[Federal Register Volume 64, Number 78 (Friday, April 23, 1999)]
[Rules and Regulations]
[Pages 19868-19878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10190]


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NUCLEAR REGULATORY COMMISSION

10 CFR Part 55

RIN 3150-AF62


Initial Licensed Operator Examination Requirements

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations to allow nuclear power facility licensees to prepare, 
proctor, and grade the required written examinations and to prepare the 
required operating tests that the NRC uses to evaluate the competence 
of individuals applying for operator licenses at those plants. The 
amendment requires facility licensees that elect to prepare the 
examinations to prepare the examinations in accordance with NRC 
operator licensing examination standards for power reactors; establish, 
implement, and maintain procedures to control examination security and 
integrity; submit, upon approval by an authorized representative of the 
facility licensee, each examination and test to the NRC for review and 
approval; and proctor and grade the written examinations upon NRC 
approval. In making this final rule change, the NRC will continue to 
administer (i.e., manage and oversee) the initial operator licensing 
examination process by: Developing the generic fundamentals 
examinations (which are also proctored by facility licensees); 
reviewing and approving the facility-developed, site-specific written 
examinations and operating tests; and independently conducting and 
grading both the dynamic simulator and walk-through portions of the 
operating test, which is considered the most performance-based aspect 
of the licensing process and permits the NRC to evaluate the operator 
and senior operator applicants' competence under normal and abnormal 
plant conditions. The amendment preserves the NRC's authority to 
prepare the examinations and tests in lieu of licensees and to exercise 
its discretion and reject a power reactor facility licensee's 
determination to prepare, proctor, and grade the written examinations 
and prepare the operating tests. The Commission is concerned with 
examination integrity; therefore, the amendment will also revise the 
regulations to ensure that applicants, licensees, and facility 
licensees understand the scope of the regulation.

EFFECTIVE DATE: This final rule is effective on October 20, 1999.

FOR FURTHER INFORMATION CONTACT: Siegfried Guenther, Office of Nuclear 
Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001, telephone: 301-415-1056; e-mail:[email protected].

SUPPLEMENTARY INFORMATION:

Background

    Section 107 of the Atomic Energy Act (AEA) of 1954, as amended, 
requires the NRC to determine the qualifications of individuals 
applying for an operator's license, to prescribe uniform conditions for 
licensing these individuals, and to issue licenses as appropriate. 
Pursuant to the AEA, 10 CFR Part 55 requires an applicant for an 
operator license to pass an examination that satisfies the basic 
content requirements specified in the regulation. The licensing 
examination consists of the following parts: (1) A written generic 
fundamentals examination (covering reactor theory, thermodynamics, and 
components) that license applicants have to pass as a prerequisite for 
taking the site-specific examination; (2) a site-specific written 
examination covering plant systems, emergency and abnormal plant 
procedures, and plant-wide generic knowledge and abilities; and (3) a 
site-specific operating test consisting of three categories, including 
a crew-based, dynamic simulator performance demonstration, an 
individual, task-based walk-through covering control room and in-plant 
systems, and various plant administrative requirements. Although 
neither the AEA nor Part 55 specifies who must prepare, proctor, or 
grade these examinations, the NRC has traditionally performed those 
tasks itself or through its contract examiners. The NRC and its 
contract examiners have used the guidance in NUREG-1021, ``Operator 
Licensing Examination Standards for Power Reactors,'' once titled 
``Operator Licensing Examiner Standards,'' to prepare the initial 
operator licensing examinations. This document has been revised as 
experience has been acquired in preparing the examinations. The current 
version is designated Revision 8.1
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    \1\ Copies are available for inspection or copying for a fee 
from the NRC Public Document Room (PDR) at 2120 L Street NW, 
Washington, DC 20555-0001; the PDR's mailing address is Mail Stop 
LL-6; telephone is 202-634-3273; fax is 202-634-3343. Revision 8 of 
NUREG-1021 is also available for downloading from the internet at 
http://www.nrc.gov.
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    In accordance with 10 CFR 170.12(i), the NRC's staff and 
contractual costs are recovered from facility licensees that receive 
examination services. In Fiscal

[[Page 19869]]

Year (FY) 1995, the NRC spent approximately $3 million on contractor 
support for the preparation and administration of the initial operator 
licensing examinations and for support of requalification program 
inspections. On March 24, 1995, in SECY-95-075, ``Proposed Changes to 
the NRC Operator Licensing Program,'' the staff advised the Commission 
of its intent to eliminate the use of contractors by allowing facility 
licensees to prepare the examinations. The NRC staff's proposal was 
motivated by the general improvement in the performance level of power 
reactor facility licensees' training programs, the NRC's continuing 
efforts to streamline the functions of the Federal government, and the 
need to accommodate anticipated resource reductions.
    On April 18, 1995, the Commission approved the NRC staff's proposal 
to initiate a transition process to revise the operator licensing 
program and directed the NRC staff to consider carefully the experience 
from pilot examinations before fully implementing the changes. On 
August 15, 1995, the NRC issued Generic Letter (GL) 95-06, ``Changes in 
the Operator Licensing Program,'' \1\ outlining the revised examination 
development process and soliciting volunteers to participate in pilot 
examinations to evaluate and refine the methodology.
    Between October 1, 1995, and April 5, 1996, the NRC reviewed and 
approved 22 operator licensing examinations, including both the written 
examinations and the operating tests, prepared by facility licensees as 
part of a pilot program. These examinations were prepared using the 
guidance in Revision 7 (Supplement 1) of NUREG-1021\1\ and the 
additional guidance in GL 95-06.
    The results of the pilot examinations were discussed in SECY-96-
123, ``Proposed Changes to the NRC Operator Licensing Program,'' dated 
June 10, 1996. Based on the results of the pilot program, the NRC staff 
recommended that the Commission approve the implementation of the new 
examination process on a voluntary basis until rulemaking could be 
completed to require all power reactor facility licensees to prepare 
the entire initial operator licensing examination and to proctor and 
grade the written portion of the examination. On July 23, 1996, the 
Commission authorized the staff to continue the pilot examination 
process on a voluntary basis and directed the staff to develop a 
rulemaking plan to justify the changes that would be necessary to 10 
CFR Part 55. The Commission also directed the staff to address a number 
of additional items (e.g., pros, cons, and vulnerabilities) regarding 
the revised examination process to facilitate a Commission decision on 
whether to implement the revised process on an industrywide basis.
    With Commission approval, the NRC staff resumed conducting pilot-
style examinations on August 19, 1996, and by the end of June 1998 had 
reviewed, approved, and administered 80 additional examinations that 
were developed by facility licensees. This raised the total number of 
examinations completed using the pilot process to 102.
    On September 25, 1996, the NRC staff forwarded the rulemaking plan 
and a response to the additional items to the Commission in SECY-96-
206, ``Rulemaking Plan for Amendments to 10 CFR part 55 to Change 
Licensed Operator Examination Requirements.'' SECY-96-206 identified a 
number of areas (i.e., quality and consistency, independence and public 
perception, examination security, NRC resources, program stability, and 
examiner proficiency) in which the NRC could be more vulnerable under 
the revised examination process and described the measures that the NRC 
has taken to manage the vulnerabilities. On December 17, 1996, the 
Commission directed the staff to proceed with the proposed rulemaking. 
The NRC staff forwarded the proposed rule (SECY-97-079, ``Proposed 
Rule--Initial Licensed Operator Examination Requirements'') to the 
Commission on April 8, 1997, and on June 26, 1997, the Commission 
approved publication of the proposed rule for a 75-day comment period. 
The proposed rule was published in the Federal Register (62 FR 42426) 
on August 7, 1997. After the public comment period expired on October 
21, 1997, 11 comment letters were received. Two additional comment 
letters arrived after the expiration date but were also considered in 
the development of the final rule.
    As written, the proposed rule would have required all power reactor 
facility licensees to prepare their operator licensing examinations and 
to proctor and grade the written portion of those examinations. 
Although the proposed rule would have imposed new requirements on 
facility licensees, the NRC took the position that the backfit rule, 10 
CFR 50.109, did not apply because the shift in responsibility for 
preparing the examinations would not: (1) Constitute a ``modification 
of the procedures required to operate a facility'' within the scope of 
the backfit rule; (2) affect the basic procedures for qualifying 
licensed operators; or (3) require facility licensees to alter their 
organizational structures. However, based upon further review after 
issuing the proposed rule, the NRC has concluded that there is 
insufficient basis to support the original position. Therefore, the NRC 
has decided to revise the final rule so power reactor facility 
licensees may elect to prepare their written examinations and operating 
tests (and proctor and grade the written examinations) in accordance 
with NUREG-1021, or to have the NRC prepare the examinations, thereby 
making a backfit analysis unnecessary.

Discussion

    The pilot examinations demonstrated that the revised process, under 
which facility licensees prepare the written examinations and operating 
tests, is generally effective and efficient. From the time the pilot 
program began in October 1995 through the end of June 1998, the NRC 
staff reviewed, approved, and administered a total of 102 examinations 
that were voluntarily developed by facility licensees under the pilot 
examination and transition program.
    Facility licensees prepared the written examinations and the 
operating tests, proctored the written examinations, and graded the 
written examinations using the guidance provided by the NRC in GL 95-06 
during the early stages of the pilot program, and subsequently in 
interim Revision 8 of NUREG-1021, ``Operator Licensing Examination 
Standards for Power Reactors.'' NRC examiners thoroughly reviewed the 
examinations and tests to determine if they were consistent with NRC 
standards, directed facility licensees to make whatever changes were 
necessary to achieve NRC standards if the submitted examinations and 
tests were deficient, and approved the examinations and tests before 
they were administered. NRC examiners independently administered all of 
the operating tests, reviewed the written examination grading, and made 
the final licensing recommendations for approval by NRC management.
    Comments from the NRC chief examiners who evaluated the pilot 
examinations indicate that the quality and level of difficulty of the 
licensee-prepared examinations (when modified as directed by the NRC) 
were generally comparable to the examinations prepared by the NRC 
(i.e., by the staff or NRC contractors). The passing rate on the 102 
pilot-style examinations administered through the end of June 1998 was 
only slightly lower than the passing rate on the power reactor 
licensing examinations administered

[[Page 19870]]

during FY 1995, the last year in which all examinations were prepared 
by the NRC. However, considering the historical fluctuation in the 
average examination passing rates and the other factors (e.g., training 
program quality and screening of applicants by facility licensees) that 
could be responsible for some or all of the observed difference, the 
Commission has concluded that the observed change in the passing rates 
is not significant. The average grades on the facility-prepared, NRC-
approved written examinations were also comparable if slightly lower 
than the grades on examinations prepared by the NRC during FY 1995. 
These data support the conclusion that the facility-prepared 
examinations are discriminating at a conservative and acceptable level 
and that the revised examination process is effective. Therefore, the 
fact that some facility licensees will be preparing the examinations 
with NRC review and approval, should have no negative effect on the 
safe operation of the plants.
    Although the NRC-approved examinations were comparable to NRC-
prepared examinations, essentially all of the examinations prepared by 
facility licensees required some changes subsequent to NRC review, and 
many of the examinations required significant rework. The NRC had 
originally believed that, with training and experience, the industry 
would quickly gain proficiency in preparing the examinations, but the 
overall quality of the examinations submitted to the NRC during the 
pilot program did not improve as expected over time. Although 
approximately half of the 17 facility licensees that had prepared more 
than one examination by the end of FY 1997 did maintain or improve the 
quality of their second or third examination submittals, the quality of 
the other facility licensees' second or third examinations was lower. 
Consequently, the NRC has asked the industry to address the issue of 
examination quality and determine the need for additional training on 
examination development. The NRC will continue to: (1) Direct facility 
licensees that prepare their examinations to revise the examinations as 
necessary to achieve an acceptable level of quality and discrimination; 
(2) withhold approval of those examinations that do not meet NRC 
standards; (3) oversee the regional implementation of the operator 
licensing process to ensure consistency; (4) address significant 
deficiencies in the submitted examinations as licensee performance 
issues in the examination reports, as appropriate; (5) conduct or 
participate in workshops, as necessary, to ensure that facility 
licensees understand the NRC's examination criteria; and (6) prepare 
the licensing examinations for those facility licensees that elect not 
to prepare their own examinations.
    With regard to the efficiency of the revised examination process, 
the experience to date supports the conclusion that the average 
industry cost will not differ significantly from the cost of NRC-
prepared examinations. Comments from the industry reflect that the cost 
for some facility licensees to prepare the examination was higher than 
it would have been for an NRC-prepared examination; however, other 
licensees prepared good quality examinations at lower cost than the 
NRC. The industry generally attributed the higher cost to the revised 
examination and administrative criteria under the pilot examination 
process. Although the NRC acknowledges that the revised criteria 
contribute somewhat to the elevated cost, many of the variables that 
affect the quality and, consequently, the cost of the examination will 
be under the facility licensees' control and can present an opportunity 
for cost savings. For example, facility licensees that elect to prepare 
the examinations will be able to manage the size and quality of their 
examination banks and the training and experience of the personnel they 
select to write their licensing examinations. The revised examination 
process allows facility licensees to control the development of the 
examinations and holds them responsible for their quality. If a 
facility licensee submits an acceptable quality examination, it is 
likely to save resources despite the additional administrative 
criteria; however, if the facility licensee submits an examination that 
requires many changes, it will likely cost more than if the NRC had 
prepared the examination.
    Comments from the NRC chief examiners who worked on the pilot 
examinations indicate that the average amount of time spent reviewing 
and revising the facility-prepared examinations was generally 
consistent with the estimates developed before starting the pilot 
program. Although a number (approximately 20 percent in FY 1997) of the 
examinations required significantly more NRC effort than originally 
anticipated to bring them up to the NRC's standards, the resource 
burden was generally offset by other examinations that required less 
effort to review and revise. The increased efficiency of the revised 
examination process has enabled the NRC to eliminate the use of 
contractors in the operator licensing program and conduct the initial 
operator licensing and requalification inspection programs with the 
existing NRC staff. Before initiating the pilot examination and 
transition process at the beginning of FY 1996, the NRC spent 
approximately $3 million per year on contractor assistance for initial 
examinations and requalification inspections. In FY 1997, when facility 
licensees prepared approximately 75 percent of the examinations, the 
NRC's spending on contractor assistance for the licensing examinations 
and requalification inspections decreased to approximately $0.5 
million. The FY 1998 and FY 1999 budgets reflect the complete 
elimination of contractor support for the operator licensing program 
(with the exception of the generic fundamentals examination). Future 
resource requirements for the operator licensing program will, in large 
part, be driven by changes in the level of facility participation in 
the voluntary examination development process.
    In order to maintain the integrity of the operator licensing 
written examinations required by 10 CFR 55.41 and 55.43 and the 
operating tests required by 10 CFR 55.45, the Commission has amended 
the final rule by adding a requirement for those power reactor facility 
licensees that elect to prepare, proctor, and grade the written 
examinations and prepare the operating tests, to establish, implement, 
and maintain procedures that control the security and integrity of 
those examinations and tests. The Commission's regulations in 10 CFR 
55.49 already prohibit applicants, licensees (operators), and facility 
licensees from engaging in any activity that compromises the integrity 
of any examination or test required by 10 CFR 55. However, based on the 
number of examination security incidents that have occurred since the 
pilot examination program began, the Commission has concluded that 
applicants, licensees, and facility licensees may not be aware that the 
requirements of 10 CFR 55.49 cover more than just those activities 
directly involving the physical administration of an examination or 
test. In that regard, the Commission considers the integrity of an 
examination or test to be compromised if any activity occurs that could 
affect the equitable and consistent administration of the examination 
or test, regardless of whether the activity takes place before, during, 
or after the administration of the examination or test. Therefore, in 
addition to requiring certain facility licensees to establish,

[[Page 19871]]

implement, and maintain procedures that control the security and 
integrity of the examinations and tests, the Commission is also 
amending 10 CFR 55.49 to clarify the scope of that regulation.
    Revision 8 of NUREG-1021 identifies a number of examination 
security and integrity guidelines (e.g., physical security precautions, 
including the use of simulators and the mailing of examination 
materials) that the affected facility licensees (i.e., those that elect 
to prepare their own written examinations and operating tests) should 
consider when establishing their procedures. Although the security and 
integrity guidelines in NUREG-1021 are not regulatory requirements, 
once a facility licensee has established its required procedures, the 
Commission intends to monitor this area to ensure that the procedures 
are implemented and maintained.
    Consistent with the examination security and integrity guidelines 
in NUREG-1021, facility employees with specific knowledge of any NRC 
examination before it is given should not communicate the examination 
contents to unauthorized individuals and should not participate in any 
further instruction of the students scheduled to take the examination. 
Before they are given access to the examination, facility employees are 
expected to sign a statement acknowledging their understanding of the 
restrictions. When the examinations are complete, the same employees 
are expected to sign a post-examination statement certifying that they 
have not knowingly compromised the examination.
    NRC examiners are expected to be attentive to the facility 
licensee's examination security measures, to review the security 
expectations with the facility licensee at the time the examination 
arrangements are confirmed, and to report any security concerns to NRC 
management. If the NRC determines during its preparation that an 
examination may have been compromised, it will not administer the 
examination until the scope of the potential compromise is determined 
and measures can be taken to address the integrity and validity of the 
examination. Pursuant to 10 CFR 55.51, the NRC must make a 
determination before issuing a license that the test or examination is 
valid, meeting the requirements of the AEA and the Commission's 
regulations. If the compromise is discovered after the examination has 
been administered, the NRC will not complete the licensing action for 
the affected applicants until the NRC staff can make a determination 
regarding the validity of the examination. If the compromise is not 
discovered until after the licensing action is complete, the NRC will 
reevaluate the licensing decision. If the NRC determines that the 
original licensing decision was based on an invalid examination, it 
will take appropriate action pursuant to 10 CFR 55.61(b)(2).
    As a separate action, the Commission is modifying its ``General 
Statement of Policy and Procedures for NRC Enforcement Actions'' 
(Enforcement Policy) to provide examples of violations that may be used 
as guidance in determining the appropriate severity level for 
violations involving the compromise of an examination or test. The NRC 
staff will evaluate all potential compromises of an examination or test 
required by 10 CFR 55 to determine whether a violation of 10 CFR 55.49 
has occurred. A compromise that is not detected before a license is 
issued would be considered a significant regulatory concern and 
categorized at least at Severity Level III. However, depending on the 
circumstances as explained in the Enforcement Policy, the severity 
level may be increased or decreased. The NRC intends to utilize its 
enforcement authority including, as warranted, civil penalties and 
orders against individuals and facility licensees who: (1) Compromise 
the integrity of an examination in violation of 10 CFR 55.49; (2) 
commit deliberate misconduct in violation of 10 CFR 50.5; or (3) 
provide incomplete or inaccurate information to the NRC in violation of 
10 CFR 50.9. In addition, cases involving willful violations may be 
referred to the Department of Justice for criminal prosecution.
    The Commission has reviewed the vulnerabilities and costs 
associated with the revised examination process and considered the 
measures that the NRC staff has taken to mitigate the vulnerabilities. 
With regard to examination quality and level of difficulty, the 
Commission acknowledges that the effectiveness of the revised 
examination process is contingent on the NRC staff's review of the 
facility-proposed examinations to ensure that NRC standards are 
achieved. The Commission has concluded, based on the results of the 
pilot examination program, that the controls implemented by the NRC 
staff will provide reasonable assurance that the examinations that are 
administered to the license applicants will provide a valid and 
consistent basis upon which to make the licensing decisions regardless 
of whether the examinations were prepared by the facility licensee or 
the NRC. The Commission also realizes that the frequency of examination 
security incidents and the risk of undetected compromises may increase 
for those examinations that are prepared by facility licensees. 
However, the Commission is confident that the measures discussed above 
will sufficiently control the vulnerability in this area.
    The Commission is aware that the original expectation that facility 
licensees would eventually realize cost savings under the revised 
process as they gain proficiency in preparing the examinations has not 
yet been realized. However, the Commission has concluded that neither 
the increased vulnerabilities nor the absence of clear industry cost 
benefit provides sufficient basis for discontinuing the revised 
examination process. The Commission also finds that the revised 
examination process is more consistent with the NRC's other oversight 
programs because it requires NRC examiners to review materials prepared 
by facility licensees. The revised process enables NRC examiners to 
focus more on the psychometric quality of examinations (e.g., the 
cognitive level at which the questions are written and the plausibility 
of the distractors or wrong answer choices) prepared by the facility 
licensees than on the technical accuracy of the examinations, which was 
their primary focus when the examinations were prepared by NRC 
contractors. This shift in the NRC examiners' focus, coupled with the 
facility licensees' technical expertise, has the potential to improve 
the overall quality of the facility-prepared licensing examinations.
    In the proposed rule, the NRC took the position that the backfit 
rule (10 CFR 50.109) did not apply to this rulemaking. However, in its 
review of the final rule, the Committee To Review Generic Requirements 
(CRGR) opined that it was inclined to view the rule as a backfit and 
recommended that the provisions of the proposed rule be implemented on 
a voluntary basis, which would not constitute a backfit. Although the 
NRC had considered and dismissed that alternative during the proposed 
rulemaking because of concerns regarding resource planning, it has 
since concluded that the benefits of the revised examination process 
(e.g., improved regulatory efficiency and greater licensee control over 
the examination costs) remain substantial even if every facility 
licensee is not required to prepare its own examinations. Rather than 
terminate the pilot program and resume the NRC-

[[Page 19872]]

prepared examination process on an industrywide basis, the NRC has 
decided to amend the final rule to give facility licensees the option 
to prepare their own examinations or to have them prepared by the NRC.

Summary of Public Comments

    The 75-day public comment period began when the notice of proposed 
rulemaking was published in the Federal Register (62 FR 42426) on 
August 7, 1997, and closed on October 21, 1997. The notice (FRN) 
requested public comment on the proposed rule, on the implementation 
guidance in interim Revision 8 of NUREG-1021, and on the following two 
questions:
    1. Are there portions of the operator exams that are common to all 
licensees, and would, therefore, be more efficiently developed by the 
NRC?
    2. Is the conclusion in the regulatory analysis correct that it 
would be less costly for each licensee to prepare its own initial 
operator examinations to be reviewed, revised, and administered by the 
NRC, than to have one NRC contractor prepare these exams for all 
licensed operators with the costs to be reimbursed by licensee fees?
    The NRC received 13 comment letters on the proposed rule; two of 
the letters arrived after the comment period closed, but they were 
considered nonetheless. The respondents included three NRC examiners, 
one contract examiner, five nuclear utilities and one utility employee, 
one nonpower reactor facility licensee, the State of Illinois, and the 
Nuclear Energy Institute (NEI), which submitted its comments on behalf 
of the nuclear power industry. Copies of the public comments are 
available in the NRC Public Document Room, 2120 L Street, NW (Lower 
Level), Washington, DC, and on the internet at ``http://
ruleforum.llnl.gov/cgi-bin/rulemake?source=OE__PRULE''.
    Seven of the respondents (three NRC examiners, one contract 
examiner, one utility employee, one nonpower facility licensee, and the 
State of Illinois) recommended that the rule change be disapproved. 
Five of the industry respondents (NEI and four utilities) supported the 
rule change; however, one utility endorsed NEI's comments but stated 
that it did not agree with the proposed rule in its present form. NEI 
and two of the utilities stated that they would rather continue with a 
voluntary program because it would allow greater flexibility for those 
facility licensees with small training staffs. However, they would 
support mandatory participation with the rule change rather than return 
to the previous process under which NRC contractors wrote most of the 
examinations.
    Those comments related to the two specific questions raised in the 
proposed rule and those that have a direct bearing on the rule are 
discussed below. The comments are categorized as they relate to reactor 
safety and the vulnerabilities discussed in SECY-96-206 (i.e., quality 
and consistency, independence and public perception, security, NRC 
resources, and examiner proficiency). The NRC received no comments 
related to program stability.
    One NRC examiner, NEI, four of the utilities, and the utility 
employee also provided specific comments and recommendations regarding 
the implementation guidance in interim Revision 8 of NUREG-1021. Those 
comments are addressed in Attachment 1 of the Commission (SECY) paper 
associated with this rulemaking. A copy of the SECY is available in the 
NRC Public Document Room, on the internet at http://www.nrc.gov, or 
from Siegfried Guenther, Office of Nuclear Reactor Regulation, U.S. 
Nuclear Regulatory Commission, at 301-415-1056 or e-mail at 
[email protected].
    Comment: With regard to the first specific question included in the 
proposed rulemaking, 2 of the 13 respondents (NEI and one utility) 
stated that all of the common material is already included in the 
generic fundamentals examination (GFE) and that the remaining elements 
are best covered as part of the site-specific examination.
    Response: It appears that the current allocation of topics between 
the GFE and site-specific written examinations is generally perceived 
to be an efficient method of covering the topics required by 10 CFR 
55.41 and 55.43. Therefore, the Commission finds no basis for changing 
the process to have the NRC separately develop portions of the initial 
examination that would be common to all facilities.
    Comment: Seven of the 13 respondents (NEI, two utilities, a utility 
employee, and three examiners) directly or indirectly addressed the 
second specific question in their letters. NEI and one utility stated 
that the revised examination criteria in interim Revision 8 of NUREG-
1021 have increased the level of effort and will result in higher 
licensing fees regardless of who prepares the examinations. However, 
NEI and another utility agreed that comparing the cost of facility-
prepared examinations to those prepared by the NRC is difficult, but 
they concluded that it should be less costly for facility licensees to 
prepare the examinations than to have the NRC prepare them under the 
same criteria.
    NEI also stated that the relative cost of the two examination 
processes should not be the only factor in deciding whether to proceed 
with the rulemaking that would have required all power reactor facility 
licensees to prepare their licensing examinations. NEI indicated that 
preparing higher cognitive level questions requires detailed plant 
knowledge, better provided by facility licensees, and that the revised 
process (which has eliminated the use of NRC contractors to administer 
the operating tests) will allow NRC staff to evaluate each applicant 
without relying on third-party observers.
    Two NRC examiners, one contract examiner, and a utility employee 
asserted that the facility licensees' cost has increased under the 
revised examination process. They cited various reasons for the 
increased cost, including training personnel to write the examinations 
and then restricting them from training the applicants, and upgrading 
equipment to maintain examination security. The NRC examiners based 
their comments on feedback from facility training personnel; one 
examiner indicated that it took facility licensees an average of 700 
hours to prepare each examination. The utility employee stated that the 
rule change will simply transfer the cost of contractors from the NRC 
to the utilities.
    Response: The NRC acknowledges that the revised administrative 
criteria in particular (e.g., the restrictions on which facility 
training personnel would be allowed to write the pilot examinations and 
the need to document the source of the test items) have probably caused 
the cost of preparing the examinations to be somewhat higher than it 
would have been if facility licensees had been allowed to prepare the 
examinations using the same criteria that applied to the NRC and its 
contractors before starting the pilot program. However, when the NRC 
first developed the revised examination process, with its additional 
administrative criteria, the NRC still believed that the cost for 
facility licensees to prepare the examinations would be offset by the 
reduction in the licensing fees and that a cost savings could be 
realized as facility licensees gained experience with the process. Many 
of the facility licensees that participated in the pilot program 
demonstrated that it is possible to prepare an acceptable quality 
examination at the same or lower cost than the NRC or its contractors 
could prepare a comparable examination. The

[[Page 19873]]

fact that a number of facility licensees did not prepare acceptable 
examinations may be as much an indication of the licensees' 
inefficiency and inexperience as it is a symptom of deficiencies in the 
examination criteria. Those facility licensees that did not initially 
submit acceptable examinations, eventually paid more in fees because of 
the additional effort required for the NRC to review, and the 
licensees' staffs to rewrite, the examinations. Finally, it is possible 
that the magnitude of the increase in effort and cost may be perceived 
to be higher than it actually is because the industry had originally 
expected to save money if the NRC would have allowed facility licensees 
to prepare the examinations using the version of NUREG-1021 that was in 
effect before beginning the pilot program.
    With regard to the additional security costs cited by the 
examiners, the Commission has stressed the importance of maintaining 
examination security, but the NRC has not required facility licensees 
to invest in additional physical security systems. However, the 
frequency of security incidents since beginning the pilot examination 
program has prompted the NRC to: (1) clarify the intent of 10 CFR 55.49 
in the final rule; (2) amend the final examination rule to require 
facility licensees that elect to prepare their examinations to 
establish, implement, and maintain procedures to control examination 
security and integrity; and (3) include additional security guidance in 
the final version of Revision 8 of NUREG-1021. These actions will help 
ensure, among other things, that facility licensees understand their 
responsibility for maintaining control over the examination process.
    The pilot examinations demonstrated that some of the people 
assigned by facility licensees to develop the examinations did not have 
sufficient expertise required to prepare good quality examination 
materials consistent with NRC standards. As noted earlier, the NRC has 
asked the industry to address the issue of examination quality and the 
need for additional training on examination development. The NRC 
acknowledges that the restrictions on the use of instructors to prepare 
the licensing examinations may be partially responsible for limiting 
the availability of qualified examination preparers. Moreover, the NRC 
has concluded that the restrictions have placed an unnecessary burden 
on facility licensees with minimal benefit and, therefore, has revised 
the personnel restrictions in the final version of Revision 8 of NUREG-
1021 to allow facility instructors to prepare the licensing 
examinations (including the written and operating test outlines, the 
written examination questions, and the operating test details) without 
regard to the amount of time they spent training the license 
applicants. However, the instructors will still be precluded from 
instructing the applicants once they begin working on the licensing 
examination. This change is consistent with NRC policy regarding 
instructor participation in requalification examinations and should 
provide licensees that elect to prepare their examinations with 
increased flexibility in managing their resources and possibly reduce 
their costs.
    The NRC has revised the regulatory analysis in response to the 
public comments and lessons learned from the pilot program. The NRC has 
also reevaluated the additional administrative criteria in interim 
Revision 8 of NUREG-1021 and considers them reasonable and essential to 
mitigate the vulnerabilities (e.g., quality, security, and conflict of 
interest) of the new examination process and to facilitate the NRC 
staff's review of the proposed examinations. These criteria are 
retained in the final version of Revision 8 of NUREG-1021.
    The issue of cost has lost much of its importance because the NRC 
has decided to continue the revised examination process on a voluntary 
basis rather than require each power reactor facility licensee to 
prepare the examinations. It will be up to each facility licensee to 
compare the cost of preparing its own examinations in accordance with 
the criteria in the effective revision of NUREG-1021 with the cost of 
having the NRC staff prepare the examinations and then make a decision 
based on its available resources (and other considerations).
    Comment: Two NRC examiners with pilot-examination experience 
asserted that the quality of the simulator and walk-through tests has 
decreased significantly and that, in most cases, the quality and 
difficulty of the submitted examinations have been below NRC standards. 
All four examiners who submitted comments cited various reasons why the 
quality and difficulty of the facility-prepared examinations might be 
lower than examinations prepared by the NRC or its contract examiners, 
including: (1) the facility licensees' tendency to narrow the scope of 
the operating test to those procedures that the facility believes are 
important (and emphasized in the training program); and (2) the belief 
that most facility training personnel do not have the expertise to 
develop valid test items. Two NRC examiners asserted that the quality 
of the examinations has not improved during the pilot program and is 
not likely to improve because there is nothing to prevent licensees 
from using different people to develop successive examinations. A 
utility employee asserted that the utilities' limited contact with the 
process by preparing an examination once every 18 to 24 months will not 
foster consistency or develop skilled examination writers.
    Two NRC examiners asserted that the elimination of NRC contract 
examiners who participated in examinations across the four NRC regions 
will be detrimental to examination consistency. One NRC examiner 
asserted that the guidance in interim Revision 8 of NUREG-1021 is not 
sufficiently prescriptive to ensure nationwide consistency in the level 
of knowledge tested and the level of difficulty of the examinations and 
that several specific changes should be included in NUREG-1021 to 
address his concerns.
    The State of Illinois asserted that the quality and consistency of 
the written examination questions can be maintained because the NRC can 
change and approve the questions before they are used. However, the 
State also recommended that the NRC should compile the examination 
questions and proctor the examinations (refer to the conflict-of-
interest discussion below).
    According to NEI, the recent facility-prepared examinations were of 
higher quality than the examinations prepared by the NRC before the 
pilot program started. Many of the NRC-prepared examinations had to be 
revised in response to the facility licensees' technical reviews.
    Response: Essentially all of the facility-prepared examinations 
required some changes and many required significant changes to make 
them conform to the NRC's standards for quality and level of 
difficulty. According to the questionnaires completed by the NRC chief 
examiners responsible for the pilot examinations, the average facility-
prepared written examination required approximately 10 to 20 changes, 
which is consistent with the number of changes often required on 
examinations prepared by NRC contract examiners. Most NRC chief 
examiners judged the final examinations (with the NRC's changes 
incorporated) to be comparable to recent NRC-prepared examinations in 
terms of quality and level of difficulty. Moreover, the fact that the 
passing rate on the facility-prepared examinations is generally 
consistent with the historical passing rate on examinations prepared by 
the NRC suggests that the NRC-approved examinations have discriminated 
at an

[[Page 19874]]

acceptable level and that they have provided an adequate basis for 
licensing the applicants at those facilities.
    Although the NRC expected that the proposed examination quality 
would improve as facility licensees gained experience and familiarity 
with the NRC's requirements and expectations, the overall quality of 
examinations submitted to the NRC during the transition process did not 
improve appreciably over time. Although approximately half of the 17 
facility licensees that had prepared more than one examination by the 
end of FY 1997 did maintain or improve the quality of their second or 
third examination submittals, the quality of the other facility 
licensees' second or third examinations was lower. Although it is 
unclear to what extent the problems with proposed examination quality 
and difficulty have been caused by a lack of sufficient expertise on 
the part of the examination writers, the NRC has asked the industry to 
address this issue. Furthermore, the NRC staff has conducted and 
participated in a number of public meetings and workshops in an effort 
to communicate its expectations to the facility employees who will be 
preparing the examinations. Additional NRC and industry workshops will 
be conducted to address examination quality and solicit industry 
feedback.
    In SECY-96-206, the NRC staff discussed the issues of examination 
quality and consistency and how they might be affected when a large 
number of facility employees assume the role that had been filled by a 
smaller number of experienced NRC and contract examiners. The NRC 
staff's comprehensive examination reviews versus the examination 
criteria in NUREG-1021, in combination with supervisory reviews and the 
examination oversight activities conducted by the Office of Nuclear 
Reactor Regulation, should mitigate the vulnerability in this area. 
Moreover, the industry and staff initiatives to improve the expertise 
of the examination writers should eventually enhance the quality and 
consistency of the facility-prepared examinations.
    Comment: All four examiners who submitted comments, a nonpower 
reactor facility licensee, and the State of Illinois asserted that 
allowing the facility licensees to prepare the operator licensing 
examinations decreases the level of independence and creates a conflict 
of interest for facility personnel having responsibility for training 
and licensing the operators. Their letters maintained that the new 
process makes it possible for the utilities to ``teach the 
examination,'' to test applicants only on what was taught, or to avoid 
testing in areas with known difficulties. One NRC examiner noted that 
the new process places training managers in a no-win situation because 
if applicants fail the examination, the managers look like poor 
trainers, and if the examination is too easy, the NRC gives them a bad 
report. He and another NRC examiner asserted, based on their experience 
during the pilot examinations, that some facility personnel openly 
admitted that they would develop the easiest possible examination to 
ensure that all their applicants would pass.
    One NRC examiner noted that the NRC review and approval process 
cannot adequately compensate for the conflict-of-interest problems 
inherent in the revised examination process and recommended a change to 
interim Revision 8 of NUREG-1021 that would limit the licensees' 
latitude in selecting topics for the examination outline. The State of 
Illinois suggested that the NRC should compile the questions and 
proctor the examination to maintain more of the checks and balances 
that existed under the old process.
    The nonpower reactor facility licensee noted that most professional 
licensing examinations are developed by independent agencies, and that 
this fosters a sense of professionalism in the license applicants.
    Response: The NRC agrees that the revised examination process 
decreases the level of independence in the licensing process and may 
create a potential conflict of interest for facility personnel involved 
in preparing the examination. However, the Commission has concluded 
that restricting the training activities of those individuals when they 
become involved in preparing the licensing examination, in combination 
with the NRC's enforcement authority, will adequately mitigate the 
vulnerability in this area. Although the NRC has amended the final 
version of Revision 8 of NUREG-1021 to allow instructors to participate 
in the examination development regardless of their involvement in 
training the license applicants (as discussed above in response to 
comments concerning the industry burden under the revised examination 
process), the NRC has also amended NUREG-1021 to include an expectation 
that facility licensees will use an objective, systematic process for 
preparing the written examination outlines. This process enhancement 
should limit the potential for bias in the selection of topics to be 
evaluated on the written examination.
    The NRC will continue to monitor the facility licensees' 
examination development programs and implement additional restrictions, 
as necessary, if actual bias problems are identified. Moreover, if the 
NRC determines that a facility licensee has intentionally biased the 
scope, content, or level of difficulty of an examination (i.e., 
compromised its integrity contrary to 10 CFR 55.49) to enhance the 
chances that its applicants would pass the examination, the NRC will 
utilize its enforcement authority including, as warranted, civil 
penalties, orders against the individuals involved, and charging the 
individuals involved with deliberate misconduct pursuant to 10 CFR 
50.5.
    Concerns regarding the potential for conflict of interest and the 
frequency of security incidents since beginning the pilot examination 
program have prompted the NRC to review the clarity of 10 CFR 55.49. 
The regulation encompasses not only activities like cheating and lapses 
in security but also activities that compromise the integrity or 
validity of the examination itself (e.g., noncompliance with the 
criteria designed to limit the potential for bias in the selection of 
topics to be evaluated on the written examination). Therefore, the NRC 
has concluded that it would be beneficial to amend 10 CFR 55.49 to 
clarify its intent and to amend the examination rule to require power 
reactor facility licensees that elect to prepare their licensing 
examinations to establish procedures to control examination security 
and integrity.
    Comment: Three NRC examiners and the State of Illinois asserted 
that the revised examination process increases the threat to 
examination security. One examiner noted that the examination is onsite 
for a longer period of time, thereby proportionally increasing the risk 
of being compromised. Another examiner cited the fact that a number of 
examination reports have documented problems with security.
    Response: As discussed in SECY-96-206 and SECY-97-079, the 
Commission is aware of the vulnerability in this area because several 
security incidents have occurred since beginning the pilot examination 
program. Therefore, based on the comments received and the experience 
with security incidents, the NRC has: (1) clarified 10 CFR 55.49 in the 
final rule to ensure that applicants, licensees, and facility licensees 
understand the scope and intent of the regulation; (2) amended the 
final examination rule to require facility licensees that elect to 
prepare their licensing examinations to establish, implement, and 
maintain procedures to control examination security and integrity; (3) 
strengthened the discussion of examination security in

[[Page 19875]]

the final version of Revision 8 of NUREG-1021; and (4) modified NUREG-
1600, ``General Statement of Policy and Procedures for NRC Enforcement 
Actions,'' to address enforcement action against parties subject to the 
requirements in 10 CFR 55.49. NRC examiners are expected to review the 
NRC's physical security guidelines and the facility licensee's specific 
plans for ensuring examination security at the time the examination 
arrangements are confirmed with the designated facility contact. 
Furthermore, the NRC has issued an Information Notice to advise power 
reactor facility licensees of the NRC's perspective and expectations 
regarding the integrity of examinations developed by the facility 
licensees' employees and representatives, and it has asked NEI to take 
the initiative in developing a model for securing examinations.
    As a separate action, the NRC will not administer any examination 
that may have been compromised until the scope of the potential 
compromise is determined and measures can be taken to address the 
integrity and validity of the examination. If the compromise is 
discovered after the examination has been administered, the NRC will 
not complete the licensing action for the affected applicants until the 
staff can make a determination regarding the impact that the compromise 
has had on the examination process. If the compromise is not discovered 
until after the licensing action is complete, the NRC will reevaluate 
the licensing decision pursuant to 10 CFR 55.61(b)(2) if it determines 
that the original licensing decision was based on an invalid 
examination.
    Comment: One NRC examiner disagreed with the conclusion in the 
proposed rulemaking that the facility-prepared examination process is 
an efficient use of NRC resources when compared to the NRC-prepared or 
contractor-prepared examinations. He noted that, in most cases, the 
quality and difficulty of the proposed examinations have been below NRC 
standards (as discussed above) and that it has taken a significant 
effort on the part of the NRC chief examiner to achieve an acceptable 
product.
    An NRC contract examiner asserted that NRC cost-saving is a poor 
reason for changing the rule, since the utilities pay for the 
examinations anyway. He noted that the pilot examination process has 
led to a loss of certified examiners and contends that those NRC 
examiners who are left will become more dissatisfied with their jobs 
and will leave because they will be required to travel more to 
compensate for the loss of contractors.
    Response: The NRC acknowledges that many of the facility-prepared 
examinations (about 20 percent in FY 1997) required significantly more 
NRC examiner time than desired or planned in order to achieve NRC 
quality standards. However, questionnaires filled out by NRC chief 
examiners for the pilot examinations indicate that the average amount 
of time spent on reviewing and upgrading the examinations is generally 
consistent with the estimates developed before starting the pilot 
program (i.e., approximately 170 examiner-hours). As noted in SECY-97-
079, the NRC has issued a memorandum to its regional administrators 
emphasizing the importance of: (1) Assigning adequate resources to 
carry out the operator licensing task; (2) completing a review of every 
facility-prepared examination; and (3) not administering any 
examination that fails to meet NRC standards for quality and level of 
difficulty. Furthermore, all the time that NRC examiners spend 
reviewing an examination and modifying it so that it meets NRC 
standards is ultimately billed to the facility licensee.
    The Commission acknowledges that facility licensees bear the cost 
of preparing the licensing examinations whether or not the NRC performs 
this function. However, this rule will give facility licensees more 
control over the cost of licensing operators at their facility, and the 
pilot examination program has demonstrated that some facility licensees 
will save resources if they elect to prepare their own licensing 
examinations.
    The NRC's budget cuts have necessitated agencywide downsizing, 
which can be expected to increase the burden of travel for many NRC 
employees, not just the operator licensing examiners. The number of NRC 
full-time equivalent (FTE) license examiners has remained essentially 
constant throughout the pilot program and, aside from normal attrition 
and staff turnover, the loss of certified examiners has been limited to 
NRC contractors.
    Comment: Two NRC examiners expressed concern that examiner 
proficiency will decrease as a result of implementing the revised 
examination process. One of the examiners stated that examination 
reviewers will not maintain the same base of knowledge as examination 
writers maintained and that they will lose their familiarity with plant 
operating procedures.
    Response: The Commission has concluded that the revised examination 
process affords sufficient NRC staff involvement that NRC examiners 
will maintain an acceptable level of proficiency. An NRC examiner will 
review and approve every facility-prepared examination before it is 
administered to ensure that it conforms to the criteria specified in 
NUREG-1021 for content, format, quality, and level of knowledge and 
difficulty. NRC examiners will also continue to independently 
administer and grade both the dynamic simulator and the plant walk-
through portions of the operating tests. Because NRC examiners will be 
administering all of the operating tests, the Commission believes that 
the revised process will enable the examiners to accrue more experience 
in a shorter period of time and to maintain their proficiency. New NRC 
license examiners will still be required to complete a standardized 
training program, including the development of a written examination 
and operating test, as part of their qualification process. Moreover, 
the NRC will ensure that the in-house capability to prepare the 
examinations is maintained by: (1) Requiring a regional supervisor to 
review and approve every examination and the Office of Nuclear Reactor 
Regulation to conduct periodic examination reviews; (2) conducting 
examiner refresher training; and (3) convening an operator licensing 
examiners' training conference at intervals not to exceed 24 months. 
Although experience during the voluntary pilot program and informal 
feedback from the industry suggests that facility licensees are likely 
to request the NRC to prepare a sufficient number of examinations to 
maintain the proficiency of its examiners, each region will be required 
to write at least one initial operator licensing examination per 
calendar year.
    Comment: A utility employee asserted that the revised examination 
process will not enhance the competency of the operators or reactor 
safety because the facilities' training resources will be diverted from 
their primary purpose (i.e., training the applicants) as much as six 
months before the examination date. Three NRC examiners also took issue 
with the conclusion in the proposed rulemaking that the NRC staff's 
focus on operator performance and its core of experience will improve 
under the pilot examination process because contractors will no longer 
be used to administer the operating tests. Two of the examiners 
asserted that the reduction in the amount of procedural research by 
examiners will result in the identification and correction of fewer 
procedural problems. Two of the examiners also stated that the contract

[[Page 19876]]

examiners help maintain examination consistency across the NRC regions 
and that their contribution to the operator licensing program goes 
beyond simple task completion.
    Response: The Commission expects that those training departments 
that cannot readily and safely absorb the examination development work 
will use the funds that they were previously paying to the NRC through 
the fee recovery program to secure the additional personnel to do the 
extra work or request the NRC to prepare the examinations. If a 
facility licensee decides to prepare the examination and, as a result, 
places insufficient resources on either training or testing, the 
quality of its proposed licensing examinations or the passing rate on 
those examinations would most likely suffer. Although many of the 
facility-prepared examinations have required significant changes to 
achieve NRC quality standards, the examination results, to date, are 
generally consistent with the results on previous NRC-prepared 
examinations, suggesting that the quality of the facility licensees' 
training programs has not been affected. Therefore, the fact that 
facility licensees will have the option of preparing the examinations 
is not expected to have a negative effect on reactor safety.
    The NRC acknowledges that the contract examiners identified 
procedural and training problems in addition to their primary 
responsibility for preparing and administering the licensing 
examinations, and that they helped maintain examination consistency by 
working on examinations in each of the NRC's regions. As noted in 
connection with the discussion of examination quality, the Commission 
realizes that the revised examination process increases the possibility 
of inconsistency, but it believes that the examination criteria in the 
final version of Revision 8 of NUREG-1021, in combination with the 
NRC's examination oversight programs, will minimize these 
inconsistencies so that they remain within acceptable limits.
    When the NRC initiated the pilot program, its goal was to eliminate 
the need for NRC contract examiners without compromising the existing 
levels of reactor safety. Because NRC examiners will be administering 
all of the operating tests, the revised process will enable the NRC 
examiners to accrue more experience in a shorter period of time and may 
improve the consistency of the operating test evaluations and the 
licensing decisions. Although the total number of procedures reviewed 
in the process of developing examinations may be fewer under the 
revised method, NRC examiners will still be expected to review and 
identify discrepancies in the procedures that will be exercised during 
the walk-through portion of the operating test and during the simulator 
scenarios.

Other Comments

    Since beginning the pilot examination program, the NRC has sought 
to obtain up-to-date insights regarding the effectiveness of the 
revised examination process based on the staff's growing body of 
experience in reviewing the facility-prepared examinations. Many of the 
staff comments received have paralleled the public comments and require 
no further attention in this notice. However, one recommendation to 
amend the wording of the proposed regulation is considered worthy of 
discussion and incorporation. Specifically, it was recommended that the 
rule should indicate that a key manager would be responsible for 
submitting the examination because that individual would be in a 
position to ensure that the facility licensee's operations and training 
departments apply sufficient resources to prepare a quality 
examination. The NRC finds that the recommendation is consistent with 
normal NRC practice and the analogous regulatory requirement in 
Sec. 55.31(a)(3), which requires ``* * * an authorized representative 
of the facility licensee by which the applicant will be employed * * 
*'' to submit a written request that examinations be administered to 
the applicant. Therefore, the wording of the final examination rule has 
been amended to require an authorized representative of the facility 
licensee to approve the written examinations and operating tests before 
they are submitted to the NRC for review and approval.

Availability of Guidance Document for Preparing Operator Licensing 
Examinations

    As a consequence of preparing and administering the initial 
operator licensing examinations over a number of years, the NRC has 
developed a substantial body of guidance to aid its examiners. That 
guidance has been published in various versions of NUREG-1021, the 
latest version of which (final Revision 8) incorporates lessons learned 
since interim Revision 8 was published in February 1997, as well as 
refinements prompted by the comments submitted in response to the FRN 
of August 7, 1997 (62 FR 42426), which solicited public comments in 
conjunction with the proposed rulemaking. A copy of the final version 
of Revision 8 of NUREG-1021 will be mailed to each facility licensee; 
in accordance with NRC practice, revisions of NUREG-1021 are announced 
in the Federal Register when they are issued and become effective six 
months after the date of issuance. Copies may be inspected and/or 
copied for a fee at the NRC's Public Document Room, 2120 L Street NW 
(Lower Level), Washington, DC. Final Revision 8 of NUREG-1021 is also 
electronically available for downloading from the internet at ``http://
www.nrc.gov.''
    The NRC will prepare, administer, and grade initial operator 
licensing examinations when requested by facility licensees and at 
least four times a year to maintain the proficiency of its examiners. 
NRC examiners will use the criteria in the effective version of NUREG-
1021 to evaluate whether an applicant meets the Commission's 
regulations. In this regard, NUREG-1021 is comparable to the Standard 
Review Plan (SRP), which establishes the criteria that the NRC uses to 
evaluate Part 50 license applications. Licensees that elect to prepare 
their own licensing examinations will also be required to use the 
guidance in the effective version of NUREG-1021. As provided in NUREG-
1021, licensees may identify differences from the NUREG-1021 
examination criteria and evaluate how the proposed alternatives provide 
an acceptable method of complying with the Commission's regulations. 
The NRC staff will review any proposed alternatives and make a decision 
regarding their acceptability. The NRC will not approve any alternative 
that would compromise its statutory responsibility of prescribing 
uniform conditions for the operator licensing examinations.

Final Rule

    This regulation adds a new section, Sec. 55.40, ``Implementation,'' 
to Subpart E of 10 CFR Part 55. Paragraph (a) of Sec. 55.40 states the 
NRC's intent to use the criteria in the version of NUREG-1021, 
``Operator Licensing Examination Standards for Power Reactors,'' in 
effect six months before the examination date when preparing and 
evaluating the written examinations required by Secs. 55.41 and 55.43, 
and the operating tests required by Sec. 55.45. The NRC uses the 
criteria in NUREG-1021 to evaluate whether an applicant meets the 
Commission's regulations. In this regard, NUREG-1021 is comparable to 
the Standard Review Plan, which establishes the criteria that the NRC 
uses to evaluate Part 50 license applications. Pursuant to Section 107 
of the AEA of 1954, as amended, the NRC must prescribe uniform 
conditions for

[[Page 19877]]

licensing individuals applying for operator licenses.
    Based on the success of the pilot examination program, paragraph 
(b) of Sec. 55.40 allows power reactor facility licensees to prepare, 
proctor, and grade the written examinations required by Secs. 55.41 and 
55.43 and to prepare the operating tests required by Sec. 55.45, 
subject to the following conditions:
    (1) To ensure uniformity pursuant to the AEA, the facility licensee 
shall prepare the examinations and tests in accordance with NUREG-1021;
    (2) To minimize the possibility that the required written 
examinations and operating tests might be compromised, the facility 
licensee shall establish, implement, and maintain procedures to control 
the security and integrity of the examinations and tests;
    (3) To ensure that the facility licensee's operations and training 
departments apply sufficient resources to prepare a quality 
examination, an authorized representative of the facility licensee 
shall approve the examinations before they are submitted to the NRC for 
review and approval; and
    (4) To ensure that NRC standards for quality are maintained, the 
facility licensee must receive Commission approval of its proposed 
written examinations and operating tests before they are given.
    These requirements are contained in Secs. 55.40(b)(1), (2), (3), 
and (4) respectively.
    As provided in NUREG-1021, licensees may identify differences from 
the NUREG-1021 examination criteria and evaluate how the proposed 
alternatives provide an acceptable method of compliance with NRC 
regulations. The NRC staff will review any proposed alternatives and 
make a decision regarding their acceptability. However, the NRC will 
not approve any alternative that would compromise its statutory 
responsibility of prescribing uniform conditions for the operator 
licensing examinations. The NRC staff will review the facility-prepared 
written examinations and operating tests against the criteria in NUREG-
1021 and direct whatever changes are necessary to ensure that adequate 
levels of quality, difficulty, and consistency are maintained. After 
the NRC staff reviews and approves a written examination, the facility 
licensee will proctor and grade the examination consistent with the 
guidance in NUREG-1021. The NRC staff will continue to independently 
administer and grade the operating tests, review and approve the 
written examination results, and make the final licensing decisions. 
The facility licensee will not conduct parallel operator evaluations 
during the dynamic simulator or the walk-through tests.
    Pursuant to the requirements in Sec. 55.40(c), the NRC staff will 
prepare the licensing examinations and tests upon written request by a 
power reactor facility licensee in accordance with Sec. 55.31(a)(3). In 
addition, the NRC may exercise its discretion to reject a power reactor 
facility licensee's determination to prepare the required written 
examinations and operating tests, and to proctor and grade the written 
examinations. The NRC will then prepare, proctor, and grade the written 
examinations and prepare the operating tests for the facility licensee. 
This provision of the regulation allows the NRC to maintain its 
proficiency and to perform these activities if the NRC questions a 
licensee's ability to prepare an acceptable examination.
    Paragraph (d) of Sec. 55.40 reasserts that the NRC will continue to 
prepare and administer the written examinations and operating tests for 
non-power reactor facility licensees. The NRC has taken this position 
because the non-power reactor community does not have an accreditation 
process for training and qualification or the resources to prepare the 
examinations.
    This regulation also amends Sec. 55.49 because the NRC has 
determined, since the proposed rule was published, that applicants, 
licensees, and facility licensees may be interpreting Sec. 55.49 too 
narrowly by limiting it to actual cases of cheating. The amendment 
clarifies that the regulation pertains to all activities that could 
affect the equitable and consistent administration of the examination, 
including activities before, during, and after the examination is 
administered.

Environmental Impact: Categorical Exclusion

    The NRC has determined that this rule is the type of action 
described as a categorical exclusion in 10 CFR 51.22(c)(1). Therefore, 
neither an environmental impact statement nor an environmental 
assessment has been prepared for this regulation.

Paperwork Reduction Act Statement

    This final rule amends information collection requirements that are 
subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq). 
These were approved by the Office of Management and Budget (OMB), 
approval number 3150-0101. The additional public reporting burden for 
this collection of information is estimated to average 500 hours per 
response, including the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing the collection of information (i.e., preparing 
the examinations). The additional, one-time burden for power reactor 
facility licensees that elect to prepare their licensing examinations 
to establish procedures to prevent the examinations from being 
compromised is not expected to exceed 100 hours per facility; and the 
burden of maintaining those procedures is estimated at approximately 10 
hours per facility per year. Send comments on any aspect of this 
collection of information, including suggestions for reducing the 
burden, to the Information and Records Management Branch (T-6F33), U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, or by 
internet electronic mail to [email protected], and to the Desk Officer, 
Office of Information and Regulatory Affairs, NEOB-10202, (3150-0101), 
Office of Management and Budget, Washington, DC 20503.

Public Protection Notification

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

Regulatory Analysis

    The Commission has prepared a regulatory analysis on this 
regulation. The analysis examines the costs and benefits of the 
alternatives considered by the Commission. The regulatory analysis is 
available for inspection in the NRC Public Document Room, 2120 L Street 
NW (Lower Level), Washington, DC. Single copies of the analysis may be 
obtained from Siegfried Guenther, Office of Nuclear Reactor Regulation, 
U.S. Nuclear Regulatory Commission, at 301-415-1056 or by e-mail at 
[email protected].

Regulatory Flexibility Certification

    In accordance with the Regulatory Flexibility Act of 1980, (5 
U.S.C. 605(b)), the Commission certifies that this rule does not have a 
significant economic impact on a substantial number of small entities. 
This rule affects only the licensing and operation of nuclear power 
plants. The companies that own these plants do not fall within the 
scope of the definition of ``small entities'' described in the 
Regulatory Flexibility Act or the Small Business Size Standards stated 
in regulations issued by the Small Business Administration at 13 CFR 
part 121.

[[Page 19878]]

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.

Backfit Analysis

    In the proposed rule, the NRC took the position that the backfit 
rule (10 CFR 50.109) did not apply because the proposed shift in 
responsibility for preparing the examinations: (1) Would not constitute 
a ``modification of the procedures required to operate a facility'' 
within the scope of the backfit rule; (2) would not have affected the 
basic procedures for qualifying licensed operators; and (3) would not 
have required facility licensees to alter their organizational 
structures. However, upon further review, the NRC has concluded that 
there is insufficient basis to support the original position. 
Therefore, the NRC has decided to revise the final rule so that power 
reactor facility licensees may elect to prepare their written 
examinations and operating tests (and proctor and grade the written 
examinations) in accordance with NUREG-1021 or to have the NRC prepare 
the examinations. Eliminating the requirement for all facility 
licensees to prepare their examinations and tests obviates the need for 
a backfit analysis.

Enforcement Policy

    In conjunction with this final rule, the Commission is separately 
publishing modifications to NUREG-1600, ``General Statement of Policy 
and Procedure for NRC Enforcement Actions,'' to address enforcement 
action against parties subject to the requirements in 10 CFR 55.49 
(i.e., Part 55 license applicants/licensees and Part 50 licensees).

List of Subjects in 10 CFR Part 55

    Criminal penalties, Manpower training programs, Nuclear power 
plants and reactors, Reporting and recordkeeping requirements.

    For the reasons given in the preamble and under the authority of 
the Atomic Energy Act of 1954, as amended; the Energy Reorganization 
Act of 1974, as amended; and 5 U.S.C. 552 and 553; the NRC adopts the 
following amendments to 10 CFR part 55.

PART 55--OPERATORS' LICENSES

    1. The authority citation for Part 55 continues to read as follows:

    Authority: Secs. 107, 161, 182, 68 Stat. 939, 948, 953 , as 
amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2137, 2201, 
2232, 2282); secs. 201, as amended, 202, 88 Stat. 1242, as amended, 
1244 (42 U.S.C. 5841, 5842).
    Sections 55.41, 55.43, 55.45, and 55.59 also issued under sec. 
306, Pub. L. 97-425, 96 Stat. 2262 (42 U.S.C. 10226). Section 55.61 
also issued under secs. 186, 187, 68 Stat. 955 (42 U.S.C. 2236, 
2237).

    2. In Sec. 55.8, paragraph (c)(4) is revised to read as follows:


Sec. 55.8  Information collection requirements; OMB approval

* * * * *
    (4) In Secs. 55.40, 55.41, 55.43, 55.45, and 55.59, clearance is 
approved under control number 3150-0101.
* * * * *
    3. A new Sec. 55.40 is added to read as follows:


Sec. 55.40  Implementation.

    (a) The Commission shall use the criteria in NUREG-1021, ``Operator 
Licensing Examination Standards for Power Reactors,'' \1\ in effect six 
months before the examination date to prepare the written examinations 
required by Secs. 55.41 and 55.43 and the operating tests required by 
Sec. 55.45. The Commission shall also use the criteria in NUREG-1021 to 
evaluate the written examinations and operating tests prepared by power 
reactor facility licensees pursuant to paragraph (b) of this section.
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    \1\ Copies of NUREGs may be purchased from the Superintendent of 
Documents, U.S. Government Printing Office, P.O. Box 38082, 
Washington, DC 20402-9328. Copies are also available from the 
National Technical Information Service, 5285 Port Royal Road, 
Springfield, VA 22161. A copy is available for inspection and/or 
copying in the NRC Public Document Room, 2120 L Street, NW (Lower 
Level), Washington, D.C.
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    (b) Power reactor facility licensees may prepare, proctor, and 
grade the written examinations required by Secs. 55.41 and 55.43 and 
may prepare the operating tests required by Sec. 55.45, subject to the 
following conditions:
    (1) Power reactor facility licensees shall prepare the required 
examinations and tests in accordance with the criteria in NUREG-1021 as 
described in paragraph (a) of this section;
    (2) Pursuant to Sec. 55.49, power reactor facility licensees shall 
establish, implement, and maintain procedures to control examination 
security and integrity;
    (3) An authorized representative of the power reactor facility 
licensee shall approve the required examinations and tests before they 
are submitted to the Commission for review and approval; and
    (4) Power reactor facility licensees must receive Commission 
approval of their proposed written examinations and operating tests.
    (c) In lieu of paragraph (b) of this section and upon written 
request from a power reactor facility licensee pursuant to 
Sec. 55.31(a)(3), the Commission shall, for that facility licensee, 
prepare, proctor, and grade, the written examinations required by 
Secs. 55.41 and 55.43 and the operating tests required by Sec. 55.45. 
In addition, the Commission may exercise its discretion and reject a 
power reactor facility licensee's determination to elect paragraph (b) 
of this section, in which case the Commission shall prepare, proctor, 
and grade the required written examinations and operating tests for 
that facility licensee.
    (d) The Commission shall prepare, proctor, and grade the written 
examinations required by Secs. 55.41 and 55.43 and the operating tests 
required by Sec. 55.45 for non-power reactor facility licensees.
    4. Section 55.49 is revised to read as follows:


Sec. 55.49  Integrity of examinations and tests.

    Applicants, licensees, and facility licensees shall not engage in 
any activity that compromises the integrity of any application, test, 
or examination required by this part. The integrity of a test or 
examination is considered compromised if any activity, regardless of 
intent, affected, or, but for detection, would have affected the 
equitable and consistent administration of the test or examination. 
This includes activities related to the preparation and certification 
of license applications and all activities related to the preparation, 
administration, and grading of the tests and examinations required by 
this part.

    Dated at Rockville, Maryland, this 19th day of April, 1999.

    For the Nuclear Regulatory Commission.
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 99-10190 Filed 4-22-99; 8:45 am]
BILLING CODE 7590-01-P