ML20206F108

Proposed Rules 10CFR21 & 50, Criteria & Procedures for Reporting of Defects. Rule Would Eliminate Duplicative Reporting of Defects & Establish Uniform Time Periods for Reporting Requirements

ML20206F108
Person / Time
Issue date:	10/31/1988
From:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
To:
References
FRN-53FR44594, FRN-56FR36081, RULE-PR-21, RULE-PR-50 AA68-2-003, AA68-2-3, PR-881031, NUDOCS 8811180351
Download: ML20206F108 (27)

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. . .w NUCLEAR REGULATORY C0m!SSION 10 CFR PARTS 21 AND 50

'88 NOV -1 A10:48 Criteria And Procedures for the pg ,,

Reporting of Defects uGCKi g*F l t

I AGENCY: . Nuclear Regulatory Comission.

l l ACTION: Proposed rule.

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, SUMARY: The Nuclear Regulatory Commission proposes to amend its regulations f on the reporting of safety defects. The proposed revisions are a result of the

' f Commission Efforti is apply the experience gained as a result of the Three Mile T q !sland accident and also reflect Connission experience to date with the l existing regulations. The proposed amendments would be applicable to  !

! Cosmission licentees, and to nonlicensees who construct facilities for, or ,

supply components to facilities or activities licensed by the Comission. The i t amendments would eliminate duplicative reporting of defects, clarify the crite-  !

i ria for reporting defects, and would establish unifom time periods for i i reporting and uniform requirements for the content of reports of defects.  !

I' t l- i DATES: Submit comments by January 3, 1989 Consents received after t l .

i this date will be considered if it is practical to do so, but assurance of l consideration cannot be given except as to coments received on or before this j date.

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1 l ADOPESSES: Submit written cmments to: Secretary, U.S. Nuclear Regulatory

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Comission Washington, DC 20555, Attention: Docketing and Service Branch. j l

Deliver coments to: 11555 Rockville Pike Rockville, Md. 20852 between 7:30 l a.m. and 4:15 p.m. Federal workdays. Copies of coments received and the i

regulatory analysis may be examined at the NRC Public Document Room, 2120 L  ;

Street NW., Washington, DC 20555. [

f j FOR FURTHER INFORMATION CONTACT: W. R. Jones, Office for Analysis and [

j Evaluation of Operational Data, U.S. Nuclear Regulatory Comission, Washington,  !

j DC 20555. Telephone: (301)492-4442. l l

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SUPPLEMENTARY INFORMATION:

Background

Existing Commission regulations contain several safety deficiency report-ing requirements applicable to the construction and operation of nuclear power plants:

10 CFR Part 21 applies to all NRC licensees, as well as nonlicensees who construct facilities for or supply components to these licensees, and requires the reporting of defects that could create a "substantial safety hazard," as defined in regulations.

10 CFR 50.55(e) applies solely to the holders of construction pennits and currently requires the reporting of "significant deviations" or "significant deficiencies" which could adversely affect safety.

10 CFR 50.72 and 50.73 establish reporting system that applies uniformly to all operating nuclear power plants. These regulations require the licensee to make prompt telephone notification to NRC and to submit a 4

written report for each significant operating everit or adverse plant l condition. Section 50.73 replaced previous Licensee Event Report (LER) requirements in Section 50.36.

l 10 CFR 73.71(c) applies to licensees and establishes a reporting system for security failure, degradations, or discovered vulnerability in a

, safeguards systems. As stated in 673.71(c), a report under 673.71(c) satisfies reporting requirements in both 650.72 and 10 CFR Part 21.

Task II J.4 of the TM! Action Plan directed the NRC staff to pvaluate and l revise, if necessary, the existing requirements of 10 CFR Part 21 and $50.55(e) l

! to ensure prompt and comprehensive reporting. Over several years, the need for revision of these regulations has become apparent. Accordingly, based upon the i staff experience with Part 21 and 150.55(e), the proposed revision would:

1. Eliminate duplicative evaluation and reporting; i

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2. More clearly and unifonnly define the defects that need to be reported under{50.55(e);

3. Establish consistent time limits for reporting;

4. Establish a time limit for transfer of infonnation to end users when a substantial safety hazard determination is not possible;

5. Establish a uniform content for reporting for 550.55(e) and Part 21; and

6. Make other more minor changes detailed below.

l These revisions will reduce the amount of time and effort expended by in-dustry in complying with existing reporting and evaluation requirements while still ensuring that safety deficiencies are identified and evaluated in a '

timely manner. The proposed revision is aimed at improving the evaluation and reporting of safety defects from the nuclear industry.

Part 21 Part 21 was intended to implement Section 206 of the Energy Reorganization Act of 1974 (42 U.S.C. 5846). Section 206 requires directors and responsible officers of finns constructing, owning, operating, or supplying the components of any facility or activity licensed under the Atomic Energy Act to report to the Comission the discovery of "defects" in "basic components" that could create a "substantial safety hazard." The purpose of Section 206 was to ensure that the Comission has prompt information concerning safety defects. In addition to imposing obligations on the directors and responsible officers of l NRC licensees, Section 206 also imposes obligations on the directors and  !

responsible officers of nonlicensees that construct facilities for or supply components to licensed facilities or activities. Any individual officer or director who knowingly fails to comply with the notification requirements is subject to civil penalties. '

On March 3,1975, the NRC oublished a proposed rule designed to implement Section 206 (40 FP 8832), and on June 6,1977, issued the final rule, adding l Part 21 to the Comission's regulations (42 FR 28893). l l

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The regulaticns in 10 CFR Part 21 impose reporting requirements on directors and responsible officers of fims constructing, owning, operating, or supplying components for any facility or activity licensed or otherwise regulated pursuant to the Atomic Energy Act of 1954, as amended, or the Energy Reorganization Act of 1974, as amended. Part 21 was amended on October 19, 1978 (43 FR 48721) to exempt "commercial grade items" from Part 21 until the items were "dedicated" for use as a basic component for a nuclear facility.

Approximately 12,000 organizations, licensees, and nonlicensees, are under the scope of Part 21 reporting requirements. Licensees include those granted licenses under the following parts: production and utilization facility 11cen-ses issued under 10 CFR Part 50, including nuclear power plants and research and test reactors at various stages in the licensing process; byproduct material licenses issued under Parts 30 through 35; source material licenses issued under Part 40; high-level radioactive waste disposal issued under Part 60; land disposal of radioactive waste issued under Part 61; special nuclear materials licenses issued under Part 70; the packaging of radioactive materials for transport under Part 71; and spent fuel storage under Part 72.

The nonlicensee suppliers covered under Part 21 are firms of many different sizes, supplying many different types of basic components and services to NRC licensees. For example, construction and operation of a nuclear power plant involves a many-level procurement chain. At the top of the chain is the electrical utility and the utility's major contractors such as the nuclear steam system supplier. The next level includes manufacturers who produce components specifically designed for nuclear use such as instrumentation, controls, major piping, pumps, and valves. These manufac-turers in turn procure necessary parts, such as resistors, wiring, solid-state devices, and other hardware, from a multitude of sources. For nuclear power ,

reactors, Part 21 applies to all tiers of the supply chain to all activities which could create a substantial safety hazard. Approximately 300 reports are submitted to the NRC annually under Part 21. These reports of potential safety problems have resulted in generic comunications such as NRC bulletins, generic letters, and information notices, and have contributed to the overall improved safety of the nuclear industry. ,

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Section 50.55(e)

Section 50.55(e) of 10 CFR Part 50, originally published as a final rule on March 30, 1972 (37 FR 6459), establishes requirements for reporting deficiencies occurring during the design and construction of nuclear power plants. The rule was designed to enable the NRC to receive prompt notification of deficiencies and to have timely infomation on which to base an evaluation of the potential safety consequences of the deficiency and detemine if further regulatory action is required. Therefore, the holder of a permit for the construction of a nuclear power plant is required to notify the Commission of each significant deficiency found in the processes of design and construction, which if it were to have remained uncorrected, could have adversely affected the safety of operations of the nuclear power plant at any time throughout the expected lifetime of the plant. '

Approximately 900 reports are submitted to the NRC annusily under 150.55(e). As with Part 21, these i 50.55(e) reports have formed the basis for generic communications such as NRC bulletins, generic letters, and infomation notices and have also contributed to the overall improved safety of the nuclear industry.

The Proposed Action

1. Eliminating Duplicative Evaluation and Reportino Requirements. As stated above, Commission regulations contain several safety deficiency reporting requirements. Although distinctions exist between these requirements, staff experience indicates a need to eliminate duplication in l reporting or evaluation among Part 21, 650.55(e), and (50.73. A number of instances have occurred where the rame deficiency in a component was evaluated and reported by two different organizations, one attempting to satisfy the criteria of Part 21, and the other attempting to meet the differently worded critoria of 650.55(e). The fact that the reporting criteria are different for each requirement and the lack of any explicit framework in the regulations to preclude duplicative reporting have led to duplication of both licensee and NRC staff effort.

The proposed revision to 621.2 would relieve holders of construction pemits under $50.23 from their Part 21 evaluation, notification, and reporting responsibilities if they report a defect under $50.55(e). The proposed revision to 150.55(e) establishes the applicable evaluation and reporting 5

procedures, as well as recordkeeping requirements, for coilstruction pemit holders. Compliance with these 550.55(e) requirements would be deemed to satisfy the corresponding requirements of Part 21.

In order to mcke the reporting of defects found during construction consistent for all production or utilization facilities, the scope of

$50.55(e), which fomerly covered only the cnnstruction of nuclear power plants, is being expanded to include all construction pemits issued under 950.23. Thus, the reporting of defects found during construction at these facilities would be shifted from 10 CFR Part 21 to 650.55(e). These facilities were prcviously covered by Part 21. Thus, no increase in reporting requirement is being iraposed on these facilities.

Likowise, proposed 521.2 would explicitly relieve the officers and directors of the holders of operating licenses under Part 50 from the Part 21 evaluation, notification, and reporting requirements because defects will be reported by holders of operating licenses under 950.73 or 973.71. The reporting procedures and recordkeeping requirements currently in 550.73, would be deemed to satisfy the corresponding requirements of Part 21.

Thus, the defect reporting requirements of section 206 of the Energy Reorganization Act would be met by Part 50 licensees by reporting under either

$50.55(e) or $50.73, as appropriate. However, responsible officers and directors of a Part 50 licensee would still be subject to the civil penalty provisions of Section 206 (b) of the Energy Reorganization Act as set forth in l

921.61 for the failure to notify the NRC of a defect.

In addition, proposed revisions to $21.21 would relieve vendors subject to j the reporting requirements of Part 21 from reporting to the Comission under Part 21 if a defect has been previously reported under ll50,55(e), 50.73, or 73.71. That is, in proposed $21.21(b)(2), for any defect identified, evaluated, and reported by a CP or OL holder pursuant to il50.55(e), 50.73, or 73.71, the related vendor would not be required to provide a report.

Proposed 650.55(e}(8) will relieve the holders of construction permits under Part 50 from reporting a defect if it has previously been reported under Part 21.

The NRC staff will continut to evaluate notifications made to NRC under Part 21, il50.55(e), 50.72, 50.73 or 73.71. Where necessary, NRC staff will contact the licensee and appropriate vendor to obtain additional infomation.

Additional vendor infomation obtained by NRC direct contact under the proposed 6

amendment to 121.21(c) would consist of infomation on additiona? locations of basic components containing the defect, corrective actions required, and advice provided to recipients of the basic components. Based on this infomation, the staff will then determine appropriate regulatory action. For cases in which the vendor notifies NRC and has not notified licensee purchasers, NRC would evaluate the need to notify licensees based on the safety significance of the defect or noncompliance. Where warranted, NRC would notify the appropriate licensees, either directly or via a generic communication such as an Infomation Notice, of the existence of such a defect. NRC staff will evaluate the need to notify vendors of a licensee notification, where warranted by the safety significance and generic aspects of the defect or noncompliance, in order that vendors are aware of the existence of a defect.

Relief for holders of operating licenses from reporting under $50.73 similar to that in proposed $50.55(e) outlined above will be implemented in the near future. However, the original intent of NRC defect reporting requirements was that repo, ting under only one of the requirer.ents would satisfy the other requirements. Additionally, it should be noted that staff experience with reporting untier $50.73 indicates that there is minimal duplication between this section and Part 21 and $50.55(e). The staff is currently reviewing the reporti:.9 experience with 150.73 since it became effective in January 1984 Changes may be required as a result of this review and this issue will be addressed at that tine.

The intent of these revisions is to establish the filing of one report by a vendor, operating license holder, or construction permit holder for each separate defect, with the reporting obligation resting on the entity that discovers the defect. It is intended tha*. 650.55(e) will be exclusively used for the reportiaa of defects discove.*ed by construction pemit holders (or referred to them by a vender who is unable to evaluate the defect); and 550.73 willbeexclusivelyusedforthereportingofdefectsdiscoveredbjtheholders of operating licenses (or referred to them by a vendor who cannot evaluate the defect). Part 21 will be exclusively used for reporting defects discovered by materials licensees covered under Parts 30, 31, 34, 35, 40, 60, 61, 70, 71, 72; Part 50 licensees other than nuclear power plant licensees and holders of construction permits; and vendors involved in constructing or supplying com-ponents for any facility or activity licensed or otherwise regulated pursuant 7

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, to the Atomic Energy Act of 1954, as amended, or the Energy Reorganization Act of 1974, as amended.

In order to facilitate the elimination of duplicate reporting, the proposed revision also establishes $50.55(e) content similar to that contained in 10 CFR Part 21. It is anticipated that this proposed revision will signifi-cantly reduce the reporting burdens on the regulated industry, as well as improve the Connission staff evaluation of these reports, without any loss of relevant safety infonnation.

In addition to the reporting of defects in basic coeponents, Part 21 also requires the reporting of failures to comply with the Atomic Energy Act of 1954, as amended, or any applicable rule, regulation, order, or license of the Coannission related to a substantial safety hazard. To further make reporting I more consistent, holders of construction permits would notify the Commission of failures to comply under 150.55(e) instead of Part 21 under the proposed amendments.

2. Defining Defects To Be Reported. Section 206 of the Energy Reorganizatien Act requires the reporting of "defects which could create a substantial safety hazard." Existing (21.3(k) defines substantial safety hazard as "a loss of safety function to the extent that there is a major reduction in the degree of protection provided to public health and safety for i

any facility or activity licensed, other than for export, pursuant to Parts 30, 40, 50, 60, 61, 70, 71, or 72...." In addittor., the supplementary information

, for the original Part 21 final rulemaking, June 6,1977(42FR2889), contained l the following guidance on what constitutes a "substantial safety hazard":

Moderate exposure to, or release of, licensed material, or Major degradation of essential safety-related equipment, or Major deficiencies involving design, construction, inspec, tion, test, or use.

Existing 150.55(e) requires the reporting of deficiencies in design and construction which could adversely affect the safety of operations of a nuclear power plant and which represent the following:

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P A significant breakdown in any portion of the cuality assurance

program, or A significant deficiency in a final design, or A significant deficiency in the construction of, or significant damage to a structure, system, or component requiring corrective action involving extensive effort, or A significant deviation from perfomance specifications requiring corrective action involving extensive effort. '

NRC experience with 550.55(e) reports has indicated that clarification of the type of deviation that is required to be reported would be advantageous.

Accordingly, the reporting criteria in proposed 150.55(e) are the same as those contained in 121.3.

This increase in the reporting threshold to all construction permit holders will allow the Comission to obtain the proper level of reporting with no loss of significant safety infomation, i.e., the proposed amendment raising the 150.55(e) threshold will facilitate eliminating duplicative reporting by making the definition of defects reported under $50.55(e) identical to those i reported under Part 21. This elimination of duplication will be accomplished with t.o loss in critical safety infomation and will reduce unnecessary

, industry burden. .

It should be pointed out that a slight difference exists between the current definition of "deviation" in Part 21 and that in the proposed

$50.55(e). In the current Part 21. "procurement documents" are specifically referred to as detemining the ret uirements of a basic component. However, in

150.55(e), procurement documents are not mentioned as detemining these l

i requirements. The basis for th's difference is that in applying 650.55(e),

i basic components will have requirements imposed on them not only by their

procurement documents, but other licensee documents. In the case of Part 21,  ;

application of the regulation to vendors will require the use of procurement i

documents to detemine the requirements which the purchaser placed on the basic component.

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3. Establishing Uniform Time Limits for Reporting. In the current Part j 21 submittal of the required written report within the five day time limit has been difficult to accomplish. In additi". the incremental infomation available during the subsequent 3 day interval following the initial report does not provide a meaningful addition to the infomation already available to the Comission. The proposed extension to 30 days for the time limit for ,

submittal of the written followup report would allow submittal of a complete I report. Also, addition of time limits for evaluation cf defects will further ensure that the staff is informed regarding significant safety hazards. Thus, the proposed rule would change the time limit fon submission of the required followup written report from five days to 30 days.

As outlined above, the proposed amendments would establish unifom reporting deadlines for Part 21 and 550.55(e). Initial notific'ation to the NRC is required within two days of identification of a defect. A difference exists between this requirement and 150.72 where initial reporting of events or conditions is required within one to four hours depending on the event or condition. The staff believes this difference is justifiable in that 950.72 reports involve problems at operating facilities for which remedial actiont may be needed very quickly. Rapid notification is required because the NRC has a responsibility to respond rapidly to protect the health and safety of the public when there is an event or condition tha: could pose a potential threat of a release of radiation above nomal operating levels.

Part 21 reports by vendors and 550.55(e) reports by construction pemit holders, on the other hand, involve reporting of defects which could create a substantial safety hazard if a specific event or failurc should occur.

l Although Part 21 and $50.55(e) reports may involve generic substantial safety hazards, the relative risk of potential failures is less than the risks of failures evidenced by actual events or conditions of plants having operating licenses. Finally, the reporting experience with Il50.72 and 50.7) versus Part 21and550.55(e)indicatesthatmoreissueswhichdirectlyaffectthehealth and safety of the public are discovered from analyses of operating reactor events than from Part 21 and $50.55(e) reports. Accordingly, the staff has proposed a two-day initial reporting time limit for Part 21 and 550.55(e) as an adequate means for providing sufficient wareing of potential safety problems.

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t, 4 Establishing Time Limit for Transfer of Information. ,

Currently, Part 21 [521.21(a)(1)(11)] does not explicitly address time I limits for transfer of information in situations for which vendors or other I suppliers of components are unab h to evaluate whether deficiencies could

create substantial safety hazards. This inability to evaluate may be due to [

the vendor's or supplier's lack of knowledge of how the component is utilized P

by the end user or for other reasons. The proposed change to Part 21 would explicitly add a time limit provision to correct this problem. The proposal would require that if, during the evaluation period, the entity which discovers a deviation that could potentially create a substantial safety hazard determines that it is unable, due to insufficient information or other reasons, to evaluate the deficiency, then that entity must notify the purchasers of the "basic l

component" within five days of this determination. ,

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5. Reporting Content. Proposed revisions e, i.n 55(e)(6) would require thecontentoftheinformationreportedunder350.5C(e)tobeconsistentwith l thatrequiredby$21.21(b)(3). These revisions will ensure that the Comission I

obtains all the information necessary to evaluate and take corrective action, l in reference to a particular defect.  !

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6. Other Changes. In addition to these rajor revisions, minor changes

are being proposed to improve the overall quality and coherence of Part 21 and j

l 650.55(e). t (a) The proposed revision to $50.55(e) would extend the period fur f notification of the Comission from one day to two days. In Petition for I

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Rulemaking (PRM) 50-36, filed by the Nuclear Utility Backfitting and Reform Group (48 FR 28282), dated April 20, 1983, petitioners propose revising 10 CFR t 50.55(e) reporting requirements to delete the 24 hour2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> initial report entirely l (IssueIII). Alternatively, the petition recomends adoption of a d,eadline of [

five days for an initial report. This proposed rulemaking extends the initial reportingdeadlineunder$50.55(e)from24to48 hours. The staff believes r that the proposed two-day requirement will provide industry with more f

flexibility while still allowing sufficient warning of safety problems and is j consistent with the objective of establishing uniform reporting criteria, The  !

staff agrees that the current 550.55(e) initial reporting requirement may be j restrictive; however, the five-day recommendation proposed by PRM-50-36 is  !

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believed to be too lang considering staff's need to be provided with early  :

notification of potentially generic conditions at construction permit faL111 ties which could affect operating facilities. This time limit will be consistent with the cserent h rt 21 time limit. Accordingly, the proposed two-day versus 24-hour current reporting requirement addresses and resolves Issue !!! of PRM 50-36

. (b) Proposed $50.55(e)(7) and revisions to h21.51 clarify the specific ,

records that must be maintained and their retention period to ensure '

compliance. Retention of procurement documents would be retained either ty the vendor or the purchaser of the basic component. The vendor would be required to retain a list of the purchasers of the basic component.  !

(c) For consistency with $ A50.55(e) and 50.73, Part 21 would be changed  !

to direct correspondence to the Document Control Desk with appropriate copies  !

to regional and headquarters offices. Also, telephone communication has been j specifically directed to the NRC Operations Center.

l (d) Current $21.3(a)(3), which clarifies items which are to be considered

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as "basic components," includes: I "design, inspection, testing, or consulting services important to safety."  !

That subsection is being modified to further clarify what are intended to ,

be significant items. The proposed subsection would be revised to include l "safsty related design, analysis, inspection, testing, quality assurance, fabrication, training, maintenance, replacement parts, or consulting

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services that are associated with the basic component hardware whether these services are performed by the component supplier or others." I l

l Also, it should be noted that, as stated in the current definit' ion of '

basic component in (21.3(a)(1), "systems" are properly considered as "basic components." These would include but not be limited to such "systems" as security and fire protection systems among other systems which can affect the ,

safety of the facility. As an example, for power reactors, the rationale is that a defect or noncompliance in the security system is one which could allow l access of an unauthorized individual into a vital area without being detected l

by the security system. The staff's view is that this represents a major  !

reduction in the degree of protection afforded the health and safety of the  !

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public and is, therefore, a substantial safety hazard and would require notification.

These clarifications are consistent with current NRC practice and previous guidance provided in both NUREG 0302, Pev.1; Re:sarks Presented at Public Regional Meetings to Discuss Regulations (10 CFR 21) for Reporting of Defects +

and Noncompliance October, 1977; and in NRC Office of Inspection and Enforcement Infomation Notice 85-101; Applicability of 10 CFR 21 to Consulting Fims Providing Training.

(e) Section 21.2, which sets forth the scope of Part 21 coverage has been revised to include Part 60 facilities.

The existing rule already applies to Part 60 licensees (as an entity licensed to possess, use, and/or transfer within the United States source material, byproduct material, special nuclear material, and/or ~ spent fuel) ad to those entities that supply basic components for an Getivity licensed under Part 60. The proposed extension of Part 21 to organizations that construct, geologic repositories would corrplete the Part 21 coverage by extending it to all the major activities or facilities licensed by the Comission.

Timeliness of Evaluations Under exist'.g $21.21(b)(2), the in'tial notification of a defect 'nust be made to the NRC within two days of the time a director or respor.sible of?icer obtains infonnation on the existence of a reportable defect. Howeve*, the existing rule '<, silent concerning the time period between the disco tery of a l potential defect and the time when an evaluation of the potential defect should j de completed and the NRC notified. Similarly, no deadline is established for when the director or responsible officer must be infomed of a potentially reportable defect. The Comission is aware of a number of cases where an inordinate length of time passed between the initial discovery of 6 potential l defect and when the Comission was infonned. While no amendment is being l

proposed to set a time limit for evaluation of deviations, and informing l directors or responsible corporate officers, W the NRC, in general, under most circumstances 30 days is believed to be a reasonable time to evaluate deviations to determine if reportable defects exist. Should a more lengthy evaluation be required, it may indicate the need to report the potential defect.

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Existing 10 CFR 50.55(e)(2) and (3) establish time frames only for the reporting of defects. Proposed $50.55(e) would also require the holder of a '

construction permit to evaluate deviations within 30 days and extend initial notification of the Commission from 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> to two days. The extension of the initial notification time from 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> to 2 days in proposed 10 CFR 50.55(e),

, provides the industry with mue flexibility, while still allowiry sufficient warning of potential safety problems. The use of the same initial notification period for both 20 CFR Part 21 &nd 10 CFR 50.55(e) is consistent with the objective of establishing uniform reporting time frames.

Regulatory Analysis The Connission has prepared a draf t regulatory analysis of the prorMed regulation. The analysis identifies and exaaines the costs and venefit s of +%

proposed regulation and its alternatives. The draft analysis is available 'u" inspection and copying for a fee at the NRC Public Document Room, 21201. Street NW., Washington, DC 20555.

, Environmental Impact: Categorical Exclusion i The NRC has determined that this proposed regulation is the type of action describedincategoricalexclusions10CFR51.22(c)(1)and(3). Therefore, [

'neitner an environmental impact statement nor an environmental assessment has

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, been prepared for this proposed regulation. [

Paperwork Reduction Act Statement l

Public reporting burden for this collection of information is estimated to ;

average 167 hours0.00193 days <br />0.0464 hours <br />2.761243e-4 weeks <br />6.35435e-5 months <br /> per 10 CFR Part 21 esponse ano 28 hours3.240741e-4 days <br />0.00778 hours <br />4.62963e-5 weeks <br />1.0654e-5 months <br /> per $50.55(e) response, including the time for reviewing instructivos, searching existing .

data surces, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden l estimate or any other aspect of this collection of information, including f j suggestions for reducing this burden to Records and Reports Management Brar,..), '

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Division of Informaiton Support Services, Office of Administration and Resources Management, U.S. Nuclear Regulatory Comission, Washington, DC 20555; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503.

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

the Ctmmission certifies that this rule, if adopted, will not have a signifi-cant economic impact on a substantial number of small entities. The proposed revision to 150.55(e) applies solely to the holders of construction pennits issued under 10 CFR 50.23, none of which can be considered small entities.

Although the proposed revision to Part 21 could potentially affect a substantial number of small entities (See NRC size standards published December 9, 1985, 50 FR 50241) who supply components to NRC licensees, the economic impact on these finns is expected to be slight. Approximately 80 percent of the 300 annual nuclear-power-plant-related Part 21 reports have in the past been submitted by licensees; the remaining 20 percent have been subnitted by nonlicensed suppliers and vendors. Proposed $21.2 eliminates duplicative reporting for those organizations subject to the defect reporting requirements, and therefore should reduce the economic impact on these organizations, including small businesses.

Any small entity subject to this regulation which determines that, because of its size, it is likely to bear a disproportionate adverse economic impact should notify the Comission of this in a coment that indicates the following:

(a) The size of their business and how the proposed regulations would result in a significant economic burden upon them as compared to larget organi-zations in the same business community.

(b) How the proposed regulations could be modified to take irito account their differing needs or capabilities.

(c) The benefits that would accrue, or the detriments that would be avoided, if the proposed regulations were modified as suggested by the comenter.

(d) How the proposed regulations, as modified, would more 'losely equalize the impact of NRC regulations or create more equal access to the 15

a benefits of Federal programs as opposed to providing special advantages to any individuals or groups.

(e) How the propose 1 regulations, as modified, would still adequately ,

protect the public health and safety.

The comments may be submitted to the NRC as indicated under the ADDRESSES heading.

l Backfit Analysis

• The Comission has determined that a backfit analysis is not required for ti.is proposed rule, because these amendments do r.ot involve any provisions which would impose backfits as defined in 10 CFR 50.109(a)(1). ,

List of Subjects f 10 CFR Part 21 Nuclear power plants and reactors, Penalty, Rar' , tion protection, Reporting and recordkeeping aequirements.

l 10 CFR Part 50 I

Antitrust, Classified information, Fire protection, Incorporation Ly [

reference, Intergoverr. mental re16tions, Nuclear power plants and reactors, l Pen +1ty, Radiation protection, Reactor siting criteria, Reporting and record i keeping requireinents, f For the reasons set out in the preamble and under the authority, of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974,  ;

) as amended, and 5 U.S.C. 553, the NRC is proposing to adopt the following I amendments to 10 CFR Parts 21 and 50.

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PliRT 21 - REPORTING OF DEFECTS AND NONCOMPi.IANCE

1. The authority citation continues to read as follows:

AUTHORITY: Sec.161, 68 Stat. 948, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2201, 2282); secs. 201, as amended, 206, 88 Stat. 1242, as amended, 1246(42U.S.C.5841,5846).

Section 21.2 aise issued under Secs. 135, 141, rub. L.97-425, 96 Stat.

2232, 2241 (42 U.S.C. 10155, 10161).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273);

il 21.6, 21.21(a) and 21.31 are issued under sec.161b, 68 Stat. 948, as amended (42U.S.C.2201(b));andil 21.21, 21.41 and 21.51 are issued under sec. 161o, 68 Stat. 950, as amended (42 U.S.C. 2201(o)). ,

2. Section 21.2 is revised to read as follows:

i 21.2 Scope.

(a) The regulations in this part apply, except as specifically provided otherwise in Parts 31, 34, 35, 39, 40, 60, 61, 70, or 72 of this chapter, to each individual, partnership, corporation, or other entity licensed pursuant to the regulations in this chapter to pessess, use, or transfer within the United States source material, byproduct material, special nuclear t,aterial, or spent fuel, or to construct, manufacture, possess, own, operato or transfer within the United States, any production or utilization facility or indepenunt spent fuel storage instc11ation, or a geologic repository for the disposal of high-level radioactive waste under Part 60 of this chapter; and to each director and responsible officer of such a licensee. The regulations in this part apply also to each individual, corporation, partnership or other entity doing business within the United States, and each director and responsible officer of such organization, that constructs a production or utilization facility licensed for manufacture, constructiori, or operation pursuant to Part 50 of this chapter or an independent spent fuel storage installation for the storage of spent fuel licensed pursuant to Part 72 of this chapter, or a geologic repository for the disposal of high-level radioactive waste under Part 60 of this chapter; or who supplies basic components for a facility or activity licensed, other than for export, under Parts 30, 40, 50, 60, 61, 70, 71, or 72 of this chapter.

(b) For persons licensed to construct a facility under a construction pennit issued under 650.23 of this chapter, reporting defects under 150.55(e) 17

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of this chapter satisfies eveh person's evaluation, notification, and reporting l obligation to report defects under this part and the responsibility of individual directors and responsible officers of such licensees to report  !

defects under Section 206 of the Energy Reorganization Act of 1974 (c) For persons licensed to operate a nuclear power plant under Part 50 of this chapter, reporting defects under $50.73 or 173.71 of this chapter I satisfies each person's evaluation, notification, and reporting obligation to report defects under this part and the responsibility of individual directors and responsible officers of such licensees to report defects under Section 206 i

of the Energy Reorganization Act of 1974 '

(d) Nothing in these regulations should be deemed to preclude either an  ;

individual, a manufacturer, or a supplier of a comercial grade, item (see {

j 521.?(a-1)) not subject to the regulations in this part from reporting to the Comission a known or suspected defect or failure to comply and, as authorized i

by law, the identity of anyone so reporting will be withheld from disclosure.

(e) NRC regional offices and headquarters will accept collect telephone calls from individuals who wish to speak to NRC representatives concerning l nuclear safety-related problems. The location and telephone numbers of the l j five regions (answered during regular working hours), are listed in Appendix D

to Part 20 of this chapter. The telephone number of the NRC Operations Center

(answered 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a day -- including holidays) is (202) 951-0550. l f

3. In i 21.3 paragraphs (a)(3), (c) and (h) are revised to read as follows:

r 121.3 Definitions. t

)

(a)

(3) In all cases, "basic component" includes safety related design, f analysis, inspection, testing, quality assurcnce, fabrication, training, i maintenance, replacement parts, or consulting services that are associated with ,

the component hardware whether these services are performed by the component

{

supplier or others.

(c) "Constructing" or "construction" means the design, manufacture, fabrication, placement, erection, installation, modification, inspection, or 18

testing of a facility or activity which is subject to the regulations in this part and consulting services related to the facility or activity that are safety related.

(h) "Operating" or "operation" means the operation of a facility or the conduct of a licensed activity which is subject to the regulations in this part .

and consulting services related to operations that are safety related.

4. Scctian 21.5 is revised to read as follows:

$21.5 Comunica tions.

Except where otherwise specified in this part, all written comunications -

and reports concerning the regulations in this part should be a'ddressed to the Document Control Desk, U.S. Nuclear Regulatory Comission Washington, DC 20555. Additionally, if the comunication is related to a nuclear power i reactor, non-power reactor, or other utilization facility licensed under Part 50, a copy shall be sent to the Director, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Comission, Washington, DC 20555. If the comunication is related to an activity licensed under Part 50 such as a fuel reprocessing plant or other production facility, a copy of the comunication shall be sent to the Director, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Comission, Washington, DC 20555. A copy of comunications related to activities licensed under Parts 30, 31, 34, 35, 40, 60, 61, 70, 71, or 72 must be sent to the Ofrector. Office of Nuclear Material Safety and Sa feguards. In the case of a licensee, a copy shall also be sent to the appropriate Regional Administrator at the address specified in Appendix D to l Part 70 of this chapter.

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5. In 121.21, paragraphs (b)(2) through (b)(4) are redesignated (b)(3) through (b)(5); new paragraph (b)(2) is added; and the section heading and paragraphs (a), (b)(1), (b)(3) and (c) are revised to read as follows:

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i 21.21 Notification of failure to comply or existence of a. defect and ,

its evaluation.

(a) Each individual, corporation, partnership, or other entity subject to l the regulations in this part shall adopt appropriate procedures to --

(1) Evaluate deviations to identify defects as soon as practicable. If, during the evaluation period, the organization discovering the deviation determines that it does not have the capability to perform the evaluation, the organization shall notify the purchasers or affected licensees within five working days of this determination so that the purchasers or affected licensees may evaluate the deviation, pursuant to the applicable reporting regulation, q and j (2) Ensure that a director or responsible officer is informed as soon as practicable, if the construction or operation of a facility or activity, or a basic component supplied for such facility or activity --

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(1) Fails to comply with the Atomic Energy Act of 1954, as amended, or any applicable rule, regulation, order, or license of the Comission relating

. to a substantial safety hazard, or (ii) Contains a defect.

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(b)(1) A director or responsible officer subject to the regulations of l this part or a person designated under $21.21(b)(5) shall notify the Comission when he or she obtains information reasonably indicating a failure to comply or j a defect affecting --

(i) the construction or operation of a facility or an activity within the United States that is subject to the licensing requirements under Parts 30, 40,

! 50, 60, 61, 70, 71, or 72 of this chapter and that is within his or her j organization's responsibility; or 1 (ii) a basic component that is within his or her organization's responsibility and is supplied for a facility or an activity within the United j States that is subject to the licensing requirements under Parts 30, 40, 50, 60, 61, 70, 71, or 72 of this chapter, i (2) The notification to NRC of a failure to comply or of a defect under

paragraph (b)(1) of this section, is not required if the director or responsible officer has actual knowledge that the Comission has been notified of the defect or the failure to comply.

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, (3) Notification required by paragraph (b)(1) of this section must be t made as follows --  !

(i) Initial notification by telefax, which is the preferred method of notification, to the NRC Operations Center at 301-492-8187 or by telephone at 301-951-0550 within two days following receipt of information by the director  !

or responsible corporate officer under paragraph (b)(1) of this section, on the  ;

identification of a defect or a failure to comply. Verification that the i telefax has been received should be made by calling the NRC Operations Center.  !

(ii) Written notification to the NRC at the address specified in 621.5 i within 30 days following receipt of information by the director or responsible l corporate officer under paragraph (a)(2) of this section, on the identification

{

of a defect or a failure to comply.

,. L (c) Individuals subject to this part may be required by the Commission to f supply additional information related to a defect or failure to comply. Such  ;

Commission action to obtain additional information may be based on reports of I defects from other reporting entities. {

6. Section 21.41 is removed. j i

521.41[ Removed]

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7. Section 21.51 is revised to read as follows:

l 521.51 Maintenance and Inspection of Records.

(a) Each individual, corporation, partnership, or other entity subject to ,

the regulations in this part shall prepare and maintain records necessary to I accomplish the purposes of this part, specifically -- l (1) Retain evaluations of all deviations for a minimum of five years. l (2) Suppliers of basic components shall retain any notifications sent to f purchasers and affected licensees for a minimum of five years.

l (3) Suppliers of basic components shall retain a record of the purchasers (

of basic components for the lifetime of the basic component. (

(b) Each individual, corporation, partnership, or other entity subject to [

the regulations in this part shall afford the Commission, at all reasonable times, the opportunity to inspect records pertaining to basic components that 21

relate to the discovery, evaluation, and reporting of deviations and defects, including any advice given to purchasers or licensees on the placement, erection, installation, operation, maintenance, modification, or inspection of a basic component.

PART 50 - 00MESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIEli

8. The authority citation for Part 50 continues to read as follows:

AUTHORITY: Sec. 102, 103, 104, 105, 161, 182, 183, 186, 189, 68 Stat.

936, 937, 938, 948, 953, 954, 955, 956, as amended, sec. 234, 83 Stat. 1244, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 2232, 2233, 2236, 2239, 2282);

secs. 201, as amended, 202, 206, 88 Stat.1242, as amended. 1244,1246(42 U.S.C.5841,5842,5846).

Section 50.7 also issued under Pub. L.95-601, sec.10, 92 Stat. 2951 (42 U.S.C.5851). Section 50.10 also issued under secs. 101, 185, 68 Stat. 936, 955, as amended (42 U.S.C. 2131, 2235); sec.102, Pub. L.91-190, 83 Stat. 853 (42U.S.C.4332). Sections 50.23, 50.35, 50.55, 50.56 also issued under sec. 185,68 Stat.955(42U.S.C.2235). Sec tions 50.33a , 50.55a , and Appendix Q also issued under sec.102, Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332).

Sections 50.34 and 50.54 also issued under sec. 204, 88 Stat. 1245 (42 U.S.C.

5844). Sections 50.58, 50.91, and 50.92 also issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239). Section 50.78 also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Sections 50.80-50.81 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2134). Section 50.103 also issued under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138). Appendix F also issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273),

il 50 10(a), (b) and (c), 50.44, 50.46, 50.48, 50.54, and 50.80(a) are issued under sec.161b, 68 Stat. 948, as amended (42 U.S.C. 2201(b)); IG 50.10(b) and (c)and50.54areissuedundersec. 1611, 68 Stat. 949, as amended (42 U.S.C.

2201(1)); and 1950.9. 50.55(e), 50.59(b), 50.70, 50.71, 50.72, 50.73, and 50.78 are issued under sec.161o, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).

9. Section 50.2 is amended by adding the following definitions in alphabetical order to read as follows:

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650.2 Defiri' ions "Basic component" means, for the purposes of $50.55(e) of this chapter:

(1) When applied to nuclear power reactors, any plant structure, system, component, or part thereof necessary to ensure (i) the integrity of the reactor coolant pressure boundary, (ii) the capability to shut down the reactor and maintain it in a safe shutdown condition, or (iii) the capability to prevent or mitigate the consequences of accidents which could result in potential offsite exposures comparable to those referred to in $100.11 of this chapter.

(2) When applied to other types of facilities or portions of such facilities for which construction permits are issued under $50.23 of this chapter, a component, structure, system or part thereof that is directly procured by the construction permit holder for the facility subject to the regulations of this part and in which a defect could create a substantial safety hazard.

(3) In all cases, safety related design, analysis, inspection, testing, quality assurance, fabrication, training, maintenance, replacement parts, or consulting services that are associated with the component hardware, whether these services are performed by the component supplier or others.

"Defect" means, for the purposes of $50.55(e) of this chapter:

(1) A deviation in a basic component delivered to a purchaser for use in a facility or activity subject to a construction permit under this part, if on the basis of an evaluation, the deviation could create a substantial safety hazard at any time throughout the expected lifetime of the facility, were it to remain uncorrected or, (2) The installation, use, or cperation of a basic component cdntaining a defect as defined in paragraph (1) of this definition; or (3) A deviation in a portion of a facility subject to the construction permit of this part providud the deviation could, on the basis of an evaluation, create a substantial safety hazard at any time throughout the expected lifetime of the facility, were it to remain uncorrected.

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"Deviation" means, for the purposes of $50.55(e) of this chapter, a departure from the technical, quality assurance, or quality control requirements defined in procurement documents, safety analysis report, construction permit, or other documents provided for basic components installed in a facility subject to the regulations of this part.

"Director" means, for the purposes of $50.55(e) of this chapter, an iedividual, appointed or elected according to law, who is authorized to manage and direct the affairs of a corporation, partnership or other entity.

"Discovery " means, for the purposes of $50.55(e) of this chapter, the 1 first identific: tion of a deviation by any individual within the organization. '

"Evaluation" means, for the purposes of $50.55(e) of this chapter, the process accomplished by or for a construction permit holder to determine ,

whether a particular oeviation could create a substantial safety hazard.

"Procurement document" means, for the purposes of $50.55(e) of this

• chapter, a contract that defines the requirements which facilities or basic components must meet in order to be considered acceptable by the purchaser.

"Responsible officer" means, for the purposes of $50.55(e) of this chapter, the president, vice-president, or other individual in the organization l of a corporation, partnership, or other entity who is vested with executive authority over activities subject to this part.

1 "Substantial safety hazard" means, for the purposes of $50.55(e) of this chapter, a loss of safety function to the extent that there is a major reduction in the degree of protection provided to public health and safety for any facility or activity authorized by the construction permit issued under this part.

! 10. In 650.55, paragraph (e) is revised to read as follows:

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950.55 Conditions of construction permits.

(e)(1) Each individual, corporation, partnership, or other entity holding a facility construction permit subject to this part shall adopt appropriate procedures to --

(1) Evaluate deviations as soon as practicable, and in all cases within 30 days of discovery, in order to identify a reportable defect that could  !

creete a substantial safety hazard at any time throughout the expected lifetime i of the plant were it to remain uncorrected.

(11) Ensure that a director or responsible officer is informed as soon as practicable, and in all cases within the initial 30-day period allowed for evaluation of deviations pursuant to paragraph (e)(1)(1) of this section, if ,

the construction of a facility or activity, or a basic component' supplied for ,

such facility or activity -- l (A) Fails to comply with the Atomic Energy Act of 1954, as amended, or  !

any applicable rule, regulation, order, or license of the Comission relating  !

to a substantial safety hazard, or I (B) Contains a defect.

(2) The holder of a facility construction pennit subject to this part who obtains information reasonably indicating that the facility fails to comply with the Atomic Energy Act of 1954, as amended, or any applicable rule, regulation, order, or Itcense of the Commission relating to a substantial safety hazard shall notify the Commission through a director or responsible officer of the failure to comply.

(3) The holder of a facility construction permit subject to this part shall notify the Commission through a director or responsible officer if the holder obtains information reasonably indicating tl'e existence of any defect found in construction or any defect found in the final design of a f acility as approved and released for construction. *

(4) This notification requirement applies to all defects regardless of whether extensive evaluation, redesign, or repair is required to conform to the criteria and bases stated in the safety analysis report or construction pennit.

Reporting under this section satisfies the responsibility of individual directors or responsible officers of holders of construction permits issued under 650.23 of this chapter to report defects under Section 206 of the Energy Reorganization Act and under 10 CFR Part 21.

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(5) The notification required by paragraph (e)(3) of this section must consist of --

(1) Initial notification by telefax, which is the preferred method of notification, to the NRC Operations Center at 301-492-8187 or by telephone at 301-951-0550 within two days following receipt of information by the director or responsible corporate officer under paragraph (e)(1)(ii) of this section, on the identification of a defect or a failure to comply. Verification that the

, telefax has been received should be made by calling the NRC Operations Center.

(ii) Written notification submitted to the Document Control Desk, U.S.

Nuclear Regulatory Cornission, Washington, DC 20555, with a copy to the 1 appropriate Regional Administrator at the address specified in Appendix 0 to

Part 20 of this chapter, a copy to the appropriate NRC resident inspector within 30 days following receipt of infomation on the identificction of a defect or failure to comply.

(iii) If insufficient infomat!cn is available for a complete ev61uation of a deviation or potential failure to comply within 30 days of discovery of the deviation, prepare and submit an interim report to the Comission that centains all available infomation, and a statement as to when a complete report will be filed. Submit the interim report within 30 days of discovery of the deviation.

4 (6) The written notification required by paragraphs (e)(5)(ii) and (iii) i of this section must clearly indicate that the notification is being submitted under paragraph (e) of this section and include the following infomation, to l

the extent known --

j (1) Name and address of the individual or individuals infoming the Comission.

(ii) Identification of the facility, the activity, or the basic component j supplied for such facility or such activity within the United States which contains a defect or fails to comply.

l (iii) Identification of the fim constructing the facility or supplying the basic component which fails to comply or contains a defect.

l (iv) Nature of the defect or failure to comply and the safety hazard which is created or could be created by such defect or failure to comply.

l (v) The date on which the infomation of such defect or failure to comply was obtained.

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, (vi) In the case of a basic component which contains a defect or fails to comply, the number and location of all such components in use at the facility subject to the regulations in this part.

(vii) The corrective action which has l'een, is being, or will be takent the name of the individual or organization responsible for the action; and the length of time that has been or will be taken to complete the action.

(viii) Any advice related to the defect or failure to comply about the facility, activity, or basic component that has been, is being, or will be

( given to other entities.

(7) The holder of a construction pemit shall prepare and maintain records necessary to accomplish the purposes of this section, specifically --

(1) Retain procurement documents, which define the requirements that facilities or basic components must meet in order to be considered acceptable, for the lifetime of the basic component.

(ii) Retain evaluations of all deviations for a minimum of five years.

(8) The requirements of this $50.55(e) are deemed to be satisfied when the defect has been previcusly reported under Part 21 of this chapter or under

$50.73 of this part.

s s , e

• Dated at Rockville, Md. this @ ~ day of Afh 6t v 1988.

F The Nuclear Regulatory Comission.

C'bu.a - 0% 1 %

kamuelJ.Chilk)

Secretary of the Comission.

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