[Federal Register Volume 59, Number 150 (Friday, August 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19115]


[[Page Unknown]]

[Federal Register: August 5, 1994]


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NUCLEAR REGULATORY COMMISSION
 

Draft Policy Statement on Agreement State Program

AGENCY: Nuclear Regulatory Commission.

ACTION: Draft policy statement on Agreement State Program.

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    The Nuclear Regulatory Commission staff is releasing the proposed 
policy statement on the Agreement State Program for public comment. The 
draft policy statement establishes Agreement State program principles, 
and describes the respective roles and responsibilities of the NRC and 
the States in the administration of this program, which is authorized 
by Section 274 of the Atomic Energy Act of 1954, as amended. Agreement 
States are States which have assumed regulatory authority from NRC over 
the possession and use of certain radioactive materials.
    On August 25, 1993, the Commission requested the NRC staff to 
recommend improvements to the NRC's Agreement States Program to assure 
adequate protection of the public health and safety. This draft policy 
statement responds to the first area the Commission requested be 
considered, ``improvements in guidance and principles of operations for 
the Agreement State Program.'' This draft document is an ``umbrella'' 
policy statement which will serve as broad guidance in delineating the 
NRC's and the State's respective responsibilities and expectations. In 
this regard, the NRC especially requests comments on the following:

    The Commission has proposed that the categories of findings made 
about adequacy of an Agreement State's program be Adequate, 
Marginally Adequate and Inadequate. For the Marginally Adequate 
finding, the NRC action could be either (a) followup reviews, or (b) 
probation with followup reviews, depending on whether or not NRC 
were confident that the State would address the program deficiencies 
in an expeditious and effective manner. Comment is requested as to 
whether these three categories are appropriately and sufficiently 
descriptive of the performance, or whether the ``Marginally 
Adequate'' category needs to be subdivided such that States placed 
on probation are not identified in the same category as those which 
are not placed on probation.

    In addition to the draft proposed ``Statement of Principles and 
Policy For the Agreement State Program,'' a document provided to the 
Commission entitled ``Specific Review Area Recommendations,'' and draft 
internal procedures on the NRC process to be applied when a State 
agreement is suspended or terminated, also are being made available for 
public comment. We also request specific comments on the use of 10 CFR 
Part 2, Subpart L ``Informal Hearing Procedures for Adjudications in 
Materials and Operator Licensing Proceedings'' for suspension and 
termination decisions, in lieu of the hearing procedures detailed in 
the internal procedures published with this Notice for suspension and 
termination of an agreement, sections V and VI, respectively.
    The staff is soliciting comments from the Agreement States and the 
public at this informal stage by publishing the documents and also 
placing them in the Nuclear Regulatory Commission's Public Document 
Room located at 2120 L Street, NW. (Lower Level), Washington, DC. 
Comment period expires October 4, 1994. Comments received after this 
date will be considered if it if practical to do so, but the Commission 
is able to assure consideration only for comments received on or before 
this date. Mail written comments to: Secretary, U.S. Nuclear Regulatory 
Commission, Washington, D.C. 20555, Attention: Docketing and Services 
Branch. Deliver comments to: 11555 Rockville Pike, Rockville, Maryland, 
between 7:45 am and 4:15 pm on Federal workdays. For further 
information contact Ms. Maria Lopez-Otin, Federal Liaison, Office of 
State Programs, U.S. Nuclear Regulatory Commission, Washington, DC 
20555, telephone (301) 504-2598. Once the comments are received, the 
staff will develop a final draft of the policy statement for Commission 
review. After obtaining Commission approval, the proposed policy 
statement will once again be issued for a final round of public 
comment.
    Two other policy statements continue to be applicable, in large 
part, but future revisions to these existing policy statements will be 
necessary to reflect the new ``umbrella'' policy statement. The two 
existing policy statements are: ``Criteria for Guidance of States and 
NRC in Discontinuance of NRC Regulatory Authority and Assumption 
Thereof by States Through Agreement'' (46 FR 7540; January 23, 1981 as 
amended by policy statements published at 46 FR 36969; July 16, 1981 
and 48 FR 33376, July 21, 1983) and ``NRC Review of Agreement State 
Radiation Control Programs, Final General Statement of Policy'' (57 FR 
22495; May 28, 1992).
    This draft statement of policy does not contain a new or amended 
information collection requirement subject to the Paperwork Reduction 
Act of 1980 (434 U.S.C. 3501 et seq.).

    Dated at Rockville, Maryland this 29th day of July, 1994.

    For the Nuclear Regulatory Commission.
John C. Hoyle,
Acting Secretary of the Commission.

I. Purpose

    The purpose of this Statement of Principles and Policy is to 
clearly describe the respective roles and responsibilities of the U.S. 
Nuclear Regulatory Commission (NRC) and States in the administration of 
programs carried out under Section 274 of the Atomic Energy Act of 
1954, as amended. Section 274 provides broad authority for the NRC to 
establish Federal and State cooperation in the administration of 
regulatory programs for the protection of public health and safety in 
the industrial, medical, and research uses of nuclear materials.
    This policy statement addresses the Federal-State interaction under 
the Atomic Energy Act to: (1) establish and maintain agreements with 
States under section 274(b) to provide for discontinuance by the NRC, 
and the assumption by the State, of responsibility for administration 
of a regulatory program for the use of byproduct, source, and small 
quantities of special nuclear material; and (2) guide post-agreement 
interactions to ensure that NRC and Agreement State radiation control 
programs are coordinated and compatible and that Agreement State 
programs continue to ensure adequate protection of the public health 
and safety.
    This policy statement establishes principles, objectives, and goals 
that should be reflected in the implementing guidance and programs of 
the NRC and Agreement States to meet their respective program 
responsibilities and which should be achieved in the administration of 
these programs.

II. Statement of Legislative Intent

    The Atomic Energy Act of 1954 did not specify a role for the States 
in regulating the use of nuclear materials. Many States were concerned 
as to what their responsibilities in this area might be and expressed 
interest in seeing that the boundaries of Federal and State authority 
were clearly defined. This need for clarification was particularly 
important in view of the fact that although the Federal government 
retained sole responsibility for protecting the public health and 
safety from the radiation hazards of byproduct, source, and special 
nuclear material, the responsibility for protecting the public from the 
radiation hazards of other sources such as x-ray machines and radium 
had for many years been borne by the States.
    Consequently, in 1959 Congress enacted Section 274 of the Atomic 
Energy Act to establish a statutory framework under which States could 
assume certain regulatory jurisdiction over byproduct, source, and 
special nuclear material in quantities less than a critical mass. The 
primary purpose of the legislation was to authorize the Commission to 
relinquish to the States its regulatory authority over the use of these 
materials. The Commission retained regulatory authority over the 
licensing of certain facilities and activities such as nuclear 
reactors, larger quantities of special nuclear material, and the export 
and import of nuclear materials.
    In considering the legislation, Congress recognized that the 
Federal government would need to assist the States to ensure that they 
developed the capability to exercise their regulatory authority in a 
competent and effective manner. Accordingly, the legislation authorized 
the Commission to provide training and other services to State 
officials and employees. However, in rendering this assistance, the 
Congress did not intend that the Commission would provide any grants to 
a State for the administration of a State regulatory program. This was 
fully consistent with the objectives of Section 274 to qualify States 
to assume independent regulatory authority over certain defined areas 
of regulatory jurisdiction and to permit the Commission to discontinue 
its regulatory responsibilities in those areas.
    In order to relinquish its authority to a particular State, the 
Commission must find that the program is compatible with the 
Commission's program for the regulation of radioactive materials and 
that the State program is adequate to protect the public health and 
safety. In addition, the Commission has an obligation to review 
existing Agreement State programs to ensure continued adequacy and 
compatibility. Section 274(j) of the Act provides that the NRC may 
terminate or suspend all or part of its agreement with a State if the 
Commission finds that such termination is necessary to protect the 
public health and safety or the State has not complied with the 
provisions of Section 274(j). In these cases, the Commission must offer 
the State reasonable notice and opportunity for hearing. In addition, 
the Commission may temporarily suspend all or part of an agreement in 
the case of an emergency situation.

III. Principles of Program Implementation

III.1. Regulatory Program Excellence
    The principles of excellence contained in this section provide a 
common philosophical basis on which Agreement States and NRC regulatory 
programs should be formulated and implemented. NRC and the Agreement 
States should strive for excellence in the administration of their 
programs and in their collective efforts to establish a credible, 
coherent, consistent program for the regulation of Atomic Energy Act 
materials throughout the United States. Both the NRC and the Agreement 
States should continually improve their regulatory program 
effectiveness and efficiency based on their respective and collective 
experience. Excellence in radiation safety regulation should include 
striving to improve assurance of the adequacy of public health and 
safety. In order to achieve excellence, the highest standards of public 
accountability, ethical conduct, and professionalism should be applied 
to individual and organizational performance.
    Regulatory decisions and actions should be developed and 
implemented in an open and publicly credible manner and should be able 
to withstand scrutiny. Such scrutiny should be welcomed by the 
regulator. The regulator should be, and appear to be, independent and 
impartial in its actions and free from pressure and inappropriate 
influences from the regulated community. Regulations and regulatory 
decisions should be based on assessments of the best available 
information from affected and interested individuals and organizations, 
as well as on the best available knowledge from research and 
operational experience. Significant decisions should be documented with 
the rationale for such decisions explained. The public should have an 
opportunity for early involvement in significant regulatory program 
decisions. Where several effective alternatives are available, the 
alternative that best assures safety while considering differing views 
should be adopted, considering the resources needed to implement that 
alternative. Regulations should be necessary, or appropriate, to assure 
safety, and should be clear, coherent, logical, and practical. 
Regulatory actions should be fully consistent with regulations and good 
public policy and should lead to stability and predictability in the 
planning and implementation of radiation control programs.
    Failure to adhere to these principles of excellence in the conduct 
of operations should be a sufficient reason for a regulatory program to 
self-initiate program changes that will result in needed improvements. 
There is an obligation by all involved to identify and express concerns 
relating to a program that appears to be operating contrary to these 
principles of excellence.
    It is not intended that these principles of excellence be 
established as formal criteria against which NRC and Agreement State 
programs would be assessed. Rather, the expectation is that these 
principles will be incorporated into the day-to-day operational fabric 
of NRC and Agreement State materials programs. These principles should 
be used in the formulation of policies and programs, implementation of 
those policies and programs, and assessments of program effectiveness. 
Application of these principles will ensure that complacency will be 
minimized, that adequate levels of protection of public health and 
safety are being provided, and that government employees tasked with 
the responsibility for these Federal and State regulatory programs 
serve the public in an effective, efficient, and responsive manner. 
These principles are primarily for the use of materials program 
managers and staff in the self assessment of their programs and to use 
in the establishment of goals and objectives for the continual 
improvement of their respective programs. However, in the normal 
conduct of NRC Region and Agreement State formal program performance 
reviews, any deficiencies that indicate the program is not adhering to 
these principles of excellence should be noted.
III.2. Coherent National Program
    NRC acknowledges its responsibility to ensure that there is a 
coherent national radiation control program and NRC through this 
program establishes national radiation protection standards. The basic 
elements of such a program include ability to ensure adequate 
protection of the public health and safety, compatibility in areas of 
national interest, sufficient flexibility to accommodate local needs 
and conditions, ability to assess program performance on a consistent 
and systematic basis, and excellence in program administration.
    Each of these elements is reflected and addressed in specific 
sections of this policy statement.
III.3. Adequate to Protect the Public Health and Safety
    NRC and Agreement State radiation control programs share a 
responsibility to ensure adequate protection of the public health and 
safety in the administration of their respective regulatory programs 
controlling the uses of nuclear materials and facilities. Accordingly, 
NRC and Agreement State programs shall possess the requisite supporting 
legislative authority, implementing organization structure and 
procedures, and financial and human resources to effectively administer 
a radiation control program that ensures adequate protection of the 
public health and safety.
III.4. Compatible in Areas of National Interest
    NRC and Agreement State radiation control programs share a 
responsibility to ensure that a consistent and compatible radiation 
control program is administered. Such a radiation protection program 
should be based on a common regulatory philosophy including use of 
common definitions and standards. It should not only be effective, and 
cooperatively implemented by NRC and the Agreement States, but also 
should provide uniformity and consistency in program areas having 
national significance.
    Such areas include those affecting interstate commerce, movement of 
goods and provision of services. Also necessary is the ability to 
communicate using a nationally accepted set of terms with common 
understanding, the ability to ensure an adequate level of protection of 
public health and safety that is consistent and stable across the 
nation, and the ability of NRC and each Agreement State to evaluate the 
effectiveness of the national radiation control program. States will 
not have the flexibility to deviate from the program elements that the 
Commission requires for compatibility.
III.5. Flexibility
    With the exception of national radiation protection standards, to 
the extent possible, Agreement State radiation control programs should 
be provided with flexibility in program implementation to accommodate 
individual State preferences, State legislative direction, and local 
needs and conditions. However, the exercise of such flexibility should 
not bar or preclude, or effectively preclude, a practice authorized by 
the Atomic Energy Act, and in the national interest. That is, a State 
would have the flexibility to design its own program, including 
incorporating more stringent requirements provided that the 
requirements for adequacy are still met, and the more stringent 
requirements do not preclude or effectively preclude a practice within 
the national interest without an adequate public health and safety or 
environmental basis.
IV. New Agreements
IV.1. Overall Process of Becoming an Agreement State
    Section 274 of the Atomic Energy Act requires that once a decision 
to seek Agreement State status is made by the State, the Governor of 
that State must certify to the NRC that the State desires to assume 
regulatory responsibility and has a program for the control of 
radiation hazards adequate to protect the public health and safety with 
respect to the materials within the State covered by the proposed 
agreement and compatible with the Commission's program. This 
certification will be provided in a letter to the NRC which includes a 
number of documents in support of the certification. These documents 
include the State's enabling legislation, the radiation control 
regulations, a narrative description of the State program's policies, 
practices and procedures, and a proposed agreement.
    The NRC has published criteria describing the necessary content 
these documents are required to cover. The NRC reviews the request and 
publishes notice of the proposed agreement in the Federal Register to 
provide an opportunity for public comment. After consideration of 
public comments, if the Commission determines that the State program is 
adequate and compatible, and approves the agreement, a formal agreement 
document is signed by the Governor and the Chairman of the NRC.
IV.2. Phased Implementation
    The NRC believes that a formal phased implementation process, 
during which a State initially assumes authority over smaller, less 
complex licenses, would be advantageous to both NRC and the Agreement 
State. It would provide the NRC an opportunity to obtain important 
information on the State's program and validation of the State's 
capabilities before turning over a major portion of the program. At the 
end of the initial phase, the NRC would have greater confidence in the 
State's ability to protect the public health and safety and to 
administratively manage the program. From the State perspective, it 
should provide new States an opportunity to work out start up problems 
with their program prior to having responsibility for more complex 
licenses.
    Therefore, upon the effective date of a full agreement, a mandatory 
phased implementation process will be used. In the initial phase, the 
State will assume full regulatory authority over categories of 
licensees programs of lesser complexity. During this phase, the State 
will perform all regulatory functions for the transferred licenses. At 
the end of this phase, the NRC will evaluate the State program to 
determine that the State program continues to be adequate to protect 
public health and safety and compatible with the Commission's program. 
If, at the end of the initial implementation phase, the Agreement State 
program is adequate and compatible, and the State has demonstrated an 
ability to assume authority for more complex licensed activities, the 
remaining categories of licensees will be transferred to the State.

V. Mutual Program Assistance

    NRC will provide training and other assistance to States, such as 
assistance in developing regulations and program descriptions to help 
individual States prepare for entrance into Agreements and to help them 
during transition periods of assumption of regulatory authority. 
Following assumption of regulatory authority, NRC will continue to 
provide training and other assistance such as review of proposed 
regulatory changes to help States administer their regulatory 
responsibilities. NRC would also use its best efforts to provide 
specialized technical assistance to Agreement States to address unique 
or complex licensing, inspection, and enforcement issues. Similarly, 
Agreement States will assist the NRC and other Agreement States in 
addressing areas where Agreement States have particular expertise or 
are in the best position to provide immediate assistance. In addition, 
NRC and Agreement States shall use their best efforts to keep each 
other informed about relevant aspects of their programs. NRC will 
provide an opportunity for Agreement States to have early and 
substantive involvement in rulemaking, policy, and guidance development 
activities. Agreement States will provide a similar opportunity to the 
NRC to make it aware of, and to provide the opportunity to review and 
comment on, proposed changes in Agreement State programs, regulations, 
policies, and regulatory guidance.
    Following assumption of regulatory authority by an Agreement State, 
if it experiences difficulty in program administration, NRC would use 
its best efforts to assist the State in maintaining the effectiveness 
of its radiation control program. Such assistance could address an 
immediate difficulty or a chronic difficulty affecting the State's 
ability to discharge its responsibility to continue to ensure adequate 
protection of the public health and safety.

VI. Performance Evaluation

    Under Section 274 of the Atomic Energy Act of 1954, as amended, NRC 
retains authority for ensuring that Agreement State programs continue 
to provide adequate protection of the public health and safety. In 
fulfilling this statutory responsibility, NRC will provide oversight of 
Agreement State radiation control programs to ensure that they are 
adequate and compatible prior to entrance into a Section 274(b) 
agreement and that they continue to be adequate and compatible after an 
Agreement is effective. NRC, in cooperation with the Agreement States, 
will establish and implement a performance evaluation program to 
provide NRC and Agreement State management with systematic, integrated, 
and reliable evaluations of the strengths and weaknesses of their 
respective radiation safety control programs and identification of 
areas needing improvement.
    As a part of this performance evaluation process, NRC will take any 
necessary actions to ensure that Agreement State radiation control 
programs remain adequate and compatible. These actions include: (1) 
biennial assessments of Agreement State radiation control programs 
against established review criteria; (2) provision of assistance to 
help address weaknesses or areas within an Agreement State radiation 
control program requiring improvement; (3) placing a State on a 
probationary status for serious program deficiencies that require 
heightened oversight; (4) temporary suspension of an agreement and 
reassertion of regulatory authority in an emergency if an Agreement 
State program experiences any immediate program difficulties preventing 
the State from continuing to ensure adequate protection of the public 
health and safety; and (5) suspension or termination of an agreement 
and reassertion of NRC regulatory authority if the Agreement State 
program experiences difficulties which jeopardize the State's ability 
to continue to ensure adequate protection of the public health and 
safety. The basis for NRC's actions will be based on a well defined and 
predictable process and a performance evaluation program which will be 
consistently and fairly applied.

VII. Levels of Agreement State Program Review Findings

    The following discussion outlines the nature of NRC findings 
regarding the NRC's Agreement State review process.
Finding 1--Adequate to Protect Public Health and Safety and Compatible
    If the NRC finds that a State program has met all of the Agreement 
State program review criteria or that only minor deficiencies exist, 
the Commission would find that the State's program is adequate to 
protect the public health and safety. If the NRC determines that a 
State program contains all required NRC program elements for 
compatibility, or only minor discrepancies exist, the program would be 
found compatible.
Finding 2--Marginally Adequate1
    If the NRC finds that a State program protects public health and 
safety, but is deficient in meeting some of the review criteria, the 
NRC may find that the State's program is marginally adequate. The NRC 
would consider in its determination plans that the State has to address 
any of the deficiencies noted during the review. In cases where less 
significant Agreement State deficiencies previously identified have 
been uncorrected for a significant period of time, NRC may also find 
that the program is marginally adequate.
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    \1\Since the compatibility finding is made on the basis of a 
State having program elements which are ``identical'', ``essentially 
identical'', or ``essentially verbatim'', there can be no 
intermediate finding between compatible and not compatible. In terms 
of the compatibility evaluation, and the need for possible NRC 
action, the significance of an individual element in a State program 
will be judged on the basis of its impact on the national radiation 
protection program.
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Finding 3--Inadequate to Protect Public Health and Safety and/or not 
Compatible
    If the NRC finds that a State program is significantly deficient in 
some or all of the review criteria, the NRC would find that the State's 
program is not adequate to protect the public health and safety. If the 
NRC determines that a State, after a substantial period of time, has 
either failed to adopt a significant item(s) of compatibility or has 
failed to adopt several of the required compatibility items, or has 
refused to revise state regulations which are inconsistent with the 
required NRC compatibility elements, the program would be found not 
compatible.

VIII. NRC Actions as a Result of These Findings

    The following discussion outlines the options available to the NRC 
as a result of making any of the above findings. None of these actions 
are automatic. The appropriate action will be determined on a case-by-
case basis by NRC management.
Letters
    In all cases, subsequent to an Agreement State program review, the 
findings would be recounted in a letter to senior level State 
management. In the event that the NRC finds that a State program is 
adequate and compatible, no further action would be required. In the 
case where minor deficiencies are noted, the State would be requested 
to describe their proposed corrective action. If the corrective action 
appears appropriate, no further NRC review is required. If additional 
clarification of the corrective actions is needed, additional 
correspondence may be necessary.
Follow-up Reviews
    In the event that deficiencies are noted during the program review, 
NRC may increase the frequency of contacts with the State to keep 
abreast of developments and conduct onsite follow-up reviews to assure 
that progress is being made on correcting program deficiencies. If, 
during follow-up reviews, it is shown that the State has taken 
corrective actions, a letter finding the State adequate and compatible 
would be provided.
Probationary Status
    There are three circumstances which can lead to a marginally 
adequate or incompatible State program being placed in a probationary 
status: (1) There are cases in which program deficiencies may be 
serious enough to require immediate heightened oversight; (2) In other 
cases, Agreement State program deficiencies previously identified may 
have been uncorrected for a significant period of time; and (3) If the 
NRC determines that a State program has been late in adopting either a 
significant item(s) of compatibility or has not adopted several of the 
required compatibility elements. If the NRC was not confident that the 
State would address the program deficiencies in an expeditious and 
effective manner, the Commission would place the State program on 
probation.
    As a result of placing a State program on probation, the NRC would 
communicate its findings to a higher level of State management. Notice 
of such probationary status would normally be addressed to the Governor 
of the State. Notice would also be published in the Federal Register. A 
copy of the letter to the Governor would be placed in the Public 
Document Room and a press release would be issued.
    Once a State program is placed on probation, the NRC would heighten 
its oversight of the program. This would include obtaining commitments 
from the State in the form of a management plan to describe actions to 
be taken by the State to address the program deficiencies, including 
specific goals and milestones. The NRC would increase observation of 
State program activities under the Agreement to assure adequate 
protection of the public health and safety. In some cases, the NRC 
would consider providing technical support for the maintenance of the 
regulatory program. The probationary period would last for a specified 
period of time. This period would not normally be more than one year, 
but could be extended based on extenuating circumstances. At the end of 
that time, if the State has not addressed the deficiencies, the NRC 
would institute suspension or termination proceedings.
Suspension
    Section 274j of the Atomic Energy Act gives the Commission 
authority to suspend all or part of its agreement with a State if the 
suspension is required to protect the public health and safety, or if 
the State has not complied with one or more of the requirements of the 
Act. In cases where the Commission finds that program deficiencies 
related to either adequacy or compatibility are such that the 
Commission must take action due to a lack of confidence in the State's 
ability to protect the public health and safety, the Commission would 
suspend all or part of its agreement with the State. If the situation 
is not resolved, termination will be considered.
    Before reaching a final decision on suspension, the Commission will 
notify the State and provide the State an opportunity for a hearing on 
the proposed suspension. Notice of the proposed suspension will also be 
published in the Federal Register. Suspension, rather than termination, 
would be the preferred option in those cases where the State provides 
evidence that the program deficiencies are temporary and that the State 
is committed to correcting the deficiencies that led to the suspension.
    In addition to the normal suspension authority, Section 274j.(2) of 
the Act also addresses emergency situations and gives the Commission 
authority to temporarily suspend all or part of its agreement with a 
State without notice or hearing if, an emergency situation exists 
requiring immediate action to protect public health and safety, and the 
State has failed to take necessary action within a reasonable time.
Termination
    Section 274j of the Atomic Energy Act gives the Commission 
authority to terminate its agreement with a State if such termination 
is required to protect the public health and safety, or if the State 
program has not complied with one or more of the requirements of the 
Act (e.g., is found to be not compatible with the Commission's 
program). When the Commission finds such significant program 
deficiencies, the Commission would institute proceedings to terminate 
its agreement with the State.
    In cases where a State has failed to respond in an acceptable 
manner during the probationary period and there is no prospect for 
improvement, termination will be considered. Before reaching a final 
decision on termination, the Commission will notify the State and 
provide the State an opportunity for a hearing on the proposed 
termination. Also, notice of the proposed termination will be published 
in the Federal Register. There may be cases where termination will be 
considered even though the State program has not been placed on 
probation.

IX. Program Funding

    NRC will continue to provide training and other assistance to 
Agreement States to the extent permitted by statute and budgetary 
resources. Currently, Section 274 does not allow federal funding for 
the administration of Agreement State radiation control programs. 
Section 274 does authorize the NRC to offer training and other 
assistance to a State in anticipation of entering into an Agreement 
with NRC, however, it is NRC practice not to fund the establishment of 
new Agreement State programs.
    Given the importance in terms of protection of the public health 
and safety to have a uniform national program of well trained radiation 
control program personnel, the NRC intends to continue funding training 
and travel for Agreement State staff. NRC staff would also provide 
technical assistance to Agreement States to address complex licensing 
and compliance issues and other specialized technical assistance.

X. Regulatory Development

    NRC and Agreement States will cooperate in the development of new 
regulations and policy. Agreement States will have early and 
substantive involvement in the development of new regulations affecting 
protection of the public health and safety and of new policy affecting 
administration of the Agreement State program. Likewise, the NRC 
expects to have the States provide it with early and substantive 
involvement in the development of new Suggested State Regulations. NRC 
and Agreement States will keep each other informed about their 
individual regulatory requirements (i.e., regulations or license 
conditions) and the effectiveness of those regulatory requirements so 
that each has the opportunity to make use of proven regulatory 
approaches to further the effective and efficient use of resources.

XI. Program Evolution

    The NRC-Agreement State program is dynamic and the NRC and 
Agreement States will continue to jointly assess the overall national 
program to identify specific changes which should be considered based 
on experience or to further improve overall performance and 
effectiveness of the national program. The changes considered should 
include possible legislative changes. The program should also include 
the formal sharing of information and views such as briefings of the 
Commission by the Agreement States.

Specific Review Area Recommendations

     Whether two separate policies, one for entering into an 
agreement and one for evaluation of existing state programs, are 
needed.
    The PAG has considered this issue and recommends that a single 
``umbrella'' policy covering the NRC and Agreement State Program be 
issued. The existing policy statements that address entering into an 
Agreement and the evaluation of State programs will be modified or 
converted to procedures.
     Evaluation of whether a formal transition period should be 
established during which new Agreement State programs could be phased 
gradually.
    The PAG recommendation, which includes a formal transition period 
for new Agreement State programs, has been incorporated as section IV 
of the draft Policy Statement.
     Reevaluation of the criteria and elements used for 
adequacy and compatibility reviews so that the less significant items 
are eliminated and the focus is on those things which must be complied 
with to provide reasonable assurance of adequate protection of the 
public health and safety.
    The new compatibility policy and criteria are being developed. The 
pilot program under the Integrated Materials Performance Evaluation 
Program (IMPEP) will consist of gathering information on the common 
performance indicators in addition to the normal program reviews. 
Criteria for adequacy are contained in the IMPEP procedures. The PAG 
will maintain cognizance of these initiatives and serve as an 
integrative mechanism.
     Identification of the information which NRC needs from the 
Agreement States and establishment of a requirement for the reporting 
of such information. In addition, why this information is needed and 
how it benefits health and safety.
    The PAG review of existing Agreements between the NRC and Agreement 
States found that the Agreements contain a commitment for the Agreement 
State and the NRC to use their best efforts to keep each other informed 
on regulatory changes to assure that the State and Commission programs 
are coordinated and compatible. Currently, representatives of the 
Agreement States and NRC staff in AEOD, OSP, and NMSS are evaluating 
options for the development of a database on events involving Atomic 
Energy Act-regulated materials. The database is intended to provide 
Agreement State and NRC staffs with information to assist in the 
evaluation of regulatory effectiveness, and aid in the prediction of 
safety trends.
    The PAG will consider the current initiatives to obtain information 
on events in conjunction with its examination of the merits of 
codifying State agreement practices in a new part of the NRC rules and 
regulations, including the need to codify a requirement for reporting 
of event data by Agreement States. The PAG will factor in the 
information derived from these initiatives when it examines the 
codification issue.
     Identification of the minimum administrative-type 
provisions the NRC will consider necessary in assessing the adequacy 
and compatibility of Agreement State programs. This covers such things 
as: hearing opportunities, rulemaking procedures, environmental 
assessments, the separation of regulatory and promotional 
responsibilities, investigative capabilities, enforcement policies, 
criminal sanctions, and other similar provisions.
    In establishing compatibility criteria, the staff will address 
these issues. IMPEP is also considering a number of these areas. The 
PAG will maintain cognizance of these initiatives and serve as an 
integrative mechanism.
     Evaluation of the present practice of placing Agreement 
State approved devices on the NRC registration list so that they can be 
used nationwide.
    OSP, NMSS, and OGC are evaluating the current practice and will 
provide recommendations to the Commission describing approaches which 
will result in improved effectiveness and efficiency in sealed source 
and device reviews.
     Review and make appropriate recommendations on the 
adequacy of the documentation and control procedures currently being 
used by the NRC for the Agreement State program.
    Although Commission regulations do not specifically impose data 
reporting requirements on Agreement States, the NRC criteria for the 
approval of new programs and the periodic review of existing State 
programs, necessitate that a State provide sufficient documentation to 
the NRC for the evaluation of the program. In addition to the 
documentation needed for the NRC to evaluate a State program against 
the NRC approval or review criteria, existing State programs routinely 
submit a wide variety of information and documentation, including 
copies of licenses and orders issued by the State, statistical data on 
licensing and inspection activities, draft and proposed regulations, 
copies of sealed source and device registrations, licensing guides, and 
similar documents.
    The PAG explored the handling of documents generated and received 
by NRC in relation to Agreement State and State Liaison program 
business, e.g., program reviews, followup letters, and other incoming 
documents and correspondence, as well as the management of information 
contained in these documents. OSP has informed the PAG that initiatives 
have begun that will improve the document control procedures used by 
the Office of State Programs. OSP has also initiated efforts to 
integrate its document tracking, control, and filing systems with those 
used throughout NRC. OSP will establish procedures to assure that 
appropriate documents are placed in the Public Document Room, use NRC 
Central Files as the official agency file for OSP correspondence, and 
use NUDOCS and RIDS for document distribution and retrieval. Other 
program improvements, such as procedures to implement the Integrated 
Materials Performance Evaluation Program, will result in satisfactory 
documentation of the important elements of OSP programs.
    Additionally, OSP, with support from IRM, will establish an 
INTERNET-based E-mail and file transfer system for use by NRC and the 
Agreement States. This system should permit electronic communication 
between NRC and the Agreement States. The system will also permit the 
electronic transfer of large documents between regulators. This system 
began operation in May 1994. As a longer term project, OSP and IRM will 
establish an Agreement State program electronic information base that 
will permit faster retrieval and analysis of programmatic information 
in the future.
    OSP indicates that these documentation and document control 
improvements should result in assurance that appropriate OSP documents 
are available to the public through use of the PDR; provide an 
administrative resource savings to OSP by using Central Files, RIDS and 
NUDOCS; and provide a resource savings to OSP and the Agreement States 
generally through (1) greater use of electronic communication, (2) more 
easily retrievable correspondence through the use of Central Files and 
NUDOCS, and (3) electronic retrieval and analysis of electronic data 
base information.
     Until performance indicators are in place and provide 
beneficial regulatory insight, staff should (keeping in mind the 
importance of a short turnaround time) provide the Commission with the 
results of each Agreement State program evaluation for which a finding 
is withheld concerning adequacy or compatibility prior to issuing a 
letter to the state.
    It is now staff practice to provide the Commission with the results 
of each Agreement State program evaluation for which a finding of 
either adequacy or compatibility is withheld.
     Propose a method to accelerate the process of issuing 
letters to States which notify State management of the status of the 
State program following NRC's formal review.
    The proposed IMPEP review process is designed to achieve and 
institutionalize an accelerated procedure for issuing review letters. 
The goal is to have letters, which contain factual program review 
findings, issued in one month. The PAG agrees with this approach.
     Determine criteria for placing (or removing) a State 
program in a status category which would serve to put State officials 
and the public on notice that their program is failing to fully meet an 
acceptable norm for public health and safety protection or 
compatibility.
    The PAG's recommendations in this area have been incorporated into 
the draft Policy Statement, and can be found at section VIII.
     Evaluate and propose internal procedures/guidance on the 
NRC process to take over when a state agreement is suspended or 
terminated, in whole or in part, or is temporarily suspended.
    You will find the PAG's proposed internal procedures in the 
following pages. Note that the concept of a Management Review Board 
(MRB) as described in these procedures, is a pilot initiative to 
evaluate the effectiveness of indicator information in adequacy and 
compatibility determinations.

Post Agreement Activities

Guidelines for Suspension of a Section 274b Agreement

I. Introduction
    A. This procedure provides the guidelines that will be followed by 
NRC staff when considering whether or not to exercise the authority 
contained in Section 274j(2) of the Atomic Energy Act to suspend an 
Agreement for a State.
    B. This procedure will not address the emergency situation where 
there is a danger to the public health and safety. Guidelines for 
emergency suspension are found in Procedure ______.
II. Suspension
    A. Section 274j. of the Atomic Energy Act gives the Commission 
authority to suspend all or part of its agreement with a State if the 
suspension is required to protect the public health and safety, or if 
the State has not complied with one or more of the requirements of the 
Act. In cases where the Commission finds that program deficiencies 
related to either adequacy or compatibility are such that the 
Commission must take action, the Commission will suspend all or part of 
its agreement with the State.
    B. Before reaching a final decision on suspension, the Commission 
will notify the State and provide the State an opportunity for a 
hearing on the proposed suspension as discussed in Part VI. Notice of 
the proposed suspension will also be published in the Federal Register. 
Suspension, rather than termination, will be the preferred option in 
those cases where the State provides evidence that the program 
deficiencies are temporary and that the State is committed to 
implementing program improvements.
III. Management Review Board Role
    A. The Management Review Board (MRB) is responsible for making the 
adequacy assessment of each Agreement State's program based on the 
reviews of the program, using both common performance indicators and 
non-common performance indicators and the compatibility determination. 
The management review board consists of senior NRC managers, or their 
designees, to include:

Executive Director for Operations
Director, Office of Nuclear Material Safety and Safeguards
Director, Office of State Programs
Director, Office of Analysis and Evaluation of Operational Data
General Counsel

    B. The MRB will consider the results of the Agreement State review 
and any other appropriate information in making a determination of 
adequacy and compatibility with respect to an Agreement State. MRB 
meetings to discuss specific program review findings normally will be 
open and Agreement States representatives will be invited to attend. 
MRB internal deliberations regarding the overall Agreement State 
program rating may be closed, given the predecisional nature of those 
discussions.
    C. If it is the recommendation of the MRB that NRC initiate the 
proceedings to suspend an Agreement, the Office of State Programs will 
be assigned the lead for preparation of the Commission paper. The 
Commission paper will contain the information supporting the suspension 
as described in Part IV, and will assess potential resource 
implications of NRC reasserting authority. The Commission paper will be 
coordinated with OGC, NMSS and the region.
IV. Staff Work
    A. Before the opportunity for hearing and issuance of the Federal 
Register notice, OSP will draft a Commission paper for the signature of 
EDO on the suspension of regulatory authority in the State based on the 
initial recommendations of the MRB. In preparation of the Commission 
paper, the assigned Project manager should coordinate with OGC as to 
the form or type of Commission paper. The draft Commission paper 
(Appendix A) should contain the following information:

1. Background information (Appendix B)
2. MRB recommendations (Appendix C)
3. Proposed Commission Order Reasserting Authority (Appendix D)
4. Proposed Federal Register Notice regarding the Suspension and 
Reassertion of NRC authority (Appendix E)
5. Letter to the Governor regarding the Commission decision (Appendix 
F)
6. A public announcement to be issued by Public Affairs (Appendix G)
7. Proposed letters to the appropriate Congressional Committees on the 
Commission Decision (Appendix H)
V. Hearings
    Before the Commission can suspend a State's program, it must 
provide reasonable notice and opportunity for a hearing to the State as 
required by Section 274j(1). Section 274j(1) does not require such a 
hearing if suspension is requested by the Governor.
    Before the opportunity for a hearing can arise, the Office of State 
Programs must submit to the Commission a paper containing a 
recommendation to suspend the State program in question. This 
Commission paper will include the recommendations of the MRB and any 
other material pertinent to the staff's recommendation to suspend the 
Agreement. Before a decision is made on the OSP recommendation, the 
Commission must provide the State with notice and an opportunity to 
request a hearing on the issue. If the State does not request a 
hearing, the Commission will make a final decision on the issue. If the 
State does request a hearing, the Commission will initiate the hearing 
process described below.
    The hearing for the suspension of an Agreement State program will 
be an informal hearing conducted either by the Commission itself, or at 
the Commission's discretion, by a Special Agreement State Board 
appointed by the Commission. In cases where the Commission determines 
that a Special Board will be used, the Board will consist of three 
members: (1) the chair of the Organization of Agreement States (OAS) 
(unless the chair is from the State in question, in which case the 
Agreement State representative will be the past chair of the OAS); (2) 
an official from the Office of General Counsel, and (3) the Deputy 
Director of an NRC regional office (outside of the region in which the 
State is located).
    The Commission, or the Special Board, as appropriate, will conduct 
an informal hearing to address the issues in question. At the hearing, 
the NRC staff, representatives of the Agreement State, and interested 
third parties will have an opportunity to testify, answer questions 
from the Special Board, and submit written materials. Third parties may 
submit written material to the Special Board and may testify for a 
limited period of time. After consideration of the issues, the 
Commission or the Special Board will issue a decision on suspension. A 
majority of the Commission or the Special Board will be required to 
support a decision. In cases where a Special Board is used, the 
Commission will have discretion to review the decision of the Special 
Board, and either uphold or overturn the Board's decision.
VI. Additional Coordination During the Suspension
    A. NRC will conduct a meeting with the licensees in the State to 
explain the reassertion of NRC authority and the present fee structure. 
Lead for the meeting should be the Region in consultation with NMSS, 
OGC and OC.
    B. After the suspension of the Agreement, OSP will prepare a letter 
to the Department of Labor advising the Department of the effective 
date of the termination of the Agreement (Appendix J).
    C. The Regional State Agreements Officer (RSAO) should obtain from 
the State a computer printout of all specific and general licenses 
affected by the suspension of the State's agreement. Mailing labels 
should be obtained if possible from the State. A letter should be 
prepared notifying each licensee of the suspension and reassertion by 
NRC and appropriate information (Appendix K).
    D. OSP will prepare a letter to all Agreement and Non-Agreement 
States notifying them of the effective date of the suspension and if 
appropriate, enclosing a copy of the order or Federal Register notice 
(Appendix L).
    E. The RSAO will coordinate with the State so that all necessary 
action is taken to have license files transferred or made available to 
the NRC.
VII. Withdrawal of Suspension/Recommendation for Termination
    A. When the situation requiring the suspension has been corrected 
or eliminated, the Management Review Board will consider all factors 
and recommend to the Commission whether to lift the suspension.
    B. If the situation is not resolved, termination will be considered 
and the Procedure ______ for termination should be followed.

Appendices to Suspension Procedure 

------------------------------------------------------------------------
  Appendix                             Subject                          
------------------------------------------------------------------------
A...........  Commission Paper for Suspension of all or part of a       
               Agreement and request for special board for hearings     
B...........  Background information on the Agreement State             
C...........  Management Review Board Recommendations                   
D...........  Proposed Commission Order Reasserting Authority           
E...........  Proposed Federal Register Notice regarding the Suspension 
               and Reassertion of NRC authority                         
F...........  Letter to Governor regarding the Commission decision on   
               suspension                                               
G...........  Public Announcement to be issued by Public Affairs        
H...........  Letters to Congressional Committees                       
I...........  Special Board's report to Commission on hearings          
J...........  Letter to Department of Labor on suspension               
K...........  Letter to licensees regarding suspension and reassertion  
L...........  Letter to All States regarding suspension and reassertion 
------------------------------------------------------------------------

Post Agreement Activities

Guidelines for Emergency Suspension of a Section 274b Agreement

I. Introduction
    This procedure provides the guidelines that will be followed by NRC 
staff when considering whether or not to exercise the authority 
contained in Section 274j(2) of the Atomic Energy Act.
II. General
    Section 274j(2) of the Act addresses emergency situations and gives 
the Commission authority to temporarily suspend all or part of its 
agreement with a State without notice or hearing if an emergency 
situation exists requiring immediate action to protect public health 
and safety and the State failed to take steps within a reasonable time. 
The NRC will invoke this authority to temporarily suspend all or part 
of its agreement with an Agreement State only as a last resort, where 
an emergency creates a danger to the public health or safety, and the 
Agreement State has failed to take, or is prevented from taking, the 
necessary steps to protect the public health and safety. The Commission 
will exercise this authority whenever necessary to contain or eliminate 
the danger, and only during the period of the emergency. Prior to any 
emergency suspension of all or part of the NRC's agreement with a 
State, the NRC will notify the governor of the State. The NRC will 
consider invoking this authority with respect to a single facility or 
location if the emergency situation and the criteria of Part V or the 
guidelines so warrant after considering the factors stated in Part VI.
III. Emergency
    The NRC recognizes that a severe threat to public health and safety 
would have to exist before a emergency suspension of all or part of its 
agreement with an Agreement State would be invoked. Under existing 
practices, an Agreement State could, if necessary, request technical 
assistance from NRC for a specific emergency situation. NRC continues 
to encourage State requests for technical assistance. The exercising of 
NRC authority to temporarily suspend an agreement would occur for those 
highly unusual events which would require prompt remedial action to 
protect the public health and safety.
IV. Initiation of Emergency Suspension Action
    1. Under section 274j(2), if a State requests that the NRC 
temporarily suspend part of its agreement, the State shall make the 
request by telephone call to the Executive Director for Operations 
(telephone number), in coordination with the Director of Office of 
State Program or in off hours, to the NRC Emergency Operation Center, 
telephone (  ). Such a request should be made by the Governor, or the 
Governor's designee, and include the specific nature of the emergency 
and its possible impacts as related to the criteria and factors in 
Parts V and VI below. This request may be made only by the Agreement 
State that has regulatory authority under which the licensee is 
operating when the emergency occurs.
    2. When the NRC determines an event warrants emergency suspension 
of an agreement it will follow the guidelines and criteria stated in 
Parts V below.
    3. The Governor and the radiation control program director of the 
affected State will be consulted and kept fully informed of the actions 
taken by the NRC. For events which may warrant consideration of 
emergency suspension but for which there is a reasonable basis for 
presumption that a State can satisfactorily resolve the emergency 
situation, the NRC will inform the State of necessary actions that the 
State should take to avert further consideration of emergency 
suspension under section 274j(2) and will provide appropriate technical 
assistance within the limits of its resources.
    4. The Executive Director for Operations, in consultation with OSP, 
NMSS, the involved Regional Office and OGC will issue an order 
regarding the emergency suspension (Appendix A). The Commission will be 
kept informed as to the nature of the emergency situation and the 
actions taken to contain or eliminate the danger (Appendix B).
    5. A press release regarding the emergency suspension will be 
prepared and issued by the Office of Public Affairs (Appendix C).
    6. State Programs will coordinate with the Office of Congressional 
Affairs in order to notify the appropriate State representatives and 
congressional committees (Appendix D).
    7. Notification to the affected licensee or groups of licensees in 
the State will be made by the Regions after obtaining information 
regarding the affected licensee or groups of licensees from the 
Agreement State Radiation Control Program (Appendix E).
V. Minimum Criteria
    1. The NRC will consider suspension of an agreement pursuant to 
Section 274j(2) in the case of an emergency involving byproduct, source 
or special nuclear material when the situation presents an immediate, 
significant, or unacceptable threat to the public health and safety and 
immediate action by the Commission is needed because the Agreement 
State program is not able to effectively carry out mitigative actions 
to ensure continued protection of the public health and safety.
    2. In evaluating such emergency situations, the NRC staff will 
consider whether the Agreement State has failed to take, or is 
prevented from taking, necessary steps to protect the public health and 
safety. Factors the staff would consider include:
    A. The timeliness and adequacy of actions being taken by the State 
in response to the emergency;
    B. Whether the State can satisfactorily resolve the emergency 
situation; and
    C. Whether the State is implementing or is committed to implement 
program improvements to address systemic deficiencies.
    3. The following type of conditions, if not appropriately addressed 
by the State to prevent the threat or prevent the threat from 
recurring, are example candidates that could result in a consideration 
of emergency suspension:
    A. Conditions that caused or threaten to cause individuals to 
receive a dose exceeding those basic dose limits set forth in Subpart C 
of 10 CFR Part 20,
    B. Conditions that caused or threaten to cause individual members 
of the public to receive a dose exceeding those basic dose limits set 
forth in Subpart D of 10 CFR Part 20, or
    C. Conditions that caused or threaten to cause individuals to 
receive a dose exceeding those dose limits applicable to a certain 
class of licenses set forth in other parts of 10 CFR, such as Part 35 
limits for patient release.
    D. Conditions specified by the Commission where an emergency has 
been or appears to need immediate action by the Commission to protect 
public health and safety.
VI. Withdrawal of Emergency Suspension
    When the emergency situation is contained or eliminated, the EDO 
will consider all factors and recommend to the Commission whether to 
lift the suspension.
    The Executive Director for Operations will notify the Governor of 
the State the emergency suspension is no longer in effect (Appendix F). 
Such a decision will be made only after NRC has determined that the 
conditions which initiated the emergency suspension no longer exist and 
are unlikely to be repeated. The NRC will inform the State of 
continuing actions which the State must carry out in order to prevent 
another emergency.
VII. Impact of the Emergency Suspension
    The State's inability to address the emergency situation will be 
considered by the Management Review Board in the evaluation of the 
Agreement State's continued ability to protect public health and 
safety. Depending on the nature of the emergency, it may be necessary 
to place the State on probation, with NRC heightening its oversight of 
the program.

Appendices to Emergency Suspension Procedure 

------------------------------------------------------------------------
  Appendix                             Subject                          
------------------------------------------------------------------------
A...........  Order for Emergency Suspension.                           
B...........  Memorandum to the Commission regarding the emergency      
               suspension of all or part of an Agreement.               
C...........  Public Announcement to be issued by Public Affairs.       
D...........  Letters to Congressional Committees concerning the        
               emergency suspension.                                    
E...........  Notification to affected Agreement State licensees        
               regarding the emergency suspension.                      
F...........  Notification of lifting suspension.                       
------------------------------------------------------------------------

Post Agreement Activities

Guidelines for Termination of a Section 274b Agreement

I. Introduction
    This procedure provides the guidelines that will be followed by NRC 
when considering whether or not to terminate an agreement pursuant to 
the authority contained in Section 274j(1) of the Atomic Energy Act.
    This procedure will describe the method for processing the 
termination whether initiated at the request of the State or at the 
initiative of the NRC.
II. Objectives
    The objectives of these procedures are to:
    A. Provide guidelines for timely action on termination of an 
agreement at the State's request or at the initiation by the NRC staff 
and
    B. Provide an orderly transition in the discontinuance of certain 
regulatory authority by the State and assumption thereof by the NRC.
III. Background
    Section 274j of the Atomic Energy Act gives the Commission 
authority to terminate its agreement with a State if such termination 
is required to protect the public health and safety, or if the State 
has not complied with one or more of the requirements of the Act (e.g. 
is found to be not compatible with the Commission's program). Section 
274j(1) also provides that an agreement may be terminated at the 
request of the Governor of a State. When the Commission finds that 
program deficiencies are such that the State can no longer protect the 
public health and safety, the Commission will institute proceedings to 
terminate the agreement with the State. Procedures to address emergency 
situations to temporarily suspend all or part of an agreement with a 
State can be found in Procedure ______.
    In cases where a State has failed to respond in an acceptable 
manner during the probationary or suspension period, and there is no 
prospect for improvement, the Commission may also institute formal 
proceedings to terminate the agreement. Before reaching a final 
decision on termination, the Commission will notify the State and 
provide the State the opportunity for a hearing on the proposed 
termination as discussed in Part VI. Notice of the proposed termination 
will also be published in the Federal Register.
IV. Minimum Criteria for Termination
    A. At the request of the Governor, NRC may terminate all or part of 
its agreement with a State and reassert its authority. The letter 
should be addressed to the Chairman, NRC, from the Governor (Appendix 
A).
    B. The Commission, on its own initiative, will institute formal 
procedures to terminate an agreement under the following circumstances:
    1. The State radiation control program is found to be inadequate to 
protect public health and safety, and no compensating program has been 
implemented,
    2. The State has been on probation for a period of time during 
which it failed to respond to NRC concerns regarding the States ability 
to carry out a program to protect public health and safety, and
    3. The State radiation control program is not compatible with the 
NRC program and the State has refused or is unable to address those 
areas previously identified as compatibility concerns and the non-
compatibility is disruptive to the national program for the regulation 
of Atomic Energy Act material.
    C. The following are examples of situations where NRC would 
consider initiating formal procedures to terminate an agreement. This 
list is not inclusive and other situations may require consideration by 
the Commission at the recommendation of the Management Review Board.
    1. Significant loss of staff which includes number of staff or 
those with critical skills, coupled with a State's inability to hire 
appropriate replacements
    2. Continual management problems which manifest in the State's 
inability to perform adequate inspections or issue appropriate licenses
    3. State's inability to adopt compatible program elements over 
significant period of time
    4. Continued probationary or suspension status for a State program.
V. Management Review Board Role
    A. The Management Review Board (MRB) is responsible for making the 
adequacy assessment of each Agreement State's program based on the 
reviews of the program, using both common performance indicators and 
non-common performance indicators, and the compatibility determination. 
The management review board consists of senior NRC managers, or their 
designees, to include:

Executive Director for Operations
Director, Office of Nuclear Material Safety and Safeguards
Director, Office of State Programs
Director, Office of Analysis and Evaluation of Operational Data
General Counsel

    B. The MRB will consider the results of the Agreement State review 
and any other appropriate information in making a determination of 
adequacy and compatibility with respect to an Agreement State. MRB 
meetings to discuss specific program review findings normally will be 
open and Agreement State representatives will be invited to attend. MRB 
internal deliberation regarding the overall Agreement State program 
rating may be closed, given the predecisional nature of those 
discussions.
    C. If it is the recommendation of the MRB that NRC initiate the 
proceedings to terminate an Agreement, the Office of State Programs 
will be assigned the lead for preparation of the Commission paper. The 
Commission paper will contain the information supporting the 
termination. The Commission paper will be coordinated with OGC, NMSS 
and the region.
VI. Staff Work
    A. Before the opportunity for hearing and issuance of the Federal 
Register notice, OSP will draft a Commission paper for the signature of 
EDO on the termination of regulatory authority in the State based on 
the initial recommendations of the MRB. In preparation of the 
Commission paper, the assigned Project manager should coordinate with 
OGC as to the form or type of Commission paper. The draft Commission 
paper (Appendix B) should contain the following information:

1. Background information (Appendix C)
2. MRB recommendations (Appendix D)
3. Letter from Governor requesting termination--if appropriate 
(Appendix A)
4. Proposed Commission Order Reasserting Authority (Appendix E)
5. Proposed Federal Register Notice regarding the Termination and 
Reassertion of NRC authority (Appendix F)
6. Letter to the Governor regarding the Commission decision (Appendix 
G)
7. A public announcement to be issued by Public Affairs (Appendix H)
8. Proposed letters to the appropriate Congressional Committees on the 
Commission Decision (Appendix I)
VII. Hearings
    Before the Commission can terminate a State's program, it must 
provide reasonable notice and opportunity for a hearing to the State as 
required by Section 274j(1). Section 274j(1) does not require such a 
hearing if termination is requested by the Governor.
    Before the opportunity for a hearing can arise, the Office of State 
Programs must submit to the Commission a paper containing a 
recommendation to terminate the State program in question. This 
Commission paper will include the recommendations of the MRB and any 
other material pertinent to the staff's recommendation to terminate the 
Agreement. Before a decision is made on the OSP recommendation, the 
Commission must provide the State with notice and an opportunity to 
request a hearing on the issue. If the State does not request a 
hearing, the Commission will make a final decision on the issue. If the 
State does request a hearing, the Commission will initiate the hearing 
process described below.
    The hearing for the termination [including the termination of a 
program that had been previously suspended] of an Agreement State 
program will be an informal hearing conducted either by the Commission 
itself, or at the Commission's discretion, by a Special Agreement State 
Board appointed by the Commission. In cases where the Commission 
determines that a Special Board will be used, the Board will consists 
of three members: (1) the chair of the Organization of Agreement States 
(OAS) (unless the chair is from the State in question, in which case 
the Agreement State representative will be the past chair of the OAS); 
(2) an official from the Office of General Counsel, and (3) the Deputy 
Director of an NRC regional office (outside of the region in which the 
State is located).
    The Commission, or the Special Board, as appropriate, will conduct 
an informal hearing to address the issues in question. At the hearing, 
the NRC staff, representatives of the Agreement State, and interested 
third parties will have an opportunity to testify, answer questions 
from the Special Board, and submit written materials. Third parties may 
submit written material to the Special Board and may testify for a 
limited period of time. After consideration of the issues, the 
Commission or the Special Board will issue a decision on termination. A 
majority of the Commission or the Special Board will be required to 
support a decision. In cases where a Special Board is used, the 
Commission will have discretion to review the decision of the Special 
Board, and either uphold or overturn the Board's decision.
VIII. Agreement State and NRC Activities During Termination Proceedings
    During the period of time NRC is pursuing termination of an 
Agreement with a State, State and NRC activities should be coordinated 
so that there is continued protection of the public health and safety. 
The State should be urged to request technical assistance in any area 
where there is a concern regarding the State's ability to carry out its 
responsibilities under the Agreement. OSP will coordinate with the 
State, region and NMSS as to the necessary technical assistance to 
continue the protection of public health and safety.
IX. Additional Coordination After Terminations
    A. NRC will conduct a meeting with the licensees in the State to 
explain the reassertion of NRC authority and the present fee structure. 
Lead for the meeting should be the Region in consultation with NMSS, 
OGC and OC.
    B. After the termination of the Agreement, OSP will prepare a 
letter to the Department of Labor advising the Department of the 
effective date of the termination of the Agreement (Appendix K).
    C. The Regional State Agreements Officer (RSAO) should obtain from 
the State a computer printout of all specific and general licenses 
under the State's agreement. Mailing labels should be obtained if 
possible from the State. A letter should be prepared notifying each 
licensee of the termination, reassertion by NRC and appropriate 
information (Appendix L).
    D. OSP will prepare a letter to all Agreement and Non-Agreement 
States notifying them of the effective date of the termination and, if 
appropriate, enclosing a copy of the order or Federal Register notice 
(Appendix M).
    E. The RSAO will coordinate with the State so that all necessary 
action is taken to have the files for the licenses transferred to the 
NRC.
X. Renewed Interest in 274b
    After a State has terminated an agreement, it may at a later date 
express interest in obtaining a new agreement. The State should be 
treated as other non-agreement States interested in agreements and 
Procedure C.1 for processing new agreements should be followed for 
these negotiations.

Appendices to Termination Procedure 

------------------------------------------------------------------------
  Appendix                             Subject                          
------------------------------------------------------------------------
A...........  Letter from Governor requesting NRC reassert its          
               authority.                                               
B...........  Commission Paper for reassertion of NRC authority in an   
               Agreement State and special board for hearings.          
C...........  Background information on the Agreement State.            
D...........  Management Review Board recommendations.                  
E...........  Proposed Commission Order Reasserting Authority.          
F...........  Proposed Federal Register Notice regarding Reassertion.   
G...........  Letter to Governor regarding the Commission decision on   
               termination.                                             
H...........  Public Announcement to be issued by Public Affairs.       
I...........  Letters to Congressional Committees.                      
J...........  Special Board's report to Commission on hearings.         
K...........  Letter to Department of Labor on termination.             
L...........  Letter to licensees regarding termination and reassertion.
M...........  Letter to All States regarding termination and            
               reassertion.                                             
------------------------------------------------------------------------

[FR Doc. 94-19115 Filed 8-4-94; 8:45 am]
BILLING CODE 7590-01-P