[Federal Register Volume 68, Number 74 (Thursday, April 17, 2003)]
[Rules and Regulations]
[Pages 18836-18843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9438]


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NUCLEAR REGULATORY COMMISSION

10 CFR Part 2

RIN 3150-AC07


Availability of Official Records

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations on availability of official records in three areas. The 
amendments require those who submit documents claimed to contain 
proprietary or other confidential information to specifically mark 
those portions of the document containing such information to decrease 
the chances of inadvertent public release of the information by the 
NRC, codify NRC's practices and delineate the circumstances under which 
the agency will not return confidential documents that have been 
submitted to the NRC, and codify NRC's practices of making as many 
copies of copyrighted material submitted to the agency as it needs to 
perform its regulatory and licensing functions. The amendments are 
necessary to conform the NRC's regulations regarding the availability 
of official records to case law and agency practice.

EFFECTIVE DATE: June 16, 2003.

ADDRESSES: The comments received in response to NRC's proposed rule for 
availability of official records are available electronically at the 
NRC's Public Electronic Reading Room on the Internet at http://www.nrc.gov/reading-rm/adams.html. From this site, the public can gain 
entry into the NRC's Agencywide Documents Access and Management System 
(ADAMS), which provides text and image files of NRC's public documents. 
Copies of comments received also may be examined at the NRC Public 
Document Room (PDR), One White Flint North, First Floor, 11555 
Rockville Pike, Rockville, Maryland or by contacting 1-800-397-4209 or 
301-415-4737, or by email at [email protected]. If you do not have access to 
ADAMS or if there are problems in accessing the documents located in 
ADAMS, contact the PDR.
    Comments received also may be viewed via the NRC's interactive 
rulemaking website (http://ruleforum.llnl.gov). This site provides the 
ability to upload comments as files (any format), if your web browser 
supports that function. For information about the interactive 
rulemaking site, contact Ms. Carol Gallagher, 301-415-5905; email 
[email protected].

FOR FURTHER INFORMATION CONTACT: Catherine M. Holzle, Senior Attorney, 
Office of the General Counsel, U.S. Nuclear Regulatory Commission, 
Washington, D.C. 20555-0001, telephone (301) 415-1560, email 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background
II. Responses to Comments
III. Final Action
IV. Voluntary Consensus Standards
V. Environmental Impact: Categorical Exclusion
VI. Paperwork Reduction Act Statement
VII. Regulatory Analysis
VIII. Regulatory Flexibility Certification
IX. Backfit Analysis
X. Small Business Regulatory Enforcement Fairness Act

I. Background

    Procedures governing the submission of proprietary information to 
the NRC are found at 10 CFR 2.790. Under this regulation, absent 
extraordinary circumstances, material determined to be proprietary is 
protected by the NRC and not released to the public. The regulations 
set forth procedures that submitters may use to challenge an NRC 
determination that material is not proprietary, or a decision by the 
agency to release proprietary information to the public. The 
regulations also address the circumstances under which the agency would 
(or would not) return a document containing proprietary information to 
the submitter. In the past, the regulation had not addressed the right 
of the NRC to reproduce copyrighted material submitted to it.
    On December 23, 1992 (57 FR 61013), the Commission published 
proposed amendments to Sec.  2.790 explaining the need for standardized 
markings on proprietary documents submitted to the NRC, expanding the 
circumstances under which the NRC would not return proprietary 
information to the submitter, and clarifying that the agency would 
reproduce copyrighted material submitted to it, as necessary to carry 
out its regulatory and licensing functions. The proposed changes were 
not intended to modify agency policy or practice regarding the public 
disclosure of proprietary information submitted to the NRC. However, 
public commenters on the proposed rule expressed concern over the 
potential for increased public disclosure of proprietary submittals, 
probably due to NRC's failure to make clear that NRC's refusal to 
return a proprietary document to its submitter did not mean that the 
NRC intended to release the document to the public. The earlier 
commenters also indicated that the established process worked fairly 
well, that overly-prescriptive document marking procedures would be 
cumbersome and unnecessary, but that the proposed copyright provisions 
seemed reasonable.
    In response, the NRC issued a revised proposed rule for comment on 
October 17, 2001 (66 FR 52721). The revised proposal made the 
regulation easier to understand, and proposed additional changes and 
clarifications. Specifically, the proposed rule, as revised, 
differentiated between the discrete determinations of document 
withholding from the public and document return to the submitter, and 
incorporated additional ``exceptions'' to the document return rule. It 
did not

[[Page 18837]]

propose any changes to the document withholding criteria nor to the 
previously proposed copyright provision.
    In the revised proposed rule, the NRC also responded in detail to 
the comments it had received on the December 23, 1992, proposed rule. 
Some of the comments received on the October 17, 2001, proposed rule 
make arguments that the Commission rejected in that notice. After 
reviewing these arguments again, the Commission stands by its 
explanation set forth in the October 17th notice and will not address 
those same arguments again.

II. Responses to Comments

A. Overview

    The Commission received six comments in response to its October 17, 
2001, notice of proposed rulemaking. The comments were from an 
individual, two nuclear industry vendors, one electric generation 
company, and two nuclear industry trade organizations. The comment 
period ended on December 31, 2001, but the NRC gave full consideration 
to comments received after that date. The comments pertained to the 
proposed changes in all three categories: document return, including 
disclosure of proprietary information; document marking; and copyright 
handling. Most of the comments considered the proposed document return 
regulations as overly broad, particularly as they apply to the 
functions of the Office of Investigations. The proposed document 
marking provisions also were criticized and commonly viewed by 
commenters as unnecessary, unworkable, or burdensome, and the proposed 
copyright handling procedures were deemed either unnecessary or 
unauthorized. The specific comments are addressed below.

B. Document Disclosure

    1. Comment. Some commenters focused on the issue of disclosure of 
proprietary information over the submitter's objections, which was not 
the subject of this rulemaking, rather than the core issue regarding 
return to the submitter of documents claimed to contain proprietary 
information. Although the Commission does not propose changes in its 
current document disclosure policy or practice, this issue warrants a 
response as it represents a fairly widespread concern among the 
comments received. Certain commenters objected to the potential for 
disclosure of proprietary information pursuant to a balancing test, a 
long-standing provision of 10 CFR 2.790(b)(5), giving the Commission 
discretionary disclosure authority. The objection is based on a claim 
that balancing is not within the Commission's authority once a 
determination is made that the submitted information is proprietary and 
falls within exemption 4 of the Freedom of Information Act (FOIA).\1\ 
Rather, the commenters asserted, the balance already has been struck by 
Congress in favor of the protection of proprietary information. 
Additionally, one commenter argued that the Trade Secrets Act, 18 
U.S.C. 1905, prohibits disclosure of information falling within 
exemption 4 of FOIA.
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    \1\ This exemption protects ``trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential,'' 5 U.S.C. 552(b)(4) (2000).
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    Response. The Commission is not making any changes to Sec.  
2.790(b)(5). Current regulations, which are based on sound judicial 
case law,\2\ recognize the NRC's authority to balance the public's 
interest in disclosure against the potential harm that such disclosure 
would cause the submitter. This authority has not been enhanced by the 
proposed changes and there is nothing in the FOIA, FOIA case law, or 
the Trade Secrets Act that prohibits a balancing of this type.
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    \2\ Indeed, this very regulatory authority of the NRC was tested 
in court nearly twenty years ago and remains good law today. General 
Electric Co. v. NRC, No. 80-2244 (C.D. Ill. Nov. 30, 1983), motion 
to vacate denied (C.D. Ill. June 26, 1984), aff'd in part, rev'd in 
part and remanded, 750 F. 2d 1394 (7th Cir. 1984). That same case 
also provides fundamental legal authority for the proposition that a 
rule permitting withdrawal of documents before public release would 
be inapplicable once the agency was in receipt of a FOIA request for 
the information.
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    Courts have expressly acknowledged that, when determining whether 
to disclose information that falls within exemption 4 of the FOIA, 
agencies may balance the public's interest in disclosure against the 
harm that would be caused by disclosure to the provider of the 
information. See Public Citizen Health Research Group v. FDA, 185 F. 3d 
898 (D.C. Cir. 1999); see also Chrysler Corp. v. Brown, 441 U.S. 281, 
293-94 (1979) (holding that Congress did not intend FOIA exemptions to 
be mandatory bars to disclosure). The public interest to be weighed in 
this balance has been narrowly defined as an interest in determining 
the bases for and effects of agency action (i.e., determining ``what 
the government is up to''), and does not include incidental benefits 
from disclosure that may be enjoyed by members of the public. Public 
Citizen, 185 F. 3d at 904, 905. Section 2.790(b)(5), which weighs the 
public's interest in being ``fully apprised as to the bases for and 
effects of the proposed action,'' currently reflects this understanding 
of the interests that the Commission may properly consider when 
deciding whether to disclose proprietary information. There is no need 
to alter the balancing test the Commission has long used.
    One commenter argued that the Trade Secrets Act, 18 U.S.C. 1905, 
prohibits the use of a balancing test to determine whether to disclose 
information considered proprietary under FOIA exemption 4. According to 
the Supreme Court, in order for an agency to disclose information 
considered proprietary and otherwise prohibited from disclosure under 
the Trade Secrets Act, the agency must act pursuant to properly 
promulgated rules based on a federal statute other than FOIA itself. 
See Chrysler Corp., 441 U.S. at 301-05, 308. Section 2.790(b)(5) of the 
Commission's regulations, which permits the use of a balancing test to 
determine whether to disclose proprietary information, was enacted 
pursuant to the Commission's rulemaking authority under the Atomic 
Energy Act of 1954, as amended (AEA). See 42 U.S.C. 2201(p). This 
rulemaking authority enables the Commission to make such rules as may 
be necessary to carry out the purposes of the AEA, one of which is the 
dissemination of unclassified scientific and technical data. See 42 
U.S.C. 2013(b), 2201(p). Because Sec.  2.790(b)(5) was properly 
promulgated under the authority of the AEA, using rulemaking procedure 
required by the Administrative Procedure Act, 5 U.S.C. 551 et seq., it 
authorizes the Commission to disclose information that would otherwise 
be prohibited from disclosure under the Trade Secrets Act. See Chrysler 
Corp., 441 U.S. at 301-05, 308.
    Finally, the proprietary determination decisionmaking process 
provides several opportunities for the submitter to make a case for 
withholding information from public disclosure. As a practical matter, 
the final determination may be the outcome of a series of exchanges 
between the agency and the submitter, almost always resulting in the 
protection of truly confidential and privileged portions of the 
material, while making available enough of the rest to inform the 
public adequately of the vital details that the public needs to 
understand and inquire into the Commission's actions. The Commission 
stresses that it rarely, if ever, has released proprietary information 
over the objection of a submitter. The Commission emphasizes that there 
is nothing in the final rule that will result in a more liberal release

[[Page 18838]]

of information deemed to be proprietary.

C. Document Return

    2. Comment. Some commenters urged that, to protect proprietary 
information adequately, the NRC should implement presubmission review 
procedures during which a document would not be considered an ``agency 
record'' under the FOIA. The purpose of the procedure would be to allow 
submitters an absolute right to withdraw documents for which 
proprietary protection is denied during the ``presubmission'' period. 
One commenter requested clarification of the return provision to 
indicate that information would not be returned automatically if a 
withholding request is denied, but may be returned upon request. This 
commenter also wished to see the procedures for supplementing 
information pursuant to a potential denial of proprietary treatment and 
for the negotiation process on the matter.
    Response. These comments seek a period of delay before a submitted 
document would have legal status as an agency record. The scheme 
suggested by the comments would allow documents to be tendered to the 
Commission on an informal basis along with a withholding request, 
pending a Commission determination on whether to grant or deny the 
withholding request. Then, should the Commission decide that the 
submitted information would not be withheld, the submitter could 
exercise an absolute right to withdraw the information, thereby 
avoiding any possibility of document capture (and possible release) 
under the FOIA.
    The Commission finds this suggested approach to be legally flawed. 
A document becomes an ``agency record'' subject to capture under the 
FOIA if: (1) It is created or obtained by the agency; and (2) it is 
under the control of the agency at the time of an FOIA request. United 
States Department of Justice v. Tax Analysts, 492 U.S. 136, 144-45 
(1989). According to the Supreme Court, ``[b]y control we mean that the 
materials have come into the agency's possession in the legitimate 
conduct of its official duties.'' Id., 492 U.S. at 145. In this 
context, ``control'' is a broad concept, and exists at the moment the 
agency gains possession of documents submitted in the normal course of 
agency business. Therefore, the Commission does not believe that 
establishing presubmission review procedures would produce the 
commenter's desired legal effect of forestalling a document's becoming 
an agency record subject to capture under the FOIA.
    Moreover, if presubmission procedures were seen as an attempt to 
evade or circumvent FOIA, the Commission would not expect them to 
survive judicial scrutiny. At least one court has held that an agency 
may not exclude documents from the legal ambit of the FOIA through 
presubmission procedures. See Teich v. FDA, 751 F. Supp. 243 (D.D.C. 
1990). In fact, the court discredited procedures similar to those 
proposed by the commenter, stating that ``presubmission review is 
nothing more than an attempt to get around the FOIA.'' Id. at 248.
    While the Commission is not prepared to institute document 
presubmission procedures, commenter's concerns are mitigated by case 
law, which in recent years, has broadened the definition of what 
constitutes proprietary information. Additionally, the Commission 
historically has worked closely with submitters to negotiate a version 
acceptable for public release for information initially claimed to be 
proprietary but upon which there is ultimate mutual agreement that 
proprietary treatment is not appropriate. Indeed, we reiterate that the 
NRC has rarely, if ever, publicly released purportedly proprietary 
information over the objection of a submitter, and such a release only 
would be undertaken after considerable thought and discourse between 
the parties. Thus, the Commission is not revising its regulations to 
provide for presubmission procedures.
    The commenter is correct in that the proposed rule does not call 
for automatic return of documents denied proprietary status. Commission 
policy is to return a document only upon request, subject to the 
document return exceptions. The rule neither addresses the negotiation 
process for obtaining the grant of a withholding request, nor how 
submittal of supplemental supporting documentation in support of the 
proprietary claim fits into the scheme. It is unclear that singling out 
this aspect of the administrative process for elaboration would be 
helpful. It would entail a fuller description than the other parts of 
the rule. This is viewed as unnecessary and potentially too limiting to 
be useful, and our regulations customarily do not go into that level of 
administrative detail.
    3. Comment. One commenter asserted that the provisions for 
determining what constitutes proprietary information make no 
distinction between documents containing proprietary information that 
the Commission requires applicants, licensees, or others to submit, 
which are subject to the disclosure criteria set forth in National 
Parks & Conservation Association v. Morton, 498 F. 2d 765 (D.C. Cir. 
1974), and those that are voluntarily submitted, which are subject to 
the disclosure criteria set forth in Critical Mass Energy Project v. 
Nuclear Regulatory Commission, 975 F.2d 871 (D.C. Cir. 1992). A 
commenter suggested that the rule be revised to distinguish between 
voluntary and mandatory submittals to reflect the dichotomy in 
standards applied to the proprietary determination for these documents.
    Response. FOIA exemption 4 authorizes agencies to withhold from 
public disclosure ``trade secrets and commercial or financial 
information obtained from a person and privileged or confidential.'' 5 
U.S.C. 552(b)(4). Until the Critical Mass case, the test for whether 
information could be withheld as confidential under exemption 4 was 
two-pronged: disclosure had to be likely either to impair the 
Government's ability to obtain information in the future or to cause 
substantial harm to the competitive position of the submitter. National 
Parks & Conservation Association v. Morton, 498 F. 2d 765 (D.C. Cir. 
1974). In Critical Mass, the court established a new and broader 
standard of categorical protection for information voluntarily 
submitted to an agency. For such information, the court found that 
there is a governmental interest to be protected, namely that of 
maintaining the continued and full availability of the information to 
the agency. In addition, the court held that the exemption also 
recognizes the submitter's interest in protecting information that 
``for whatever reason, ``would customarily not be released to the 
public by the person from whom it was obtained'.'' Critical Mass, 975 
F.2d at 878, citing Sterling Drug, Inc. v. FTC, 450 F. 2d 698, 709 
(D.C. Cir. 1971). Thus, the court found that there was broad protection 
for voluntarily submitted information, provided it is not customarily 
disclosed to the public by the submitter.
    Currently, Sec.  2.790 does not explicitly distinguish between 
voluntary and mandatory submittals. Instead, the Commission's rules 
provide that in determining whether a submittal is proprietary, a 
number of factors are considered. In the Commission's view, this 
approach allows for maximum flexibility in accommodating the 
continually evolving legal standards governing the classification of 
proprietary information. Explicitly defining specific standards for 
voluntary submittals and mandatory submittals in the text of the final 
rule would remove this flexibility and potentially require revisions to 
the rule as judicial case law

[[Page 18839]]

changes. Therefore, the Commission has chosen to maintain its present 
approach to the classification of proprietary information in the text 
of the rule, with a slight modification intended to capture the precise 
standard for voluntarily submitted information set forth in Critical 
Mass. Under the current rule, one factor to be considered when 
determining whether a submittal is proprietary is ``whether the 
information is of a type customarily held in confidence by its owner 
and whether there is a rational basis therefor.'' 10 CFR 
2.790(b)(4)(ii). In response to this comment, and in order to align the 
Commission's rules with the holding of Critical Mass, the final rule 
eliminates any inquiry into whether there is a rational basis for 
withholding voluntarily submitted information if it is of a type 
customarily held in confidence by its owner. In cases of mandatory 
submittals, the rational basis factor may be weighed along with the 
others listed in Sec.  2.790(b)(4) in order to determine proprietary 
status. In cases of voluntarily submitted information, the only factor 
to be considered in determining whether the information is proprietary 
is the ``customarily held in confidence'' factor, in accordance with 
Critical Mass. Thus, the final rule will accurately reflect the 
standard of Critical Mass while retaining the flexibility to 
accommodate future changes to the legal criteria for determining when 
submitted information is considered to be proprietary.
    4. Comment. A few of the commenters considered the proposed rule to 
sweep too broadly with respect to retention of documents obtained 
during investigations conducted by the NRC Office of Investigations 
(OI) and preferred to see the rule provision restricted to ``evidence'' 
obtained during an ongoing OI investigation. Some commenters were 
concerned about the additional release under FOIA of confidential 
information inadvertently revealed at Advisory Committee or at open 
Commission meetings. One of these commenters also objected to the 
proposed change from the 30-day period after denial of a withholding 
request to a ``reasonable time'' after which the information in 
question would be publicly released, assuming no other resolution was 
reached sooner.
    Response. The Commission does not agree with the suggestion that 
only those documents that specifically form the basis of the OI's 
decision, i.e., ``evidence,'' should be subject to the return 
exception, or for that matter, only those documents relied upon to make 
an official finding or to develop a report, decision, or policy by an 
advisory committee or the Commission in Sunshine Act meetings. Such an 
interpretation would add nothing to the provisions that provide for 
retention of documents that form the basis of a final decision or 
agency action. The Commission would not compound a mistake by 
deliberating making publicly available confidential information that 
had been inadvertently or erroneously released at an Advisory Committee 
or an open Commission meeting. The Commission takes pains to ensure 
that inappropriate disclosures do not occur. However, in the unusual 
circumstance that it should happen, the NRC would not simply publish 
the information under the theory that ``the horse is already out of the 
barn.''
    As for the issue regarding a suitable period of time to provide the 
submitter after denial of a withholding request, the Commission has 
changed it from 30 days to a ``reasonable time'' to allow maximum 
flexibility, particularly in situations in which time may be of the 
essence and a 30-day period is simply untenable. The regulation merely 
substitutes the less definitive qualifier ``reasonable time'' for the 
specific but rigid quantifier 30 days. In no case would the submitter 
be afforded inadequate notice; notice is guaranteed and the amount of 
time to be provided is specified in the notice itself. This 
modification will permit an informed decision of the amount of time 
that may be afforded judiciously for the submitter to address the 
denial without jeopardizing any of the Commission's competing 
responsibilities. Even where a brief period is deemed necessary, the 
submitter still will be provided adequate opportunity to address the 
matter.

D. Document Marking

    5. Comment. The proposed rule used the term ``confidential'' to 
encompass all types of information that might be susceptible to 
protection under 10 CFR 2.790. One commenter was troubled by the 
potential for confusion because the same term is used in the context of 
classified national security information. The commenter suggested an 
alternative.
    The Commission's proposed rule also would require submitters of 
documents containing proprietary or other confidential information to 
mark those portions of the documents claimed to be withholdable from 
the public and would provide direction on how this is to be done. The 
comments on the proposed document marking provisions were largely 
oriented toward pragmatic concerns over the potential burdens of 
performing ``adjacent'' marking and top-of-page marking, calling them 
duplicative, time-consuming, impractical, and unnecessary. Some 
commenters viewed the marking provisions as too prescriptive and 
suggested that a general requirement, combined with submitters' self-
interest, would accomplish the Commission's goal of reducing the risk 
of inadvertent disclosure of proprietary or otherwise confidential 
material. Two commenters generally supported the proposed marking 
requirement, one requesting clarification to determine whether the 
``first page'' to which the proposed regulation referred was the cover 
letter or a substantive page, and if the cover letter, whether it also 
must bear an indication of confidential content. The commenter 
suggested a ``decontrolling'' provision for the cover letter when 
separated from the remaining material. This commenter believes that 
identification in the affidavit of the location of confidential 
material by page number should be adequate. One commenter requested 
guidance on how portion marking might be done (e.g., would bracketing 
of material to be withheld be appropriate?), and on identification in 
the affidavit of the location of information to be withheld.
    Response. The proposed rule used the term ``confidential'' because 
it was already employed in the existing version of the rule and because 
exemption 4 of the FOIA, the primary statutory provision for 
withholding information from public disclosure that serves as the model 
for this section, as well as the judicial case law, utilize that term. 
Thus, there is value in employing it. Changing the term now might 
produce confusion, particularly since it will be at variance with both 
the statutory language and the interpretive case law. Thus, the 
Commission has decided to retain the term ``confidential'' in 
accordance with established usage and case law, with the understanding 
that the intent is to interpret the term consistently with that usage 
and not as a reference to classified national security information.
    In response to the comments regarding the marking requirements for 
documents containing confidential information, e.g., proprietary or 
personal privacy information, the Commission's final rule provides 
submitters of confidential information greater leeway. As to the need 
for adjacent marking, it is noted that, while some parties may submit 
one type of confidential information (e.g., proprietary information), 
others may submit documents or packages with mixed, or more than one, 
type of

[[Page 18840]]

confidential information (e.g., both proprietary and personal privacy 
information). This was the primary reason for the ``adjacent'' marking 
requirement. While this identification still could be confined to any 
required affidavit, the benefit to the Commission of adjacent marking 
is in obviating the need for NRC personnel to cross-reference the 
document to the affidavit to determine which particular portions should 
be protected and under what basis.
    It will be acceptable to employ a bracketing approach akin to that 
commonly used in the FOIA process, in which portions of documents 
subject to particular exemptions are enclosed with brackets and marked 
with the statutory (exemption) basis for withholding. This is a 
reasonable way to handle the adjacent marking requirement, where less 
than an entire page is affected by the marking, and without marking 
each paragraph. However, the Commission's intention is not to be 
overly-prescriptive in the particulars of either the marking language 
or the mechanics, in order for submitters to have broad latitude for 
whatever is most sensible in each case.
    The Commission does not agree that the reference to ``first page'' 
of the document is ambiguous; the provision refers to ``document, or a 
portion of it,'' sought to be withheld. The reference does not 
encompass a ``cover letter,'' unless the cover letter itself reveals 
confidential material, in which case it should be marked accordingly. 
Obviously, submitters are free to place any legend they choose on cover 
correspondence to indicate public availability where only the 
attachments are to be withheld from the public.
    There seemed to be a consensus among commenters that a less 
prescriptive form of document marking would work as well as the 
proposed marking language and that a general requirement, coupled with 
the submitter's self-interest, would produce the same results. The 
Commission agrees with this observation and has decided to relax this 
requirement to reflect a less rigid standard, relying on the submitter 
to identify proprietary or other confidential material appropriately. 
The Commission will accept any marking that clearly indicates the 
material to be withheld from public disclosure, or the affected portion 
thereof, such as by the following legends: ``withhold from public 
disclosure under 10 CFR 2.790,'' ``proprietary,'' or ``confidential.'' 
Any cover letter, likewise, should provide notice of confidential 
content in the enclosure, although there would be no reason to withhold 
from public disclosure a cover letter that itself contained no 
confidential material. As for the affidavit, identification of 
confidential material by page number should be adequate, as suggested 
by one of the commenters. Ultimately, the Commission will honor any 
legend that signifies the same sense of restriction intended to be 
conveyed by the prescribed marking, as described more fully in response 
to the following comment.
    6. Comment. Another commenter expressed concern that confidential 
documents not be vulnerable to disclosure for inadvertent or immaterial 
failure to follow the prescribed marking requirements and sought 
clarification of handling procedures in such situations, as well as a 
reasonable opportunity for the submitter to rectify the situation upon 
discovery of the error. This commenter also objected to the redaction 
and affidavit requirement for personal privacy information, indicating 
that imposing the document marking requirement for this type of 
information presented an administrative burden without a corresponding 
benefit. The commenter suggested a categorical exemption to withhold in 
the entirety medical, personnel, and operator examination records, and 
possibly other documents containing personal privacy information, 
arguing that it usually is clear when a document contains privacy 
information and the need to protect it normally requires no further 
justification. Finally, the commenter sought clarification of the 
affidavit requirement for privacy information to state that a licensee 
official might sign the affidavit, rather than the subject of the 
personal information.
    Response. As noted in this comment, the proposed rule attempted to 
provide reassurance that submitters would not be penalized for 
inadvertent failure to follow prescribed marking procedures. The 
Commission reiterates its position that it prefers use of the 
standardized language set forth in the final rule because it does not 
believe that requiring standardized language will result in a serious 
hardship on submitters, especially since the NRC intends to use 
standardized marking language as a processing tool and not as a means 
of limiting access to the withholding request procedure. The NRC will 
not impose a penalty, however, for failure to use the precise wording 
prescribed. Language substantially similar to that prescribed will be 
equally acceptable.\3\
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    \3\ ``The point is not to enforce a standard rigidly for its own 
sake, but to afford appropriate protection to submitter's 
confidential information, as economically and efficiently as 
possible. The NRC would work with submitters, as it always has, to 
resolve any discrepancies of which it was aware within a particular 
request.'' NRC Proposed Rule on Availability of Official Records 
(October 17, 2001; 66 FR 52721, 52723).
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    The Commission continues to have concerns when submitters intend 
that the NRC treat information as proprietary or confidential, yet do 
not request this treatment or request this treatment without 
identifying those portions warranting such treatment. A major purpose 
of the rule is to put the public on notice that the NRC will not place 
itself in the position of having to comb through documents searching 
for confidential information that had not been identified by the 
submitter and for which there was no reasonable designation. There is, 
however, ample opportunity to resolve situations cooperatively where 
the submitter inadvertently neglects to mark confidential information 
and subsequently seeks to have it so designated. There is no need to 
codify such a process, and in response to admonishments not to be 
overly-prescriptive, the final rule does not address every type of 
situation that may be encountered, nor the manner in which each would 
be handled. Moreover, preserving the flexibility for treating each 
circumstance in the most appropriate fashion would seem to counsel 
against such codification.
    As to the objection regarding the affidavit requirement for 
personal information, the Commission agrees with the comment that an 
affidavit need not accompany a request to withhold personal privacy 
information. The affidavit requirement is better suited to submittals 
containing proprietary information. The final rule thus does not 
require that an affidavit accompany submittals containing personal 
privacy information. Nonetheless, the submitter needs to identify 
personal privacy information in accordance with the marking 
requirements, to assist in the avoidance of inadvertent release.
    Finally, although no comment was received on this point, the 
proposed rule contained a provision in Sec.  2.790(e)(2) for the 
Commission to ``waive the requirements of this paragraph on request, or 
on its own initiative, in circumstances the Commission deems 
appropriate.'' The waiver was intended to apply to the affidavit 
requirement. Therefore, the language has been moved to paragraph 
(b)(1)(ii), which pertains to affidavits, and revised to reflect that 
correction.

[[Page 18841]]

E. Copyright Handling

    7. Comment. The Commission proposed to codify its practices 
regarding the copying of copyrighted material submitted to it. Two 
commenters suggested that, under the ``fair use'' doctrine of copyright 
law, the Commission already is authorized to make copies of submittals 
as necessary to perform its official responsibilities, and that Sec.  
2.790(e) is unnecessary. One commenter was concerned that proposed 
Sec.  2.790(e) violates the Copyright Act (17 U.S.C. 101 et seq.) by 
allowing the Commission an unrestricted right to make and distribute 
copies as a condition of providing the Commission with information. Two 
commenters objected to the ``hold harmless'' provision, which was 
intended to limit liability of NRC employees for inadvertent copyright 
infringement in making copies of documents when the submitter lacked 
the requisite authority to grant reproduction permission (proposed 
Sec.  2.790(e)(1)(ii)). These commenters considered this an improper 
attempt to shield the Commission from responsibility for wrongful acts 
arising out of potential copyright abuses. Finally, one commenter 
suggested that it is unfair for the Commission to require, as a 
condition of acceptance for any submittal, that the submitter grant a 
license to the Commission to make copies because the submitter may not 
in fact have the legal authority to do so.
    Response. The Commission agrees with the comment that, under the 
``fair use'' doctrine, the Commission is authorized to make such copies 
of information submitted to it as necessary to perform its official 
responsibilities. The purpose of Sec.  2.790(e) is simply to codify and 
give public notice of the Commission's intent to make copies of 
documents submitted to it as necessary to perform its mission, and to 
make explicit its view that such activity per se constitutes ``fair 
use.'' Section 2.790(e) is intended to eliminate any confusion about 
how the Commission will make use of information submitted to it.
    The Commission recognizes that Sec.  2.790(e) is coextensive with 
the ``fair use'' doctrine, and does not grant the Commission an 
unrestricted right to copy material submitted to it. Rather, the 
Commission's right to copy submittals is linked directly to the need to 
perform its statutory mission of protecting the public health and 
safety and promoting the common defense and security. The Commission 
disagrees with the comment that Sec.  2.790(e) would give it a 
virtually unlimited right to reproduce copyrighted material. The 
Commission does not intend to make or distribute copies of submittals 
in a manner inconsistent with traditional copyright protections. The 
Commission makes copies available pursuant to its responsibilities 
under the Federal Records Act and the Administrative Procedure Act. The 
NRC will continue its practice of placing copyrighted documents into 
the electronic record-keeping system for inspection. This does not 
entitle non-NRC parties to copy documents not otherwise authorized by 
copyright laws, much as with volumes maintained by public libraries.
    Commenters expressed further concern that the ``hold harmless'' 
provision, proposed Sec.  2.790(e)(1)(ii), was an improper attempt to 
shield the Commission from liability for copyright infringement. This 
provision sought to limit liability resulting from unauthorized 
reproduction or distribution of documents submitted to the NRC. The 
Commission never intended to shield from liability for copyright 
infringement NRC employees who go beyond fair use. The intent of the 
``hold harmless'' provision was simply to make clear that NRC personnel 
must not be held liable for making copies of materials utilized 
pursuant to the proper performance of their official responsibilities. 
As proposed, the specific goal of Sec.  2.790(e)(1)(ii) was the 
prevention of suits by third parties who might claim copyright 
infringement in the event their copyrighted material was submitted by 
another to the NRC and copied by the Commission without the copyright 
holder's knowledge or consent. However, under the fair use doctrine, no 
liability should attach to the copying and internal distribution of 
submittals as necessary to carry out the Commission's regulatory 
responsibilities. Thus, upon further reflection, because the fair use 
doctrine permits the copying necessary to carry out its official 
duties, the Commission has concluded that the proposed provision is 
unnecessary. It has been deleted from the final rule.
    Because Sec.  2.790(e) is based upon the fair use doctrine, and 
because the fair use doctrine provides that copies may be made without 
the consent of the copyright holder, the remaining provisions of 
Sec. Sec.  2.790(e)(1) and 2.790(e)(2)\4\ also are unnecessary. These 
provisions would have required that, as a condition for the 
Commission's accepting any submittal, the submitter explicitly 
authorize the Commission to make and distribute copies of the 
submittal, and provided notice of the Commission's ``hold harmless'' 
position. However, in the Commission's view, any submittal may be 
copied as necessary to support the agency's mission, regardless of any 
stated copyright restrictions accompanying the submittal or any 
objections from copyright holders. Similarly, these copies may be 
distributed within the agency for use in carrying out the Commission's 
official responsibilities. The fair use doctrine requires no express 
grant of permission and thus, such a requirement is not needed in the 
regulation. Moreover, it may create problems for those submitters who 
are unable to make such a warranty over the objection of third-parties 
who may hold copyrights in some or all of the information being 
submitted. Finally, the ``hold harmless'' provision, likewise, is 
deemed unnecessary and has been removed.
---------------------------------------------------------------------------

    \4\ One portion of Sec.  2.790(e)(2) addressed affidavit waivers 
and has been relocated in the regulation to clarify that point, as 
explained above.
---------------------------------------------------------------------------

    In sum, in response to these comments, and in order to avoid 
confusion regarding the Commission's intent in promulgating Sec.  
2.790(e), changes have been made in the final rule. Sections 
2.790(e)(1) and 2.790(e)(2) have been deleted. Section 2.790(e) has 
been retained to give explicit notice of the Commission's intent to 
copy and distribute submittals within the agency as necessary to carry 
out its official responsibilities, consistent with the fair use 
doctrine.

III. Final Action

    The NRC is amending its regulations on availability of official 
records to provide specific guidance for marking information a 
submitter seeks to have withheld from public disclosure on the basis of 
proprietary content or other confidential information, to codify NRC 
practices concerning circumstances under which submitted documents will 
not be returned to the submitter, and to explain and clarify NRC's 
practices regarding handling of copyrighted material submitted to it.

IV. Voluntary Consensus Standards

    The National Technology Transfer and Advancement Act of 1995, Pub. 
L. 104-113, requires that Federal agencies use technical standards that 
are developed or adopted by voluntary consensus standards bodies unless 
using such a standard is inconsistent with applicable law or otherwise 
impractical. In this final rule the Commission is codifying its 
practices regarding the treatment of proprietary information and 
copyrighted material. This action does not constitute the

[[Page 18842]]

establishment of a standard that establishes generally applicable 
requirements, and the use of a voluntary consensus standard is not 
applicable.

V. Environmental Impact: Categorical Exclusion

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

VI. Paperwork Reduction Act Statement

    This final rule does not contain information collection 
requirements and, therefore, is not subject to the requirements of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

VII. Regulatory Analysis

    This final rule brings NRC's regulations concerning the 
availability of official records into conformance with case law and 
current Commission practice. This rule informs the public of document 
marking requirements for submitted information, of four additional 
exceptions to a submitter's limited right to withdraw submitted 
information, and of Commission practice concerning the reproduction and 
distribution of submitted copyright material. The rule reflects 
Commission administrative and procedural practice and has only minor 
impact on the benefits or costs associated with the Commission's 
regulations. Some submitters already mark documents consistent with the 
requirements in this rule. For others, the rule will shift some 
responsibility to the submitter for ensuring that its confidential 
material is identified and protected. It also codifies the Commission's 
practices regarding its dissemination of copyrighted material.

VIII. Regulatory Flexibility Certification

    As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 
605(b)), the Commission certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities. 
The rule sets forth new document marking requirements for submitted 
information, clarifies the right of the submitter of information to 
have certain information returned on request, and provides notice of 
Commission practice concerning the reproduction and distribution of 
copyrighted material. The rule does not impose substantial obligations 
or have significant financial impact on entities, including any 
regulated entities that may be ``small entities,'' as defined by the 
Regulatory Flexibility Act (5 U.S.C. 601(3)), or under the Size 
Standards adopted by the NRC in 10 CFR 2.810.

IX. Backfit Analysis

    The NRC has determined that a backfit analysis is not required for 
this final rule because these amendments do not include any provisions 
that would impose backfits as defined in 10 CFR chapter 1.

X. Small Business Regulatory Enforcement Fairness Act

    In accordance with the Small Business Regulatory Enforcement 
Fairness Act of 1996, Pub. L. 104-121, the NRC has determined that this 
action is not a major rule.

List of Subjects in 10 CFR Part 2

    Administrative practice and procedure, Antitrust, Byproduct 
material, Classified information, Environmental protection, Nuclear 
materials, Nuclear power plants and reactors, Penalties, Sex 
discrimination, Source material, Special nuclear material, Waste 
treatment and disposal.

0
For the reasons set out in the preamble and under the authority of the 
Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 
1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the 
following amendments to 10 CFR part 2.

PART 2--RULES OF PRACTICE FOR DOMESTIC LICENSING PROCEEDINGS AND 
ISSUANCE OF ORDERS

0
1. The authority citation for part 2 continues to read as follows:

    Authority: Secs. 161, 181, 68 Stat. 948, 953, as amended (42 
U.S.C. 2201, 2231); sec. 191, as amended, Pub. L. 87-615, 76 Stat. 
409 (42 U.S.C. 2241); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 
5841); 5 U.S.C. 552. Section 2.101 also issued under secs. 53, 62, 
63, 81, 103, 104, 105, 68 Stat. 930, 932, 933, 935, 936, 937, 938, 
as amended (42 U.S.C. 2073, 2092, 2093, 2111, 2133, 2134, 2135); 
sec. 114(f), Pub. L. 97-425, 96 Stat. 2213, as amended (42 U.S.C. 
10134(f)), sec. 102, Pub. L. 91-190, 83 Stat. 853, as amended (42 
U.S.C. 4332); sec. 301, 88 Stat. 1248 (42 U.S.C. 5871). Sections 
2.102, 2.103, 2.104, 2.105, 2.721 also issued under secs. 102, 103, 
104, 105, 183i, 189, 68 Stat. 936, 937, 938, 954, 955, as amended 
(42 U.S.C. 2132, 2133, 2134, 2135, 2233, 2239). Section 2.105 also 
issued under Pub. L. 97-415, 96 Stat. 2073 (42 U.S.C. 2239). 
Sections 2.200-2.206 also issued under secs. 161b, i, o, 182, 186, 
234, 68 Stat. 948-951, 955, 83 Stat. 444, as amended (42 U.S.C. 2201 
(b), (i), (o), 2236, 2282); sec. 206, 88 Stat 1246 (42 U.S.C. 5846). 
Section 2.205(j) also issued under Pub. L. 101-410, 104 Stat. 90, as 
amended by section 3100(s), Pub. L. 104-134, 110 Stat. 1321-373 (28 
U.S.C. 2461 note.) Sections 2.600-2.606 also issued under sec. 102, 
Pub. L. 91-190, 83 Stat. 853, as amended (42 U.S.C. 4332). Sections 
2.700a, 2.719 also issued under 5 U.S.C. 554. Sections 2.754, 2.760, 
2.770, 2.780 also issued under 5 U.S.C. 557. Section 2.764 also 
issued under secs. 135, 141, Pub. L. 97-425, 96 Stat. 2232, 2241 (42 
U.S.C. 10155, 10161). Section 2.790 also issued under sec. 103, 68 
Stat. 936, as amended (42 U.S.C. 2133) and 5 U.S.C. 552. Sections 
2.800 and 2.808 also issued under 5 U.S.C. 553. Section 2.809 also 
issued under 5 U.S.C. 553 and sec. 29, Pub. L. 85-256, 71 Stat. 579, 
as amended (42 U.S.C. 2039). Subpart K also issued under sec. 189, 
68 Stat. 955 (42 U.S.C. 2239); sec. 134, Pub. L. 97-425, 96 Stat. 
2230 (42 U.S.C. 10154). Subpart L also issued under sec. 189, 68 
Stat. 955 (42 U.S.C. 2239). Subpart M also issued under sec. 184 (42 
U.S.C. 2234) and sec. 189, 68 Stat. 955 (42 U.S.C. 2239). Appendix A 
also issued under sec. 6, Pub. L. 91-560, 84 Stat. 1473 (42 U.S.C. 
2135).


0
2. Section 2.790 is amended by revising the introductory text of 
paragraph (a); adding introductory text to paragraph (b); revising 
paragraphs (b)(1), (b)(4)(ii); and (c); redesignating paragraph (e) as 
paragraph (f); and adding new paragraph (e), to read as follows:


Sec.  2.790  Public inspections, exemptions, requests for withholding.

    (a) Subject to the provisions of paragraphs (b), (c), (d), (e), and 
(f) of this section, final NRC records and documents, including but not 
limited to correspondence to and from the NRC regarding the issuance, 
denial, amendment, transfer, renewal, modification, suspension, 
revocation, or violation of a license, permit, or order, or regarding a 
rulemaking proceeding subject to this part shall not, in the absence of 
an NRC determination of a compelling reason for nondisclosure after a 
balancing of the interests of the person or agency urging nondisclosure 
and the public interest in disclosure, be exempt from disclosure and 
will be made available for inspection and copying at the NRC Web site, 
http://www.nrc.gov, and/or at the NRC Public Document Room, except for 
matters that are:
* * * * *
    (b) The procedures in this section must be followed by anyone 
submitting a document to the NRC who seeks to have the document, or a 
portion of it, withheld from public disclosure because it contains 
trade secrets, privileged or confidential commercial or financial 
information.
    (1) The submitter shall request withholding at the time the 
document is submitted and shall comply with the document marking and 
affidavit requirements set forth in this paragraph. The NRC has no 
obligation to review

[[Page 18843]]

documents not so marked to determine whether they contain information 
eligible for withholding under paragraph (a) of this section. Any 
documents not so marked may be made available to the public at the NRC 
Website, http://www.nrc.gov or at the NRC Public Document Room.
    (i) The submitter shall ensure that the document containing 
information sought to be withheld is marked as follows:
    (A) The top of the first page of the document and the top of each 
page containing such information must be marked with language 
substantially similar to: ``confidential information submitted under 10 
CFR 2.790;'' ``withhold from public disclosure under 10 CFR Sec.  
2.790;'' or ``proprietary'' to indicate it contains information the 
submitter seeks to have withheld.
    (B) Each document, or page, as appropriate, containing information 
sought to be withheld from public disclosure must indicate, adjacent to 
the information, or at the top if the entire page is affected, the 
basis (i.e., trade secret, personal privacy, etc.) for proposing that 
the information be withheld from public disclosure under paragraph (a) 
of this section.
    (ii) The Commission may waive the affidavit requirements on 
request, or on its own initiative, in circumstances the Commission, in 
its discretion, deems appropriate. Otherwise, except for personal 
privacy information, which is not subject to the affidavit requirement, 
the request for withholding must be accompanied by an affidavit that--
    (A) Identifies the document or part sought to be withheld;
    (B) Identifies the official position of the person making the 
affidavit;
    (C) Declares the basis for proposing the information be withheld, 
encompassing considerations set forth in Sec.  2.790(a);
    (D) Includes a specific statement of the harm that would result if 
the information sought to be withheld is disclosed to the public; and
    (E) Indicates the location(s) in the document of all information 
sought to be withheld.
    (iii) In addition, an affidavit accompanying a withholding request 
based on paragraph (a)(4) of this section must contain a full statement 
of the reason for claiming the information should be withheld from 
public disclosure. Such statement shall address with specificity the 
considerations listed in paragraph (b)(4) of this section. In the case 
of an affidavit submitted by a company, the affidavit shall be executed 
by an officer or upper-level management official who has been 
specifically delegated the function of reviewing the information sought 
to be withheld and authorized to apply for its withholding on behalf of 
the company. The affidavit shall be executed by the owner of the 
information, even though the information sought to be withheld is 
submitted to the Commission by another person. The application and 
affidavit shall be submitted at the time of filing the information 
sought to be withheld. The information sought to be withheld shall be 
incorporated, as far as possible, into a separate paper. The affiant 
must designate with appropriate markings information submitted in the 
affidavit as a trade secret, or confidential or privileged commercial 
or financial information within the meaning of Sec.  9.17(a)(4) of this 
chapter, and such information shall be subject to disclosure only in 
accordance with the provisions of Sec.  9.19 of this chapter.
* * * * *
    (4) * * *
    (ii) Whether the information is of a type customarily held in 
confidence by its owner and, except for voluntarily submitted 
information, whether there is a rational basis therefor;
* * * * *
    (c) The Commission either may grant or deny a request for 
withholding under this section.
    (1) If the request is granted, the Commission will notify the 
submitter of its determination to withhold the information from public 
disclosure.
    (2) If the Commission denies a request for withholding under this 
section, it will provide the submitter with a statement of reasons for 
that determination. This decision will specify the date, which will be 
a reasonable time thereafter, when the document will be available at 
the NRC Website, http://www.nrc.gov. The document will not be returned 
to the submitter.
    (3) Whenever a submitter desires to withdraw a document from 
Commission consideration, it may request return of the document, and 
the document will be returned unless the information--
    (i) Forms part of the basis of an official agency decision, 
including but not limited to, a rulemaking proceeding or licensing 
activity;
    (ii) Is contained in a document that was made available to or 
prepared for an NRC advisory committee;
    (iii) Was revealed, or relied upon, in an open Commission meeting 
held in accordance with 10 CFR Part 9, Subpart C;
    (iv) Has been requested in a Freedom of Information Act request; or
    (v) Has been obtained during the course of an investigation 
conducted by the NRC Office of Investigations.
* * * * *
    (e) Submitting information to NRC for consideration in connection 
with NRC licensing or regulatory activities shall be deemed to 
constitute authority for the NRC to reproduce and to distribute 
sufficient copies to carry out the Commission's official 
responsibilities.
* * * * *

    Dated in Rockville, Maryland, this 7th day of April, 2003.

    For the Nuclear Regulatory Commission.
Annette Vietti-Cook,
Secretary of the Commission.
[FR Doc. 03-9438 Filed 4-16-03; 8:45 am]
BILLING CODE 7590-01-P