[Federal Register Volume 63, Number 92 (Wednesday, May 13, 1998)]
[Notices]
[Pages 26630-26652]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12534]


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NUCLEAR REGULATORY COMMISSION

[NUREG-1600, Rev. 1]


Revision of NRC Enforcement Policy

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy statement.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is publishing a 
complete revision of the agency's Enforcement Policy (NUREG-1600, 
``General Statement of Policy and Procedure for NRC Enforcement 
Actions'') based on (1) a 2-year review of the revised Enforcement 
Policy, that was effective June 30, 1995, and (2) a consolidation of 
changes to the Enforcement Policy since June 30, 1995.

DATES: This action is effective May 13, 1998, while comments are being 
received. Submit comments on or before June 29, 1998.

ADDRESSES: Submit written comments to: David L. Meyer, Chief, Rules and 
Directives Branch, Division of Administrative Services, Office of 
Administration, Mail Stop: T6D59, U.S. Nuclear Regulatory Commission, 
Washington, DC 20555. Hand deliver comments to: 11555 Rockville Pike, 
Rockville, Maryland, between 7:30 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 June 30, 1995, the Commission published a 
complete revision of the NRC's Enforcement Policy (60 FR 34381). The 
changes to the Enforcement Policy resulted from the efforts of a review 
team established in 1994 to assess the NRC's enforcement program. The 
review team published its recommendations in NUREG-1525, ``Assessment 
of the NRC Enforcement Program,'' and the Commission made revisions to 
the Enforcement Policy after considering those recommendations. The 
revisions to the Enforcement Policy were intended to, among other 
things:
     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.
    The revisions to the Enforcement Policy were also intended to 
better focus the inspection and enforcement process on safety, provide 
greater incentives for strong self-monitoring and corrective action 
programs in the civil penalty assessment process, provide more 
predictability and consistency in the civil penalty assessment process, 
and to better convey clear regulatory messages.
    When the Commission published the revised Enforcement Policy in the 
Federal Register on June 30, 1995, it stated that it would provide the 
public an opportunity to comment on the revised Enforcement Policy 
after it had been in effect for about 18 months. On February 5, 1997 
(62 FR 5495), the Commission published an opportunity for the public to 
comment on the revised Enforcement Policy.
    The NRC has reviewed approximately 2 years of experience under the 
revised Enforcement Policy and considered public comments. The NRC 
staff prepared a report (NUREG-1622,\1\ ``NRC Enforcement Policy 
Review: July 1995--July 1997,'' November 1997) that concluded that the 
changes made to the Enforcement Policy in 1995 (especially in the civil 
penalty assessment process) have helped to improve the predictability 
and consistency of enforcement actions, while maintaining the agency's 
desire to use enforcement sanctions for providing appropriate emphasis 
and deterrence in a way that helps to support the agency's overall 
safety mission. This conclusion is

[[Page 26631]]

reflected in several aspects of the Enforcement Policy:
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    \1\ Copies of NUREG-1622 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 report is 
also included on the NRC's Office of Enforcement's homepage on the 
Internet at www.nrc.gov/OE/.
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     The current Enforcement Policy is appropriately geared 
toward creating deterrence (i.e., taking action in a manner that 
provides incentives to identify and correct violations that have 
occurred and discourage future violations) and is properly structured 
for nuclear regulation.
     The Enforcement Policy recognizes that violations have 
varying degrees of safety significance, and that in considering the 
significance of a violation, it is appropriate to consider the 
technical significance (i.e., actual and potential consequences) and 
the regulatory significance. In addition, risk is an appropriate 
consideration in evaluating the technical significance of a violation.
     The Enforcement Policy is appropriately structured to 
maintain a focus on safety.
     The current civil penalty assessment process is 
appropriately structured to reflect issues the agency believes are 
appropriate to consider in assessing whether a civil penalty should be 
proposed, i.e., past performance, identification, corrective action, 
and those warranting discretion.
     The use of discretion and judgment throughout the 
deliberative process recognizes that enforcement of NRC requirements 
does not lend itself to mechanistic treatment.
    Notwithstanding the general satisfaction with the Enforcement 
Policy, the review included a number of recommendations to the 
Commission for revisions to the Enforcement Policy and for development 
of additional enforcement guidance. The Commission is issuing this 
policy statement after considering those recommendations and the bases 
for them in NUREG-1622.
    The more significant changes to the Enforcement Policy (in the 
order that they appear in the Policy) are described below:

I. Introduction and Purpose

    This section has been modified to include a brief discussion on the 
meaning of ``safety'' and ``compliance'' as they are used in the 
context of this policy statement. This section also references a new 
appendix (Appendix A) that describes the nexus between safety and 
compliance.

III. Responsibilities

    This section has been modified to reflect that the Chief Financial 
Officer (CFO) is delegated the authority to issue orders where 
licensees violate Commission regulations by nonpayment of license and 
inspection fees. The Office of the Chief Financial Officer (OCFO) was 
created as part of the NRC's January 5, 1997, reorganization. The 
Office of the Controller has now been incorporated into the OCFO and 
the position of the Director, Office of the Controller (previously 
identified in the policy as having the issuing authority), has been 
subsumed by the CFO.
    This section has also been modified to emphasize that the technical 
and regulatory significance of violations are considered in conjunction 
with the principles of the policy statement and the surrounding 
circumstances when the agency determines the appropriate enforcement 
strategy.
    This section has also been revised to indicate that the Commission 
is to be provided notification (where appropriate, based on the 
uniqueness or significance of the issue) for a plant meeting the 
criteria of Section VII.B.6 (mitigation for violations involving 
special circumstances). This is consistent with the policy revision to 
Section VII issued on December 26, 1996 (61 FR 68070).

IV. Severity of Violations

    This section has been modified such that minor violations will no 
longer be noted as Non-Cited Violations (NCVs) when they are documented 
in inspection reports. Instead, if a minor violation warrants 
documentation, it will be noted as a violation of minor significance 
that is not subject to formal enforcement action. The definition of an 
NCV included in footnote 6 has also been deleted. The purpose of these 
changes is to avoid confusion between minor violations dispositioned as 
NCVs in accordance with Section IV and Severity Level IV violations 
dispositioned as NCVs in accordance with Section VII.B.1, ``Licensee-
Identified Severity Level IV Violations.'' Use of the term ``NCV'' will 
now be reserved for those Severity Level IV violations that meet the 
criteria for discretion in Section VII.B.1.

V. Predecisional Enforcement Conferences

    This section has been modified to indicate that a predecisional 
enforcement conference is not required if the NRC has sufficient 
information to make an informed enforcement decision. If a conference 
is not held, the licensee may be requested to provide a written 
response to an inspection report as to the licensee's views on the 
apparent violations and their root causes and a description of planned 
or implemented corrective actions. (The previous discussion indicated 
that the licensee will normally be requested to provide a written 
response.) It is the NRC's intent that this approach will normally be 
taken in the event a civil penalty is under consideration. This section 
has also been modified to include an additional option when a 
conference is not held, such that the NRC may proceed to issue an 
enforcement action without first obtaining the licensee's response to 
the inspection report, if the NRC has sufficient information to 
conclude that a civil penalty is not warranted. This approach would 
still: (1) Provide licensees an opportunity to request a conference to 
dispute the action, (2) provide licensees an opportunity to dispute the 
action in writing through the provisions of 10 CFR 2.201 (as with any 
Notice of Violation), (3) allow the NRC to conduct a conference where 
matters are disputed or where the licensee's documented corrective 
actions are not sufficiently prompt and comprehensive, and (4) provide 
for modification or recision of the NOV, if appropriate.
    It should be noted that these modifications are not meant to be 
construed as exclusive enforcement options. In other words, it does not 
change the existing practice whereby the NRC may choose to issue an 
enforcement action (including civil penalties and orders) without 
conducting a conference. These changes are being made in an effort to 
make the enforcement process more efficient (by reducing the number of 
conferences and reducing the workload of both the NRC and licensees and 
improving the timeliness of enforcement actions).

VI. Enforcement Actions

    This general discussion of the NRC's philosophy and approach to 
taking enforcement has been modified by including the recognition that 
circumstances regarding a violation may warrant discretion such that 
the NRC may refrain from issuing a Notice of Violation or other 
enforcement action. This discussion was previously included in Section 
VI.A, ``Notice of Violation,'' and has been more appropriately 
relocated to this section.

A. Notice of Violation

    The NRC has had a long-standing policy that licensees are not 
ordinarily cited for violations resulting from matters not within their 
control, such as equipment failures that are not avoidable by 
reasonable licensee quality assurance measures or management controls. 
This discussion has been deleted from this section and more 
appropriately included in the discussion on mitigation of sanctions in

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Section VII.B.6, ``Violations Involving Special Circumstances.''

B. Civil Penalty

1. Base Civil Penalty
    Table 1A has been revised to correct the inadvertent omission of a 
footnote that indicates that large firms engaged in manufacturing or 
distribution of byproduct, source, or special nuclear material be 
considered as industrial processors. Table 1A had included this 
footnote prior to the 1995 policy revision and this footnote was 
included in the table in the draft Federal Register notice that the 
Commission approved for publication and in the table in Section 
II.D.7.c of NUREG-1525. Table 1A has also been revised to include 
additional guidance in determining which category material users should 
be considered under by including ``other large material users'' in 
category ``c'' and ``other small materials users'' in category ``d.''

VII. Exercise of Discretion

B. Mitigation of Enforcement Sanctions

    Section VII.B.1, ``Licensee-Identified Severity Level IV 
Violations,'' is being modified to address licensee-identified 
violations that are identified as a result of an event. On December 10, 
1996 (61 FR 65088), the Commission issued a revision to the Enforcement 
Policy that included a modification to the criterion in Section 
VII.B.1.a. Specifically, the phrase ``including identification through 
an event'' was deleted from the criterion. The modification was 
intended to make it clear that use of discretion is not automatic if 
the violation is identified through an event. A footnote is being 
included to the criterion to address how the NRC will normally consider 
violations that are identified as a result of an event.
    The Commission recognizes that there may be particular 
circumstances in a case where discretion is warranted and the NRC 
should refrain from issuing enforcement action. Sections VII.B.3, 
VII.B.4, and VII.B.6 of the Enforcement Policy provide that discretion 
may be warranted for certain Severity Level II and III violations. If 
the circumstances of a particular case may warrant discretion at 
Severity Level II or III, then discretion may also be appropriate at 
Severity Level IV. Therefore, changes have been made to the examples to 
reflect that the NRC may choose to refrain from issuing a Notice of 
Violation for a Severity Level IV violation.
    Section VII.B.6 was also modified to include additional factors for 
consideration, including whether the regulatory requirement that was 
violated was clear, or given the NRC's current information, 
appropriate. As previously addressed, this section also includes that 
the NRC may refrain from issuing enforcement action for violations 
resulting from matters beyond a licensee's control. However, licensees 
are generally responsible for the actions of its employees. The revised 
text, consistent with long-standing NRC interpretation, makes it clear 
that licensees are also responsible for the actions of their 
contractors.

Appendix A: Safety and Compliance

    This appendix has been added to address the NRC's philosophy on the 
nexus between safety and compliance.

Appendix B: Supplements--Violation Examples

    This appendix was administratively created as a result of the 
addition of Appendix A and includes the previous guidance included in 
the Supplements section of the policy.

Supplement VII--Miscellaneous Matters

    Examples B.4 and C.4 have been revised to reflect NRC practice in 
applying Severity Level II and III categorization for violations 
involving discrimination. In particular, Severity Level II 
categorization is appropriate for discriminatory acts by middle to 
upper management, not simply any level above first-line supervision. 
Severity Level III categorization is appropriate for low-level 
supervision and management, even if they are above a first-line 
supervisor.

Paperwork Reduction Act

    This policy statement does not contain a new or amended information 
collection requirement 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 3150-0136. The 
approved information collection requirements contained in this policy 
statement appear in Section VII.C.

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.
    Accordingly, the NRC Enforcement Policy is revised to read as 
follows:

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 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
Appendix A: Safety and Compliance
Appendix B: Supplements--Violation Examples

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

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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.
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    \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, 
contractors,\2\ 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 this enforcement policy. In no case, however, will 
licensees who cannot achieve and maintain adequate levels of safety be 
permitted to conduct licensed activities.
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    \2\ The term ``contractor'' as used in this policy inlcudes 
vendors who supply 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 linceses. 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. These non-licensees include 
contractors and subcontractors, holders of, or applicants for, NRC 
approvals, e.g, certificates of compliance, early site permits, or 
standard design certiciates and the employees of these non-
licensees. Specific guidance regarding enforcement action against 
individuals and non-licensees is addressed in Sections VIII and X. 
respectively.
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    For purposes of this policy statement, safety means avoiding undue 
risk, i.e., providing reasonable assurance of adequate protection for 
the public in connection with the use of source, byproduct and special 
nuclear materials. Compliance means meeting regulatory requirements. 
Appendix A to this policy statement describes the nexus between safety 
and compliance.

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.
    Notwithstanding the $100,000 limit stated in the Atomic Energy Act, 
the Commission may impose higher civil penalties as provided by the 
Debt Collection Improvement Act of 1996. Under the Act, the Commission 
is required to modify civil monetary penalties to reflect inflation. 
The adjusted maximum civil penalty amount is reflected in 10 CFR 2.205 
and this Policy Statement.
    Chapter 18 of the Atomic Energy Act provides for varying levels of 
criminal 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

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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 officer of the NRC, the Deputy Executive Director for 
Regulatory Effectiveness, hereafter referred to as the Deputy Executive 
Director, has been delegated the authority to approve or issue all 
escalated enforcement actions.\4\ The Deputy Executive Director is 
responsible to the EDO for the NRC enforcement program. The Office of 
Enforcement (OE) exercises oversight of and implements the NRC 
enforcement program. The Director, OE, acts for the Deputy Executive 
Director in enforcement matters in his absence or as delegated.
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    \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 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 the 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 Chief 
Financial Officer 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 and 
regulatory significance of the violations and the surrounding 
circumstances.
    Unless Commission consultation or notification is required by this 
policy, the NRC 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 the first time that 
discretion is exercised for a plant meeting the criteria of Section 
VII.B.2. The Commission is also to be provided notification (where 
appropriate, based on the uniqueness or significance of the issue) for 
a plant meeting the criteria of 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 a civil penalty for a single violation or 
problem that is greater than 3 times the Severity Level I value shown 
in Table 1A for that class of licensee;
    (3) Any proposed enforcement action that involves a Severity Level 
I violation;
    (4) Any action the EDO believes warrants Commission involvement;
    (5) Any proposed enforcement case involving an Office of 
Investigations (OI) report where the NRC 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
    (6) Any proposed enforcement action on which the Commission asks to 
be consulted.

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. In considering the significance of a 
violation, the staff considers the technical significance, i.e., actual 
and potential consequences, and the regulatory significance. In 
evaluating the technical significance, risk is an appropriate 
consideration.
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    \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 will be noted as violations of minor significance that 
are not subject to formal enforcement action.
    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

[[Page 26635]]

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. 6 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.
---------------------------------------------------------------------------

    \6\ 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.
---------------------------------------------------------------------------

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 7 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 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.
---------------------------------------------------------------------------

    \7\ 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 contractor, the 
NRC may provide an opportunity for a predecisional enforcement 
conference with the licensee, contractor, 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 actions 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. 
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 may 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

[[Page 26636]]

description of planned or implemented corrective actions. However, if 
the NRC has sufficient information to conclude that a civil penalty is 
not warranted, it may proceed to issue an enforcement action without 
first obtaining the licensee's response to the inspection report.
    During the predecisional enforcement conference, the licensee, 
contractor, 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, contractors, 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 normally open to public observation. 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 that has not been publicly disclosed; 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, 
notwithstanding the above normal criteria for opening or closing 
conferences, with the approval of the Executive Director for 
Operations, conferences may either be open or closed to the public 
after balancing the benefit of the public's observation against the 
potential impact on the agency's decision-making process in a 
particular case.
    The NRC will notify the licensee that the conference will be open 
to public observation. 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, (3) a toll-free electronic bulletin board at 
800-952-9676, and on the World Wide Web at the NRC Office of 
Enforcement homepage (www.nrc.gov/OE). 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 may observe but may not 
participate in the conference. It is noted that the purpose of 
conducting open conferences is not to maximize public attendance, but 
rather to provide the public with opportunities to be informed of NRC 
activities consistent 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. The open conference will be terminated if disruption 
interferes with a successful conference. NRC's Predecisional 
Enforcement Conferences (whether open or closed) normally will be held 
at the NRC's regional offices or in NRC Headquarters Offices and not in 
the vicinity of the licensee's facility.
    For a case in which an NRC Office of Investigations (OI) report 
finds that discrimination as defined under 10 CFR 50.7 (or similar 
provisions in Parts 30, 40, 60, 70, or 72) has occurred, the OI report 
may be made public, subject to withholding certain information (i.e., 
after appropriate redaction), in which case the associated 
predecisional enforcement conference will normally be open to public 
observation. In a conference where a particular individual is being 
considered potentially responsible for the discrimination, the 
conference will remain closed. In either case (i.e., whether the 
conference is open or closed), the employee or former employee who was 
the subject of the alleged discrimination (hereafter referred to as 
``complainant'') will normally be provided an opportunity to 
participate in the predecisional enforcement conference with the 
licensee/employer. This participation will normally be in the form of a 
complainant statement and comment on the licensee's presentation, 
followed in turn by an opportunity for the licensee to respond to the 
complainant's presentation. In cases where the complainant is unable to 
attend in person, arrangements will be made for the complainant's 
participation by telephone or an opportunity given for the complainant 
to submit a written response to the licensee's presentation. If the 
licensee chooses to forego an enforcement conference and, instead, 
responds to the NRC's findings in writing, the complainant will be 
provided the opportunity to submit written comments on the licensee's 
response. For cases involving potential discrimination by a contractor, 
any associated predecisional enforcement conference with the contractor 
would be handled similarly. These arrangements for complainant 
participation in the predecisional enforcement conference are not to be 
conducted or viewed in any respect as an adjudicatory hearing. The 
purpose of the complainant's participation is to provide information to 
the NRC to assist it in its enforcement deliberations.
    A predecisional enforcement conference may not need to be held in 
cases where there is a full adjudicatory record before the Department 
of Labor. If a conference is held in such cases, generally the 
conference will focus on the licensee's corrective action. As with 
discrimination cases based on OI investigations, the complainant may be 
allowed to participate.
    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,

[[Page 26637]]

or the lack thereof, are not intended to represent final determinations 
or beliefs.
    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.
    However, circumstances regarding the violation findings may warrant 
discretion being exercised such that the NRC refrains from issuing a 
Notice of Violation or other enforcement action. (See Section VII.B, 
``Mitigation of Enforcement Sanctions.'')

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.

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, 
contractors, and other persons. Tables 1A and 1B show the base civil 
penalties for various reactor, fuel cycle, and materials 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.
    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

[[Page 26638]]

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
[GRAPHIC] [TIFF OMITTED] TN13MY98.000


BILLING CODE 7590-01-C

    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 
8;
---------------------------------------------------------------------------

    \8\ 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.

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[[Page 26639]]

    (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-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

[[Page 26640]]

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 
predecisional 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 
environment for raising safety concerns in the workplace, and (2) 
provides a remedy for the particular discrimination at issue.
    In response to violations of 10 CFR 50.59, corrective action should 
normally be considered prompt and comprehensive only if the licensee:
    (i) Makes a prompt decision on operability; and either
    (ii) Makes a prompt evaluation under 10 CFR 50.59 if the licensee 
intends to maintain the facility or procedure in the as found 
condition; or
    (iii) Promptly initiates corrective action consistent with 
Criterion XVI of 10 CFR 50, Appendix B, if it intends to restore the 
facility or procedure to the FSAR description.
    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 $110,000 per 
day.

                     Table 1A--Base Civil Penalties                     
------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
a. Power reactors and gaseous diffusion plants...............   $110,000
b. Fuel fabricators, industrial processors,\1\ and                      
 independent spent fuel and monitored retrievable storage               
 installations...............................................     27,500
c. Test reactors, mills and uranium conversion facilities,              
 contractors, waste disposal licensees, industrial                      
 radiographers, and other large material                                
 users.......................................................     11,000
d. Research reactors, academic, medical, or other small                 
 material users\2\...........................................     5,500 
------------------------------------------------------------------------
\1\ Large firms engaged in manufacturing or distribution of byproduct,  
  source, or special nuclear material.                                  
\2\ This applies to nonprofit institutions not otherwise categorized in 
  this table, mobile nuclear services, nuclear pharmacies, and physician
  offices.                                                              


                     Table 1B--Base Civil Penalties                     
                              [In percent]                              
------------------------------------------------------------------------
                                                                  Base  
                                                                 civil  
                        Severity level                          penalty 
                                                                 amount 
------------------------------------------------------------------\1\---
I ...........................................................        100
II ..........................................................         80
III .........................................................        50 
------------------------------------------------------------------------
\1\ Percent of amount listed in Table 1A.                               

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

[[Page 26641]]

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 non-licensees, including contractors and 
subcontractors, holders of NRC approvals, e.g., certificates of 
compliance, early site permits, standard design certificates, or 
applicants for any of them, and to employees of any of the foregoing, 
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 contractors 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 
contractors' 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 contractor'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.

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 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 $110,000 
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. The Commission will be 
notified 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

[[Page 26642]]

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 violation results in a substantial increase 
in risk, including cases in which the duration of the violation has 
contributed to the substantial increase;
    (f) Situations when the licensee made a conscious decision to be in 
noncompliance in order to obtain an economic benefit;
    (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; or
    (h) Severity Level II or III violations associated with departures 
from the Final Safety Analysis Report identified after two years from 
October 18, 1996. Such a violation or problem would consider the number 
and nature of the violations, the severity of the violations, whether 
the violations were continuing, and who identified the violations (and 
if the licensee identified the violation, whether exercise of Section 
VII.B.3 enforcement discretion is warranted).
    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 $110,000 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 Sections VI.A and 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 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.6. Commission notification 
is required for exercising discretion of the type described in: (1) 
Section VII.B.2 the first time discretion is exercised during that 
plant shutdown, and (2) Section VII.B.6 where appropriate based on the 
uniqueness or significance of the issue. Examples when discretion 
should be considered for departing from the normal approach in Sections 
VI.A and 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 or her 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; \9\
---------------------------------------------------------------------------

    \9\ Discretion is not warranted when a licensee identifies a 
violation as a result of an event where the root cause of the event 
is obvious or the licensee had prior opportunity to identify the 
problem but failed to take action that would have prevented the 
event. Discretion may be warranted if the licensee demonstrated 
initiative in identifying the violation's root cause.
---------------------------------------------------------------------------

    (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 
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.)

[[Page 26643]]

    (b) It is based upon activities of the licensee prior to the events 
leading to the shutdown;
    (c) It would not be categorized at Severity Level I;
    (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 a 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 a Severity Level II, III, or IV violation that meets 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.
    Section VII.B.3 discretion would not normally be applied to 
departures from the FSAR if:
    (a) The NRC identifies the violation unless it was likely in the 
staff's view that the licensee would have identified the violation in 
light of the defined scope, thoroughness, and schedule of the 
licensee's initiative (provided the schedule provides for completion of 
the licensee's initiative within two years after October 18, 1996;
    (b) The licensee identifies the violation as a result of an event 
or surveillance or other required testing where required corrective 
action identifies the FSAR issue;
    (c) The licensee identifies the violation but had prior 
opportunities to do so (was aware of the departure from the FSAR) and 
failed to correct it earlier;
    (d) There is willfulness associated with the violation;
    (e) The licensee fails to make a report required by the 
identification of the departure from the FSAR; or
    (f) The licensee either fails to take comprehensive corrective 
action or fails to appropriately expand the corrective action program. 
The corrective action should be broad with a defined scope and 
schedule.
    4. Violations Identified Due to Previous 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 
enforcement action, 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 enforcement action;
    (b) It has the same or similar root cause as the violation for 
which 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.
    (e) It would not be categorized at Severity Level I;
    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 enforcement process addressed in Section VI.A or 
the normal civil penalty assessment process addressed in Section VI.B, 
the NRC may reduce or refrain from issuing a civil penalty or a Notice 
of Violation for a Severity Level II, III, or IV 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 technical and 
regulatory significance of the violation, the clarity of the 
requirement, the appropriateness of the requirement, 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. In 
addition, the NRC may refrain from issuing enforcement action

[[Page 26644]]

for violations resulting from matters not within a licensee's 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 
and contractors. Accordingly, this policy should not be construed to 
excuse personnel or contractor errors.

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 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 advise 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.

[[Page 26645]]

    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.
     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 contractors 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 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.

[[Page 26646]]

    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 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 contractors and subcontractors, holders of NRC 
approvals, e.g., certificates of compliance, early site permits, 
standard design certificates, quality assurance program approvals, or 
applicants for any of them, and to employees of any of the foregoing, 
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 knowing submission of incomplete or inaccurate 
information are provided in the rule on deliberate misconduct, e.g., 10 
CFR 30.10 and 50.5.
    Contractors who supply 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 licensees, 
suppliers may be required to have quality assurance programs that meet 
applicable requirements, e.g., 10 CFR Part 50, Appendix B, and 10 CFR 
Part 71, Subpart H. Contractors supplying certain products or services

[[Page 26647]]

to 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 contractors 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 contractors have programs that meet applicable requirements. 
Notices of Violation will be issued for contractors who violate 10 CFR 
Part 21. Civil penalties will be imposed against individual directors 
or responsible officers of a contractor organization who knowingly and 
consciously fail to provide the notice required by 10 CFR 21.21(b)(1). 
Notices of Nonconformance will be used for contractors who 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 Deputy Executive Director.

Appendix A: Safety and Compliance

    As commonly understood, safety means freedom from exposure to 
danger, or protection from harm. In a practical sense, an activity 
is deemed to be safe if the perceived risks are judged to be 
acceptable. The Atomic Energy Act of 1954, as amended, establishes 
``adequate protection'' as the standard of safety on which NRC 
regulation is based. In the context of NRC regulation, safety means 
avoiding undue risk or, stated another way, providing reasonable 
assurance of adequate protection for the public in connection with 
the use of source, byproduct and special nuclear materials.
    The definition of compliance is much simpler. Compliance simply 
means meeting applicable regulatory requirements. The relationship 
between compliance and safety is discussed below.
     Safety is the fundamental regulatory objective, and 
compliance with NRC requirements plays a fundamental role in giving 
the NRC confidence that safety is being maintained. NRC 
requirements, including technical specifications, other license 
conditions, orders, and regulations, have been designed to ensure 
adequate protection--which corresponds to ``no undue risk to public 
health and safety''--through acceptable design, construction, 
operation, maintenance, modification, and quality assurance 
measures. In the context of risk-informed regulation, compliance 
plays a very important role in ensuring that key assumptions used in 
underlying risk and engineering analyses remain valid.
     Adequate protection is presumptively assured by 
compliance with NRC requirements. Circumstances may arise, however, 
where new information reveals, for example, that an unforeseen 
hazard exists or that there is a substantially greater potential for 
a known hazard to occur. In such situations, the NRC has the 
statutory authority to require licensee action above and beyond 
existing regulations to maintain the level of protection necessary 
to avoid undue risk to public health and safety.
     The NRC has the authority to exercise discretion to 
permit continued operations--despite the existence of a 
noncompliance--where the noncompliance is not significant from a 
risk perspective and does not, in the particular circumstances, pose 
an undue risk to public health and safety. When non-compliances 
occur, the NRC must evaluate the degree of risk posed by that non-
compliance to determine if specific immediate action is required. 
Where needed to ensure adequate protection of public health and 
safety, the NRC may demand immediate licensee action, up to and 
including a shutdown or cessation of licensed activities. In 
addition, in determining the appropriate action to be taken, the NRC 
must evaluate the non-compliance both in terms of its direct safety 
and regulatory significance and by assessing whether it is part of a 
pattern of non-compliance (i.e., the degree of pervasiveness) that 
can lead to the determination that licensee control processes are no 
longer adequate to ensure protection of the public health and 
safety. Based on the NRC's evaluation, the appropriate action could 
include refraining from taking any action, taking specific 
enforcement action, issuing orders, or providing input to other 
regulatory actions or assessments, such as increased oversight 
(e.g., increased inspection).
     Since some requirements are more important to safety than 
others, the Commission should use a risk-informed approach when 
applying NRC resources to the oversight of licensed activities (this 
includes enforcement).

Appendix B: Supplements--Enforcement Examples

    This appendix provides examples of violations in each of four 
severity levels as guidance in determining the appropriate severity 
level for violations in each of eight activity areas (reactor 
operations, Part 50 facility construction, safeguards, health 
physics, transportation, fuel cycle and materials operations, 
miscellaneous matters, and emergency preparedness).

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;
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    \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;

[[Page 26648]]

    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; or
    4. Failures to meet 10 CFR 50.59 including several unreviewed 
safety questions, or conflicts with technical specifications, 
involving a broad spectrum of problems affecting multiple areas, 
some of which impact the operability of required equipment.
    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. [Reserved]
    6. A licensee failure to conduct adequate oversight of 
contractors 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;
    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;
    10. The failure to meet 10 CFR 50.59 where an unreviewed safety 
question is involved, or a conflict with a technical specification, 
such that a license amendment is required;
    11. The failure to perform the required evaluation under 10 CFR 
50.59 prior to implementation of the change in those situations in 
which no unreviewed safety question existed, but an extensive 
evaluation would be needed before a licensee would have had a 
reasonable expectation that an unreviewed safety question did not 
exist;
    12. Programmatic failures (i.e., multiple or recurring failures) 
to meet the requirements of 10 CFR 50.59 and/or 50.71(e) that show a 
significant lack of attention to detail, whether or not such 
failures involve an unreviewed safety question, resulting in a 
current safety or regulatory concern about the accuracy of the FSAR 
or a concern that 10 CFR 50.59 requirements are not being met. 
Application of this example requires weighing factors such as: a) 
the time period over which the violations occurred and existed, b) 
the number of failures, c) whether one or more systems, functions, 
or pieces of equipment were involved and the importance of such 
equipment, functions, or systems, and d) the potential significance 
of the failures;
    13. The failure to update the FSAR as required by 10 CFR 
50.71(e) where the unupdated FSAR was used in performing a 10 CFR 
50.59 evaluation and as a result, an inadequate decision was made 
demonstrating a significant regulatory concern; or
    14. The failure to make a report required by 10 CFR 50.72 or 
50.73 associated with (a) an unreviewed safety question, (b) a 
conflict with a technical specification, or (c) any other Severity 
Level III violation.
    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. [Reserved]
    3. A failure to meet regulatory requirements that have more than 
minor safety or environmental significance;
    4. A failure to make a required Licensee Event Report;
    5. Relatively isolated violations of 10 CFR 50.59 not involving 
severity level II or III violations that do not suggest a 
programmatic failure to meet 10 CFR 50.59. Relatively isolated 
violations or failures would include a number of recently discovered 
violations that occurred over a period of years and are not 
indicative of a programmatic safety concern with meeting 10 CFR 
50.59 or 50.71(e);
    6. A relatively isolated failure to document an evaluation where 
there is evidence that an adequate evaluation was performed prior to 
the change in the facility or procedures, or the conduct of an 
experiment or test;
    7. A failure to update the FSAR as required by 10 CFR 50.71(e) 
where an adequate evaluation under 10 CFR 50.59 had been performed 
and documented; or
    8. A past programmatic failure to meet 10 CFR 50.59 and/or 10 
CFR 50.71(e) requirements not involving Severity Level II or III 
violations that does not reflect a current safety or regulatory 
concern about the accuracy of the FSAR or a concern that 10 CFR 
50.59 requirements are not being met.

E. Minor Violations

    A failure to meet 10 CFR 50.59 requirements that involves a 
change to the FSAR description or procedure, or involves a test or 
experiment not described in the FSAR, where there was not a 
reasonable likelihood that the change to the facility or procedure 
or the conduct of the test or experiment would ever be an unreviewed 
safety question. In the case of a 10 CFR 50.71(e) violation, where a 
failure to update the FSAR would not have a material impact on 
safety or licensed activities. The focus of the minor violation is 
not on the actual change, test, or experiment, but on the potential 
safety role of the system, equipment, etc., that is being changed, 
tested, or experimented on.

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 would 
not have satisfied their intended safety related purpose.
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    \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,

[[Page 26649]]

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;
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    \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 nor likely to be 
exploitable;
    8. A failure to conduct an adequate search at the exit from a 
material access area;
    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
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    \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.
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    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:

[[Page 26650]]

    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;
    8. A failure to report an exceedance of the dose constraint 
established in 10 CFR 20.1101(d) or a failure to take corrective 
action for an exceedance, as required by 10 CFR 20.1101(d); or
    9. 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 in the area of NRC transportation 
requirements 20.
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    \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;
    4. A failure to follow the procedures of the quality management 
program, required by 10 CFR 35.32, that results in a death or 
serious injury (e.g., substantial organ impairment) to a patient;
    5. A safety limit, as defined in 10 CFR 76.4, the Technical 
Safety Requirements, or the application being exceeded; or
    6. Significant injury or loss of life due to a loss of control 
over licensed or certified activities, including chemical processes 
that are integral to the licensed or certified activity, whether 
radioactive material is released or not.
    B. Severity Level II--Violations involving for example:

[[Page 26651]]

    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;
    3. A substantial programmatic failure in the implementation of 
the quality management program required by 10 CFR 35.32 that results 
in a misadministration;
    4. A failure to establish, implement, or maintain all 
criticality controls (or control systems) for a single nuclear 
criticality scenario when a critical mass of fissile material was 
present or reasonably available, such that a nuclear criticality 
accident was possible; or
    5. The potential for a significant injury or loss of life due to 
a loss of control over licensed or certified activities, including 
chemical processes that are integral to the licensed or certified 
activity, whether radioactive material is released or not (e.g., 
movement of liquid UF6 cylinder by unapproved methods).
    C. Severity Level III--Violations involving for example:
    1. A failure to control access to licensed materials for 
radiation protection 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 
or uncertified person;
    5. A substantial potential for exposures, radiation levels, 
contamination levels, or releases, including releases of toxic 
material caused by a failure to comply with NRC regulations, from 
licensed or certified activities in excess of regulatory limits;
    6. Substantial failure to implement the quality management 
program as required by 10 CFR 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 at 
least two qualified individuals 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 as required by 10 CFR 
150.20;
    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 the safety guidelines; 
or a change in the quantity or type of radioactive material being 
processed or used that has radiological significance;
    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 accordance with regulation or license condition, or 
failure to meet required schedules without adequate justification;
    12. A significant failure to comply with the action statement 
for a Technical Safety Requirement Limiting Condition for Operation 
where the appropriate action was not taken within the required time, 
such as:
    (a) In an autoclave, where a containment isolation valve is 
inoperable for a period in excess of that allowed by the action 
statement; or
    (b) Cranes or other lifting devices engaged in the movement of 
cylinders having inoperable safety components, such as redundant 
braking systems, or other safety devices for a period in excess of 
that allowed by the action statement;
    13. 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 
utilities available, materials or components not according to 
specifications); or
    (b) Being degraded to the extent that a detailed evaluation 
would be required to determine its operability;
    14. Changes in parameters that cause unanticipated reductions in 
margins of safety;
    15. A significant failure to meet the requirements of 10 CFR 
76.68, including a failure such that a required certificate 
amendment was not sought;
    16. A failure of the certificate holder to conduct adequate 
oversight of contractors resulting in the use of products or 
services that are of defective or indeterminate quality and that 
have safety significance;
    17. Equipment failures caused by inadequate or improper 
maintenance that substantially complicates recovery from a plant 
transient;
    18. A failure to establish, maintain, or implement all but one 
criticality control (or control systems) for a single nuclear 
criticality scenario when a critical mass of fissile material was 
present or reasonably available, such that a nuclear criticality 
accident was possible; or
    19. A failure, during radiographic operations, to stop work 
after a pocket dosimeter is found to have gone off-scale, or after 
an electronic dosimeter reads greater than 200 mrem, and before a 
determination is made of the individual's actual radiation exposure.
    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;
    3. Failure to follow the quality management (QM) 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 10 CFR 35.32;
    4. A failure to keep the records required by 10 CFR 35.32 or 
35.33;
    5. A less significant failure to comply with the Action 
Statement for a Technical Safety Requirement Limiting Condition for 
Operation when the appropriate action was not taken within the 
required time;
    6. A failure to meet the requirements of 10 CFR 76.68 that does 
not result in a Severity Level I, II, or III violation;
    7. A failure to make a required written event report, as 
required by 10 CFR 76.120(d)(2); or
    8. A failure to establish, implement, or maintain a criticality 
control (or control system) for a single nuclear criticality 
scenario when the amount of fissile material available was not, but 
could have been sufficient to result in a nuclear criticality.

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

[[Page 26652]]

    6. A failure to substantially implement the required fitness-
for-duty program. 22
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    \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 or mid-level management 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 or other low-level 
management 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 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 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 more than 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 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 6th day of May, 1998.

    For the Nuclear Regulatory Commission.
John C. Hoyle,
Secretary of the Commission.
[FR Doc. 98-12534 Filed 5-12-98; 8:45 am]
BILLING CODE 7590-01-P