[Federal Register Volume 67, Number 62 (Monday, April 1, 2002)]
[Proposed Rules]
[Pages 15339-15344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-7764]


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DEPARTMENT OF ENERGY

Office of Security

10 CFR Part 824

[Docket No. SO-RM-00-01]
RIN 1992-AA28


Procedural Rules for the Assessment of Civil Penalties for 
Classified Information Security Violations

AGENCY: Office of Security, Department of Energy.

ACTION: Notice of proposed rulemaking and public hearing.

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SUMMARY: The Department of Energy (DOE) proposes regulations to 
implement section 234B of the Atomic Energy Act of 1954 (Section 234B) 
which was added to that act by section 3147 of the National Defense 
Authorization Act for Fiscal Year 2000. Section 234B subjects 
contractors and others working for DOE to civil penalties for 
violations of DOE rules, regulations and orders regarding the 
safeguarding and security of Restricted Data and other classified 
information.

DATES: Written comments (7 copies) may be submitted by July 1, 2002. 
Public hearings will be held in Las Vegas, Nevada on May 22, 2002, and 
in Washington, DC on May 29, 2002. Requests to speak at the Las Vegas 
hearing must be submitted on or before May 15, 2002, or at the 
Washington, DC hearing on or before May 22, 2002.

ADDRESSES: Comments should be addressed to: Geralyn C. Praskievicz, 
Office of Security, SO-1, Docket No. SO-RM-00-01, U.S. Department of 
Energy, 1000 Independence Ave. SW., Washington, DC 20585, (202) 586-
4451.
    The following two public hearings will be held: May 22, 2002, from 
9:30 a.m. until 12:30 p.m. at the U.S. Department of Energy, National 
Nuclear Security Administration, Nevada Operations Office, 232 Energy 
Way, Las Vegas, Nevada, room A107, and May 29, 2002, from 9:30 a.m. 
until 12:30 p.m., at the U.S. Department of Energy, James Forrestal 
Building, 1000 Independence Avenue SW, Washington, DC, room GE-086.
    The envelope and written comments should indicate the above docket 
number. Written comments and hearing testimony may be examined between 
9 a.m. and 4 p.m., Monday through Friday at: U.S. Department of Energy, 
Freedom of Information Reading Room, room 1E-190, Docket No. SO-RM-00-
01, 1000 Independence Avenue S.W., Washington, D.C. 20585, (202) 586-
3142.

FOR FURTHER INFORMATION CONTACT: Geralyn Praskievicz, Office of 
Security, SO-1, U.S. Department of Energy, 1000 Independence Ave. SW., 
Washington, DC 20585, (202) 586-4451; Jo Ann Williams, Office of 
General Counsel, GC-53, U.S. Department of Energy, 1000 Independence 
Ave. SW., Washington, DC 20585, (202) 586-6899.

SUPPLEMENTARY INFORMATION:

I. Introduction.
II. Procedural Requirements.
    A. Review Under Executive Order 12866.
    B. Review Under the Regulatory Flexibility Act.
    C. Review Under the Paperwork Reduction Act.
    D. Review Under the National Environmental Policy Act.
    E. Review Under Executive Order 12988.
    F. Review Under Executive Order 13132.
    G. Review Under the Treasury and General Appropriations Act, 
1999.
    H. Review under Executive Order 13084.
III. Public Comment Procedures.
    A. Written Comments.
    B. Public Hearings.

I. Introduction.

    On October 5, 1999, Congress enacted section 3147 of the National 
Defense

[[Page 15340]]

Authorization Act for Fiscal Year 2000 (Pub.L. 106-65, October 5, 1999) 
that adds a new section 234B to the Atomic Energy Act of 1954, 42 
U.S.C. 2282b. Subsection a. of section 234B provides that any person 
who: (1) Has entered into a contract or agreement with DOE, or a 
subcontract or subagreement thereto, and (2) violates (or whose 
employee violates) any applicable rule, regulation, or order prescribed 
or otherwise issued by the Secretary of Energy pursuant to the Atomic 
Energy Act relating to the safeguarding or security of Restricted Data 
or other classified or ``sensitive information,'' shall be subject to a 
civil penalty not to exceed $100,000 for each such violation. 
Subsection b. of section 234B requires that each DOE contract contain 
provisions which provide an appropriate reduction in the fees or 
amounts paid to the contractor under the contract in the event of a 
violation by the contractor or contractor employee of any rule, 
regulation or order relating to the safeguarding or security of 
Restricted Data or other classified or sensitive information.
    On February 1, 2001, DOE published a Notice of Proposed Rulemaking 
(66 FR 8560) to implement subsection b. of section 234B, concerning 
reductions in fees or amounts paid to contractors in the event of a 
security violation. DOE received numerous comments in response to that 
notice of proposed rulemaking. Some of the commenters assumed that the 
procurement rulemaking was intended to address all of the provisions in 
section 234B. Two separate rulemakings, one establishing procedural 
rules similar to the procedural rules to achieve compliance with DOE 
nuclear safety requirements found at 10 CFR Part 820 and the other 
establishing a procurement clause like Conditional payment of fee, 
profit or incentives, 48 CFR (DEAR) 970.5204-86, were always 
contemplated and deemed necessary by DOE. The February 1, 2001, notice 
of proposed rulemaking was only intended to address subsection b. of 
234B.
    DOE in this rulemaking proposes to establish a new Part 824 to 
Chapter III of Title 10 of the Code of Federal Regulations (CFR) to 
implement all subsections of section 234B of the Atomic Energy Act, 
except subsection b., with respect to contractors of DOE, including 
those of the National Nuclear Security Administration (NNSA). To a 
large extent these proposed regulations are self-explanatory. There 
are, however, several features that require explanation.
    In this rulemaking action, DOE proposes applying civil penalties 
only to violations of requirements for the protection of classified 
information. Classified information is ``Restricted Data'' or 
``Formerly Restricted Data'' protected against unauthorized disclosure 
pursuant to the Atomic Energy Act of 1954, and ``National Security 
Information'' protected against unauthorized disclosure pursuant to 
Executive Order 12958 (April 17, 1995) or any predecessor or successor 
order. Although section 234B refers to ``sensitive information,'' DOE 
does not employ this term in the proposal because: (1) Neither the 
statute nor its legislative history defines the term; (2) there is no 
commonly accepted definition of ``sensitive information'' within DOE or 
the Executive Branch; (3) the legislative history indicates that the 
Congress was concerned with unauthorized disclosures of classified 
information; and (4) the only category of unclassified information that 
might merit inclusion in a regulation imposing civil penalties is 
Unclassified Controlled Nuclear Information (UCNI), a category of 
unclassified government information concerning atomic energy defense 
programs established by section 148 of the Atomic Energy Act of 1954 
(42 U.S.C. 2168). Section 148 provides that any person who violates a 
regulation or order issued under that section shall be subject to a 
civil penalty not to exceed $100,000. DOE implemented the provisions of 
section 148 in regulations contained in 10 CFR Part 1017. Since Part 
1017 already imposes a civil monetary penalty for unauthorized 
dissemination of UCNI comparable to the penalty specified in section 
3147, we determined that it is unnecessary to include UCNI in 
regulations implementing section 3147.
    DOE proposes to assess civil penalties only for violations 
described in proposed section 824.4. These are violations of: (1) 
Specified DOE regulations related to classified information security 
presently in the CFR, (2) any other DOE rule, regulation or order 
relating to the safeguarding or security of Restricted Data or other 
classified information that specifically indicates that violation of 
its provisions may result in a civil penalty pursuant to section 234B, 
and (3) compliance orders issued pursuant to proposed part 824.
    With respect to compliance orders, section 161 of the Atomic Energy 
Act grants DOE broad authority to prescribe regulations and orders 
deemed necessary to protect the common defense and security, 42 U.S.C. 
2201. Pursuant to this authority, the Secretary may issue a compliance 
order requiring a person to take corrective action if a person by act 
or omission jeopardizes the security of classified information even if 
that person has not violated a regulation listed in the proposed part. 
Violation of the compliance order may result in the assessment of a 
civil penalty. Compliance orders would not be subject to the DOE 
Acquisition Regulations or require any authorization by a contracting 
officer. While the recipient of a compliance order may request the 
Secretary to rescind or modify the compliance order, the request does 
not stay the effectiveness of the order unless the Secretary issues a 
new order to that effect. The compliance order provisions of today's 
proposed regulations are modeled after a similar mechanism in 10 CFR 
Part 820, the regulations implementing procedures for section 234A of 
the Atomic Energy Act of 1954 with respect to nuclear safety.
    It is important to note that this proposed rule would only apply to 
contractors and others who have entered into agreements or 
subagreements with DOE. Subsection a. of section 234B clearly provides 
that the contractor or other entity that has entered into an agreement 
or subagreements thereto with DOE is liable for violations of its 
employees. Consequently, no civil penalties would be assessed against 
individual employees under Part 824 as proposed.
    Subsection d. of section 234B sets limitations on civil penalties 
assessed against certain non-profit entities specified at subsection d. 
of section 234A. As to each of these seven named entities working at 
named sites, the statute provides that no civil penalty may be assessed 
until the entity enters into a new contract with DOE or an extension of 
a current contract with DOE. The statute also limits the total amount 
of civil penalties assessed against these entities in any fiscal year 
to the total amount of fees paid to that entity in that fiscal year. It 
should be noted that the limitations applicable to these seven entities 
at the named sites also apply to their subcontractors and suppliers 
regardless of whether they are for-profit or non-profit.
    DOE has determined as a matter of discretion under section 234B.c. 
and section 234A.b.(2) to extend the cap on civil penalties assessed on 
non-profits provided in section 234B.d.(2) to any non-profit 
educational institution under the United States Internal Revenue Code. 
DOE exercised similar discretionary authority for educational non-
profit institutions in Part 820 with respect to automatic remission 
from civil penalties for nuclear safety violations. DOE continues to 
believe these other non-profit entities should

[[Page 15341]]

receive uniform treatment concerning civil penalties. However, the for-
profit subcontractors and suppliers of these other non-profits would 
not have their civil penalties limited to fee as in the case of the 
for-profit subcontractors and for-profit suppliers of the seven named 
entities at sites named in section 234A. Also, as a matter of 
discretion, these other non-profit entities would not be subject to 
civil penalties until they enter into a new contract with DOE or an 
extension of a current contract.
    The fee that represents the cap for civil penalties of non-profits 
will be determined pursuant to the provisions of the specific contracts 
covered by the limitation on non-profits.

II. Procedural Requirements

A. Review Under Executive Order 12866

    Today's regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993). 
Accordingly, today's action is not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs of 
the Office of Management and Budget.

B. Review Under the Regulatory Flexibility Act

    These proposed rules were reviewed under the Regulatory Flexibility 
Act of 1980, Pub. L 96-354, which requires preparation of an initial 
regulatory flexibility analysis for any rule that is likely to have 
significant economic impact on a substantial number of small entities. 
This rulemaking will apply principally to large entities who are 
management and operating contractors with cost reimbursement contracts. 
Therefore, DOE certifies that this regulation will not have a 
significant economic impact on a substantial number of small entities 
and, therefore, no regulatory flexibility analysis has been prepared.

C. Review Under the Paperwork Reduction Act

    The proposed information and reporting requirements are not 
substantially different from existing reporting requirements contained 
in DOE contracts with the Department's prime contractors covered by 
these rules. DOE will submit any new information collection requests 
concerning these proposed rules to the Office of Management and Budget 
for approval in accordance with the Paperwork Reduction Act of 1980, 44 
U.S.C. 3501.1 et seq., and the procedures implementing that Act, 5 CFR 
Part 1320.

D. Review Under the National Environmental Policy Act

    DOE has reviewed the promulgation of this proposed rule with 
respect to its responsibilities under the National Environmental Policy 
Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.) and the Council on 
Environmental Quality regulations for implementing NEPA (40 CFR Parts 
1500-1508). The proposed rulemaking specifies procedures and standards 
for DOE enforcement actions under section 3147 of the Defense 
Authorization Act for Fiscal Year 2000. As noted in the CEQ 
regulations, major Federal actions ``do not include bringing judicial 
or administrative civil or criminal enforcement actions'' (40 CFR 
1508.18(a)). Therefore, DOE has concluded that the proposed rulemaking 
is not a major Federal action with significant effects on the human 
environment within the meaning of NEPA and that no further review under 
NEPA is required.

E. Review Under Executive Order 12988

    With respect to the promulgation of new regulations, section 3(a) 
of Executive Order 12988, ``Civil Justice Reform,'' 61 FR 4729 
(February 7, 1996) imposes on Executive agencies the general duty to: 
(1) Eliminate drafting errors and ambiguity; (2) write regulations to 
minimize litigation; and (3) provide a clear legal standard for 
affected conduct rather than a general standard and to promote 
simplification and burden reduction. With regard to the review required 
by section 3(a), section 3(b) of Executive Order 12988 specifically 
requires that Executive agencies make every reasonable effort to ensure 
that a regulation: (1) Clearly specifies its preemptive effect, if any; 
(2) clearly specifies any effect on existing Federal law or regulation; 
(3) provides a clear legal standard for affected conduct while 
promoting simplification and burden reduction; (4) specifies its 
retroactive effect, if any; (5) adequately defines key terms; and (6) 
addresses other important issues affecting clarity and general 
draftsmanship under any guidelines issued by the Attorney General. 
Section 3(c) of Executive Order 12988 requires Executive agencies to 
review regulations in light of the applicable standards in section 3(a) 
and 3(b) to determine whether they are met or if it is unreasonable to 
meet one or more of them. The DOE has completed the required reviews 
and has determined that, to the extent allowed by law, the proposed 
regulations meet the relevant standards of Executive Order 12988.

F. Review Under Executive Order 13132

    Executive Order 13132 (64 FR 43255, August 4,1999) imposes certain 
requirements on agencies formulating and implementing policies or 
regulations that preempt State law or that have federalism 
implications. Agencies are required to examine the constitutional and 
statutory authority supporting any action that would limit the 
policymaking discretion of the States and carefully assess the 
necessity for such actions. DOE has examined today's proposed rule and 
has determined that it does not preempt State law and does not have a 
substantial direct effect on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government. No further 
action is required by Executive Order 13132.

G. Review Under Treasury and General Government Appropriations Act, 
1999

    Section 654 of the Treasury and General Government Appropriations 
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family 
Policymaking Assessment for any proposed rule that may affect family 
well-being. Today's proposal would not have any impact on the autonomy 
or integrity of the family as an institution. Accordingly, DOE has 
concluded that it is not necessary to prepare a family policymaking 
assessment.

H. Review Under Executive Order 13084

    Under Executive Order 13084 (Consultation and Coordination with 
Indian Tribal Governments), DOE may not issue a discretionary rule that 
significantly or uniquely affects Indian tribal governments and imposes 
substantial direct compliance costs. This proposed rulemaking would not 
have such effects. Accordingly, Executive Order 13084 does not apply to 
this rulemaking.

III. Public Comment Procedures

A. Written Comments

    Interested persons are invited to participate by submitting data, 
views, or arguments with respect to the proposed rule set forth in this 
notice. Seven copies of written comments should be submitted to the 
address indicated in the ADDRESSES section of this notice. All comments 
will be available for public inspection in the DOE Freedom of 
Information Reading Room, room 1E-190, 1000 Independence Avenue, SW., 
Washington, DC 20585, between the

[[Page 15342]]

hours of 9 a.m. and 4 p.m., Monday through Friday, except Federal 
holidays. Written comments received by the date indicated in the DATES 
section of this notice of proposed rulemaking will be assessed and 
considered prior to publication of the final rule. Any information that 
a commenter considers to be confidential must be so identified and 
submitted in writing, one copy only. DOE reserves the right to 
determine the appropriateness of confidential status for the 
information and to treat it in accordance with its determination. See 
10 CFR Part 1004.11.
    DOE is interested in comments concerning the potential costs and 
benefits of this regulation, either to the general public, the 
Department's contractors, or the Department itself.

B. Public Hearing.

    Requests to speak at the hearings must be submitted to the address 
and by the date indicated in the DATES section of this notice of 
proposed rule making. Requests for oral presentations should contain a 
telephone number where the requester may be contacted prior to the 
hearing. Speakers are requested to submit seven copies of their 
statement to DOE at the hearings.
    DOE reserves the right to select the persons to be heard at the 
hearings, to schedule their respective presentations, and to establish 
the procedures governing the conduct of the hearings. The length of 
each presentation is limited to fifteen minutes. The hearings will 
begin at 9:30 a.m. A DOE official will be designated to preside at each 
hearing. These will not be judicial-type hearings. Questions may be 
asked only by those conducting the hearing. Any further procedural 
rules needed for the proper conduct of the hearing will be announced by 
the presiding officer. A transcript of the hearing will be made 
available to the public. The entire record of each hearing, including 
the transcript, will be retained by DOE and made available for 
inspection in the DOE Freedom of Information Reading Room. Transcripts 
may be purchased from the hearing transcriber/reporter.

List of Subjects in 10 CFR Part 824

    Classified information, Government contracts, Nuclear security, 
Penalties, Security measures.

    Issued in Washington, DC on March 19, 2002.
Spencer Abraham,
Secretary of Energy.

    For the reasons set forth in the preamble, DOE proposes to amend 
Chapter III of Title 10 of the Code of Federal Regulations by adding a 
new part 824 as set forth below.

PART 824--PROCEDURAL RULES FOR THE ASSESSMENT OF CIVIL PENALTIES 
FOR CLASSIFIED INFORMATION SECURITY VIOLATIONS

Sec.
824.1  Purpose and scope.
824.2  Applicability.
824.3  Definitions.
824.4  Civil penalties.
824.5  Notice of violation.
824.6  Investigations.
824.7  Hearing.
824.8  Hearing Counsel.
824.9  Hearing Officer.
824.10  Rights of the person at the hearing.
824.11  Conduct of the hearing.
824.12  Initial decision.
824.13  Final order.
824.14  Special procedures.
824.15  Collection of civil fines.

    Authority: 42 U.S.C. 2201, 2282b, 7101 et seq., 50 U.S.C. 2401 
et seq.

PART 824--PROCEDURAL RULES FOR THE ASSESSMENT OF CIVIL PENALTIES 
FOR CLASSIFIED INFORMATION SECURITY VIOLATIONS


Sec. 824.1  Purpose and scope.

    This part implements subsections a., c., and d. of section 234B of 
the Atomic Energy Act of 1954, 42 U.S.C. 2282b, which provides that any 
person who has entered into a contract or agreement with the Department 
of Energy (DOE), or a subcontract or subagreement thereto, and violates 
(or whose employee violates) any applicable rule, regulation or order 
under the Atomic Energy Act relating to the security or safeguarding of 
Restricted Data or other classified information, shall be subject to a 
civil penalty not to exceed $100,000 for each violation. Specifically, 
these regulations establish procedures for assessing civil penalties 
against any entity that violates DOE regulations which impose 
requirements for the protection of classified information or that 
violates a compliance order issued under this part.


Sec. 824.2  Applicability.

    (a) General. These regulations apply to any entity that is subject 
to DOE security requirements for the protection of classified 
information.
    (b) Limitations. In the case of the following entities, DOE may not 
assess any civil penalty against the entity until it enters into a new 
contract with DOE or an extension of a current contract with DOE, and 
the total amount of civil penalties may not exceed the total amount of 
fees paid by the DOE to that entity in that fiscal year:
    (1) Entities (including subcontractors and suppliers thereto) 
specified at subsection d. of section 234A of the Atomic Energy Act of 
1954; and
    (2) Any nonprofit educational institution under the United States 
Internal Revenue Code.
    (c) Individual employees. No civil penalty may be assessed against 
an individual employee of a contractor or any other entity which enters 
into an agreement with DOE.


Sec. 824.3  Definitions.

    (a) As used in this part:
    (1) Act means the Atomic Energy Act of 1954 (42 U.S.C. 2011 et 
seq.)
    (2) Classified information means Restricted Data and Formerly 
Restricted Data protected against unauthorized disclosure pursuant to 
the Act and National Security Information protected against 
unauthorized disclosure under Executive Order 12958 (April 17, 1995) or 
any predecessor or successor executive order.
    (3) Contractor means any person under contract or other agreement 
(including suppliers and access permittees) with the Department of 
Energy, including the National Nuclear Security Administration (NNSA), 
or a subcontract or subagreement thereto, to perform activities or to 
supply services or products that are subject to DOE security 
requirements.
    (4) Deputy Secretary means the Deputy Secretary of Energy.
    (5) Director means the Director, Office of Security, or any person 
to whom the Director's authority under this part is re-delegated.
    (6) Person means any person as defined in section 11.s. of the 
Atomic Energy Act, 42 U.S.C. 2014, or any affiliate or parent 
corporation thereof, who enters into a contract or agreement with the 
Department of Energy, including a subcontract or subagreement thereto.
    (7) Secretary means the Secretary of Energy.
    (b) Words in the singular also include the plural and words in the 
masculine gender also include the feminine and vice versa, as the case 
may require.


Sec. 824.4  Civil penalties.

    (a) Any person who violates a requirement of any of the following 
is subject to a civil penalty under this part:
    (1) 10 CFR Part 1016--Safeguarding of Restricted Data;
    (2) 10 CFR Part 1045--Nuclear Classification and Declassification;
    (3) 10 CFR Part 1046--Physical Protection of Security Interests; 
and
    (4) Any other DOE rule, regulation or order related to the 
safeguarding or

[[Page 15343]]

security of classified information that specifically indicates that 
violation of its provisions may result in a civil penalty pursuant to 
subsection a. of section 234B of the Act.
    (b) If, without violating any regulation listed in paragraph (a) of 
this section, a person by an act or omission jeopardizes the security 
of classified information, the Secretary may issue a compliance order 
to that person requiring the person to take corrective action and 
notifying the person that violation of the compliance order is subject 
to a notice of violation and assessment of a civil penalty. If a person 
wishes to contest the compliance order, the person must file a notice 
of appeal with the Secretary within 15 days of receipt of the 
compliance order.
    (c) The Deputy Secretary, based on a recommendation from the 
Director, may propose imposition of a civil penalty for violation of a 
requirement of a rule, regulation or order listed in paragraph (a) of 
this section or a compliance order issued under paragraph (b) of this 
section, not to exceed $100,000 for each violation.
    (d) If any violation is a continuing one, each day of such 
violation shall constitute a separate violation for the purpose of 
computing the applicable civil penalty.


Sec. 824.5  Notice of violation.

    (a) In order to begin a proceeding to impose a civil penalty under 
this part, the Deputy Secretary, based upon a recommendation of the 
Director, shall notify the person by a written notice of violation sent 
by certified mail, return receipt requested, of--
    (1) The date, facts, and nature of each act or omission with which 
the person is charged;
    (2) The particular provision of the regulation involved in the 
violation;
    (3) Each penalty which the Deputy Secretary proposes to impose and 
the amount;
    (4) The right of the person to submit a written reply to each of 
the allegations in the notification letter to the Director within 30 
calendar days of receipt of such a notice of violation; and,
    (5) The right of the person to submit to the Director a written 
request for a hearing under Sec. 824.7 or, in the alternative, to elect 
the procedures specified in 42 U.S.C. 2282a.(c)(3).
    (b) Within ten days of receiving a reply or a hearing request 
letter, the Director shall acknowledge its receipt in writing. In the 
case of a hearing request letter, the acknowledgment from the Director 
shall provide information regarding scheduling of the hearing.
    (c) The Director, at the request of a person accused of a 
violation, may extend for a reasonable period the time for submitting a 
reply or a hearing request letter.
    (d) After notifying a person of a violation under paragraph (a) of 
this section, the Deputy Secretary, based upon the recommendation of 
the Director, may enter into a settlement regarding the violation with 
or without conditions.
    (e) If a person fails to submit a written request for a hearing 
within the specified time period, the person relinquishes the right to 
a hearing. If the person does not request a hearing, the notice of 
violation including proposed civil penalties shall constitute the final 
order of DOE.


Sec. 824.6  Investigations

    The Director, at the request of the Deputy Secretary, may conduct 
investigations and inspections relating to the scope, nature and extent 
of compliance by a person with DOE security requirements specified in 
Sec. 824.4 (a) and (b) and take such action as he deems necessary and 
appropriate to the conduct of the investigation or inspection, 
including issuing and serving subpoenas signed by the Deputy Secretary.


Sec. 824.7  Hearing.

    Any person who receives a notification letter under Sec. 824.5 may 
request a hearing to answer under oath or affirmation the allegations 
contained in the letter. The person shall mail or deliver any letter 
requesting a hearing to the Director within 30 calendar days of receipt 
of the notification letter. Upon receipt from a person of a written 
request for a hearing, the Deputy Secretary shall appoint a Hearing 
Counsel and select an administrative law judge appointed under section 
3105 of Title 5, U.S.C., to serve as Hearing Officer.


Sec. 824.8  Hearing Counsel.

    The Hearing Counsel--
    (a) Represents DOE;
    (b) Consults with the person or the person's counsel prior to the 
hearing;
    (c) Examines and cross-examines witnesses during the hearing; and
    (d) Enters into a settlement of the enforcement proceeding at any 
time if settlement is consistent with the objectives of the Atomic 
Energy Act and DOE security requirements.


Sec. 824.9  Hearing Officer.

    The Hearing Officer--
    (a) Administers oaths and affirmations;
    (b) Issues subpoenas;
    (c) Rules on offers of proof and receives relevant evidence;
    (d) Takes depositions or has depositions taken when the ends of 
justice would serve;
    (e) Conducts the hearing in a manner which is fair and impartial;
    (f) Holds conferences for the settlement or simplification of the 
issues by consent of the parties;
    (g) Disposes of procedural requests or similar matters;
    (h) Makes an initial decision under Sec. 824.12; and
    (i) Requires production of documents.


Sec. 824.10  Rights of the person at the hearing.

    The person may--
    (a) Testify or present evidence through witnesses or by documents;
    (b) Cross-examine witnesses and rebut records or other physical 
evidence, except as provided in Sec. 824.11(d);
    (c) Be present during the entire hearing, except as provided in 
Sec. 824.11(d); and
    (d) Be accompanied, represented and advised by counsel of the 
person's choosing.


Sec. 824.11  Conduct of the hearing.

    (a) DOE shall make a transcript of the hearing;
    (b) Except as provided in paragraph (d) of this section, the 
Hearing Officer may receive any oral or documentary evidence, but shall 
exclude irrelevant, immaterial or unduly repetitious evidence;
    (c) Witnesses shall testify under oath and are subject to cross-
examination, except as provided in paragraph (d) of this section;
    (d) The Hearing Officer must use procedures appropriate to 
safeguard and prevent disclosure of classified information or 
Unclassified Controlled Nuclear Information to unauthorized persons, 
with minimum impairment of rights and obligations under this part; and
    (e) DOE bears the burden of proving, by a preponderance of the 
evidence, that a violation has occurred.


Sec. 824.12  Initial decision.

    (a) The Hearing Officer shall issue an initial decision as soon as 
practicable after the hearing. The initial decision shall contain 
findings of fact, conclusions regarding all material issues of law or 
discretion, as well as reasons therefor. If the Hearing Officer 
determines that a violation has occurred and that a civil penalty is 
appropriate, the initial decision shall set forth the amount of the 
civil penalty based on:

[[Page 15344]]

    (1) The nature, circumstances, extent, and gravity of the violation 
or violations;
    (2) The violator's ability to pay;
    (3) Its effect on the person's ability to do business;
    (4) Any history of prior violations;
    (5) The degree of culpability; and
    (6) Such other matters as justice may require.
    (b) The Hearing Officer shall serve all parties with the initial 
decision by certified mail, return receipt requested. The initial 
decision shall include notice that it constitutes a final order of DOE, 
unless within 15 days of receipt of notification a request for review 
by the Secretary is filed with the Director.


Sec. 824.13  Final order.

    (a) Upon receipt of a request for review of the initial decision, 
the Director shall forward the request, along with the entire record, 
to the Secretary.
    (b) The Secretary shall issue a final order as soon as practicable 
after completing his review. The Secretary may, at his discretion, 
order additional proceedings, remand the matter or modify the amount of 
the civil fines assessed in the initial determination. The person shall 
be notified of the Secretary's final order in writing by certified 
mail, return receipt requested.


Sec. 824.14  Special procedures.

    A person receiving a notice of violation under Sec. 824.5 may elect 
in writing within 30 days of receipt of such notice, the application of 
special procedures regarding payment of the penalty that are set forth 
in section 234A.c.(3) of the Atomic Energy Act, 42 U.S.C. 2282a.c.(3). 
The Deputy Secretary, based upon a recommendation of the Director, 
shall promptly assess a civil penalty, by order, after the date of such 
election. If the civil penalty has not been paid within sixty calendar 
days after the assessment has been issued, the Deputy Secretary shall 
institute an action in the appropriate district court of the United 
States for an order affirming the assessment of the civil penalty.


Sec. 824.15  Collection of civil fines.

    If any person fails to pay an assessment of a civil penalty after 
it has become a final order or after the appropriate district court has 
entered final judgment for DOE under Sec. 824.14, the Deputy Secretary 
shall institute an action to recover the amount of such penalty in an 
appropriate district court of the United States. In such action, the 
validity and appropriateness of such final order or judgment shall not 
be subject to review.

[FR Doc. 02-7764 Filed 3-29-02; 8:45 am]
BILLING CODE 6450-01-P