[Federal Register Volume 64, Number 216 (Tuesday, November 9, 1999)]
[Notices]
[Pages 61142-61167]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28595]


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NUCLEAR REGULATORY COMMISSION

[NUREG-1600]


Revision of the NRC Enforcement Policy

AGENCY: Nuclear Regulatory Commission.

ACTION: Policy Statement: revision.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is publishing a 
complete revision of its General Statement of Policy and Procedure for 
NRC Enforcement Actions (NUREG-1600) (Enforcement Policy or Policy). 
This is the third complete revision of the Enforcement Policy since it 
was first published as a NUREG document on June 30, 1995; 60 FR 34381. 
The NRC publishes the policy statement as a NUREG to foster its 
widespread dissemination. This revision: (1) Revises the approach for 
assessing the significance of violations; (2) Changes guidance to 
conform to recent revisions to the NRC's regulations for operating 
reactors regarding changes, tests, and experiments (64 FR 53582; 
October 4, 1999); (3) Updates the Policy to reflect the Deputy 
Executive Director for Reactor Programs and the Deputy Executive 
Director for Materials, Research and State Programs as the principal 
enforcement officers of the NRC; (4) Corrects the schedule for 
exercising enforcement discretion for findings involving the 
completeness and accuracy of licensee Final Safety Analysis Reports 
(FSAR); (5) Consolidates the guidance on dispositioning Severity Level 
IV violations as either Notices of Violation or Non-Cited Violations; 
(6) Reorganizes existing guidance on the relationship between safety 
and compliance to improve clarity; (7) Consolidates changes to the 
Enforcement Policy since May 1998; and (8) Edits and restructures 
existing guidance to assure consistency with recent policy changes and 
to facilitate maintenance of the Enforcement Policy. The intent of this 
Policy revision is to move towards a more risk-informed and 
performance-based approach.

DATES: This action is effective November 9, 1999. Comments on this 
revision should be submitted on or before December 9, 1999 and will be 
considered by the NRC prior to the next Enforcement Policy revision.

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 20555-0001. Hand deliver comments to: 11555 Rockville 
Pike, Maryland, between 7:30 a.m. and 4:15 p.m., Federal workdays. 
Copies of comments received may be examined at the NRC Public Document 
Room 2120 L Street, NW. (Lower Level), Washington, DC.
    The NRC's Office of Enforcement maintains the current policy 
statement on its homepage on the Internet at www.nrc.gov/OE/.

FOR FURTHER INFORMATION CONTACT: Bill Borchardt, Director, Office of 
Enforcement, (301) 415-2741, or Renee Pedersen, Senior Enforcement 
Specialist, Office of Enforcement, U.S.

[[Page 61143]]

Nuclear Regulatory Commission, Washington, D.C. 20555-0001, (301) 415-
2741.

SUPPLEMENTARY INFORMATION: The NRC Enforcement Policy was first issued 
as a formal policy statement on September 4, 1980. Since that time, the 
Enforcement Policy has been revised on a number of occasions. On June 
30, 1995; (60 FR 34381), the Enforcement Policy was completely revised 
as a result of the recommendations of a high-level review team who 
assessed the enforcement program and solicited input from stakeholders 
and other government agencies (NUREG-1525, ``Assessment of the NRC 
Enforcement Program.'') On May 13, 1998; (63 FR 26630) the Enforcement 
Policy was completely republished based on a review of the experience 
with the revised policy and consideration of public comment (NUREG-
1600, ``NRC Enforcement Policy Review; July 1995-July 1997''). Most 
recently (February 9, 1999; 64 FR 6388), the Policy was modified by 
revising the treatment of Severity Level IV violations at power 
reactors to help reduce unnecessary regulatory burden. The NRC is 
constantly refining and improving its policy and processes to ensure 
that enforcement actions are appropriate and contribute to safety.
    In developing this Policy revision, the NRC considered comments of 
various internal and external stakeholders. Consideration was given to 
written comments submitted in response to the May 13, 1998; 63 FR 
26630, revision to the Enforcement Policy; Congressional concerns; 
information provided during numerous meetings with representatives of 
the industry and public interest groups; and several written 
submittals.1 The main stakeholder involvement has been with 
the Nuclear Energy Institute (NEI), various power reactor licensees, 
the Union of Concerned Scientists (UCS), and Public Citizen.
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    \1\ See, NEI letters to James Lieberman, dated December 14, 
1998, and to William Travers, dated October 23, 1998, and UCS letter 
to James Lieberman dated November 11, 1998. These documents are 
available at the NRC's Public Document Room (see ADDRESSES section).
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    The NRC recognizes that additional changes may be considered as a 
result of ongoing efforts to make improvements to the inspection and 
performance assessment processes for power reactors. In addition, 
changes are anticipated in the materials areas that will conform to the 
move toward risk-informed performance-based inspections in this area.
    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 by adding a discussion of the 
relationship between safety and compliance. This discussion captures 
the essence of the Commission-approved discussion that was previously 
included as Appendix A to this policy statement. Moving this discussion 
from the back of the Policy to the front improves the logical flow of 
information and helps ensure that it will not be overlooked.

III. Responsibilities

    This section has been modified to reflect the August 9, 1999, 
reorganization of the office of the Executive Director for Operations. 
The Deputy Executive Director for Reactor Programs and the Deputy 
Executive Director for Materials, Research and State Programs, replace 
the Deputy Executive Director for Regulatory Effectiveness as the 
principal enforcement officers of the NRC. The Deputy Executive 
Director for Reactor Programs is responsible to the Executive Director 
for Operations for NRC enforcement programs.

IV. Significance of Violations

    This section has been renamed and significantly modified to reflect 
the NRC's new approach on how it will assess the significance of 
violations.
    Because regulatory requirements have varying degrees of safety, 
safeguards, or environmental significance, the NRC's Enforcement Policy 
uses a graded approach in dealing with noncompliances both in terms of 
assessing significance and developing enforcement sanctions. This 
section provides that assessing the relative importance or significance 
of the violation is the first step in the enforcement process. The NRC 
is revising its approach for assessing significance that identifies 
four specific issues to consider: (1) Actual safety consequences; (2) 
potential safety consequences, including the consideration of risk 
information; (3) potential for impacting the NRC's ability to perform 
its regulatory function; and (4) any willful aspects of the violation.
    This is a change from previous practice that assessed significance 
by weighing (1) Actual consequences; (2) potential consequences; and 
(3) the regulatory significance of a violation. Although not 
specifically defined by the Policy, ``regulatory significance'' 
historically included issues such as, but not limited to, programmatic 
breakdowns (i.e., aggregation of violations 2), repetitive 
violations, willful violations and reporting violations. The NRC is 
eliminating the use of this term in the context of assessing the 
significance of violations. The NRC believes this is warranted given 
the nature of stakeholder concerns, which included the term's lack of 
sufficient definition, its subjective nature, and its lack of a clear 
nexus to safety. There is also a concern that use of regulatory 
significance (under the practice of aggregation) is a form of 
assessment that should be performed outside the enforcement process. 
Under the revised Policy, if the NRC has concerns about a licensee's 
performance as a result of a large number of less significant 
violations, or repetitive violations based on ineffective corrective 
actions, the current and future assessment processes provide the 
regulatory tools necessary to address these performance concerns.
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    \2\ The previous policy stated that a group of Severity Level IV 
violations could be evaluated in the aggregate and assigned a 
single, increased severity level, thereby resulting in a Severity 
Level III problem, if the violations had the same underlying cause 
or programmatic deficiencies.
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    Although the NRC believes it is appropriate to eliminate the term, 
``regulatory significance'' from this policy statement, some of its 
underlying concepts are appropriate to maintain. The NRC will continue 
to consider violations that impact or have the potential to impact 
NRC's ability to carry out its statutory mission. Examples of cases in 
this category would include violations of Secs. 30.9, 50.9, etc. 
(completeness and accuracy of information), Secs. 30.34(f), 50.54(a), 
50.59, 76.68, etc. (need for NRC approval of changes), and Subpart M of 
Part 20, Secs. 30.50, 50.72-73, etc. (reporting requirements). Even 
inadvertent reporting failures are important because many of the 
surveillance, quality control, and auditing systems on which both the 
NRC and its licensees rely in order to monitor compliance with safety 
standards are based primarily on complete, accurate and timely 
recordkeeping and reporting. The NRC will continue to consider willful 
violations involving licensees and their employees, including the 
ability to maintain a safety conscious work environment. Examples of 
cases in this category would include violations of Secs. 30.10, 50.5, 
etc. (deliberate misconduct), and willful violations of requirements 
including Secs. 30.7, 50.7, etc. (discrimination), Secs. 30.9, 50.9, 
etc. (completeness and accuracy of information), and reporting 
requirements. Willful violations are, by definition, of particular 
concern to the

[[Page 61144]]

Commission because its regulatory program is based on licensees and 
their contractors, employees, and agents acting with integrity and 
communicating with candor.
    This section also elaborates on the concept of potential 
consequences as a consideration in the significance assessment process. 
It emphasizes that the NRC will consider the realistic likelihood of 
affecting safety (i.e., the existence of credible scenarios with 
potentially significant consequences). It also states that risk 
information will be used wherever possible and clarifies that use of 
risk information may increase or decrease the severity level of a 
violation.
    This overall approach to assessing significance preserves the 
ability to evaluate violations based on those concepts the NRC believes 
important, while minimizing the controversy that surrounds the use of 
the term ``regulatory significance.''

VI.B.2.d  Exercise of Discretion

    The guidance in this section has been rewritten to state that the 
NRC may exercise discretion by either escalating or mitigating the 
amount of a civil penalty after the normal assessment process to ensure 
that the proposed civil penalty reflects all relevant circumstances of 
the particular case. The phrases ``reflects the NRC's level of 
concern'' and ``conveys the appropriate message to the licensee'' have 
been eliminated. Like regulatory significance, these phrases have been 
criticized as allowing the regulator to arbitrarily issue sanctions 
without a sufficient nexus to safety. This new language is consistent 
with the agency's other policy changes and its plain language 
initiatives. Similar changes are made throughout the Policy.

VII.A.1  Civil Penalties

    Paragraph (h) of this section has been modified to include the 
correct schedule the NRC will use when it considers whether it should 
exercise escalating enforcement discretion for violations associated 
with departures from the FSAR. The previous schedule stated, ``after 
two years from October 18, 1996.'' The correct schedule identifies 
March 30, 2000, for risk-significant items as defined by the licensee's 
maintenance rule program and March 30, 2001, for all other issues. This 
change corrects an error in the policy and conforms to the schedule 
established by the Commission in a staff requirements memorandum dated 
June 30, 1998.

VII.B.1  Non-Cited Violations

    This section has been renamed and consolidates the guidance on 
dispositioning Severity Level IV violations as either Notices of 
Violation or Non-Cited Violations. The definition of a Non-Cited 
Violation (NCV) is simplified to state that it is a Severity Level IV 
violation for which the NRC chooses to exercise discretion and refrain 
from issuing a formal Notice of Violation. It makes it clear that this 
discretion is not meant to eliminate either the NRC's emphasis on 
compliance or the importance of maintaining safety. Section VII.B.1.a 
includes the essence of the guidance on dispositioning power reactor 
Severity Level IV violations that was previously included in Appendix 
C. Sections VII.B.1.b-g are reserved for future applications. Section 
VII.B.1.h includes guidance for dispositioning all other types of 
licensees. This subsection captures the guidance that was previously 
included under VII.B.1.

VII.B.3  Violations Involving Old Design Issues

    Paragraph (a) of this section has been modified to include the 
correct schedule the NRC will use when it considers whether it should 
exercise mitigating enforcement discretion for violations associated 
with departures from the FSAR. The previous schedule stated, ``within 
two years after October 18, 1996.'' The correct schedule identifies 
March 30, 2000, for risk-significant items as defined by the licensee's 
maintenance rule program and March 30, 2001, for all other issues. Like 
the schedule in Section VII.A.1.h, this Commission-approved schedule 
inadvertently failed to be reflected in a revision to the policy 
statement.

VII.C  Notice of Enforcement Discretion for Power Reactors and 
Gaseous Diffusion Plants

    This section has been renamed to more clearly reflect that this 
type of discretion applies to both power reactors and gaseous diffusion 
plants.

Supplements--Violation Examples

    Each of the eight supplements was modified by removing examples of 
violations based on the concept of aggregating less significant 
violations into one of higher significance and the use of repetitive 
violations to increase the severity of a given violation, i.e., ``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.''

Supplement I--Reactor Operations

    Example B.4 is eliminated because it was unnecessary, given that it 
is highly unlikely that Sec. 50.59 violations will rise to Severity 
Level II and if operability of equipment is actually affected, then the 
severity level of the system inoperability will be based on the actual 
and potential consequences of that inoperability.
    Example C.2. (b) is eliminated because basing severity level on any 
necessary analyses is inconsistent with determining severity level 
based on actual and potential consequences.
    Example C.9 replaces previous examples C.10 and C.11 (which are no 
longer consistent with recent revisions of 10 CFR 50.59). This example 
provides that violations of 10 CFR 50.59 will be characterized at 
Severity Level III only if the change, which would require Commission 
approval prior to implementation, would not have been found acceptable 
to the Commission.
    Example C.10 replaces previous example C.13 and reflects that 
Severity Level III characterization may be appropriate for violations 
of 10 CFR 50.71(e) in those situations where the erroneous information 
contained in the FSAR resulted in a change to the facility, implemented 
without prior Commission approval, that would not be acceptable.
    Example C.11 replaces previous example C.14. Given that unreviewed 
safety questions and conflicts with technical specifications will not 
necessarily be Severity Level III violations under the revised 
enforcement guidance pertaining to 10 CFR 50.59, this example simply 
reflects that the failure to make required reports associated with any 
Severity Level III violation may be characterized at Severity Level 
III.
    Example D.5 replaces previous examples D.5 and D.6 (which are no 
longer consistent with recent revisions of 10 CFR 50.59). This example 
provides that Severity Level IV categorization is appropriate for 
violations of 10 CFR 50.59 that do not involve circumstances in which a 
change that required prior Commission approval would not be found 
acceptable had the approval been sought. Any reference to programmatic 
failures is unnecessary.
    Example D.6 replaces previous examples D.7 and D.8 (which are no 
longer consistent with recent revisions of 10 CFR 50.59). This example 
provides that Severity Level IV characterization may be appropriate for 
violations of 10 CFR 50.71(e) in those situations where the erroneous 
information contained in the FSAR is not used to make an

[[Page 61145]]

unacceptable change to the facility or procedures.

Paperwork Reduction Act

    This final 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.

Public Protection Notification

    If a means used to impose an information collection does not 
display a currently valid OMB control number, the NRC may not conduct 
or sponsor, and a person is not required to respond to, the information 
collection.

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, Office of Management and Budget.
    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 and Procedural Framework
    A. Statutory Authority
    B. Procedural Framework
III. Responsibilities
IV. Significance of Violations
    A. Assessing Significance
    1. Actual Safety Consequences
    2. Potential Safety Consequences
    3. Impacting the Regulatory Process
    4. Willful Violations
    B. Assigning Severity Level
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. Non-Cited Violations (NCVs)
    a. Power Reactor Licensees
    b.-g. [Reserved]
    h. All Other Licensees
    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 Certain Discrimination Issues
    6. Violations Involving Special Circumstances
    C. Notice of Enforcement Discretion for Power Reactors and 
Gaseous Diffusion Plants
VIII. Enforcement Actions Involving Individuals
IX. Inaccurate and Incomplete Information
X. Enforcement Action Against Non-Licensees
XI. Referrals to the Department of Justice
XII. Public Disclosure of Enforcement Actions
XIII. Reopening Closed Enforcement Actions

Supplements--Violation Examples

Interim Enforcement Policies

Interim Enforcement Policy for Generally Licensed Devices Containing 
Byproduct Material (10 CFR 31.5)
Interim Enforcement Policy Regarding Enforcement Discretion for Nuclear 
Power Plants During the Year 2000 Transition
Interim Enforcement Policy for Use During the NRC Power Reactor 
Oversight Process Pilot Plant Study

Preface

    The following policy statement describes the enforcement policy and 
procedures that the U.S. Nuclear Regulatory Commission (NRC or 
Commission) and its staff intends to follow in initiating and reviewing 
enforcement actions in response to violations of NRC requirements. This 
statement of general policy and procedure is published as NUREG-1600 to 
foster its widespread dissemination. However, this is a policy 
statement and not a regulation. The Commission may deviate from this 
statement of policy as appropriate under the circumstances of a 
particular case.

I. Introduction and Purpose

    The Atomic Energy Act of 1954, as amended, establishes ``adequate 
protection'' as the standard of safety on which NRC regulations are 
based. In the context of NRC regulations, safety means avoiding undue 
risk or, stated another way, providing reasonable assurance of adequate 
protection of workers and the public in connection with the use of 
source, byproduct and special nuclear materials.
    While safety is the fundamental regulatory objective, compliance 
with NRC requirements plays an important 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.
    While adequate protection is presumptively assured by compliance 
with NRC requirements, circumstances may arise where new information 
reveals 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 also 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 noncompliance occurs, the NRC must evaluate the 
degree of risk posed by that noncompliance 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.
    Based on the NRC's evaluation of noncompliance, 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 NRC endeavors to use a risk-informed approach 
when applying NRC resources to the oversight of licensed activities, 
including enforcement activities.
    The primary purpose of the NRC's Enforcement Policy is to support 
the NRC's overall safety mission in protecting the public health and 
safety and the environment. Consistent with that purpose, the policy 
endeavors to:

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     Deter noncompliance by emphasizing the importance of 
compliance with NRC requirements, and
     Encourage prompt identification and prompt, comprehensive 
correction of violations of NRC requirements.
    Therefore, licensees,1 contractors,2 and 
their employees who do not achieve the high standard of compliance 
which the NRC expects will be subject to enforcement sanctions. Each 
enforcement action is dependent on the circumstances of the case. 
However, in no case will licensees who cannot achieve and maintain 
adequate levels of safety be permitted to continue to conduct licensed 
activities.
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    \1\ This policy primarily addresses the activities of NRC 
licensees and applicants for NRC licenses. However, this policy 
provides for taking enforcement action against non-licensees and 
individuals in certain cases. 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 certificates, 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.
    \2\ The term ``contractor'' as used in this policy includes 
vendors who supply products or services to be used in a NRC-licensed 
facility or activity.
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II. Statutory Authority and Procedural Framework

A. Statutory Authority

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

III. Responsibilities

    The Executive Director for Operations (EDO) and the principal 
enforcement officers of the NRC, the Deputy Executive Director for 
Reactor Programs (DEDR) and the Deputy Executive Director for 
Materials, Research and State Programs (DEDMRS) have been delegated the 
authority to approve or issue all escalated enforcement 
actions.3 The DEDR is responsible to the EDO for NRC 
enforcement programs. 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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    \3\ 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.

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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 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 
Discretion.''
    The Commission will be provided written notification for the 
following situations:
    (1) All enforcement actions involving civil penalties or orders;
    (2) The first time that discretion is exercised for a plant that 
meets the criteria of Section VII.B.2;
    (3) (Where appropriate, based on the uniqueness or significance of 
the issue) when discretion is exercised for violations that meet the 
criteria of Section VII.B.6; and
    (4) All Notices of Enforcement Discretion (NOEDs) issued involving 
natural events, such as severe weather conditions.
    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 against the potential radiological or 
other hazards associated with continued operation (cases involving 
severe weather or other natural phenomena may be addressed by the staff 
without prior Commission consultation in accordance with Section 
VII.C);
    (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. Significance of Violations

    Regulatory requirements 4 have varying degrees of 
safety, safeguards, or environmental significance. Therefore, the 
relative importance or significance of each violation is assessed as 
the first step in the enforcement process. Following this assessment, a 
commensurate severity level may be assigned to help determine and 
develop the appropriate enforcement sanction.
---------------------------------------------------------------------------

    \4\ The term ``requirement'' as used in this policy means a 
legally binding requirement such as a statute, regulation, license 
condition, technical specification, or order.
---------------------------------------------------------------------------

A. Assessing Significance

    In assessing the significance of a noncompliance, the NRC considers 
four specific issues: (1) actual safety consequences; (2) potential 
safety consequences, including the consideration of risk information; 
(3) potential for impacting the NRC's ability to perform its regulatory 
function; and (4) any willful aspects of the violation.
1. Actual Safety Consequences
    In evaluating actual safety consequences, the NRC considers issues 
such as actual onsite or offsite releases of radiation, onsite or 
offsite radiation exposures, accidental criticalities, core damage, 
loss of significant safety barriers, loss of control of radioactive 
material or radiological emergencies.
2. Potential Safety Consequences
    In evaluating potential safety consequences, the NRC considers the 
realistic likelihood of affecting safety, i.e., the existence of 
credible scenarios with potentially significant actual consequences. 
The NRC will use risk information wherever possible in assessing 
significance and assigning severity levels. A higher severity may be 
warranted for violations that have greater risk significance and a 
lower severity level may be appropriate for issues that have low risk 
significance. Duration is an appropriate consideration in assessing the 
significance of violations.
3. Impacting the Regulatory Process
    The NRC considers the safety implications of noncompliances which 
may impact the NRC's ability to carry out its statutory mission. 
Noncompliances may be significant because they may challenge the 
regulatory envelope upon which certain activities were licensed. These 
types of violations include failures such as: failures to provide 
complete and accurate information, failures to receive prior NRC 
approval for changes in licensed activities, failures to notify NRC of 
changes in licensed activities, failure to perform 10 CFR 50.59 
analysis, reporting failures, etc. Even inadvertent reporting failures 
are important because many of the surveillance, quality control, and 
auditing systems on which both the NRC and its licensees rely in order 
to monitor compliance with safety standards are based primarily on 
complete, accurate and timely recordkeeping and reporting. The 
existence of a regulatory process violation does not automatically mean 
that the issue is safety significant. In determining the significance 
of a violation, the NRC will consider appropriate factors for the 
particular regulatory process violation. These factors may include: the 
significance of the underlying issue, whether the failure actually 
impeded or influenced regulatory action, the level of individuals 
involved in the failure and the reasonableness of the failure given 
their position and training, and whether the failure invalidates the 
licensing basis. Factors to consider for failures to provide complete 
and accurate information are addressed in Section IX of this policy.
    Unless otherwise categorized in the Supplements to this policy 
statement, 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

[[Page 61148]]

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.
4. 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. Therefore, a violation may be 
considered more significant than the underlying noncompliance if it 
includes 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., negligence, 
inadvertent clerical errors in a document submitted to the NRC. In 
determining the significance 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 5 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 significance 
assessment 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 considered at least more than minor. 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.
---------------------------------------------------------------------------

    \5\ 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.
---------------------------------------------------------------------------

B. Assigning Severity Level

    For purposes of formal enforcement action, violations are normally 
categorized in terms of four levels of severity to show their relative 
importance or significance 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 
6. In general, violations that are included in these 
severity categories involve actual or high potential consequences on 
public health and safety. Severity Level III violations are cause for 
significant regulatory concern. Severity Level IV violations are less 
serious but are of more than minor concern. Violations at Severity 
Level IV involve noncompliance with NRC requirements that are not 
considered significant based on risk. This should not be misunderstood 
to imply that Severity Level IV issues have no risk significance.
---------------------------------------------------------------------------

    \6\ Regulatory concern pertains to primary NRC regulatory 
responsibilities, i.e., safety, safeguards, and the environment.
---------------------------------------------------------------------------

    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 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.

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 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

[[Page 61149]]

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 interveners 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 (included on the NRC's Public Meeting Web site), the NRC 
intends to announce open conferences normally at least 10 calendar days 
in advance of conferences. Conferences will be announced on the 
Internet at the NRC Office of Enforcement's homepage (www.nrc.gov/OE) 
and on the Public Meeting Web site (www.nrc.gov/NRC/PUBLIC/meet.html). 
Individuals who do not have Internet access may get assistance on 
scheduled conferences by contacting the NRC staff at the Public 
Document Room, by calling toll-free 1-800-397-4209. In addition, the 
NRC will normally 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, 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.

[[Page 61150]]

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.
    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 significant violations.
    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.

                     Table 1A.--Base Civil Penalties
------------------------------------------------------------------------
 
------------------------------------------------------------------------
a. Power reactors and gaseous diffusion plants..............    $110,000
b. Fuel fabricators authorized to possess Category I or II        55,000
 quantities of SNM..........................................
c. Fuel fabricators, industrial processors,\1\ and                27,500
 independent spent fuel and monitored retrievable storage
 installations..............................................
d. Test reactors, mills and uranium conversion facilities,        11,000
 contractors, waste disposal licensees, industrial
 radiographers, and other large material users..............
e. Research reactors, academic, medical, or other small           5,500
 material users\2\..........................................
------------------------------------------------------------------------
\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
------------------------------------------------------------------------
                                                              Base civil
                                                               penalty
                                                                amount
                       Severity level                        (Percent of
                                                                amount
                                                              listed in
                                                              Table 1A)
------------------------------------------------------------------------
I..........................................................          100
II.........................................................           80
III........................................................           50
------------------------------------------------------------------------

2. Civil Penalty Assessment
    In an effort to (1) emphasize the importance of adherence to 
requirements and (2) reinforce prompt

[[Page 61151]]

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 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] TN09NO99.003


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; 
7
---------------------------------------------------------------------------

    \7\ 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 have been inadequately monitored for radiation, the issue 
would normally be considered licensee-identified; however, if the 
same dosimetry readings disclosed an overexposure, the issue would 
be considered an event.
---------------------------------------------------------------------------

    (ii) Whether prior opportunities existed to identify the problem 
requiring corrective action, and if so, the age and number of those 
opportunities;
    (iii) Whether the problem was revealed as the result of a licensee 
self-monitoring effort, such as conducting an audit, a test, a 
surveillance, a design review, or troubleshooting;
    (iv) For a problem revealed through an event, the ease of 
discovery, and the degree of licensee initiative in identifying the 
root cause of the problem and any associated violations;
    (v) For NRC-identified issues, whether the licensee would likely 
have identified the issue in the same time-period if the NRC had not 
been involved;

[[Page 61152]]

    (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 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

[[Page 61153]]

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 all relevant circumstances of the particular case. 
However, in no instance will a civil penalty for any one violation 
exceed $110,000 per day.

C. Orders

    An order is a written NRC directive to modify, suspend, or revoke a 
license; to cease and desist from a given practice or activity; or to 
take such other action as may be proper (see 10 CFR 2.202). Orders may 
also be issued in lieu of, or in addition to, civil penalties, as 
appropriate for Severity Level I, II, or III violations. Orders may be 
issued as follows:
    1. License Modification orders are issued when some change in 
licensee equipment, procedures, personnel, or management controls is 
necessary.
    2. Suspension Orders may be used:
    (a) To remove a threat to the public health and safety, common 
defense and security, or the environment;
    (b) To stop facility construction when,
    (i) Further work could preclude or significantly hinder the 
identification or correction of an improperly constructed safety-
related system or component; or
    (ii) The licensee's quality assurance program implementation is not 
adequate to provide confidence that construction activities are being 
properly carried out;
    (c) When the licensee has not responded adequately to other 
enforcement action;
    (d) When the licensee interferes with the conduct of an inspection 
or investigation; or
    (e) For any reason not mentioned above for which license revocation 
is legally authorized.
    Suspensions may apply to all or part of the licensed activity. 
Ordinarily, a licensed activity is not suspended (nor is a suspension 
prolonged) for failure to comply with requirements where such failure 
is not willful and adequate corrective action has been taken.
    3. Revocation Orders may be used:
    (a) When a licensee is unable or unwilling to comply with NRC 
requirements;
    (b) When a licensee refuses to correct a violation;
    (c) When licensee does not respond to a Notice of Violation where a 
response was required;
    (d) When a licensee refuses to pay an applicable fee under the 
Commission's regulations; or
    (e) For any other reason for which revocation is authorized under 
section 186 of the Atomic Energy Act (e.g., any condition which would 
warrant refusal of a license on an original application).
    4. Cease and Desist Orders may be used to stop an unauthorized 
activity that has continued after notification by the NRC that the 
activity is unauthorized.
    5. Orders to 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

[[Page 61154]]

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 takes into consideration all of the 
relevant circumstances of the particular case.

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. 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 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 March 30, 2000, 
for risk-significant items as defined by the licensee's maintenance 
rule program and March 30, 2001, for all other issues. 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
    To recognize the added 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

[[Page 61155]]

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 after considering the general 
principles of this statement of policy and the surrounding 
circumstances. 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 Sections 
VII.B.1.a and VII.B.1.h where a willful violation is involved, and of 
the types described in Sections VII.B.2 through VII.B.6. The 
circumstances under which mitigation discretion should be considered 
include, but are not limited to the following:
1. Non-Cited Violations (NCVs)
    A Non-Cited Violation (NCV) is defined as a Severity Level IV 
violation for which the staff chooses to exercise discretion in 
accordance with the Enforcement Policy and refrain from issuing a 
Notice of Violation pursuant to 10 CFR 2.201.
    Severity Level IV violations are defined in the Enforcement Policy 
as violations of more than minor concern. Violations at Severity Level 
IV involve noncompliance with NRC requirements that are not considered 
significant based on risk. This should not be misunderstood to imply 
that Severity Level IV issues have no risk significance.
    Exercising this type of discretion for Severity Level IV violations 
does not eliminate the NRC's emphasis on compliance with requirements 
nor the importance of maintaining safety. NRC inspectors will continue 
to identify and document Severity Level IV violations associated with 
matters they inspect. Doing so prompts licensees to take corrective 
actions and assures the public that violations are not ignored. This 
type of discretion is merely an option for dispositioning Severity 
Level IV violations; it does not change the threshold for Severity 
Level IV violations. This approach will allow licensees to dispute 
violations described as NCVs.
    The specific criteria for exercising NCV discretion is described in 
the sections below.
    a. Power Reactor Licensees. Severity Level IV violations at power 
reactors will normally be dispositioned as NCVs. Notwithstanding that 
this is the normal policy, the disposition of a Severity Level IV 
violation as an NCV is still an exercise of discretion, in that the 
agency is making a conscious decision not to issue a legal citation 
(Notice of Violation) for a violation of the requirements. Severity 
Level IV violations will be described in inspection reports, although 
the NRC will close these violations based on their being entered into 
the licensee's corrective action program. At the time a violation is 
closed in an inspection report, the licensee may not have completed its 
corrective actions or begun the process to identify the root cause and 
develop action to prevent recurrence. Licensee actions will be taken 
commensurate with the established priorities and processes of the 
licensee's corrective action program. The NRC inspection program will 
provide an assessment of the effectiveness of the corrective action 
program. In addition to documentation in inspection reports, violations 
will be entered into the Plant Issues Matrix (PIM) that the NRC 
maintains for each facility to assist in identifying declining 
performance and determining repetitiveness.
    Because the NRC will not normally obtain a written response from 
licensees describing actions taken to restore compliance and prevent 
recurrence of Severity Level IV violations, this enforcement approach 
places greater NRC reliance on licensee corrective action programs. 
Therefore, notwithstanding the normal approach of treating most 
Severity Level IV violations as NCVs, the NRC has identified four 
circumstances in which a written response to a Severity Level IV 
violation may be important. Any one of the following circumstances will 
result in consideration of a Notice of Violation (NOV) requiring a 
formal written response from a licensee.
    1. The licensee failed to restore compliance within a reasonable 
time after a violation was identified.
    2. The licensee did not place the violation into a corrective 
action program to address recurrence.
    3. The violation is repetitive as a result of inadequate corrective 
action, and was identified by the NRC.
    4. The violation was willful. Notwithstanding willfulness, an NCV 
may still be appropriate if:
    (i) The licensee identified the violation and 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.A);
    (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.
    b.-g. [Reserved]
    h. All Other Licensees. The NRC, with the approval of the Regional 
Administrator or his or her designee, may refrain from issuing an NOV 
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 an NCV provided that the inspection report includes a brief 
description of the corrective action and that the violation meets all 
of the following criteria:
    1. It was identified by the licensee; 8
---------------------------------------------------------------------------

    \8\ 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.
---------------------------------------------------------------------------

    2. 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;
    3. 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; and
    4. 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.A);
    (iii) The violation appears to be the isolated action of the 
employee without

[[Page 61156]]

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.
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.)
    (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 by March 30, 2000, for risk-significant items 
as defined by the licensee's maintenance rule program and by March 30, 
2001, for all other issues;
    (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

[[Page 61157]]

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 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 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. Notice of Enforcement Discretion for Power Reactors and Gaseous 
Diffusion Plants

    On occasion, circumstances may arise where a power reactor'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. Similarly, for a gaseous diffusion plant (GDP), 
circumstances may arise where compliance with a Technical Safety 
Requirement (TSR) or technical specification or other certificate 
condition would unnecessarily call for a total plant shutdown or, 
notwithstanding that a safety, safeguards or security feature was 
degraded or inoperable, compliance would unnecessarily place the plant 
in a transient or condition where those features could be required.
    In these circumstances, the NRC staff may choose not to enforce the 
applicable TS, TSR, or other license or certificate 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. The staff may also grant enforcement discretion in 
cases involving severe weather or other natural phenomena, based upon 
balancing the public health and safety or common defense and security 
of not operating, against the potential radiological or other hazards 
associated with continued operation, and a determination that safety 
will not be impacted unacceptably by exercising this discretion. The 
Commission is to be informed expeditiously following the granting of an 
NOED in such situations. A licensee or certificate holder 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 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 Office of Nuclear Materials Safety and Safeguards, as 
appropriate, 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) or a certificate 
amendment under 10 CFR 76.45. The person exercising enforcement 
discretion will document the decision.
    For an operating reactor, 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.
    For GDPs, the exercise of enforcement discretion would be used 
where compliance with a certificate condition would involve an 
unnecessary plant shutdown or, notwithstanding that a safety, 
safeguards or security feature was degraded or inoperable, compliance 
would unnecessarily place the plant in a transient or condition where 
those features could be required. Such regulatory flexibility is needed 
because

[[Page 61158]]

a total plant shutdown is not necessarily the best response to a plant 
condition. GDPs are designed to operate continuously and have never 
been shut down. Although portions can be shut down for maintenance, the 
staff has been informed by the certificate holder that restart from a 
total plant shutdown may not be practical and the staff agrees that the 
design of a GDP does not make restart practical. Hence, the decision to 
place either GDP in plant-wide shutdown condition would be made only 
after determining that there is inadequate safety, safeguards, or 
security and considering the total impact of the shutdown on safety, 
the environment, safeguards, and security. A NOED would not be used for 
noncompliances with other than certificate requirements, or for 
situations where the certificate holder cannot demonstrate adequate 
safety, safeguards, or security.
    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 and 
certificate holders should not rely on the NRC's authority to exercise 
enforcement discretion as a routine substitute for compliance or for 
requesting a license or certificate 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.
    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

[[Page 61159]]

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.9 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.
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    \9\ 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.
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    Orders to NRC-licensed reactor operators may involve suspension for 
a specified period, modification, or revocation of their individual 
licenses. Orders to unlicensed individuals might include provisions 
that would;
     Prohibit involvement in NRC licensed activities for a 
specified period of time (normally the period of suspension would not 
exceed 5 years) or until certain conditions are satisfied, e.g., 
completing specified training or meeting certain qualifications.
     Require notification to the NRC before resuming work in 
licensed activities.
     Require the person to tell a prospective employer or 
customer engaged in licensed activities that the person has been 
subject to an NRC order.
    In the case of a licensed operator's failure to meet applicable 
fitness-for-duty requirements (10 CFR 55.53(j)), the NRC may issue a 
Notice of Violation or a civil penalty to the Part 55 licensee, or an 
order to suspend, modify, or revoke the Part 55 license. These actions 
may be taken the first time a licensed operator fails a drug or alcohol 
test, that is, receives a confirmed positive test that exceeds the 
cutoff levels of 10 CFR Part 26 or the facility licensee's cutoff 
levels, if lower. However, normally only a Notice of Violation will be 
issued for the first confirmed positive test in the absence of 
aggravating circumstances such as errors in the performance of licensed 
duties or evidence of prolonged use. In addition, the NRC intends to 
issue an order to suspend the Part 55 license for up to 3 years the 
second time a licensed operator exceeds those cutoff levels. In the 
event there are less than 3 years remaining in the term of the 
individual's license, the NRC may consider not renewing the 
individual's license or not issuing a new license after the three year 
period is completed. The NRC intends to issue an order to revoke the 
Part 55 license the third time a licensed operator exceeds those cutoff 
levels. A licensed operator or applicant who refuses to participate in 
the drug and alcohol testing programs established by the facility 
licensee or who is involved in the sale, use, or possession of an 
illegal drug is also subject to license suspension, revocation, or 
denial.
    In addition, the NRC may take enforcement action against a licensee 
that may impact an individual, where the conduct of the individual 
places in question the NRC's reasonable assurance that licensed 
activities will be properly conducted. The NRC may take enforcement 
action for reasons that would warrant refusal to issue a license on an 
original application. Accordingly, appropriate enforcement actions may 
be taken regarding matters that raise issues of integrity, competence, 
fitness-for-duty, or other matters that may not necessarily be a 
violation of specific Commission requirements.
    In the case of an unlicensed person, whether a firm or an 
individual, an order modifying the facility license may 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, ``Significance 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.

[[Page 61160]]

    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 
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(d)(1). 
Notices of Violation or orders will be used against non-licensees who 
are subject to the specific requirements of Part 72. Notices of 
Nonconformance will be used for contractors who fail to meet 
commitments related to NRC activities but are not in violation of 
specific requirements.

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.

[[Page 61161]]

Supplements--Violation Examples

    This section 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 10 designed to prevent or mitigate a 
serious safety event not being able to perform its intended safety 
function 11 when actually called upon to work;
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    \10\ The term ``system'' as used in these supplements, includes 
administrative and managerial control systems, as well as physical 
systems.
    \11\ ``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.
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    3. An accidental criticality; or
    4. A licensed operator at the controls of a nuclear reactor, or 
a senior operator directing licensed activities, involved in 
procedural errors which result in, or exacerbate the consequences 
of, an alert or higher level emergency and who, as a result of 
subsequent testing, receives a confirmed positive test result for 
drugs or alcohol.
    B. Severity Level II--Violations involving for example:
    1. A system designed to prevent or mitigate serious safety 
events not being able to perform its intended safety function;
    2. A licensed operator involved in the use, sale, or possession 
of illegal drugs or the consumption of alcoholic beverages, within 
the protected area; or
    3. A licensed operator at the control of a nuclear reactor, or a 
senior operator directing licensed activities, involved in 
procedural errors and who, as a result of subsequent testing, 
receives a confirmed positive test result for drugs or alcohol.
    C. Severity Level III--Violations involving for example:
    1. A significant failure to comply with the Action Statement for 
a Technical Specification Limiting Condition for Operation where the 
appropriate action was not taken within the required time, such as:
    (a) In a pressurized water reactor, in the applicable modes, 
having one high-pressure safety injection pump inoperable for a 
period in excess of that allowed by the action statement; or
    (b) In a boiling water reactor, one primary containment 
isolation valve inoperable for a period in excess of that allowed by 
the action statement.
    2. A system designed to prevent or mitigate a serious safety 
event 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).
    3. Inattentiveness to duty on the part of licensed personnel;
    4. Changes in reactor parameters that cause unanticipated 
reductions in margins of safety;
    5. A non-willful compromise of an application, test, or 
examination required by 10 CFR Part 55 that:
    (a) In the case of initial operator licensing, contributes to an 
individual being granted an operator or a senior operator license, 
or
    (b) In the case of requalification, contributes to an individual 
being permitted to perform the functions of an operator or a senior 
operator.
    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 licensed operator's confirmed positive test for drugs or 
alcohol that does not result in a Severity Level I or II violation;
    8. Equipment failures caused by inadequate or improper 
maintenance that substantially complicates recovery from a plant 
transient;
    9. A failure to obtain prior Commission approval required by 10 
CFR 50.59 for changes that would not be found acceptable by the 
Commission;
    10. 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 for a change to the facility or procedures, 
implemented without prior Commission approval, that would not be 
found acceptable had approval been sought; or
    11. The failure to make a report required by 10 CFR 50.72 or 
50.73 associated with any 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. A non-willful compromise of an application, test, or 
examination required by 10 CFR Part 55 that:
    (a) In the case of initial operator licensing, is discovered and 
reported to the NRC before an individual is granted an operator or a 
senior operator license, or
    (b) In the case of requalification, is discovered and reported 
to the NRC before an individual is permitted to perform the 
functions of an operator or a senior operator, or
    (c) Constitutes more than minor concern.
    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. Violations of 10 CFR 50.59 that do not involve circumstances 
in which a change that required prior Commission approval would not 
be found acceptable had the approval been sought; or
    6. A failure to update the FSAR as required by 10 CFR 50.71(e) 
in cases where the erroneous information is not used to make an 
unacceptable change to the facility or procedures.
    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 12 in such a manner that they would 
not have satisfied their intended safety related purpose.
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    \12\ 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,

[[Page 61162]]

and normally involves multiple examples of deficient construction or 
construction of unknown quality due to inadequate program 
implementation;
    2. A failure to confirm the design safety requirements of a 
structure or system as a result of inadequate preoperational test 
program implementation; or
    3. A failure to make a required 10 CFR 50.55(e) report.
    D. Severity Level IV--Violations involving failure to meet 
regulatory requirements including one or more Quality Assurance 
Criterion not amounting to Severity Level I, II, or III violations 
that have more than minor safety or environmental significance.

Supplement III--Safeguards

    This supplement provides examples of violations in each of the 
four severity levels as guidance in determining the appropriate 
severity level for violations in the area of safeguards.
    A. Severity Level I--Violations involving for example:
    1. An act of radiological sabotage in which the security system 
did not function as required and, as a result of the failure, there 
was a significant event, such as:
    (a) A Safety Limit, as defined in 10 CFR 50.36 and the Technical 
Specifications, was exceeded;
    (b) A system designed to prevent or mitigate a serious safety 
event was not able to perform its intended safety function when 
actually called upon to work; or
    (c) An accidental criticality occurred;
    2. The theft, loss, or diversion of a formula quantity 
13 of special nuclear material (SNM); or
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    \13\ 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 14 who 
represents a threat into a vital area 15 from outside the 
protected area;
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    \14\ 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.
    \15\ The phrase ``vital area'' as used in this supplement 
includes vital areas and material access areas.
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    2. The theft, loss or diversion of SNM of moderate strategic 
significance 16 in which the security system did not 
function as required; or
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    \16\ 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 17 into a vital area from outside 
the protected area;
---------------------------------------------------------------------------

    \17\ 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; or
    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.
    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 conduct a proper search at the access control 
point;
    5. 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;
    6. A failure to control access such that an opportunity exists 
that could allow unauthorized and undetected access into the 
protected area but which was neither easily or likely to be 
exploitable;
    7. A failure to conduct an adequate search at the exit from a 
material access area;
    8. 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
    9. 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 20.18
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    \18\ Personnel overexposures and associated violations incurred 
during a life-saving or other emergency response effort will be 
treated on a case-by-case basis.
---------------------------------------------------------------------------

    A. Severity Level I--Violations involving for example:
    1. A radiation exposure during any year of a worker in excess of 
25 rems total effective dose equivalent, 75 rems to the lens of the 
eye, or 250 rads to the skin of the whole body, or to the feet, 
ankles, hands or forearms, or to any other organ or tissue;
    2. A radiation exposure over the gestation period of the embryo/
fetus of a declared pregnant woman in excess of 2.5 rems total 
effective dose equivalent;
    3. A radiation exposure during any year of a minor in excess of 
2.5 rems total effective dose equivalent, 7.5 rems to the lens of 
the eye, or 25 rems to the skin of the whole body, or to the feet, 
ankles, hands or forearms, or to any other organ or tissue;
    4. An annual exposure of a member of the public in excess of 1.0 
rem total effective dose equivalent;
    5. A release of radioactive material to an unrestricted area at 
concentrations in excess of 50 times the limits for members of the 
public as described in 10 CFR 20.1302(b)(2)(i); or
    6. Disposal of licensed material in quantities or concentrations 
in excess of 10 times the limits of 10 CFR 20.2003.
    B. Severity Level II--Violations involving for example:
    1. A radiation exposure during any year of a worker in excess of 
10 rems total effective dose equivalent, 30 rems to the lens of the 
eye, or 100 rems to the skin of the whole body, or to the feet, 
ankles, hands or forearms, or to any other organ or tissue;
    2. A radiation exposure over the gestation period of the embryo/
fetus of a declared pregnant woman in excess of 1.0 rem total 
effective dose equivalent;
    3. A radiation exposure during any year of a minor in excess of 
1 rem total effective dose equivalent; 3.0 rems to the lens of the 
eye, or 10 rems to the skin of the whole body, or to the feet, 
ankles, hands or forearms, or to any other organ or tissue;
    4. An annual exposure of a member of the public in excess of 0.5 
rem total effective dose equivalent;
    5. A release of radioactive material to an unrestricted area at 
concentrations in excess of 10 times the limits for members of the 
public as described in 10 CFR 20.1302(b)(2)(i) (except when 
operation up to 0.5 rem a year has been approved by the Commission 
under Section 20.1301(c));
    6. Disposal of licensed material in quantities or concentrations 
in excess of five times the limits of 10 CFR 20.2003; or

[[Page 61163]]

    7. A failure to make an immediate notification as required by 10 
CFR 20.2202 (a)(1) or (a)(2).
    C. Severity Level III--Violations involving for example:
    1. A radiation exposure during any year of a worker in excess of 
5 rems total effective dose equivalent, 15 rems to the lens of the 
eye, or 50 rems to the skin of the whole body or to the feet, 
ankles, hands or forearms, or to any other organ or tissue;
    2. A radiation exposure over the gestation period of the embryo/
fetus of a declared pregnant woman in excess of 0.5 rem total 
effective dose equivalent (except when doses are in accordance with 
the provisions of Section 20.1208(d));
    3. A radiation exposure during any year of a minor in excess of 
0.5 rem total effective dose equivalent; 1.5 rems to the lens of the 
eye, or 5 rems to the skin of the whole body, or to the feet, 
ankles, hands or forearms, or to any other organ or tissue;
    4. 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));
    5. 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));
    6. 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);
    7. 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;
    8. Disposal of licensed material not covered in Severity Levels 
I or II;
    9. 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;
    10. Conduct of licensee activities by a technically unqualified 
person; or
    11. A significant failure to control licensed material.
    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.19
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    \19\ Some transportation requirements are applied to more than 
one licensee involved in the same activity such as a shipper and 
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; or
    4. A failure to make required initial notification associated 
with Severity Level III violations.
    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:
    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

[[Page 61164]]

    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 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;
    8. A failure to submit an NRC Form 241 as required by 10 CFR 
150.20;
    9. 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;
    10. 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;
    11. 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;
    12. 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;
    13. Changes in parameters that cause unanticipated reductions in 
margins of safety;
    14. A significant failure to meet the requirements of 10 CFR 
76.68, including a failure such that a required certificate 
amendment was not sought;
    15. 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;
    16. Equipment failures caused by inadequate or improper 
maintenance that substantially complicates recovery from a plant 
transient;
    17. 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
    18. 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 20 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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    \20\ In applying the examples in this supplement regarding 
inaccurate or incomplete information and records, reference should 
also be made to the guidance in Section IX, ``Inaccurate and 
Incomplete Information,'' and to the definition of ``licensee 
official'' contained in Section IV.C.
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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
    6. A failure to substantially implement the required fitness-
for-duty program.21
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    \21\ The example for violations for fitness-for-duty relate to 
violations of 10 CFR Part 26.
---------------------------------------------------------------------------

    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

[[Page 61165]]

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; or
    9. 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); or
    2. A licensee failure to meet or implement one emergency 
planning standard involving assessment or notification.
    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.

Interim Enforcement Policies

Interim Enforcement Policy for Generally Licensed Devices Containing 
Byproduct Material (10 CFR 31.5)

    This section sets forth the interim enforcement policy that the NRC 
will follow to exercise enforcement discretion for certain violations 
of requirements in 10 CFR Part 31 for generally licensed devices 
containing byproduct material. It addresses violations that persons 
licensed pursuant to 10 CFR 31.5 identify and correct now, as well as 
during the initial cycle of the notice and response program 
contemplated by the proposed new requirements published in the Federal 
Register on December 2, 1998 (63 FR 66492), entitled ``Requirements for 
Those Who Possess Certain Industrial Devices Containing Byproduct 
Material to Provide Requested Information''.
Exercise of Enforcement Discretion
    Under this interim enforcement policy, enforcement action normally 
will not be taken for violations of 10 CFR 31.5 if they are identified 
by the general licensee, and reported to the NRC if reporting is 
required, provided that the general licensee takes appropriate 
corrective action to address the specific violations and prevent 
recurrence of similar problems.
Exceptions
    Enforcement action may be taken where there is: (a) failure to take 
appropriate corrective action to prevent recurrence of similar 
violations; (b) failure to respond and provide the information required 
by the notice and response program (if it becomes a final rule); (c) 
failure to provide complete and accurate information to the NRC; or (d)

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a willful violation, such as willfully disposing of generally licensed 
material in an unauthorized manner. Enforcement sanctions in these 
cases may include civil penalties as well as Orders to modify or revoke 
the authority to possess radioactive sources under the general license.

Interim Enforcement Policy Regarding Enforcement Discretion for Nuclear 
Power Plants During the Year 2000 Transition

    This section sets forth the interim enforcement policy that will 
govern the exercise of enforcement discretion by the NRC staff when 
licensees of operating nuclear power plants find it necessary to 
deviate from license conditions, including technical specifications 
(TSs), in those cases in which year 2000 (Y2K) related complications 
would otherwise require a plant shutdown that could adversely affect 
the stability and reliability of the electrical power grid. This policy 
does not extend to situations in which a licensee may be unable to 
communicate with the NRC.
    The policy is effective August 30, 1999, and will remain in effect 
through January 1, 2001. This policy only applies during Y2K transition 
or rollover periods (December 31, 1999, through January 3, 2000; 
February 28, 2000, through March 1, 2000; and December 30, 2000, 
through January 1, 2001). During these periods, a licensee may contact 
the NRC Headquarters Operations Center and seek NRC enforcement 
discretion with regard to the potential noncompliance with license 
conditions, including TSs, if the licensee has determined that:
    (a) Complying with license conditions, including TSs, in a Y2K-
related situation would require a plant shutdown;
    (b) Continued plant operation is needed to help maintain a reliable 
and stable grid; and
    (c) Any decrease in safety as a result of continued plant operation 
is small (considering both risk and deterministic aspects), and 
reasonable assurance of public health and safety, the environment, and 
security is maintained with the enforcement discretion.
    Licensees are expected to follow the existing guidance as stated in 
NRC Inspection Manual Part 9900 for Notices of Enforcement Discretion 
to the maximum extent practicable, particularly regarding a safety 
determination and notification of NRC. A licensee seeking NRC 
enforcement discretion must provide a written justification, or in 
circumstances in which good cause is shown, an oral justification 
followed as soon as possible by written justification. The 
justification must document the need and safety basis for the request 
and provide whatever other information the NRC staff needs to make a 
decision regarding whether the exercise of discretion is appropriate. 
The NRC staff may grant enforcement discretion on the basis of 
balancing the public health and safety or common defense and security 
of not operating against potential radiological or other hazards 
associated with continued operation, and a determination that safety 
will not be unacceptably affected by exercising the discretion. The 
Director of the Office of Nuclear Reactor Regulation, or designee, will 
advise the licensee whether the NRC has approved the licensee's request 
and, if so, will subsequently confirm the exercise of discretion in 
writing. Enforcement discretion will only be exercised if the NRC staff 
is clearly satisfied that the action is consistent with protecting 
public health and safety and is warranted in the circumstances 
presented by the licensee.
    If the volume of requests to the NRC Headquarters Operations Center 
is such that the NRC staff cannot review and approve all licensee 
requests in a timely fashion, the NRC staff will obtain the safety-
significant information from the licensee to enable the NRC staff to 
make a prompt initial assessment. Unless the assessment is unfavorable, 
the licensee would be permitted to proceed with its planned course of 
action. The NRC staff will complete these assessments as time permits 
and the licensee will be advised of the results orally, if possible, 
and then in writing. If the NRC staff's prompt initial assessment or 
subsequent assessment determines that a licensee's actions raise safety 
concerns, the licensee would be so informed. The licensee would then be 
required to follow its license conditions, including TSs.
    If there are communications difficulties between the licensee and 
the NRC, the licensee is encouraged to interact with the NRC inspector 
onsite who will have a dedicated satellite telephone. The inspector 
should be able to facilitate communication with the NRC Headquarters 
Operations Center and/or the NRC Regional Incident Response Centers 
(IRCs). If communication with the NRC Headquarters Operations Center is 
not possible, then the licensee should contact the IRC in NRC Region IV 
to discuss enforcement discretion. Similarly, if the Region IV IRC 
cannot be reached, then the licensee should attempt to contact the 
Region I, II and III IRCs. Although it is considered highly unlikely, 
if communication with NRC is not possible, the licensee should follow 
the plant license conditions, including technical specifications.
    In conducting its assessments, the licensee should follow, to the 
extent practicable, the guidance in NRC Inspection Manual Part 9900 for 
Notices of Enforcement Discretion. Contrary to Part 9900 Section B.3 
guidance, it is not necessary for an emergency to be declared by a 
government entity. Licensees are encouraged to contact NRC early in 
their evaluation process, particularly if time is of the essence, even 
though complete information as specified in Part 9900 may not be 
available.
    The decision to exercise enforcement discretion does not change the 
fact that the licensee will be in noncompliance nor does it imply that 
enforcement discretion is being exercised for any noncompliance that 
may have led to the noncompliance at issue. To the extent noncompliance 
was involved, the NRC staff will normally take enforcement action for 
the root causes that led to the noncompliance for which enforcement 
discretion was granted. Enforcement action will also be considered in 
those cases in which incorrect or incomplete information was provided 
to the NRC staff by a licensee in its justification. The NRC recognizes 
that a licensee will need to exercise judgment in making a 
determination under this discretion provision. Consistent with the 
NRC's position involving 10 CFR 50.54(x), enforcement action for a 
violation of a license condition, including a TS, will not be taken 
unless a licensee's action was clearly unreasonable considering all the 
relevant circumstances. Enforcement action could include assessment of 
civil penalties and the issuance of orders.

Interim Enforcement Policy for Use During the NRC Power Reactor 
Oversight Process Pilot Plant Study

    This section sets forth the interim enforcement policy that the NRC 
will use to address violations of the requirements of 10 CFR Part 50 
and associated license conditions at nine power reactor sites 
participating in the NRC reactor oversight process pilot plant study 
beginning in June 1999. This policy approaches enforcement for the 
plants participating in the pilot plant study by dividing identified 
violations into two groups.

I. Violations Evaluated by the Significance Determination Process

    The first group consists of those violations that the Reactor 
Oversight Program's Significance Determination Process (SDP) can 
evaluate. For these

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violations, the SDP will determine the significance of the violation 
and the Agency Action Matrix will determine the appropriate agency 
response. These violations will be cited or non-cited. Normally, no 
severity levels and civil penalties will be used to characterize these 
violations.
A. Violations of Low Significance
    Violations that the SDP evaluates as not being risk significant 
(i.e., green) will be described in inspection reports as Non-Cited 
Violation (NCVs) and be categorized by the assessment process within 
the licensee response band. However, a Notice of Violation (NOV) will 
be issued if:
    (1) The licensee fails to restore compliance within a reasonable 
time after they identified the violation;
    (2) The licensee fails to place the violation into the corrective 
action program; or
    (3) The violation was willful. An NCV may be appropriate if the 
violation meets the criteria in Section VII.B.1.a.4 of the Enforcement 
Policy.
    The three exceptions are consistent with items (1), (2), and (4) of 
Section VII.B.1.a.
B. Significant Violations
    Violations that the SDP evaluates as risk significant (i.e., white, 
yellow, or red) will be assigned a color band related to its 
significance for use by the assessment process. Because of being risk 
significant, an NOV will be issued requiring a formal written response 
unless sufficient information is already on the docket. The Commission 
reserves the use of discretion for particularly significant violations 
(e.g. an accidental criticality) to assess civil penalties in 
accordance with Section 234 of the Atomic Energy Act of 1954, as 
amended.

II. Violations Not Evaluated by the SDP and Those Having Actual 
Consequences

    In the second group of violations, the Enforcement Policy will be 
retained, along with severity levels and the potential for the 
imposition of civil penalties or other appropriate enforcement action. 
Three categories of violations are within this group:
    (A) Violations that involve willfulness including discrimination,
    (B) Violations that may impact the NRC's ability for oversight of 
licensee activities such as those associated with reporting issues, 
failure to obtain NRC approvals such as for changes to the facility as 
required by 10 CFR 50.59, 10 CFR 50.54(a), 10 CFR 50.54 (p), and 
failure to provide the NRC with complete and accurate information or to 
maintain accurate records, and
    (C) Violations that involve actual consequences such as an 
overexposure to the public or plant personnel, failure to make the 
required notifications that impact the ability of federal, state and 
local agencies to respond to an actual emergency preparedness or 
transportation event, or a substantial release of radioactive material.
    To the extent the above does not modify the NRC Enforcement Policy, 
the NRC Enforcement Policy remains applicable to power reactor 
licensees.

    Dated at Rockville, Maryland, this 26th day of October, 1999.

    For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. 99-28595 Filed 11-8-99; 8:45 am]
BILLING CODE 7590-01-P