensees material Commission within 30 days. Alternatively, 24, Personal Computer Data Input for status reports on special nuclear material these reports may be submitted with the NRC Licensees. These reports must filed under part 72 or 74 of this chapter. licensees material status reports on document holdings as of September 30 of Copies of the reporting instructions may special nuclear material filed under part 74 each year and be submitted to the be obtained by writing to the U.S. Nuclear of this chapter. Copies of the reporting Commission within 30 days. Alternatively, Regulatory Commission, Division of Fuel instructions may be obtained by writing to these reports may be submitted with the Cycle Safety and Safeguards, the U.S. Nuclear Regulatory Commission, licensees material status reports on Washington, DC 20555-0001, or by e-mail Division of Fuel Cycle Safety and special nuclear material filed under part 74 to RidsNmssFcss@nrc.gov. Each licensee Safeguards, Washington, DC 20555- of this chapter. Copies of the reporting required to report material balance, and 0001, or by e-mail instructions may be obtained by writing to inventory information, as described in this to RidsNmssFcss.Resource@nrc.gov. the U.S. Nuclear Regulatory Commission, part, shall resolve any discrepancies Each licensee required to report material Division of Fuel Cycle Safety and identified during the report review and balance, and inventory information, as Safeguards, Washington, DC 20555-reconciliation process within 30 calendar described in this part, shall resolve any 0001, or by e-mail 52

Draft Final Rule, Amendments to Material Control and Accounting Regulations PRELIMINARY INFORMATION FOR PUBLIC MEETING ON AUGUST 28, 2018 Current Rule Proposed Rule (11/2013) Final Rule (08/2018) days of the notification of a discrepancy discrepancies identified during the report to RidsNmssFcss.Resource@nrc.govRids identified by the NRC. review and reconciliation process within 30 NmssFcse.Resource@nrc.gov. Each calendar days of the notification of a licensee required to report material discrepancy identified by the NRC. balance, and inventory information, as

* * *

described in this part, shall resolve any discrepancies identified during the report review and reconciliation process within 30 calendar days of the notification of a discrepancy identified by the NRC.

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SECY-08-0059, Draft Rule Text Table for Preliminary Information for Public Meeting on August 28, 2018

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SECY-08-0059, Draft Rule Text Table for Preliminary Information for Public Meeting on August 28, 2018

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