ML20137T278

Final Rules 10CFR25,50,54 & 95, Access to & Protection of Classified Info, Amending Regulations to Confirm Requirement for Protection of & Access to Classified Info to New National Security Policy Documents

ML20137T278
Person / Time
Issue date:	03/26/1997
From:	Callan L NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO)
To:
References
FRN-61FR40555, FRN-62FR17683, RULE-PR-25, RULE-PR-50, RULE-PR-54, RULE-PR-95, RULE-PR-L-4-1PT50LIC, RULE-PR-L-4-1PT54 AF37-2-007, AF37-2-6, AF37-2-7, NUDOCS 9704160051
Download: ML20137T278 (70)

Text

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NUCLEAR REGULATORY COMMISSION OFFICE OF SECRETARY 00CXETING & CERY!CE BRANCH 10 CFR PARTS 25, 50, 54 AND 95 RIN 3150-AF37 .

Access' to And Protection of Classified Information AGENCY: '

Nuclear Regulatory Commission, ACTION: Final rule.

SUMMARY

'The Nuclear Regulatory Commission (NRC) is amending its regulations _'

to conform the requirements for the protection of and access to classified rule is information to new national security policy documents. This final necessary to ensure that classified information in the possession of NRC licensees and others under the NRC's regulatory requirements is protected in accordance with current national policies.

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EFFECTIVE DATE: (40- d a y : %e-date of publFeatimt-ffrthe-federal--Re9 '

Du6ne G. Kidd, Division of Security, Office FOR FURTHER INFORMATION CONTACT:

20555-of Administration, U.S. Nuclear Regulatory Commission, Washington, DC 0001, telephone (301) 415 7403, Email DGKONRC. GOV.

J SUPPLEMENTARY INFORMATION:

1. Background (f On August 5,1996 (61 FR 40555), the NRC published a proposed rule in the Federal Register to amend 10 CFR Parts 25 and 95 pertaining to the protection of Restricted Data and classified National Security Information at licensee, The proposed amendments were

< certificate holder and other facilities. I intended to conform NRC regulations to new national requirements for the that protection of and access to classified National . Security information ~

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were revised by the issuance of the National Industrial Security Program Operating Manual (NISP0M), Executive Order (E.0.) 12958, " Classified National &

Security Information," dated April 17, 1995, and E.O. 12968, " Access to The requirements of 10 CFR Classified Information," dated August 2, 1995 ,

Parts 25 and 95, and the sections of Parts 50 and 54 that contain requirements for access to Restricted Data, were substantially based on E.0. 12356, dated April 6, 1982, which was superseded by E.0, 12958 and supplemented by the NISP0H.

The final rule amends the provisic,s of 10 CFR Parts 25, 50, 54, and 95 that deal with requirements for access to and protection of classified information that have been changed or added by the NISPOM or the Executive security Orders with the exception of those requirements related to personnel clearance for access to Secret Restricted Data.

The proposed rule would have permitted, in SS25.15 and 95.35, access to

.most Secret Restricted Data, other than that defined as Critical Secret Restricted Data in the NISPOM and its supplement, with an "L" clearance based The on a Nat'onal Agency Check with Inquiries and Credit Check (NACIC).

Department of Energy (DGE) objected to this change in their formal comments on the proposed rule. DOE believes that, pending completion of the Joint DOE /DoD Nuclear Weapons Access Authorization Revies Group determination of what constitutes the most sensitive Restricted Data, the subsequent review of all classification guidance to determine if the guidance contains this type of information, and the upgrading of this information to Top Secret, all "0" clearance personnel with access to Secret Restricted Data must have a Given DOE's special based on a Single Scope Background Investigation (SSBI).

statutory authorities in establishing contrc's for Restricted Data, their views deserve special consideration. However, because this requirement may 2

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and i exceed the requirements of applicable National Policy (i.e., the NISPOM),

result in additional costs to licensees and certificate holders, the NRC has  :

decided to withdraw the changes to $525.15 and 95.35 .in this final rulemaking and to republish them separately for additional public comment.. This will provide interested parties an equal opportunity to address the issues and 4 provide supporting rationale for their recommendations and comments.

Other aspects of the proposed rule were generally acceptable to all l

commenters, Those changes included revised and added definitions such as l Cognizant Security Agency, Classified National Security Information, ,

Classified Information, Facility Security Clearance, Foreign Ownership, 1 Control, or Influence as well as numerous amendments to reflect the f act that ]

the NRC may permit another Cognizant Security Agency (DOE, 000, or CIA) to assume some or all of the security oversight functicos at an NRC facility under the requirements of 10 CFR Parts '25 and/or 95 when that agency also has a significant security interest at the facility (SS25.13, 25.17, 25.19, 25.21, 25.23, 25.25, 25.27, 25.29, 25.33, 95.17, 95.18, 95.19, 95.25, 95.27. 95.29,  !

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95.31, 95.33, 95.37, 95.39, 95.43, 95.47, 95.49, 95.51, 95.53, 95.57 and

" National 95.59). The final rule addresses the intent of E.O.12829 Industrial Security Program," to reduce wastef ul and inefficient dupilcative oversight of private f acilities which have classified interests from more than one government agency.

The final rule also adopts new requiiements in areas where the Executive Orders or the NISPOM, mandate specific requirements not included in

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the previous versions of the rules. These new requirements include: l Requiring that key management personnel have access authorizations as well as those employees with access to classified information (SS95.17 and 95,18):

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Permitting reinstatement of an access authorization up to 24 months _ after l J

termination instead of the previous 6-months (S25.29):

Permitting facility security officers to issue visit authorization letters directly rather than processing authorization requests through the NRC  :

Division of Security (525.35):

Requiring a finding that a facility is not under foreign ownership, j control or influence (5595.15 and 95.17): l Requiring facility security officers to have specific training related to i

their position (595.33):  ;

Permitting the use of reinforced steel filing cabinets with lockbars and key locks for classified information (provided appropriate supplemental protection is in place during non-working hours) (595.25):

Changing the security classification markings to conform to E.O.12958 (595.37):

Reducing the accountability requirements for Secret documents (595.41):

Defining procedures for challenging classification decisions that one i

believes to be in error (595.37):

Allowing for additional methods of transmitting classified information (595.39):

Changir , 10 CFR Parts 50 and 54 to refer tv current procedures in 10 CFR Parts 25 and/or 95 fcr access to classified information (5550.37 and 54.17):

and Imposing fewer limitations on a facility's authority to reproduce classified information when operationally necessary (595.43).

4 II. Comments on the Proposed Rule The Commission received two letters commenting on the proposed rule, one 4

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from Georgia Power Company and one.from'.the 00E. Copies of the letters are available for public inspection and copying for a fee at the Commission's  :

Dublic Document Room, located at 2110 L Street, NW. (Lower' Level), Washingto'n,-

DC. Both comments support the rulemaking, but provide recommendations for clarifications and improvements. The Georgia Power Company _ recommends that the NRC:

(1) Provide a procedure for the designation of the Cognizant Security i

. Agency (CSA) for a facility; (2) Address the Commission's ro_le in ensuring compliance with the rules f of other CSA's; I (3) Reconcile Restricted Data requirements in 10 CFR Parts 50 and 54 of the Commission's regulations with the proposed changes to 10 CFR Parts 25 and 95; and, ]

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(4) Define when a facility clearance from the Commission 15 required. ,

l The DOE recommends that the NRC: l (1) Use either " access authorization" throughout the rule or indicate that " personnel security clearance" is a synonym for " access authorization;"

(2) Eliminate the use of th7 term 'ir',tical Secret Restricted Data" and require all Secret Restricted Data to be protected at the level required by )

the February 1995 NISP0M Supplement; (3) Clarify the definition of " access authorization" in $25.5;  !

I (4) Clarify.the requirements for review of the SF-86 in $25.17(e);

(5) Clarify the scope of information to be protec+.ed in $95.3; (6) Change the term " survey" to " review" in $95.17(a)(2);

(7) Clarify the level of access authorization required for senior

.- maragement in $95.18

• (8) Raise the' level of protection for Secret Restricted Data in $95.25 5

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to the ' requirements of'the NISPOM Supplement; (9) Eliminate the requirements in S95.25(c)(2)(v) to change security-container combirations once every 1" months which exceeds the NISPOM requirements; (10) Require that documents indicating " multiple sources" as the basis for classification have those sources identified on the record copy of the -

document; and, (11) Require that " person" not be referred to as able to possess a facility clearance in S95.57.

Comments from Georgia Power:

Comment:

The commenter stated that "...the proposed rule does not explain which of these agencies ic +ha sppropri;t: CSA in a given situation or Conceivably, more than for a given facility, or who makes that determination.

one of the agencies co,uld be the CSA." Georgia Power recommended that th'e final rule include a more precise definition of CSA or a procedure for f

designating a CSA in a given situation, l Response: The definition of a CSA in 10 CFR Parts 25 and 95 has been changed to reflect that the CSA is the agency that exercises primary authority for the protection of the classified information at the facility and is the The NRC agreement agency with which tne facility interacts in these matters.

with the DoD and 00E implementing the National Ir.dustrial Security Program ,

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clearly indicates that One agency, the one with the greater security interest .

J as determined between the agencies, would serve as the CSA and would be the l

j agent of the other for matters relating to the protection of classified information. -The f acility would normally deal directly with the CSA on all l

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issues related to the pro +.ection of class'fied information at that facility and the CSA would inform the other agency of issues related to its security l l

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interest.

Comment: With respect to the issue' of the Commission's role of ensuring compliance with the rules of other CSAs, tne commenter's concern was "...how the Commission will be notified regarding access authorizations requested from ,

another agency. Does an NRC licensee have an obligation to notify the Commission if it applies to another CSA for an access authorization?"

Response: Section 25.17 has been revised to require a f acility, with a i

CSA other than NRC, to advise the NRC when it submits an individual for an The NRC does access authorization for access to NRC classified information.

not need to be notified when the facility submits access authorization .

In keeping requests for access to classified information of the other agency.

with the comment that the process should be simple, the change merely requires J

The NRC must be ]

a letter of request for access to NRC classified information.

involved when access to NRC classified information is requested since the NRC l The NRC will handle any necessary l must make the need-to-know determination. \

coordination between itself and the CSA. i i

Comment: The commenter noted an apparent conflict between S$50.37 and E4.17(g) and other Commission regulations.

Response: The NRC has revised those paragraphs to resolve the conflict.

The NRC has clarified that compliance with 10 CFR Parts 25 and/or 95 satisfies the requirements of S$50.37 and 54.17(g) as they relate to the protection of classified information.

l Comment: The commenter indicated that $95.15 was unclear on whether a f acility clearance was required under certain circumstances for licensee activities at other facilities. Specific?lly the commenter stated. "As j

revised by the proposed rule, it is unclear whether 10 CFR 95.15 requires an 7 l j

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NRC . licensee to obtain a f acility clearance from the Commission in order for employees of that licensee to 'use' or ' handle' classified information which is located at a completely dif ferent JJcility, including f acilities subject to the oversight of another agency. For example, does 10 CFR 95.15 require a 1 f acility clearance f rom the Commission in order for employees of an NRC licensed facility to use or handle classified information which is maintained at a DOE facility? Conversely, does 10 CFR 95.15 require the NRC to clear the non NRC licensed f acility? Although it does not appear to be the Commission's intent to require a facility clearance in either situation, an affirmative statement in this regard would assist in the implementation of the rule."  :

Response: Section 95.15 has been modified to clarify that an NRC l 2

f acility clearance is only required for the use or possession of NRC i classified information at the f acility. A licensee or other facility whose personnel are cleared by another agency f or access to that agency's information at another facility, does not require a facility clearance under However, it should be clear S95.15, nor would NRC clear the other f acility.

that if a licensee or other facility has a facility clearance for NRC ,

classified information and they wish another facility (e.g., one of their contractors), to have access to the NRC classified information at their (the contractor's) f icility, that contractor would require an NRC facility cl ea rance.

Comments from DOE: t Comment: 00E had two comments relating to " access authorization" (1) While " access authorization" was the commonly used term. . ."The introduction to the proposed rule ref erences ' personnel security clearance *  ;

and some of the language in the text contains variations, such as ' personnel access authorization *, A common term should be used throughout, or the f act 8

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t that a personnel security clearance is a synonym for access authorization estaolished."

(2) "The definition for ' access' authorization' is confusing, stating c

that it means an individual is eligible for " security clearance for access to classified information." r Response: The term " personnel security clearance" in the Supplementary section cf the final rule, which is an explanatory section rather than a ,

The other portion of the rule, has been changed to " access authorization."

changes have not been adopted since this is a recommendation for an editorial ,

The change and, in each case where the terms are used the meaning is clear.

definition of " access authorization" has been used within the NRC industrial security program since the early 1980's, including at sites with joint DOE security . interests, and within the NRC internal program since the inception of the agency, without confusion. The only change to the definition in this rule is to include certif;cate holders within its scope.

Comment: The commenter noted that the proposed rule contains the term

" Critical Rettricted Data." They state that this term has not been adopted by any agency and that the level of protection for Secret Restricted Data was not adequate. Specifically the commenter stated, "The draf t regulation uses the term ' Critical Secret Restricted Data.' This term has not be (sic) implemented by any agency. A review group was formed to review this issue and has decided not to use this term. Instead, information will be appropriately upgraded to Top Secret. It is strongly recommended that NRC not use the term

" Critical Secret Restricted Data" in this regulation. Instead we suggest that all Secret Restricted Data continue to be protected at the NISp0M supplement

' level until the critical inf ormation t.as been upgraded to Top Secret." The commenter further states "The storage requirements for Secret contained in 9

this(sic) sections are not consistent with the storage requiremer.ts for Secret Restricted Data in the NISPOM supplement."

Response: Because of DOE's statutory responsibilities for the protection e

of Restricted Data, the potential economic impact on licensees and certificate holders and possible discrepancies with the requirements of the NISP0M, NRC is ,

withdrawing the changes to SS25.15 and 95.35 which deal with the level of clearance / type of background investigation required for access to Secret Restricted Data and will republish those c':anges separately for public comment. Additionally, although the term " Critical Secret Restricted Data" is defined in and the security requirements for it are specified in Chapter 9

" Restricted Data," of the NISP0M Supplement, dated February 1995, the Supplement also indicates that a Joint DOE /DoD Nuclear Weapons Access Authorization Group is reviewing this issue and that there are ongoing efforts by the DOE and DoD to revise the requirements reflected in the Supplement.

Because that group has decided not to use the term " Critical Restricted Data,"

it has been removed from 595.31(b) and a description of the information it was intended to protect has been substituted. However, because the level of physical protection required for Sacret Restricted Data in the proposed rule is essentially the same as the requirements of the current, lorg standing Part it 95, and those requirements appear to meet the requirements of the NISPOM.

is dif ficult for the NRC to justify increasing its physical security requirements for all Secret' Restricted Data, at increased financial and administrative burden to licensees and certificate holders at this time.

However, if new policies for Restricted Data are approved and issued the NRC, at that time, will consider revising its .eg lations to reflect the new policies.

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Comment: The.commenter questioned whether $25.17(e) requires a licensee / contractor to review Part 2 of the SF-86, 4

. Response: It is not the intent of this section that personnel at a

. licensee, certificate holder, or other facility review Part 2 of the SF-86, nor has it been NRC practice that this occur. The NRC's instructions for completing the SF-86 explicitly state that Part 2 of the SF-86 is to be placed in a' sealed envelope by the individual completing the form and that the t has envelope is tc be forwarded to the NRC unopened. Section 25.17(d)(1)(i) been clarified to ensure that these requirements are clear.

Comment: The commenter is concerned that 595.3 does not include c formerly Restricted Data.

Response: While former.ly Restricted Data (FRD). information related primarily to the military use of atomic weapons, is rare in the NRC program, the NRC agrees that its regulations should clearly address all forms of classified information. Section 95.3 has been revised accordingly.  ;

Comment: The commenter is concerned that the term " security survey" is used in 10 CFR Part 95 instead of the NISPOM term " security review."

Response: The term " survey" in SS95.17(a)(2) and 95.59 has been changed to " review."

Comment: The commenter is concerned that $95.18 is not sufficiently clear about the level of access authorizations required for senior management.

Specifically, the commenter states, " Senior management cannot be cleared to the " level of the f acility" by NRC, as NRC can only grant "0" and "L" access  ;

etc.

authorizations, and facilities are classified as Secret, Top Secret, Perhaps senicr management could be cleared to a level commensurate with that of the facility clearance."

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t Response: Section 95.18 has been revised to reflect that senior management will be cleared.to a level commensurate with that of the facility r clearance. ,

The commenter is concerned that the requirement to change l Comment:

security container combinations once every 12 months exceeds the requirements of the NISP0M.

Response: Section 95,25(c)(2)(v) has been deleted, eliminating this requirement.

Comment: The commenter is concerned that documents classified from multiple sources will not have an adequate record of what those sources were.

Specifically, the commenter states, "Suggest a sentence be added to indicate that on a document marked ' multiple sources' that the multiple sources must be identified in the records copy of the document."  :

Response: The suggested revision is already contained in i

$95.37(c)(1)(iv).

Comment: The commenter is concerned about the use of the term " person" in association with a facility clearance and that the definition of facility clearance should be more detailed.

Response: It is clear from the definitions and the context that any ,

possessor of a facility clearance is obligated to immediately report certain types of information. The definition "f acility (security) clearance" is a verbatim extract from the NISPOM and the definition of " person" used in Part 95 is similarly defined throughout 10 CFR and has been used for many years without confusion as to its meaning.

111. The Final Rule With the exception of the items addressed under " Comments on the 12

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i Proposed Rule" and a slight change to the definition of " Visit Authorization The Letter" in $25.5.. the final rule is the same as the proposed rule.

Decific changes from the proposed rule are-- .

The proposed revisions to SS25.15 and 95.35 have been withdrawn:

The definition of "CSA" in 10 CFR Parts 25 and 95 has been revised to reflect that the CSA is the agency which exercises primary authority for the ,

l protection of the classified information at the facility and is the agency with which the facility interacts in these matters:

The definition of " Visit Authorization Letter" in $25.5 has been revised to clarify that such a letter is only required for inform'ation specifically  !

related to the license, certificate, or other NRC pr ogram at the f acility; ,

Section 25,17 has been amended to require a facility, with a CSA other than NRC, to advise the NRC when it submits an individual f ar an access ,

I authorization for access to NRC classified information, but not when the.

facility submits access authorization requests for access to the classified i

information of the other agency; 1 Section 95,31(b) has been revised to delete the term " Critical Secret Restricted Data" and replace it with a generic description of the type of data it was intended to protect:

Section 25.17(d)(1)(1) has been modified to clarify that facility security personnel are not to review Part 2 of the SF-86; Sections 50.37 and 54,17(g) have been amended to clarif y that compliance with 10 CFR Parts 25 and/or 95 satisfies the requirements of 10 CFR Parts 50 and 54; Section 95.3 has been modified to include Formerly Restricted Data within its scope; Section 95,15 has been modified to clarify that an hRC facility 13 l

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clearance is only required for the use or possession of NRC classified information at'the f:cility; Sections 95.17(a)(2) and 95.59 1 ave been revised to change " survey" to i i

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" review";

Section 95.18 has been revised to reflect .that senior management will be I

cleared to a level commensurate with the facility clearance rather than "to the level of" the f acility clearance; and, Section 95.25 has been revisedcto eliminate the requirement for changing i j

security container combinations once every twelve months.

Small Business Regulatory Enforcement f airness Act Ausiness Regc etory Enforcement Fairness l i in accordance with the Small l Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory l

Affairs of OMB.

Environmental impact: Categorical Exclusion The NRC has determined that this final rule is the type of action Therefore, neither an described in categorical exclusion 10 CFR 51.22(c)(2).

environmental impact statement nor an environmental assessment has been prepared for this final rule.  ;

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Paperwork Reduction Act Statement This final rule amends information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.).  ;

I These requirements were approved by the Office of Management and Budget, approval numbers 3150 0046, 3150 0047, and 3150-0050. . .

The public reporting burden for this collection of information is estimated to average .5 hours5.787037e-5 days <br />0.00139 hours <br />8.267196e-6 weeks <br />1.9025e-6 months <br /> per response, including the time for reviewing

' instructions, searching existing data sources, gathering and maintaining the ,

data needed, and completing and reviewing the collection of information. ,

Send comments on any aspect of this collection of information, P including suggestions for reducing the burden, to the Information and Records Management Branch (T 6 F33), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, or by Internet electronic mail at BJS10NRC. GOV; and to the Desk i Officer, Of fice of Information and Regulatory Af fairs, NE08-10202, (3150-0046,

-0047 and -0050), Office of Management and Budget, Washington, DC 20503.

Public Protection Notification The NRC may not conduct or sponsor, and a person is not required to i respond to, a collection of information unless it displays a currently valid OMB control number.

Regulatory Analysis final The Commission has prepared a regulatory analysis for this regulation. The analysis examines the costs and benefits of the alternatives considered by the Commission. Interested persons may examine a copy of the regul atory analysis at the NRC Public Document Room, 2120 L Street, NW.

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(Lower Level), Washington, DC. Single copies of the analysis may be obtained from Duane G. Kidd, Division of Security, Office of Administration, U. S.

l Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone (301) 415-7403.

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

l the Commission certifies that this rule does not have a significant economic The NRC carefully f impact upon a substantial number of small entities.

considered the effect on small entities in developing this final rule on the protection of classified information and has determined that none of the 1 facilities af fected by this rule would qualify as a small entity under the NRC's size standards (10 CFR 2.810).

Backfit Analysis l The NRC has determined that the backfit rule,10 CFR 50.109, applies to this rulemaking initiative because it f alls within the criteria of 10 CFR Part

50. ~109 ( a ) ( 1 ) , but that a backfit analysis is not required because this that reads rulemaking qualifies for exemption under 10 CFR 50.109(a)(4)(iii)

"That the regulatory action involves . . . redefining what level of protection to the . .

, common defense and security should be regarded as adequate."

List of Subjects 10 CFR Part 25 Classified information, Criminal penalties, Investigations, Reporting and recordkeeping requirements, Security measures.

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l 10 CFR Part 50 Antitrust, Classified information, Criminal penalties, Fire protection, Intergovernmental relations, Nuclear power plants and reactors, Radiation protection, Reactor siting criteria, Reporting and recordkeeping requirements 10 CFR Part 54 Ad.ainistrative practice and procedure, Aging management review, 1

8ackfitting, Classified information, Criminal penalties, Nuclear power plants l

and' reactors, Reporting and recordkeeping requirements 10 CFR Part 95 Classified information, Criminal penalties, Reporting and recordkeeping requirements, Security measures.

For the reasm.s set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the f ollowing amendments to 10 CFR Parts 25, SU. d4 and 95.

" ART 25 - ACCESS AUTHORIZATION FOR LICENSEE PERSONNEL

1. The authority citation for Part 25 is revised to read as follows:

AUTHORITY: Secs. 145, 161, 68 Stat. 942, 948, as amended (42 U.S.C.

2165, 2201); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841): E.0.

10865, as amended, 3 CFR 1959 - 1963 COMP., p. 398 (50 U.S.C. 401, note):

E.0. 12829, 3 CFR, 1993 Comp., p. 570; E.0. 12958, 3 CFR, 1995 Comp., p.333; E.O. 12968, 3 CFR, 1995 Comp., p.396.

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Appendix A also issued under 96 Stat. 1051 (31 U.S.C. 9701).

2. Section 25.1 is revised to read as follows:.

S 25.1 Puroose.

The regulations in this part establish procedures for granting, reinstating, extending, transferring, and terminating access authorizations of licensee personnel, licensee contractors or agents, and other persons (e.g. individuals involved in adjudicatory procedures as set forth in 10 CFR Part 2, subpart 1) who may require acc?ss to classified information.

3. Section 25.3 is revised to read as follows:

l_25.3 Scoce.

The regulations in this'part apply to licensees and others who may require access to classified information related to a license or an application for a license.

4. Section 25.5 is amended by revising the definitions Access authorization and Need-to-know and by adding the definitions of Certificate holder, Classified information, Classified National Security Information, CESS.izant Security Acency, and Visit author 4zation letters in a'.phabetical order to read as follows:

l S 25.5 Definitions. l Access authorization means an administrative determination that an

~ individual (including a consultant) who is employed by or an applicant for employment with the NRC, NRC contractors, at nts, licensees and certificate holders, or other person designated by the Executive Director for 18

0perations, is eligible for a security clearance for access to classified information.  :

Certificate holder means a facility operating under the provisions of Parts 71 or 76 of this chapter.  :

Classified information means either classified National Security 3 information, I .-stricted Data, or Formerly R. stricted Data or any one of l them. It is the 1eneric term for information requiring protection in the interest of National Security whether classified under an Executive Order or l

the Atomic Energy Act. i Classified National Security Information means information that has been determined pursuant to E.0. 12958 or any predecessor order to require is so designated.

protection ag0 inst unauthorized disclosure and that foonizj ' Security Acency (CSA) means egencies of the Executive Branch that have been author 'ed by E.0. 12829 to establish an industrial security i

I program for the purpose of safeguarding classified information under the jurisdiction of those agencies when disclosed or released to U.S. industry.  !

These agencies are the Department of Defense, the Department of Energy, the A

Central Intel):gence Agency, and the Nuclear Regulatory Commission. i e

l facility has a single CSA which exercises primary authority for the protection of classified information at the facility. The CSA for the facility provides security representation for other government agencies with

- security interests at the facility. The Secretary of Defense has been I

i designated as Executive Agent for the National industrial Security Program,  !

Need-to-know means a determination Lade by an authorized holder of-classified information that a prospective recipient requires access to 19

4 specific classified inf6rmation to perform or assist in a lawful'and authorized governmental function under the cognizance of the Commission.

i Visit authorization letters (VAL) means a letter, generated by a licensee, certificate holder or other organization under the requirements of 10 CFR Parts 25 and/or 95, ' verifying the r.eed to-know and access authorization of an individual from that organization who needs to visit another authorized facility for the purpose of exchanging or acquiring classified information related to the license.

5. In S 25,8, paragraphs (a) and (b) are revised to read as follows:

9 25.8 Information collection recuirements: OMB acoroval.

(a) The Nuclear Regulatory Commission has submitted the information collection requirements contained in this part to the Of fice of Management and Budget (OMB) for approval as required by the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). The NRC may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control numrer. OMB has approved the information l

collection requirements contained in this part under control number 3150 -

0046.

(b) The approved information collection requirements contained in this part appear in SS 25.11, 25.17, 25.21, 25.23, 25.25, 25.27, 25.29, 25.31, 25.33, and c5.35.

6. In 525.13, paragraph (a) is revised to read as follows:

20

\

1 a .

l 1

6 25.13 Maintenance of records.

(a) Each licensee or organization employing individuals ap'p roved for shall maintain personnel security access authorization under this part, records as prescribed within the part. These records are subject to review and inspection by CSA representatives during security reviews.

7. Section 25.17 is revised to read as follows:

9 25.17 Acoroval for orocessina aoolicants for access authorization.

(a) Access authorizations must be requested for licensee employees or I

other persons (e.g., 10 CFR Part 2. subpart I) who need access to classified 50, 52, 54, 70, l information in connection with activities under 10 CFR parts 72, or 76.

(b) The request must be submitted to the facility CSA. If the NRC is If the NRC the CSA, the procedures in $25.17(c) and (d) will be followeo is not the CSA, the request will be submitted to the CSA in accordance with procedures established by the CSA. The NRC will be notified of the request by a letter that includes the name, Social Security number and level of access authorization.

(c) The request must include a completed personnel security packet (see S 25.17(d)) and request form (NRC Form 237) signed by a licensee, I licensee contractor official, or other authorized person' ,

(d)(1) Each personnel security packet submitted must include the following completed forms:

(i) Questionnaire for National Security Positions (SF - 86, Parts 1 and 2) (Part 2 is to be completed by the cpplicant and placed in a sealed No licensee, licensee envelope which is to be forwarded to NRC unopened.

21

9

' contractor official, or other person at a facility is permitted to review Part 2 information):

(11) Two standard fingerprint .ards (F0 - 258); i and j (iii) Security Acknowledgment (NRC form 176);

(iv) Other related forms where specified in accompanying instr uctions  !

(NRC Form 254). ,

need.be completed by (2) Only a Security Acknowledgment (NRC Form 176) any person possessing an active access authorization, or who is being  ;

The processed for an access autnorization, by another Federal agency.

active or pending access authorization must be at an equivalent level to that required by the NRC and be based on an adequate investigation not more than five years old.

(e) To avoid delays in processing requests for access authorizations, each security packet should be reviewed for completeness and correctness (including legibility of response on the forms) before submittal.

(f) Applications for access authorization or access authorization i renewal processing that are submitted to the NRC for processing must be ]

1 j

accompanied by a check or money order, payable to the United States Nuclear i Regulatory Commission, representing the et rrent cost for the processing of l

each 0 and L

access authorization, or renewal request. Access

. authorization and access autbyrization renewal fees will be published each time the Office of Personnel Management notifies the NRC of a change in the Any changed rates it charges the NRC for the conduct of investigations.

accri

.thorization or access authorization renewal fees will be applicable to u n access authorization or access authorization renewal request received upon or after th] date of publication. Applications from individuals having current federal access authorizations may be processed 22

~ _ . . -. , _

more expeditiously and at less cost, since the Commission may accept the  ;

certification of access authorization and investigative data from other ,

4 4

Federal Government agencies that grant personnel access authorizations.

8. Section 25.19 is revised to read as follows:

6 25.19 Processina aonlications.

Each application for access authorization or access authorization renewal must be submitted to the CSA, if the NRC is the CSA, the s

application and its accompanying fee must be submitted to the NRC Division of Security, If necessary, the NRC Division of Security may obtain approval from the appropriate Commission office exercising licensing or regulatory authority before processing the access authorization or access authorization renewal request. If the applicant is disapproved for processing, the NRC Division of Security shall notifv the submitter in writing and return the i.

original. application (security packet) and its accompanying fee.

9. Section 25.21 is revised to read as follows:

for access 6 25.21 Determination of initial and continued eliaibility authorization.

(a) Following receipt by the CSA of the reports of the personnel security investigations, the record will be reviewed to determine that granting an access authorization or renewal of access authorization will not l

endanger the common defense and security and is clearly consistent with the  !

national interest. If this determination is made, access authorization will be granted or renewed, if the NRC is the CSA, questions as to initial or l j

continued eligibility will be determined in accordance with Part 10 of Chapter 1. If another agency is the CSA, that agency will, under the 23

4 requirements of the NISPOM, have established procedures at the facility to .

4 resolve questions as to initial or continued eligibility for access

- authorization. These questions will Le determined in accordance with established CSA procedures already in effect for the facility.

(b) The CSA must be promptly notified of developments that bear on  !

I continued eligibility for access authorization throughout the period for which the authorization is active (e.g., persons who marry subsequent to the completion of a personnel security packet must report this change by submitting a completed NRC form 354, Data Report on Spouse or equivalent  :

CSA form).

(c)(1) Except as provided in paragraph (c)(2) of this section, NRC "0" and "L" access authorizations must be renewed every five years f rom the date of issuance. An application for renewal must be submitted at least 120 days before the expiration of the five year period, and must include:

A statement by the licensee or other person that the individual (i) continues to require access to classifieu National Security Information or Restricted Data; and (ii) A personnel security packet as described in S25.17(d).

(2) Renewal applications and the required paperwork are not required f or ir,disiduals who have a current and active access authorization f rom another Federal agency and who are subject to a reinvestigation program by i

that agency that is determined by the NRC to meet the NRC's requirements.

(The DOE Reinvestigation Program has been determined to meet the NRC's requirements). For these individuals, the submission of the SF 86 by the licensee or other person to the other government agency pursuant to their l l

reinvestigation requirements will sat'.sfy the NRC renewal submission and paperwork requirements, even if less than five years has passed since the  :

24 I l

1

- - -,ar

l l

J or "L" access authorization. Any j date of issuance or renewal of the NRC "Q"

-NRC access authorization contint.

1. in response to the provisions of this ,

paragraph will, thereafter, not be due for renewal until the date set by the other government agency for the next teinvestigation of the individual However, the period l pursuant to the other agency's reinvestigation program. l of time for the initial and each subsequent NRC "0" or NRC "L" renewal 1

application to the NRC may not exceed seven years. Any individual who is subject to the reinvestigation program requirements of another Federal )

agency but, for administrative or other reasons, does not submit I l

reinvestigation forms to that agency within seven years of the previous submission, shall submit a renewal application to the NRC using the forms prescribed in S 25.17(d) before the expiration of the seven-year period.

(3) If the NRC is not the-CSA, reinvestigation program procedures and requirements will be set by the CSA.

10. Section 25.23 is revised to read as ft'1 0ws: i 6 25.23 Notification of arant of access av _;rization.

The determination to qrant or renew access authorization will be furnished in writing to the licensee or organization that initiated the request. Upon receipt of the notification of original grant of access authorization, the iicensee or organization shall obtain, as a condition for grant of access-authorization and access to classified information, an executed " Classified Information Nondisclosure Agreement" (SF-312) from the affected individual. The SF 312 is an agreement between the United States and an individual who is cleared for access to classified information. An employee issued an initial access authorization shall execute a SF-312 before being granted access to classified information. The licensee or other 2S

1.  ;

• O if organization shall forward the executed SF-312 to the CSA for retention, the employee refuses to execute the SF-312, the licensee or other

• organization shall deny the employee access to classified information and submit a report to the CSA. The SF 312 must be' signed and dated by the employee and witnessed. The employee's and witness' signatures must bear the same date. The individual shall also be given a security orientation briefing in accordance with S95.33 of this chapter. Records of access 4

authorization grant and renewal notification must be maintained by the ,

i licensee or other organization for three years after the access authorization has been terminated by the CSA. This information may also be furnished to other representatives of the Commission, to licensees, contractors, or other Federal agencies. Notifications of access authorization will not be given in writing to the affected individual except:

(a) In those cases in which the determination was made as a result of a Personnel Security Hearing or by Personnel Security Review Examiners; or (b) When the individual also is the official designated by the licensee or other organization to whom written NRC notifications are forwarded.

l

11. Section 25.25 is revised tc read as follows:

S 25.25 Cancellation of reauests for access authorization.

L When a request for an individual's access authorization or renewal of access authorization is withdrawn or canceled, the requestor shall notify the CSA immediately by telephone so that the full field investigation, f i

I National Agency Check with Credit Investiga+ ion, or other personnel security action may be discontinued. The requestor shall identify the full name and 26 1

l a

date of birth cf the indivi[ual, the date of request, and the type of access authorization or access authorization renewal requested. The requestor z shall confirm each telephone notification promptly in writing.

12. Section 25,27 is revised to read as follows:

i 9 25.27 Recoenina of cases in which reauests for access authorizations are canceled.

(a) In conjunction with a new request for access authorization (NRC Form 237 or CSA equivalent) for individuals whose cases were previously canceled, new fingerprint cards (FD - 257) in duplicate and a new Security Acknowledgment (NRC Form 176), or CSA equivalents, must be furnished to the CSA along with the request.

(b) Additionally, if 90 days or more have elapsed since the date of 86), or CSA equivalent, the last Ouestionnaire for Sensitive Positions (SF the individual must complete a personnel security packet (see S25.17(d)).

The CSA, based on investigative or other needs. may require a complete personnel security packet in other cases as well . A fee, equal to the ,

amount paid for an initial request, will be charged only if a new or updating investigation by the NRC is required.  ;

13. Section 25.29 is revised to read as follows:

6 25.29 Reinstatement of access authorization.

(a) An access authorization can be reinstated provided that: ,

.(1) No more than 24 months has lapsed since the date of termination of  !

the clearance; i (2) There has been no break in employment with the employer since the date of termination of the clearance: >

27  ;

l V

4

'(3) There is no known adverse information;  ;

(4) The most recent investigation must not exceed 5 years (Top Secret,  !

0) or 10 years (Secret, L); and (5) The most recent investigation must meet or exceed the scope of the is to be investigation required for the level of access authorization that reinstated or granted.

(b) An access authorization can be reinstated at the same, or lower, 1evel by submission of a CSA-designated form to the CSA, The employee may not have access to classified information until receipt of written  !

confirmation of reinstatement and an up-to-date personnel security packet will be furnished with the request for reinstatement of an access authorization. A new Security Acknowledgment will be obtained in all cases.

Where personnel security packets are not required, a request for reinstatement must state the level of access authorization to be reinstated and the full name and date of birth of the individual to establish positive identification. A fee, equal to the amount paid for an initial request, will be charged only if a new or updating investigation by the NRC is required.

14. In $25.31, paragraphs (a) and (c) are revised to read as f ollows:

6 25.31 Extensions and transfers of access authorizations.

(a) The NRC Division of Security may, on request, extend the authorization of an individual who possesses an access authorization in connection with a particular employer or activity, to permit access to classified information in connection with an assignment with another employer or activity.

28 4

u .- , - - _ _ ,

(c) Requests for extension or transfer of access authorization must state the full name of the person, his date of birth and level of access &

authorization. The Director, Division of Security, may require a new to be completed by the applicant.

personnel security packet (see $ 25.17(c))

A fee, equal to the amount paid for an initial request, will be charged only if a new or updating investigation by the NRC is required.

15 Section 25.33 is revised to read as follows:

6 25.33 Termination of access authorizations. ,

(a) Access authorizations will be terminated when:

(1) Access authorization is no longer required; (2) An individual is separated f rom the employment or the activity for which he obtained an access authorization for a period of 90 days or more:

l or (3) An individual, pursuant to 10 CFR part 10 or other CSA approved adjudicatory standards, is no longer eligible for access authorization.

(b) A representative of the licensee or other organization that employs the individual whose access authocization will be terminated shall immediately notify the CSA when the circumstances noted in paragraph (a)(1) f or (a)(2) of this section exist; inform the individual that his access authorization is being terminated, and the reason; and that he will be considered for reinstatement of access authorization if he resumes work requiring it.

(c) When an access authorization is to be terminated, a representative of the licensee or other organization shall conduct a security termination briefing of the individual involved, explain the Security Termination Statement (NRC Form 136 or CSA approved form) and have the individual 29

A complete the form. The representative shall promptly forward the original copy of the completcd Security. Termination Statement to CSA.

J

16. Section 25.35 is revised to read as follows; S 25.35 Clastified visits. l (a) The number of classified visits must be held to a minimum. The licensee, certificate holder, or other facility shall determine that the ilsit is necessary and that the purpose of the visit cannot be achieved without access to, or disclosure of, classified information. All classified visits require advance notification to, and approval of, the organization to l l

I be visited, in urgent cases, visit information may be furnished by telephone and confi'rmed in writino.

l (b) Representatives of the Federal Government, when acting in their official capacities as inspectors, investigators, or auditors, may visit a licensee, certificate holder or other's facility without furnishing advanced 4 notification, provided these representatives present appropriate government credentials upon arrival . Normally, however, Federai representatives will provide advance notification in the form of an NRC Form 277, " Request for Visit or Access Approval," with the "need to-know" certified by the appropriate NRC office exercising licensing or regulatory authority and verification of NRC access authorization by the Division of Security.

(c) The licensee, certificate holder, or others shall include the following information in all Visit Authorization Letters (VAL) which they prepare.

(1) Visitor's name,' address, and telephone number and certification of the level of the facility security clearance; (2) Name, date and place of birth, ard citizenship of the individual 30

+ _ -

intending to visit;-

(3) Certification of the proposed visitor's personnel clearance and any special access authorizations required for the visit:

(4) Name of person (s) to be visited:

(5) Purpose and sufficient justification for the visit to allow for a i

determination of the necessity of the visit; and .

(6) Date or period during which the VAL is to be valid.

(d) Classified visits may be arranged for a 12 month period. The requesting f acility shall notify all places honoring these visit arrangements of any change in the individual's status that will cause the visit request to be canceled before its normal termination date.

(e) The responsibility for determining need-to-know in connection with a classified visit rests with the individual who will disclose classified information during the visit. The licensee, certificate holder or other facility shall establish procedures to ensure positive identification of visitors before the disclosure of any classified information. ,

PART 50 - DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES

17. The authority citation for Pact 50 's revised to read as follows:

AUTHORITY: Secs. 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,  ;

1 i

2282); secs. 201, as amended. 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846), E.0. !?829, 3 CFR, 1993 Comp., p. 570:

E.0. 12958, as amended. 3 CFR, 1995 Comp., p.333; E.0. 12968. 3 CFR, 1995 i

Comp..-p. 391.

31

l 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, 955 as amended (42 U.S.C. 2131, 2235), sec. 102, Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332). Sections 50.13, 50.54(dd), and 50.103 also issued under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138). Sections 50.23, 50.35, 50.55, and 50.56 also issued under sec.185, 68 Stat. 955 (42 U.S.C., 2235). Sections 50.33a, 50.55a and Appendix 0 also issued under sec. i 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. 2234). Appendix F also issued under sec. 187, 68 Stat.

955 (42 U.S.C 2237).

18. Section 50.37 is revised to read as follows:

, J J

6 50.37 Aareement limitina access te riassified Information As part of its application and in any event before the receipt of

- Restricted Data or classified National Srcurity Information or the issuance i

of a license or construction permit, the applicant shall agree in writing that it will not permit any individual to have access to or any facility to possess Restricted Dat.'i or classified National Security information until the individual and/or' facility has been approved for such access under the provisions of 10 CFR Parts 25 and/or 95. .The agreement of the applicant in this regard shall be deemed part of the iicense or construction permit, whether so stated therein or not.

32

- ~ ~

r I

i P

PART 54 -- REQUIREMENTS FOR RENEWAL 0F OPERATING LICENSES FOR NUCLEAR  !

PLANTS ,

19. The aut'ority citation for Part 54 is revised to read as follows:

Authority: Secs, 102, 103, 104, 161, 181, 182, 183, 186. 189, 68. Stat.

i 936, 937, 938, 948, 953, 954, 955, 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, 202, 206, 88 Stat. 1242, 1244, as amended (42 U.S.C. 5841, 5842), E,0. 12829, 3 CFR, 1993 Comp., p. 570; E.O. 12958, as amer,ded 3 CFR, 1995 Comp., p.333: E.O. 12968, 3 CFR, 1995 Comp., p. 391.

20. In 554.17, paragraph (g) is revised to read as follows:

6 54.17 Filina of acolication. l

• i (g) As part of its application, and in any event before the receipt of Restricted Data or classified National Security Information or the issuance of a renewed license, the applicant shall agree in writing that it will not permit any individual to have access to or any facility to possess Restricted Data or classified National Security Information until the individual and/or facility has been approved for such access under the provisions of 10 CFR Parts 25 and/or 95. The agreement of the applicant in this regard shall be deemed part of the renewed license, whether so stated therein or not.

PART 95 -SECURITY FACILITY APPROVAL AND SAFEGUARDING 0F NATIONAL SECURITY INFORMATION AND RESTRICTED DATA 33 i

i

. I

21. The authority citation for.Part 95 is revised to read as follows:

AUTHORITY: Secs. 145, 161, 193, 68 Stat. 942, 948, as amended (42 U.S.C.

2165, 2201); sec. 201, 88 Stat. 124c, as amended (42 U.S.C. 5841): E.0. 10865, as amended 3 CFR 1959-1963 COMP., p. 398 (50 U.S.C. 401, note): E.O. 12829, 3 CFR, 1993 Comp., p. 570: E.0. 12958, as amended, 3 CFR. 1995 Comp., p. 333; E.O. 12968, 3 CFR, 1995 Comp., p.391.

22. Section 95.1 is revised to read as follows:

S 95.1 Puroose. 1 The regulations in this part establish procedures for obtaining security facility approval and for safegua,Jirig Secret ano Confidential National Security information and Restricted Data received or developed in conjunction f

with activities licensed, certified or regulated by the Commission. This part l information may

' does not apply to Top Secret information because Top Secret 1 1

not be forwarded to licensees, certificate holders, or others within the scope of an NRC license or certificate.

4

23. Section 95.3 is revised to read a- follows: 1 4

4 95.3 Scone.

The regulations in this part apply to licensees, certificate holders and others regulated by the Commission who may require access to classified

' National Security Information and/or Restricted Data and/or Formerly ed Data (FRD) that is used, processed, stored, reproduced, l Rest' l

-transmitted, transported, or handled in connection with a license or certificate or an application for a license or certificate.

34 l

National Security 24, In S95.5, the definitions for Authorized classifier, 4

Information, NRC access authorization, Security facility aooroval_, and Security survey are removed and the definitions Classified mail address, infraction. and Need-to-know are revise'd and the definitions Access authorization, Classified National Security Information, Classified shionina address, Closed area, Coanizant Security Aaency, Facility (Security) clearan'ce, Foreion ownershio control or influence, Restricted area, Security reviews, Sucolemental Protection and Violation are added in alphabetical order to read as follows:

S 95.5 Definitions.

l Access authorization means an administrative determination that an I

i individual (including a consultant) who is employed by or an applicant for employment with the NRC, NRC contractors, agents, licensees and certificate holders, or other person designated by the Executive Director f or Operations, is eligible for a security clearance for access to classified inf ormation.

Cl3ssified mail address means a mail address established for each facility approved by the NRC, to which all classified information for the facility is l

to be sent.

• *

• I j

Classified National Security Information means information that has been  !

determined pursuant to E.0. 12958 or any predecessor order to require protection against unauthorized disclosure and that is so designated.

Classified shinoina address means ar address established for a f acility,  ;

approved by the NRC to which clacsified material that cannot be transmitted as normal mail is to be sent.

35

o ..

Closed area means an area that meets the requirements of the CSA, for the purpose of safeguarding classified material that, because of its size, nature, or operational necessity, canaot be adequately protected by the normal safeguards or stored during nonworking hours in approved containers.

Coonizant Security Acency (CSA) means agencies of the Executive Branch that have been authorized by E.0. 12829 to establish an industrial security program for the purpose of safeguarding classified information under the jurisdiction of those agencies when disclosed or released to U.S. industry.

These agencies are the Department of Cefense, the Department of Energy, the l

A Central Intelligence Agency, and the Nuclear Regulatory Commission.

f acility has a single CSA which exercises primary authority for the protection of classified information at the facility. The CSA for the facility provides f I

security representation for other government agencies with security interests at the f acility. The Secretary of Defense has been designated as Executive Agent for the National Industrial Security Program. 1 Facility (Security) Clearance (FCL) means an administrative determination that, from a security viewpoint, a f acility is eligible for access to e

classified information of a certain category (and all lower categories). l

- Foreian ow-ershio. control or influence (FOC1) means a foreign interest l has the power, direct or indirect, whether or not exercised, and whether or not exercisable thrcugh the ownership of a U.S. company's securities, by contractual arrangements or other means, to direct or decide matters af fecting the management or operations of that company in a manner which may result in unauthorized access to classified information or may affect adversely the performance of classified contracts.

Inf raction means any knowing, willful, or negligent action contrary to the 36

requirements of E.0. 12958, or its implementing directives, that does not comprise a " violation," as defined in this section.

Need-to-know means a determination made by an authorized holder of classified information that a prospective recipient requires access to specific classified information in order to perform or assist in a lawful and authorized governmental function under the cognizance of the Commission.

Restricted area means a controllej access area established to safeguard classified material, that because of its size or nature, cannot be adequately is capable of protected during working hours by the usual safeguards, but that being stored during non working hours in an approved repository or secured by other methods approved by the CSA.

Security reviews means aperiodic security reviews of cleared facilities conducted to ensure that safeguards employed by licensees and others are adequate for the protection of classified information.

Suppl ement al Protection means additional security procedures such as intrusion detection systems, security guards, and access control systems.

Violation means any knowing, willful, or negligent action that could reasonably be expected to result in an unauthorized disclosure of classified >

information or any knowing, willful, or negligent action to classify or continue the classification of information contrary to the requirements of E.O.12958 or its implementing directives.

25. Section 95.8 is revised to recd as follows:

37

i S 95.8 information collection reauirements: OMB aooroval.

(a) The Nuclear Regulatory Commission has submitted the information collection requirements contained in this part to the Office of Management and Budget (OMB) for approval as required by the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). The NRC may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. OMB has approved the information 3150 0047.

collection requirements contained in this part under control number (b) The approved information collection requirements contained in this part appear in SS95.11, 95.15, 95.18, 95.19, 95.21, 95.25, 95.29, 95.33, 95.36, 95.37, 95.39, 95.41, 95.43, 95.45, 95.47, 95.53, 95.57.

l

26. In S95.13, paragraph (a) is revised to read as follows: l S 95.13 Maintenance of records.

(a) Each licensee, certificate holder or other person granted facility clearanc~e under this part shall _ maintain re:ords as prescribed within the part. These records are subject to review and inspection by CSA representatives during security reviews.

27. In S95.15, paragraphs (a) end (b) are revised to read as follows:

4 38

cl ea ra nce.

6 95.15 Acoroval fnr orocessino licensees and others for f acility (a) A licensee, certificate holder or other person who has a need to use, process, store, reproduce, transmit, transport, or handle NRC classified information at any location in connection with Commission related activities shall promptly request an NRC f acility clearance. This specifically includes situations where a licensee, certificate holder or other person needs a contractor or consultant to have access to NRC classified information.

However it is not necessary for a licensee, certificate holder or other person to request an NRC facility clearance for access to another agency's classified information at that agency's facilities or to store that agency's classif*ied information at their facility, provided no NRC classified information is involved and they meet the security requirements cf the other agency. If NRC classified information is involved the requirements of $95.17 apply.

(b) The request must include the name of the f acility, the location of the facility and an identification of any facility clearance issued by another

. government agency. If there is no evisting facility clearance. the request must include a security Standard ' Practice Procedures Plan that outlines the facility's proposed security procedures and controls for the protection of classified information, a floor plan of the area in which the matter is to be used, processed, stored, reproduced, transmitted, transported or handled; and Foreign Ownership, Control or Influence information.

28. Section 95.17 is revised to read as follows:

39

i G 95.17 Processina facility clearance.

(a) Following the receipt of an acceptable request for f acility clearance, the NRC will either accept an existing facility clearance granted by a current CSA and authorize possession of license or certificate related classified Processing will information or process the facility for a facility clearance. I J

i ncl ud e--

(1) A determination based on review and approval of a Standard Practice Procedure Plan that granting of the Facility Clearance would not ,

be inconsistent with the national interest, including a finding that the f acility is not under foreign ownership, control, or influence to such a l

degree that a determination could not be made; I (2) An acceptable security review conducted by the NRC;

" (3) Submitting key management personnel for personnel clearances 1

(PCLs): and (4) Appointing a U.S. citizen employee as the f acility security f l

4 officer. l j

(b) An interim Facility Clearance may be granted by the CSA on a temporary basis pending completion of the full investigative requirements. 1 l

29. SS 95.18 and 95.19 [ Redesignated) S595.19 and 95.20,

30. A new 595.18 is added to read as follows:

40

3 3

S 95.18 K6v oersonnel .

The senior management official and the Facility Security Officer must 31 ways be cleared to a level commensurate with the Facility Clearance.

an f Other' key management officials, as determined by the CSA, must be granted When formal access authorization or be excluded from classified access.

exclusion action is required, the organization's board of directors or similar i

executive body shall affirm the following, as appropriate.

(a) Officers, directors, partners, regents, or trustees (designated by ,

4 l

name) that are excluded may not require, may not have, and can be effectively excluded from access to all classified information disclosed to the organization. These individuals also may not occupy positions that would enable them to adversely affect the organization's policies or practices in P the performance of activities involving classified information. This action a

will be made a matter of record by the organization's executive body. A copy 4

of the resolution must be furnished to the CSA.

(b) Officers, directors, partners, regents, or trustees (designated by name) that are excluded may not require, may not have, and can be effectively denied access to higher-level classified information (specify which higher level (s)). These individuals may not occupy positions that would enable them to adversely affect the organization's policies or practices in the protection of classified information. This action will be made a matter of record by the organization's executive body. A copy of the resolution must be furnished to the CSA.

31. In the newly redesignated S95.19, the introductory text of paragraphs (a) and (b) are revised to read as follows:

1 l

I 41 4

4

6 6 95.19 Chances to security oractices and procedures.

(a) Except as specified in paraw raph (b) of this section, each licenset, certificate holder or other person shall obtain prior CSA approval for any proposed change to the name, location, security procedures.and controls, or floor plan of the approved f acility. A written description of the proposed change must be furnished to the CSA with copies to the Director, Division of Security, Office of Administration, NRC, Washington, OC 20555-0001 (if NRC is not the CSA), and the NRC Regional Administrator of the cognizant Regional ,

Office listed in appendix A of part 73, The CSA shall promptly respond in writing to all such proposals. Some examples of substantive changes requiring prior CSA approval include--

(b) A licensee or other person may effect a minor, non substantive change to an approved Standard Practice Procedures Plan for the safeguarding of classified information without receiving prior CSA approval, provided prompt notification of such minor change is furnished to the addressees noted in paragraph (a) of this section, and the change does not decrease the Some examples of effectiveness of the Standard Practice Procedures Plan.

minor, non-substantive changes to the Standard P-actice Procedures Plan include--

2

32. The newly redesignated $95.20 is revised to read as follows:

l 4 95.20 Grant. denial or termination of facility clearance. 1 The Division of Security shall provide notification in writing (or orally l

42

~ - .

1 0 ,

~

l l

with written confirmation) to the licensee or other organization of the l

Commission's grant, acceptance of another agency's facility Clearance, denial, I

f or termination'of facility clearance. This information must also be furnished to representatives of the NRC, NRC licensees, NRC certificate holders, NRC '

i i

contractors, or other Federal agencies having a need to transmit classified information to the licensee or other person.

33. Section 95.21 is revised to read as follows:

S 95.21 Withdrawal of reauests for facility clearance.

l When a request for facility clearance is to be withdrawn or canceled, the )

requester shall netify the NRC Division of Security immediately by telephone so that processing for this approval may be terminated. The notification must identify the full name of the individual requesting discontinuance, his 1 identification of the facility. The  !

position with the facility, and the full l requestor shall confirm the telephone notification promptly in writing.

34. Section 95.23 is revised to read as follows:

1 S 95.23 Termination of facility clearance.

(a) Facility clearance will be terminated when-- )

(1) There is no longer a need to use, process, store, reproduce, transmit, transport or handle classified matter at the facility; or (2) The Commission makes a determination that continued facility clearance is not in the interest of national security.

43 '

- - . ~ . - - . -.. .. -= .-. - . - . -

• e (b) When f acility clearance is terminated, the licensee or other person will be notified in. writing of the determination and the procedures outlined in' S95.53 apply.

4

35. In 595.25, paragraphs (a), (b), (c). (d), (g) (h), and (1) are revised and paragraph (j) is added to' read as follows: ,

6 95.25 Protection of classified information in storace. 1 1(a)- Secret documents, while unattended or not in actual use, mcst be stored in .

(1) A safe, steel file cabinet, or. safe-type steel file container that has an automatic unit locking mechanism. All such receptacles will be accorded supplemental protection during non-working hours; or (2) Any . teel file cabinet that has four sides and a top and bottom ,

(all permanently attached by welding, rivets or peened bolts so the contents and is secured by cannot be removed without leaving visible evidence of entry) a' rigid metal lock bar and an approved key operated or Combination padlock.

The keepers of the rigid metal lock bar must be secured to the cabinet by welding, rivets, or bolts, so thay cannot be removed and replaced without leaving evidence of the entry. The drawers of the container must be held securely, so their contents cannot be removed without forcing open the drawer.

This type cabinet will be accorded supplemental protection during non-working hours.

(b)- Confidential matter while unattended or not in use must be stored in the same manner as SECRET matter except that no supplemental protection is required.

44

.- -u j

~

(c) Classified lock combinations.

(1) A minimum number of authorized persons may know the combinations to authorized storage containers. Security containers, vaults, cabinets, and other authorized storage containers must be kept locked when not under the direct supervision of an authorized person entrusted with the contents.

(2) Combinations must be changed by a person authorized access to the contents of the container, or.by the Facility Security Officer er his or her designee. Combinations must be changed upon -

(i)

The initial use of an approved container or lock for the protection l of. classified material: )

(ii)

The termination of employment of any person having knowledge of the combination, or when the clearance granted to any such person has been withdrawn, suspended, or revoked;

~

f (iii) The compromise or suspected c'ompromise of a container or its combination, or discovery of a container lef t unlocked and unattended; or (iv)

At other times when considered necessary by the Facility Security Officer or CSA.

(d) Pecords of combinations, if a record is made of a combination, the record must be marked with the highest classification of material authorized for storage in the container. Superseded combinations must be destroyed.

(g) Posted information. Containers may not bear external markings indicating the level cf classified material authorized for storage. A record of the names of persons having knowledge of the combination must be posted 45

• o a

inside the container.

(h) End of day security checks.

(1) Facilities that store classified material shall establish a system of  ;

security checks at the cic3e of each working day to ensure that all classified material and security repositories have been appropriately secured.

(2) Facilities operating with multiple work shifts shall perform the security checks at the end of the last working shif t in which classified materia' had been removed f rom storage for use. The checks are not required during continuous 24-hour operations.

(1) Unattended security container found opened. If an unattended security container housing classified matter is found unlocked, the custodian or an alternate must be r.otified immediately. The container must be secured by protective personnel and the contents inventoried as soon as possible but not later than the next workday. A report reflecting all actions taken must be 10 CFR part 73 submitted to the responsible Regional Office (see appendix A, for addresses) with an information copy to the NRC Division of Security. The licensee shall retain records pertaining to these matters for three years after completion of final corrective action.

(j) Supervision of keys and padlocks. Use of key-operated padlocks are subject 'to the following requirements:

(1) A Vay and lock custodian shall be appointed to ensure proper custody and handling of keys and locks used for protection of classified material:

(2) A key and lock control register must be maintained to identify keys for each lock and their current location and custody; (3) Keys and locks must be audited each month; (4) Keys must be inventoried with each change of custody; (5) Keys must not be removed from the premises; 46 i'

• e (6) Keys and spare locks must be protected equivalent to the level of I

classified material involved:

(7) Locks must be changed or rotated at least annually, and must be replaced after loss or compromise of their operable keys; and (8) Master keys may not be made 1

36. Section 95.27 is revised to read as follows:

S 95.27 Protection while in use.

i l

While in use, matter containing classified information must be under the direct control of an authorized individual to preclude physical, audio, and visual access by persons who do not have the prescribed access authorization f

or other written CSA disclosure authorization (see S95.36 for additional l_

information concerning disclosure authorizations).

37, Section 95.29 is revised to read as follows:

d J

S 95.29 Establishment of Restricted or Closed areas.

(a) If, because of its nature, sensitivit; c- importance, matter 9

containing classified information cannot otherwise be effectively controlled in accordance with the provisions of SS 95.25 and 95.27, a Restricted or 4

Closed area must ~be established to protect such matter.

(b) The following measures apply to Restricted Areas:

(1) Restricted areas must be separated from adjacent areas by a physical

! barrier designed to prevent unauthorized access (physical, audio, and visual) 47 l

- . - ~ _ _ _ . ..

into these areas.

(2) Controls must be established to prevent unauthorized access to and removal of classified matts ~1 ossess f

('.-) /.;tess to classified matter must be limited to persons who I I

appropriate access authorization or other written CSA disclosure authorization and who require access in the performance of their official duties or l regulatory obligations.

(4) Persons without appropriate access authorization for the area visited must be escorted by an appropriate CSA access authorized person at all times while within Restricted or Closed areas.

(5) Each individual authorized to enter a Restricted or Closed area must be issued a distinctive form of identification (e.g., badge) when the number of employees assigned to the area exceeds thirty per shif t. )

(6) During nonwo ding hours, admittance must be controlled t'v protective personnel . Protective personnel shall conduct patrols during nonworking hours at 1 ast every 8 hours9.259259e-5 days <br />0.00222 hours <br />1.322751e-5 weeks <br />3.044e-6 months <br /> and more f requently if necessary to maintain a commensurate level of protection. Entrances must be continuously monitored by l

protective personnel or by an appcoved alarm system. j i

(c) Due to the size and nature of the classified material, or operational necessity, it may be necessary to constrrct Closed Areas for storage because Y

GSA-approved containers or vaults are unsuitable or impractical . Closed Areas 5 must be approved by the CSA. The followins b sures apply to Closed Areas:

(1) Access to Closed Areas must be controlled to preclude unauthorized access. This may be accomplished through the use of a cleared employee or by a CSA approved access control device or system. l (2) Access must be limited to authorized persons who have an appropriate security clearance and a need-to;know for the classified material /information i 48 ,

l l

l l

l

within the area. Persons without the appropriate level of clearance and/or need-to know must be escorted at all times by an authorized person where inadverte.t or unauthorized exposure to classified information cannot l

otherwise be effectively prevented.

(3) The Closed Area must be accorded supplemental protection during j

non-working hours. During these hours, admittance to the area must be i controlled by locked entrances and exits secured by either an approved built in combination lock or an approved combination or key-operated padlock.

However, doors secured from the inside with a panic bolt (for example, actuated by a panic bar), a dead bolt, a .-igid wood or metal bar, or other means approved by the CSA, do not require additional locking devices.

(4) Open shelf or bin storage of classified documents in Closed Areas requires CSA approval . Only areas protected by an approvea intrusion detection system will qualif y for approval .

38. Section 95.31 is revised to read as follows:

6 95.31 Protectivo nersonnel.

Whenever protective personnel are used to protect classified information they shall:

(a) Possess an L access authorization (or CSA equivalent) if the licensee or other person possesses information classified Confidential National Security Information, Confidential Restricted Data or Secret National Security Information.

(b) Posses: 0 access authorization (or C3A equivalent) if the licensee or other person possesses Secrr+ Restricted Data related to nuclear 49

weapons design, manufacturing and vulnerability information; and certain particularly sensitive Naval Nuclear Propulsion Program information (e.g.,

fuel manuf acturing technology) and .ne protective personnel require access as part of their regular duties.

39 Section 95.33 is revised to read as follows:

5 95.33 Security education.

All cleared employees must be provided with security training and briefings commensurate with their involvement with classified information.

The facility may obtain defensive security, threat awareness, and other education and training information and material from their CSA or other sources.

(a) Facility Security Officer Training. Licensees and others are responsible for ensuring that the Facility Security Officer, and others performing security duties, complete security training deemed appropriate by the CSA. Training requirements must be based on the f acility's involvement with classified information and may incivie a Facility Security Officer orientation course and, for facility Security Of#icers at facilities with safeguarding capability, a Facility Security Officer Program Management Course. Training, if required, should be completed within 1 year of appointment to the position of Facility Security Officer.

(b) Government-Provided Briefings. The CSA is responsible for providing initial security briefings to the Facility Security Officer, and for ensuring that other briefings regt. ired for special categories of information are provided, 50

(c) Temporary Help Suppliers. A temporary help supplier, or other contractor who employs cleared individuals solely for dispatch elsewhere, is responsible for ensuring that required briefings are provided to their cleared personnel. The temporary help supplier or the using licensee or other fecility may conduct these briefings.

The SF-312 (d) Classified Information Nondisclosure Agreement (SF 312).

is an agreement between the United States and an individual who is cleared for. ,

access to classified information. An employee issued an initial access authorization must. in accordance with the requirements of $25.23 of this chapter, execute an SF-312 before being granted access to classified information. The Facility Security Officer shall forward the executed SF-312 i

to the CSA for retention. If the employee refuses to execute the SF-312. the i l

licensee or other f acility shall deny the employee access to classified l information and submit a report to the CSA. The SF 312 must be signed and dated by the employee and witnessed. The employee's and witness' signatures must bear the same date.

Initial Security Briefings. Before being granted access to (e) classified information. an employee shall receive an initial security briefing that includes the following topics:

(1) A Threat Awareness Briefing.

(2) 'A Defensive Security Briefing.

(3) An overview of the security classification system. ,

I (4) Employee reporting obligations and requirements.

(5) Security procedures and duties applicable to the employee's job.  !

(f) Refresher Briefings. The licensne or other f acility shall conduct periodic ref resher briefings for all cleared employees. As a minimum, the refresher briefing must' reinforce the information provided during the initial 51

briefing and inform employees of appropriate changes in' security regulations.

This requirement may be satisfied by use of audio / video materials and by issuing written materials on a regular basis.

(g) Debriefings. Licensee and other facilities shall debrief cleared employees at the time of termination of employment (discharge, resignation, or retirement); when an employee's access authorization is terminated, suspended, or revoked ; and upon termination of the Facility Clearance.

(h) Records reflecting an individual's initial and refresher security ,

orientations and security termination must be maintained for three years after >

termination of the individual's access authorization.

40. Section 95.36 is revised to read as fcilows:

S 95.36 Access by reoresentatives of the International Atomic Enerov Aaency I

or by carticipants in other international aareements.

(a) Based upon written disclosure authorization from the NRC Division of Security that an individual is an authorized representative of the International Atomic Energy Agency (IAEA) or other international organization and that the i .dividual is authorized to make visits or inspections in a

accordance with an established agreement with the United States Government, licensee, certificate holder or other person subject to this part shall permit the individual (upon presentation of the credentials specified in $75.7 of this chapter and any other credentials identified in the disclosure authorization) to have access to matter which is classified National Security i l

Information that is-relevant to the conduct of a visit or inspection. A  !

disclosure authorization under this section does not authorize a licensee, 52 ,

certificate holder, or other person subject to this part to provide access to Restricted Data.

(b) For purposes of this section, classified National Serurity'Information  ;

is relevant to the conduct of a visit or inspection if--

(1) In the case of a visit, chis information is needed to verify information according to $75.13 of this chapter; or (2) In the case of an inspection, an inspector is entitled to have access to the information under $75.42 of this chapter.

(c) In accordance with the specific disclosure authorization provided by the Division of Security, licensees or other persons subject to this part are authorized to release (i.e. , transfer possession of) copies of documents which contain classified National Security Information directly to IAEA inspectors and other representatives officially designated to request and receive classified National Security Information documents. These documents must be ,

l marked specifically for release to IAEA or other international organizations in accordance with instructions contained in the NRC's disclosure authorization letter. Licensees and other persons subject to this part may also forward these documents through the NRC to the international organization's headquarters in accordance with the NRC disclosure authorization. Licensees and other persons may not reproduce documents containing classified National Security Information except as provided in )

S95.43.

(d) Records regarding these visits and inspections must be maintained for five years beyond the date of the visit or inspection. These records must ,

specifically identify each document which has been released to an authorized representative and indicate the date of the release. These records must also identify (in such detail as the Division of Security, by letter, may require) 53 l

n

. , i the categories of documents that the authorized representative has had access l and the date of this access. A licensee or other person subject to this part ,

l shall also retain Division of Security disclosure authorizations for five I

years beyond the date of any visit or inspection when access to classified information was permitted.

f (e) Licensees or other persons subject to this part shall take such measures as may be necessary to preclude access to classified matter by participants of other international agreements unless specifically provided for under the terms of a specific agreemera. l

41. Sectiori 95.37 is revised to read as follows:

l ip5.37 Classification and orecaration of documents.

(a) Classification. Classified information generated or possessed by a licensee or other person must be appropriately marked. Class'ified material which is not conducive to markings (e.g., equipment) may be exempt from this requirement. These exemptions are subject to the approval of the CSA%on a case-by-case basis. If a person or facility generates m possesses information that is believed to be classified based on guidance provided by the NRC or by derivation from classified documents, but which no authorized ciassifier has determined to be classified, the information must be protected and marked with the appropriate.classificatien inarkings pending review and signature of an NRC authorized classifier. This information shall be protected as classified i-informatio^ pending final determination.

(b) Classification consistent with content. Each document containing classified information shall be classified Latret or Confidential according to its content. NRC licensees' or others subject to the requirements of 10 CFR 54  !

L Part 95 may not make original classification decisions. ,

(c) Markings required on face of documents.

(1) For derivative classification of classified National Security Information:

(1) Derivative classifications of classified National Security Information must contain the identity of the source document or the classification guide. including the agency and office of origin, on the

" Derived From" line and its classification date. If more than one source is cited, the " Derived from" line should ind,cate " Multiple Sources."

When marking derivatively classi#ied (ii) Declassification instructions.

documents, the "DECLAS$1FY ON" line must carry forward the declassificatin if multiple sources are instructions as reflected in the original document, used, the instructions will carry forward the longest duration.

(iii) If the source document used for derivative classification contains the declassification instruction, " Originating Agency's Determination Required" (0ADR), the new document should reflect the date of the original cl'assification of the information as contained in the source doc" ment or classification guide. An example of the stamp might be as follows:

Derived From j (source)

Reason Declassify On: Source Marked "OADR'i Date of Source:

Classifier:

(Name/ Title / Number)

(iv) The derivative classifier shall maintain the identification of each source with the file or record copy of the derivatively classified document.

(2) For Restricted Data documents:

55

must be (i) Identity of the classifier. The identity of the classif t shown by completion of the Derivative Classifier line. The ' Derivative Classifier line must show the name of the person classifying the document and the basis for the classification. Dates for downgrading or declassification do not apply. )

and (ii) Classification designation (e.g., Secret, Confidential)

Restricted Data. NOTE: No " Declassification" instructions will be placed on documents containing Restricted Data. I (d) Placement of markings. The highesc classification marking assigned to a document must be placed in a conspicuous fashion in letters at the top and bottom of the outside cf the front covers and title pages, if any, and first and last pages on which text appears, on both bound and unbound documents, and on the outside of back covers of bound documents. The balance of the pages must be marked at the top and bottom with:

(1) The overall classification marking assigned to the document; I

(2) The highest classification marking -equired by content of the page; or l (3) The marking UNCLASSIFIED if they have no classi fied content.

(e) Additional markings.

(1) If the document contains any form of Restricted Data, it must Lear the appropriate marking on the first page of text, cn the f ront cover and title i l

page, if any, for example: "This document contains Restricted Data as defined in the Atomic Energy Act of 1954. Unauthorized disclosure subject to Administrative and Criminal Sanctions."

(2) Limitation on reproduction or dissemination. If the originator or classifier determines that reproduction or further dissemination of a dccument should be restricted, the following additional worJing may be placed on the face of the document:

56

. m Reproduction or Further Dissemination Requires Approval of 1

If any po* tion of this additit a marking does not apply, it should be crossed out. 1 (f) Portion markings. In addition to the information required on the face i of the document, each classified document is required, by marking or other means,. to indicate clearly which portions are classified (e.g., paragraphs or (C) pages) and which portions are not classified. The symbols (S) for Secret, f

for Confidential (U) for Unclassified, or (RD) .for Restricted Data may be \

j used immediately preceding or following the text to which it applies, except l I

that th? designation must follow titles or subjects. (Portion marking of If this paragraphs is nnt required for documents containing Restricted Data.)

type of portion marking is not practicable, the document must contain a f

description sufficient to identify the classified information and the unclassified information.

Exampl e Pages 1 3 Secret Pages 4 19 Unclassified Pages 20-26 Secret Pages 27 32 Confidential (g) Transmittal Jocument. If a document transmitting classified information contains no classified information or the classification level of the transmittal document is not as high e- the highest classification level of 57

l i

its enclosures, then the document must be marked at the top and bottom with a classification at lea'st as high as its highest classified enclosure. The classification may be higher if the enc'losures, when combined, warrant a i

higher classification than any individual enclosure. When.the contents of the transmittal document warrants a lower classification than the highest -,

classified enclosure (s) or combination of enclosures or requires no j

classification, a stamp or marking such as the following must also be used on the transmittal document:

i UPON REMOVAL Of ATTACHMENTS THIS DOCUMENT IS:

(Classification level of transmittal docunent standing alone or the word i

UNCLASS! fled if the transmittai occument contains no classified  !

L information.)

(h) Classification challenges, Persons in authorized possession of classified National Security information who in good faith believe that the inf ormation*s classification status (i.e. that the document), is classified at either too high a level for its content (overclassification) nr too low for its content (underclassification) are erT =cted to challe, ye its classification status. Persons who wish to challenge a classifi^ation status shal~. -

(i) Tiefer the document or information to the originator or to an authorized NRC classifier for review. The authorized classifier shall review the document and render a written classification decision to the holder of the information.

(ii) In the event of a question regarding classification review,. the holder of the information or the authorized classifier shall consult the NRC Division of Security, Information Security Branch, for as;istance.

58

. .. I 1

(iii)

Persons who challenge classification decisions have the right to rppeal the classification decision to the Interagency Security Classification Appeals Panel . I (iv)

Persons seeking to challenge the classification of information will i not be the subject of retribution.

(1) Files, folders or group of ' documents. Files, folders, binders, or )

l group's of physically connected documents must be marked at least as high as -l the highest classified document which they contain.

(j) Drafts and working papers. Drafts of documents and working papers  :

which contain, or whic' are believed to contain, classified information must f be marked as classified information.

(k) Classification guidance.

~

Licensees, certificate holders, or other 1

persons subject to this part shall classify and mark classified matter as National Security Information or Restricteo Data, as appropriate, in I accordance with classification guidance provided by the NRC as part of the l facility clearance process.

42. Section 95.39 is revised to read as fol'ows:

9 95.39 External transmission of documents and material.

(a) Restrictions. Documents and material containing classified information received or originated in connection with an NRC license or certificate must be transmitted only to CSA approved security facilities.

(b) Preparation of documents. Documents containing classified information must be prepared in accordance w th the f ollowing when transmitted outside an i

indivi' dual instal.lation, j

59

.o o (1) The documents must be enclosed in two sealed opaque envelopes or wrappers.

(2) The inner envelope or wrapper must contain the addressee's classified mail address and the name of the intended recipient. The appropriate classification must be placed on both, sides of the envelope (top and bottom) and the additional markings, as appropriate, referred to in S95.37(e) must be placed on the side bearing the address. f l

(3) The outer envelope or wrapper must contain the addressee's classified mail address. The outer envelope or wrapper may not contain any classification, additional marking or other notation that indicates that the l

enclosed document contains classified information.

(4) A receipt that contains an unclassified description of the document, the document number, if any, date of the document classification, the date of transfer, the recipient and the person transferring the document must be enclosed within the inner envelope containing the document and be signed by the recipient and returned to the sender whenever the custody of a Secret er document is transferred. This receipt process is at the option of the sen for Confidential information.

(c) Methods of transportation.

(1) Secret matter may be transported only by one of the following methods within and directly between the U.S., Puerto Rico, or a U.S. possession or trust territory:

(i)

U.S. Postal Service Express Mail and U.S. Postal Service Registered Mail. NOTE: The " Waiver of Signature and Indemnity" block on the U.S. Postal Service Express Mail Label 11-B may not be executed and the use of external (street side) express mail collection boxes is prohibited.

(ii) A cleared " Commercial Carrier."

60

a :,

i (iii) A cleared commercial messenger service engaged .in the intracity / local area delivery (same day delivery only) of classified material.

(iv)

A commercial delivery company, approved by the CSA, that- provides nationwide, overnight service with computer tracing and reporting features.

These companies need not be security cleared.

(v) Other methods as directed, in writing, by the CSA.

(2) Confidential matter may be transported by one of the methods set forth j in paragraph (c)(1) of this section, oy U.S. first class, express or certified mail, First class, express, or certified mail may be used in transmission of Confidential documents to Puerto Rico or any United States territory or i

possession, j Classified information i (d) Telecommunication of classified information.

may not be telecommunicated unless the telecommunication system has been approved by the CSA. Licensees, certificate holders or other persons who may require a secure telecommunication system shall submit a telecommunication plan as part of their request for f acility clearance, as outlined in S95.15, or as an amendment to their existing Standard Practice Procedures Plan for the J protection of classified information (e) Security of classified information in transit. Classified matter that, because of its nature, cannot be transported in accordance with l S95.39(c), may only be transported in accordance with procedures approved by the CSA. Procedures for transporting classified matter are based on a satisf actory transportation plan submitted as part of the licensee's, certificate holder, or other person's request for f acility clearance or 61

submitted as an amendment to its existing Standard Practice Procedures Plan.

43. Section 95.41 is revised to read as follows: 1

[

-6 95.41 External receiot and disoatch records. ,

e Each licensee, certificate holder or other person possessing classified ,

information shall maintain 'a record that reflects:

(a) The date of the material; (b) The date of receipt or dispatch:

ii (c) The classification; (d) An unclassified description of the material; and (e) The identity of the sender from which the material was received or i l

recipient to which the material was dispatched. Receipt and dispatch records l must be retained for 2 years. l

44. Section 95.43 is revised to read as f ollows:

S 95.43 Authority to reoroduce.

I (a) Each licensee or other person possessing classified information shall establish a reproduction control system to ensure that reproduction of j classified material is held to the minimum consistent with operational requirements. Classified reproduction must be accomplished by autherized employees' knowledgeable of the procedures for classified reproduction. The use j of technology that prevents, discourages, os detects the unauthorized reproduction of classified documents is eicouraged.

62  !

l h

(b) Unless restricted' by the CSA, Secret and Confidential documents may be

~

reproduced. Reproduced copies of classified documents are subject to the same protection as the original documents.

(c) All reproductions of classified material must be conspicuously marked with che same. classification markings as the material being reproduced. Copies of classified material must be reviewed after the reproduction process to ensure that these markings are visible.

45. Section' 95.45 is revised to read as follows: ,

6 95.45 Chances in classification.

j (a) Documents containing classified National Security Information must be l

)

downgraded or declassified as authorized by the NRC classification guides or I I

as determined by the NRC Requests for downgrading or declassifying any NRC classified information should be forwarded to the NRC Division of Security.

Requests for downgrading Office of Administration, Washington, DC 20555-0001.

or declassifying of, Restricted Data will be forwarded to the NRC Division of Security for coordination with the Department of Energy.  ;

l J

(b) If a change of classification o- dcclassification is approved, the

-previous classification marking must be canceled and the following statement, properly completed, must be placed on the first page of the document:

Classification canceled (or changed to)

(Insert appropriate classification) by authority of 63

(Person authorizing change in classification) by (Signature of per' son making change and date thereof)

(c) New markings reflecting the current classification status of the document will be applied in accordance with the requirements of S95.37.

(d) Any persons making a change in classification or receiving notice of such a change shall forward notice of the change in classification to holders I

of all copies as shown on their records.  !

)

i 46, Section 95.47 is revised to read as follows: i 6 95.47 Destruction of matter containina classified information.

Documents containing classificd information may be destroyed by burning, pulping, or another method that ensures complete destruction of the information that they contain. The method of destruction must preclude recognition or reconstruction of the classified information. Any doubts on methods should be referred to the CSA. If the document contains Secret information, a record of the subject or title, document number, if any, originator,-its date of origination and the date of destruction must be signed by,the person destroying the document and must be maintained in the office of the custodian at the time of destruction. These destruction records must be retained for two years after destruction.

64

47. Section 95.49 is revised to read as follows:

' S 95.49 Security of automatic data orocessina (ADP) systems.

Classified data or information may not be processed or produced on an ADP system unless the system and procedures to protect the classified data or information have been approved by the CSA. Approval of the ADP system and ';

procedures is based on a satisfactory ADP security proposal submitted as part of the licensee's or other person's request for f acility clearance outlined in 595.15 or submitted as an amendment to its existing Standard Practice Procedures Plan for the protection of classified information.

48. Section 95.51 is revised to read as follows:

revocation of S 95.51 Retrieval of classified matter followina susoension or access aut)orization.

In any case where the access authorization of an individaal is suspended or revoked in accordance with the procedures set forth in Part 25 of this  !

l chapter, or other relevant CSA procedures, the licensee, certificate holder or other organization shall, upon due notice from the Commission of such suspension or revocation, retrieve all classified information possessed by the individual and take the action necessary to preclude that individual having l

further access to the information.

49. Section 95.53 is revised to read as follows:

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S 95.53 Termination of facility clearance.

(a) If the need to use, process, store, reproduce, transmit, transport, or handle classified matter no longer exists, the facility clearance will be terminated. The f acility may deliver all documents and materials containing classified information to the Commission or to a person authorized to receive them or destroy all such documents and materials. In either case, the facility shall submit a certification of nonpossession of classified information to the NRC Division of Security.

(b) In any instance where facility slearance has been terminated based on a determination of the CSA that further possession of classified matter by the l

facility would not be in the intc.~est vi tne national security, the facility shall, upon notice from the CSA. immediately deliver all classified documents 1 l

and materials to the Commission along with a certificate of nonpossession of classified information.

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50. Section 95.55 is revised to read as follows:

1 6 95.55 Continued acclicability of the reaulations in this oart. 1 The suspension, revocation or other termination of access authorization or the termination of f acility clearance does not relieve any person f rom compliance with the regulations in this part.

51. Section 95.57 is revised to read as follows:

6 95.57 Renorts. .

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Each' licensee or other person having a facility clearance shall immediately report to the CSA and the Regional Administrator of the appropriate NRC Regional Office listed in appendix A,10 CFR part 73:

(a) Any alleged or suspected violation of the Atomic Energy Act, Espionage-Act, or other Federal statutes ~ related to classified information.

(b) Any infractions, losses, compromises or possible compromise of classified information or classified documents not falling within paragraph i

(a) of this section.

(c) in addition, an authorized classifier of a licensee, certificate holder or other organization subject to this Part shall complete an NRC Form

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790, " Classification Record," whenever matter containing classified I information is generated, its classification changed or it is declassified.

Notification of declassification is not required for any document or material

- which has an automatic declassification date. Completed NRC Form 790 must be 20555-0001, on a submitted to the NRC Division of Security, Washington, DC monthly basis, l

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52. Section 95.59 is revised to read as follows:

S 95.59 Insoections.

The Commission shal'. make inspections and reviews of the premises, activities, records and procedures of any person subject to the regulations in this part as the Commission and CSA 'ceem necessary to effect the purposes of the Act, E.O.12958 and/or NRC rules.

Dated at Rockville, Maryland, this 9[ day of Al 1997.

For the Nuclear Regulatory Commission.

L , Jo'seph pa'l j lan, Executive mirector for Operations.

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REGULATORY ANALYSIS

1. ' Statement of Problem On October 31, 1994, the Deputy Secretary of Defense, acting as the Executive Agent for the National Industrial Security Program (NISP),

approved the NISP Operating Manual (NISP0H) establishing government-wide requirements for the protection of- classified National Security  ;

Information and Restricted D, a at industrial facilities, including NRC i

contractors, and, to the extent feasible within regulatory requirements, NRC licensees and certificate holders. On April 17, 1995 ard August 2, 1995, the President signed Executive Orders 12958, " Classified National Security Information," and 12968, " Access to Classified Information,"  ;

respectively which revised requirements for handling, protecting and >

accessing classified information. The requirements of these new national +

security policy documents are applicable to licensees, certificate holders, and others regulated by the NRC. The effect of the new Executive Orders and the NISP0H is tnat 10 CFR Part 25, " Access Authorization for Licensee Personnel," 10 CFR Part 50, " Domestic Licensing of Production and Utilization Facilities," 10 CFR Part 54, " Requirements for Renewal of Operating Licenses for Nuclear Power Plants," and 10 CFR Part 95.

" Security Facility Approval and Safeguarding of National Security Information and Restricted Data," are no longer consistent with national security policies and directives. l

2. Obiective The objective of this regulatory initiative is to conform the NRC's regulations for the protection of classified information at licensee, certificate holder and other NRC regulated f acilities possessing or having employees with access to classified information, with national policies for the prnte' tion of such information.

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3. Alternatives There is no reasonable alternativt to the revision of these regulations that would achieve the desired result.

4. Consecuences There are approximately 10 affected entities licensed or otherwise regulated by the NRC. Each licensee, certificate holder or other entity who requires access to National Security Information or Restricted Data to conduct official business related to an NRC regulated activity must have a f acility clearance under the provisions of Part 95 and individuals, other than USEC personnel who are cleared by DOE, who have access to classified information must have a access authorization granted to them under Part 25 1 or, under $50.37 or S54.17(g). " ..The Commission shall have determined that permitting such person to have access to Restricted Data will not endanger the common defense and security."

These entities will be required to compiy with the requirements of 10 CFR Parts 25, 50, 54 and 95, which will involve costs to these entities. The l

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a costs, however, should be no higher than under the current regulations and ,

are likely to be lower since a number of requirements have been reduced i (e.g., lesser requirements for accountability of secret information,  ;

reduction of requirements for GSA approved security containers and These ,

reduction of administrative requirements for classified visits).

changes will not have an impact on other NRC programs or requirements at these facilities, s

5. Decision Rationale i

'l The only available method of imposing these requirements on selectedOther  ;

licensees and others is to revise 10 CFR Parts 25, 50, 54 and 95. [

avenues would lack the requisite formality and' legality necessary to ,

require all affected NRC licensees to adhere to the changes in requirements for the protection of classified information.

6. Imol ement ation The Division of Security intends to publish the final rule amending 10 l

- CFR Parts 25, 50, 54 and 95 by March 31, 1997.  !

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