[Federal Register Volume 67, Number 30 (Wednesday, February 13, 2002)]
[Proposed Rules]
[Pages 6663-6665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-3503]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 67, No. 30 / Wednesday, February 13, 2002 / 
Proposed Rules  

[[Page 6663]]



NUCLEAR REGULATORY COMMISSION

10 CFR Part 50


Criteria for the Treatment of Individual Requirements in a 
Regulatory Analysis; Meeting

AGENCY: Nuclear Regulatory Commission.

ACTION: Notice of public meeting.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is announcing a public 
meeting to discuss criteria for the treatment of individual 
requirements in a regulatory analysis. The meeting is intended to 
obtain public input on preliminary proposed guidance that could be 
incorporated into the Commission's Regulatory Analysis Guidelines.

DATES: March 21, 2002.

ADDRESSES: The public meeting will be held in Room Number T-10A1 in the 
NRC's headquarters at Two White Flint North, 11545 Rockville Pike, 
Rockville, Maryland 20852.

FOR FURTHER INFORMATION CONTACT: Dennis P. Allison, Office of Nuclear 
Reactor Regulation, Washington DC 20555-0001, telephone (301) 415-1178, 
e-mail [email protected] or Clark W. Prichard, Office of Nuclear Materials 
Safety and Safeguards, Washington DC 20555-0001, telephone (301) 415-
6203, e-mail [email protected].

SUPPLEMENTARY INFORMATION:

Purpose

    The purpose of the meeting is to discuss criteria for the treatment 
of individual requirements in a regulatory analysis. The meeting is 
intended to obtain public input on preliminary proposed guidance that 
could be incorporated into the Commission's Regulatory Analysis 
Guidelines.

Participation

    To facilitate orderly conduct of the meeting, members of the public 
who wish to speak should contact one of the cognizant NRC staff members 
listed above under the heading ``For Further Information Contact'' to 
register in advance of the meeting. Indicate as specifically as 
possible the topic(s) of your comment(s) and the length of time you 
wish to speak. Provide your name and a telephone number where you can 
be contacted, if necessary, before the meeting. Registration to speak 
will also be available at the meeting on a first come basis to the 
extent that time is available.

Background

    Normally, in considering a proposed rulemaking action, the NRC 
performs an aggregate regulatory analysis for the entire rule to 
determine whether or not the action is justified.\1\ The current 
guidelines in NUREG-BR-0058, Revision 3, July 2000, Regulatory Analysis 
Guidelines of the U.S. Nuclear Regulatory Commission, do not 
specifically state when an individual requirement, which is part of the 
rule, should be analyzed separately to determine whether or not it is 
justified.\2\ Thus, aggregation of different requirements into a single 
rulemaking action could theoretically mask an individual requirement 
that is neither integral to the purpose of the rule nor justified on 
its own merits. In the case of rules that provide voluntary 
alternatives to current requirements, the net benefit from relaxation 
of one requirement could potentially support an unrelated increase in 
another requirement that is not cost-justified. In the case of rules 
that are subject to a backfit analysis, the net benefit from one 
requirement could potentially support an unrelated requirement that is 
not cost-justified.\3\
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    \1\ In the case of a rule that is subject to a backfit analysis, 
it is the intent of the NRC's regulatory analysis guidelines that 
the regulatory analysis satisfy the documentation requirements of 
the backfit rule, 10 CFR 50.109. Provided this intent is met the 
regulatory analysis may serve as the backfit analysis. Thus, for the 
purpose of simplicity, the single term regulatory analysis is used 
in this discussion to mean a regulatory analysis and/or a backfit 
analysis.
    \2\ Additional guidelines may be found in other sources such as: 
10 CFR 50.109, 70.76, 72.62, and 76.76 which control generic or 
plant-specific backfitting at nuclear power plants, special nuclear 
materials facilities, independent spent fuel storage facilities, and 
gaseous diffusion plants, respectively; the Charter of the Committee 
to Review Generic Requirements, which controls some generic actions; 
and Management Directive 8.4, which controls plant-specific 
backfitting at nuclear power plants.
    \3\ This discussion does not apply to backfits that qualify 
under one of the exceptions in 10 CFR 50.109(a)(4) (i.e., backfits 
that are necessary for compliance or adequate protection). Those 
types of backfits require a documented evaluation rather than a 
backfit analysis, and cost is not a consideration in deciding 
whether or not they are justified.
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    In a Commission paper dated September 14, 2000, SECY-00-0198, 
Status Report on Study of Risk-Informed Changes to the Technical 
Requirements of 10 CFR Part 50 (Option 3) and Recommendations on Risk-
Informed Changes to 10 CFR 50.44 (Combustible Gas Control), the NRC 
staff discussed development of a voluntary risk-informed alternative 
rule. The staff recommended against allowing selective implementation 
of parts of the voluntary alternative and against application of the 
backfit rule. In a staff requirements memorandum (SRM) dated January 
19, 2001, the Commission agreed that selective implementation of 
individual elements of a risk-informed alternative should not be 
permitted. The Commission also agreed that since implementation of the 
risk-informed alternative version of 10 CFR 50.44 is voluntary, a 
backfit analysis of that version is not required. Furthermore, the 
Commission stated that

    * * * a disciplined, meaningful, and scrutable process needs to 
be in place to justify any new requirements that are added as a 
result of the development of risk-informed alternative versions of 
regulations. Just as any burden reduction must be demonstrated to be 
of little or no safety significance, any new requirement should be 
justifiable on some cost-benefit basis. The Commission challenges 
the staff to establish such a criterion in a manner that adds 
fairness and equity without adding significant complexity. The staff 
should develop a proposed resolution for this issue and provide it 
to the Commission for approval.

    In a Commission paper dated July 23, 2001, SECY-01-0134, Final Rule 
Amending the Fitness-for-duty Rule, the staff recommended withdrawing 
the OMB clearance request for a final rule and developing a new notice 
of proposed rulemaking. In an SRM, dated October 3, 2001, the 
Commission approved that recommendation. Furthermore, the Commission 
provided specific instructions on the backfit analysis as follows.


[[Page 6664]]


    In the new fitness-for-duty rulemaking, the Commission will 
conduct an aggregate backfit analysis of the entire rulemaking. If 
there is a reasonable indication that a proposed change imposes 
costs disproportionate to the safety benefit attributable to that 
change, as part of the final rule package the Commission will 
perform an analysis of that proposed change in addition to the 
aggregate analysis of the entire rulemaking to determine whether 
this proposed change should be aggregated with the other proposed 
change for the purposes of the backfit analysis. That analysis will 
need to show that the individual change is integral to achieving the 
purpose of the rule, has costs that are justified in view of the 
benefits that would be provided or qualifies for one of the 
exceptions in 10 CFR 50.109(a)(4).

    In a Commission paper dated August 23, 2001, SECY-01-0162, Staff 
Plans for Proceeding with the Risk-informed Alternative to the 
Standards for Combustible Gas Control Systems in Light-water-cooled 
Power Reactors in 10 CFR 50.44 (WITS 20010003), the staff proposed to 
identify any revisions that would be needed to existing guidance to put 
into place a disciplined, meaningful, and scrutable process for 
assessing any new requirements that could be added by a risk-informed 
alternative rule. Consistent with past practice and public 
expectations, the staff indicated that it planned to seek stakeholder 
input before reporting its recommendations to the Commission. In an SRM 
dated December 31, 2001, the Commission directed the staff to

    * * * provide the Commission with recommendations for revising 
existing guidance in order to implement a disciplined, meaningful, 
and scrutable methodology for evaluating the value-impact of any new 
requirements that could be added by a risk-informed alternative 
rule.

    Two principal considerations have guided the NRC staff in 
developing preliminary proposed guidance:
    (1) If an individual requirement is integral to achieving the 
purpose of a proposed rule, the requirement should be integrated into 
an aggregate regulatory analysis of the overall rulemaking. That would 
be the case if the individual requirement is:
    (a) Necessary to achieve the stated objectives of the rule;
    (b) Needed, in combination with other elements of the rule, to 
establish a coherent regulatory approach, such as the key principles 
discussed in Regulatory Guide 1.174;
    (c) Not separable from other elements of the rule; or
    (d) Needed to ensure that the rule does not significantly increase 
risk. As an example of this category, if a rule provides a relaxation 
in one requirement for the purpose of reducing unnecessary burden, a 
compensating increase in another requirement might be needed to support 
a finding that risk is not significantly increased.
    (2) If an individual requirement is not integral to achieving the 
purpose of a proposed rule, it could theoretically be separated and 
required to stand on its own. However, that approach would be 
impractical because it would involve separate regulatory analyses for 
individual elements of a proposed rule. In the case of a proposed rule 
subject to a backfit analysis, it would also be unreasonably stringent 
if it were taken to mean that individual elements of a proposed rule, 
on their own, must each provide ``a substantial increase in the overall 
protection of the public health and safety or the common defense and 
security.''\4\
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    \4\ 10 CFR 50.109(a)(3).
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    The NRC's periodic review and endorsement of new versions of the 
ASME Codes is a special case. Some aspects of those rulemakings are not 
addressed in regulatory analyses and thus not subject to the 
considerations discussed above. However, for those aspects that are 
addressed in regulatory analyses, the principal considerations 
discussed above would apply.
    The NRC staff has now developed preliminary proposed guidance and 
wishes to obtain input from interested members of the public. This 
guidance could be added to Section 4 of the Regulatory Analysis 
Guidelines, which applies to regulatory and backfit analyses in 
general, including those for mandatory and voluntary rules. It would 
state the following:

    Normally, in considering a proposed rulemaking action, the NRC 
performs an aggregate regulatory analysis for the entire rule to 
determine whether or not it is justified. However, there is a 
concern that aggregation or bundling of different requirements in a 
single analysis could potentially mask the inclusion of an 
inappropriate individual requirement. In the case of a rule that 
provides a voluntary alternative to current requirements, the net 
benefit from relaxation of one requirement could potentially support 
an unrelated requirement that is not cost-justified. In the case of 
a rule that is subject to a backfit analysis, the net benefit from 
one requirement could potentially support an unrelated requirement 
that is not cost-justified.\5\ To address this concern, in 
presenting a rulemaking alternative that constitutes an aggregation 
or bundling of requirements, the analyst should include an 
individual requirement only if it is integral to the purpose of the 
rule or justified on a cost-benefit basis.
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    \5\ This discussion does not apply to backfits that qualify 
under one of the exceptions in 10 CFR 50.109(a)(4) (i.e., backfits 
that are necessary for compliance or adequate protection). Those 
types of backfits require a documented evaluation rather than a 
backfit analysis, and cost is not a consideration in deciding 
whether or not they are justified.
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    In this context, an individual requirement is considered 
integral to the purpose of the rule if it is:
    (1) Necessary to achieve the stated objectives of the rule;
    (2) Needed, in combination with other elements of the rule, to 
establish a coherent regulatory approach, such as the key principles 
discussed in Regulatory Guide 1.174;\6\
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    \6\ Regulatory Guide 1.174, An Approach for Using Probabilistic 
Risk Assessment In Risk-Informed Decisions On Plant-Specific Changes 
to the Licensing Basis, July 1998, includes five key principles, 
four of which would be appropriate to consider in connection with a 
risk-informed voluntary alternative rule:
    (1) The proposed change is consistent with the defense-in-depth 
philosophy;
    (2) The proposed change maintains sufficient safety margins;
    (3) If there is an increase in core damage frequency or risk, it 
should be small and consistent with the intent of the NRC's safety 
goal policy statement, published in the Federal Register on August 
4, 1986 (51 FR 30028); and
    (4) The impact of the proposed change should be monitored using 
performance measurement strategies.
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    (3) Not separable from other elements of the rule; or
    (4) Needed to ensure that the rule does not significantly 
increase risk. As an example of this category, if a rule provides a 
relaxation in one requirement for the purpose of reducing 
unnecessary burden, a compensating increase in another requirement 
might be needed to support a finding that risk is not significantly 
increased.
    If an individual requirement is not integral to the purpose of 
the rule, it must be cost-justified. This means that the individual 
requirement must add more to the rulemaking action in terms of 
benefit than it does in terms of cost. It does not mean that the 
individual requirement, by itself, must provide a substantial 
increase in the overall protection of the public health and safety 
or the common defense and security.
    As a practical matter, a rulemaking action is generally divided 
into discrete elements for the purpose of estimating costs and 
benefits in a regulatory analysis. Thus, it should be apparent to 
the analyst whether or not there are individual elements that must 
be excluded because they are neither integral to the purpose of the 
rule nor cost-justified. The analyst may rely on his or her judgment 
to make this determination. It is not necessary to provide 
additional documentation or analysis to explain how the 
determination was made.
    When a draft regulatory analysis is published for comment along 
with a proposed rule, the NRC may receive a comment to the effect 
that an individual requirement is neither integral to the purpose of 
the rule nor cost justified. If the comment provides a reasonable 
indication that this is the case, the NRC's response in the final 
rule should either agree with the comment or explain how, 
notwithstanding the comment, the individual requirement is 
determined to be integral to the purpose of the rule or cost-

[[Page 6665]]

justified. To provide a reasonable indication, the comment must:
    (1) Identify the specific regulatory provision that is of 
concern;
    (2) Explain why the provision is not integral to the purpose of 
the rule, with supporting information as necessary; and
    (3) Demonstrate, with supporting information, that the 
regulatory provision is not cost-justified.
    Comments that do not provide a reasonable indication need not be 
addressed in detail.\7\
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    \7\ NUREG/BR-0053, Revision 5, March 2001, United States Nuclear 
Regulatory Commission Regulations Handbook, Section 7.9, provides 
further discussion of comments that should be treated in detail.
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    A special case involves the NRC's periodic review and 
endorsement of new versions of the ASME Codes. Some aspects of those 
rulemakings are not addressed in regulatory analyses. However, for 
those matters that are addressed in regulatory analyses, the same 
principles as discussed above should be applied. Further details are 
provided below.
    The NRC's longstanding policy has been to incorporate new 
versions of the ASME Codes into its regulations. Furthermore, the 
National Technology Transfer and Advancement Act of 1995 (Public Law 
104-113) directs Federal agencies to adopt technological standards 
developed by voluntary consensus standard organizations. The law 
allows an agency to take exception to specific portions of the 
standard if those provisions are deemed to be inconsistent with 
applicable law or otherwise impractical.
    ASME Codes are updated on an annual basis to reflect 
improvements in technology and operating experience. The NRC reviews 
the updated ASME Codes and conducts rulemaking to incorporate the 
latest versions by reference into 10 CFR 50.55a, subject to any 
modifications, limitations, or supplementations (i.e., exceptions) 
that are deemed necessary.\8\ It is generally not necessary to 
address new provisions of the updated ASME Codes in the regulatory 
analyses for these rulemakings. However:
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    \8\ NRC regulations require licensees to periodically update 
their inservice inspection and inservice testing programs to the 
latest ASME Code incorporated by reference in 10 CFR 50.55a(b).
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    (1) When the NRC endorses a new provision of the ASME Code that 
takes a substantially different direction from the currently 
existing requirement, the action should be addressed in the 
regulatory analysis. An example was the NRC's endorsement of new 
Subsections IWE and IWL, which imposed containment inspection 
requirements on operating reactors for the first time. Since those 
requirements involved a substantially different direction, they were 
considered in the regulatory analysis, treated as backfits, and 
justified in accordance with the standards of 10 CFR 50.109.
    (2) If the NRC takes exception to a new Code provision and 
imposes a requirement that is a substantial change from the 
currently existing requirement, the action should be addressed in 
the regulatory analysis.
    (3) When the NRC requires implementation of a new Code provision 
on an expedited basis, the action should be addressed in the 
regulatory analysis. This applies when implementation is required 
sooner than it would be required if the NRC simply endorsed the Code 
without any expediting language.
    When the NRC takes exception to a new Code provision, but merely 
maintains the currently existing requirement, it is not necessary to 
address the action in the regulatory analysis (or to justify 
maintenance of the status quo on a cost-benefit basis). However, the 
NRC explains any exceptions to the ASME Code in the Statement of 
Considerations for the rule.

    The NUREG reports, Commission papers, SRMs, and Regulatory Guide 
discussed above are available for public inspection at the Commission's 
Public Document Room, located at One White Flint North, 11555 Rockville 
Pike (first floor), Rockville, Maryland. They are also accessible from 
the Agencywide Documents Assess and Management Systems (ADAMS) Public 
Electronic Reading Room on the internet at the NRC Web site, http://www.nrc.gov/reading-rm/adams.html under the following ADAMS accession 
numbers:
    Regulatory Guide 1.174: ML003740133.
    Regulatory Analysis Guidelines, NUREG/BR-0058, Rev. 3: ML003738939.
    Regulations Handbook, NUREG/BR-0053, Rev. 5: ML011010183.
    Commission paper, SECY-00-0198: ML003747699.
    SRM regarding SECY-00-0198: ML010190405.
    Commission paper, SECY-01-0134: ML011970363.
    SRM regarding SECY-01-0134: ML012760353.
    Commission paper, SECY-01-0162: ML012120024.
    SRM regarding SECY-01-0162: ML013650390.
    If you do not have access to ADAMS or if there are problems in 
accessing the documents located in ADAMS, contact the NRC Public 
Document Room (PDR) Reference Staff at 1-800-397-4209, 301-415-4737 or 
by email to [email protected]. Single copies of the documents may be obtained 
from the contacts listed above under the heading For Further 
Information Contact.

Agenda for Public Meeting

    9 a.m.-9:30 a.m., Introductory Remarks. 9:30 a.m.-10:30 a.m., 
Discussion of Preliminary Proposed Guidance by the NRC Staff.
    10:30 a.m.-12:30 p.m., Public Comments and Statements.
    12:30 p.m.-12:45 p.m., Concluding Remarks.

    Dated at Rockville, Maryland, this 6th day of February, 2002.
    For the Nuclear Regulatory Commission.
Cynthia A. Carpenter,
Program Director, Policy and Rulemaking Program, Division of Regulatory 
Improvement Programs, Office of Nuclear Reactor Regulation.
[FR Doc. 02-3503 Filed 2-12-02; 8:45 am]
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