[Federal Register Volume 62, Number 170 (Wednesday, September 3, 1997)]
[Notices]
[Pages 46517-46525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23330]


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NUCLEAR REGULATORY COMMISSION


Statement of Principles and Policy for the Agreement State 
Program; Policy Statement on Adequacy and Compatibility of Agreement 
State Programs

AGENCY: Nuclear Regulatory Commission.

ACTION: Final policy statements.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is publishing two 
final policy statements: the ``Statement of Principles and Policy for 
the Agreement State Program,'' and ``Policy Statement on Adequacy and 
Compatibility of Agreement State Programs.''

EFFECTIVE DATE: September 3, 1997.

ADDRESSES: Documents referenced in this notice are available for 
inspection in the Public Document Room, 2120 L Street, NW (Lower 
Level), Washington, DC, between 7:45 am and 4:15 pm.

FOR FURTHER INFORMATION CONTACT: Ms. Cardelia Maupin, Sr. Project 
Manager, Office of State Programs, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555, telephone (301) 415-2312.

SUPPLEMENTARY INFORMATION:

I. Background

A. Statement of Principles and Policy for the Agreement State Program

    On August 25, 1993, the Commission requested the NRC staff to 
recommend improvements to the NRC's Agreement State Program to assure 
adequate protection of public health and safety. The draft Policy 
Statement was published in the Federal Register on August 5, 1994 (59 
FR 40058). At the Commission's request, the public comment period 
scheduled to end on October 4, 1994, was extended to December 19, 1994 
(59 FR 52316).
    A final Policy Statement was prepared based on the public comments, 
other activities and issues before the Commission, e.g., the ``Policy 
Statement on Adequacy and Compatibility of Agreement State Programs,'' 
issues discussed at public briefings of the Commission by the 
Organization of Agreement States (OAS), and the Commission's 
deliberations on the Integrated Materials Performance Evaluation 
Program. On May 5, 1995, the NRC staff submitted to the Commission the 
``Final Statement of Principles and Policy for the Agreement State 
Program'' and ``Procedures for Suspension and Termination of an 
Agreement State Program'' (SECY 95-115) that contained the full 
analysis of

[[Page 46518]]

comments. By Staff Requirements Memorandum dated June 29, 1995, the 
Commission provided comments on the Statement of Principles and Policy 
for the Agreement State Program and directed staff to develop 
procedures for placing an Agreement State in probationary status and 
for implementing the phase-in of a new Agreement State program.
    On October 3, 1996, the NRC staff submitted to the Commission the 
Statement of Principles and Policy for the Agreement State Program that 
had been modified as directed by the Commission (SECY 96-213). Further 
revisions were made to ensure consistency with the revised Policy 
Statement on Adequacy and Compatibility of Agreement State Programs. 
The procedures for suspension, emergency suspension and termination of 
agreements were finalized on April 25, 1996, and the procedure for 
placing an Agreement State in probationary status was finalized on July 
3, 1996.

B. Statement on Adequacy and Compatibility of Agreement State Programs.

    On July 21, 1994 (59 FR 37269), the Commission published in the 
Federal Register, for public comment, a draft Policy Statement 
regarding the adequacy of Agreement State programs to protect public 
health and safety and compatibility with NRC regulatory programs. The 
comment period for the draft Policy Statement was scheduled to expire 
on October 19, 1994, but was extended to December 19, 1994 (59 FR 
52317). In addition, a public workshop was held on November 15, 1994 
(59 FR 52321) to provide an opportunity for Agreement States and 
interested members of the public to provide comments on the draft 
Policy Statement.
    A final ``Policy Statement on Adequacy and Compatibility of 
Agreement State Program'' was prepared based on the public comments and 
other activities and issues before the Commission. On May 3, 1995, the 
NRC staff submitted to the Commission the ``Final Policy Statement on 
Adequacy and Compatibility of Agreement State Programs'' (SECY 95-112) 
that contained the full analysis of comments.

C. Status of the Policy Statements

    The Commission approved both policy statements in principle with a 
Staff Requirements Memorandum dated June 29, 1995, but deferred their 
implementation until all implementing procedures were completed and 
approved by the Commission. On August 2, 1995 (60 FR 39463), the 
Commission published in the Federal Register the status of these two 
policy statements and a notice of their availability.
    NRC staff also prepared draft implementing procedures for phased 
implementation of a new Agreement State program that contained language 
for a standard agreement (Management Directive 5.8 and its associated 
handbook). Comments on the draft implementing procedures for phased 
implementation of new agreements and the standard agreement were 
requested from the Agreement States on November 15, 1996. The complete 
analysis of these comments is included in ``Final Recommendations on 
Policy Statements and Implementing Procedures for: Statement of 
Principles and Policy for the Agreement State Program and Policy 
Statement on Adequacy and Compatibility of Agreement State Programs'' 
(SECY 97-054, dated March 3, 1997) that is available for inspection at 
the NRC Public Document Room. A summary of the comments appears with 
the text of the final policy statement in this notice.
    In October 1995, a Working Group consisting of representatives of 
Agreement States and the NRC was formed to develop implementing 
procedures for the ``Policy Statement on Adequacy and Compatibility of 
Agreement State Programs.'' The formation of this Working Group was 
announced in the Federal Register on December 1, 1995 (60 FR 61716). A 
notice announcing availability of the initial Working Group report 
(August 21, 1996) and implementing procedures was published in the 
Federal Register on September 19, 1996 (61 FR 49357). Comments also 
were requested specifically from Agreement States and panelists who 
participated in the November 15, 1994, public workshop. The analysis of 
State and public comments is part of the supplemental report of the 
Working Group dated January 27, 1997, that is available for inspection 
at the NRC Public Document Room. A summary of the comments appears with 
the text of the final policy statement in this notice.

II. Statement of Principles and Policy for the Agreement State 
Program

A. Comment Summary

    Comment letters were received from twelve Agreement States on the 
implementing procedures for phased agreements (Management Directive 
5.8). There was strong opposition from the Agreement States on the 
inclusion of mandatory phased agreements for states seeking Agreement 
State status. Staff analyzed the comments and agreed with the concerns 
associated with the use of phased agreements. Changes were made to the 
Policy Statement to remove the phased agreement concept and to include 
revisions offered by the Agreement States, as appropriate. The Policy 
Statement was also edited to conform it to the position that Agreement 
States have flexibility to impose legally binding requirements on its 
licensees through mechanisms other than rules.
    The text of the final policy statement follows.

B. The Commission Policy

Statement of Principles and Policy for the Agreement State Program
    1. Purpose: The purpose of this Statement of Principles and Policy 
for the Agreement State Program is to clearly describe the respective 
roles and responsibilities of the U.S. Nuclear Regulatory Commission 
(NRC) and States in the administration of programs carried out under 
Section 274 of the Atomic Energy Act of 1954, as amended. Section 274 
provides broad authority for the NRC to establish Federal and State 
cooperation in the administration of regulatory programs for the 
protection of public health and safety in the industrial, medical, and 
research uses of nuclear materials.
    This Policy Statement addresses the Federal-State interaction under 
the Atomic Energy Act to: (1) Establish and maintain agreements with 
States under Section 274(b) that provide for discontinuance by the NRC, 
and the assumption by the State, of responsibility for administration 
of a regulatory program for the use of byproduct, source, and small 
quantities of special nuclear material; and (2) ensure that post-
agreement interactions among the NRC and Agreement State radiation 
control programs are coordinated and compatible and that Agreement 
State programs continue to provide adequate protection of public health 
and safety.
    This Policy Statement establishes principles, objectives, and goals 
that the Commission expects will be reflected in the implementing 
guidance and programs of the NRC and Agreement States to meet their 
respective program responsibilities and that should be achieved in the 
administration of these programs.
    This Policy Statement is intended solely as guidance for the 
Commission and the Agreement States in the implementation of the 
Agreement State program. This Policy Statement does not itself impose 
legally binding

[[Page 46519]]

requirements on the Agreement States. In addition, nothing in this 
Policy Statement expands the legal authority of Agreement States beyond 
that already granted to them by Section 274 of the AEA and other 
relevant legal authority. Implementation procedures adopted pursuant to 
this Policy Statement shall be consistent with the legal authorities of 
the Commission and the Agreement States.
    2. Statement of Legislative Intent: The Atomic Energy Act of 1954 
did not specify a role for the States in regulating the use of nuclear 
materials. Many States were concerned as to what their responsibilities 
in this area might be and expressed interest in seeing that the 
boundaries of Federal and State authority were clearly defined. This 
need for clarification was particularly important in view of the fact 
that although the Federal government retained sole responsibility for 
protecting public health and safety from the radiation hazards of 
byproduct, source, and special nuclear material, the responsibility for 
protecting the public from the radiation hazards of other sources such 
as x-ray machines and radium had been borne for many years by the 
States.
    Consequently, in 1959 Congress enacted Section 274 of the Atomic 
Energy Act to establish a statutory framework under which States could 
assume certain regulatory jurisdiction over byproduct, source, and 
special nuclear material in quantities less than a critical mass. The 
primary purpose of the legislation was to authorize the Commission to 
discontinue its regulatory authority over the use of these materials 
and for assumption of this authority by the States. The Commission 
retained regulatory authority over the licensing of certain facilities 
and activities such as nuclear reactors, larger quantities of special 
nuclear material, and the export and import of nuclear materials.
    In considering the legislation, Congress recognized that the 
Federal government would need to assist the States to ensure that they 
developed the capability to exercise their regulatory authority in a 
competent and effective manner. Accordingly, the legislation authorized 
the Commission to provide training and other services to State 
officials and employees. However, in rendering this assistance, 
Congress did not intend that the Commission would provide any grants to 
a State for the administration of a State regulatory program. This was 
fully consistent with the objectives of Section 274 to qualify States 
to assume independent regulatory authority over certain defined areas 
of regulatory jurisdiction and to permit the Commission to discontinue 
its regulatory responsibilities in those areas.
    In order to relinquish its authority to a particular State, the 
Commission must find that the program is compatible with the 
Commission's program for the regulation of radioactive materials and 
that the State program is adequate to protect public health and safety. 
In addition, the Commission has an obligation, pursuant to Section 
274(j) of the Act, to review existing Agreement State programs to 
ensure continued adequacy and compatibility. Section 274(j) of the Act 
provides that the NRC may terminate or suspend all or part of its 
agreement with a State if the Commission finds that such termination is 
necessary to protect public health and safety or that the State has not 
complied with the provisions of Section 274(j). In these cases, the 
Commission must offer the State reasonable notice and opportunity for a 
hearing. In addition, the Commission may temporarily suspend all or 
part of an agreement in the case of an emergency situation.

C. Principles of Program Implementation

1. Good Regulation Principles
    In 1991, the Commission adopted ``Principles of Good Regulation'' 
to serve as a guide to both agency decision making and to individual 
behavior as NRC employees. Adherence to these principles has helped to 
ensure that NRC's regulatory activities have been of the highest 
quality, appropriate, and consistent. The ``Principles of Good 
Regulation'' recognize that strong, vigilant management and a desire to 
improve performance are prerequisites for success, for both regulators 
and the regulated industry. The Commission believes that NRC's 
implementation of these principles has served the public, the Agreement 
States, and the regulated community well. The Commission further 
believes that such principles may be useful as a part of a common 
culture that NRC and the Agreement States share as co-regulators. 
Accordingly, the Commission encourages each Agreement State to adopt a 
similar set of principles for use in its own regulatory program.
    Regulatory decisions and actions should be developed and 
implemented in an open and publicly credible manner and should be able 
to withstand scrutiny. Such scrutiny should be welcomed by the 
regulator. The regulator should be independent and impartial in its 
actions, and this should be clearly evident. Regulations and regulatory 
decisions should be based on assessments of the best available 
information from affected and interested individuals and organizations, 
as well as on the best available knowledge from research and 
operational experience. Significant decisions, for example, a change in 
enforcement policy, should be documented explaining the rationale for 
such decisions. The public should have an opportunity for early 
involvement in significant regulatory program decisions. Where several 
effective alternatives are available, the alternative that best assures 
safety while considering differing views should be adopted, considering 
the resources needed to implement that alternative. Regulations should 
be necessary, and appropriate, to assure safety, and should be clear, 
coherent, logical, and practical. Regulatory actions should be fully 
consistent with regulations or other legally binding requirements and 
good public policy and should lead to stability and predictability in 
the planning and implementation of radiation control programs.
    Failure to adhere to these principles of good regulation in the 
conduct of operations should be a sufficient reason for a regulatory 
program to self-initiate program changes that will result in needed 
improvements. All involved should welcome expressions of concern that 
indicate a program may not be operating in accordance with these 
principles and revise their program to more completely reflect these 
principles.
    It is not intended that these principles of good regulation be 
established as formal criteria against which NRC and Agreement State 
programs would be assessed. Rather, the expectation is that these 
principles will be incorporated into the day-to-day operational fabric 
of NRC and Agreement State materials programs. These principles should 
be used in the formulation of policies and programs, implementation of 
those policies and programs, and assessments of program effectiveness. 
Application of these principles will ensure that complacency will be 
minimized, that adequate levels of protection of public health and 
safety are being provided, and that government employees tasked with 
the responsibility for these Federal and State regulatory programs 
serve the public in an effective, efficient, and responsive manner. 
These principles are primarily for the use of NRC and Agreement State 
materials program managers and staff in the self assessment of their 
respective programs and to use in the establishment of goals and 
objectives for the continual improvement of their respective

[[Page 46520]]

programs. Deficiencies identified during the conduct of NRC Region and 
Agreement State formal program performance reviews may indicate that 
the program is not adhering to these principles of good regulation. The 
organization being assessed should factor the need for these principles 
into its actions to address identified deficiencies.
2. Coherent Nationwide Effort
    The mission of the NRC is to assure that civilian use of nuclear 
materials in the United States is carried out with adequate protection 
of public health and safety. NRC acknowledges its responsibility, 
shared with the Agreement States, to ensure that the regulatory 
programs of the NRC and the Agreement States collectively establish a 
coherent nationwide effort for the control of AEA materials. The basic 
elements of such regulatory programs include ability to ensure adequate 
protection of public health and safety, compatibility in areas of 
national interest, sufficient flexibility to accommodate local needs 
and conditions, ability to assess program performance on a consistent 
and systematic basis, and principles of good regulation in program 
administration.
    Each of these elements is reflected and addressed in specific 
sections of this Policy Statement.
3. Adequate to Protect Public Health and Safety
    NRC and the Agreement States have the responsibility to ensure 
adequate protection of public health and safety in the administration 
of their respective regulatory programs controlling the uses of AEA 
materials. Accordingly, NRC and Agreement State programs shall possess 
the requisite supporting legislative authority, implementing 
organization structure and procedures, and financial and human 
resources to effectively administer a radiation control program that 
ensures adequate protection of public health and safety.
4. Compatible in Areas of National Interest
    NRC and the Agreement States have the responsibility to ensure that 
consistent and compatible radiation control programs are administered. 
Such radiation control programs should be based on a common regulatory 
philosophy including the common use of definitions and standards. They 
should be not only effective and cooperatively implemented by NRC and 
the Agreement States, but also should provide uniformity and 
consistency in program areas having national significance.
    Such areas include those affecting interstate commerce, movement of 
goods and provision of services, and safety reviews for sealed source 
devices sold nationwide. Also necessary is the ability to communicate 
using a nationally accepted set of terms with common understanding, the 
ability to ensure an adequate level of protection of public health and 
safety that is consistent and stable across the nation, and the ability 
of NRC and each Agreement State to evaluate the effectiveness of the 
NRC and Agreement State programs for the regulation of agreement 
material with respect to protection of public health and safety.
5. Flexibility
    With the exception of those compatibility areas where all programs 
should be essentially identical, to the extent possible, Agreement 
State radiation control programs for AEA materials should be provided 
with flexibility in program implementation to accommodate individual 
State preferences, State legislative direction, and local needs and 
conditions. However, the exercise of such flexibility should not 
preclude, or effectively preclude, a practice authorized by the Atomic 
Energy Act, and in the national interest. That is, a State would have 
the flexibility to design its own program, including incorporating more 
stringent, or similar, requirements provided that the requirements for 
adequacy are still met and compatibility is maintained, and the more 
stringent requirements do not preclude or effectively preclude a 
practice in the national interest without an adequate public health and 
safety or environmental basis related to radiation protection.

D. New Agreements

    Section 274 of the Atomic Energy Act requires that once a decision 
to seek Agreement State status is made by the State, the Governor of 
that State must certify to the NRC that the State desires to assume 
regulatory responsibility and has a program for the control of 
radiation hazards adequate to protect public health and safety with 
respect to the materials within the State covered by the proposed 
agreement. This certification will be provided in a letter to the NRC 
that includes a number of documents in support of the certification. 
These documents include the State's enabling legislation, the radiation 
control regulations, a narrative description of the State program's 
policies, practices and procedures, and a proposed agreement.
    The NRC has published criteria describing the necessary content 
these documents are required to cover. The NRC reviews the request and 
publishes notice of the proposed agreement in the Federal Register to 
provide an opportunity for public comment. After consideration of 
public comments, if the Commission determines that the State program is 
adequate and compatible, and approves the agreement, a formal agreement 
document is signed by the Governor and the Chairman of the NRC.

E. Program Assistance

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

F. Performance Evaluation

    Under Section 274 of the Atomic Energy Act of 1954, as amended, the

[[Page 46521]]

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

G. Levels of Agreement State Program Review Findings

    The following discussion outlines the nature of NRC findings 
regarding the NRC's Agreement State review process.
Finding 1--Adequate To Protect Public Health and Safety and (or not) 
Compatible
    If the NRC finds that a State program has met all of the Agreement 
State program review criteria or that only minor deficiencies exist, 
the Commission would find that the State's program is adequate to 
protect public health and safety. If the NRC determines that a State 
program contains all required NRC program elements for compatibility, 
or only minor discrepancies exist, the program would be found 
compatible. If the NRC determines that a State has a program that 
disrupts the orderly pattern of regulation among the collective 
regulatory efforts of the NRC and other Agreement States, i.e., creates 
conflicts, gaps, or duplication in regulation, the program would be 
found not compatible.
Finding 2--Adequate, but Needs Improvement and (or not) Compatible
    If the NRC finds that a State program protects public health and 
safety, but is deficient in meeting some of the review criteria, the 
NRC may find that the State's program is adequate, but needs 
improvement. The NRC would consider in its determination plans that the 
State has to address any of the deficiencies noted during the review. 
In cases where less significant Agreement State deficiencies previously 
identified have been uncorrected for a significant period of time, NRC 
may also find that the program is adequate but in need of improvement. 
If the NRC determines that a State program contains all required NRC 
program elements for compatibility, or only minor discrepancies exist, 
the program would be found compatible. If the NRC determines that a 
State has a program that disrupts the orderly pattern of regulation 
among the collective regulatory efforts of the NRC and other Agreement 
States, i.e., creates conflicts, gaps, or duplication in regulation, 
the program would be found not compatible.
Finding 3--Inadequate to Protect Public Health and Safety and (or not) 
Compatible
    If the NRC finds that a State program is significantly deficient in 
some or all of the review criteria, the NRC would find that the State's 
program is not adequate to protect public health and safety. If the NRC 
determines that a State program contains all required NRC program 
elements for compatibility, or only minor discrepancies exist, the 
program would be found compatible. If the NRC determines that a State 
has a program that disrupts the orderly pattern of regulation among the 
collective regulatory efforts of the NRC and other Agreement States, 
i.e., creates conflicts, gaps, or duplication in regulation, the 
program would be found not compatible.

H. NRC Actions as a Result of These Findings

    The following discussion outlines the options available to the NRC 
as a result of making any of the above findings. The appropriate action 
will be determined on a case-by-case basis by NRC management.
Letters
    In all cases, subsequent to an Agreement State program review, the 
findings would be recounted in a letter to senior level State 
management. In the event that the NRC finds that a State program is 
adequate and compatible, no further action would be required, except a 
response by the State to any suggestions or recommendations. In the 
case where minor deficiencies are noted or areas for improvement are 
identified, the State would be requested to describe their proposed 
corrective action. If the corrective action appears appropriate, no 
further NRC action is required. If additional clarification of the 
corrective actions is needed, additional correspondence may be 
necessary.
Follow-up Reviews
    In the event that deficiencies are noted during the program review, 
NRC may increase the frequency of contacts with the State to keep 
abreast of developments and conduct onsite follow-up reviews to assure 
that progress is being made on correcting program deficiencies. If, 
during follow-up reviews, it is shown that the State has taken 
corrective actions, a letter finding the State adequate and compatible 
would be provided.
Probationary Status
    There are three circumstances that can lead to an adequate but 
needs improvement or incompatible State program being placed in a 
probationary status: (1) There are cases in which program deficiencies 
may be serious enough to require immediate heightened oversight; (2) in 
other cases, Agreement State program deficiencies previously identified 
may have been uncorrected for a significant period of time; and (3) if 
the NRC determines that a State program has been late in adopting 
required compatibility program elements and significant disruption in 
the collective nationwide efforts to

[[Page 46522]]

regulate AEA materials has occurred. If the NRC was not confident that 
the State would address the program deficiencies in an expeditious and 
effective manner, the Commission would place the State program on 
probation.
    As a result of placing a State program on probation, the NRC would 
communicate its findings to a higher level of State management. Notice 
of such probationary status would normally be addressed to the Governor 
of the State. Notice would also be published in the Federal Register. A 
copy of the letter to the Governor would be placed in the Public 
Document Room and a press release would be issued.
    Once a State program is placed on probation, the NRC would heighten 
its oversight of the program. This would include obtaining commitments 
from the State in the form of a management plan to describe actions to 
be taken by the State to address the program deficiencies, including 
specific goals and milestones. The NRC would increase observation of 
State program activities under the agreement to assure adequate 
protection of public health and safety. If requested and in accordance 
with terms agreed to by the parties, the NRC would consider providing 
technical support for the maintenance of the regulatory program. The 
probationary period would last for a specified period of time. This 
period would not normally be more than one year, but could be extended 
based on extenuating circumstances. At the end of that time, if the 
State has not addressed the deficiencies, the NRC would institute 
suspension or termination proceedings.
Suspension
    Section 274j of the Atomic Energy Act gives the Commission 
authority to suspend all or part of its agreement with a State if the 
suspension is required to protect public health and safety, or if the 
State has not complied with one or more of the requirements of Section 
274 of the Act. In cases where the Commission finds that program 
deficiencies related to either adequacy or compatibility are such that 
the Commission must take action to protect public health and safety, or 
if the program has not complied with one or more of the requirements of 
Section 274 of the Act, the Commission would suspend all or part of its 
agreement with the State. In cases where a State has failed to respond 
in an acceptable manner during the probationary period, suspension 
would be considered. If the situation is not resolved, termination will 
be considered.
    Before reaching a final decision on suspension, the Commission will 
notify the State and provide the State an opportunity for a hearing on 
the proposed suspension. Notice of the proposed suspension will also be 
published in the Federal Register. Suspension, rather than termination, 
would be the preferred option in those cases where the State provides 
evidence that the program deficiencies are temporary and that the State 
is committed to correcting the deficiencies that led to the suspension.
    In addition to the normal suspension authority, Section 274j(2) of 
the Act also addresses emergency situations and gives the Commission 
authority to temporarily suspend all or part of its agreement with a 
State without notice or hearing if an emergency situation exists 
requiring immediate action to protect public health and safety, and the 
State has failed to take necessary action within a reasonable time.
Termination
    Section 274j of the Atomic Energy Act gives the Commission 
authority to terminate its agreement with a State if such termination 
is required to protect public health and safety, or if the State 
program has not complied with one or more of the requirements of 
Section 274 of the Act (e.g., is found to be not compatible with the 
Commission's program). When the Commission finds such significant 
program deficiencies, the Commission would institute proceedings to 
terminate its agreement with the State.
    In cases where a State has failed to respond in an acceptable 
manner during the probationary period and there is no prospect for 
improvement, termination will be considered. Before reaching a final 
decision on termination, the Commission will notify the State and 
provide the State an opportunity for a hearing on the proposed 
termination.
    Also, notice of the proposed termination will be published in the 
Federal Register. There may be cases where termination will be 
considered even though the State program has not been placed on 
probation.

I. Program Funding

    Currently, Section 274 does not allow federal funding for the 
administration of Agreement State radiation control programs. Section 
274 permits the NRC to offer training and other assistance to a State 
in anticipation of entering into an Agreement with NRC, however, it is 
NRC policy not to fund the establishment of new Agreement State 
programs. Regarding training, given the importance in terms of public 
health and safety of having well trained radiation control program 
personnel, the NRC offers certain relevant training courses and 
notifies Agreement State personnel of their availability.

J. Regulatory Development

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

K. Program Evolution

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

III. Policy Statement on Adequacy and Compatibility of Agreement State 
Programs

A. Comment Summary

    Ten comment letters were received, one from the Organization of 
Agreement States, six Agreement State program directors, two industry 
organizations and one environmental group. The Joint NRC-Agreement 
State Working Group for Development of Implementing Procedures for the 
Final Policy Statement on Adequacy and Compatibility of Agreement State 
Programs analyzed the comments and changes were made to the Policy 
Statement (1) to add additional clarifying language for the terms 
``adequacy'' and ``compatibility'' and the cooperative nature of the 
NRC--Agreement State relationship; (2) to

[[Page 46523]]

conform it to the position that Agreement States have flexibility with 
respect to the legally binding mechanism by which regulatory 
requirements needed for adequacy or compatibility are adopted; and (3) 
to simplify the language describing compatibility categories. Changes 
also were made in response to the June 30, 1997 Staff Requirements 
Memorandum. These changes (1) reflect that program elements for 
compatibility also impact public health and safety and may also be 
considered program elements for adequacy; (2) clarify the definition of 
basic radiation protection standard; and (3) clarify that States may 
not adopt program elements reserved exclusively to NRC. The 
implementing procedures were changed to reflect the final Policy 
Statement.
    One Agreement State specifically commented that it did not believe 
that Section 274 of the AEA required compatibility of programs or 
program elements after an agreement is effective except for 
requirements pertaining to the Uranium Mill Tailings Radiation Control 
Act in section 274(o). This position also was reflected in the 
recommended changes to the Policy Statement submitted by the 
Organization of Agreement States.
    The Commission does not agree with this interpretation of the AEA. 
Both Sections 274d.(2) and 274g. indicate that the Commission must find 
a State program to be compatible with that of NRC in order to enter 
into a Section 274b. agreement with the State. It is the Commission's 
view that, pursuant to Section 274, an Agreement State's program should 
be compatible with NRC's program for the duration of the Agreement for 
the following reasons:

    Subsection 274g. authorizes and directs the Commission to 
cooperate with the States in the formulation of radiation protection 
standards ``to assure that the State and Commission programs for the 
protection against hazards of radiation will be coordinated and 
compatible.'' This provision demonstrates Congress' intention that 
the compatibility between the NRC and Agreement State programs 
should be maintained on a continuing basis.
    Section 274j.(1) calls on the Commission to suspend or terminate 
an Agreement State's program if ``the State has not complied with 
one or more of the requirements'' of the Section 274. The Commission 
believes that this phrase ``one or more of the requirements,'' 
encompasses all requirements of Section 274, including the 
requirement for compatibility.
    Under subsection 274d.(2), the Commission is authorized to enter 
into an agreement with a State if the Commission makes both 
requisite findings that the State program is compatible with the 
NRC's program and adequate to protect public health and safety. 
Absent a continuing compatibility requirement, an Agreement State 
could divert from having a compatible program the day after any 
agreement is signed with NRC. This would render the Commission's 
initial compatibility finding required by Section 274d.(2) 
meaningless.

    Therefore, the Commission does not believe that Congress intended 
such meaning for the compatibility requirement and no changes were made 
to the Policy Statement in response to this comment.
    The text of the final policy statement follows.

B. The Commission Policy

Policy Statement on Adequacy and Compatibility of Agreement State 
Programs
    Purpose: Section 274 of the Atomic Energy Act (AEA) of 1954, as 
amended, provides for a special Federal-State regulatory framework for 
the control of radioactive materials under which the NRC, by agreement 
with a State, relinquishes its authority in certain areas to the State 
government as long as the State program is adequate to protect public 
health and safety and compatible with the Commission's program. Section 
274 further directs the Commission to periodically review State 
programs to ensure compliance with provisions of Section 274. This 
Policy Statement presents the Nuclear Regulatory Commission's policy 
for determining the adequacy and compatibility of Agreement State 
programs established pursuant to Section 274. This Policy Statement 
clarifies the meaning and use of the terms ``adequate to protect public 
health and safety'' and ``compatible with the Commission's regulatory 
program'' as applied to the Agreement State program. The Policy 
Statement also describes the general framework that will be used to 
identify those program elements \1\ that Agreement State programs 
should implement to be adequate to protect public health and safety and 
to be compatible with the Commission's regulatory program. Finally, the 
Policy Statement reflects principles discussed in the Commission's 
Statement of Principles and Policy for the Agreement State Program 
which should be considered in conjunction with this Policy Statement.
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    \1\ For the purposes of this Policy Statement, ``program 
element'' means any component or function of a radiation control 
regulatory program, including regulations and/or other legally 
binding requirements imposed on regulated persons, that contributes 
to implementation of that program.
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    This Policy Statement is solely guidance for the Commission and the 
Agreement States in the implementation of the Agreement State program. 
This Policy Statement does not itself impose legally binding 
requirements on the Agreement States. In addition, nothing in this 
Policy Statement expands the legal authority of Agreement States beyond 
that already granted to them by Section 274 of the Atomic Energy Act 
and other relevant legal authority. Implementation procedures adopted 
pursuant to this Policy Statement shall be consistent with the legal 
authorities of the Commission and the Agreement States.
    Background: The terms ``adequate'' and ``compatible'' represent 
fundamental concepts in the Agreement State program authorized in 1959 
by Section 274 of the Atomic Energy Act of 1954, as amended (AEA). 
Subsection 274d. states that the Commission shall enter into an 
Agreement under subsection b., discontinuing NRC's regulatory authority 
over certain materials in a State, provided that the State's program is 
adequate to protect public health and safety and compatible, in all 
other respects, with the Commission's regulatory program. Subsection 
274g. authorizes and directs the Commission to cooperate with States in 
the formulation of standards to assure that State and Commission 
standards will be coordinated and compatible. Subsection 274j.(1) 
requires the Commission to review periodically the Agreements and 
actions taken by States under the Agreements to ensure compliance with 
provisions of Section 274. In other words, the Commission must review 
the actions taken by States under the Agreements to ensure that the 
programs continue to be adequate to protect public health and safety 
and compatible with the Commission's program.
    Section 274 of the AEA requires that Agreement State programs be 
both ``adequate to protect the public health and safety'' and 
``compatible with the Commission's program.'' These separate findings 
are based on consideration of two different objectives. First, an 
Agreement State program should provide for an acceptable level of 
protection of public health and safety in an Agreement State (the 
``adequacy'' component). Second, the Agreement State should ensure that 
its program serves an overall nationwide interest in radiation 
protection (the ``compatibility'' component). As discussed in more 
detail below, an ``adequate'' program should consist of those program 
elements necessary to maintain an acceptable level of protection of 
public health and safety within an Agreement State. A ``compatible'' 
program should consist of those program elements necessary to

[[Page 46524]]

meet a larger nationwide interest in radiation protection generally 
limited to areas of regulation involving radiation protection standards 
and activities with significant transboundary implications. Program 
elements for adequacy focus on the protection of public health and 
safety within a particular State, whereas program elements for 
compatibility focus on the impacts of an Agreement State's regulation 
of agreement material on a nationwide basis or its potential effects on 
other jurisdictions. Many program elements for compatibility also 
impact public health and safety; therefore, they may also be considered 
program elements for adequacy.
    In identifying those program elements for adequate and compatible 
programs, or any changes thereto, the Commission will seek the advice 
of the Agreement States and will consider such advice in its final 
decision.
    Adequacy: An Agreement State's radiation control program is 
adequate to protect public health and safety if administration of the 
program provides reasonable assurance of protection of public health 
and safety in regulating the use of source, byproduct, and small 
quantities of special nuclear material (hereinafter termed ``agreement 
material'') as identified by Section 274b. of the AEA. The level of 
protection afforded by the program elements of NRC's materials 
regulatory program is presumed to be that which is adequate to provide 
a reasonable assurance of protection of public health and safety. The 
overall level of protection of public health and safety provided by a 
State program should be equivalent to, or greater than, the level 
provided by the NRC program. To provide reasonable assurance of 
protection of public health and safety, an Agreement State program 
should contain five essential program elements, identified below, that 
the Commission will use to define the scope of its review of the 
program. The Commission also will consider, when appropriate, other 
program elements of an Agreement State which appear to affect the 
program's ability to provide reasonable assurance of public health and 
safety protection. Such consideration will occur only if concerns 
arise.

A. Legislation and Legal Authority

    State statutes should:

    Authorize the State to establish a program for the regulation of 
agreement material and provide authority for the assumption of 
regulatory responsibility under an Agreement with the Commission;
    Authorize the State to promulgate regulatory requirements 
necessary to provide reasonable assurance of protection of public 
health and safety;
    Authorize the State to license, inspect, and enforce legally 
binding requirements such as regulations and licenses; and
    Be otherwise consistent with Federal statutes, as appropriate, 
such as Pub. L. 95-604, The Uranium Mill Tailings Radiation Control 
Act (UMTRCA).

    In addition, the State should have existing legally enforceable 
measures such as generally applicable rules, license provisions, or 
other appropriate measures, necessary to allow the State to ensure 
adequate protection of public health and safety in the regulation of 
agreement material in the State. Specifically, Agreement States should 
adopt a limited number of legally binding requirements based on those 
of NRC because of their particular health and safety significance. In 
adopting such requirements, Agreement States should adopt the essential 
objectives of those of the Commission.

B. Licensing

    The State should conduct appropriate evaluations of proposed uses 
of agreement material, before issuing a license, to assure that the 
proposed licensee's operations can be conducted safely. Licenses should 
provide for reasonable assurance of public health and safety protection 
in relation to the licensed activities.

C. Inspection and Enforcement

    The State should periodically conduct inspections of licensed 
activities involving agreement material to provide reasonable assurance 
of safe licensee operations and to determine compliance with its 
regulatory requirements. When determined to be necessary by the State, 
the State should take timely enforcement action against licensees 
through legal sanctions authorized by State statutes and regulations.

D. Personnel

    The State should be staffed with a sufficient number of qualified 
personnel to implement its regulatory program for the control of 
agreement material.

E. Response to Events and Allegations

    The State should respond to and conduct timely inspections or 
investigations of incidents, reported events, and allegations involving 
agreement material within the State's jurisdiction to provide 
reasonable assurance of protection of public health and safety.
Compatibility
    An Agreement State radiation control program is compatible with the 
Commission's regulatory program when its program does not create 
conflicts, duplications, gaps, or other conditions that would 
jeopardize an orderly pattern in the regulation of agreement material 
on a nationwide basis. For purposes of compatibility, the State should 
address categories A, B, and C identified below:

A. Basic Radiation Protection Standards

    For purposes of this Policy Statement, this category includes 
``basic radiation protection standards'' meaning dose limits, 
concentration and release limits related to radiation protection in 10 
CFR part 20 that are generally applicable, and the dose limits in 10 
CFR 61.41.2 Also included in this category are a limited 
number of definitions, signs, labels and scientific terms that are 
necessary for a common understanding of radiation protection principles 
among licensees, regulatory agencies, and members of the public. Such 
State standards should be essentially identical to those of the 
Commission, unless Federal statutes provide the State authority to 
adopt different standards. Basic radiation protection standards do not 
include constraints or other limits below the level associated with 
``adequate protection'' that take into account permissible balancing 
considerations such as economic cost and other factors.
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    \2\ The Commission will implement this category consistent with 
its earlier decision in the LLW area to allow Agreement States 
flexibility to establish pre-closure operational release limit 
objectives, ALARA goals or design objectives at such levels as the 
State may deem necessary or appropriate, as long as the level of 
protection of public health and safety is at least equivalent to 
that afforded by Commission requirements.
---------------------------------------------------------------------------

B. Program Elements with Significant Transboundary Implications

    The Commission will limit this category to a small number of 
program elements (e.g., transportation regulations and sealed source 
and device registration certificates) that have significant 
transboundary implications. Agreement State program elements should be 
essentially identical to those of the Commission.

C. Other Commission Program Elements

    These are other Commission program elements (e.g., reciprocity 
procedures) that are important for an Agreement State to have in order 
to avoid conflicts, duplications, gaps, or other conditions that would 
jeopardize an orderly pattern in the regulation of agreement material 
on a nationwide basis. Such Agreement State program elements should 
embody the essential objective of the corresponding Commission program 
elements.

[[Page 46525]]

D. Program Elements not Required for Compatibility

    An Agreement State has the flexibility to adopt and implement 
program elements based on those of the Commission (other than those 
identified in A, B, and C above) or other program elements within the 
State's jurisdiction that are not addressed by NRC.
    All program elements of an Agreement State relating to agreement 
material should:

    Be compatible with those of the Commission (i.e., should not 
create conflicts, duplications, gaps, or other conditions that would 
jeopardize an orderly pattern in the regulation of agreement 
material on a nationwide basis);
    Not preclude, or effectively preclude, a practice \3\ in the 
national interest without an adequate public health and safety or 
environmental basis related to radiation protection; or
---------------------------------------------------------------------------

    \3\ ``Practice'' means a use, procedure, or activity associated 
with the application, possession, use, storage, or disposal of 
agreement material. The term ``practice'' is used in a broad and 
encompassing manner in this Policy Statement. The term encompasses 
both general activities involving use of radioactive materials such 
as industrial and medical uses and specific activities within a 
practice such as industrial radiography and brachytherapy.
---------------------------------------------------------------------------

    Not preclude, or effectively preclude, the ability of the 
Commission to evaluate the effectiveness of the NRC and Agreement 
State programs for agreement material with respect to protection of 
public health and safety.

E. Areas of Exclusive NRC Regulatory Authority

    These are program elements that address areas of regulation that 
cannot be relinquished to Agreement States pursuant to the AEA or 
provisions of Title 10 of the Code of Federal Regulations. However, an 
Agreement State may inform its licensees of certain of these NRC 
provisions through a mechanism that is appropriate under the State's 
administrative procedure laws as long as the State adopts these 
provisions solely for the purposes of notification, and does not 
exercise any regulatory authority pursuant to them.
Summary and Conclusions
    To foster and enhance a coherent and consistent nationwide program 
for the regulation of agreement material, the Commission encourages 
Agreement States to adopt and implement program elements that are 
patterned after those adopted and implemented by the Commission. 
However, the fact that an Agreement State's program is compatible with 
that of the Commission does not affect that State's obligation to 
maintain an adequate program as described in this Policy Statement.
    By adopting the criteria for adequacy and compatibility as 
discussed in this Policy Statement the Commission will provide 
Agreement States a broad range of flexibility in the administration of 
individual programs. In doing so, the Commission allows Agreement 
States to fashion their programs so as to reflect specific State needs 
and preferences, recognizing the fact that Agreement States have 
responsibilities for radiation sources in addition to agreement 
material.
    The Commission will minimize the number of NRC regulatory 
requirements that the Agreement States will be requested to adopt in an 
identical manner to maintain compatibility. At the same time, 
requirements in these compatibility categories will allow the 
Commission to ensure that an orderly pattern for the regulation of 
agreement material exists nationwide. The Commission believes that this 
approach achieves a proper balance between the need for Agreement State 
flexibility and the need for coordinated and compatible regulation of 
agreement material across the country.
* * * * *

Paperwork Reduction Act Statement

    These final policy statements do not contain new or amended 
information collection requirements subject to the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were 
approved by the Office of Management and Budget, approval number 3150-
0183.

Public Protection Notification

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

Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996, the NRC has determined that this action is not a 
major rule and has verified this determination with the Office of 
Information and Regulatory Affairs of OMB.

    Dated at Rockville, Md., this 27th day of August, 1997.

    For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 97-23330 Filed 9-2-97; 8:45 am]
BILLING CODE 7590-01-P