[Federal Register Volume 60, Number 126 (Friday, June 30, 1995)]
[Notices]
[Pages 34381-34403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15952]




  Federal Register / Vol. 60, No. 126 / Friday, June 30, 1995 / 
Notices  

[[Page 34381]]


NUCLEAR REGULATORY COMMISSION


Revision of the NRC Enforcement Policy

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy statement.

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SUMMARY: As a result of an assessment of the Nuclear Regulatory 
Commission's (NRC) enforcement program, the NRC has revised its General 
Statement of Policy and Procedure for Enforcement Actions (Enforcement 
Policy or Policy). By a separate action published today in the Federal 
Register, the Commission is removing the Enforcement Policy from the 
Code of Federal Regulations.

DATES: This action is effective on June 30, 1995, while comments are 
being received. Submit comments on or before August 14, 1995. 
Additionally, the Commission intends to provide an opportunity for 
public comments after this revised Enforcement Policy has been in 
effect for about 18 months.

ADDRESSES: Send written comments to: The Secretary of the Commission, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555. ATTN: 
Docketing and Service Branch. Hand deliver comments to: 11555 Rockville 
Pike, Rockville, Maryland, between 7:45 am and 4:15 pm, Federal 
workdays. Copies of comments received may be examined at the NRC Public 
Document Room, 2120 L Street, NW. (Lower Level), Washington, DC.

FOR FURTHER INFORMATION CONTACT: James Lieberman, Director, Office of 
Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, 
(301) 415-2741.

SUPPLEMENTARY INFORMATION: On May 13, 1994, the NRC's Executive 
Director for Operations established a review team to assess the NRC 
enforcement program. In its report (NUREG-1525,1 ``Assessment of 
the NRC Enforcement Program,'' April 5, 1995), the review team 
concluded that the existing NRC enforcement program, as implemented, is 
appropriately directed toward supporting the agency's overall safety 
mission. This conclusion is reflected in several aspects of the 
program:

    \1\ Copies of NUREG-1525 may be purchased from the 
Superintendent of Documents, U.S. Government Printing Office, Mail 
Stop SSOP, Washington, DC 20402-9328. Copies are also available from 
the National Technical Information Service, 5285 Port Royal Road, 
Springfield, Virginia 22161. A copy is also available for inspection 
and copying for a fee in the NRC Public Document Room, 2120 L 
Street, NW. (Lower Level), Washington, DC 20555-0001.

     The Policy recognizes that violations have differing 
degrees of safety significance. As reflected in the severity levels, 
safety significance includes actual safety consequence, potential 
safety consequence, and regulatory significance. The use of 
graduated sanctions from Notices of Violation to orders further 
reflects the varying seriousness of noncompliances.
     The enforcement conference is an important step in 
achieving a mutual understanding of facts and issues before making 
significant enforcement decisions. Although these conferences take 
time and effort for both the NRC and licensees, they generally 
contribute to better decision-making.
     Enforcement actions deliver regulatory messages 
properly focused on safety. These messages emphasize the need for 
licensees to identify and correct violations, to address the root 
causes, and to be responsive to initial opportunities to identify 
and prevent violations.
     The use of discretion and judgment throughout the 
deliberative process recognizes that enforcement of NRC requirements 
does not lend itself to mechanistic treatment.

    However, the Review Team found that the existing enforcement 
program at times provided mixed regulatory messages to licensees, and 
room for improvement existed in the Enforcement Policy. The review 
suggested that the program's focus should be clarified to:

     Emphasize the importance of identifying problems before 
events occur, and of taking prompt, comprehensive corrective action 
when problems are identified;
     Direct agency attention at licensees with multiple 
enforcement actions in a relatively short period; and
     Focus on current performance of licensees.

    In addition, the review team found that the process for assessing 
civil penalties could be simplified to improve the predictability of 
decision-making and obtain better consistency between regions.
    As a result of its review, the review team made several 
recommendations to revise the NRC Enforcement Policy to produce an 
enforcement program with clearer regulatory focus and more 
predictability. The Commission is issuing this policy statement after 
considering those recommendations and the bases for them in NUREG-1525.
    The more significant changes to the current Enforcement Policy are 
described below:

I. Introduction and Purpose

    This section has been modified to emphasize that the purpose and 
objectives of the enforcement program are focused on using enforcement 
actions:
    (1) As a deterrent to emphasize the importance of compliance with 
requirements; and
    (2) To encourage prompt identification and prompt, comprehensive 
correction of violations.

IV. Severity of Violations

    Severity Level V violations have been eliminated. The examples at 
that level have been withdrawn from the supplements. Formal enforcement 
actions will now only be taken for violations categorized at Severity 
Level I to IV to better focus the inspection and enforcement process on 
safety. To the extent that minor violations are described in an 
inspection report, they will be labeled as Non-Cited Violations (NCVs). 
When a licensee does not take corrective action or repeatedly or 
willfully commits a minor violation such that a formal response would 
be needed, the violation should be categorized at least at a Severity 
Level IV.
    The NRC staff will be reviewing the severity level examples in the 
supplements over the next 6 months. The purpose of this review is to 
ensure the examples are appropriately focused on safety significance, 
including consideration of actual safety consequence, potential safety 
consequence, and regulatory significance.

V. Predecisional Enforcement Conferences

    Enforcement conferences are being renamed ``predecisional 
enforcement conferences.'' These conferences should be held for the 
purpose of obtaining information to assist NRC in making enforcement 
decisions when the agency reasonably expects that escalated enforcement 
actions will result. They should also normally be held if requested by 
a licensee. In addition they should normally be held before issuing an 
order or a civil penalty to an unlicensed individual.
    In light of the changes to the Enforcement Policy, the Commission 
has decided to continue a trial program of conducting approximately 25 
percent of eligible conferences open to public observation pending 
further evaluation. (See 57 FR 30762; July 10, 1992, and 59 FR 36796; 
July 19, 1994). The intent of open conferences is not to maximize 
public attendance, but is rather for determining whether providing the 
public with an opportunity to observe the regulatory process is 
compatible with the NRC's ability to exercise its regulatory and safety 
responsibilities. The provisions of the trial program have been 
incorporated into the Enforcement Policy.

[[Page 34382]]


VI. Enforcement Actions

A. Notice of Violation

    This section was modified to clarify that the NRC may waive all or 
portions of a licensee's written response to a Notice of Violation to 
the extent relevant information has already been provided to the NRC in 
writing or documented in an NRC inspection report and is on the 
applicable docket in the NRC Public Document Room.

B. Civil Penalty

1. Base Civil Penalty
    Tables 1A and 1B have been revised. In Table 1B the percentage for 
Severity Level IV violations has been deleted since such violations 
will not be subject to civil penalties. If a violation that would 
otherwise be categorized at a Severity Level IV violation merits a 
civil penalty because of its significance, the violation would normally 
be categorized at a Severity Level III.
    Table 1A has been simplified to combine categories of licensees 
with the same base penalty amounts. The base penalty amounts have 
generally remained unchanged. The revised policy notes that the base 
penalties may be adjusted on a case-by-case basis to reflect the 
ability to pay and the gravity of the violation. 10 CFR Part 35 
licensees (doctors, nuclear pharmacies, and other medical related 
licensees) are combined into an overall medical category, based on the 
similarity of hazards. Because transportation violations for all 
licensees are primarily concerned with the potential for personnel 
exposure to radiation, the violations in this area will be treated the 
same as those in the health physics area.
    The $100,000 base civil penalty amount for safeguards violations, 
which applies to only two categories of licensees, fuel fabricators and 
independent fuel and monitored retrievable storage installations, has 
been deleted. The penalty amount for safeguards should be the same as 
for other violations at these facilities. NRC has not had significant 
safeguards violations at these facilities. If the penalty that would 
normally be assessed for operational violations is not adequate to 
address the circumstances of the violation, then discretion would be 
used to determine the appropriate penalty amount.
    The base civil penalty for ``other'' materials licensees, currently 
set at $1000, has been increased to $5000. The primary concerns for 
these licensed activities are individual radiation exposure and loss of 
control of material to the environment, both of which warrant a more 
financially meaningful penalty. A $500 civil penalty for a Severity 
Level III violation (at 50% of the Severity Level I base amount) does 
not reflect the seriousness of this type of violation for this category 
of licensee. It is noted that with the revised assessment approach, 
these licensees will not normally receive a civil penalty if prompt and 
comprehensive corrective action is taken for isolated non-willful 
Severity Level III violations.
2. Civil Penalty Assessment
    This section has been renamed to reflect that the process for 
assessing civil penalties has been substantially changed. The revised 
process is intended to:
     Continue to emphasize compliance in a manner that deters 
future violations;
     Encourage prompt identification and prompt, comprehensive 
correction of violations and their root causes;
     Apply the recognition of good past performance to give 
credit to a licensee committing a non-willful SL III violation who has 
had no previous significant violations during the past 2 years or 2 
inspections (whichever is longer);
     Place greater attention on situations of greater concern 
(i.e., where a licensee has had more than one significant violation in 
a 2-year or two-inspection period, where corrective action is less than 
prompt and comprehensive, or where egregious circumstances, such as 
where it is clear that repetitiveness or willfulness, are involved);
     Streamline the NRC decisional process in a manner that 
will preserve judgment and discretion, but will provide a clear 
normative standard and produce relatively predictable results for 
routine cases; and
     Provide clear guidance on applying fewer adjustment 
factors in various types of cases, in order to increase consistency and 
predictability.
    Once a violation has been categorized at a Severity Level III or 
above, the assessment process considers four basic decisional points:
    (1) Whether the licensee has had a previous escalated enforcement 
action during the past 2 years or past 2 inspections, whichever is 
longer;
    (2) Whether the licensee should be given credit for actions related 
to identification;
    (3) Whether the licensee's corrective actions may reasonably be 
considered prompt and comprehensive; and
    (4) Whether, in view of all the circumstances, the case in question 
warrants the exercise of discretion. As described in the Enforcement 
Policy, each of these decisional points may have several associated 
considerations for any given case. However, the outcome of a case, 
absent the exercise of discretion, is limited to three results: no 
civil penalty, a base civil penalty, or a base civil penalty escalated 
by 100%.

D. Related Administrative Actions

    The reference to related administrative mechanisms have been 
replaced with related administrative actions to clarify the documents 
as actions.
VII. Exercise of Discretion

    The ability to exercise discretion is preserved with the revised 
policy. Discretion is provided to deviate from the normal approach to 
either increase or decrease sanctions where necessary to ensure that 
the sanction reflects the significance of the circumstances and conveys 
the appropriate regulatory message. This section has been modified to 
provide examples where it is appropriate to consider civil penalties or 
escalate civil penalties notwithstanding the normal assessment process 
in Section VI of the Enforcement Policy. One significant example to 
note involves the loss of a source. This example is being added to 
emphasize the importance of licensees being aware of the location of 
their sources and to recognize that there should not be an economic 
advantage for inappropriate disposal or transfer. As to mitigation of 
sanctions for violations involving special circumstances, mitigation 
can be considered if the licensee has demonstrated overall sustained 
performance which has been particularly good. The levels of approval 
for exercising discretion are described in this section. Finally, Table 
2, ``Examples of Progressions of Escalated Enforcement Actions for 
Similar Violations in the Same Activity Area Under the Same License,'' 
has been withdrawn from the Enforcement Policy. The guidance in that 
table is not needed because the policy is clear that each case should 
be judged on its own merits, especially those repetitive violation 
cases to which the table applied.

VIII. Enforcement Actions Involving Individuals

    The Enforcement Policy has been clarified to provide that some 
action is normally to be taken against a licensee for violations caused 
by significant acts of wrongdoing by its employees, contractors, or 
contractors employees. The Policy has also been modified to state that 
the nine factors in Section VIII 

[[Page 34383]]
should be used to assist in the decision on whether enforcement action 
should be taken against an unlicensed individual as well as the 
licensee. The Policy currently uses these factors to determine whether 
to take enforcement action against an unlicensed person rather than the 
licensee. These changes are consistent with the intent of the 
Commission in promulgating the rule on deliberate misconduct (56 FR 
40664, 40666, August 15, 1991). Less significant cases may be treated 
as an NCV under Section VII.B.1. A Letter of Reprimand is not a 
sanction and is now referred to as an administrative action consistent 
with Section VI.D of the Policy.
    The Commission expects that the changes to the Enforcement Policy 
should result in an increase in the protection of the public health and 
safety by better emphasizing the prevention, detection, and correction 
of violations before events occur with impact on the public. In about 2 
years the Commission intends to review the Enforcement Policy. In that 
regard, it is expected that in about 18 months an opportunity will be 
provided to receive public comments on the implementation of this 
Policy.

General Statement of Policy and Procedure for NRC Enforcement 
Actions

Table of Contents

Preface

I. Introduction and Purpose
II. Statutory Authority
    A. Statutory Authority
    B. Procedural Framework
III. Responsibilities
IV. Severity of Violations
    A. Aggregation of Violations
    B. Repetitive Violations
    C. Willful Violations
    D. Violations of Reporting Requirements
V. Predecisional Enforcement Conferences
VI. Enforcement Actions
    A. Notice of Violation
    B. Civil Penalty
    1. Base Civil Penalty
    2. Civil Penalty Assessment
    a. Initial Escalated Action
    b. Credit for Actions Related to Identification
    c. Credit for Prompt and Comprehensive Corrective Action
    d. Exercise of Discretion
    C. Orders
    D. Related Administrative Actions
VII. Exercise of Discretion
    A. Escalation of Enforcement Sanctions
    1. Civil Penalties
    2. Orders
    3. Daily Civil Penalties
    B. Mitigation of Enforcement Sanctions
    1. Licensee-Identified Severity Level IV Violations
    2. Violations Identified During Extended Shutdowns or Work 
Stoppages
    3. Violations Involving Old Design Issues
    4. Violations Identified Due to Previous Escalated Enforcement 
Action
    5. Violations Involving Discrimination
    6. Violations Involving Special Circumstances
    C. Exercise of Discretion for an Operating Facility
VIII. Enforcement Actions Involving Individuals
IX. Inaccurate and Incomplete Information
X. Enforcement Action Against Non-Licensees
XI. Referrals to the Department of Justice
XII. Public Disclosure of Enforcement Actions
XIII. Reopening Closed Enforcement Actions
  Supplements

Preface

    The following statement of general policy and procedure explains 
the enforcement policy and procedures of the U.S. Nuclear Regulatory 
Commission (NRC or Commission) and the NRC staff (staff) in initiating 
enforcement actions, and of the presiding officers and the Commission 
in reviewing these actions. This statement is applicable to enforcement 
in matters involving the radiological health and safety of the public, 
including employees' health and safety, the common defense and 
security, and the environment.1 This statement of general policy 
and procedure will be published as NUREG-1600 to provide widespread 
dissemination of the Commission's Enforcement Policy. However, this is 
a policy statement and not a regulation. The Commission may deviate 
from this statement of policy and procedure as appropriate under the 
circumstances of a particular case.

    \1\  Antitrust enforcement matters will be dealt with on a case-
by-case basis.
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I. Introduction and Purpose

    The purpose of the NRC enforcement program is to support the NRC's 
overall safety mission in protecting the public and the environment. 
Consistent with that purpose, enforcement action should be used:
     As a deterrent to emphasize the importance of compliance 
with requirements, and
     To encourage prompt identification and prompt, 
comprehensive correction of violations.
    Consistent with the purpose of this program, prompt and vigorous 
enforcement action will be taken when dealing with licensees, 
vendors,2 contractors, and their employees, who do not achieve the 
necessary meticulous attention to detail and the high standard of 
compliance which the NRC expects.3 Each enforcement action is 
dependent on the circumstances of the case and requires the exercise of 
discretion after consideration of these policies and procedures. In no 
case, however, will licensees who cannot achieve and maintain adequate 
levels of protection be permitted to conduct licensed activities.

    \2\ The term ``vendor'' as used in this policy means a supplier 
of products or services to be used in an NRC-licensed facility or 
activity.
    \3\ This policy primarily addresses the activities of NRC 
licensees and applicants for NRC licenses. Therefore, the term 
``licensee'' is used throughout the policy. However, in those cases 
where the NRC determines that it is appropriate to take enforcement 
action against a non-licensee or individual, the guidance in this 
policy will be used, as applicable. Specific guidance regarding 
enforcement action against individuals and non-licensees is 
addressed in Sections VIII and X, respectively.
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II. Statutory Authority and Procedural Framework

A. Statutory Authority

    The NRC's enforcement jurisdiction is drawn from the Atomic Energy 
Act of 1954, as amended, and the Energy Reorganization Act (ERA) of 
1974, as amended.
    Section 161 of the Atomic Energy Act authorizes the NRC to conduct 
inspections and investigations and to issue orders as may be necessary 
or desirable to promote the common defense and security or to protect 
health or to minimize danger to life or property. Section 186 
authorizes the NRC to revoke licenses under certain circumstances 
(e.g., for material false statements, in response to conditions that 
would have warranted refusal of a license on an original application, 
for a licensee's failure to build or operate a facility in accordance 
with the terms of the permit or license, and for violation of an NRC 
regulation). Section 234 authorizes the NRC to impose civil penalties 
not to exceed $100,000 per violation per day for the violation of 
certain specified licensing provisions of the Act, rules, orders, and 
license terms implementing these provisions, and for violations for 
which licenses can be revoked. In addition to the enumerated provisions 
in section 234, sections 84 and 147 authorize the imposition of civil 
penalties for violations of regulations implementing those provisions. 
Section 232 authorizes the NRC to seek injunctive or other equitable 
relief for violation of regulatory requirements.
    Section 206 of the Energy Reorganization Act authorizes the NRC to 
impose civil penalties for knowing and conscious failures to provide 
certain safety information to the NRC.
    Chapter 18 of the Atomic Energy Act provides for varying levels of 
criminal 

[[Page 34384]]
penalties (i.e., monetary fines and imprisonment) for willful 
violations of the Act and regulations or orders issued under sections 
65, 161(b), 161(i), or 161(o) of the Act. Section 223 provides that 
criminal penalties may be imposed on certain individuals employed by 
firms constructing or supplying basic components of any utilization 
facility if the individual knowingly and willfully violates NRC 
requirements such that a basic component could be significantly 
impaired. Section 235 provides that criminal penalties may be imposed 
on persons who interfere with inspectors. Section 236 provides that 
criminal penalties may be imposed on persons who attempt to or cause 
sabotage at a nuclear facility or to nuclear fuel. Alleged or suspected 
criminal violations of the Atomic Energy Act are referred to the 
Department of Justice for appropriate action.

B. Procedural Framework

    Subpart B of 10 CFR part 2 of NRC's regulations sets forth the 
procedures the NRC uses in exercising its enforcement authority. 10 CFR 
2.201 sets forth the procedures for issuing notices of violation.
    The procedure to be used in assessing civil penalties is set forth 
in 10 CFR 2.205. This regulation provides that the civil penalty 
process is initiated by issuing a Notice of Violation and Proposed 
Imposition of a Civil Penalty. The licensee or other person is provided 
an opportunity to contest in writing the proposed imposition of a civil 
penalty. After evaluation of the response, the civil penalty may be 
mitigated, remitted, or imposed. An opportunity is provided for a 
hearing if a civil penalty is imposed. If a civil penalty is not paid 
following a hearing or if a hearing is not requested, the matter may be 
referred to the U.S. Department of Justice to institute a civil action 
in District Court.
    The procedure for issuing an order to institute a proceeding to 
modify, suspend, or revoke a license or to take other action against a 
licensee or other person subject to the jurisdiction of the Commission 
is set forth in 10 CFR 2.202. The licensee or any other person 
adversely affected by the order may request a hearing. The NRC is 
authorized to make orders immediately effective if required to protect 
the public health, safety, or interest, or if the violation is willful. 
Section 2.204 sets out the procedures for issuing a Demand for 
Information (Demand) to a licensee or other person subject to the 
Commission's jurisdiction for the purpose of determining whether an 
order or other enforcement action should be issued. The Demand does not 
provide hearing rights, as only information is being sought. A licensee 
must answer a Demand. An unlicensed person may answer a Demand by 
either providing the requested information or explaining why the Demand 
should not have been issued.

III. Responsibilities

    The Executive Director for Operations (EDO) and the principal 
enforcement officers of the NRC, the Deputy Executive Director for 
Nuclear Material Safety, Safeguards and Operations Support (DEDS) and 
the Deputy Executive Director for Nuclear Reactor Regulation, Regional 
Operations, and Research (DEDR), have been delegated the authority to 
approve or issue all escalated enforcement actions.4 The DEDS is 
responsible to the EDO for the NRC enforcement programs. The Office of 
Enforcement (OE) exercises oversight of and implements the NRC 
enforcement programs. The Director, OE, acts for the Deputy Executive 
Directors in enforcement matters in their absence or as delegated.

    \4\ The term ``escalated enforcement action'' as used in this 
policy means a Notice of Violation or civil penalty for any Severity 
Level I, II, or III violation (or problem) or any order based upon a 
violation.
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    Subject to the oversight and direction of OE, and with the approval 
of the appropriate Deputy Executive Director, where necessary, the 
regional offices normally issue Notices of Violation and proposed civil 
penalties. However, subject to the same oversight as the regional 
offices, the Office of Nuclear Reactor Regulation (NRR) and the Office 
of Nuclear Material Safety and Safeguards (NMSS) may also issue Notices 
of Violation and proposed civil penalties for certain activities. 
Enforcement orders are normally issued by a Deputy Executive Director 
or the Director, OE. However, orders may also be issued by the EDO, 
especially those involving the more significant matters. The Directors 
of NRR and NMSS have also been delegated authority to issue orders, but 
it is expected that normal use of this authority by NRR and NMSS will 
be confined to actions not associated with compliance issues. The 
Director, Office of the Controller, has been delegated the authority to 
issue orders where licensees violate Commission regulations by 
nonpayment of license and inspection fees.
    In recognition that the regulation of nuclear activities in many 
cases does not lend itself to a mechanistic treatment, judgment and 
discretion must be exercised in determining the severity levels of the 
violations and the appropriate enforcement sanctions, including the 
decision to issue a Notice of Violation, or to propose or impose a 
civil penalty and the amount of this penalty, after considering the 
general principles of this statement of policy and the technical 
significance of the violations and the surrounding circumstances.
    Unless Commission consultation or notification is required by this 
policy, the staff may depart, where warranted in the public's interest, 
from this policy as provided in Section VII,''Exercise of Enforcement 
Discretion.'' The Commission will be provided written notification of 
all enforcement actions involving civil penalties or orders. The 
Commission will also be provided notice in those cases where discretion 
is exercised as discussed in Section VII.B.6. In addition, the 
Commission will be consulted prior to taking action in the following 
situations (unless the urgency of the situation dictates immediate 
action):
    (1) An action affecting a licensee's operation that requires 
balancing the public health and safety or common defense and security 
implications of not operating with the potential radiological or other 
hazards associated with continued operation;
    (2) Proposals to impose civil penalties in amounts greater than 3 
times the Severity Level I values shown in Table 1A;
    (3) Any proposed enforcement action that involves a Severity Level 
I violation;
    (4) Any enforcement action that involves a finding of a material 
false statement;
    (5) Exercising discretion for matters meeting the criteria of 
Section VII.A.1 for Commission consultation;
    (6) Refraining from taking enforcement action for matters meeting 
the criteria of Section VII.B.2;
    (7) Any proposed enforcement action that involves the issuance of a 
civil penalty or order to an unlicensed individual or a civil penalty 
to a licensed reactor operator;
    (8) Any action the EDO believes warrants Commission involvement;
    (9) Any proposed enforcement case involving an Office of 
Investigation (OI) report where the staff (other than the OI staff) 
does not arrive at the same conclusions as those in the OI report 
concerning issues of intent if the Director of OI concludes that 
Commission consultation is warranted; and
    (10) Any proposed enforcement action on which the Commission asks 
to be consulted.

[[Page 34385]]


IV. Severity of Violations

    Regulatory requirements 5 have varying degrees of safety, 
safeguards, or environmental significance. Therefore, the relative 
importance of each violation, including both the technical significance 
and the regulatory significance is evaluated as the first step in the 
enforcement process.

    \5\ The term ``requirement'' as used in this policy means a 
legally binding requirement such as a statute, regulation, license 
condition, technical specification, or order.
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    Consequently, for purposes of formal enforcement action, violations 
are normally categorized in terms of four levels of severity to show 
their relative importance within each of the following eight activity 
areas:

I. Reactor Operations;
II. Facility Construction;
III. Safeguards;
IV. Health Physics;
V. Transportation;
VI. Fuel Cycle and Materials Operations;
VII. Miscellaneous Matters; and
VIII. Emergency Preparedness.

    Licensed activities will be placed in the activity area most 
suitable in light of the particular violation involved including 
activities not directly covered by one of the above listed areas, e.g., 
export license activities. Within each activity area, Severity Level I 
has been assigned to violations that are the most significant and 
Severity Level IV violations are the least significant. Severity Level 
I and II violations are of very significant regulatory concern. In 
general, violations that are included in these severity categories 
involve actual or high potential impact on the public. Severity Level 
III violations are cause for significant regulatory concern. Severity 
Level IV violations are less serious but are of more than minor 
concern; i.e., if left uncorrected, they could lead to a more serious 
concern.
    The Commission recognizes that there are other violations of minor 
safety or environmental concern which are below the level of 
significance of Severity Level IV violations. These minor violations 
are not the subject of formal enforcement action and are not usually 
described in inspection reports. To the extent such violations are 
described, they are noted as Non-Cited Violations.6

    \6\ A Non-Cited Violation (NCV) is a violation that has not been 
formalized into a 10 CFR 2.201 Notice of Violation.
---------------------------------------------------------------------------

    Comparisons of significance between activity areas are 
inappropriate. For example, the immediacy of any hazard to the public 
associated with Severity Level I violations in Reactor Operations is 
not directly comparable to that associated with Severity Level I 
violations in Facility Construction.
    Supplements I through VIII provide examples and serve as guidance 
in determining the appropriate severity level for violations in each of 
the eight activity areas. However, the examples are neither exhaustive 
nor controlling. In addition, these examples do not create new 
requirements. Each is designed to illustrate the significance that the 
NRC places on a particular type of violation of NRC requirements. Each 
of the examples in the supplements is predicated on a violation of a 
regulatory requirement.
    The NRC reviews each case being considered for enforcement action 
on its own merits to ensure that the severity of a violation is 
characterized at the level best suited to the significance of the 
particular violation. In some cases, special circumstances may warrant 
an adjustment to the severity level categorization.
A. Aggregation of Violations

    A group of Severity Level IV violations may be evaluated in the 
aggregate and assigned a single, increased severity level, thereby 
resulting in a Severity Level III problem, if the violations have the 
same underlying cause or programmatic deficiencies, or the violations 
contributed to or were unavoidable consequences of the underlying 
problem. Normally, Severity Level II and III violations are not 
aggregated into a higher severity level.
    The purpose of aggregating violations is to focus the licensee's 
attention on the fundamental underlying causes for which enforcement 
action appears warranted and to reflect the fact that several 
violations with a common cause may be more significant collectively 
than individually and may therefore, warrant a more substantial 
enforcement action.

B. Repetitive Violations

    The severity level of a Severity Level IV violation may be 
increased to Severity Level III, if the violation can be considered a 
repetitive violation.7 The purpose of escalating the severity 
level of a repetitive violation is to acknowledge the added 
significance of the situation based on the licensee's failure to 
implement effective corrective action for the previous violation. The 
decision to escalate the severity level of a repetitive violation will 
depend on the circumstances, such as, but not limited to, the number of 
times the violation has occurred, the similarity of the violations and 
their root causes, the adequacy of previous corrective actions, the 
period of time between the violations, and the significance of the 
violations.

    \7\ The term ``repetitive violation'' or ``similar violation'' 
as used in this policy statement means a violation that reasonably 
could have been prevented by a licensee's corrective action for a 
previous violation normally occurring (1) within the past 2 years of 
the inspection at issue, or (2) the period within the last two 
inspections, whichever is longer.
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C. Willful Violations

    Willful violations are by definition of particular concern to the 
Commission because its regulatory program is based on licensees and 
their contractors, employees, and agents acting with integrity and 
communicating with candor. Willful violations cannot be tolerated by 
either the Commission or a licensee. Licensees are expected to take 
significant remedial action in responding to willful violations 
commensurate with the circumstances such that it demonstrates the 
seriousness of the violation thereby creating a deterrent effect within 
the licensee's organization. Although removal of the person is not 
necessarily required, substantial disciplinary action is expected.
    Therefore, the severity level of a violation may be increased if 
the circumstances surrounding the matter involve careless disregard of 
requirements, deception, or other indications of willfulness. The term 
``willfulness'' as used in this policy embraces a spectrum of 
violations ranging from deliberate intent to violate or falsify to and 
including careless disregard for requirements. Willfulness does not 
include acts which do not rise to the level of careless disregard, 
e.g., inadvertent clerical errors in a document submitted to the NRC. 
In determining the specific severity level of a violation involving 
willfulness, consideration will be given to such factors as the 
position and responsibilities of the person involved in the violation 
(e.g., licensee official 8 or non-supervisory employee), the 
significance of any underlying violation, the intent of the violator 
(i.e., careless disregard or deliberateness), and the economic or other 
advantage, if any, gained as a result of the violation. The relative 
weight given to each of these 

[[Page 34386]]
factors in arriving at the appropriate severity level will be dependent 
on the circumstances of the violation. However, if a licensee refuses 
to correct a minor violation within a reasonable time such that it 
willfully continues, the violation should be categorized at least at a 
Severity Level IV.

    \8\ The term ``licensee official'' as used in this policy 
statement means a first-line supervisor or above, a licensed 
individual, a radiation safety officer, or an authorized user of 
licensed material whether or not listed on a license. 
Notwithstanding an individual's job title, severity level 
categorization for willful acts involving individuals who can be 
considered licensee officials will consider several factors, 
including the position of the individual relative to the licensee's 
organizational structure and the individual's responsibilities 
relative to the oversight of licensed activities and to the use of 
licensed material.
---------------------------------------------------------------------------

D. Violations of Reporting Requirements

    The NRC expects licensees to provide complete, accurate, and timely 
information and reports. Accordingly, unless otherwise categorized in 
the Supplements, the severity level of a violation involving the 
failure to make a required report to the NRC will be based upon the 
significance of and the circumstances surrounding the matter that 
should have been reported. However, the severity level of an untimely 
report, in contrast to no report, may be reduced depending on the 
circumstances surrounding the matter. A licensee will not normally be 
cited for a failure to report a condition or event unless the licensee 
was actually aware of the condition or event that it failed to report. 
A licensee will, on the other hand, normally be cited for a failure to 
report a condition or event if the licensee knew of the information to 
be reported, but did not recognize that it was required to make a 
report.

V. Predecisional Enforcement Conferences

    Whenever the NRC has learned of the existence of a potential 
violation for which escalated enforcement action appears to be 
warranted, or recurring nonconformance on the part of a vendor, the NRC 
may provide an opportunity for a predecisional enforcement conference 
with the licensee, vendor, or other person before taking enforcement 
action. The purpose of the conference is to obtain information that 
will assist the NRC in determining the appropriate enforcement action, 
such as: (1) A common understanding of facts, root causes and missed 
opportunities associated with the apparent violations, (2) a common 
understanding of corrective action taken or planned, and (3) a common 
understanding of the significance of issues and the need for lasting 
comprehensive corrective action.
    If the NRC concludes that it has sufficient information to make an 
informed enforcement decision, a conference will not normally be held 
unless the licensee requests it. However, an opportunity for a 
conference will normally be provided before issuing an order based on a 
violation of the rule on Deliberate Misconduct or a civil penalty to an 
unlicensed person. If a conference is not held, the licensee will 
normally be requested to provide a written response to an inspection 
report, if issued, as to the licensee's views on the apparent 
violations and their root causes and a description of planned or 
implemented corrective action.
    During the predecisional enforcement conference, the licensee, 
vendor, or other persons will be given an opportunity to provide 
information consistent with the purpose of the conference, including an 
explanation to the NRC of the immediate corrective actions (if any) 
that were taken following identification of the potential violation or 
nonconformance and the long-term comprehensive actions that were taken 
or will be taken to prevent recurrence. Licensees, vendors, or other 
persons will be told when a meeting is a predecisional enforcement 
conference.
    A predecisional enforcement conference is a meeting between the NRC 
and the licensee. Conferences are normally held in the regional offices 
and are not normally open to public observation. However, a trial 
program is being conducted to open approximately 25 percent of all 
eligible conferences for public observation, i.e., every fourth 
eligible conference involving one of three categories of licensees 
(reactor, hospital, and other materials licensees) will be open to the 
public. Conferences will not normally be open to the public if the 
enforcement action being contemplated:
    (1) Would be taken against an individual, or if the action, though 
not taken against an individual, turns on whether an individual has 
committed wrongdoing;
    (2) Involves significant personnel failures where the NRC has 
requested that the individual(s) involved be present at the conference;
    (3) Is based on the findings of an NRC Office of Investigations 
report; or
    (4) Involves safeguards information, Privacy Act information, or 
information which could be considered proprietary;
    In addition, conferences will not normally be open to the public 
if:
    (5) The conference involves medical misadministrations or 
overexposures and the conference cannot be conducted without disclosing 
the exposed individual's name; or
    (6) The conference will be conducted by telephone or the conference 
will be conducted at a relatively small licensee's facility.
    Notwithstanding meeting any of these criteria, a conference may 
still be open if the conference involves issues related to an ongoing 
adjudicatory proceeding with one or more intervenors or where the 
evidentiary basis for the conference is a matter of public record, such 
as an adjudicatory decision by the Department of Labor. In addition, 
with the approval of the Executive Director for Operations, conferences 
will not be open to the public where good cause has been shown after 
balancing the benefit of the public observation against the potential 
impact on the agency's enforcement action in a particular case.
    As soon as it is determined that a conference will be open to 
public observation, the NRC will notify the licensee that the 
conference will be open to public observation as part of the agency's 
trial program. Consistent with the agency's policy on open meetings, 
``Staff Meetings Open to Public,'' published September 20, 1994 (59 FR 
48340), the NRC intends to announce open conferences normally at least 
10 working days in advance of conferences through (1) notices posted in 
the Public Document Room, (2) a toll-free telephone recording at 800-
952-9674, and (3) a toll-free electronic bulletin board at 800-952-
9676. In addition, the NRC will also issue a press release and notify 
appropriate State liaison officers that a predecisional enforcement 
conference has been scheduled and that it is open to public 
observation.
    The public attending open conferences under the trial program may 
observe but not participate in the conference. It is noted that the 
purpose of conducting open conferences under the trial program is not 
to maximize public attendance, but rather to determine whether 
providing the public with opportunities to be informed of NRC 
activities is compatible with the NRC's ability to exercise its 
regulatory and safety responsibilities. Therefore, members of the 
public will be allowed access to the NRC regional offices to attend 
open enforcement conferences in accordance with the ``Standard 
Operating Procedures For Providing Security Support For NRC Hearings 
And Meetings,'' published November 1, 1991 (56 FR 56251). These 
procedures provide that visitors may be subject to personnel screening, 
that signs, banners, posters, etc., not larger than 18'' be permitted, 
and that disruptive persons may be removed.
    Members of the public attending open conferences will be reminded 
that (1) the apparent violations discussed at predecisional enforcement 
conferences are subject to further review and may be subject to change 
prior to any resulting enforcement action and (2) the statements of 
views or expressions of opinion made by NRC employees at predecisional 
enforcement conferences, or the lack thereof, are not intended to 
represent final determinations or beliefs. 

[[Page 34387]]
Persons attending open conferences will be provided an opportunity to 
submit written comments concerning the trial program anonymously to the 
regional office. These comments will be subsequently forwarded to the 
Director of the Office of Enforcement for review and consideration.
    When needed to protect the public health and safety or common 
defense and security, escalated enforcement action, such as the 
issuance of an immediately effective order, will be taken before the 
conference. In these cases, a conference may be held after the 
escalated enforcement action is taken.

VI. Enforcement Actions

    This section describes the enforcement sanctions available to the 
NRC and specifies the conditions under which each may be used. The 
basic enforcement sanctions are Notices of Violation, civil penalties, 
and orders of various types. As discussed further in Section VI.D, 
related administrative actions such as Notices of Nonconformance, 
Notices of Deviation, Confirmatory Action Letters, Letters of 
Reprimand, and Demands for Information are used to supplement the 
enforcement program. In selecting the enforcement sanctions or 
administrative actions, the NRC will consider enforcement actions taken 
by other Federal or State regulatory bodies having concurrent 
jurisdiction, such as in transportation matters. Usually, whenever a 
violation of NRC requirements of more than a minor concern is 
identified, enforcement action is taken. The nature and extent of the 
enforcement action is intended to reflect the seriousness of the 
violation involved. For the vast majority of violations, a Notice of 
Violation or a Notice of Nonconformance is the normal action.

A. Notice of Violation

    A Notice of Violation is a written notice setting forth one or more 
violations of a legally binding requirement. The Notice of Violation 
normally requires the recipient to provide a written statement 
describing (1) the reasons for the violation or, if contested, the 
basis for disputing the violation; (2) corrective steps that have been 
taken and the results achieved; (3) corrective steps that will be taken 
to prevent recurrence; and (4) the date when full compliance will be 
achieved. The NRC may waive all or portions of a written response to 
the extent relevant information has already been provided to the NRC in 
writing or documented in an NRC inspection report. The NRC may require 
responses to Notices of Violation to be under oath. Normally, responses 
under oath will be required only in connection with Severity Level I, 
II, or III violations or orders.
    The NRC uses the Notice of Violation as the usual method for 
formalizing the existence of a violation. Issuance of a Notice of 
Violation is normally the only enforcement action taken, except in 
cases where the criteria for issuance of civil penalties and orders, as 
set forth in Sections VI.B and VI.C, respectively, are met. However, 
special circumstances regarding the violation findings may warrant 
discretion being exercised such that the NRC refrains from issuing a 
Notice of Violation. (See Section VII.B, ``Mitigation of Enforcement 
Sanctions.'') In addition, licensees are not ordinarily cited for 
violations resulting from matters not within their control, such as 
equipment failures that were not avoidable by reasonable licensee 
quality assurance measures or management controls. Generally, however, 
licensees are held responsible for the acts of their employees. 
Accordingly, this policy should not be construed to excuse personnel 
errors.

B. Civil Penalty

    A civil penalty is a monetary penalty that may be imposed for 
violation of (1) certain specified licensing provisions of the Atomic 
Energy Act or supplementary NRC rules or orders; (2) any requirement 
for which a license may be revoked; or (3) reporting requirements under 
section 206 of the Energy Reorganization Act. Civil penalties are 
designed to deter future violations both by the involved licensee as 
well as by other licensees conducting similar activities and to 
emphasize the need for licensees to identify violations and take prompt 
comprehensive corrective action.
    Civil penalties are considered for Severity Level III violations. 
In addition, civil penalties will normally be assessed for Severity 
Level I and II violations and knowing and conscious violations of the 
reporting requirements of section 206 of the Energy Reorganization Act.
    Civil penalties are used to encourage prompt identification and 
prompt and comprehensive correction of violations, to emphasize 
compliance in a manner that deters future violations, and to serve to 
focus licensees' attention on violations of significant regulatory 
concern.
    Although management involvement, direct or indirect, in a violation 
may lead to an increase in the civil penalty, the lack of management 
involvement may not be used to mitigate a civil penalty. Allowing 
mitigation in the latter case could encourage the lack of management 
involvement in licensed activities and a decrease in protection of the 
public health and safety.
1. Base Civil Penalty
    The NRC imposes different levels of penalties for different 
severity level violations and different classes of licensees, vendors, 
and other persons. Tables 1A and 1B show the base civil penalties for 
various reactor, fuel cycle, materials, and vendor programs. (Civil 
penalties issued to individuals are determined on a case-by-case 
basis.) The structure of these tables generally takes into account the 
gravity of the violation as a primary consideration and the ability to 
pay as a secondary consideration. Generally, operations involving 
greater nuclear material inventories and greater potential consequences 
to the public and licensee employees receive higher civil penalties. 
Regarding the secondary factor of ability of various classes of 
licensees to pay the civil penalties, it is not the NRC's intention 
that the economic impact of a civil penalty be so severe that it puts a 
licensee out of business (orders, rather than civil penalties, are used 
when the intent is to suspend or terminate licensed activities) or 
adversely affects a licensee's ability to safely conduct licensed 
activities. The deterrent effect of civil penalties is best served when 
the amounts of the penalties take into account a licensee's ability to 
pay. In determining the amount of civil penalties for licensees for 
whom the tables do not reflect the ability to pay or the gravity of the 
violation, the NRC will consider as necessary an increase or decrease 
on a case-by-case basis. Normally, if a licensee can demonstrate 
financial hardship, the NRC will consider payments over time, including 
interest, rather than reducing the amount of the civil penalty. 
However, where a licensee claims financial hardship, the licensee will 
normally be required to address why it has sufficient resources to 
safely conduct licensed activities and pay license and inspection fees.
2. Civil Penalty Assessment
    In an effort to (1) emphasize the importance of adherence to 
requirements and (2) reinforce prompt self-identification of problems 
and root causes and prompt and comprehensive correction of violations, 
the NRC reviews each proposed civil penalty on its own merits and, 
after considering all relevant circumstances, may adjust the base civil 
penalties shown in Table 1A and 1B for Severity Level I, II, and III 
violations as described below.

[[Page 34388]]

    The civil penalty assessment process considers four decisional 
points: (a) Whether the licensee has had any previous escalated 
enforcement action (regardless of the activity area) during the past 2 
years or past 2 inspections, whichever is longer; (b) whether the 
licensee should be given credit for actions related to identification; 
(c) whether the licensee's corrective actions are prompt and 
comprehensive; and (d) whether, in view of all the circumstances, the 
matter in question requires the exercise of discretion. Although each 
of these decisional points may have several associated considerations 
for any given case, the outcome of the assessment process for each 
violation or problem, absent the exercise of discretion, is limited to 
one of the following three results: no civil penalty, a base civil 
penalty, or a base civil penalty escalated by 100%. The flow chart 
presented below is a graphic representation of the civil penalty 
assessment process.

BILLING CODE 7590-01-P

[[Page 34389]]
[GRAPHIC][TIFF OMITTED]TN30JN95.052


BILLING CODE 7590-01-P
 
[[Page 34390]]

    a. Initial escalated action. When the NRC determines that a non-
willful Severity Level III violation or problem has occurred, and the 
licensee has not had any previous escalated actions (regardless of the 
activity area) during the past 2 years or 2 inspections, whichever is 
longer, the NRC will consider whether the licensee's corrective action 
for the present violation or problem is reasonably prompt and 
comprehensive (see the discussion under Section VI.B.2.c, below). Using 
2 years as the basis for assessment is expected to cover most 
situations, but considering a slightly longer or shorter period might 
be warranted based on the circumstances of a particular case. The 
starting point of this period should be considered the date when the 
licensee was put on notice of the need to take corrective action. For a 
licensee-identified violation or an event, this would be when the 
licensee is aware that a problem or violation exists requiring 
corrective action. For an NRC-identified violation, the starting point 
would be when the NRC puts the licensee on notice, which could be 
during the inspection, at the inspection exit meeting, or as part of 
post-inspection communication.
    If the corrective action is judged to be prompt and comprehensive, 
a Notice of Violation normally should be issued with no associated 
civil penalty. If the corrective action is judged to be less than 
prompt and comprehensive, the Notice of Violation normally should be 
issued with a base civil penalty.
    b. Credit for actions related to identification. (1) If a Severity 
Level I or II violation or a willful Severity Level III violation has 
occurred--or if, during the past 2 years or 2 inspections, whichever is 
longer, the licensee has been issued at least one other escalated 
action--the civil penalty assessment should normally consider the 
factor of identification in addition to corrective action (see the 
discussion under Section VI.B.2.c, below). As to identification, the 
NRC should consider whether the licensee should be given credit for 
actions related to identification.
    In each case, the decision should be focused on identification of 
the problem requiring corrective action. In other words, although 
giving credit for Identification and Corrective Action should be 
separate decisions, the concept of Identification presumes that the 
identifier recognizes the existence of a problem, and understands that 
corrective action is needed. The decision on Identification requires 
considering all the circumstances of identification including:
    (i) Whether the problem requiring corrective action was NRC-
identified, licensee-identified, or revealed through an event; 9

    \9\ An ``event,'' as used here, means (1) an event characterized 
by an active adverse impact on equipment or personnel, readily 
obvious by human observation or instrumentation, or (2) a 
radiological impact on personnel or the environment in excess of 
regulatory limits, such as an overexposure, a release of radioactive 
material above NRC limits, or a loss of radioactive material. For 
example, an equipment failure discovered through a spill of liquid, 
a loud noise, the failure to have a system respond properly, or an 
annunciator alarm would be considered an event; a system discovered 
to be inoperable through a document review would not. Similarly, if 
a licensee discovered, through quarterly dosimetry readings, that 
employees had been inadequately monitored for radiation, the issue 
would normally be considered licensee-identified; however, if the 
same dosimetry readings disclosed an overexposure, the issue would 
be considered an event.
---------------------------------------------------------------------------

    (ii) Whether prior opportunities existed to identify the problem 
requiring corrective action, and if so, the age and number of those 
opportunities;
    (iii) Whether the problem was revealed as the result of a licensee 
self-monitoring effort, such as conducting an audit, a test, a 
surveillance, a design review, or troubleshooting;
    (iv) For a problem revealed through an event, the ease of 
discovery, and the degree of licensee initiative in identifying the 
root cause of the problem and any associated violations;
    (v) For NRC-identified issues, whether the licensee would likely 
have identified the issue in the same time-period if the NRC had not 
been involved;
    (vi) For NRC-identified issues, whether the licensee should have 
identified the issue (and taken action) earlier; and
    (vii) For cases in which the NRC identifies the overall problem 
requiring corrective action (e.g., a programmatic issue), the degree of 
licensee initiative or lack of initiative in identifying the problem or 
problems requiring corrective action.
    (2) Although some cases may consider all of the above factors, the 
importance of each factor will vary based on the type of case as 
discussed in the following general guidance:
    (i) Licensee-Identified. When a problem requiring corrective action 
is licensee-identified (i.e., identified before the problem has 
resulted in an event), the NRC should normally give the licensee credit 
for actions related to identification, regardless of whether prior 
opportunities existed to identify the problem.
    (ii) Identified Through an Event. When a problem requiring 
corrective action is identified through an event, the decision on 
whether to give the licensee credit for actions related to 
identification normally should consider the ease of discovery, whether 
the event occurred as the result of a licensee self-monitoring effort 
(i.e., whether the licensee was ``looking for the problem''), the 
degree of licensee initiative in identifying the problem or problems 
requiring corrective action, and whether prior opportunities existed to 
identify the problem.
    Any of these considerations may be overriding if particularly 
noteworthy or particularly egregious. For example, if the event 
occurred as the result of conducting a surveillance or similar self-
monitoring effort (i.e., the licensee was looking for the problem), the 
licensee should normally be given credit for identification. As a 
second instance, even if the problem was easily discovered (e.g., 
revealed by a large spill of liquid), the NRC may choose to give credit 
because noteworthy licensee effort was exerted in ferreting out the 
root cause and associated violations, or simply because no prior 
opportunities (e.g., procedural cautions, post-maintenance testing, 
quality control failures, readily observable parameter trends, or 
repeated or locked-in annunciator warnings) existed to identify the 
problem.
    (iii) NRC-Identified. When a problem requiring corrective action is 
NRC-identified, the decision on whether to give the licensee credit for 
actions related to Identification should normally be based on an 
additional question: should the licensee have reasonably identified the 
problem (and taken action) earlier?
    In most cases, this reasoning may be based simply on the ease of 
the NRC inspector's discovery (e.g., conducting a walkdown, observing 
in the control room, performing a confirmatory NRC radiation survey, 
hearing a cavitating pump, or finding a valve obviously out of 
position). In some cases, the licensee's missed opportunities to 
identify the problem might include a similar previous violation, NRC or 
industry notices, internal audits, or readily observable trends.
    If the NRC identifies the violation but concludes that, under the 
circumstances, the licensee's actions related to Identification were 
not unreasonable, the matter would be treated as licensee-identified 
for purposes of assessing the civil penalty. In such cases, the 
question of Identification credit shifts to whether the licensee should 
be penalized for NRC's identification of the problem.
    (iv) Mixed Identification. For ``mixed'' identification situations 
(i.e., where multiple violations exist, some NRC-

[[Page 34391]]
identified, some licensee-identified, or where the NRC prompted the 
licensee to take action that resulted in the identification of the 
violation), the NRC's evaluation should normally determine whether the 
licensee could reasonably have been expected to identify the violation 
in the NRC's absence. This determination should consider, among other 
things, the timing of the NRC's discovery, the information available to 
the licensee that caused the NRC concern, the specificity of the NRC's 
concern, the scope of the licensee's efforts, the level of licensee 
resources given to the investigation, and whether the NRC's path of 
analysis had been dismissed or was being pursued in parallel by the 
licensee.
    In some cases, the licensee may have addressed the isolated 
symptoms of each violation (and may have identified the violations), 
but failed to recognize the common root cause and taken the necessary 
comprehensive action. Where this is true, the decision on whether to 
give licensee credit for actions related to Identification should focus 
on identification of the problem requiring corrective action (e.g., the 
programmatic breakdown). As such, depending on the chronology of the 
various violations, the earliest of the individual violations might be 
considered missed opportunities for the licensee to have identified the 
larger problem.
    (v) Missed Opportunities to Identify. Missed opportunities include 
prior notifications or missed opportunities to identify or prevent 
violations such as (1) through normal surveillances, audits, or quality 
assurance (QA) activities; (2) through prior notice i.e., specific NRC 
or industry notification; or (3) through other reasonable indication of 
a potential problem or violation, such as observations of employees and 
contractors, and failure to take effective corrective steps. It may 
include findings of the NRC, the licensee, or industry made at other 
facilities operated by the licensee where it is reasonable to expect 
the licensee to take action to identify or prevent similar problems at 
the facility subject to the enforcement action at issue. In assessing 
this factor, consideration will be given to, among other things, the 
opportunities available to discover the violation, the ease of 
discovery, the similarity between the violation and the notification, 
the period of time between when the violation occurred and when the 
notification was issued, the action taken (or planned) by the licensee 
in response to the notification, and the level of management review 
that the notification received (or should have received).
    The evaluation of missed opportunities should normally depend on 
whether the information available to the licensee should reasonably 
have caused action that would have prevented the violation. Missed 
opportunities is normally not applied where the licensee appropriately 
reviewed the opportunity for application to its activities and 
reasonable action was either taken or planned to be taken within a 
reasonable time.
    In some situations the missed opportunity is a violation in itself. 
In these cases, unless the missed opportunity is a Severity Level III 
violation in itself, the missed opportunity violation may be grouped 
with the other violations into a single Severity Level III ``problem.'' 
However, if the missed opportunity is the only violation, then it 
should not normally be counted twice (i.e., both as the violation and 
as a missed opportunity-- ``double counting'') unless the number of 
opportunities missed was particularly significant.
    The timing of the missed opportunity should also be considered. 
While a rigid time-frame is unnecessary, a 2-year period should 
generally be considered for consistency in implementation, as the 
period reflecting relatively current performance.
    (3) When the NRC determines that the licensee should receive credit 
for actions related to Identification, the civil penalty assessment 
should normally result in either no civil penalty or a base civil 
penalty, based on whether Corrective Action is judged to be reasonably 
prompt and comprehensive. When the licensee is not given credit for 
actions related to Identification, the civil penalty assessment should 
normally result in a Notice of Violation with either a base civil 
penalty or a base civil penalty escalated by 100%, depending on the 
quality of Corrective Action, because the licensee's performance is 
clearly not acceptable.
    c. Credit for prompt and comprehensive corrective action. The 
purpose of the Corrective Action factor is to encourage licensees to 
(1) take the immediate actions necessary upon discovery of a violation 
that will restore safety and compliance with the license, 
regulation(s), or other requirement(s); and (2) develop and implement 
(in a timely manner) the lasting actions that will not only prevent 
recurrence of the violation at issue, but will be appropriately 
comprehensive, given the significance and complexity of the violation, 
to prevent occurrence of violations with similar root causes.
    Regardless of other circumstances (e.g., past enforcement history, 
identification), the licensee's corrective actions should always be 
evaluated as part of the civil penalty assessment process. As a 
reflection of the importance given to this factor, an NRC judgment that 
the licensee's corrective action has not been prompt and comprehensive 
will always result in issuing at least a base civil penalty.
    In assessing this factor, consideration will be given to the 
timeliness of the corrective action (including the promptness in 
developing the schedule for long term corrective action), the adequacy 
of the licensee's root cause analysis for the violation, and, given the 
significance and complexity of the issue, the comprehensiveness of the 
corrective action (i.e., whether the action is focused narrowly to the 
specific violation or broadly to the general area of concern). Even in 
cases when the NRC, at the time of the enforcement conference, 
identifies additional peripheral or minor corrective action still to be 
taken, the licensee may be given credit in this area, as long as the 
licensee's actions addressed the underlying root cause and are 
considered sufficient to prevent recurrence of the violation and 
similar violations.
    Normally, the judgment of the adequacy of corrective actions will 
hinge on whether the NRC had to take action to focus the licensee's 
evaluative and corrective process in order to obtain comprehensive 
corrective action. This will normally be judged at the time of the 
enforcement conference (e.g., by outlining substantive additional areas 
where corrective action is needed). Earlier informal discussions 
between the licensee and NRC inspectors or management may result in 
improved corrective action, but should not normally be a basis to deny 
credit for Corrective Action. For cases in which the licensee does not 
get credit for actions related to Identification because the NRC 
identified the problem, the assessment of the licensee's corrective 
action should begin from the time when the NRC put the licensee on 
notice of the problem. Notwithstanding eventual good comprehensive 
corrective action, if immediate corrective action was not taken to 
restore safety and compliance once the violation was identified, 
corrective action would not be considered prompt and comprehensive.
    Corrective action for violations involving discrimination should 
normally only be considered comprehensive if the licensee takes prompt, 
comprehensive corrective action that (1) addresses the broader 

[[Page 34392]]
environment for raising safety concerns in the workplace, and (2) 
provides a remedy for the particular discrimination at issue.
    d. Exercise of discretion. As provided in Section VII, ``Exercise 
of Discretion,'' discretion may be exercised by either escalating or 
mitigating the amount of the civil penalty determined after applying 
the civil penalty adjustment factors to ensure that the proposed civil 
penalty reflects the NRC's concern regarding the violation at issue and 
that it conveys the appropriate message to the licensee. However, in no 
instance will a civil penalty for any one violation exceed $100,000 per 
day.

                     Table 1A.--Base Civil Penalties                    
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
a. Power reactors..........................................     $100,000
b. Fuel fabricators, industrial processors, and independent             
 spent fuel and monitored retrievable storage installations       25,000
c. Test reactors, mills and uranium conversion facilities,              
 contractors, vendors, waste disposal licensees, and                    
 industrial radiographers..................................       10,000
d. Research reactors, academic, medical, or other material              
 licensee \1\..............................................       5,000 
------------------------------------------------------------------------
\1\ This applies to nonprofit institutions not otherwise categorized in 
  this table, mobile nuclear services, nuclear pharmacies, and physician
  offices.                                                              


                     Table 1B.--Base Civil Penalties                    
------------------------------------------------------------------------
                                                           Base civil   
                                                         penalty amount 
                    Severity level                         (Percent of  
                                                        amount listed in
                                                            Table 1A)   
------------------------------------------------------------------------
I.....................................................               100
II....................................................                80
III...................................................                50
------------------------------------------------------------------------

    C. Orders. An order is a written NRC directive to modify, suspend, 
or revoke a license; to cease and desist from a given practice or 
activity; or to take such other action as may be proper (see 10 CFR 
2.202). Orders may also be issued in lieu of, or in addition to, civil 
penalties, as appropriate for Severity Level I, II, or III violations. 
Orders may be issued as follows:
    1. License Modification orders are issued when some change in 
licensee equipment, procedures, personnel, or management controls is 
necessary.
    2. Suspension Orders may be used:
    (a) To remove a threat to the public health and safety, common 
defense and security, or the environment;
    (b) To stop facility construction when,
    (i) Further work could preclude or significantly hinder the 
identification or correction of an improperly constructed safety-
related system or component; or
    (ii) The licensee's quality assurance program implementation is not 
adequate to provide confidence that construction activities are being 
properly carried out;
    (c) When the licensee has not responded adequately to other 
enforcement action;
    (d) When the licensee interferes with the conduct of an inspection 
or investigation; or
    (e) For any reason not mentioned above for which license revocation 
is legally authorized.
    Suspensions may apply to all or part of the licensed activity. 
Ordinarily, a licensed activity is not suspended (nor is a suspension 
prolonged) for failure to comply with requirements where such failure 
is not willful and adequate corrective action has been taken.
    3. Revocation Orders may be used:
    (a) When a licensee is unable or unwilling to comply with NRC 
requirements;
    (b) When a licensee refuses to correct a violation;
    (c) When licensee does not respond to a Notice of Violation where a 
response was required;
    (d) When a licensee refuses to pay an applicable fee under the 
Commission's regulations; or
    (e) For any other reason for which revocation is authorized under 
section 186 of the Atomic Energy Act (e.g., any condition which would 
warrant refusal of a license on an original application).
    4. Cease and Desist Orders may be used to stop an unauthorized 
activity that has continued after notification by the NRC that the 
activity is unauthorized.
    5. Orders to unlicensed persons, including vendors and contractors, 
and employees of any of them, are used when the NRC has identified 
deliberate misconduct that may cause a licensee to be in violation of 
an NRC requirement or where incomplete or inaccurate information is 
deliberately submitted or where the NRC loses its reasonable assurance 
that the licensee will meet NRC requirements with that person involved 
in licensed activities.
    Unless a separate response is warranted pursuant to 10 CFR 2.201, a 
Notice of Violation need not be issued where an order is based on 
violations described in the order. The violations described in an order 
need not be categorized by severity level.
    Orders are made effective immediately, without prior opportunity 
for hearing, whenever it is determined that the public health, 
interest, or safety so requires, or when the order is responding to a 
violation involving willfulness. Otherwise, a prior opportunity for a 
hearing on the order is afforded. For cases in which the NRC believes a 
basis could reasonably exist for not taking the action as proposed, the 
licensee will ordinarily be afforded an opportunity to show why the 
order should not be issued in the proposed manner by way of a Demand 
for Information. (See 10 CFR 2.204)
    D. Related administrative actions. In addition to the formal 
enforcement actions, Notices of Violation, civil penalties, and orders, 
the NRC also uses administrative actions, such as Notices of Deviation, 
Notices of Nonconformance, Confirmatory Action Letters, Letters of 
Reprimand, and Demands for Information to supplement its enforcement 
program. The NRC expects licensees and vendors to adhere to any 
obligations and commitments resulting from these actions and will not 
hesitate to issue appropriate orders to ensure that these obligations 
and commitments are met.
    1. Notices of Deviation are written notices describing a licensee's 
failure to satisfy a commitment where the commitment involved has not 
been made a legally binding requirement. A Notice of Deviation requests 
a licensee to provide a written explanation or statement describing 
corrective steps taken (or planned), the results achieved, and the date 
when corrective action will be completed.
    2. Notices of Nonconformance are written notices describing 
vendor's failures to meet commitments which have not been made legally 
binding requirements by NRC. An example is a commitment made in a 
procurement contract with a licensee as required by 10 CFR Part 50, 
Appendix B. Notices of Nonconformances request non-licensees to provide 
written explanations or statements describing corrective steps (taken 
or planned), the results achieved, the dates when corrective actions 
will be completed, and measures taken to preclude recurrence.
    3. Confirmatory Action Letters are letters confirming a licensee's 
or vendor's agreement to take certain actions to remove significant 
concerns about health and safety, safeguards, or the environment.
    4. Letters of Reprimand are letters addressed to individuals 
subject to Commission jurisdiction identifying a significant deficiency 
in their performance of licensed activities.
    5. Demands for Information are demands for information from 
licensees or other persons for the purpose of enabling the NRC to 
determine whether an order or other enforcement action should be 
issued. 

[[Page 34393]]


VII. Exercise of Discretion

    Notwithstanding the normal guidance contained in this policy, as 
provided in Section III, ``Responsibilities,'' the NRC may choose to 
exercise discretion and either escalate or mitigate enforcement 
sanctions within the Commission's statutory authority to ensure that 
the resulting enforcement action appropriately reflects the level of 
NRC concern regarding the violation at issue and conveys the 
appropriate message to the licensee.

A. Escalation of Enforcement Sanctions

    The NRC considers violations categorized at Severity Level I, II, 
or III to be of significant regulatory concern. If the application of 
the normal guidance in this policy does not result in an appropriate 
sanction, with the approval of the appropriate Deputy Executive 
Director and consultation with the EDO and Commission, as warranted, 
the NRC may apply its full enforcement authority where the action is 
warranted. NRC action may include (1) escalating civil penalties, (2) 
issuing appropriate orders, and (3) assessing civil penalties for 
continuing violations on a per day basis, up to the statutory limit of 
$100,000 per violation, per day.
    1. Civil penalties. Notwithstanding the outcome of the normal civil 
penalty assessment process addressed in Section VI.B, the NRC may 
exercise discretion by either proposing a civil penalty where 
application of the factors would otherwise result in zero penalty or by 
escalating the amount of the resulting civil penalty (i.e., base or 
twice the base civil penalty) to ensure that the proposed civil penalty 
reflects the significance of the circumstances and conveys the 
appropriate regulatory message to the licensee. Consultation with the 
Commission is required if the deviation in the amount of the civil 
penalty proposed under this discretion from the amount of the civil 
penalty assessed under the normal process is more than two times the 
base civil penalty shown in Tables 1A and 1B. Examples when this 
discretion should be considered include, but are not limited to the 
following:
    (a) Problems categorized at Severity Level I or II;
    (b) Overexposures, or releases of radiological material in excess 
of NRC requirements;
    (c) Situations involving particularly poor licensee performance, or 
involving willfulness;
    (d) Situations when the licensee's previous enforcement history has 
been particularly poor, or when the current violation is directly 
repetitive of an earlier violation;
    (e) Situations when the excessive duration of a problem has 
resulted in a substantial increase in risk;
    (f) Situations when the licensee made a conscious decision to be in 
noncompliance in order to obtain an economic benefit; or
    (g) Cases involving the loss of a source. In addition, unless the 
licensee self-identifies and reports the loss to the NRC, these cases 
should normally result in a civil penalty in an amount at least in the 
order of the cost of an authorized disposal of the material or of the 
transfer of the material to an authorized recipient.
    2. Orders. The NRC may, where necessary or desirable, issues orders 
in conjunction with or in lieu of civil penalties to achieve or 
formalize corrective actions and to deter further recurrence of serious 
violations.
    3. Daily civil penalties. In order to recognize the added technical 
safety significance or regulatory significance for those cases where a 
very strong message is warranted for a significant violation that 
continues for more than one day, the NRC may exercise discretion and 
assess a separate violation and attendant civil penalty up to the 
statutory limit of $100,000 for each day the violation continues. The 
NRC may exercise this discretion if a licensee was aware or clearly 
should have been aware of a violation, or if the licensee had an 
opportunity to identify and correct the violation but failed to do so.

B. Mitigation of Enforcement Sanctions

    The NRC may exercise discretion and refrain from issuing a civil 
penalty and/or a Notice of Violation, if the outcome of the normal 
process described in Section VI.B does not result in a sanction 
consistent with an appropriate regulatory message. In addition, even if 
the NRC exercises this discretion, when the licensee failed to make a 
required report to the NRC, a separate enforcement action will normally 
be issued for the licensee's failure to make a required report. The 
approval of the Director, Office of Enforcement, with consultation with 
the appropriate Deputy Executive Director as warranted, is required for 
exercising discretion of the type described in Section VII.B.1.b where 
a willful violation is involved, and of the types described in Sections 
VII.B.2 through VII.B.5. Commission consultation is required for 
exercising discretion of the type described in Section VII.B.2 and the 
approval of the appropriate Deputy Executive Director and Commission 
notification is required for exercising the discretion of the type 
described in Section VII.B.6. Examples when discretion should be 
considered for departing from the normal approach in Section VI.B 
include but are not limited to the following:
    1. Licensee-Identified Severity Level IV Violations. The NRC, with 
the approval of the Regional Administrator or his designee, may refrain 
from issuing a Notice of Violation for a Severity Level IV violation 
that is documented in an inspection report (or official field notes for 
some material cases) and described therein as a Non-Cited Violation 
(NCV) provided that the inspection report includes a brief description 
of the corrective action and that the violation meets all of the 
following criteria:
    (a) It was identified by the licensee, including identification 
through an event;
    (b) It was not a violation that could reasonably be expected to 
have been prevented by the licensee's corrective action for a previous 
violation or a previous licensee finding that occurred within the past 
2 years of the inspection at issue, or the period within the last two 
inspections, whichever is longer;
    (c) It was or will be corrected within a reasonable time, by 
specific corrective action committed to by the licensee by the end of 
the inspection, including immediate corrective action and comprehensive 
corrective action to prevent recurrence;
    (d) It was not a willful violation or if it was a willful 
violation;
    (i) The information concerning the violation, if not required to be 
reported, was promptly provided to appropriate NRC personnel, such as a 
resident inspector or regional section or branch chief;
    (ii) The violation involved the acts of a low-level individual (and 
not a licensee official as defined in Section IV.C);
    (iii) The violation appears to be the isolated action of the 
employee without management involvement and the violation was not 
caused by lack of management oversight as evidenced by either a history 
of isolated willful violations or a lack of adequate audits or 
supervision of employees; and
    (iv) Significant remedial action commensurate with the 
circumstances was taken by the licensee such that it demonstrated the 
seriousness of the violation to other employees and contractors, 
thereby creating a deterrent effect within the licensee's organization. 
Although removal of the employee from licensed activities is not 
necessarily required, substantial disciplinary action is expected.
    2. Violations Identified During Extended Shutdowns or Work 

[[Page 34394]]
    Stoppages. The NRC may refrain from issuing a Notice of Violation or a 
proposed civil penalty for a violation that is identified after (i) the 
NRC has taken significant enforcement action based upon a major safety 
event contributing to an extended shutdown of an operating reactor or a 
material licensee (or a work stoppage at a construction site), or (ii) 
the licensee enters an extended shutdown or work stoppage related to 
generally poor performance over a long period of time, provided that 
the violation is documented in an inspection report (or official field 
notes for some material cases) and that it meets all of the following 
criteria:
    (a) It was either licensee-identified as a result of a 
comprehensive program for problem identification and correction that 
was developed in response to the shutdown or identified as a result of 
an employee allegation to the licensee; (If the NRC identifies the 
violation and all of the other criteria are met, the NRC should 
determine whether enforcement action is necessary to achieve remedial 
action, or if discretion may still be appropriate.)
    (b) It is based upon activities of the licensee prior to the events 
leading to the shutdown;
    (c) It would not be categorized at a severity level higher than 
Severity Level II;
    (d) It was not willful; and
    (e) The licensee's decision to restart the plant requires NRC 
concurrence.
    3. Violations Involving Old Design Issues. The NRC may refrain from 
proposing a civil penalty for a Severity Level II or III violation 
involving a past problem, such as in engineering, design, or 
installation, provided that the violation is documented in an 
inspection report (or official field notes for some material cases) 
that includes a description of the corrective action and that it meets 
all of the following criteria:
    (a) It was licensee-identified as a result of its voluntary 
initiative;
    (b) It was or will be corrected, including immediate corrective 
action and long term comprehensive corrective action to prevent 
recurrence, within a reasonable time following identification (this 
action should involve expanding the initiative, as necessary, to 
identify other failures caused by similar root causes); and
    (c) It was not likely to be identified (after the violation 
occurred) by routine licensee efforts such as normal surveillance or 
quality assurance (QA) activities.
    In addition, the NRC may refrain from issuing a Notice of Violation 
for cases that meet the above criteria provided the violation was 
caused by conduct that is not reasonably linked to present performance 
(normally, violations that are at least 3 years old or violations 
occurring during plant construction) and there had not been prior 
notice so that the licensee should have reasonably identified the 
violation earlier. This exercise of discretion is to place a premium on 
licensees initiating efforts to identify and correct subtle violations 
that are not likely to be identified by routine efforts before degraded 
safety systems are called upon to work.
    4. Violations Identified Due to Previous Escalated Enforcement 
Action. The NRC may refrain from issuing a Notice of Violation or a 
proposed civil penalty for a violation that is identified after the NRC 
has taken escalated enforcement action for a Severity Level II or III 
violation, provided that the violation is documented in an inspection 
report (or official field notes for some material cases) that includes 
a description of the corrective action and that it meets all of the 
following criteria:
    (a) It was licensee-identified as part of the corrective action for 
the previous escalated enforcement action;
    (b) It has the same or similar root cause as the violation for 
which escalated enforcement action was issued;
    (c) It does not substantially change the safety significance or the 
character of the regulatory concern arising out of the initial 
violation; and
    (d) It was or will be corrected, including immediate corrective 
action and long term comprehensive corrective action to prevent 
recurrence, within a reasonable time following identification.
    5. Violations Involving Certain Discrimination Issues. Enforcement 
discretion may be exercised for discrimination cases when a licensee 
who, without the need for government intervention, identifies an issue 
of discrimination and takes prompt, comprehensive, and effective 
corrective action to address both the particular situation and the 
overall work environment for raising safety concerns. Similarly, 
enforcement may not be warranted where a complaint is filed with the 
Department of Labor (DOL) under Section 211 of the Energy 
Reorganization Act of 1974, as amended, but the licensee settles the 
matter before the DOL makes an initial finding of discrimination and 
addresses the overall work environment. Alternatively, if a finding of 
discrimination is made, the licensee may choose to settle the case 
before the evidentiary hearing begins. In such cases, the NRC may 
exercise its discretion not to take enforcement action when the 
licensee has addressed the overall work environment for raising safety 
concerns and has publicized that a complaint of discrimination for 
engaging in protected activity was made to the DOL, that the matter was 
settled to the satisfaction of the employee (the terms of the specific 
settlement agreement need not be posted), and that, if the DOL Area 
Office found discrimination, the licensee has taken action to 
positively reemphasize that discrimination will not be tolerated. 
Similarly, the NRC may refrain from taking enforcement action if a 
licensee settles a matter promptly after a person comes to the NRC 
without going to the DOL. Such discretion would normally not be 
exercised in cases in which the licensee does not appropriately address 
the overall work environment (e.g., by using training, postings, 
revised policies or procedures, any necessary disciplinary action, 
etc., to communicate its policy against discrimination) or in cases 
that involve: allegations of discrimination as a result of providing 
information directly to the NRC, allegations of discrimination caused 
by a manager above first-line supervisor (consistent with current 
Enforcement Policy classification of Severity Level I or II 
violations), allegations of discrimination where a history of findings 
of discrimination (by the DOL or the NRC) or settlements suggests a 
programmatic rather than an isolated discrimination problem, or 
allegations of discrimination which appear particularly blatant or 
egregious.
    6. Violations Involving Special Circumstances. Notwithstanding the 
outcome of the normal civil penalty assessment process addressed in 
Section VI.B, as provided in Section III, ``Responsibilities,'' the NRC 
may reduce or refrain from issuing a civil penalty or a Notice of 
Violation for a Severity Level II or III violation based on the merits 
of the case after considering the guidance in this statement of policy 
and such factors as the age of the violation, the safety significance 
of the violation, the overall sustained performance of the licensee has 
been particularly good, and other relevant circumstances, including any 
that may have changed since the violation. This discretion is expected 
to be exercised only where application of the normal guidance in the 
policy is unwarranted.

C. Exercise of Discretion for an Operating Facility

    On occasion, circumstances may arise where a licensee's compliance 
with a Technical Specification (TS) Limiting Condition for Operation or 
with other license conditions would involve an 

[[Page 34395]]
unnecessary plant transient or performance of testing, inspection, or 
system realignment that is inappropriate with the specific plant 
conditions, or unnecessary delays in plant startup without a 
corresponding health and safety benefit. In these circumstances, the 
NRC staff may choose not to enforce the applicable TS or other license 
condition. This enforcement discretion, designated as a Notice of 
Enforcement Discretion (NOED), will only be exercised if the NRC staff 
is clearly satisfied that the action is consistent with protecting the 
public health and safety. A licensee seeking the issuance of a NOED 
must provide a written justification, or in circumstances where good 
cause is shown, oral justification followed as soon as possible by 
written justification, which documents the safety basis for the request 
and provides whatever other information the NRC staff deems necessary 
in making a decision on whether or not to issue a NOED.
    The appropriate Regional Administrator, or his or her designee, may 
issue a NOED where the noncompliance is temporary and nonrecurring when 
an amendment is not practical. The Director, Office of Nuclear Reactor 
Regulation, or his or her designee, may issue a NOED if the expected 
noncompliance will occur during the brief period of time it requires 
the NRC staff to process an emergency or exigent license amendment 
under the provisions of 10 CFR 50.91(a)(5) or (6). The person 
exercising enforcement discretion will document the decision.
    For an operating plant, this exercise of enforcement discretion is 
intended to minimize the potential safety consequences of unnecessary 
plant transients with the accompanying operational risks and impacts or 
to eliminate testing, inspection, or system realignment which is 
inappropriate for the particular plant conditions. For plants in a 
shutdown condition, exercising enforcement discretion is intended to 
reduce shutdown risk by, again, avoiding testing, inspection or system 
realignment which is inappropriate for the particular plant conditions, 
in that, it does not provide a safety benefit or may, in fact, be 
detrimental to safety in the particular plant condition. Exercising 
enforcement discretion for plants attempting to startup is less likely 
than exercising it for an operating plant, as simply delaying startup 
does not usually leave the plant in a condition in which it could 
experience undesirable transients. In such cases, the Commission would 
expect that discretion would be exercised with respect to equipment or 
systems only when it has at least concluded that, notwithstanding the 
conditions of the license: (1) The equipment or system does not perform 
a safety function in the mode in which operation is to occur; (2) the 
safety function performed by the equipment or system is of only 
marginal safety benefit, provided remaining in the current mode 
increases the likelihood of an unnecessary plant transient; or (3) the 
TS or other license condition requires a test, inspection or system 
realignment that is inappropriate for the particular plant conditions, 
in that it does not provide a safety benefit, or may, in fact, be 
detrimental to safety in the particular plant condition.
    The decision to exercise enforcement discretion does not change the 
fact that a violation will occur nor does it imply that enforcement 
discretion is being exercised for any violation that may have led to 
the violation at issue. In each case where the NRC staff has chosen to 
issue a NOED, enforcement action will normally be taken for the root 
causes, to the extent violations were involved, that led to the 
noncompliance for which enforcement discretion was used. The 
enforcement action is intended to emphasize that licensees should not 
rely on the NRC's authority to exercise enforcement discretion as a 
routine substitute for compliance or for requesting a license 
amendment.
    Finally, it is expected that the NRC staff will exercise 
enforcement discretion in this area infrequently. Although a plant must 
shut down, refueling activities may be suspended, or plant startup may 
be delayed, absent the exercise of enforcement discretion, the NRC 
staff is under no obligation to take such a step merely because it has 
been requested. The decision to forego enforcement is discretionary. 
When enforcement discretion is to be exercised, it is to be exercised 
only if the NRC staff is clearly satisfied that such action is 
warranted from a health and safety perspective.

VIII. Enforcement Actions Involving Individuals

    Enforcement actions involving individuals, including licensed 
operators, are significant personnel actions, which will be closely 
controlled and judiciously applied. An enforcement action involving an 
individual will normally be taken only when the NRC is satisfied that 
the individual fully understood, or should have understood, his or her 
responsibility; knew, or should have known, the required actions; and 
knowingly, or with careless disregard (i.e., with more than mere 
negligence) failed to take required actions which have actual or 
potential safety significance. Most transgressions of individuals at 
the level of Severity Level III or IV violations will be handled by 
citing only the facility licensee.
    More serious violations, including those involving the integrity of 
an individual (e.g., lying to the NRC) concerning matters within the 
scope of the individual's responsibilities, will be considered for 
enforcement action against the individual as well as against the 
facility licensee. Action against the individual, however, will not be 
taken if the improper action by the individual was caused by management 
failures. The following examples of situations illustrate this concept:
     Inadvertent individual mistakes resulting from inadequate 
training or guidance provided by the facility licensee.
     Inadvertently missing an insignificant procedural 
requirement when the action is routine, fairly uncomplicated, and there 
is no unusual circumstance indicating that the procedures should be 
referred to and followed step-by-step.
     Compliance with an express direction of management, such 
as the Shift Supervisor or Plant Manager, resulted in a violation 
unless the individual did not express his or her concern or objection 
to the direction.
     Individual error directly resulting from following the 
technical advice of an expert unless the advice was clearly 
unreasonable and the licensed individual should have recognized it as 
such.
     Violations resulting from inadequate procedures unless the 
individual used a faulty procedure knowing it was faulty and had not 
attempted to get the procedure corrected.
    Listed below are examples of situations which could result in 
enforcement actions involving individuals, licensed or unlicensed. If 
the actions described in these examples are taken by a licensed 
operator or taken deliberately by an unlicensed individual, enforcement 
action may be taken directly against the individual. However, 
violations involving willful conduct not amounting to deliberate action 
by an unlicensed individual in these situations may result in 
enforcement action against a licensee that may impact an individual. 
The situations include, but are not limited to, violations that 
involve:
     Willfully causing a licensee to be in violation of NRC 
requirements. 

[[Page 34396]]

     Willfully taking action that would have caused a licensee 
to be in violation of NRC requirements but the action did not do so 
because it was detected and corrective action was taken.
     Recognizing a violation of procedural requirements and 
willfully not taking corrective action.
     Willfully defeating alarms which have safety significance.
     Unauthorized abandoning of reactor controls.
     Dereliction of duty.
     Falsifying records required by NRC regulations or by the 
facility license.
     Willfully providing, or causing a licensee to provide, an 
NRC inspector or investigator with inaccurate or incomplete information 
on a matter material to the NRC.
     Willfully withholding safety significant information 
rather than making such information known to appropriate supervisory or 
technical personnel in the licensee's organization.
     Submitting false information and as a result gaining 
unescorted access to a nuclear power plant.
     Willfully providing false data to a licensee by a 
contractor or other person who provides test or other services, when 
the data affects the licensee's compliance with 10 CFR part 50, 
appendix B, or other regulatory requirement.
     Willfully providing false certification that components 
meet the requirements of their intended use, such as ASME Code.
     Willfully supplying, by vendors of equipment for 
transportation of radioactive material, casks that do not comply with 
their certificates of compliance.
     Willfully performing unauthorized bypassing of required 
reactor or other facility safety systems.
     Willfully taking actions that violate Technical 
Specification Limiting Conditions for Operation or other license 
conditions (enforcement action for a willful violation will not be 
taken if that violation is the result of action taken following the 
NRC's decision to forego enforcement of the Technical Specification or 
other license condition or if the operator meets the requirements of 10 
CFR 50.54 (x), (i.e., unless the operator acted unreasonably 
considering all the relevant circumstances surrounding the emergency.)
    Normally, some enforcement action is taken against a licensee for 
violations caused by significant acts of wrongdoing by its employees, 
contractors, or contractors' employees. In deciding whether to issue an 
enforcement action to an unlicensed person as well as to the licensee, 
the NRC recognizes that judgments will have to be made on a case by 
case basis. In making these decisions, the NRC will consider factors 
such as the following:
    1. The level of the individual within the organization.
    2. The individual's training and experience as well as knowledge of 
the potential consequences of the wrongdoing.
    3. The safety consequences of the misconduct.
    4. The benefit to the wrongdoer, e.g., personal or corporate gain.
    5. The degree of supervision of the individual, i.e., how closely 
is the individual monitored or audited, and the likelihood of detection 
(such as a radiographer working independently in the field as 
contrasted with a team activity at a power plant).
    6. The employer's response, e.g., disciplinary action taken.
    7. The attitude of the wrongdoer, e.g., admission of wrongdoing, 
acceptance of responsibility.
    8. The degree of management responsibility or culpability.
    9. Who identified the misconduct.
    Any proposed enforcement action involving individuals must be 
issued with the concurrence of the appropriate Deputy Executive 
Director. The particular sanction to be used should be determined on a 
case-by-case basis.10 Notices of Violation and Orders are examples 
of enforcement actions that may be appropriate against individuals. The 
administrative action of a Letter of Reprimand may also be considered. 
In addition, the NRC may issue Demands for Information to gather 
information to enable it to determine whether an order or other 
enforcement action should be issued.

    \10\ Except for individuals subject to civil penalties under 
section 206 of the Energy Reorganization Act of 1974, as amended, 
NRC will not normally impose a civil penalty against an individual. 
However, section 234 of the Atomic Energy Act (AEA) gives the 
Commission authority to impose civil penalties on ``any person.'' 
``Person'' is broadly defined in Section 11s of the AEA to include 
individuals, a variety of organizations, and any representatives or 
agents. This gives the Commission authority to impose civil 
penalties on employees of licensees or on separate entities when a 
violation of a requirement directly imposed on them is committed.
---------------------------------------------------------------------------

    Orders to NRC-licensed reactor operators may involve suspension for 
a specified period, modification, or revocation of their individual 
licenses. Orders to unlicensed individuals might include provisions 
that would:
     Prohibit involvement in NRC licensed activities for a 
specified period of time (normally the period of suspension would not 
exceed 5 years) or until certain conditions are satisfied, e.g., 
completing specified training or meeting certain qualifications.
     Require notification to the NRC before resuming work in 
licensed activities.
     Require the person to tell a prospective employer or 
customer engaged in licensed activities that the person has been 
subject to an NRC order.
    In the case of a licensed operator's failure to meet applicable 
fitness-for-duty requirements (10 CFR 55.53(j)), the NRC may issue a 
Notice of Violation or a civil penalty to the Part 55 licensee, or an 
order to suspend, modify, or revoke the Part 55 license. These actions 
may be taken the first time a licensed operator fails a drug or alcohol 
test, that is, receives a confirmed positive test that exceeds the 
cutoff levels of 10 CFR Part 26 or the facility licensee's cutoff 
levels, if lower. However, normally only a Notice of Violation will be 
issued for the first confirmed positive test in the absence of 
aggravating circumstances such as errors in the performance of licensed 
duties or evidence of prolonged use. In addition, the NRC intends to 
issue an order to suspend the Part 55 license for up to 3 years the 
second time a licensed operator exceeds those cutoff levels. In the 
event there are less than 3 years remaining in the term of the 
individual's license, the NRC may consider not renewing the 
individual's license or not issuing a new license after the three year 
period is completed. The NRC intends to issue an order to revoke the 
Part 55 license the third time a licensed operator exceeds those cutoff 
levels. A licensed operator or applicant who refuses to participate in 
the drug and alcohol testing programs established by the facility 
licensee or who is involved in the sale, use, or possession of an 
illegal drug is also subject to license suspension, revocation, or 
denial.
    In addition, the NRC may take enforcement action against a licensee 
that may impact an individual, where the conduct of the individual 
places in question the NRC's reasonable assurance that licensed 
activities will be properly conducted. The NRC may take enforcement 
action for reasons that would warrant refusal to issue a license on an 
original application. Accordingly, appropriate enforcement actions may 
be taken regarding matters that raise issues of integrity, competence, 
fitness-for-duty, or other matters that may not necessarily be a 
violation of specific Commission requirements.
    In the case of an unlicensed person, whether a firm or an 
individual, an order modifying the facility license may 

[[Page 34397]]
be issued to require (1) The removal of the person from all licensed 
activities for a specified period of time or indefinitely, (2) prior 
notice to the NRC before utilizing the person in licensed activities, 
or (3) the licensee to provide notice of the issuance of such an order 
to other persons involved in licensed activities making reference 
inquiries. In addition, orders to employers might require retraining, 
additional oversight, or independent verification of activities 
performed by the person, if the person is to be involved in licensed 
activities.

IX. Inaccurate and Incomplete Information

    A violation of the regulations involving submittal of incomplete 
and/or inaccurate information, whether or not considered a material 
false statement, can result in the full range of enforcement sanctions. 
The labeling of a communication failure as a material false statement 
will be made on a case-by-case basis and will be reserved for egregious 
violations. Violations involving inaccurate or incomplete information 
or the failure to provide significant information identified by a 
licensee normally will be categorized based on the guidance herein, in 
Section IV, ``Severity of Violations,'' and in Supplement VII.
    The Commission recognizes that oral information may in some 
situations be inherently less reliable than written submittals because 
of the absence of an opportunity for reflection and management review. 
However, the Commission must be able to rely on oral communications 
from licensee officials concerning significant information. Therefore, 
in determining whether to take enforcement action for an oral 
statement, consideration may be given to factors such as (1) The degree 
of knowledge that the communicator should have had, regarding the 
matter, in view of his or her position, training, and experience; (2) 
the opportunity and time available prior to the communication to assure 
the accuracy or completeness of the information; (3) the degree of 
intent or negligence, if any, involved; (4) the formality of the 
communication; (5) the reasonableness of NRC reliance on the 
information; (6) the importance of the information which was wrong or 
not provided; and (7) the reasonableness of the explanation for not 
providing complete and accurate information.
    Absent at least careless disregard, an incomplete or inaccurate 
unsworn oral statement normally will not be subject to enforcement 
action unless it involves significant information provided by a 
licensee official. However, enforcement action may be taken for an 
unintentionally incomplete or inaccurate oral statement provided to the 
NRC by a licensee official or others on behalf of a licensee, if a 
record was made of the oral information and provided to the licensee 
thereby permitting an opportunity to correct the oral information, such 
as if a transcript of the communication or meeting summary containing 
the error was made available to the licensee and was not subsequently 
corrected in a timely manner.
    When a licensee has corrected inaccurate or incomplete information, 
the decision to issue a Notice of Violation for the initial inaccurate 
or incomplete information normally will be dependent on the 
circumstances, including the ease of detection of the error, the 
timeliness of the correction, whether the NRC or the licensee 
identified the problem with the communication, and whether the NRC 
relied on the information prior to the correction. Generally, if the 
matter was promptly identified and corrected by the licensee prior to 
reliance by the NRC, or before the NRC raised a question about the 
information, no enforcement action will be taken for the initial 
inaccurate or incomplete information. On the other hand, if the 
misinformation is identified after the NRC relies on it, or after some 
question is raised regarding the accuracy of the information, then some 
enforcement action normally will be taken even if it is in fact 
corrected. However, if the initial submittal was accurate when made but 
later turns out to be erroneous because of newly discovered information 
or advance in technology, a citation normally would not be appropriate 
if, when the new information became available or the advancement in 
technology was made, the initial submittal was corrected.
    The failure to correct inaccurate or incomplete information which 
the licensee does not identify as significant normally will not 
constitute a separate violation. However, the circumstances surrounding 
the failure to correct may be considered relevant to the determination 
of enforcement action for the initial inaccurate or incomplete 
statement. For example, an unintentionally inaccurate or incomplete 
submission may be treated as a more severe matter if the licensee later 
determines that the initial submittal was in error and does not correct 
it or if there were clear opportunities to identify the error. If 
information not corrected was recognized by a licensee as significant, 
a separate citation may be made for the failure to provide significant 
information. In any event, in serious cases where the licensee's 
actions in not correcting or providing information raise questions 
about its commitment to safety or its fundamental trustworthiness, the 
Commission may exercise its authority to issue orders modifying, 
suspending, or revoking the license. The Commission recognizes that 
enforcement determinations must be made on a case-by-case basis, taking 
into consideration the issues described in this section.

X. Enforcement Action Against Non-Licensees

    The Commission's enforcement policy is also applicable to non-
licensees, including employees of licensees, to contractors and 
subcontractors, and to employees of contractors and subcontractors, who 
knowingly provide components, equipment, or other goods or services 
that relate to a licensee's activities subject to NRC regulation. The 
prohibitions and sanctions for any of these persons who engage in 
deliberate misconduct or submission of incomplete or inaccurate 
information are provided in the rule on deliberate misconduct, e.g., 10 
CFR 30.10 and 50.5.
    Vendors of products or services provided for use in nuclear 
activities are subject to certain requirements designed to ensure that 
the products or services supplied that could affect safety are of high 
quality. Through procurement contracts with reactor licensees, vendors 
may be required to have quality assurance programs that meet applicable 
requirements including 10 CFR Part 50, Appendix B, and 10 CFR Part 71, 
Subpart H. Vendors supplying products or services to reactor, 
materials, and 10 CFR Part 71 licensees are subject to the requirements 
of 10 CFR Part 21 regarding reporting of defects in basic components.
    When inspections determine that violations of NRC requirements have 
occurred, or that vendors have failed to fulfill contractual 
commitments (e.g., 10 CFR Part 50, Appendix B) that could adversely 
affect the quality of a safety significant product or service, 
enforcement action will be taken. Notices of Violation and civil 
penalties will be used, as appropriate, for licensee failures to ensure 
that their vendors have programs that meet applicable requirements. 
Notices of Violation will be issued for vendors that violate 10 CFR 
Part 21. Civil penalties will be imposed against individual directors 
or responsible officers of a vendor organization who knowingly and 
consciously fail to provide the notice required by 10 CFR 21.21(b)(1). 
Notices 

[[Page 34398]]
of Nonconformance will be used for vendors which fail to meet 
commitments related to NRC activities.

XI. Referrals to the Department of Justice

    Alleged or suspected criminal violations of the Atomic Energy Act 
(and of other relevant Federal laws) are referred to the Department of 
Justice (DOJ) for investigation. Referral to the DOJ does not preclude 
the NRC from taking other enforcement action under this policy. 
However, enforcement actions will be coordinated with the DOJ in 
accordance with the Memorandum of Understanding between the NRC and the 
DOJ, 53 FR 50317 (December 14, 1988).

XII. Public Disclosure of Enforcement Actions

    Enforcement actions and licensees' responses, in accordance with 10 
CFR 2.790, are publicly available for inspection. In addition, press 
releases are generally issued for orders and civil penalties and are 
issued at the same time the order or proposed imposition of the civil 
penalty is issued. In addition, press releases are usually issued when 
a proposed civil penalty is withdrawn or substantially mitigated by 
some amount. Press releases are not normally issued for Notices of 
Violation that are not accompanied by orders or proposed civil 
penalties.

XIII. Reopening Closed Enforcement Actions

    If significant new information is received or obtained by NRC which 
indicates that an enforcement sanction was incorrectly applied, 
consideration may be given, dependent on the circumstances, to 
reopening a closed enforcement action to increase or decrease the 
severity of a sanction or to correct the record. Reopening decisions 
will be made on a case-by-case basis, are expected to occur rarely, and 
require the specific approval of the appropriate Deputy Executive 
Director.

Supplement I--Reactor Operations

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of reactor operations.
    A. Severity Level I--Violations involving for example:
    1. A Safety Limit, as defined in 10 CFR 50.36 and the Technical 
Specifications being exceeded;
    2. A system 11 designed to prevent or mitigate a serious 
safety event not being able to perform its intended safety function 
12 when actually called upon to work;

    \11\ The term ``system'' as used in these supplements, includes 
administrative and managerial control systems, as well as physical 
systems.
    \12\ ``Intended safety function'' means the total safety 
function, and is not directed toward a loss of redundancy. A loss of 
one subsystem does not defeat the intended safety function as long 
as the other subsystem is operable.
---------------------------------------------------------------------------

    3. An accidental criticality; or
    4. A licensed operator at the controls of a nuclear reactor, or a 
senior operator directing licensed activities, involved in procedural 
errors which result in, or exacerbate the consequences of, an alert or 
higher level emergency and who, as a result of subsequent testing, 
receives a confirmed positive test result for drugs or alcohol.
    B. Severity Level II--Violations involving for example:
    1. A system designed to prevent or mitigate serious safety events 
not being able to perform its intended safety function;
    2. A licensed operator involved in the use, sale, or possession of 
illegal drugs or the consumption of alcoholic beverages, within the 
protected area; or
    3. A licensed operator at the control of a nuclear reactor, or a 
senior operator directing licensed activities, involved in procedural 
errors and who, as a result of subsequent testing, receives a confirmed 
positive test result for drugs or alcohol.
    C. Severity Level III--Violations involving for example:
    1. A significant failure to comply with the Action Statement for a 
Technical Specification Limiting Condition for Operation where the 
appropriate action was not taken within the required time, such as:
    (a) In a pressurized water reactor, in the applicable modes, having 
one high-pressure safety injection pump inoperable for a period in 
excess of that allowed by the action statement; or
    (b) In a boiling water reactor, one primary containment isolation 
valve inoperable for a period in excess of that allowed by the action 
statement.
    2. A system designed to prevent or mitigate a serious safety event:
    (a) Not being able to perform its intended function under certain 
conditions (e.g., safety system not operable unless offsite power is 
available; materials or components not environmentally qualified); or
    (b) Being degraded to the extent that a detailed evaluation would 
be required to determine its operability (e.g., component parameters 
outside approved limits such as pump flow rates, heat exchanger 
transfer characteristics, safety valve lift setpoints, or valve stroke 
times);
    3. Inattentiveness to duty on the part of licensed personnel;
    4. Changes in reactor parameters that cause unanticipated 
reductions in margins of safety;
    5. A significant failure to meet the requirements of 10 CFR 50.59, 
including a failure such that a required license amendment was not 
sought;
    6. A licensee failure to conduct adequate oversight of vendors 
resulting in the use of products or services that are of defective or 
indeterminate quality and that have safety significance;
    7. A breakdown in the control of licensed activities involving a 
number of violations that are related (or, if isolated, that are 
recurring violations) that collectively represent a potentially 
significant lack of attention or carelessness toward licensed 
responsibilities; or
    8. A licensed operator's confirmed positive test for drugs or 
alcohol that does not result in a Severity Level I or II violation.
    9. Equipment failures caused by inadequate or improper maintenance 
that substantially complicates recovery from a plant transient.
    D. Severity Level IV--Violations involving for example:
    1. A less significant failure to comply with the Action Statement 
for a Technical Specification Limiting Condition for Operation where 
the appropriate action was not taken within the required time, such as:
    (a) In a pressurized water reactor, a 5% deficiency in the required 
volume of the condensate storage tank; or
    (b) In a boiling water reactor, one subsystem of the two 
independent MSIV leakage control subsystems inoperable;
    2. A failure to meet the requirements of 10 CFR 50.59 that does not 
result in a Severity Level I, II, or III violation;
    3. A failure to meet regulatory requirements that have more than 
minor safety or environmental significance; or
    4. A failure to make a required Licensee Event Report.

Supplement II--Part 50 Facility Construction

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of Part 50 facility construction.
    A. Severity Level I--Violations involving structures or systems 
that are completed 13 in such a manner that they 

[[Page 34399]]
would not have satisfied their intended safety related purpose.

    \13\ The term ``completed'' as used in this supplement means 
completion of construction including review and acceptance by the 
construction QA organization.
---------------------------------------------------------------------------

    B. Severity Level II--Violations involving for example:
    1. A breakdown in the Quality Assurance (QA) program as exemplified 
by deficiencies in construction QA related to more than one work 
activity (e.g., structural, piping, electrical, foundations). These 
deficiencies normally involve the licensee's failure to conduct 
adequate audits or to take prompt corrective action on the basis of 
such audits and normally involve multiple examples of deficient 
construction or construction of unknown quality due to inadequate 
program implementation; or
    2. A structure or system that is completed in such a manner that it 
could have an adverse effect on the safety of operations.
    C. Severity Level III--Violations involving for example:
    1. A deficiency in a licensee QA program for construction related 
to a single work activity (e.g., structural, piping, electrical or 
foundations). This significant deficiency normally involves the 
licensee's failure to conduct adequate audits or to take prompt 
corrective action on the basis of such audits, and normally involves 
multiple examples of deficient construction or construction of unknown 
quality due to inadequate program implementation;
    2. A failure to confirm the design safety requirements of a 
structure or system as a result of inadequate preoperational test 
program implementation; or
    3. A failure to make a required 10 CFR 50.55(e) report.
    D. Severity Level IV--Violations involving failure to meet 
regulatory requirements including one or more Quality Assurance 
Criterion not amounting to Severity Level I, II, or III violations that 
have more than minor safety or environmental significance.
Supplement III--Safeguards

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of safeguards.
    A. Severity Level I--Violations involving for example:
    1. An act of radiological sabotage in which the security system did 
not function as required and, as a result of the failure, there was a 
significant event, such as:
    (a) A Safety Limit, as defined in 10 CFR 50.36 and the Technical 
Specifications, was exceeded;
    (b) A system designed to prevent or mitigate a serious safety event 
was not able to perform its intended safety function when actually 
called upon to work; or
    (c) An accidental criticality occurred;
    2. The theft, loss, or diversion of a formula quantity 14 of 
special nuclear material (SNM); or

    \14\  See 10 CFR 73.2 for the definition of ``formula 
quantity.''
---------------------------------------------------------------------------

    3. Actual unauthorized production of a formula quantity of SNM.
    B. Severity Level II--Violations involving for example:
    1. The entry of an unauthorized individual 15 who represents a 
threat into a vital area 16 from outside the protected area;

    \15\  The term ``unauthorized individual'' as used in this 
supplement means someone who was not authorized for entrance into 
the area in question, or not authorized to enter in the manner 
entered.
    \16\  The phrase ``vital area'' as used in this supplement 
includes vital areas and material access areas.
---------------------------------------------------------------------------

    2. The theft, loss or diversion of SNM of moderate strategic 
significance 17 in which the security system did not function as 
required; or

    \17\  See 10 CFR 73.2 for the definition of ``special nuclear 
material of moderate strategic significance.''
---------------------------------------------------------------------------

    3. Actual unauthorized production of SNM.
    C. Severity Level III--Violations involving for example:
    1. A failure or inability to control access through established 
systems or procedures, such that an unauthorized individual (i.e., not 
authorized unescorted access to protected area) could easily gain 
undetected access 18 into a vital area from outside the protected 
area;

    \18\  In determining whether access can be easily gained, 
factors such as predictability, identifiability, and ease of passage 
should be considered.
---------------------------------------------------------------------------

    2. A failure to conduct any search at the access control point or 
conducting an inadequate search that resulted in the introduction to 
the protected area of firearms, explosives, or incendiary devices and 
reasonable facsimiles thereof that could significantly assist 
radiological sabotage or theft of strategic SNM;
    3. A failure, degradation, or other deficiency of the protected 
area intrusion detection or alarm assessment systems such that an 
unauthorized individual who represents a threat could predictably 
circumvent the system or defeat a specific zone with a high degree of 
confidence without insider knowledge, or other significant degradation 
of overall system capability;
    4. A significant failure of the safeguards systems designed or used 
to prevent or detect the theft, loss, or diversion of strategic SNM;
    5. A failure to protect or control classified or safeguards 
information considered to be significant while the information is 
outside the protected area and accessible to those not authorized 
access to the protected area;
    6. A significant failure to respond to an event either in 
sufficient time to provide protection to vital equipment or strategic 
SNM, or with an adequate response force;
    7. A failure to perform an appropriate evaluation or background 
investigation so that information relevant to the access determination 
was not obtained or considered and as a result a person, who would 
likely not have been granted access by the licensee, if the required 
investigation or evaluation had been performed, was granted access; or
    8. A breakdown in the security program involving a number of 
violations that are related (or, if isolated, that are recurring 
violations) that collectively reflect a potentially significant lack of 
attention or carelessness toward licensed responsibilities.
    D. Severity Level IV--Violations involving for example:
    1. A failure or inability to control access such that an 
unauthorized individual (i.e., authorized to protected area but not to 
vital area) could easily gain undetected access into a vital area from 
inside the protected area or into a controlled access area;
    2. A failure to respond to a suspected event in either a timely 
manner or with an adequate response force;
    3. A failure to implement 10 CFR Parts 25 and 95 with respect to 
the information addressed under Section 142 of the Act, and the NRC 
approved security plan relevant to those parts;
    4. A failure to make, maintain, or provide log entries in 
accordance with 10 CFR 73.71 (c) and (d), where the omitted information 
(i) is not otherwise available in easily retrievable records, and (ii) 
significantly contributes to the ability of either the NRC or the 
licensee to identify a programmatic breakdown;
    5. A failure to conduct a proper search at the access control 
point;
    6. A failure to properly secure or protect classified or safeguards 
information inside the protected area which could assist an individual 
in an act of radiological sabotage or theft of strategic SNM where the 
information was not removed from the protected area;
    7. A failure to control access such that an opportunity exists that 
could allow unauthorized and undetected access into the protected area 
but which was neither easily or likely to be exploitable;
    8. A failure to conduct an adequate search at the exit from a 
material access area; 

[[Page 34400]]

    9. A theft or loss of SNM of low strategic significance that was 
not detected within the time period specified in the security plan, 
other relevant document, or regulation; or
    10. Other violations that have more than minor safeguards 
significance.

Supplement IV--Health Physics (10 CFR Part 20)

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of health physics, 10 CFR Part 
20.19

    \19\  Personnel overexposures and associated violations incurred 
during a life-saving or other emergency response effort will be 
treated on a case-by-case basis.
---------------------------------------------------------------------------

    A. Severity Level I - Violations involving for example:
    1. A radiation exposure during any year of a worker in excess of 25 
rems total effective dose equivalent, 75 rems to the lens of the eye, 
or 250 rads to the skin of the whole body, or to the feet, ankles, 
hands or forearms, or to any other organ or tissue;
    2. A radiation exposure over the gestation period of the embryo/
fetus of a declared pregnant woman in excess of 2.5 rems total 
effective dose equivalent;
    3. A radiation exposure during any year of a minor in excess of 2.5 
rems total effective dose equivalent, 7.5 rems to the lens of the eye, 
or 25 rems to the skin of the whole body, or to the feet, ankles, hands 
or forearms, or to any other organ or tissue;
    4. An annual exposure of a member of the public in excess of 1.0 
rem total effective dose equivalent;
    5. A release of radioactive material to an unrestricted area at 
concentrations in excess of 50 times the limits for members of the 
public as described in 10 CFR 20.1302(b)(2)(i); or
    6. Disposal of licensed material in quantities or concentrations in 
excess of 10 times the limits of 10 CFR 20.2003.
    B. Severity Level II--Violations involving for example:
    1. A radiation exposure during any year of a worker in excess of 10 
rems total effective dose equivalent, 30 rems to the lens of the eye, 
or 100 rems to the skin of the whole body, or to the feet, ankles, 
hands or forearms, or to any other organ or tissue;
    2. A radiation exposure over the gestation period of the embryo/
fetus of a declared pregnant woman in excess of 1.0 rem total effective 
dose equivalent;
    3. A radiation exposure during any year of a minor in excess of 1 
rem total effective dose equivalent; 3.0 rems to the lens of the eye, 
or 10 rems to the skin of the whole body, or to the feet, ankles, hands 
or forearms, or to any other organ or tissue;
    4. An annual exposure of a member of the public in excess of 0.5 
rem total effective dose equivalent;
    5. A release of radioactive material to an unrestricted area at 
concentrations in excess of 10 times the limits for members of the 
public as described in 10 CFR 20.1302(b)(2)(i) (except when operation 
up to 0.5 rem a year has been approved by the Commission under Section 
20.1301(c));
    6. Disposal of licensed material in quantities or concentrations in 
excess of five times the limits of 10 CFR 20.2003; or
    7. A failure to make an immediate notification as required by 10 
CFR 20.2202 (a)(1) or (a)(2).
    C. Severity Level III--Violations involving for example:
    1. A radiation exposure during any year of a worker in excess of 5 
rems total effective dose equivalent, 15 rems to the lens of the eye, 
or 50 rems to the skin of the whole body or to the feet, ankles, hands 
or forearms, or to any other organ or tissue;
    2. A radiation exposure over the gestation period of the embryo/
fetus of a declared pregnant woman in excess of 0.5 rem total effective 
dose equivalent (except when doses are in accordance with the 
provisions of Section 20.1208(d));
    3. A radiation exposure during any year of a minor in excess of 0.5 
rem total effective dose equivalent; 1.5 rems to the lens of the eye, 
or 5 rems to the skin of the whole body, or to the feet, ankles, hands 
or forearms, or to any other organ or tissue;
    4. A worker exposure above regulatory limits when such exposure 
reflects a programmatic (rather than an isolated) weakness in the 
radiation control program;
    5. An annual exposure of a member of the public in excess of 0.1 
rem total effective dose equivalent (except when operation up to 0.5 
rem a year has been approved by the Commission under Section 
20.1301(c));
    6. A release of radioactive material to an unrestricted area at 
concentrations in excess of two times the effluent concentration limits 
referenced in 10 CFR 20.1302(b)(2)(i) (except when operation up to 0.5 
rem a year has been approved by the Commission under Section 
20.1301(c));
    7. A failure to make a 24-hour notification required by 10 CFR 
20.2202(b) or an immediate notification required by 10 CFR 
20.2201(a)(1)(i);
    8. A substantial potential for exposures or releases in excess of 
the applicable limits in 10 CFR Part 20 Sections 20.1001-20.2401 
whether or not an exposure or release occurs;
    9. Disposal of licensed material not covered in Severity Levels I 
or II;
    10. A release for unrestricted use of contaminated or radioactive 
material or equipment that poses a realistic potential for exposure of 
the public to levels or doses exceeding the annual dose limits for 
members of the public, or that reflects a programmatic (rather than an 
isolated) weakness in the radiation control program;
    11. Conduct of licensee activities by a technically unqualified 
person;
    12. A significant failure to control licensed material; or
    13. A breakdown in the radiation safety program involving a number 
of violations that are related (or, if isolated, that are recurring) 
that collectively represent a potentially significant lack of attention 
or carelessness toward licensed responsibilities.
    D. Severity Level IV--Violations involving for example:
    1. Exposures in excess of the limits of 10 CFR 20.1201, 20.1207, or 
20.1208 not constituting Severity Level I, II, or III violations;
    2. A release of radioactive material to an unrestricted area at 
concentrations in excess of the limits for members of the public as 
referenced in 10 CFR 20.1302(b)(2)(i) (except when operation up to 0.5 
rem a year has been approved by the Commission under Section 
20.1301(c));
    3. A radiation dose rate in an unrestricted or controlled area in 
excess of 0.002 rem in any 1 hour (2 millirem/hour) or 50 millirems in 
a year;
    4. Failure to maintain and implement radiation programs to keep 
radiation exposures as low as is reasonably achievable;
    5. Doses to a member of the public in excess of any EPA generally 
applicable environmental radiation standards, such as 40 CFR Part 190;
    6. A failure to make the 30-day notification required by 10 CFR 
20.2201(a)(1)(ii) or 20.2203(a);
    7. A failure to make a timely written report as required by 10 CFR 
20.2201(b), 20.2204, or 20.2206; or
    8. Any other matter that has more than a minor safety, health, or 
environmental significance.

Supplement V--Transportation

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations 

[[Page 34401]]
in the area of NRC transportation requirements 20.

    \20\ Some transportation requirements are applied to more than 
one licensee involved in the same activity such as a shipper and a 
carrier. When a violation of such a requirement occurs, enforcement 
action will be directed against the responsible licensee which, 
under the circumstances of the case, may be one or more of the 
licensees involved.
---------------------------------------------------------------------------

    A. Severity Level I--Violations involving for example:
    1. Failure to meet transportation requirements that resulted in 
loss of control of radioactive material with a breach in package 
integrity such that the material caused a radiation exposure to a 
member of the public and there was clear potential for the public to 
receive more than .1 rem to the whole body;
    2. Surface contamination in excess of 50 times the NRC limit; or
    3. External radiation levels in excess of 10 times the NRC limit.
    B. Severity Level II--Violations involving for example:
    1. Failure to meet transportation requirements that resulted in 
loss of control of radioactive material with a breach in package 
integrity such that there was a clear potential for the member of the 
public to receive more than .1 rem to the whole body;
    2. Surface contamination in excess of 10, but not more than 50 
times the NRC limit;
    3. External radiation levels in excess of five, but not more than 
10 times the NRC limit; or
    4. A failure to make required initial notifications associated with 
Severity Level I or II violations.
    C. Severity Level III--Violations involving for example:
    1. Surface contamination in excess of five but not more than 10 
times the NRC limit;
    2. External radiation in excess of one but not more than five times 
the NRC limit;
    3. Any noncompliance with labeling, placarding, shipping paper, 
packaging, loading, or other requirements that could reasonably result 
in the following:
    (a) A significant failure to identify the type, quantity, or form 
of material;
    (b) A failure of the carrier or recipient to exercise adequate 
controls; or
    (c) A substantial potential for either personnel exposure or 
contamination above regulatory limits or improper transfer of material;
    4. A failure to make required initial notification associated with 
Severity Level III violations; or
    5. A breakdown in the licensee's program for the transportation of 
licensed material involving a number of violations that are related 
(or, if isolated, that are recurring violations) that collectively 
reflect a potentially significant lack of attention or carelessness 
toward licensed responsibilities.
    D. Severity Level IV--Violations involving for example:
    1. A breach of package integrity without external radiation levels 
exceeding the NRC limit or without contamination levels exceeding five 
times the NRC limits;
    2. Surface contamination in excess of but not more than five times 
the NRC limit;
    3. A failure to register as an authorized user of an NRC-Certified 
Transport package;
    4. A noncompliance with shipping papers, marking, labeling, 
placarding, packaging or loading not amounting to a Severity Level I, 
II, or III violation;
    5. A failure to demonstrate that packages for special form 
radioactive material meets applicable regulatory requirements;
    6. A failure to demonstrate that packages meet DOT Specifications 
for 7A Type A packages; or
    7. Other violations that have more than minor safety or 
environmental significance.

Supplement VI--Fuel Cycle and Materials Operations

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of fuel cycle and materials 
operations.
    A. Severity Level I--Violations involving for example:
    1. Radiation levels, contamination levels, or releases that exceed 
10 times the limits specified in the license;
    2. A system designed to prevent or mitigate a serious safety event 
not being operable when actually required to perform its design 
function;
    3. A nuclear criticality accident; or
    4. A failure to follow the procedures of the quality management 
program, required by Section 35.32, that results in a death or serious 
injury (e.g., substantial organ impairment) to a patient.
    B. Severity Level II--Violations involving for example:
    1. Radiation levels, contamination levels, or releases that exceed 
five times the limits specified in the license;
    2. A system designed to prevent or mitigate a serious safety event 
being inoperable; or
    3. A substantial programmatic failure in the implementation of the 
quality management program required by 10 CFR 35.32 that results in a 
misadministration.
    C. Severity Level III--Violations involving for example:
    1. A failure to control access to licensed materials for radiation 
purposes as specified by NRC requirements;
    2. Possession or use of unauthorized equipment or materials in the 
conduct of licensee activities which degrades safety;
    3. Use of radioactive material on humans where such use is not 
authorized;
    4. Conduct of licensed activities by a technically unqualified 
person;
    5. Radiation levels, contamination levels, or releases that exceed 
the limits specified in the license;
    6. Substantial failure to implement the quality management program 
as required by Section 35.32 that does not result in a 
misadministration; failure to report a misadministration; or 
programmatic weakness in the implementation of the quality management 
program that results in a misadministration.
    7. A breakdown in the control of licensed activities involving a 
number of violations that are related (or, if isolated, that are 
recurring violations) that collectively represent a potentially 
significant lack of attention or carelessness toward licensed 
responsibilities;
    8. A failure, during radiographic operations, to have present or to 
use radiographic equipment, radiation survey instruments, and/or 
personnel monitoring devices as required by 10 CFR Part 34;
    9. A failure to submit an NRC Form 241 in accordance with the 
requirements in Section 150.20 of 10 CFR Part 150;
    10. A failure to receive required NRC approval prior to the 
implementation of a change in licensed activities that has radiological 
or programmatic significance, such as, a change in ownership; lack of 
an RSO or replacement of an RSO with an unqualified individual; a 
change in the location where licensed activities are being conducted, 
or where licensed material is being stored where the new facilities do 
not meet safety guidelines; or a change in the quantity or type of 
radioactive material being processed or used that has radiological 
significance; or
    11. A significant failure to meet decommissioning requirements 
including a failure to notify the NRC as required by regulation or 
license condition, substantial failure to meet decommissioning 
standards, failure to conduct and/or complete decommissioning 
activities in 

[[Page 34402]]
accordance with regulation or license condition, or failure to meet 
required schedules without adequate justification.
    D. Severity Level IV--Violations involving for example:
    1. A failure to maintain patients hospitalized who have cobalt-60, 
cesium-137, or iridium-192 implants or to conduct required leakage or 
contamination tests, or to use properly calibrated equipment;
    2. Other violations that have more than minor safety or 
environmental significance; or
    3. Failure to follow the quality management program, including 
procedures, whether or not a misadministration occurs, provided the 
failures are isolated, do not demonstrate a programmatic weakness in 
the implementation of the QM program, and have limited consequences if 
a misadministration is involved; failure to conduct the required 
program review; or failure to take corrective actions as required by 
Section 35.32; or
    4. A failure to keep the records required by Sections 35.32 or 
35.33.

Supplement VII--Miscellaneous Matters

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations involving miscellaneous matters.
    A. Severity Level I--Violations involving for example:
    1. Inaccurate or incomplete information 21 that is provided to 
the NRC (a) deliberately with the knowledge of a licensee official that 
the information is incomplete or inaccurate, or (b) if the information, 
had it been complete and accurate at the time provided, likely would 
have resulted in regulatory action such as an immediate order required 
by the public health and safety.

    \21\ In applying the examples in this supplement regarding 
inaccurate or incomplete information and records, reference should 
also be made to the guidance in Section IX, ``Inaccurate and 
Incomplete Information,'' and to the definition of ``licensee 
official'' contained in Section IV.C.
---------------------------------------------------------------------------

    2. Incomplete or inaccurate information that the NRC requires be 
kept by a licensee that is (a) incomplete or inaccurate because of 
falsification by or with the knowledge of a licensee official, or (b) 
if the information, had it been complete and accurate when reviewed by 
the NRC, likely would have resulted in regulatory action such as an 
immediate order required by public health and safety considerations;
    3. Information that the licensee has identified as having 
significant implications for public health and safety or the common 
defense and security (``significant information identified by a 
licensee'') and is deliberately withheld from the Commission;
    4. Action by senior corporate management in violation of 10 CFR 
50.7 or similar regulations against an employee;
    5. A knowing and intentional failure to provide the notice required 
by 10 CFR Part 21; or
    6. A failure to substantially implement the required fitness-for-
duty program.22

    \22\ The example for violations for fitness-for-duty relate to 
violations of 10 CFR Part 26.
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    B. Severity Level II--Violations involving for example:
    1. Inaccurate or incomplete information that is provided to the NRC 
(a) by a licensee official because of careless disregard for the 
completeness or accuracy of the information, or (b) if the information, 
had it been complete and accurate at the time provided, likely would 
have resulted in regulatory action such as a show cause order or a 
different regulatory position;
    2. Incomplete or inaccurate information that the NRC requires be 
kept by a licensee which is (a) incomplete or inaccurate because of 
careless disregard for the accuracy of the information on the part of a 
licensee official, or (b) if the information, had it been complete and 
accurate when reviewed by the NRC, likely would have resulted in 
regulatory action such as a show cause order or a different regulatory 
position;
    3. ``Significant information identified by a licensee'' and not 
provided to the Commission because of careless disregard on the part of 
a licensee official;
    4. An action by plant management above first-line supervision in 
violation of 10 CFR 50.7 or similar regulations against an employee;
    5. A failure to provide the notice required by 10 CFR Part 21;
    6. A failure to remove an individual from unescorted access who has 
been involved in the sale, use, or possession of illegal drugs within 
the protected area or take action for on duty misuse of alcohol, 
prescription drugs, or over-the-counter drugs;
    7. A failure to take reasonable action when observed behavior 
within the protected area or credible information concerning activities 
within the protected area indicates possible unfitness for duty based 
on drug or alcohol use;
    8. A deliberate failure of the licensee's Employee Assistance 
Program (EAP) to notify licensee's management when EAP's staff is aware 
that an individual's condition may adversely affect safety related 
activities; or
    9. The failure of licensee management to take effective action in 
correcting a hostile work environment.
    C. Severity Level III--Violations involving for example:
    1. Incomplete or inaccurate information that is provided to the NRC 
(a) because of inadequate actions on the part of licensee officials but 
not amounting to a Severity Level I or II violation, or (b) if the 
information, had it been complete and accurate at the time provided, 
likely would have resulted in a reconsideration of a regulatory 
position or substantial further inquiry such as an additional 
inspection or a formal request for information;
    2. Incomplete or inaccurate information that the NRC requires be 
kept by a licensee that is (a) incomplete or inaccurate because of 
inadequate actions on the part of licensee officials but not amounting 
to a Severity Level I or II violation, or (b) if the information, had 
it been complete and accurate when reviewed by the NRC, likely would 
have resulted in a reconsideration of a regulatory position or 
substantial further inquiry such as an additional inspection or a 
formal request for information;
    3. A failure to provide ``significant information identified by a 
licensee'' to the Commission and not amounting to a Severity Level I or 
II violation;
    4. An action by first-line supervision in violation of 10 CFR 50.7 
or similar regulations against an employee;
    5. An inadequate review or failure to review such that, if an 
appropriate review had been made as required, a 10 CFR Part 21 report 
would have been made;
    6. A failure to complete a suitable inquiry on the basis of 10 CFR 
Part 26, keep records concerning the denial of access, or respond to 
inquiries concerning denials of access so that, as a result of the 
failure, a person previously denied access for fitness-for-duty reasons 
was improperly granted access;
    7. A failure to take the required action for a person confirmed to 
have been tested positive for illegal drug use or take action for 
onsite alcohol use; not amounting to a Severity Level II violation;
    8. A failure to assure, as required, that contractors or vendors 
have an effective fitness-for-duty program;
    9. A breakdown in the fitness-for-duty program involving a number 
of violations of the basic elements of the fitness-for-duty program 
that collectively reflect a significant lack of attention or 
carelessness towards 

[[Page 34403]]
meeting the objectives of 10 CFR 26.10; or
    10. Threats of discrimination or restrictive agreements which are 
violations under NRC regulations such as 10 CFR 50.7(f).
    D. Severity Level IV--Violations involving for example:
    1. Incomplete or inaccurate information of more than minor 
significance that is provided to the NRC but not amounting to a 
Severity Level I, II, or III violation;
    2. Information that the NRC requires be kept by a licensee and that 
is incomplete or inaccurate and of more than minor significance but not 
amounting to a Severity Level I, II, or III violation;
    3. An inadequate review or failure to review under 10 CFR Part 21 
or other procedural violations associated with 10 CFR Part 21 with more 
than minor safety significance;
    4. Violations of the requirements of Part 26 of more than minor 
significance;
    5. A failure to report acts of licensed operators or supervisors 
pursuant to 10 CFR 26.73; or
    6. Discrimination cases which, in themselves, do not warrant a 
Severity Level III categorization.

Supplement VIII--Emergency Preparedness

    This supplement provides examples of violations in each of the four 
severity levels as guidance in determining the appropriate severity 
level for violations in the area of emergency preparedness. It should 
be noted that citations are not normally made for violations involving 
emergency preparedness occurring during emergency exercises. However, 
where exercises reveal (i) training, procedural, or repetitive failures 
for which corrective actions have not been taken, (ii) an overall 
concern regarding the licensee's ability to implement its plan in a 
manner that adequately protects public health and safety, or (iii) poor 
self critiques of the licensee's exercises, enforcement action may be 
appropriate.
    A. Severity Level I--Violations involving for example:
    In a general emergency, licensee failure to promptly (1) correctly 
classify the event, (2) make required notifications to responsible 
Federal, State, and local agencies, or (3) respond to the event (e.g., 
assess actual or potential offsite consequences, activate emergency 
response facilities, and augment shift staff).
    B. Severity Level II--Violations involving for example:
    1. In a site emergency, licensee failure to promptly (1) correctly 
classify the event, (2) make required notifications to responsible 
Federal, State, and local agencies, or (3) respond to the event (e.g., 
assess actual or potential offsite consequences, activate emergency 
response facilities, and augment shift staff); or
    2. A licensee failure to meet or implement one emergency planning 
standard involving assessment or notification.
    C. Severity Level III--Violations involving for example:
    1. In an alert, licensee failure to promptly (1) correctly classify 
the event, (2) make required notifications to responsible Federal, 
State, and local agencies, or (3) respond to the event (e.g., assess 
actual or potential offsite consequences, activate emergency response 
facilities, and augment shift staff);
    2. A licensee failure to meet or implement more than one emergency 
planning standard involving assessment or notification; or
    3. A breakdown in the control of licensed activities involving a 
number of violations that are related (or, if isolated, that are 
recurring violations) that collectively represent a potentially 
significant lack of attention or carelessness toward licensed 
responsibilities.
    D. Severity Level IV--Violations involving for example:
    A licensee failure to meet or implement any emergency planning 
standard or requirement not directly related to assessment and 
notification.

    Dated at Rockville, Maryland, this 23rd day of June 1995.

    For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 95-15952 Filed 6-29-95; 8:45 am]
BILLING CODE 7590-01-P