[Federal Register Volume 73, Number 207 (Friday, October 24, 2008)]
[Rules and Regulations]
[Pages 63546-63582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-24904]



[[Page 63545]]

-----------------------------------------------------------------------

Part II





Nuclear Regulatory Commission





-----------------------------------------------------------------------



10 CFR Parts 2, 30, 40, et al.,



Protection of Safeguards Information; Final Rule

  Federal Register / Vol. 73 , No. 207 / Friday, October 24, 2008 / 
Rules and Regulations  

[[Page 63546]]


-----------------------------------------------------------------------

NUCLEAR REGULATORY COMMISSION

10 CFR Parts 2, 30, 40, 50, 52, 60, 63, 70, 71, 72, 73, 76, and 150

RIN 3150-AH57
[NRC-2005-0001]


Protection of Safeguards Information

AGENCY: Nuclear Regulatory Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Nuclear Regulatory Commission (NRC) is amending its 
regulations for the protection of Safeguards Information (SGI) to 
protect SGI from inadvertent release and unauthorized disclosure which 
might compromise the security of nuclear facilities and materials. The 
amendments modify the requirements for the protection of SGI with 
respect to persons, information, and materials subject to the 
regulations, as well as those that are not. These amendments are within 
the scope of Commission authority under the Atomic Energy Act of 1954, 
as amended (AEA). The NRC published a proposed rule on SGI on February 
11, 2005, and published a revised proposed rule on October 31, 2006, to 
allow for public comment on changes to the proposed rule text made for 
the following reasons: In response to public comments, to reflect 
amendments to the AEA in the Energy Policy Act of 2005 (EPAct), and to 
reflect Commission Orders issued to licensees authorized to possess and 
transfer items containing certain quantities of radioactive material. 
The NRC is now publishing this final rule, in which the NRC is 
responding to the comments that have been received and is making 
appropriate changes to the text of the revised proposed rule.

DATES: This rule is effective on February 23, 2009. Licensees and other 
persons subject to this rule are required to implement this rule by 
February 23, 2009. Licensees required to submit to the NRC any changes 
to security plans under these regulations are required to submit such 
changes to the NRC by this effective date.

ADDRESSES: You can access publicly available documents related to this 
document using the following methods:
    Federal e-Rulemaking Portal: Go to http://www.regulations.gov and 
search for documents filed under Docket ID NRC-2005-0001. Address 
questions about NRC dockets to Carol Gallagher 301-415-5905; e-mail 
[email protected].
    NRC's Public Document Room (PDR): The public may examine and have 
copied for a fee, publicly available documents at the NRC's PDR, Public 
File Area O1-F21, One White Flint North, 11555 Rockville Pike, 
Rockville, Maryland.
    NRC's Agencywide Documents Access and Management System (ADAMS):
    Publicly available documents created or received at the NRC are 
available electronically at the NRC's Electronic Reading Room at http://www.nrc.gov/reading-rm/adams.html. From this page, the public can gain 
entry into ADAMS, which provides text and image files of NRC's public 
documents. If you do not have access to ADAMS or if there are problems 
in accessing the documents located in ADAMS, contact the NRC's PDR 
reference staff at 1-800-397-4209, 301-415-4737, or by e-mail to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Jason Zorn, Attorney, Office of the 
General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 
20555-0001, telephone (301) 415-8350, e-mail [email protected]; or 
Bernard Stapleton, Office of Nuclear Security and Incident Response, 
Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone 
(301) 415-2432, e-mail [email protected].

SUPPLEMENTARY INFORMATION:

I. Background
II. Need for Rule
III. Purpose of Rulemaking
IV. Discussion
    A. Resolution of Public Comments on the Revised Proposed Rule
    1. Overview of Comments on the Revised Proposed Rule
    2. Comments and Issues, and Their Resolution in the Final Rule
    B. Analysis of Changes Made in the Final Rule to the Text of the 
Revised Proposed Rule
V. Criminal Penalties
VI. Agreement State Issues
VII. Voluntary Consensus Standards
VIII. Finding of No Significant Impact: Environmental Assessment
IX. Paperwork Reduction Act Statement
X. Regulatory Analysis
XI. Regulatory Flexibility Certification
XII. Backfit Analysis
XIII. Congressional Review Act

I. Background

    On February 11, 2005 (70 FR 7196), the NRC published a proposed 
rule to amend 10 CFR parts 2, 30, 40, 50, 52, 60, 63, 70, 71, 72, 73, 
76, and 150 governing the handling of Safeguards Information (SGI) and 
to create a new category of protected material, Safeguards 
Information--Modified Handling (SGI-M). Subsequently, Congress passed 
the Energy Policy Act of 2005 (EPAct), Public Law No. 109-58, 119 Stat. 
594. Section 652 of the EPAct amended section 149 of the Atomic Energy 
Act of 1954, as amended (AEA) to require fingerprinting, for criminal 
history records check purposes, of a broader class of persons. Before 
the EPAct, the NRC's fingerprinting authority was limited to requiring 
licensees and applicants for a license to operate a nuclear power 
reactor under 10 CFR part 50 to fingerprint individuals prior to 
granting access to SGI. The EPAct expanded the NRC's authority to 
require fingerprinting of individuals before granting them access to 
SGI. Under the EPAct, fingerprinting by the following individuals or 
entities is necessary before granting access to SGI: (1) Individuals 
licensed or certified to engage in an activity subject to regulation by 
the Commission, including utilization facilities; (2) Individuals who 
have filed an application for a license or certificate to engage in 
Commission-regulated activities; and (3) Individuals who have notified 
the Commission in writing of an intent to file an application for 
licensing, certification, permitting, or approval of a product or 
activity subject to regulation by the Commission.
    The EPAct preserved the Commission's authority in Section 149 to 
relieve by rule certain persons from the fingerprinting, 
identification, and criminal history records checks required for access 
to SGI. The Commission exercised that authority to relieve by rule 
certain categories of persons from those requirements, including 
Federal, State, and local officials involved in security planning and 
incident response; Agreement State employees who evaluate licensee 
compliance with NRC-issued security-related orders; members of Congress 
who request SGI as part of their oversight function; and certain 
foreign representatives. These exemptions are based on the Commission's 
findings that interrupting those individuals' access to SGI to perform 
fingerprinting and criminal history records checks (1) would harm vital 
inspection, oversight, planning, and enforcement functions, (2) would 
impair communications among the NRC, its licensees, and first 
responders in the event of an imminent security threat or other 
emergency, and (3) could strain the Commission's cooperative 
relationships with its international counterparts, and might delay 
needed exchanges of information to the detriment of current security 
initiatives both at home and abroad. The final rule was published in 
the Federal Register

[[Page 63547]]

on June 13, 2006 (71 FR 33989). That final rule was necessary to avoid 
disruption of the Commission's information sharing activities during 
the interim period while the Commission completed the overall revision 
of the SGI-related regulations in this rulemaking.
    SGI is a special category of sensitive unclassified information to 
be protected from unauthorized disclosure under Section 147 of the 
Atomic Energy Act of 1954, as amended (AEA). Although SGI is considered 
to be sensitive unclassified information, it is handled and protected 
more like Classified National Security Information than like other 
sensitive unclassified information (e.g., privacy and proprietary 
information). Part 73, ``Physical Protection of Plants and Materials,'' 
of the NRC's regulations in Title 10 of the Code of Federal Regulations 
(CFR) contains requirements for the protection of SGI. Commission 
orders issued since September 11, 2001, have also imposed requirements 
for the designation and protection of SGI. These requirements apply to 
SGI in the hands of any person, whether or not a licensee of the 
Commission, who produces, receives, or acquires SGI. An individual's 
access to SGI requires both a valid ``need to know'' for the 
information and an authorization based on an appropriate background 
check. Power reactors, certain research and test reactors, and 
independent spent fuel storage installations are examples of the 
categories of licensees currently subject to the provisions of 10 CFR 
part 73 for the protection of SGI. Examples of the types of information 
designated as SGI include the physical security plan for a licensee's 
facility, the design features of a licensee's physical protection 
system, and operational procedures for the licensee's security 
organization.
    The Commission has authority under Section 147 of the AEA to 
designate, by regulation or order, other types of information as SGI. 
For example, Section 147a.(2) allows the Commission to designate as SGI 
a licensee's or applicant's detailed security measures (including 
security plans, procedures and equipment) for the physical protection 
of source material or byproduct material in quantities determined by 
the Commission to be significant to the public health and safety or the 
common defense and security. The Commission has, by order, imposed SGI 
handling requirements on certain categories of these licensees. An 
example is the November 25, 2003, Order issued to certain materials 
licensees.\1\
---------------------------------------------------------------------------

    \1\ This Order was published in the Federal Register as ``All 
Licensees Authorized to Manufacture or Initially Transfer Items 
Containing Radioactive Material for Sale or Distribution and Who 
Possess Certain Radioactive Material of Concern and All Persons Who 
Obtain Safeguards Information Described Herein; Order Issued on 
November 25, 2003, Imposing Requirements for the Protection of 
Certain Safeguards Information (Effective Immediately),'' (69 FR 
3397; January 23, 2004).
---------------------------------------------------------------------------

    Violations of SGI handling and protection requirements, whether 
those specified in part 73 or those imposed by order, are subject to 
the applicable civil and criminal sanctions. Licensee employees, past 
or present, and all other persons who have had access to SGI have a 
continuing obligation to protect SGI in order to prevent inadvertent 
release and unauthorized disclosure. Information designated as SGI must 
be withheld from public disclosure and must be physically controlled 
and protected. Protection requirements include (1) secure storage; (2) 
document marking; (3) restriction of access; (4) limited reproduction; 
(5) protected transmission; and (6) controls for information processing 
on electronic systems.
    Inadequate protection of SGI, including unauthorized disclosure, 
may result in civil and/or criminal penalties. The AEA explicitly 
provides in Section 147a. that ``any person, whether or not a licensee 
of the Commission, who violates any regulations adopted under this 
section shall be subject to the civil monetary penalties of Section 234 
of this Act.'' Furthermore, willful violation of any regulation or 
order governing SGI is a felony subject to criminal penalties in the 
form of fines or imprisonment, or both, as prescribed in Section 223 of 
the AEA.

II. Need for Rule

    Changes in the threat environment have revealed the need to protect 
as SGI additional types of security information held by a broader group 
of persons, including licensees, applicants, vendors, and certificate 
holders. The regulations in effect prior to this rule did not specify 
all of the types of information that could be designated as SGI and are 
now recognized to be significant to the public health and safety or the 
common defense and security. The unauthorized release of this 
information could result in harm to the public health and safety and 
the Nation's common defense and security, as well as damage to the 
Nation's critical infrastructure, including nuclear power plants and 
other facilities and materials licensed and regulated by the NRC or 
Agreement States.
    Since September 11, 2001, the NRC has issued orders that have 
increased the number of licensees whose security measures will be 
protected as SGI and added types of security information considered to 
be SGI. Orders have been issued to power reactor licensees, fuel cycle 
facility licensees, certain source material licensees, and certain 
byproduct material licensees. Some of the orders expanded the types of 
information to be protected by licensees who already have an SGI 
protection program, such as nuclear power reactor licensees. Other 
orders were issued to licensees that have not previously been subject 
to SGI protection requirements in the regulations, such as certain 
licensees authorized to manufacture or initially transfer items 
containing radioactive material.\2\ Some orders imposed a new 
designation: Safeguards Information-Modified Handling (SGI-M).
---------------------------------------------------------------------------

    \2\ See Order (69 FR 3397; January 23, 2004).
---------------------------------------------------------------------------

    SGI-M refers to SGI with handling requirements that are modified 
somewhat due to the lower risk posed by unauthorized disclosure of the 
information. The SGI-M protection requirements apply to certain 
security-related information regarding quantities of source, byproduct, 
and special nuclear materials for which the harm caused by unauthorized 
disclosure of information would be less than that for other SGI.
    Some of the requirements imposed by orders that have increased the 
types of information to be considered SGI are not covered by the 
current regulations. Although new SGI requirements could continue to be 
imposed through the issuance of orders, the regulations would not 
reflect current Commission SGI policy and/or requirements.

III. Purpose of Rulemaking

    NRC staff review of the SGI regulatory program indicates that 
changes in the regulations are needed to address issues such as access 
to SGI, types of security information to be protected, and handling and 
storage requirements.
    This rulemaking will:
    (1) Revise the definition of ``need to know'' in 10 CFR 73.2;
    (2) Implement expanded fingerprinting and criminal history records 
check procedures for broader categories of individuals who will have 
access to SGI unless exempt from those requirements;
    (3) Implement a requirement for background checks to determine 
trustworthiness and reliability for

[[Page 63548]]

individuals who will have access to SGI unless exempt from those 
requirements;
    (4) Implement generally applicable requirements for SGI that are 
similar to requirements imposed by the orders;
    (5) Expand the scope of part 73 to include additional categories of 
licensees (e.g., source and byproduct material licensees, research and 
test reactors not previously covered, and fuel cycle facilities not 
previously covered). As expanded, vendors, applicants and certificate 
holders are also within the scope of the rule;
    (6) Expand the types of security information covered by the 
definition of SGI in Sec.  73.2 and the information categories 
described in Sec. Sec.  73.22 and 73.23 to include detailed security 
measures for the physical protection of byproduct, source, and special 
nuclear material; emergency planning scenarios and implementing 
procedures; uncorrected vulnerabilities or weaknesses in a security 
system; and certain training and qualification information;
    (7) Clarify requirements for obtaining access to SGI in the context 
of adjudications and clarify the appeal procedures available;
    (8) Modify the original proposed rule to align it with the final 
rule in 10 CFR 73.59 granting relief from the fingerprinting, 
identification and criminal history records checks and background 
checks for designated categories of individuals; and
    (9) Modify 10 CFR 73.59 to make it consistent with the language and 
structure of the proposed SGI rule.
    In the development of the rule, a graded approach, based on the 
risks and consequences of information disclosure, was used to determine 
which category of licensee or type of information would be subject to 
certain protection requirements. This graded approach was applied to 
issues such as the type of information to be protected, the classes of 
licensees subject to the rule, and the level of handling requirements 
necessary for the various licensees. For example, the graded approach 
allows certain licensees to employ the modified-handling procedures 
introduced in recent orders and now set forth in the SGI-M provisions 
of this final rule.
    The requirements set forth in this final rule are the minimum 
restrictions the Commission finds necessary to protect SGI against 
inadvertent release or unauthorized disclosure which might compromise 
the health and safety of the public or the common defense and security. 
The final rule covers those facilities and materials the Commission has 
already determined need to be protected against theft or sabotage. The 
categories of information constituting SGI relate to the types of 
facilities and the quantities of special nuclear material, source 
material and byproduct material determined by the Commission to be 
significant and therefore subject to protection against unauthorized 
disclosure pursuant to Section 147 of the AEA. Unauthorized release of 
SGI could reduce the deterrence value of systems and measures used to 
protect nuclear facilities and materials and allow for the possible 
compromise of those facilities and materials. Such disclosures could 
also facilitate advance planning by an adversary intent on committing 
acts of theft or sabotage against the facilities and materials within 
the scope of this rule. Further, the Commission has determined, 
pursuant to Section 147a.(3)(B) of the AEA, that the unauthorized 
disclosure of SGI could reasonably be expected to have a significant 
adverse effect on the health and safety of the public or the common 
defense and security by significantly increasing the likelihood of 
theft, diversion, or sabotage of nuclear material or a facility.

IV. Discussion

A. Resolution of Public Comments on the Revised Proposed Rule

1. Overview of Comments on the Revised Proposed Rule
    On February 11, 2005 (70 FR 7196), the Commission published a 
proposed rule and requested public comments. On October 31, 2006 (71 FR 
64004), the Commission published a revised version of the proposed rule 
that responded to comments on the original proposed rule. The revised 
proposed rule also solicited comments on changes and additions to the 
original proposed rule by January 2, 2007. In addition to this general 
solicitation for comments, the revised proposed rule (71 FR 64051) 
solicited specific public comment on the appropriateness of the 
exemptions in the revised provisions in 10 CFR 73.59, as they apply to 
various categories of individuals. The specified categories of 
individuals are exempt from the background check requirements 
(including fingerprinting for a criminal history records check) for 
access to SGI.
    Ten comment letters were received. Copies of those letters are 
available for public inspection and copying for a fee at the NRC Public 
Document Room, 11555 Rockville Pike, Rockville, Maryland, or on the 
NRC's Agencywide Documents Access and Management System, available 
online at: http://www.nrc.gov/reading-rm/adams/web-based.html.
    Two comment letters were from agreement states, six comment letters 
were from industry, one comment letter was from a university with a 
research reactor, and one comment letter was from an individual. The 
comment letters provided various points of view and suggestions for 
clarifications, additions and deletions. Also, although commenters did 
not refer to the request for specific comment, the Commission received 
two comments on Sec.  73.59. Responses to the comments are set forth 
below.
2. Comments and Issues, and Their Resolution in the Final Rule
    General Issues.
    Information in Licenses.
    Comment: A commenter states that although not referenced, 
information about the types and quantities of material listed on a 
license in some cases should be considered SGI when the license 
contains nuclides and quantities of concern. The commenter also states 
that licensees transferring material to another licensee must obtain a 
copy of the recipient's license so this information is easily available 
and in many cases publicly available. According to this commenter, this 
issue needs to be reviewed by NRC and state agencies to assure the 
appropriate level of security is given to standard licensing documents.
    Response: Under existing regulations and practice, licensing 
documents are reviewed to determine if they contain any information 
which constitutes SGI or other information which warrants protection 
from unauthorized disclosure. Generally speaking, information on 
possession limits for radionuclides does not meet the definition of 
SGI. This information, although not categorized as SGI, may be withheld 
from public disclosure if disclosure of the information could raise 
security concerns. For example, in some contexts, information on actual 
quantities possessed in relation to possession limits could raise 
security concerns. Prior to transferring material to another licensee, 
verification that the licensee is authorized to receive the material is 
required by one of the methods provided in Sec.  30.41(d) or in 
Commission orders.
    Interaction with other regulations.
    Comment: Another commenter asserts that the proposed rule conflicts 
with the requirements of 49 CFR part 15, the Department of 
Transportation (DOT) regulations regarding the protection of 
information associated with the transportation of certain types and 
quantities of radioactive materials. The commenter further believes 
that this

[[Page 63549]]

will result in licensees transporting nuclear materials having to 
contend with two separate information protection regulations for the 
same information. The commenter urges the NRC and the DOT to develop a 
coordinated rulemaking regarding this issue.
    Response: This comment was made on the previous proposed rule and a 
response was provided at 71 FR 64024. The commenter has not provided 
any new information, and the Commission continues to conclude that the 
NRC's regulations are not in conflict with the DOT regulations. 
Security plans required by the NRC can be developed so that they also 
comply with DOT requirements.
    Implementation period for the rule.
    Comment: Some commenters believe that the implementation period of 
90 days after publication of the rule is too short. One commenter 
asserts that gaseous diffusion plant licensees will need to review 
existing security plans that integrate protective measures for special 
nuclear material, classified material and other security interest areas 
against existing classification guidance and SGI designation guidance 
to ensure that information is properly designated and marked. A 
commenter believes that for information subject to multiple, 
overlapping protection programs, the 90-day implementation period is 
not sufficient. The commenters believe that at least one year should be 
provided for implementation for power reactors and other licensee 
sites.
    Response: Although many of the requirements in the rule for the 
designation and handling of SGI are similar to the requirements in 
orders issued by the Commission since September 11, 2001, some 
licensees are subject to new requirements in the rule. For example, 
some security orders have required licensees to conduct a criminal 
history records check prior to granting an individual access to SGI, 
but have not imposed the other elements of a background check (at a 
minimum, an individual's employment history, education, and personal 
references). Unless one of the exemptions from the background check 
requirement in Sec.  73.59 applies, licensees will be obligated to 
perform a background check consisting of all of its elements for access 
to SGI. In order to allow sufficient time for licensees to implement 
this new requirement and any others to which a licensee may be subject, 
the Commission is extending the time period for the implementation of 
the final rule from 90 days to 120 days. The Commission does not, 
however, believe that an implementation period of at least one year is 
needed.
    Section-Specific Comments:
    Part 2: Rules of Practice for Domestic Licensing Proceedings and 
Issuance of Orders.
    Comments concerning burdens on the parties to an NRC adjudication.
    Comment: An agreement state commenter predicts that intervenors in 
an adjudication will over-designate the material they create as SGI 
because of the potential threat of civil and criminal penalties for 
unauthorized disclosure of SGI documents. The commenter also believes 
that it is too burdensome for intervenors to determine whether the 
engineering and safety analyses they generate to support a contention 
are SGI. The commenter believes that in light of the above 
difficulties, parties should be allowed to file documents marked ``may 
contain safeguards information,'' which would be treated as SGI pending 
a determination by NRC staff members not involved in the adjudicatory 
proceeding. Although it is not entirely clear from the comment letter, 
the commenter might also be requesting that intervenors not be 
potentially subject to criminal and civil penalties for violating SGI 
requirements.
    Response: In response to a comment on the first proposed rule, the 
Commission acknowledged that there is a tendency to ``err on the safe 
side'' in making SGI designations, and stated that it might make 
appropriate changes if over-designating documents as SGI arises as a 
problem in practice. (71 FR 64020-64021). Eliminating criminal and 
civil sanctions for violating SGI requirements, however, would not be 
among these appropriate changes. The Commission believes that criminal 
and civil sanctions serve a worthwhile purpose in securing compliance 
with SGI provisions, and that these sanctions should apply equally to 
all parties. The AEA explicitly authorizes criminal sanctions for 
willful violations of SGI provisions. See 42 U.S.C. 2167 and 2273.
    The Commission does not accept the commenter's suggestion to allow 
parties to mark pleadings as possibly containing SGI awaiting a 
determination by the NRC staff; the Commission thinks it fair that 
parties be responsible for determining whether the analyses they 
generate contain SGI. The commenter's suggestion, if implemented, would 
allow parties to file documents labeled ``may contain Safeguards 
Information'' without doing a careful analysis. The potential for over-
designating SGI would be much greater under the commenter's suggested 
regime than under the rule as proposed. Until the NRC staff review was 
complete, there would likely be a much larger number of documents 
subject to SGI handling than would be the case under the proposed rule. 
If a party needs assistance, however, in determining whether the 
materials it creates contain SGI, the staff will be available to 
provide advice if requested.
    Comment: An agreement state commenter asserts that proposed Sec.  
73.22(h) allows the decontrol of SGI-marked documents only by, or with 
the approval of, the NRC, and suggests that a mechanism be established 
allowing intervenors to request the NRC staff to decontrol documents, 
or portions thereof. The commenter believes that such a process would 
benefit intervenors by removing from them the burden of having to 
control and store a large mass of documents as SGI. The commenter 
states that destruction might not be a viable option for an intervenor 
to reduce its burdens because of that intervenor's internal document 
retention procedures.
    Response: Contrary to the commenter's understanding, Sec.  73.22(h) 
allows an SGI document to be decontrolled in consultation with the 
person or organization making the original SGI determination, as well 
as by the NRC or with the NRC's approval. The language of 73.22(h) and 
73.23(h) has been modified to make this intent clear. If an intervenor 
no longer believes a document to contain SGI, Sec. Sec.  73.22(h) and 
73.23(h) allow the intervenor to contact either the NRC, or the 
individual or organization making the original SGI determination, for 
an authoritative decontrol determination.
    The Commission is not adopting the commenter's suggestion to have 
the NRC decontrol portions of SGI documents possessed by intervenors. 
Such a task would require the expenditure of substantial resources 
without concomitant gain. For instance, the commenter's stated goal of 
reducing the number of documents requiring SGI handling would not be 
furthered because a partially decontrolled document is still an SGI 
document subject to SGI handling requirements.
    Comment: An agreement state commenter asserts that the proposed 
rule chills a party's right to judicial appeal of an NRC decision that 
may involve SGI because it fails explicitly to give a party to an NRC 
proceeding a right to provide SGI to federal Courts of Appeal (even for 
filings under seal) in support of its judicial filings. The commenter 
believes that the proposed rules are unclear on whether a party would 
need pre-authorization from the NRC before filing SGI with a court. The

[[Page 63550]]

commenter recommends revising part 73 to ensure that NRC rules defer to 
established court procedures so that a party may independently file SGI 
under seal with the court.
    Response: The Commission disagrees that the approach adopted by the 
Commission chills a party's right to judicial appeals of NRC decisions. 
Over the years, it has been rare that a party to an NRC adjudicatory 
proceeding has sought to file SGI in its federal court filings. The 
Commission prefers to consider such matters on a case-by-case basis, 
and, therefore, does not believe it appropriate to address this issue 
through this rulemaking. If this situation were to become frequent, 
rulemaking may be undertaken in the future. In the meantime, parties 
who contemplate filing SGI in judicial appeals of NRC decisions should 
contact the Solicitor of the NRC. The Commission does note that the 
requirement to protect SGI in federal court filings, or in any other 
context, existed under the old rules and is not fundamentally altered 
by these rule changes.
    Comments concerning SGI designation and access determinations.
    Comment: A commenter states that the procedure specified in 
proposed Sec.  2.336(f)(1)(iv) for review of an adverse determination 
on a party's trustworthiness and reliability should avoid any 
appearance of biasing the proceeding, which might occur if the review 
is conducted by the presiding officer of the proceeding. Such a review, 
according to the commenter, would require the presiding officer to 
consider personal information about the party, or the party's attorney, 
consultant, or expert witness to determine whether the person is 
trustworthy and reliable for purposes of having access to SGI. The 
commenter further states that the presiding officer might later be 
called upon to decide the merits of a contention based on other 
considerations, potentially including the credibility and 
persuasiveness of witnesses and advocates. In such circumstances, the 
commenter believes that questions may be raised about whether these 
judgments were improperly affected by personal information. The 
commenter concludes that it would be equally efficient, and avoid any 
appearance of bias, to require that all requests for review be 
presented to the ``Chairman of the Atomic Safety and Licensing Board 
(ASLB) Panel'' [Chief Administrative Judge], who would appoint an 
officer, other than the presiding officer, to review the adverse 
determination. Moreover, the commenter believes that such a process 
would reduce the risk that reviews by the presiding officer would 
adversely affect the schedule for the proceeding.
    Response: The Commission agrees with the commenter and is revising 
the rule to require the designation of a separate officer to review any 
adverse determination on trustworthiness and reliability made by the 
NRC Office of Administration. The Commission is confident that the 
presiding officer of an adjudicatory proceeding is capable of reviewing 
such a determination objectively without affecting the fairness of the 
proceedings. However, the Commission also acknowledges that such an 
arrangement may create the appearance of bias, and thus finds it 
appropriate to require, as a matter of course, that an officer detached 
from the proceedings be appointed to review the adverse determination. 
Section 2.336(f)(1)(iv) has been revised to reflect this. Conforming 
changes have also been made to sections 2.705(c)(3)(iv), 
2.709(f)(1)(iv), and 2.1010(b)(6)(i)(D), which contain similar 
provisions.
    Comment: An agreement state commenter objects to the proposed 
process for making ``need to know'' determinations in NRC adjudications 
and the process for challenging adverse ``need to know'' 
determinations. The commenter believes that the process for making such 
determinations, which is reflected in the definition of ``need to 
know'' in proposed Sec.  73.2, is flawed in that it can place 
responsibility for the determination in the hands of a party 
``adverse'' to an intervenor, whose judgment might be biased. 
Specifically, the commenter notes that the NRC staff would make the 
``need to know'' determination if SGI either was originated by the NRC 
staff or is in the NRC staff's possession. In other cases, the 
originator of the SGI would make the determination, and in some cases 
the originator is the applicant.
    The commenter also believes that the process for making ``need to 
know'' determinations, and challenging adverse determinations, 
``ignores the protections'' of Federal Rule of Civil Procedure 26(b). 
The commenter appears to believe that the process for challenging 
adverse SGI determinations in NRC adjudicatory settings would be 
governed by proposed Sec.  2.336(f)(1)(iv). According to the commenter, 
that section would not protect an intervenor's ``confidential'' and 
privileged information from being disclosed to adverse parties (which 
the commenter asserts includes the NRC staff) because an intervenor's 
rationale for compelling disclosure would have to be served on the 
staff. The commenter asserts that such confidential, privileged 
information could include confidential details about a nontestifying 
witness, attorney work-product, and litigation strategy, that the 
commenter believes might have to be divulged to demonstrate that the 
intervenor has a ``need to know'' for the information.
    From the commenter's discussion of Sec.  2.336(f)(1)(iv) as applied 
to ``need to know'' determinations, it appears that the commenter 
believes that initial determinations are made by the NRC's Office of 
Administration. The commenter fears that this determination might be 
biased due to influence from the NRC staff or its counsel, and that a 
``wall of separation'' should be erected between the NRC staff/counsel 
and the Office of Administration. The commenter concludes by stating 
that the Commission ``must ensure'' that ``need to know'' 
determinations be made by ``an unbiased NRC entity,'' and that, at a 
minimum, the NRC staff/counsel making such determinations (as well as 
the information upon which those determinations are based) be screened 
from the NRC staff/counsel litigating the proceeding.
    Response: Section 2.336(f)(1)(iv) does not govern challenges to 
adverse ``need to know'' determinations. Section 2.336(f)(1)(i) and the 
definition of ``need to know'' in proposed Sec.  73.2 provide that 
disputes over ``need to know'' determinations are to be resolved by the 
presiding officer. Section 2.336(f)(1)(iv) governs disputes over 
``trustworthiness and reliability'' determinations. ``Need to know'' 
and ``trustworthiness and reliability'' are distinct concepts (compare 
the separate definitions for the two terms in proposed Sec.  73.2) 
reflected in separate requirements for access to SGI (see sections 
2.336(f)(1), 73.22(b), and 73.23(b)). Also, the NRC's Office of 
Administration makes all ``trustworthiness and reliability'' 
determinations in adjudications (see section 2.336(f)(1)(iii)-(iv)), 
but ``need to know'' determinations are made by the NRC staff office in 
the best position to make an informed decision about ``need to know'' 
or by the originator (see definition of ``need to know'' in section 
73.2).
    With these clarifications in mind, there are two commenter issues 
to be addressed. The first issue is that the initial ``need to know'' 
determination might reflect a biased judgment made by a party 
``adverse'' to the intervenor. Although a party making the 
determination might be ``adverse'' to an intervenor, that party would 
still have a duty to comply with the rule. In disputed cases, the 
matter would be decided by the presiding officer, who is independent of 
the parties. This basic process is not substantially different

[[Page 63551]]

from other discovery, in which parties may assert privileges to keep 
various information from adverse parties, who can then file a motion to 
compel disclosure.
    The second issue is that to support an intervenor's ``need to 
know'' request before the presiding officer, the intervenor might have 
to reveal to adverse parties confidential information, such as attorney 
work-product, litigation strategy, or confidential details about a 
nontestifying expert. The Commission believes that the ``need to know'' 
requirement will not result in a prejudicial disclosure of an 
intervenor's opinions or strategy. According to the definition in Sec.  
73.2, the ``need to know'' standard is satisfied if the following two 
conditions are met: (1) The information is necessary for the party ``to 
proffer and/or adjudicate a specific contention,'' and (2) the 
recipient has the ability to ``effectively utilize the specific 
Safeguards Information in the proceeding.'' Because an intervenor's 
positions must be specifically stated at the earliest stage of 
litigation (the contention stage), an intervenor's strategy and 
opinions must, to a substantial degree, be made public at the earliest 
stages of litigation.\3\ The first ``need to know'' condition might be 
satisfied based on the face of the contention alone. Even if further 
information is required, a presiding officer reviewing an adjudicatory 
dispute concerning a ``need to know'' determination will probably not 
need to delve much further into an intervenor's strategy than might a 
presiding officer assessing a party's ``need for the information'' in 
challenges to assertions of qualified, as opposed to absolute, 
privileges.\4\ But even if some prejudice were to result, SGI simply 
must be protected from unauthorized disclosure by limiting its 
dissemination only to those who have a ``need to know'' for it and who 
otherwise meet the requirements for access.
---------------------------------------------------------------------------

    \3\ For an intervenor's contention to be admissible under 10 CFR 
2.309(f)(1), the intervenor must state a specific issue of law or 
fact, briefly explain the basis for the contention, provide concise 
statements of alleged fact or expert opinion in support of the 
contention, demonstrate that the contention is material and within 
the proceeding's scope, and provide enough information to show that 
a genuine dispute exists on a material issue of law or fact.
    \4\ See Friedman v. Bache Halsey Stuart Shields, Inc., 738 F.2d 
1336, 1344 (D.C. Cir. 1984) (stating that ``[i]n the discovery 
context, when qualified privilege is properly raised, the litigant's 
need is a key factor. Whether the information is disclosed depends 
on the relative weight of the claimant's need and the government's 
interest in confidentiality'').
---------------------------------------------------------------------------

    Satisfying the second ``need to know'' condition for access might 
require the disclosure of details about a non-testifying expert's 
qualifications, but the text of Federal Rule of Civil Procedure 
26(b)(4) protects only the ``facts known or opinions held by'' such 
experts, not inquiries into their qualifications. Although the 
predominant approach of the federal courts apparently requires a 
showing of ``extreme circumstances'' to justify discovery of even the 
identity of a non-testifying expert,\5\ the Commission does not rigidly 
apply the procedures used in federal courts. In NRC adjudicatory 
proceedings, the Commission does not believe that disclosing either the 
identity of such an expert or his or her qualifications will 
substantially prejudice parties. In any event, the need to protect SGI 
is paramount.
---------------------------------------------------------------------------

    \5\ See 8 Charles Alan Wright, Arthur R. Miller & Richard L. 
Marcus, Federal Practice and Procedure, Sec.  2032 (2d ed. 1994).
---------------------------------------------------------------------------

    Comment: A commenter believes that for the purposes of part 2, 
documents should be considered SGI if they have been designated as SGI 
in accordance with part 73. The commenter notes that in the event of a 
dispute about whether a document that has been designated as SGI should 
nevertheless be disclosed, the presiding officer must determine whether 
the person seeking disclosure should be granted access to the SGI 
(i.e., has a need to know and is trustworthy and reliable). The 
commenter also asserts, however, that the presiding officer should not 
consider whether the information in the document meets the definition 
of SGI because presiding officers generally are not inherently 
qualified to determine whether information meets the definition of 
``Safeguards Information.'' The commenter believes that if the 
definition of ``Safeguards Information'' in 10 CFR part 2 is the same 
as the definition in part 73, it will appear that parties may seek a 
determination by the presiding officer on whether the information meets 
that definition. The commenter also believes that it is clear from 
proposed Sec. Sec.  2.336(f)(1), 2.705, 2.709 and 2.1010, which specify 
the grounds for a presiding officer to issue an order requiring 
disclosure of SGI, that a presiding officer would not be authorized to 
issue such an order on the grounds that the information does not meet 
the definition of SGI. The commenter believes this to be appropriate 
and to this end, suggests that Sec.  2.4 ``Safeguards Information'' be 
modified to state, ``Safeguards Information means information that has 
been determined to be Safeguards Information in accordance with 10 CFR 
73.21-23.''
    Response: Contrary to the commenter's belief, the proposed rule 
nowhere prohibits presiding officers from deciding whether information 
in a document meets the definition of SGI. In Private Fuel Storage, 
L.L.C. (Independent Spent Fuel Storage Installation), CLI-05-22, 62 NRC 
542 (2005), the Commission dealt with the issue of a licensing board 
revisiting SGI redactions contained in one of its previously issued 
decisions. The Commission, citing an analogous provision in Sec.  
2.904, directed the licensing board to request the Commission to 
appoint a special adjudicatory employee ``when necessary.'' Id. at 545. 
The Commission believes that presiding officers can also resolve other 
questions concerning the designation of SGI, such as those arising in 
discovery disputes between parties. If a presiding officer believes 
that he or she could benefit from expert assistance in determining 
whether information meets the definition of SGI, he or she can request 
the Commission to appoint a special adjudicatory employee, who will 
assist the Board in making such determinations.
    As for the suggested change to the definition of ``Safeguards 
Information'' in part 2, the proposed definition is based on Section 
147 of the AEA and the Commission has determined that the definition of 
that term in the regulations should be as broad as the statutory 
definition. Based on this definition, Sec. Sec.  73.21, 73.22, and 
73.23 describe types of information included within the scope of the 
statutory definition and include examples of information designated as 
SGI. The Commission believes that a cross-reference to those provisions 
in the definition of SGI is unnecessary.
    Comment: An agreement state commenter objects to the abuse of 
discretion standard in proposed Sec. Sec.  2.709(f)(1)(iv) and 
2.1010(b)(6)(i)(D) \6\ for review by a presiding officer \7\ in 
adjudications of adverse trustworthiness and reliability determinations 
by the NRC Office of Administration. The commenter prefers that such 
determinations be given ``plenary'' review,\8\ and gives the following 
four reasons for its position:
---------------------------------------------------------------------------

    \6\ Sections 2.336(f)(1)(iv), 2.704(c)(3)(iv), 2.709(f)(1)(iv), 
and 2.1010(b)(6)(i)(D) are mirror provisions of one another, with 
slight differences due to the different contexts in which they are 
applied.
    \7\ In licensing proceedings, the presiding officer will 
ordinarily be an Atomic Safety and Licensing Board. 10 CFR 2.4.
    \8\ The Commission believes that by ``plenary'' review the 
commenter means de novo review, in which a determination is reviewed 
without deference to the decision-maker. By contrast, review for 
abuse of discretion involves deference to the determination being 
reviewed.

---------------------------------------------------------------------------

[[Page 63552]]

    (1) On contested matters, the NRC staff's safety evaluations are 
subject to ``plenary'' review, not review for an abuse of discretion, 
so the NRC staff's trustworthiness and reliability determinations 
should also be subject to ``plenary'' review. Both categories of issues 
often involve matters of judgment and there is, therefore, no basis to 
distinguish between them.
    (2) Because the Commission itself has ``plenary'' power over its 
staff, limiting the scope of presiding officer review will merely lead 
to an unnecessary and time-consuming proliferation of appeals to the 
Commission to exercise its ``plenary'' power.
    (3) The abuse of discretion standard confuses the roles of an 
adversary party and an independent adjudicator. Under the 
Administrative Procedure Act (APA) and Atomic Energy Act of 1954, as 
amended (AEA), the Commission may delegate adjudicatory decision-making 
authority to a presiding officer and define the scope of Commission 
review of that presiding officer's decision in a narrow fashion. When 
the NRC staff participates as a party in an adjudicatory proceeding, it 
is not performing an adjudicatory function but a litigating function, 
and therefore there is no basis to limit the scope of review of any NRC 
staff decision. There will always be a concern that the NRC staff's 
trustworthiness and reliability determinations will be part of its 
litigating strategy, and this concern can be addressed only if the 
presiding officer or the Commission may exercise ``plenary'' power to 
reverse the staff determination.
    (4) The abuse of discretion review standard does not comply with 
Section 181 of the AEA, which ``requires NRC standards to be the 
`minimum impairment of the procedural rights which would be available 
if * * * safeguards information * * * were not involved.' '' The 
commenter believes that an abuse of discretion standard is not a 
minimum impairment.
    Response: The Commission believes that an abuse of discretion 
standard is appropriate for presiding officer review in adjudications 
of adverse trustworthiness and reliability determinations made by the 
Office of Administration. The Commission chose the abuse of discretion 
standard primarily because trustworthiness and reliability 
determinations rely upon expertise developed through training and 
experience. Office of Administration employees who make these 
determinations possess specialized training and experience in 
evaluating similar information for NRC employee security clearances. 
Because of the Office of Administration's expertise, the Commission 
believes that the office's trustworthiness and reliability 
determinations will generally be sound. A searching, de novo review by 
the presiding officer, therefore, would not be warranted. A presiding 
officer review of adverse trustworthiness and reliability 
determinations under an abuse of discretion standard will not involve 
witness testimony or other procedures that might arguably put the 
presiding officer in a better position to assess the evidence 
underlying a trustworthiness and reliability determination.\9\
---------------------------------------------------------------------------

    \9\ To be clear, the Commission does not believe that setting up 
a ``mini-hearing'' within a hearing by taking witness testimony and 
using other trial-type procedures is justified to resolve what is, 
at heart, a discovery dispute over whether certain individuals in a 
party's litigation team can have access to SGI.
---------------------------------------------------------------------------

    The following four numbered paragraphs respond in order to the four 
numbered reasons given in the comment above:
    (1) The commenter's comparison of the review of Office of 
Administration trustworthiness and reliability determinations to the 
review of staff safety evaluations is invalid. The commenter is 
mistaken in stating that the staff's safety evaluations are subject to 
review in contested licensing proceedings. Well-established Commission 
precedent provides that the license application, and not the staff's 
safety review, is the subject of a contested licensing proceeding.\10\
---------------------------------------------------------------------------

    \10\ ``Final Rule, Changes to Adjudicatory Process,'' 69 FR 
2182, 2202 (Jan. 14, 2004) (stating that ``[t]he adequacy of the 
applicant's license application, not the NRC staff's safety 
evaluation, is the safety issue in any licensing proceeding, and 
under longstanding decisions of the agency, contentions on the 
adequacy of the SER [Safety Evaluation Report] are not cognizable in 
a proceeding'').
---------------------------------------------------------------------------

    (2) The Commission does not believe that a limited scope of 
presiding officer review will lead to a proliferation of appeals to the 
Commission. First, most Commission adjudicatory proceedings do not 
involve access to SGI, and there is no evidence to indicate that 
proceedings involving SGI will often lead to disputes over 
trustworthiness and reliability determinations. Second, the Commission 
does not agree that the level of presiding officer review of adverse 
trustworthiness and reliability determinations will have an effect on 
the number of appeals to the Commission. Moreover, the commenter has 
submitted no evidence indicating that an increase in appeals is likely.
    The commenter also asserts that a limited scope of review by the 
presiding officer is unnecessary and time consuming because the 
Commission has ``plenary'' power over the NRC staff, which is being 
read to mean that the Commission can review NRC staff decisions de 
novo, without giving deference to them. The commenter's position 
appears to be based on a belief that the Commission on appeal would 
often, or always, exercise de novo review of the Office of 
Administration's adverse trustworthiness and reliability 
determinations, and that it would, therefore, make more sense to have 
de novo review exercised at the presiding officer level since de novo 
review is inevitable at some point. This position, however, overlooks 
that the Commission does not exercise de novo review in many 
situations,\11\ and there is no reason to believe that the Commission 
will often, or always, exercise de novo review of adverse 
trustworthiness and reliability determinations. The Commission is, in 
fact, expressing with this rulemaking its judgment that trustworthiness 
and reliability determinations made by the Office of Administration 
warrant the deference that is reflected in the abuse of discretion 
standard.
---------------------------------------------------------------------------

    \11\ See e.g., Private Fuel Storage, L.L.C. (Independent Spent 
Fuel Storage Installation), CLI-05-19, 62 NRC 403, 411 (2005) 
(stating that the standard for overturning a factual finding of the 
Board is the ``quite high'' standard of ``clear error''); Duke 
Energy Corp. (Catawba Nuclear Station, Units 1 and 2), CLI-04-21, 60 
NRC 21, 27 (2004) (stating that Board evidentiary rulings are 
subject to an abuse of discretion standard).
---------------------------------------------------------------------------

    (3) The Commission does not agree with the commenter that an abuse 
of discretion standard for review of adverse trustworthiness and 
reliability determinations confuses the role of an adversary with an 
independent adjudicator. Although the Office of Administration is an 
office within the NRC staff and the NRC staff is a party to the 
litigation, the Office of Administration, itself, will have no interest 
in the outcome of the litigation. In making trustworthiness and 
reliability determinations, the Office of Administration will be 
exercising a purely administrative function. This is the same type of 
function that the Office of Administration regularly exercises in 
making determinations on employment clearances and access 
authorizations. Also, unlike private entities that serve private 
interests, the NRC staff serves the public interest and has a duty to 
ensure compliance with the Commission's regulations. There is, 
therefore, no basis to believe that the Office of Administration's

[[Page 63553]]

determination on trustworthiness and reliability will be improperly 
influenced.
    It also appears that the commenter is suggesting that an ``abuse of 
discretion'' standard for Office of Administration trustworthiness and 
reliability determinations is contrary to the APA and the AEA, but 
points to no specific provision of either the APA or the AEA that 
supports such a position. The Commission is not aware of any provision 
of the APA or the AEA that forbids an ``abuse of discretion'' review 
standard or that forbids deference to an administrative determination.
    (4) The Commission disagrees with the commenter's assertion that an 
``abuse of discretion'' review standard for trustworthiness and 
reliability determinations violates the ``minimum impairment'' 
requirement in Section 181 of the AEA. Section 181 of the AEA does not 
apply to the scope of review for adverse trustworthiness and 
reliability determinations. The impairments referred to in Section 181 
are impairments of procedural rights that would be available if the 
proceeding did not involve SGI, or in other words, procedural rights 
that are normally available in a proceeding. An example of how the SGI 
rule impacts normally available procedural rights can be found in the 
context of discovery in adjudications. In discovery, a party has a 
normally available procedural right to information available under the 
rules of discovery. The requirement that an individual be found 
trustworthy and reliable to access SGI is an impairment of this 
normally available procedural right whenever a party is seeking 
discoverable information designated as SGI. In such circumstances, the 
party faces an additional hurdle (meeting the trustworthiness and 
reliability requirement) that would not be faced if the proceeding did 
not involve SGI. The trustworthiness and reliability requirement, 
however, is the minimum impairment necessary to protect SGI and 
complies with Section 181.
    The process for making trustworthiness and reliability 
determinations, and the review standard for adverse determinations, are 
not impairments of normally available procedural rights but, rather, 
components of a process intended to produce sound trustworthiness and 
reliability determinations. The only normally available procedural 
right that might be at issue here is the right to access discoverable 
information, but the trustworthiness and reliability requirement is the 
impairment of that right, not any subsequent adjudicatory review 
procedures. As a general matter, review of a determination is provided 
because of the possibility that the determination was erroneous or 
otherwise improper. The standard for review and the procedures 
attendant to review are matters for Commission judgment and are based 
upon the nature of the determination, its importance, and the 
likelihood that the determination may be erroneous or improper, among 
other factors. In the case of trustworthiness and reliability 
determinations in adjudications, the Commission has decided that the 
procedures provided in Sec. Sec.  2.336(f)(1)(ii)-(iv) and 73.57(e) are 
appropriate to provide for sound trustworthiness and reliability 
determinations in a manner consistent with conducting reasonably 
expeditious proceedings.
    Comment: An agreement state commenter believes that the fifteen-day 
deadline for presiding officer decisions on challenges, in adjudicatory 
contexts, to adverse trustworthiness and reliability determinations is 
not reasonable because the NRC staff will not commit to any reasonable 
deadline for its own determination.
    Response: The Commission is not lengthening the fifteen-day period 
in Sec. Sec.  2.336(f)(1)(iv), 2.704(c)(3)(iv), 2.709(f)(1)(iv), and 
2.1010(b)(6)(i)(D) for presiding officer decisions on challenges to 
adverse trustworthiness and reliability determinations. The presiding 
officer will not be conducting a trial-type hearing and will not be 
performing a searching, de novo review of the evidence. Rather, the 
presiding officer will be reviewing for abuse of discretion and will 
base this review on a record compiled by the Office of Administration 
as supplemented by one round of pleadings from the parties. The 
Commission believes that fifteen days is sufficient time for this 
review and that providing a longer period would unnecessarily delay 
proceedings without a compensating benefit.
    The commenter's analogy relating the time needed for the presiding 
officer's decision to the time needed for the initial determination by 
the NRC staff's Office of Administration's is not apt. In order to make 
its decision, the Office of Administration must first collect 
information that originates from a variety of sources. This process 
takes time, and the speed of information collection depends upon the 
time taken by the providers of the information. As explained in the 
preceding paragraph, a presiding officer's review of an adverse 
trustworthiness and reliability determination would involve review only 
for an abuse of discretion and would not involve the presiding officer 
independently gathering information for that determination.
    Comment: An agreement state asserts that if the Commission were 
unwilling to entertain appeals of presiding-officer-reviewed access 
determinations on a timely basis, the proposed changes to part 2 would 
lead to a denial of parties' rights to a fair hearing and the 
assistance of counsel. The commenter asserts that lack of timely 
Commission review would give the NRC staff, as a party in an 
adjudicatory hearing, broad discretion to deprive an opposing party of 
both expert witnesses and legal counsel needed to present its case. 
According to the commenter, this situation would be a violation of 
Section 555 of the APA, 5 U.S.C. 555.
    Response: To the extent the comment reflects a concern about the 
availability of Commission review of access determinations arising in 
the pending high-level waste (HLW) Pre-License Application Presiding 
Officer proceeding or any subsequent adjudication regarding the 
expected application by the Department of Energy for a construction 
authorization for a HLW repository, the comment overlooks the appeal 
process available pursuant to 10 CFR part 2, subpart J. The current 
Sec.  2.1015(b) contemplates prompt appeals to the Commission of 
certain presiding officer orders; under the final SGI rule's revisions 
to Sec.  2.1010, such appealable orders would include rulings 
concerning whether SGI should be disclosed, as well as related rulings 
upon review of adverse determinations with respect to trustworthiness 
and reliability. In addition, the Commission has published a final rule 
\12\ that provides for interlocutory review of comparable SGI-related 
rulings in other adjudicatory proceedings. Moreover, the Commission 
already has general discretionary authority to review presiding officer 
actions on its own motion or in response to appropriate review requests 
under Sec.  2.341. In short, the available means of appellate review 
demonstrate the Commission's authority to ensure consistency and 
fairness in adjudicatory proceedings.
---------------------------------------------------------------------------

    \12\ Final Rule, Interlocutory Review of Rulings on Requests by 
Potential Parties for Access to Sensitive Unclassified Non-
Safeguards Information and Safeguards Information, 73 FR 12627 
(March 10, 2008).
---------------------------------------------------------------------------

    The Commission also disagrees with the comment's characterization 
of the NRC staff's ``discretion'' with respect to access determinations 
that may affect the hearing process. Staff determinations on a 
requestor's trustworthiness and reliability are part of the agency's 
statutory responsibility to protect SGI and are not determined

[[Page 63554]]

by the views of the staff in its capacity as a party to a proceeding. 
The staff's independent obligations with respect to trustworthiness and 
reliability determinations thus do not result in adjudicatory staff 
``discretion'' to prevent SGI access by other parties. Accordingly, the 
functional and appellate framework described above would protect 
against possible violations of section 555 of the APA regarding the 
rights of persons compelled or permitted to appear in person or by 
representative in agency proceedings.
    Comments concerning sanctions for violating SGI protective orders 
in adjudications.
    Comment: A commenter states that the provisions concerning civil 
penalties are appropriate for violations that involve the disclosure of 
SGI that by order is prohibited from being disclosed, but that 
violations of orders requiring disclosure of SGI should be subject only 
to the same penalties that would apply for violations of orders 
requiring disclosure of other types of information. The commenter 
believes that the regulation regarding the potential for civil 
penalties for violation of an order should be clearly limited to 
disclosure of SGI in violation of provisions of an order that are 
imposed for the purpose of preventing unauthorized disclosure of SGI. 
The commenter suggests revising proposed Sec. Sec.  2.336(f)(5), 
2.705(c)(6), 2.709(f)(5) and 2.1010(b)(6)(v) to state: ``In addition to 
any other sanction that may be imposed by the presiding officer for 
violation of an order issued pursuant to this paragraph, disclosure of 
Safeguards Information in violation of limitations on such disclosure 
in an order pertaining to the disclosure of Safeguards Information may 
be subject to a civil penalty imposed under Sec.  2.205.''
    Response: The purpose of this rule is to impose requirements for 
SGI to protect that information from unauthorized disclosure. See Sec.  
73.1(b)(7). The Commission agrees with the commenter that the failure 
to disclose SGI in violation of an order does not implicate provisions 
for the protection of SGI. The Commission also agrees that the proposed 
rule as written might be read to cover such a violation. Violating an 
order by not disclosing SGI should be treated the same as violating an 
order by not disclosing other types of information. The commenter's 
proposed text, however, would make only acts of disclosure subject to 
civil penalties under Sec.  2.205. The Commission intends that the 
violation of any provision for the protection of SGI in an order be 
subject to civil penalties, whether those provisions apply to the act 
of disclosure or not. Therefore, Sec.  2.336(f)(5) in the final rule 
has been modified to read as follows: ``In addition to any other 
sanction that may be imposed by the presiding officer for violation of 
an order issued pursuant to this paragraph, violation of a provision 
for the protection of Safeguards Information from unauthorized 
disclosure that is contained in an order may be subject to a civil 
penalty imposed under Sec.  2.205.'' Conforming changes have also been 
made to Sec. Sec.  2.705(c)(7) (2.705(c)(6) in the proposed rule), 
2.709(f)(5), and 2.1010(b)(6)(v).
    Comment: A commenter asserts that any provision concerning 
potential criminal penalties for violation of an order concerning 
disclosure of SGI should clearly state that any such penalty would be 
based on disclosure of SGI in violation of an order imposing limits on 
such disclosure. The commenter believes that it should be clear that 
the criminal penalty provisions would not apply to violations of orders 
of presiding officers that impose obligations or limitations other than 
limitations imposed for the purpose of preventing disclosure of SGI to 
unauthorized persons. The commenter suggests revising proposed 
Sec. Sec.  2.336(f)(6), 2.705(c)(7), 2.709(f)(6) and 2.1010(b)(6)(vi) 
to state, ``For the purpose of imposing the criminal penalties 
contained in Section 223 of the Atomic Energy Act of 1954, as amended, 
a limitation on the disclosure of Safeguards Information included in 
any order issued pursuant to this paragraph is considered to be an 
order issued under Section 161b of the Atomic Energy Act.''
    Response: As with civil penalties, the Commission agrees that the 
rule text should clearly state that application of criminal penalties 
in Section 223 of the Act is limited to violations of those provisions 
regarding the protection of SGI. However, as explained in the preceding 
response, the rule text should be broader than suggested by the 
commenter. Accordingly, Sec.  2.336(f)(6) has been modified to read: 
``For the purpose of imposing the criminal penalties contained in 
Section 223 of the Atomic Energy Act of 1954, as amended, a provision 
for the protection of Safeguards Information from unauthorized 
disclosure that is contained in an order issued pursuant to this 
paragraph is considered to be issued under Section 161b of the Atomic 
Energy Act of 1954, as amended.'' Conforming changes have also been 
made to Sec. Sec.  2.705(c)(8) (2.705(c)(7) in the proposed rule), 
2.709(f)(6), and 2.1010(b)(6)(vi).
    Part 30: Rules of General Applicability to Domestic Licensing of 
Byproduct Material.
    Sections 30.32(j) and 30.34(j).
    Comment: One commenter questions the clarity of the rule text in 
proposed Sec. Sec.  30.32 (j) and 30.33(j) pertaining to the 
applicability of the requirements in Sec. Sec.  73.21 and 73.23 to 
byproduct material applicants and licensees. The commenter states that 
he had difficulty determining whether his ``processes'' would be 
subject to these regulations. The commenter also asserts that an 
appendix should be created to specifically list the amounts of 
byproduct material that would trigger the regulatory requirements. He 
recommends revising Sec. Sec.  30.32(j) and 30.34(j) to refer to the 
appendix for determining parties subject to the regulation. According 
to the commenter, the same appendix could also be used to define the 
RAMQC amounts in a separate table.
    Response: The proposed rule (October 31, 2006; 71 FR 64050) 
explains that Appendix I to 10 CFR part 73--''Category 1 and 2 
Radioactive Materials,'' is a table of radionuclides and quantities 
that establishes the ``quantities of concern'' referenced in the 
proposed rule.\13\
---------------------------------------------------------------------------

    \13\ The table has been used to determine the types and 
quantities of radioactive materials that warrant additional security 
requirements, some of which have already been imposed by order.
---------------------------------------------------------------------------

    In response to this comment, the Commission is adding the 
definition of ``quantities of concern'' in Sec.  30.4. This definition 
is identical to the definition of that term in the Sec.  73.2 
definitions. The definition states that ``quantities of concern'' means 
``the quantities of radionuclides meeting or exceeding the threshold 
limits set forth in Table 1 of Appendix I of this part.'' (71 FR 
64060). This change should assist licensees, applicants, and other 
persons subject to part 30, to determine which of their activities are 
subject to the SGI designation and protection requirements of part 73.
    Part 73: Physical Protection of Plants and Materials.
    Section 73.2 Definitions.
    Comment: A commenter states that a definition is needed of the term 
``safe havens'' as used in Sec. Sec.  73.22(a)(2)(iv) and 
73.23(a)(2)(iii). The commenter recommends that the definition be 
included in Sec.  73.2.
    Response: A ``safe haven'' along a highway transportation route is 
used for temporary refuge or emergency assistance. Safe havens should 
be as

[[Page 63555]]

close to the highway as possible, easily accessible by the 
transportation vehicle, controlled, and well-lighted. Examples of 
possible ``safe havens'' include truck stops, rest areas, highway 
patrol barracks, and weigh stations. Having explained this, the 
Commission does not believe it necessary to include a definition of 
``safe havens'' in the rule.
    Comment: A commenter states that the definition of the term 
``Safeguards Information'' in Sec.  73.2 is too broad, specifically 
with reference to the phrase ``control and accounting procedures.'' The 
commenter recommends changing the definition of SGI to delete the 
reference to ``control and accounting procedures.'' According to the 
commenter, there is no information in the proposed rule that provides 
any ``qualifying details'' on that term. The commenter believes that 
based solely on the proposed definition, the phrase ``control and 
accounting procedures'' could be interpreted to be applicable to: (a) 
The ``control procedures'' associated with the placement of special 
nuclear material (SNM) in pools or other onsite spent fuel storage 
facilities; and (b) accounting procedures regarding the quantity of SNM 
maintained by a licensee. In the commenter's view, the NRC intent is 
that information about the physical protection of SNM must be 
controlled as SGI. The commenter also states that the NRC staff intends 
power reactors to control SNM in accordance with American National 
Standards Institute (ANSI) N15.8, Nuclear Material Control Systems for 
Nuclear Power Plants. According to the commenter, as a national 
standard, the ANSI document cannot be controlled as SGI. Also, the 
commenter states the understanding that the NRC staff intends to 
endorse the national standard in a Regulatory Guide for licensee use 
and that licensees will use the standard to revise their site 
procedures to comply with NRC guidance.
    Response: In the revised proposed rule (October 31, 2006; 71 FR 
64012) the Commission addressed a comment on the original proposed rule 
(February 11, 2005; 70 FR 7196) regarding the meaning of the term 
``control and accounting procedures,'' as applied to four specific 
types of information. The Commission's response provided ``qualifying 
details'' as to the meaning of the term by noting, among other things, 
that the term does not encompass the four categories of information 
specified in the comment, including the written directions for 
transferring fuel between the fuel pool and the reactor. (71 FR 64012).
    The Commission is providing the following additional information in 
response to this comment. The terms ``material control and accounting'' 
have meaning with respect to the protection of special nuclear 
material. ``Material control'' means the use of control and monitoring 
measures to prevent or detect loss when it occurs or soon afterward. 
``Material accounting'' is the use of statistical and accounting 
measures to maintain knowledge of the quantities of SNM present in each 
area of a facility. It includes the use of physical inventories and 
material balances to verify the presence of material or to detect the 
loss of material after it occurs, in particular, through theft. In the 
definition of ``Safeguards Information'' in Sec.  73.2 in the final 
rule, the term ``control and accounting procedures'' is linked to the 
physical protection of special nuclear material ``in quantities 
determined by the commission through order or regulations to be 
significant to the public health and safety and the common defense or 
security.''
    Accounting procedures regarding the quantity of SNM maintained by a 
licensee would not necessarily constitute SGI. However, when coupled 
with other information, information containing the quantities of SNM 
could be SGI and would be designated and handled as such. Because 
Section 147 of the AEA authorizes the Commission to protect information 
that specifically identifies the control and accounting procedures used 
to protect special nuclear material, the Commission is not deleting 
this term from the definitions of SGI in the regulations. The 
information the commenter provides about the endorsement of an ANSI 
standard in a regulatory guide for licensees use does not constitute a 
basis for deleting the term ``control and accounting procedures'' from 
the definition of SGI.
    Section 73.21(a)(1).
    Comment: According to a commenter, an order issued October 4, 2006 
required USEC Inc. Lead Cascade Demonstration Facility and American 
Centrifuge Plant to implement specific SGI-M requirements to ensure 
proper handling and protection of SGI to avoid unauthorized disclosure. 
The commenter states that Sec.  73.21(a)(1)(i) conflicts with the 
previous order by requiring uranium enrichment facilities to modify 
their protection strategy from SGI-M to SGI. This provision, in the 
commenter's opinion, imposes an unnecessary regulatory burden without 
providing commensurate benefit, and could result in the two facilities 
being governed by different SGI handling requirements even though they 
are located within the same physical boundary and will ultimately share 
common infrastructure.
    Response: An order issued on October 4, 2006, and published in the 
Federal Register on October 24, 2006 (71 FR 62318), required the United 
States Enrichment Corporation (USEC) to protect certain information 
relating to its uranium enrichment test and demonstration facility 
(Lead Cascade Facility). Specifically, the order required USEC and 
other persons to employ the modified handling requirements for SGI-M 
relating to the interim measures to enhance security at the Lead 
Cascade Facility. As reflected in Sec.  73.21(a)(1), the Commission 
later determined that the type of information described above should be 
subject to the requirements for SGI. Interim security measures relating 
to the other facility located onsite with the Lead Cascade Facility 
(the American Centrifuge Plant) are also designated as SGI. Therefore, 
there is no longer a discrepancy with respect to the information 
protection requirements for the two facilities.
    Radioactive Material in Quantities of Concern (RAMQC) Sections 
73.21(a)(1)(ii) and 73.23.
    Comment: Two commenters addressed implementation of SGI-M 
requirements for the ``new'' Category 2 RAMQC specified in Table I-1, 
``Quantities of Concern Thresholds.'' One commenter stated that the 
SGI-M designation should not be applied to Category 2 materials for 
industrial radiography and oil well logging facilities that routinely 
ship material to temporary job sites on a daily basis. The commenter 
asserted that requiring an SGI-M program for the routine transport of 
sources used by those licensees would be unwieldy and almost impossible 
to administer. The commenter recommended that the requirement for an 
SGI-M program should be limited to the original regulatory intent, that 
is, for the transportation of Category 1 sources.
    According to another commenter, applying SGI-M handling 
requirements to Category 2 radioactive materials quantities of concern 
(Category 2 RAMQC) materials most likely will introduce the 
requirements for SGI security to a wide set of organizations that have 
little experience with these requirements. The commenter further 
asserted that the introduction of SGI requirements may unintentionally 
result in the disruption of treatment for patients, as shippers of 
these materials may be intimidated by the new security regulations. In 
this commenter's opinion, extending SGI-M requirements to new Category 
2 RAMQC should await more discussions and understanding of

[[Page 63556]]

the impact this may have on commerce and specifically medical 
radioactive material shipments. The commenter believes that the 
capability of shippers to meet these requirements would certainly 
benefit from Department of Homeland Security (DHS) initiatives in 
progress, such as the Transportation Worker Identification Credential 
(TWIC). Also, the commenter states that for the transportation of 
Category 2 RAMQC, the proposed regulations would require segregation of 
a portion of the shipping documents and a cover indicating that the 
segregated portions contain SGI. This would add confusion to the 
shipping documentation and could be counterproductive to security as it 
will highlight information that may otherwise be dispersed throughout 
the shipping documents.
    The commenter asserts that shipment of RAMQC often requires the 
coordination of multiple carriers and modes of transportation to 
provide timely delivery. According to the commenter, it is unclear how 
the originator of a RAMQC Category 2 will be able to assure that each 
carrier meets the requirements to handle SGI-M. The commenter concludes 
that the determination must be made at each step of the custody of such 
RAMQC shipments, with the possible result being a shipment being 
delayed or stopped from its intended destination.
    Response: The Commission has determined that information relating 
to the transportation of Category 2 RAMQC need not be protected as SGI-
M and may be shared on a ``need-to-know'' basis. The text in Sec. Sec.  
73.21(a)(1)(ii) and 73.23 has been changed accordingly.
    Sections 73.22(a)(1)(xii) and 73.23(a)(1)(x).
    Comment: A commenter proposes that engineering and safety analyses 
need to be linked to security just as the other items described in 
proposed Sec. Sec.  73.22(a)(1) and 73.23(a)(1). Therefore, the 
commenter concludes that Sec. Sec.  73.22(a)(1)(xii) and 73.23(a)(1)(x) 
should be revised to state ``Engineering and safety analyses related to 
physical protection,* * *''
    Response: This change is not necessary because the limitation the 
commenter seeks is already set forth in Sec. Sec.  73.22(a), 
73.22(a)(1), 73.23(a) and 73.23(a)(1). In sum, these provisions specify 
the relevant information as ``security-related'' or ``related to 
physical protection.'' Therefore, it is not necessary to repeat that 
language in Sec. Sec.  73.22(a)(1)(xii) and 73.23(a)(1)(x).
    Sections 73.22(a)(2)(iv) and 73.23(a)(2)(iii).
    Comment: A commenter urges that the reference to safe haven in 
Sec. Sec.  73.22(a)(2)(iv) and 73.23(a)(2)(iii) be removed and a 
separate paragraph added in Sec. Sec.  73.22(a)(2) and 73.23(a)(2) 
which states ``safe havens identified along the transport route.''
    Response: In response to this comment and in light of the 
description of ``safe haven'' earlier in this Notice, the Commission is 
modifying the language in Sec. Sec.  73.22(a)(2)(iv) and 
73.23(a)(2)(iii) to read ``safe havens identified along the highway 
transportation route.'' However, the Commission sees no reason to move 
that language into separate paragraphs in Sec. Sec.  73.22(a)(2) and 
73.23(a)(2).
    Comment: A commenter notes that some States require a carrier of 
radioactive materials to give advance notice to local law enforcement 
prior to crossing the State border and at other times in transit. The 
commenter interprets the wording of the proposed regulation to mean 
that shippers could not use two-way radio or cellular phones currently 
used to make these communications. In this commenter's view, developing 
a secure alternative method of communication would be an unwarranted 
burden on the licensees, carriers and local law enforcement. The 
commenter believes that Sec. Sec.  73.22(a)(2)(iv) and 73.23(a)(2)(iii) 
should be modified so in-route communications between transport 
vehicles and local-law enforcement agencies need not be controlled as 
SGI.
    Response: The wording of the provisions cited above does not 
prohibit shippers from using two-way radios or cellular phones to 
communicate with local law enforcement during transit. Section 
73.23(a)(2)(ii) states that ``[s]cheduling and itinerary information 
used for the purpose of preplanning, coordination, and advance 
notification may be shared with others and need not be designated as 
Safeguards Information Modified-Handling.''
    Sections 73.22(b)(2) and 73.23(b)(2).
    Comment: A commenter asserts that the conditions for access to SGI 
are unclear in this provision because of the phrase ``or other means 
approved by the Commission.'' Therefore, the commenter concludes that 
this phrase should be deleted from the regulation until the Commission 
is prepared to give specific requirements, which should be given by 
rule rather than regulatory guidance.
    Response: The language in question is found in Sec. Sec.  
73.22(b)(2) and 73.23(b)(2), which address, as a condition for access 
to SGI, a finding that a person is trustworthy and reliable, based on a 
background check or other means approved by the Commission. This 
provision is consistent with the Commission's authority under Section 
149 of the AEA to relieve, by rule, persons from the obligations 
imposed by that section, under specified terms, conditions, and 
periods, if the Commission finds that such action is consistent with 
its obligations to promote the common defense and security and to 
protect the health and safety of the public. Relying on that authority, 
the Commission could, by rule, relieve persons from the criminal 
history records check requirement included in a background check to 
determine a person's trustworthiness and reliability for access to SGI. 
If the Commission determines that a rule change would be useful to 
specify means other than a criminal history records check for 
establishing an individual's trustworthiness and reliability, a 
rulemaking proceeding would be initiated.
    However, notwithstanding the Commission's obligation to relieve 
persons from criminal history records checks only by rule, the phrase 
``other means approved by the Commission'' is intended to maintain 
flexibility in modifying the other aspects of the background check for 
unique circumstances. As it has learned from past experience, in some 
limited circumstances, the Commission might have to impose additional 
measures to the background check requirements to increase assurances of 
trustworthiness and reliability. While in others, it may be appropriate 
for the Commission to relax certain aspects of the background check. 
Without such a relief provision built into the rule, the Commission 
would not, absent a rulemaking, be able to make such deviations.
    Section 73.22(c)(2).
    Comment: A commenter requests deletion of the proposed requirement 
that SGI must be stored in unmarked cabinets. The following bases are 
offered for this request: Unmarked cabinets containing SGI would be 
obvious because they would be the only locking GSA-approved cabinets in 
the security organization area at the average power reactor site; such 
a requirement would not permit the use of NRC-required brightly colored 
mnemonic aids to verify that the SGI cabinet is locked; and any 
visitors to the area are usually escorted so the risk is minimal. 
Accordingly, the commenter concludes that Sec.  73.22(c)(2) should be 
modified to delete the unmarked storage container requirement.
    Response: The issue of marking storage cabinets to indicate the 
presence of SGI was raised in a previous comment on the original 
proposed rule. For the reasons stated in responding to

[[Page 63557]]

this comment on the original proposed rule (October 31, 2006; 71 FR 
64020), the NRC is not adopting the change advocated. However, the 
Commission notes that prohibiting that marking on such cabinets does 
not, as the commenter asserts, preclude the use of ``brightly colored 
mnemonic aids'' to indicate that the cabinet is locked.
    Section 73.22(d)(1).
    Comment: A commenter notes that the NRC did not ``adopt'' a 
previous comment that the marking of SGI documents in the proposed rule 
is too prescriptive. The commenter seeks revision of the rule to 
clarify that a licensee has the flexibility to have the specified 
information in Sec.  73.22(d)(1)(i)-(iii) on the top of the document, 
whether that is the first page, a cover sheet or a binder cover of the 
document. The commenter proposes, as an alternative, modifying the 
regulation so documents produced prior to the implementation date of 
the rule can be marked according to the requirements in the licensee's 
SGI program at the time.
    Response: This comment was previously made on the first proposed 
rule and a response was provided (October 31, 2006; 71 FR 64020). The 
commenter has not provided any new information in this comment to 
warrant a change in the Commission's position. However, in the previous 
response, the Commission noted that it ``does not expect that licensees 
or applicants must go back and mark documents for which a cover sheet 
was used for the required information instead of the first page of the 
document as set forth in Sec.  73.22(d)(1).'' To that extent, the 
Commission has adopted the alternative the commenter proposed.
    Sections 73.22(g)(1) and 73.22(g)(2).
    Comment: In one commenter's view, the provisions on the use of 
various storage media when processing SGI on a computer and limitations 
on computer locations are too restrictive. This commenter requests that 
Sec.  73.22(g)(2) be modified to allow external storage media to be 
used as long as the media are properly controlled and the removable 
storage medium is locked away when not in use. Also, the commenter 
recommends that the rule should allow computers used to process SGI to 
be located in controlled access areas when unattended by a person 
authorized access to SGI, as long as the computers have password 
protection.
    Response: In keeping with standard computer security practices and 
in response to the above comment, the text in Sec.  73.22(g)(1) has 
been changed to provide that SGI may be stored, processed, or produced 
on a password protected stand-alone computer (or computer system). In 
addition, the Commission modified Sec.  73.22(g)(2) to provide that 
computers not located within an approved and lockable security storage 
container must have removable storage media with a bootable operating 
system. Corresponding changes are made throughout this section to 
substitute ``storage media'' for ``storage medium.'' Thus, data may be 
processed and saved on the same removable storage media. An additional 
restriction was also added as Sec.  73.22(g)(4) (with a conforming 
change to Sec.  73.23(g)(4)) to require that electronic systems used to 
store, process, or produce Safeguards Information must be free of 
recoverable Safeguards Information prior to being returned to 
nonexclusive use.
    Sections 73.22(h) and 73.23(h).
    Comment: Several commenters recommend removing the ten-year review 
requirement asserting that it would consume resources with no 
commensurate benefit to public health and safety. One commenter states 
that licensees currently review SGI documents as they are being used 
for possible decontrol and that this process has been effective in 
allowing licensees to make the appropriate determinations.
    Another commenter makes more detailed assertions about the relative 
costs and benefits of the ten-year review requirement. On the costs 
side of the equation, the commenter states that according to a 2005 NEI 
survey, power reactor sites have an average inventory of 2,293 SGI 
documents, with another 235 being produced each year. In ten years' 
time, the commenter believes there would first need to be a sort 
through the accumulated 4,643 SGI designated documents to find the 
2,293 SGI documents ten years or older, and then a review of these 
2,293 documents for a decontrol determination. On the benefits side of 
the equation, the commenter asserts that this review requirement would 
not lead to greater public disclosure of documents because licensees, 
unlike the public sector, have no obligation to publicly release 
documents.
    This commenter asserts that performing such a review is an error-
prone operation that could lead to second-guessing by NRC inspectors. 
This commenter also asserts that the ten-year review could consume NRC 
resources. The commenter believes that organizations would ask the NRC 
to make decontrol determinations for many SGI-designated documents for 
which the individual who made the original determination is 
unavailable. Other individuals in the organization would not likely 
make the decontrol determinations in these situations because of a 
hesitancy to second guess the individuals who originally designated the 
document as SGI.
    Response: The Commission accepts the commenters' suggestion to 
remove the ten-year review requirement from the rule because the review 
would require an expenditure of resources not commensurate with the 
benefits. As set forth in more detail below, the costs would include 
cataloguing all SGI documents in a holder's inventory, reviewing a 
portion of them for possible decontrol every ten years, and 
communicating decontrol determinations to other holders of the 
document. It should be noted that although cataloguing SGI-designated 
documents would be necessary as a practical matter under the ten-year 
review requirement, there exists no similar cataloguing requirement for 
documents containing Classified National Security Information. For the 
period 2008-2018, the estimated costs of the review would total $2.5 
million dollars for all regulated entities.\14\
---------------------------------------------------------------------------

    \14\ Costs are in 2007 dollars assuming a 7% Discount Rate for 
the period 2008-2018.
---------------------------------------------------------------------------

    The benefits, however, are slight because there would be very few 
documents decontrolled in the review process. As described in more 
detail below, few SGI-designated documents ten years or older are in 
current use, so not many would be reviewed. Of those that would be 
reviewed, many would still be considered to contain SGI and would 
therefore not be decontrolled. Even for the few SGI-designated 
documents that would be decontrolled, there is no requirement for 
licensees and other private entities to make those public. Some 
decontrolled documents, however, might also be in the hands of the NRC, 
which could make the documents public as long as the documents were not 
otherwise withheld under Sec.  2.390. The few documents likely to be 
made public by the review does not justify the expense.
    However, the Commission is retaining the requirement, also in the 
current rules, that SGI-designated documents no longer falling within 
the SGI category have their SGI designations removed. This would mean 
that users of SGI-designated documents that no longer meet the 
definition of SGI would have to remove the designation. This 
requirement applies to SGI documents of any age.
    The ten-year review requirement is contained in the following three 
sentences from proposed Sec.  73.22(h): ``Documents originally 
containing Safeguards Information must be

[[Page 63558]]

removed from the Safeguards Information category at such time as the 
information no longer meets the criteria contained in this part. A 
review of such documents to make that determination shall be conducted 
every ten years. Documents that are ten years or older and designated 
as SGI or SGI-M shall be reviewed for a decontrol determination if they 
are currently in use or removed from storage.'' A nearly identical 
version of this requirement was in proposed Sec.  73.23(h).
    The first sentence in proposed Sec.  73.22(h), which is being 
retained in the final rule, generally requires the decontrol of SGI-
designated documents that no longer fit within the SGI category and is 
substantially identical to the requirement in the prior version of 
Sec.  73.21(i). The second and third sentences in proposed Sec.  
73.22(h), which have not been retained in the final rule, would have 
required holders of SGI to conduct a special review every ten years of 
SGI-designated documents that are ten years or older and also in 
current use. As a practical matter, complying with the ten-year review 
requirement would have first involved the cataloguing of all SGI-
designated documents so that the documents could be located for the 
review and so that it could have been determined which documents were 
ten years or older at the time of the review. Then, at ten-year 
intervals, the subset of SGI-designated documents ten years or older 
and in current use would have been reviewed for a possible decontrol 
determination. A smaller subset of these reviewed documents would then 
have been decontrolled by the licensee. Some of these decontrolled 
documents would also have been in the possession of other persons or 
the NRC, and these other holders would have to have been informed about 
the decontrol determination.
    How such a process would proceed in practice can be illustrated 
with the 64 power reactor sites covered by Sec.  73.22, using the 
numbers referenced by one of the commenters. A 2005 NEI survey showed 
that power reactor sites had an average of 2,293 SGI documents per site 
and 235 were created each year.
    Assuming that the first ten-year review would occur in 2008, there 
would then be about 3,000 SGI documents at each site. All of these 
documents would need to be catalogued. Only a portion of these would be 
ten years old, however, and it is assumed that about half of the 2,293 
documents were created since September 11, 2001, because of increased 
security concerns. A reasonable estimate is that there will be about 
900 SGI-designated documents per site that are ten years or older (that 
is, created prior to 1998).
    Of these 900, however, very few that are ten years or older would 
likely be in current use, with a reasonable estimate being about 10 
percent. With this estimate, only about 90 documents would make it to 
the review process. Of these 90 documents in current use, the fact that 
they are in current use makes it more likely that they still contain 
SGI. Assuming that 20 percent of the reviewed documents are 
decontrolled, only about 18 documents that were once designated as SGI 
would be decontrolled. Assuming that the NRC possesses half of those 
decontrolled documents, the 2008 review would result in possibly 9 SGI-
designated documents per power reactor site being made public.
    In 2018, the second ten-year review would be conducted of SGI-
designated documents created prior to 2008. More documents will have 
been added to the total inventory, but many will have been retired. 
Assuming that very few documents 20 years or older are likely to exist, 
the Commission believes that there could be as many as 2,300 SGI-
designated documents per power reactor site that are ten years or older 
in 2018.\15\ Applying the assumptions used above yields 230 documents 
requiring a review, with about 46 documents being decontrolled, and 
with possibly 23 documents per site being made public on the NRC ADAMS 
system. It must be noted that the number of documents projected as 
being decontrolled by this process might be overstated because, prior 
to the ten-year review, SGI-designated documents in current use would 
be decontrolled if the user recognizes that the document no longer 
contains SGI.
---------------------------------------------------------------------------

    \15\ It might be the case, however, that many of these 2300 SGI-
designated documents would be destroyed, pursuant to the 
requirements of Sec. Sec.  73.22(i) and 73.23(i) in the final rule, 
because they would be no longer needed.
---------------------------------------------------------------------------

    On top of the initial task of cataloguing documents and the reviews 
required every ten years, documents would have to be added to the 
catalog as they were being created, which would be about 235 per year 
for each power reactor site. This is another cost that must be 
considered. Finally, one must consider costs to holders of SGI other 
than the power reactors. These costs are relatively minor compared to 
the 64 power reactor sites but are included in the calculations.
    The numbers clearly show that cataloguing is the overwhelming 
factor for costs because of the large number of documents involved. The 
entire initial cataloguing cost for all entities is estimated to be 
$1.6M dollars and the entire annual cataloguing cost is estimated at 
$110K dollars. The entire cost of performing the 2008 review is 
estimated to be $100K dollars, which includes review of the selected 
documents, communication of decontrol determinations to other holders 
of the decontrolled documents, and NRC action on these communications. 
The entire cost of performing the 2018 review is estimated at $270K 
dollars. To put the costs and benefits in perspective, useful measures 
to look at are the cost per decontrolled document and the cost per 
document possibly made public by the NRC. For power reactors as of the 
2018 review, the estimated cost per decontrolled document is about $750 
and the estimated cost per document possibly made public by the NRC is 
about $1500.\16\ In light of the preceding analysis, the Commission 
believes that the costs of performing this review do not justify the 
benefits and is removing the ten-year review requirement from the rule.
---------------------------------------------------------------------------

    \16\ It is appropriate to consider only power reactors here 
because the overwhelming majority of SGI documents in the possession 
of private entities are possessed by power reactors. Therefore, 
power reactors bear the overwhelming majority of the review's costs.
---------------------------------------------------------------------------

    A possible modification to the ten-year review requirement 
involving a review every ten years of all SGI documents ten years or 
older would also not justify retention. If the ten-year review 
encompassed all SGI documents older than ten years, those in current 
use as well as those that are not, the cataloguing costs would remain, 
but the reviewing costs would increase because there would be 
additional documents to review. It is true that with the review of more 
SGI documents, potentially more SGI documents would be decontrolled, 
but it is unclear how many such additional documents would actually be 
reviewed. Many SGI documents no longer currently used would likely be 
documents ``no longer needed,'' which are required to be destroyed 
pursuant to final Sec. Sec.  73.22(i) and 73.23(i). This would probably 
amount to roughly half of the SGI-designated documents ten years or 
older.
    Comment: A commenter asserts that it is impractical to have the NRC 
approve the decontrol of documents generated by other agencies and that 
sometimes the individual in an organization who made the original SGI 
determination is unavailable. The commenter suggests that the proposed 
text of Sec. Sec.  73.22(h) and 73.23(h) be modified to allow other 
authorized individuals within the

[[Page 63559]]

organization that made the original SGI determination to decontrol the 
document. Another commenter echoes this request.
    Response: In response to these comments, the Commission is 
clarifying the text in Sec. Sec.  73.22(h) and 73.23(h) to state that 
the authority to determine that documents originally containing SGI 
must be removed from the SGI category may be exercised by the NRC, with 
the approval of the NRC, or in consultation with the individual or 
organization that made the original determination.
    Section 73.23.
    Comment: A commenter asserts that for shipments of Category 1 
materials, which are not routine, schedules and itineraries of a 
shipment constitute information that, if disclosed, could reduce the 
security of the shipment. For the more routine Category 2 RAMQC 
shipments, the commenter states that it is not clear from the proposed 
rule that relevant security information will accompany these shipments. 
The commenter believes that the following statement from the proposed 
rule in the discussion for Sec.  73.23 adds confusion to the issue: 
``Scheduling and itinerary information used for the purpose of 
preplanning, coordination and advance notification may be shared with 
others on a `need to know' basis and need not be designated as 
Safeguards Information-Modified Handling.'' (71 FR 64004, 64063; 
October 31, 2006).
    Response: It is not clear what the commenter means when referring 
to ``relevant security information'' accompanying Category 2 RAMQC 
shipments. The statement from the rule text which the commenter quotes 
is consistent with the Commission's recent determination, discussed 
earlier in this Notice, that information relating to the shipment of 
Category 2 RAMQC need not be designated and controlled as SGI-M. 
Rather, such information may be shared on a ``need -to-know'' basis.
    Section 73.23(a).
    Comment: A commenter requests that Sec.  73.23(a) be modified to 
correspond to Sec.  73.22(a), which deleted the undefined terms 
``additional security measures,'' ``protective measures'' and ``interim 
compensatory measures.''
    Response: The Commission agrees with this comment and has deleted 
the terminology above from Sec.  73.23(a).
    Section 73.59.
    Comment: One commenter stated that Sec.  73.59 should be revised to 
permit a licensee to recognize a background check conducted in 
accordance with the final rule by another NRC or Agreement State 
licensee. The commenter believes that this change would help allow a 
licensee to sub-contract work to other licensees where it may be 
necessary to divulge SGI to the contracted licensee in order for the 
maintenance activity to be performed safely. The commenter's suggested 
revision would state that an ``employee of an NRC or Agreement State 
licensee who has undergone criminal history and background checks in 
accordance with or equivalent to those required by 10 CFR 73.22(b) or 
73.23(b).''
    Response: Section 73.59 of the rule provides relief from the 
fingerprinting and criminal history records check requirements set 
forth in Section 149 of the AEA for limited categories of individuals 
set forth in Sec.  73.59(1) through (9). Those categories of 
individuals are considered to be trustworthy and reliable by virtue of 
their occupational status and have either already undergone a 
background check or criminal history records check as a condition of 
their employment, or are subject to direct oversight by government 
authorities in their day-to-day job functions. The categories of 
individuals specified in Sec.  73.59 include governmental employees at 
the federal, state or local level or certain NRC-certified 
representatives of the International Atomic Energy Agency. In addition, 
any agent, contractor, or consultant of those categories of individuals 
is also exempt provided equivalent criminal history and background 
checks to those required by Sec. Sec.  73.22(b) or 73.23(b) have been 
performed. The Commission has determined not to adopt the language the 
commenter has proposed to extend the exemption to an even broader 
category of non-governmental individuals. However, a mechanism exists 
in Sec.  73.57(f)(3) of the current regulations for the transfer to 
another licensee of personal information obtained on an individual 
obtained from a criminal history records check, provided the conditions 
specified in paragraphs (f)(3)(i) and (ii) are met.
    Comment: An Agreement State requests the NRC to continue its 
``previous policy of exempting from its trustworthiness and reliability 
reviews (and related fingerprinting and criminal history records 
checks) those individuals designated by the Governor of a State as 
needing access to SGI, regardless of whether those individuals are 
State employees.'' According to the State, this exemption is allowed by 
law and ``is a matter of respect and comity'' because ``the NRC should 
* * * trust the duly elected Governor of a sovereign state to designate 
only those individuals who may be trusted with access to SGI.''
    Response: NRC regulations historically relieved licensees 
authorized to operate power reactors from requiring specified 
categories of individuals to undergo criminal history records checks 
(including fingerprinting) for access to SGI. The exempt categories of 
individuals included the ``Governor of a State, or his or her 
designated representative.'' See, e.g., 10 CFR 73.57(b)(2)(ii).
    Limiting the scope of the relief granted to the above category of 
licensees reflected the narrow scope of NRC's previous statutory 
authority under Section 149 of the AEA to require fingerprinting. The 
EPAct amended Section 149 of the AEA to obligate the NRC to require 
individuals or entities (including licensees or applicants for licenses 
to engage in any activity subject to regulation by the Commission), to 
fingerprint any individual seeking access to SGI. However, the EPAct 
preserved NRC's authority under Section 149.b. of the AEA to relieve, 
by rule, persons from the obligations imposed by Section 149, upon 
specified terms, conditions, and periods, if the Commission makes 
findings that such action is consistent with its obligations to promote 
the common defense and security and to protect the health and safety of 
the public. The NRC exercised that authority in a final rule that added 
to part 73 a new Sec.  73.59, ``Relief from fingerprinting, 
identification and criminal history records checks and other elements 
of background checks for designated categories of individuals.'' Final 
rule, Relief from Fingerprinting and Criminal History Records Check for 
Designated Categories of Individuals (June 13, 2006; 71 FR 33989). The 
rule was needed to enable the Commission to continue to share SGI with 
certain categories of individuals seeking access to SGI from non-power 
reactor licensees or from the Commission without subjecting them to the 
expanded criminal history records checks required by the EPAct. (71 FR 
33989). The rule continued the relief previously granted in Sec. Sec.  
73.21 and 73.57, but expanded and lengthened the categories of 
individuals relieved by the rule from the fingerprinting and criminal 
history records checks. (71 FR 33989, 33990). In promulgating the rule, 
the Commission specifically found the rule to be consistent with its 
obligations to promote the common defense and security and to protect 
the health and safety of the public. (71 FR at 33990).
    Because trustworthiness and reliability determinations are based 
upon background checks, the State's comments are relevant to Sec.  
73.59. Section 73.59 exempts a number of categories of individuals from 
the otherwise applicable background check

[[Page 63560]]

requirements for access to SGI, including criminal history records 
checks (and fingerprinting). See proposed rule, Protection of 
Safeguards Information (October 31, 2006; 71 FR 64004). The proposed 
SGI rule added, as Sec.  73.59(k), a new category of exempt individuals 
consisting of ``any agent, contractor, or consultant of the 
aforementioned persons who has undergone equivalent criminal history 
records and background checks to those required by 10 CFR 73.22(b) or 
73.23(b).'' (71 FR at 64006). Another category of exempt individuals is 
set forth in Sec.  73.59(e), for ``the Governor of a State or his or 
her designated State employee representative.'' The rationale for this 
category and other categories of exempt individuals is that the 
individuals described in those categories ``are considered trustworthy 
and reliable to receive SGI by virtue of their occupational status and 
have either already undergone a background or criminal history check as 
a condition of their employment, or are subject to direct oversight by 
government authorities in their day-to-day job functions.'' (71 FR 
33990). A Governor's designated State employee representative is 
considered to be trustworthy and reliable because of the employee's 
occupational status--reporting to and vouched for by the Governor and 
the fact that the employee is subject to direct employment oversight by 
a high-level government official in the employee's day-to-day job 
functions. Under the exemption in former Sec.  73.57 for Governor-
designated representatives, a non-employee of a State would have been 
exempt from the criminal history records check (including 
fingerprinting). A non-employee would not necessarily have undergone a 
criminal history records check as part of the background check. In 
addition, the non-employee would not be subject to direct oversight by 
high-level government authorities in that individual's day-to-day job 
functions. Therefore, the Commission narrowed that specific exemption 
to include only state employee representatives designated by a 
Governor. The Commission is well within its authority under Section 149 
of the AEA to so limit the specific exemption in Sec.  73.59(e).
    Moreover, the State's comment does not account for the 
applicability of the exemption in Sec.  73.59(k) for an agent, 
contractor, or consultant of the categories of individuals specified in 
Sec.  73.59 who have undergone effective criminal history records 
checks as part of background checks. Thus, designated representatives 
of a Governor meeting the equivalency provision would not have to 
undergo a separate check prior to being granted access to SGI. Given 
the availability of this exemption for individuals not included in 
Sec.  73.59(e) and for the reasons set forth above, the Commission 
declines to make the changes in the rule requested by the State.
    Regulatory Analysis.
    Comment: According to a commenter, the proposed rule incorrectly 
states that the rule would be implemented in FY 2005 and 2006. Because 
the commenter stated that the earliest it could be implemented is in FY 
2007, the commenter concluded that the regulatory analysis is flawed 
because it uses 2005 dollars.
    Response: The Commission has modified the regulatory analysis to 
state dollars as FY 2007 dollars.
    Comment: A commenter asserts that the regulatory and backfit 
analyses fail to calculate the substantial cost to power reactor 
licensees for modifying their existing SGI process and adding the ten-
year review. The commenter asks that these analyses consider the actual 
substantial cost of rule implementation regarding power reactor 
licensee costs to modify SGI programs and the significant costs of the 
ten-year review required by proposed Sec.  73.22(h), and suggests that 
the rulemaking be delayed until accurate regulatory and backfit 
analyses are completed.
    Response: The Commission disagrees that the regulatory analysis 
fails to calculate the cost to power reactors for modifying their 
existing SGI programs. The cost for such modifications are reflected in 
both the draft and final regulatory analyses. Additionally, the 
regulatory analysis has been changed to account for the increased 
number of power reactor applicants and to use power reactor costs for 
power reactor applicants. There is no item in the regulatory analysis 
reflecting the ten-year review requirement because this review 
requirement is not being retained in the final rule. In the response to 
comments on the ten-year review requirement, however, the Commission 
provides a brief analysis of the costs and benefits of the ten-year 
review in explaining its decision not to retain the requirement. As for 
the backfit analysis requested by the commenter, the Commission has 
determined in section XII of this document that a backfit analysis is 
not required. As explained therein, the Commission has determined that 
many of the requirements imposed by the final rule are not backfits. 
Those requirements that are backfits have been determined to be 
necessary to ensure that the facilities and materials described in the 
final rule provide adequate protection to the public health and safety 
and are in accord with the common defense and security, as applicable. 
Therefore, a backfit analysis is not required and the cost-benefit 
standards of Sec. Sec.  50.109(a)(3), 70.76, 72.62, and 76.76, do not 
apply.
    Comment: A commenter characterizes the NRC's regulatory and backfit 
analyses as too qualitative in their assessments of the benefits 
provided by the rule, and that the regulatory analysis should contain 
quantitative evidence to support the conclusion that the benefits of 
the rule outweigh the costs. The commenter believes that topics where 
quantitative benefits analyses are desirable include (1) the added 
safety benefits from requiring transporters of nuclear materials to 
follow both DOT and NRC marking requirements and (2) how much of the 
additional material protected under the final rule has been released to 
the public because of the lack of the final rule's requirements. The 
commenter asks that the rulemaking be delayed until accurate regulatory 
and backfit analyses are completed.
    Response: The Commission believes that it is appropriate to 
describe the benefits of the rule in qualitative rather than 
quantitative terms, and that further efforts to quantify the rule's 
benefits in the Regulatory Analysis would be of little use and 
potentially misleading. Qualitative discussion of the unquantifiable 
values and impacts of a rule is expressly provided for in NUREG/BR-
0058, Revision 4, ``Regulatory Analysis Guidelines of the U.S. Nuclear 
Regulatory Commission.'' \17\
---------------------------------------------------------------------------

    \17\ NUREG/BR-0058, Rev. 4, p. 24.
---------------------------------------------------------------------------

    Regarding the benefit of requiring transporters of nuclear 
materials to follow both DOT and NRC marking requirements, the benefit 
is the simple, but essential, one of informing holders of the document 
which handling and disclosure requirements apply to the document. If a 
document containing SGI, but only marked with DOT markings, were 
transmitted to another individual, that individual would not know that 
SGI requirements apply to the document. Because DOT and SGI 
requirements differ, the recipient of the document containing SGI would 
likely not comply with all of the SGI handling requirements. The 
benefits of using NRC markings need not be quantified.
    The Commission also does not consider it a useful measure to 
quantify how much additional material protected under the rule has 
historically been released to the public because of the

[[Page 63561]]

lack of the rule's requirements. First, a relatively small quantity of 
SGI obtained by one determined individual for nefarious purposes could 
be more dangerous than a larger quantity of material obtained by 
several people with peaceful intentions. Second, the request misses the 
point that security orders issued since September 11, 2001, have 
imposed SGI protection requirements above and beyond those imposed by 
the current rule. There is no recent experience with the current rule 
as a baseline from which to make the requested calculation, even if 
such a calculation produced a useful measure.
    Finally, with respect to a quantitative analysis of benefits in a 
backfit analysis, the Commission has determined that a backfit analysis 
is not necessary for this rule, as explained in the response to the 
previous comment.

B. Analysis of Changes Made in the Final Rule to the Text of the 
Revised Proposed Rule

    Change from ``criminal history check'' to ``criminal history 
records check.''
    Throughout the rule, references to ``criminal history check'' have 
been revised to read ``criminal history records check.'' This change is 
being made for consistency with Sec.  73.59, ``Relief from 
fingerprinting, identification and criminal history records checks and 
other elements of background checks for designated categories of 
individuals.''
    Analysis of part 2 changes to the proposed rule text.
    Part 2 Authority citation.
    The authority citation for part 2 is being updated from the version 
in the revised proposed rule to cite Sections 147 and 149 of the AEA, 
as amended, as opposed to just the EPAct amendment to Section 149, and 
to correct a typo in the authority citation for Appendix A.
    Renumbering of SGI-related provisions in Sec.  2.705.
    Proposed Sec.  2.705(c)(2)-(c)(7), which contains SGI access 
procedures for discovery in Subpart G adjudications, was misnumbered. 
Proposed Sec.  2.705(c)(2)-(c)(7) will be moved to Sec.  2.705(c)(3)-
(c)(8) in the final rule, and Sec.  2.705(c)(2) in the current rules 
will be retained in its current form.
    Clarifying the scope of SGI access procedures for discovery in 
adjudications.
    Proposed Sec. Sec.  2.336(f), 2.705(c)(3)-(c)(8) (2.705(c)(2)-
(c)(7) in the revised proposed rule), 2.709(f), and 2.1010(b)(6) 
contain SGI procedures for discovery in adjudications. There are other 
areas of discovery in adjudications, however, that are not explicitly 
covered by the proposed rule. Specifically, disclosures in subpart G 
adjudications by parties other than the NRC staff are covered under 
Sec.  2.704. To clarify the intent of the rule, a new Sec.  2.704(f) is 
added, which reads as follows: ``Disclosure under this section of 
documents and records including Safeguards Information referred to in 
Sections 147 and 181 of the Atomic Energy Act of 1954, as amended, will 
be according to the provisions in Sec.  2.705(c)(3)-(c)(8).'' Also, 
Sec.  2.1010 in subpart J speaks only to the powers of the Pre-
Application Presiding Officer (PAPO), but there might be document 
discovery in the High-Level Waste proceeding after the PAPO dissolves. 
Therefore, a new Sec.  2.1018(h) is added with the following text: 
``Discovery under this section of documentary material including 
Safeguards Information referred to in Sections 147 and 181 of the 
Atomic Energy Act of 1954, as amended, will be according to the 
provisions in Sec.  2.1010(b)(6)(i)-(b)(6)(vi).''
    Change from ``Chairman of the Atomic Safety and Licensing Board 
Panel'' to ``Chief Administrative Judge.''
    There are several instances in the revised proposed rule text in 
which the term ``Chairman of the Atomic Safety and Licensing Board 
Panel'' is used to refer to the head of the Atomic Safety and Licensing 
Board Panel. The Commission has decided to change this term to ``Chief 
Administrative Judge'' in the final rule to reflect the usage of Sec.  
1.15. The change will be made in Sec. Sec.  2.336(f)(1)(iv), 
2.705(c)(3)(iv), 2.709(f)(1)(iv), 2.1010(b)(6)(i)(D), and 73.57(e)(3).
    Clarification of jurisdiction when a presiding officer has yet to 
be appointed.
    The term ``presiding officer'' is used throughout Sec.  2.336(f), 
but there may be instances in which adjudicatory decisions related to 
SGI need to be made prior to the designation of a presiding officer. 
For instance, a person seeking participation in an adjudication may 
desire access to SGI to proffer a contention but may be denied access 
because of an adverse ``need to know'' or trustworthiness and 
reliability determination. Disputes in such cases should be resolved as 
quickly as possible and not await the appointment of a presiding 
officer. To account for this situation, a new Sec.  2.336(f)(7) has 
been added with the following text: ``If a presiding officer has yet to 
be appointed, the authority to take the actions described in (f)(1) to 
(f)(6) resides in the officer with jurisdiction under Sec.  2.318(a).''
    Changes related to adverse trustworthiness and reliability 
determinations in adjudications.
    The Commission is changing proposed Sec.  2.336(f)(1)(ii)-(iii) to 
clarify that the protections referred to therein are to be afforded 
before a final adverse determination. After an adverse determination 
becomes final, the appeal procedures in Sec.  2.336(f)(1)(iv) can be 
used. Conforming changes have also been made to Sec. Sec.  
2.705(c)(3)(ii)-(iii), 2.709(f)(1)(ii)-(iii), and 2.1010(b)(6)(i)(B)-
(C). With respect to the appeal procedures in Sec.  2.336(f)(1)(iv), 
the rule has been modified to require designation of an officer other 
than the presiding officer for review of final adverse determinations 
in all instances, rather than leaving such matters to the discretion of 
the Chief Administrative Judge. Conforming changes were also made to 
Sec. Sec.  2.705(c)(3)(iv), 2.709(f)(1)(iv), and 2.1010(b)(6)(i)(D).
    The Commission is modifying Sec.  2.336(f)(1)(iii) by replacing the 
last sentence in the revised proposed rule with more appropriate 
language. The last sentence in the revised proposed rule states that 
``before an adverse determination on an individual's background check 
for trustworthiness and reliability, the individual shall be afforded 
the protections provided by Sec.  73.57.'' The protections referred to 
in Sec.  73.57(e)(1)-(2), however, apply only to criminal history 
records checks, and proposed Sec.  2.336(f)(1)(ii) already references 
those same protections specifically for criminal history records 
checks.\18\ Therefore, the last sentence in Sec.  2.336(f)(1)(iii) is 
superfluous when read in a literal manner, duplicating the effect of 
the reference in Sec.  2.336(f)(1)(ii).
---------------------------------------------------------------------------

    \18\ Although a background check is based upon a criminal 
history records check, it is also based upon other elements, such as 
employment history, education, and personal references.
---------------------------------------------------------------------------

    The Commission, however, considers it proper to provide the 
essential rights contained in Sec.  73.57(e)(1)-(2) for components of 
the background check other than the criminal history records check. For 
criminal history records checks, the essential rights provided by Sec.  
73.57(e)(1)-(2) are (1) access to the criminal history record and (2) 
the option within ten days to challenge the completeness and accuracy 
of the information contained in that record by providing additional 
information and/or explanation.
    By analogy, the Commission believes that for components of the 
background check other than the criminal history records check, 
individuals subject to an adverse trustworthiness and reliability

[[Page 63562]]

determination should have access to the records that were considered in 
the trustworthiness and reliability determination. These individuals 
should also be able to provide additional information and/or an 
explanation to the Office of Administration within ten days, and the 
Office of Administration should promptly resolve the challenge 
presented by the individual. Therefore, the last sentence in Sec.  
2.336(f)(1)(iii) is being replaced with language that provides the 
essential rights of Sec.  73.57 for components of the background check 
other than the criminal history records check. Conforming changes are 
also being made to Sec. Sec.  2.705(c)(3)(iii), 2.709(f)(1)(iii), and 
2.1010(b)(6)(i)(C).
    The Commission has decided to replace ``[p]articipants, potential 
witnesses, and attorneys'' in proposed Sec. Sec.  2.336(f)(1)(iv), 
2.705(c)(3)(iv), 2.709(f)(1)(iv), and 2.1010(b)(6)(i)(D) with 
``[i]ndividuals seeking access to Safeguards Information to participate 
in an NRC adjudication.'' The proposed language did not cover 
consulting experts who are not expected to be witnesses, and the word 
``participant'' was not defined by the rule and may have caused 
confusion. A similar change is also being made to Sec.  73.57(e)(3). 
The language in the final rule better reflects Commission intent and 
mirrors the language in Sec. Sec.  2.336(f)(1)(i), 2.705(c)(3)(i), 
2.709(f)(1)(i), and 2.1010(b)(6)(i)(A).
    In proposed Sec.  2.1010(b)(6)(i)(D) regarding review of adverse 
trustworthiness and reliability determinations, instances of 
``presiding officer'' have been changed to ``Pre-License Application 
Presiding Officer.''
    Clarification of presiding officer authority regarding protective 
orders in adjudications.
    Proposed Sec.  2.336(f)(2) would give the presiding officer the 
authority to include in an order any protective terms and conditions as 
may be necessary and appropriate to limit disclosure of SGI to parties, 
interested governmental entities participating under Sec.  2.315(c), 
and their qualified witnesses and counsel.
    This list of individuals and entities, however, is not exhaustive 
and does not adequately convey the intended coverage of Sec.  
2.336(f)(2). See 71 FR 64029. Therefore, proposed Sec.  2.336(f)(2) has 
been changed to the following: ``The presiding officer may include in 
an order any protective terms and conditions (including affidavits of 
nondisclosure) as may be necessary and appropriate to prevent the 
unauthorized disclosure of Safeguards Information.'' Conforming changes 
are also being made to Sec. Sec.  2.705(c)(4) (Sec.  2.705(c)(4) in the 
revised proposed rule), 2.709(f)(2), and 2.1010(b)(6)(ii).
    Changes regarding civil and criminal penalties.
    Sections 2.336(f)(5), 2.705(c)(7), 2.709(f)(5) and 2.1010(b)(6)(v) 
will be modified to clarify that a violation only of provisions for the 
protection of SGI from unauthorized disclosure in an adjudicatory order 
will be subject to civil penalties under Sec.  2.205. Similarly, 
changes have also been made to sections 2.336(f)(6), 2.705(c)(8) 
(2.705(c)(7) in the proposed rule), 2.709(f)(6), and 2.1010(b)(6)(vi), 
to specify that criminal penalties are available only with respect to 
violations of provisions in adjudicatory orders related to the 
protection of SGI from unauthorized disclosure.
    Clarification of the application of Sec. Sec.  73.21, 73.22, and 
73.23 in adjudications.
    The word ``participant'' in proposed Sec.  2.336(f)(3) is being 
replaced in the final rule by ``anyone'' to better reflect the intent 
of the rule (71 FR 64030), and to avoid using the word ``participant,'' 
which is not defined in the rule and may, therefore, cause confusion. 
``Anyone'' in final Sec.  2.336(f)(3) should be interpreted in the 
broadest manner. Conforming changes are also being made to Sec. Sec.  
2.705(c)(5) (2.705(c)(4) in the revised proposed rule) and 2.709(f)(3).
    Minor change in terminology.
    The phrase ``delegate of the Executive Director for Operations'' in 
Sec.  2.709(f)(1) will be changed to ``delegee of the Executive 
Director for Operations'' to conform with the usage throughout the rest 
of Sec.  2.709.
    Section by section analysis of remaining changes to the proposed 
rule text.
    Section 30.4 Definitions.
    A definition of ``quantities of concern'' is added, which is 
identical to the definition of that term in parts 2 and 73. Defining 
that term in part 30 will assist licensees, applicants, and other 
persons subject to part 30 in determining the applicability to their 
activities of the requirements for the protection of SGI in part 73.
    Section 30.32 Application for specific licenses.
    In paragraph (j), the references to Sec. Sec.  73.21 and 73.23 are 
modified to read ``Sec.  73.21, 73.22, and/or 73.23, as applicable.'' 
This change correctly denotes the applicable sections of part 73 
relating to a part 30 licensee's or applicant's protection against 
unauthorized disclosure of SGI. In addition, the phrase ``subject to 
the requirements of part 73 of this chapter'' is being deleted because 
byproduct material licensees are not subject to part 73 other than 
requirements relating to SGI.
    Section 30.34 Terms and conditions of licenses.
    In paragraph (j), the phrase deleted from 30.32(j) is also deleted 
in this paragraph for the same reason.
    Section 40.31 Application for specific licenses.
    In paragraph (m), the words ``or conversion'' are added after 
``production'' for a more complete statement of the type of facility to 
which this requirement applies. Also, the phrase ``subject to the 
requirements of part 73 of this chapter'' is being deleted because 
applicants for source licenses are not otherwise subject to part 73.
    Section 40.41 Terms and conditions of licenses.
    In paragraph (h), the phrase ``subject to the requirements of part 
73 of this chapter'' is being deleted because applicants for source 
licenses are not otherwise subject to part 73.
    Section 60.42 Conditions of license.
    In paragraph (d), ``(Department of Energy)'' is added after 
``licensee'' to clarify that the licensee is the Department of Energy.
    Section 63.42 Conditions of license.
    In paragraph (e), ``(Department of Energy)'' is added after 
``licensee'' to clarify that the licensee is the Department of Energy.
    Section 72.44 License conditions.
    In paragraph (h), the phrase ``subject to the requirements of part 
73 of this chapter'' is being deleted because the licenses under part 
72 are only subject to the requirements in part 73 relating to the 
protection of SGI.
    Part 73 Authority citation.
    The authority citation for part 73 is being updated from the 
version in the proposed rule to reflect the correct citation of the 
Energy Policy Act.
    Part 73 Changes of Wide Applicability.
    Throughout part 73, references to ``SGI'' have been changed to 
``Safeguards Information'' and references to ``SGI-M'' have been 
changed to ``Safeguards Information-Modified Handling.''
    Also, throughout part 73, references to ``Safeguards Information-
Modified Handling'' have been changed to clarify that Safeguards 
Information-Modified Handling is in fact Safeguards Information, but 
subject to handling requirements modified from the specific Safeguards 
Information handling requirements that are applicable to Safeguards 
Information needing a higher level of protection.
    Section 73.2 Definitions.
    The definition of background check is changed to add a reference to 
the

[[Page 63563]]

Federal Bureau of Investigation (FBI) criminal history records check. 
This reference is necessary because the criminal history records check 
is performed by the FBI. In addition, the parenthetical at the 
beginning of the definition is being changed to read ``* * * (including 
verification of identity based on fingerprinting) * * *.'' This is a 
more complete statement of the elements of a criminal history records 
check.
    In the definition of ``need to know,'' the phrase ``incorporated 
into another document by the recipient'' has been revised to include 
``incorporated into another document or other matter by the 
recipient.'' This revision reflects a change made for consistency 
throughout the rule text (see, e.g., Sec.  73.22(a)(1)(vii)). The 
definition is also revised to clarify that Safeguards Information 
includes Safeguards Information designated as Safeguards Information--
Modified Handling.
    The definition of Safeguards Information--Modified Handling is 
revised to read ``the designation or marking applied to Safeguards 
Information which the Commission has determined requires handling 
requirements modified from the specific Safeguards Information handling 
requirements that are applicable to Safeguards Information needing a 
higher level of protection.'' The last phrase of the definition has 
been added to reiterate the reason for the difference between the 
handling requirements for SGI-M and those for other SGI.
    The definition of ``Trustworthiness and reliability'' is 
italicized. In addition, the last sentence of the definition is changed 
to read ``A determination of trustworthiness and reliability for this 
purpose is based upon a background check.'' This change is needed to 
distinguish ``trustworthiness and reliability'' for the purpose of 
access to SGI from ``trustworthiness and reliability'' for the purpose 
of determining personnel access authorization requirements for nuclear 
power plants under Sec.  73.56. The definition is also revised to 
clarify that Safeguards Information includes Safeguards Information 
designated as Safeguards Information--Modified Handling.
    Section 73.21 Protection of Safeguards Information: Performance 
Requirements.
    In paragraph (a), a reference is added to a ``certificate holder'' 
as a person to whom the general performance requirement in Sec.  73.21 
applies. These changes are needed for a complete statement of the 
applicability of Sec.  73.21.
    In paragraph (a)(i), the phrase ``uranium hexafluoride production 
facilities'' is changed to read ``uranium hexafluoride production or 
conversion facilities.'' This is a conforming change to that made in 
Sec.  40.31.
    In paragraph (a)(1)(ii), the phrase ``source, byproduct, or special 
nuclear material in greater than or equal to Category 2 quantities of 
concern * * *'' is changed to read ``source material, or byproduct or 
special nuclear material in greater than or equal to Category 2 
quantities of concern * * *.'' The reason for this change is to 
accurately state the materials included in RAMQC. Also, the reference 
to ``transportation of greater than or equal to Category 2 quantities 
of concern'' is changed to ``transportation of source, byproduct, or 
special nuclear material in greater than or equal to Category 1 
quantities of concern.'' The Commission has determined that information 
relating to the transportation of Category 2 RAMQC need not be 
protected as SGI-M and may be shared on a ``need-to-know'' basis.
    A new paragraph, (a)(iii), is added to Sec.  73.21, to state that 
if the Safeguards Information is not described in paragraphs (a)(1)(i) 
and (a)(1)(ii), it shall be protected in accordance with the 
requirements of Sec.  73.22. Although paragraph (a) already requires 
that each licensee, certificate holder, applicant, or other person who 
produces, receives, or acquires SGI shall ensure that it is protected 
against unauthorized disclosure, protecting SGI as SGI-M under Sec.  
73.23 could potentially constitute a violation of the protection 
requirements for SGI. Protecting the information, whether SGI or SGI-M, 
under Sec.  73.22 would remove the potential for such a violation.
    Section 73.22 Protection of Safeguards Information: Specific 
Requirements.
    The first paragraph of this section is changed to add the words 
``or conversion'' after ``production'' for a more complete statement of 
the type of facility to which this requirement applies. Also, a phrase 
is added clarifying that the requirements of Sec.  73.22 apply to 
persons subject to the requirements of Sec.  73.21(a)(1)(i). At the end 
of the paragraph, the phrase ``and Safeguards Information in the hands 
of any person subject to the requirements of Sec.  73.21(a)(1)(iii)'' 
is added as a cross-reference to the new paragraph in Sec.  
73.21(a)(1)(iii) (requiring persons to follow the provisions of Sec.  
73.22 in protecting Safeguards Information not described in paragraphs 
(a)(1)(i) and (a)(1)(ii) of Sec.  73.21).
    In paragraph (a)(1)(vii), the words ``or other matter'' are added 
after ``identified in the documents.'' This change removes 
inconsistencies in the proposed rule text with respect to terminology 
for ``documents,'' or ``documents or other matter'' or ``documents or 
other media.'' Unless otherwise noted, the term ``documents or other 
matter'' will be used throughout the rule text.
    The cross-reference in paragraph (a)(1)(xi) to ``Sec.  73.1'' is 
being corrected to state ``Sec.  73.1(a)(1) or (a)(2).'' This change is 
necessary because two ``Design Basis Threats'' (DBT) are described in 
Sec.  73.1. Also, the reference to the adversary characteristics 
document ``or other implementing guidance'' is changed to the adversary 
characteristics document ``and related information, including 
implementing guidance,'' to more clearly describe the documents to be 
protected.
    In response to a comment regarding the meaning of the term ``safe 
havens'' in paragraph (a)(2)(iv), the following change to paragraph 
(a)(2)(iv) is being made: ``* * * safe havens identified along the 
transportation route.'' This change adds specificity to the term ``safe 
havens.'' For the same reason, a conforming change is being made to 
Sec.  73.23(a)(2)(iii).
    In paragraph (b)(1), the acronym ``FBI'' is inserted after 
``Federal Bureau of Investigation'' and the word ``records'' is 
inserted following ``criminal history.'' These changes are needed for 
the sake of accuracy. Conforming changes are being made to Sec.  
73.23(b)(1).
    In paragraph (b)(4), the phrase ``other than those specified in 
Sec.  73.59,'' is being removed. This phrase would have excluded 
persons identified in Sec.  73.59 from the process prescribed in the 
paragraph for ``need to know'' determinations in adjudications. This 
exclusion is being deleted because persons identified in Sec.  73.59 
are exempt from elements of background checks, not from the ``need to 
know'' requirement. Also, the process described in paragraph (b)(4) 
applies just as well to persons identified in Sec.  73.59 as it does to 
other persons, and the rule does not elsewhere prescribe a separate 
process for ``need to know'' determinations for individuals identified 
under Sec.  73.59. The same change is being made in Sec.  73.23(b)(4).
    In paragraph (d)(2), language has been added to make clear that a 
transmittal document without SGI can only be decontrolled if the 
document does not otherwise warrant protection from unauthorized 
disclosure. Conforming changes are being made in Sec.  73.23(d)(2).

[[Page 63564]]

    The language in paragraph (f)(3) has been modified to specify that 
the standard method for Internet e-mail encryption is Federal 
Information Processing Standard [FIPS] 140-2, or later, that is 
approved by the appropriate NRC Office.
    In paragraph (g)(2), changes have been made to allow data to be 
saved on ``either the removable storage medium that is used to boot the 
operating system, or on a different removable storage medium.'' This 
change provides more flexibility regarding the storage of SGI. However, 
a new paragraph (g)(4) has been added to specify that any electronic 
system that has been used for storage, processing or production of 
Safeguards Information must be free of recoverable Safeguards 
Information prior to being returned to nonexclusive use.
    In response to comments, the second and third sentences of 
paragraph (h), which require a review every ten years of documents ten 
years or older that are in current use or out of storage, will not be 
retained in the final rule. The Commission believes that the benefits 
of the requirement would be outweighed by the costs, as explained in 
more detail in the response to the comments in this document 
recommending deletion of the requirement. For the same reason, a 
conforming change is being made to Sec.  73.23(h).
    Also, in the rule's provisions on the authority to decontrol 
documents that have been designated as containing SGI, paragraph (h) 
will be changed to make clear that SGI can be decontrolled by the NRC, 
with NRC approval, or in consultation with the individual or 
organization which made the initial determination. For the same reason, 
a conforming change is being made to Sec.  73.23(h).
    Section 73.23 Protection of Safeguards Information-Modified 
Handling: Specific Requirements.
    In the first paragraph of this section, a phrase is added 
clarifying that the requirements of Sec.  73.23 apply to any person 
subject to the requirements of Sec.  73.21(a)(1)(ii). Also, the 
reference to ``transportation of greater than or equal to Category 2 
quantities of concern'' is changed to ``transportation of source, 
byproduct, or special nuclear material in greater than or equal to 
Category 1 quantities of concern.'' The Commission has determined that 
information relating to the transportation of Category 2 RAMQC need not 
be protected as SGI-M and may be shared on a ``need-to-know'' basis. 
For the same reason, a conforming change is being made to paragraph 
(a)(2).
    In paragraph (b)(3), the phrase ``exempt from the background check 
requirements'' is changed to ``exempt from the criminal history records 
check and background check requirements'' to clarify that the criminal 
history records check is included in the exemption because it is part 
of a background check.
    In paragraph (f)(3), the phrase ``encryption * * * approved by'' 
has been modified as ``encryption by a method * * * approved by'' to 
clarify that Federal Information Processing Standard [FIPS] 140-2 is a 
method of encryption.
    In paragraph (g)(1), the requirements for marking, removal and 
storage of typewriter ribbons have been modified to add proper marking 
of the ribbons. A new paragraph (g)(4) has been added to specify that 
any electronic system that has been used for storage, processing or 
production of Safeguards Information designated as Safeguards 
Information-Modified Handling must be free of recoverable Safeguards 
Information designated as Safeguards Information-Modified Handling 
prior to being returned to nonexclusive use.
    Section 73.57 Requirements for criminal history records checks of 
individuals granted unescorted access to a nuclear power facility or 
access to Safeguards Information.
    In paragraph (b)(2)(i), the word ``or'' before the parenthetical is 
being deleted because itis not needed.
    In paragraph (e)(3), ``Chairman of the Atomic Safety and Licensing 
Board Panel'' is being changed to ``Chief Administrative Judge,'' 
because the latter term is the correct one. Also, language has been 
changed to provide that individuals seeking access to SGI to 
participate in adjudications may request review of final adverse 
trustworthiness and reliability determinations made by the NRC Office 
of Administration.
    Section 73.59 Relief from fingerprinting, identification and 
criminal history records checks and other elements of background checks 
for designated categories of individuals.
    In the title and introductory paragraph of this section, the words 
``other elements of'' are being inserted before ``background checks'' 
because criminal history records checks (comprised of fingerprinting, 
verification of identity, and a review of criminal history records) are 
part of a ``background check.'' Also, in the introductory paragraph and 
in paragraph (f), ``Safeguards Information or Safeguards Information 
designated as Safeguards Information-Modified Handling'' is revised to 
read ``Safeguards Information, including Safeguards Information 
designated as Safeguards Information-Modified Handling,'' to emphasize 
that SGI-M is SGI.
    Section 76.113 Formula quantities of strategic special nuclear 
material--Category I.
    In paragraph (c) of this section, the phrase ``and parts 25 and 
95'' is being deleted because those parts are not applicable to SGI.
    Section 76.115 Special nuclear material of moderate strategic 
significance--Category II.
    In paragraph (d), a sentence is being added to the end of this 
paragraph to indicate that information designated by the U.S. 
Department of Energy (DOE) as Unclassified Controlled Nuclear 
Information must be protected in accordance with DOE requirements. This 
requirement, also stated in Sec.  76.113, applies to Sec.  76.115.
    Section 76.117 Special nuclear material of low strategic 
significance--Category III.
    In paragraph (c), a sentence is being added to the end of this 
paragraph to indicate that information designated by the U.S. 
Department of Energy (DOE) as Unclassified Controlled Nuclear 
Information must be protected in accordance with DOE requirements. This 
requirement, also stated in Sec. Sec.  76.113 and 76.115, applies to 
Sec.  76.117.

V. Criminal Penalties

    For the purpose of Section 223 of the Atomic Energy Act of 1954, as 
amended (AEA), the Commission is amending 10 CFR parts 2, 30, 40, 50, 
52, 60, 63, 70, 71, 72, 73, 76, and150 under one or more of Sections 
147, 161b., 161i., or 161o. of the AEA. Willful violations of the rule 
will be subject to criminal enforcement.

VI. Agreement State Issues

    The rule changes to parts 2, 30, 40, 50, 52, 60, 63, 70, 71, 72, 
73, 76, and 150 are considered to be Category NRC compatibility and 
therefore are areas of exclusive NRC authority. The Agreement State of 
Utah presented four comments on the following issues related to 
procedures applicable to SGI in adjudicatory contexts: (1) Whether 
intervenors should be required to make designation determinations for 
the SGI they create; (2) the extent to which the NRC staff should make 
SGI decontrol determinations for intervenors; (3) how SGI procedures 
relate to judicial appeals of NRC decisions; and (4) how ``need to 
know'' determinations in an adjudicatory context should be made and 
reviewed. The Agreement State of Nevada submitted four comments, one 
dealing with a Sec.  73.59 exemption from

[[Page 63565]]

the background check requirement, and the other three dealing with 
adjudicatory review of adverse trustworthiness and reliability 
determinations by the NRC Office of Administration. These eight 
comments, and the responses to them, can be found in the part 2 portion 
of the comments in Section IV.A.2 of this document. Each of the 
comments identifies that an agreement state was the submitter.

VII. Voluntary Consensus Standards

    The National Technology Transfer 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 the 
use of such a standard is inconsistent with applicable law or otherwise 
impractical. In this rule, the NRC is using the following Government-
unique standard: National Institute of Standards and Technology, 
Federal Information Processing Standard [FIPS] PUB-140-2, ``Security 
Requirements for Cryptographic Modules,'' May 25, 2001. The NRC has 
determined that using this Government-unique standard is justified 
because no voluntary consensus standard has been identified that could 
be used instead. In addition, this Government-unique standard was 
developed using the same procedures used to create a voluntary 
consensus standard.

VIII. Finding of No Significant Impact: Environmental Assessment

    The Commission has determined under the National Environmental 
Policy Act of 1969, as amended, and the Commission's regulations in 
subpart A of 10 CFR part 51, that this rule is not a major Federal 
action significantly affecting the quality of the human environment 
and, therefore, an environmental impact statement is not required. The 
basis for this determination is that the rule relates to the 
designation, handling and protection of SGI and the collection of 
information on which a determination to grant individuals access to 
this information is based. The determination of this environmental 
assessment is that there will be no significant environmental impacts 
from this action.
    The NRC has sent a copy of the environmental assessment and the 
revised proposed rule to every State Liaison Officer and requested 
comments on the environmental assessment. No State provided comments on 
the draft environmental assessment.

IX. Paperwork Reduction Act Statement

    This final rule contains new or amended information collection 
requirements that are subject to the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). These requirements were approved by the 
Office of Management and Budget, approval number 3150-0017; 0020; 0011; 
0151; 0127; 0199; 0009; 0008; 0132; 0002; and 0032.
    The burden to the public for these information collections is 
estimated to average 10 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
information collection. Send comments on any aspect of these 
information collections, including suggestions for reducing the burden, 
to the Records and FOIA/Privacy Services Branch (T-5 F52), U.S. Nuclear 
Regulatory Commission, Washington, DC 20555-0001, or by Internet 
electronic mail to [email protected]; and to the Desk Officer, 
Office of Information and Regulatory Affairs, NEOB-10202, (3150-0017; 
0020; 0011; 0151; 0127; 0199; 0009; 0008; 0132; 0002; and 0032), Office 
of Management and Budget, Washington, DC 20503.

Public Protection Notification

    The NRC may not conduct or sponsor, and a person is not required to 
respond to, a request for information or an information collection 
requirement unless the requesting document displays a currently valid 
OMB control number.

X. Regulatory Analysis

    The Commission has prepared a regulatory analysis on this final 
rule. The analysis examines the costs and benefits of the alternatives 
considered by the Commission. The regulatory analysis is available for 
inspection in the NRC Public Document Room, 11555 Rockville Pike, 
Rockville, MD 20852.
    The regulatory analysis is also available electronically via the 
Federal eRulemaking portal http://www.Regulations.gov, Docket number 
NRC-2005-0001. Single copies of the analysis may be obtained from the 
Office of the General Counsel, U.S. Nuclear Regulatory Commission, at 
301-415-8350 or by e-mail at [email protected].

XI. Regulatory Flexibility Certification

    In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C. 
605(b), the NRC has determined that this rule, if adopted, will not 
have a significant economic impact upon a substantial number of small 
entities. The NRC estimates that the regulation will affect 
approximately 152 NRC licensees, 87 Agreement State licensees, 200 
state contacts, and 29 applicants for licenses. The NRC estimates that 
small businesses as defined by 10 CFR 2.810 comprise less than 1 
percent of the total number of NRC licensees and state contacts 
affected by this regulation. The NRC does not have information on the 
small business status of the Agreement State licensees or applicants 
for NRC and Agreement State licenses affected by this regulation. 
Therefore, in its February 11, 2005, and October 31, 2006, Federal 
Register notices and the regulatory analyses for the proposed rules, 
the NRC requested public comments on the impact of the proposed rules 
on small businesses. No comments were received from entities 
identifying themselves as ``small businesses'' meeting the criteria in 
10 CFR 2.810, ``NRC size standards.'' In the absence of information on 
the small business status of the Agreement State licensees and 
applicants for NRC and Agreement State licenses affected by this 
regulation, and based on the small proportion of NRC licensees that 
qualify as small entities, the NRC estimates that the number of small 
entities among these licensees is also less than 1 percent. For a small 
entity, the implementation burden imposed by the regulation is 
estimated to be 41.8 hours, and the annual burden is estimated to be 
3.5 hours.
    The potential benefits of preventing disclosure of SGI by 
unauthorized persons significantly outweigh the economic impact on 
small licensees.

XII. Backfit Analysis

    The Commission has concluded, on the basis of the documented 
evaluation in the regulatory analysis, that the majority of the 
requirements in the rule are not backfits as defined in 10 CFR 
50.109(a)(4)(ii), 70.76(a)(4)(iii), 72.62, and 76.76(a)(4)(ii). The 
Commission has also concluded that the requirements in the rule that 
constitute backfits are necessary to ensure that the facilities and 
materials described in the rule provide adequate protection to the 
public health and safety and are in accord with the common defense and 
security, as applicable. Therefore, a backfit analysis is not required 
and the cost-benefit standards of 10 CFR 50.109(a)(3), 70.76, 72.62, 
and 76.76, do not apply. The documented evaluation in the regulatory 
analysis includes a statement of the objectives of and the reasons for 
the backfits that will be

[[Page 63566]]

required by the rule and sets forth the Commission's conclusion that 
these backfits are not subject to the cost-benefit standards of 10 CFR 
50.109(a)(3), 70.76, 72.62, and 76.76.

XIII. Congressional Review Act

    In accordance with the Congressional Review Act, the NRC has 
determined that this action is not a major rule and has verified this 
determination with the Office of Information and Regulatory Affairs of 
OMB.

List of Subjects

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.

10 CFR Part 30

    Byproduct material, Criminal penalties, Government contracts, 
Intergovernmental relations, Isotopes, Nuclear materials, Radiation 
protection, Reporting and recordkeeping requirements.

10 CFR Part 40

    Criminal penalties, Government contracts, Hazardous materials 
transportation, Nuclear materials, Reporting and recordkeeping 
requirements, Source material, Uranium.

10 CFR Part 50

    Antitrust, Classified information, Criminal penalties, Fire 
protection, Intergovernmental relations, Nuclear power plants and 
reactors, Radiation protection, Reactor siting criteria, Reporting and 
recordkeeping requirements.

10 CFR Part 52

    Administrative practice and procedure, Backfitting, Combined 
license, Early site permit, Emergency planning, Fees, Inspection, 
Limited work authorization, Nuclear power plants and reactors, 
Probabilistic risk assessment, Prototype, Reactor siting criteria, 
Redress of site, Reporting and recordkeeping requirements, Standard 
design, Standard design certification.

10 CFR Part 60

    Criminal penalties, High-level waste, Nuclear materials, Nuclear 
power plants and reactors, Reporting and recordkeeping requirements, 
Waste treatment and disposal.

10 CFR Part 63

    Criminal penalties, High-level waste, Nuclear power plants and 
reactors, Reporting and recordkeeping requirements, Waste treatment and 
disposal.

10 CFR Part 70

    Criminal penalties, Hazardous materials transportation, Material 
control and accounting, Nuclear materials, Packaging and containers, 
Radiation protection, Reporting and recordkeeping requirements, 
Scientific equipment, Security measures, Special nuclear material.

10 CFR Part 71

    Criminal penalties, Hazardous materials transportation, Nuclear 
materials, Packaging and containers, Reporting and recordkeeping 
requirements.

10 CFR Part 72

    Administrative practice and procedure, Criminal penalties, Manpower 
training programs, Nuclear materials, Occupational safety and health, 
Penalties, Radiation protection, Reporting and recordkeeping 
requirements, Security measures, Spent fuel, Whistleblowing.

10 CFR Part 73

    Criminal penalties, Export, Hazardous materials transportation, 
Import, Nuclear materials, Nuclear power plants and reactors, Reporting 
and recordkeeping requirements, Security measures.

10 CFR Part 76

    Certification, Criminal penalties, Radiation protection, Reporting 
and record keeping requirements, Security measures, Special nuclear 
material, Uranium enrichment by gaseous diffusion.

10 CFR Part 150

    Criminal penalties, Hazardous materials transportation, 
Intergovernmental relations, Nuclear materials, Reporting and 
recordkeeping requirements, Security measures, Source material, Special 
nuclear material.

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 Parts 2, 30, 40, 50, 52, 60, 63, 70, 71, 
72, 73, 76 and 150.

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

0
1. The authority citation for part 2 is revised 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); sec. 147, as amended, 94 Stat. 788 (42 U.S.C. 2167); sec. 
149, as amended, 100 Stat. 853 (42 U.S.C. 2169); 5 U.S.C. 552; sec. 
1704, 112 Stat. 2750 (44 U.S.C. 3504 note).
    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. 10143(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, 2.321 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. 161 b, 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). Subpart C also issued 
under sec. 189, 68 Stat. 955 (42 U.S.C. 2239). Section 2.301 also 
issued under 5 U.S.C. 554. Sections 2.343, 2.346, 2.712, also issued 
under 5 U.S.C. 557. Section 2.340 also issued under secs. 135, 141, 
Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). 
Section 2.390 also issued under sec. 103, 68 Stat. 936, as amended 
(42 U.S.C. 2133) and 5 U.S.C. 552. 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 2.800 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). Subpart N also issued under sec. 189, 68 Stat. 955 (42 
U.S.C. 2239). Appendix A also issued under sec. 6, Pub. L. 91-560, 
84 Stat. 1472 (42 U.S.C. 2135).


0
2. In Sec.  2.4, a new definition for Safeguards Information is added 
in alphabetical order to read as follows:


Sec.  2.4  Definitions.

* * * * *
    Safeguards Information means information not classified as National 
Security Information or Restricted Data

[[Page 63567]]

which specifically identifies a licensee's or applicant's detailed 
control and accounting procedures for the physical protection of 
special nuclear material in quantities determined by the Commission 
through order or regulation to be significant to the public health and 
safety or the common defense and security; detailed security measures 
(including security plans, procedures, and equipment) for the physical 
protection of source, byproduct, or special nuclear material in 
quantities determined by the Commission through order or regulation to 
be significant to the public health and safety or the common defense 
and security; security measures for the physical protection and 
location of certain plant equipment vital to the safety of production 
or utilization facilities; and any other information within the scope 
of Section 147 of the Atomic Energy Act of 1954, as amended, the 
unauthorized disclosure of which, as determined by the Commission 
through order or regulation, could reasonably be expected to have a 
significant adverse effect on the health and safety of the public or 
the common defense and security by significantly increasing the 
likelihood of sabotage or theft or diversion of source, byproduct, or 
special nuclear material.
* * * * *

0
3. In Sec.  2.336, paragraph (f) is redesignated as paragraph (g), and 
a new paragraph (f) is added to read as follows:


Sec.  2.336  General discovery.

* * * * *
    (f)(1) In the event of a dispute over disclosure of documents and 
records including Safeguards Information referred to in Sections 147 
and 181 of the Atomic Energy Act of 1954, as amended, the presiding 
officer may issue an order requiring disclosure if--
    (i) The presiding officer finds that the individual seeking access 
to Safeguards Information to participate in an NRC adjudication has the 
requisite ''need to know'', as defined in 10 CFR 73.2;
    (ii) The individual has undergone an FBI criminal history records 
check, unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as 
applicable, by submitting fingerprints to the NRC Office of 
Administration, Security Processing Unit, Mail Stop T-6E46, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, and otherwise 
following the procedures in 10 CFR 73.57(d) for submitting and 
processing fingerprints. However, before a final adverse determination 
by the NRC Office of Administration on an individual's criminal history 
records check is made, the individual shall be afforded the protections 
provided by 10 CFR 73.57; and
    (iii) The NRC Office of Administration has found, based upon a 
background check, that the individual is trustworthy and reliable, 
unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as applicable. 
In addition to the protections provided by 10 CFR 73.57 for adverse 
determinations based on criminal history records checks, the Office of 
Administration must take the following actions before making a final 
adverse determination on an individual's background check for 
trustworthiness and reliability. The Office of Administration will:
    (A) For the purpose of assuring correct and complete information, 
provide to the individual any records, in addition to those required to 
be provided under 10 CFR 73.57(e)(1), that were considered in the 
trustworthiness and reliability determination;
    (B) Resolve any challenge by the individual to the completeness or 
accuracy of the records described in Sec.  2.336(f)(1)(iii)(A). The 
individual may make this challenge by submitting information and/or an 
explanation to the Office of Administration. The challenge must be 
submitted within 10 days of the distribution of the records described 
in Sec.  2.336(f)(1)(iii)(A), and the Office of Administration must 
promptly resolve any challenge.
    (iv) Individuals seeking access to Safeguards Information to 
participate in an NRC adjudication for whom the NRC Office of 
Administration has made a final adverse determination on 
trustworthiness and reliability may submit a request to the Chief 
Administrative Judge for review of the adverse determination. Upon 
receiving such a request, the Chief Administrative Judge shall 
designate an officer other than the presiding officer of the proceeding 
to review the adverse determination. For purposes of review, the 
adverse determination must be in writing and set forth the grounds for 
the determination. The request for review shall be served on the NRC 
staff and may include additional information for review by the 
designated officer. The request must be filed within 15 days after 
receipt of the adverse determination by the person against whom the 
adverse determination has been made. Within 10 days of receipt of the 
request for review and any additional information, the NRC staff will 
file a response indicating whether the request and additional 
information has caused the NRC Office of Administration to reverse its 
adverse determination. The designated officer may reverse the Office of 
Administration's final adverse determination only if the officer finds, 
based on all the information submitted, that the adverse determination 
constitutes an abuse of discretion. The designated officer's decision 
must be rendered within 15 days after receipt of the staff filing 
indicating that the request for review and additional information has 
not changed the NRC Office of Administration's adverse determination.
    (2) The presiding officer may include in an order any protective 
terms and conditions (including affidavits of nondisclosure) as may be 
necessary and appropriate to prevent the unauthorized disclosure of 
Safeguards Information.
    (3) When Safeguards Information protected from unauthorized 
disclosure under Section 147 of the Atomic Energy Act of 1954, as 
amended, is received and possessed by anyone other than the NRC staff, 
it must also be protected according to the requirements of Sec.  73.21 
and the requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.
    (4) The presiding officer may also prescribe additional procedures 
to effectively safeguard and prevent disclosure of Safeguards 
Information to unauthorized persons with minimum impairment of the 
procedural rights which would be available if Safeguards Information 
were not involved.
    (5) In addition to any other sanction that may be imposed by the 
presiding officer for violation of an order issued pursuant to this 
paragraph, violation of a provision for the protection of Safeguards 
Information from unauthorized disclosure that is contained in an order 
may be subject to a civil penalty imposed under Sec.  2.205.
    (6) For the purpose of imposing the criminal penalties contained in 
Section 223 of the Atomic Energy Act of 1954, as amended, a provision 
for the protection of Safeguards Information from unauthorized 
disclosure that is contained in an order issued pursuant to this 
paragraph is considered to be issued under Section 161b of the Atomic 
Energy Act of 1954, as amended.
    (7) If a presiding officer has yet to be appointed, the authority 
to take the actions described in paragraphs (f)(1) to (f)(6) of this 
section resides in the officer with jurisdiction under Sec.  2.318(a).
* * * * *

0
4. In Sec.  2.704, paragraph (f) is added to read as follows:


Sec.  2.704   Discovery--required disclosures.

* * * * *
    (f) Disclosure under this section of documents and records 
including

[[Page 63568]]

Safeguards Information referred to in Sections 147 and 181 of the 
Atomic Energy Act of 1954, as amended, will be according to the 
provisions in Sec.  2.705(c)(3) through (c)(8).

0
5. In Sec.  2.705, paragraphs (c)(3) through (8) are added to read as 
follows:


Sec.  2.705  Discovery-additional methods.

* * * * *
    (c) * * *
    (3) In the case of documents and records including Safeguards 
Information referred to in Sections 147 and 181 of the Atomic Energy 
Act of 1954, as amended, the presiding officer may issue an order 
requiring disclosure if--
    (i) The presiding officer finds that the individual seeking access 
to Safeguards Information in order to participate in an NRC proceeding 
has the requisite ``need to know,'' as defined in 10 CFR 73.2;
    (ii) The individual has undergone an FBI criminal history records 
check, unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as 
applicable, by submitting fingerprints to the NRC Office of 
Administration, Security Processing Unit, Mail Stop T-6E46, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, and otherwise 
following the procedures in 10 CFR 73.57(d) for submitting and 
processing fingerprints. However, before a final adverse determination 
by the NRC Office of Administration on an individual's criminal history 
records check is made, the individual shall be afforded the protections 
provided by 10 CFR 73.57; and
    (iii) The NRC Office of Administration has found, based upon a 
background check, that the individual is trustworthy and reliable, 
unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as applicable. 
In addition to the protections provided by 10 CFR 73.57 for adverse 
determinations based on criminal history records checks, the Office of 
Administration must take the following actions before making a final 
adverse determination on an individual's background check for 
trustworthiness and reliability. The Office of Administration will:
    (A) For the purpose of assuring correct and complete information, 
provide to the individual any records, in addition to those required to 
be provided under 10 CFR 73.57(e)(1), that were considered in the 
trustworthiness and reliability determination;
    (B) Resolve any challenge by the individual to the completeness or 
accuracy of the records described in Sec.  2.705(c)(3)(iii)(A). The 
individual may make this challenge by submitting information and/or an 
explanation to the Office of Administration. The challenge must be 
submitted within 10 days of the distribution of the records described 
in Sec.  2.705(c)(3)(iii)(A), and the Office of Administration must 
promptly resolve any challenge.
    (iv) Individuals seeking access to Safeguards Information to 
participate in an NRC adjudication for whom the NRC Office of 
Administration has made a final adverse determination on 
trustworthiness and reliability may submit a request to the Chief 
Administrative Judge for review of the adverse determination. Upon 
receiving such a request, the Chief Administrative Judge shall 
designate an officer other than the presiding officer of the proceeding 
to review the adverse determination. For purposes of review, the 
adverse determination must be in writing and set forth the grounds for 
the determination. The request for review shall be served on the NRC 
staff and may include additional information for review by the 
designated officer. The request must be filed within 15 days after 
receipt of the adverse determination by the person against whom the 
adverse determination has been made. Within 10 days of receipt of the 
request for review and any additional information, the NRC staff will 
file a response indicating whether the request and additional 
information has caused the NRC Office of Administration to reverse its 
adverse determination. The designated officer may reverse the Office of 
Administration's final adverse determination only if the officer finds, 
based on all the information submitted, that the adverse determination 
constitutes an abuse of discretion. The designated officer's decision 
must be rendered within 15 days after receipt of the staff filing 
indicating that the request for review and additional information has 
not changed the NRC Office of Administration's adverse determination.
    (4) The presiding officer may include in an order any protective 
terms and conditions (including affidavits of nondisclosure) as may be 
necessary and appropriate to prevent the unauthorized disclosure of 
Safeguards Information.
    (5) When Safeguards Information protected from unauthorized 
disclosure under Section 147 of the Atomic Energy Act of 1954, as 
amended, is received and possessed by anyone other than the NRC staff, 
it must also be protected according to the requirements of Sec.  73.21 
and the requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.
    (6) The presiding officer may also prescribe additional procedures 
to effectively safeguard and prevent disclosure of Safeguards 
Information to unauthorized persons with minimum impairment of the 
procedural rights which would be available if Safeguards Information 
were not involved.
    (7) In addition to any other sanction that may be imposed by the 
presiding officer for violation of an order issued pursuant to this 
paragraph, violation of a provision for the protection of Safeguards 
Information from unauthorized disclosure that is contained in an order 
may be subject to a civil penalty imposed under Sec.  2.205.
    (8) For the purpose of imposing the criminal penalties contained in 
Section 223 of the Atomic Energy Act of 1954, as amended, a provision 
for the protection of Safeguards Information from unauthorized 
disclosure that is contained in an order issued pursuant to this 
paragraph is considered to be issued under Section 161b of the Atomic 
Energy Act of 1954, as amended.
* * * * *

0
6. In Sec.  2.709, paragraph (f) is revised to read as follows:


Sec.  2.709  Discovery against NRC staff.

* * * * *
    (f)(1) In the case of requested documents and records including 
Safeguards Information referred to in Sections 147 and 181 of the 
Atomic Energy Act of 1954, as amended exempt from disclosure under 
Sec.  2.390, the presiding officer may issue an order requiring 
disclosure to the Executive Director for Operations or a delegee of the 
Executive Director for Operations, to produce the documents or records 
(or any other order issued ordering production of the document or 
records) if--
    (i) The presiding officer finds that the individual seeking access 
to Safeguards Information to participate in an NRC adjudication has the 
requisite ``need to know,'' as defined in 10 CFR 73.2;
    (ii) The individual has undergone an FBI criminal history records 
check, unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as 
applicable, by submitting fingerprints to the NRC Office of 
Administration, Security Processing Unit, Mail Stop T-6E46, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, and otherwise 
following the procedures in 10 CFR 73.57(d) for submitting and 
processing fingerprints. However, before a final adverse determination 
by the NRC Office of Administration on an individual's criminal history 
records check is made, the individual shall be afforded the protections 
provided by 10 CFR 73.57; and
    (iii) The NRC Office of Administration has found, based upon a 
background

[[Page 63569]]

check, that the individual is trustworthy and reliable, unless exempt 
under 10 CFR 73.22(b)(3) or 73.23(b)(3), as applicable. In addition to 
the protections provided by 10 CFR 73.57 for adverse determinations 
based on criminal history records checks, the Office of Administration 
must take the following actions before making a final adverse 
determination on an individual's background check for trustworthiness 
and reliability. The Office of Administration will:
    (A) For the purpose of assuring correct and complete information, 
provide to the individual any records, in addition to those required to 
be provided under 10 CFR 73.57(e)(1), that were considered in the 
trustworthiness and reliability determination;
    (B) Resolve any challenge by the individual to the completeness or 
accuracy of the records described in Sec.  2.709(f)(1)(iii)(A). The 
individual may make this challenge by submitting information and/or an 
explanation to the Office of Administration. The challenge must be 
submitted within 10 days of the distribution of the records described 
in Sec.  2.709(f)(1)(iii)(A), and the Office of Administration must 
promptly resolve any challenge.
    (iv) Individuals seeking access to Safeguards Information to 
participate in an NRC adjudication for whom the NRC Office of 
Administration has made a final adverse determination on 
trustworthiness and reliability may submit a request to the Chief 
Administrative Judge for review of the adverse determination. Upon 
receiving such a request, the Chief Administrative Judge shall 
designate an officer other than the presiding officer of the proceeding 
to review the adverse determination. For purposes of review, the 
adverse determination must be in writing and set forth the grounds for 
the determination. The request for review shall be served on the NRC 
staff and may include additional information for review by the 
designated officer. The request must be filed within 15 days after 
receipt of the adverse determination by the person against whom the 
adverse determination has been made. Within 10 days of receipt of the 
request for review and any additional information, the NRC staff will 
file a response indicating whether the request and additional 
information has caused the NRC Office of Administration to reverse its 
adverse determination. The designated officer may reverse the Office of 
Administration's final adverse determination only if the officer finds, 
based on all the information submitted, that the adverse determination 
constitutes an abuse of discretion. The designated officer's decision 
must be rendered within 15 days after receipt of the staff filing 
indicating that the request for review and additional information has 
not changed the NRC Office of Administration's adverse determination.
    (2) The presiding officer may include in an order any protective 
terms and conditions (including affidavits of nondisclosure) as may be 
necessary and appropriate to prevent the unauthorized disclosure of 
Safeguards Information.
    (3) When Safeguards Information protected from disclosure under 
Section 147 of the Atomic Energy Act of 1954, as amended, is received 
and possessed by anyone other than the NRC staff, it must also be 
protected according to the requirements of Sec.  73.21 and the 
requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.
    (4) The presiding officer may also prescribe additional procedures 
to effectively safeguard and prevent disclosure of Safeguards 
Information to unauthorized persons with minimum impairment of the 
procedural rights which would be available if Safeguards Information 
were not involved.
    (5) In addition to any other sanction that may be imposed by the 
presiding officer for violation of an order issued pursuant to this 
paragraph, violation of a provision for the protection of Safeguards 
Information from unauthorized disclosure that is contained in an order 
may be subject to a civil penalty imposed under Sec.  2.205.
    (6) For the purpose of imposing the criminal penalties contained in 
Section 223 of the Atomic Energy Act of 1954, as amended, a provision 
for the protection of Safeguards Information from unauthorized 
disclosure that is contained in an order issued pursuant to this 
paragraph is considered to be issued under Section 161b of the Atomic 
Energy Act of 1954, as amended.
* * * * *

0
7. In Sec.  2.1003, paragraph (a)(4)(iii) is revised to read as 
follows:


Sec.  2.1003  Availability of material.

    (a) * * *
    (4) * * *
    (iii) Which constitutes Safeguards Information under Sec.  73.21 
and the requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.
* * * * *

0
8. In Sec.  2.1010, paragraph (b)(6) is revised to read as follows:


Sec.  2.1010  Pre-License application presiding officer.

* * * * *
    (b) * * *
    (6) Whether the material should be disclosed under a protective 
order containing such protective terms and conditions (including 
affidavits of nondisclosure) as may be necessary and appropriate to 
limit the disclosure to potential parties, interested governmental 
participants, and parties in the proceeding, or to their qualified 
witnesses and counsel.
    (i) The Pre-License Application Presiding Officer may issue an 
order requiring disclosure of Safeguards Information if--
    (A) The Pre-License Application Presiding Officer finds that the 
individual seeking access to Safeguards Information in order to 
participate in an NRC adjudication has the requisite ``need to know,'' 
as defined in 10 CFR 73.2;
    (B) The individual has undergone an FBI criminal history records 
check, unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as 
applicable, by submitting fingerprints to the NRC Office of 
Administration, Security Processing Unit, Mail Stop T-6E46, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555-0001, and otherwise 
following the procedures in 10 CFR 73.57(d) for submitting and 
processing fingerprints. However, before a final adverse determination 
by the NRC Office of Administration on an individual's criminal history 
records check is made, the individual shall be afforded the protections 
provided by 10 CFR 73.57; and
    (C) The NRC Office of Administration has found, based upon a 
background check, that the individual is trustworthy and reliable, 
unless exempt under 10 CFR 73.22(b)(3) or 73.23(b)(3), as applicable. 
In addition to the protections provided by 10 CFR 73.57 for adverse 
determinations based on criminal history records checks, the Office of 
Administration must take the following actions before making a final 
adverse determination on an individual's background check for 
trustworthiness and reliability. The Office of Administration will:
    (1) For the purpose of assuring correct and complete information, 
provide to the individual any records, in addition to those required to 
be provided under 10 CFR 73.57(e)(1), that were considered in the 
trustworthiness and reliability determination;
    (2) Resolve any challenge by the individual to the completeness or 
accuracy of the records described in Sec.  2.1010(b)(6)(i)(C)(1). The 
individual may make this challenge by submitting information and/or an 
explanation to the Office of Administration. The

[[Page 63570]]

challenge must be submitted within 10 days of the distribution of the 
records described in Sec.  2.1010(b)(6)(i)(C)(1), and the Office of 
Administration must promptly resolve any challenge.
    (D) Individuals seeking access to Safeguards Information to 
participate in an NRC adjudication for whom the NRC Office of 
Administration has made a final adverse determination on 
trustworthiness and reliability may submit a request to the Chief 
Administrative Judge for review of the adverse determination. Upon 
receiving such a request, the Chief Administrative Judge shall 
designate an officer other than the Pre-License Application Presiding 
Officer to review the adverse determination. For purposes of review, 
the adverse determination must be in writing and set forth the grounds 
for the determination. The request for review shall be served on the 
NRC staff and may include additional information for review by the 
designated officer. The request must be filed within 15 days after 
receipt of the adverse determination by the person against whom the 
adverse determination has been made. Within 10 days of receipt of the 
request for review and any additional information, the NRC staff will 
file a response indicating whether the request and additional 
information has caused the NRC Office of Administration to reverse its 
adverse determination. The designated officer may reverse the Office of 
Administration's final adverse determination only if the officer finds, 
based on all the information submitted, that the adverse determination 
constitutes an abuse of discretion. The designated officer's decision 
must be rendered within 15 days after receipt of the staff filing 
indicating that the request for review and additional information has 
not changed the NRC Office of Administration's adverse determination.
    (ii) The Pre-License Application Presiding Officer may include in 
an order any protective terms and conditions (including affidavits of 
nondisclosure) as may be necessary and appropriate to prevent the 
unauthorized disclosure of Safeguards Information.
    (iii) When Safeguards Information, protected from disclosure under 
Section 147 of the Atomic Energy Act of 1954, as amended, is received 
and possessed by a potential party, interested government participant, 
or party, other than the NRC staff, it shall also be protected 
according to the requirements of Sec.  73.21 and the requirements of 
Sec. Sec.  73.22 or 73.23 of this chapter, as applicable.
    (iv) The Pre-License Application Presiding Officer may also 
prescribe such additional procedures as will effectively safeguard and 
prevent disclosure of Safeguards Information to unauthorized persons 
with minimum impairment of the procedural rights which would be 
available if Safeguards Information were not involved.
    (v) In addition to any other sanction that may be imposed by the 
Pre-License Application Presiding Officer for violation of a provision 
for the protection of Safeguards Information from unauthorized 
disclosure that is contained in an order, the entity in violation may 
be subject to a civil penalty imposed pursuant to Sec.  2.205.
    (vi) For the purpose of imposing the criminal penalties contained 
in Section 223 of the Atomic Energy Act of 1954, as amended, a 
provision for the protection of Safeguards Information from 
unauthorized disclosure that is contained in an order issued pursuant 
to this paragraph is considered to be issued under Section 161b of the 
Atomic Energy Act of 1954, as amended.
* * * * *

0
9. In Sec.  2.1018, paragraph (h) is added to read as follows:


Sec.  2.1018  Discovery.

* * * * *
    (h) Discovery under this section of documentary material including 
Safeguards Information referred to in Sections 147 and 181 of the 
Atomic Energy Act of 1954, as amended, will be according to the 
provisions in Sec.  2.1010(b)(6)(i) through (b)(6)(vi).

PART 30--RULES OF GENERAL APPLICABILITY TO DOMESTIC LICENSING OF 
BYPRODUCT MATERIAL

0
10. The authority citation for part 30 is revised to read as follows:

    Authority: Secs. 81, 82, 161, 182, 183, 186, 68 Stat. 935, 948, 
953, 954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 
U.S.C. 2111, 2112, 2201, 2232, 2233, 2236, 2282); secs. 201, as 
amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 
5841, 5842, 5846); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); 
Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 549 (2005). 
Section 30.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 as amended by Pub. L. 102-486, sec. 2902, 106 Stat. 3123, (42 
U.S.C. 5851). Section 30.34(b) also issued under sec. 184, 68 Stat. 
954, as amended (42 U.S.C. 2234). Section 30.61 also issued under 
sec. 187, 68 Stat. 955 (42 U.S.C. 2237).


0
11. In Sec.  30.4, a new definition ``Quantities of Concern'' is added 
in alphabetical order to read as follows:


Sec.  30.4  Definitions.

* * * * *
    Quantities of Concern means the quantities of the radionuclides 
meeting or exceeding the threshold limits set forth in Table I-1 of 
Appendix I of part 73 of this chapter.
* * * * *

0
12. In Sec.  30.32, paragraph (k) is added to read as follows:


Sec.  30.32  Application for specific licenses.

* * * * *
    (k) Each applicant for a license for byproduct material shall 
protect Safeguards Information against unauthorized disclosure in 
accordance with the requirements in Sec. Sec.  73.21, 73.22 and/or 
73.23 of this chapter, as applicable.

0
13. In Sec.  30.34, paragraph (k) is added to read as follows:


Sec.  30.34  Terms and conditions of licenses.

* * * * *
    (k) Each licensee shall ensure that Safeguards Information is 
protected against unauthorized disclosure in accordance with the 
requirements in Sec. Sec.  73.21 and 73.23 of this chapter, as 
applicable.

PART 40--DOMESTIC LICENSING OF SOURCE MATERIAL

0
14. The authority citation for part 40 is revised to read as follows:

    Authority: Secs. 62, 63, 64, 65, 81, 161, 182, 183, 186, 68 
Stat. 932, 933, 935, 948, 953, 954, 955, as amended, secs. 11e(2), 
83, 84, Pub. L. 95-604, 92 Stat. 3033, as amended, 3039, sec. 234, 
83 Stat. 444, as amended (42 U.S.C. 2014(e)(2), 2092, 2093, 2094, 
2095, 2111, 2113, 2114, 2201, 2232, 2233, 2236, 2282); sec. 274, 
Pub. L. 86-373, 73 Stat. 688 (42 U.S.C. 2021); secs. 201, as 
amended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 
5841, 5842, 5846); sec. 275, 92 Stat. 3021, as amended by Pub. L. 
97-415, 96 Stat. 2067 (42 U.S.C. 2022); sec. 193, 104 Stat. 2835, as 
amended by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 
2243); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy 
Policy Act of 2005, Pub. L. No. 109-59, 119 Stat. 594 (2005). 
Section 40.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 (42 U.S.C. 5851). Section 40.31(g) also issued under sec. 122, 
68 Stat. 939 (42 U.S.C. 2152). Section 40.46 also issued under sec. 
184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 40.71 also 
issued under sec. 187, 68 Stat. 955 (42 U.S.C. 2237).


0
15. In Sec.  40.31, paragraph (m) is added to read as follows:


Sec.  40.31   Application for specific licenses.

* * * * *
    (m) Each applicant for a license for the possession of source 
material at a facility for the production or conversion

[[Page 63571]]

of uranium hexafluoride shall protect Safeguards Information against 
unauthorized disclosure in accordance with the requirements in 
Sec. Sec.  73.21 and 73.22 of this chapter, as applicable. Each 
applicant for a license for source material shall protect Safeguards 
Information against unauthorized disclosure in accordance with the 
requirements in Sec.  73.21 and the requirements of Sec.  73.22 or 
Sec.  73.23 of this chapter, as applicable.

0
16. In Sec.  40.41, paragraph (h) is added to read as follows:


Sec.  40.41   Terms and conditions of licenses.

* * * * *
    (h) Each licensee shall ensure that Safeguards Information is 
protected against unauthorized disclosure in accordance with the 
requirements in Sec.  73.21 and the requirements of Sec.  73.22 or 
Sec.  73.23 of this chapter, as applicable.

PART 50--DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION 
FACILITIES

0
17. The authority citation for part 50 is revised to read as follows:

    Authority: Secs. 102, 103, 104, 105, 161, 182, 183, 186, 189, 68 
Stat. 936, 937, 938, 948, 953, 954, 955, 956, as amended, sec. 234, 
83 Stat. 444, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 
2232, 2233, 2236, 2239, 2282); secs. 201, as amended, 202, 206, 88 
Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); 
sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act 
of 2005, Pub. L. No. 109-58, 119 Stat. 594 (2005). Section 50.7 also 
issued under Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 
5841). Section 50.10 also issued under secs. 101, 185, 68 Stat. 955, 
as amended (42 U.S.C. 2131, 2235); sec. 102, Pub. L. 91-190, 83 
Stat. 853 (42 U.S.C. 4332). Sections 50.13, 50.54(dd), and 50.103 
also issued under sec. 108, 68 Stat. 939, as amended (42 U.S.C. 
2138).
    Sections 50.23, 50.35, 50.55, and 50.56 also issued under sec. 
185, 68 Stat. 955 (42 U.S.C. 2235). Sections 50.33a, 50.55a and 
Appendix Q also issued under sec. 102, Pub. L. 91-190, 83 Stat. 853 
(42 U.S.C. 4332). Sections 50.34 and 50.54 also issued under sec. 
204, 88 Stat. 1245 (42 U.S.C. 5844). Sections 50.58, 50.91, and 
50.92 also issued under Pub. L. 97-415, 96 Stat. 2073 (42 U.S.C. 
2239). Section 50.78 also issued under sec. 122, 68 Stat. 939 (42 
U.S.C. 2152). Sections 50.80-50.81 also issued under sec. 184, 68 
Stat. 954, as amended (42 U.S.C. 2234). Appendix F also issued under 
sec. 187, 68 Stat. 955 (42 U.S.C. 2237).


0
18. In Sec.  50.34, the section heading and paragraph (e) are revised 
to read as follows:


Sec.  50.34   Contents of applications; technical information.

* * * * *

0
(e) Each applicant for a license to operate a production or utilization 
facility shall protect Safeguards Information against unauthorized 
disclosure in accordance with the requirements in Sec.  73.21 and the 
requirements in Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.
* * * * *

0
19. In Sec.  50.54, paragraph (v) is revised to read as follows:


Sec.  50.54  Conditions of licenses.

* * * * *
    (v) Each licensee subject to the requirements of Part 73 of this 
chapter shall ensure that Safeguards Information is protected against 
unauthorized disclosure in accordance with the requirements in Sec.  
73.21 and the requirements in Sec.  73.22 or Sec.  73.23 of this 
chapter, as applicable.
* * * * *

PART 52-LICENSES, CERTIFICATIONS, AND APPROVALS FOR NUCLEAR POWER 
PLANTS

0
20. The authority citation for part 52 is revised to read as follows:

    Authority: Sec. 161, 68 Stat. 948, as amended, sec. 274, 73 
Stat. 688 (42 U.S.C. 2201, 2021); sec. 201, 88 Stat. 1242, as 
amended (42 U.S.C. 5841); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 
note); Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 
(2005). Sections 150.3, 150.15, 150.15a, 150.31, 150.32 also issued 
under secs. 11e(2), 81, 68 Stat. 923, 935, as amended, secs. 83, 84, 
92 Stat. 3033, 3039 (42 U.S.C. 2014e(2), 2111, 2113, 2114). Section 
150.14 also issued under sec. 53, 68 Stat. 930, as amended (42 
U.S.C. 2073). Section 150.15 also issued under secs. 135, 141, Pub. 
L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 
150.17a also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). 
Section 150.30 also issued under sec. 234, 83 Stat. 444 (42 U.S.C. 
2282).


0
21. In Sec.  52.17, paragraph (d) is added to read as follows:


Sec.  52.17   Contents of applications; technical information.

* * * * *
    (d) Each applicant for an early site permit under this part shall 
protect Safeguards Information against unauthorized disclosure in 
accordance with the requirements in Sec. Sec.  73.21 and 73.22 of this 
chapter, as applicable.


0
22. In Sec.  52.47, paragraph (d) is added to read as follows:


Sec.  52.47   Contents of applications; technical information.

* * * * *
    (d) Each applicant for a standard design certification under this 
part shall protect Safeguards Information against unauthorized 
disclosure in accordance with the requirements in Sec. Sec.  73.21 and 
73.22 of this chapter, as applicable.

0
23. In Sec.  52.79, paragraph (f) is added to read as follows:


Sec.  52.79  Contents of application; technical information in final 
safety analysis report.

* * * * *
    (f) Each applicant for a combined license under this subpart shall 
protect Safeguards Information against unauthorized disclosure in 
accordance with the requirements in Sec. Sec.  73.21 and 73.22 of this 
chapter, as applicable.

PART 60--DISPOSAL OF HIGH-LEVEL RADIOACTIVE WASTES IN GEOLOGIC 
REPOSITORIES

0
24. The authority citation for part 60 is revised to read as follows:

    Authority: Secs. 51, 53, 62, 63, 65, 81, 161, 182, 183, 68 Stat. 
929, 930, 932, 933, 935, 948, 953, 954, as amended (42 U.S.C. 2071, 
2073, 2092, 2093, 2095, 2111, 2201, 2232, 2233); secs. 202, 206, 88 
Stat. 1244, 1246 (42 U.S.C. 5842, 5846); secs. 10 and 14, Pub. L. 
95-601, 92 Stat. 2951 (42 U.S.C. 2021a and 5851); sec. 102, Pub. L. 
91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 114, 121, Pub. L. 97-
425, 96 Stat. 2213g, 2228, as amended (42 U.S.C. 10134, 10141), and 
Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 
1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act of 
2005, Pub. L. No. 109-58, 119 Stat. 594 (2005).


0
25. In Sec.  60.21, paragraph (d) is added to read as follows:


Sec.  60.21  Content of application.

* * * * *
    (d) The applicant for a license to receive and possess source, 
special nuclear, and byproduct material at a geologic repository 
operations area sited, constructed, or operated in accordance with the 
Nuclear Waste Policy Act of 1982 shall protect Safeguards Information 
in accordance with the requirements in Sec.  73.21 and the requirements 
in Sec.  73.22 or Sec.  73.23 of this chapter, as applicable, and shall 
protect classified information in accordance with the requirements of 
parts 25 and 95 of this chapter, as applicable.

0
26. In Sec.  60.42, paragraph (d) is added to read as follows:


Sec.  60.42  Conditions of license.

* * * * *
    (d) The licensee (Department of Energy) shall ensure that 
Safeguards Information is protected against unauthorized disclosure in 
accordance with the requirements in Sec.  73.21 and the requirements in 
Sec.  73.22 or Sec.  73.23 of this chapter, as applicable. The licensee 
(Department of Energy) shall ensure that classified information is 
protected in

[[Page 63572]]

accordance with the requirements of parts 25 and 95 of this chapter, as 
applicable.

PART 63--DISPOSAL OF HIGH-LEVEL RADIOACTIVE WASTES IN A GEOLOGIC 
REPOSITORY AT YUCCA MOUNTAIN, NEVADA

0
27. The authority citation for part 63 is revised to read as follows:

    Authority: Secs. 51, 53, 62, 63, 65, 81, 161, 182, 183, 68 Stat. 
929, 930, 932, 933, 935, 948, 953, 954, as amended (42 U.S.C. 2071, 
2073, 2092, 2093, 2095, 2111, 2201, 2232, 2233); secs. 202, 206, 88 
Stat. 1244, 1246 (42 U.S.C. 5842, 5846); secs. 10 and 14, Pub. L. 
95-601, 92 Stat. 2951 (42 U.S.C. 2021a and 5851); sec. 102, Pub. L. 
91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 114, 121, Pub. L. 97-
425, 96 Stat. 2213g, 2238, as amended (42 U.S.C. 10134, 10141), and 
Pub. L. 102-486, sec. 2902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 
1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act of 
2005, Pub. L. No. 109-58, 119 Stat. 594 (2005).

0
28. In Sec.  63.21, paragraph (d) is added to read as follows:


Sec.  63.21  Content of application.

* * * * *
    (d) The applicant for a license to receive and possess source, 
special nuclear, and byproduct material at a geologic repository at 
Yucca Mountain, Nevada, shall protect Safeguards Information in 
accordance with the requirements in Sec.  73.21, and the requirements 
in Sec.  73.22, or Sec.  73.23 of this chapter, as applicable, and 
shall protect classified information in accordance with the 
requirements of parts 25 and 95 of this chapter, as applicable.

0
29. In Sec.  63.42, paragraph (e) is added to read as follows:


Sec.  63.42   Conditions of license.

* * * * *
    (e) The licensee (Department of Energy) shall ensure that 
Safeguards Information is protected against unauthorized disclosure in 
accordance with the requirements in Sec.  73.21, and the requirements 
in Sec.  73.22, or Sec.  73.23 of this chapter, as applicable, and 
shall protect classified information in accordance with the 
requirements of parts 25 and 95 of this chapter, as applicable.

PART 70--DOMESTIC LICENSING OF SPECIAL NUCLEAR MATERIAL

0
30. The authority citation for part 70 is revised to read as follows:

    Authority: Secs. 51, 53, 161, 182, 183, 68 Stat. 929, 930, 948, 
953, 954, as amended, sec. 234, 83 Stat. 444, as amended, (42 U.S.C. 
2071, 2073, 2201, 2232, 2233, 2282, 2297f); secs. 201, as amended, 
202, 204, 206, 88 Stat. 1242, as amended, 1244, 1245, 1246 (42 
U.S.C. 5841, 5842, 5845, 5846). Sec. 193, 104 Stat. 2835 as amended 
by Pub. L. 104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243); sec. 
1704, 112 Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act of 
2005, Pub. L. No. 109-58, 119 Stat. 594 (2005).
    Sections 70.1(c) and 70.20a(b) also issued under secs. 135, 141, 
Pub. L. 97-425, 96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161).
    Section 70.7 also issued under Pub. L. 95-601, sec. 10, 92 Stat. 
2951 (42 U.S.C. 5851). Section 70.21(g) also issued under sec. 122, 
68 Stat. 939 (42 U.S.C. 2152). Section 70.31 also issued under sec. 
57d, Pub. L. 93-377, 88 Stat. 475 (42 U.S.C. 2077). Sections 70.36 
and 70.44 also issued under sec. 184, 68 Stat. 954, as amended (42 
U.S.C. 2234). Section 70.81 also issued under secs. 186, 187, 68 
Stat. 955 (42 U.S.C. 2236, 2237). Section 70.82 also issued under 
sec. 108, 68 Stat. 939, as amended (42 U.S.C. 2138).


0
31. In Sec.  70.22, paragraph (l) is revised to read as follows:


Sec.  70.22  Contents of applications.

* * * * *
    (l) Each applicant for a license shall protect Safeguards 
Information against unauthorized disclosure in accordance with the 
requirements in Sec.  73.21 and the requirements of Sec.  73.22, or 
73.23 of this chapter, as applicable, and shall protect classified 
information in accordance with the requirements of parts 25 and 95 of 
this chapter, as applicable.
* * * * *

0
32. In Sec.  70.32, paragraph (j) is revised to read as follows:


Sec.  70.32   Conditions of licenses.

* * * * *
    (j) Each licensee who possesses special nuclear material, or who 
transports, or delivers to a carrier for transport, a formula quantity 
of strategic special nuclear material, special nuclear material of 
moderate strategic significance, or special nuclear material of low 
strategic significance, or more than 100 grams of irradiated reactor 
fuel shall ensure that Safeguards Information is protected against 
unauthorized disclosure in accordance with the requirements in Sec.  
73.21 and the requirements of Sec.  73.22 or Sec.  73.23 of this 
chapter, as applicable, and shall protect classified information in 
accordance with the requirements of parts 25 and 95 of this chapter, as 
applicable.
* * * * *

PART 71--PACKAGING AND TRANSPORTATION OF RADIOACTIVE MATERIAL

0
33. The authority citation for part 71 is revised to read as follows:

    Authority: Secs. 53, 57, 62, 63, 81, 161, 182, 183, 68 Stat. 
930, 932, 933, 935, 948, 953, 954, as amended, sec. 1701, 106 Stat. 
2951, 2952, 2953 (42 U.S.C. 2073, 2077, 2092, 2093, 2111, 2201, 
2232, 2233, 2297f); secs. 201, as amended, 202, 206, 88 Stat. 1242, 
as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); sec. 1704, 112 
Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act of 2005, Pub. L. 
No. 109-58, 119 Stat. 594 (2005). Section 71.97 also issued under 
sec. 301, Pub. L. 96-295, 94 Stat. 789-790.


0
34. Section 71.11 is added to read as follows:


Sec.  71.11   Protection of Safeguards Information.

    Each licensee, certificate holder, or applicant for a Certificate 
of Compliance for a transportation package for transport of irradiated 
reactor fuel, strategic special nuclear material, a critical mass of 
special nuclear material, or byproduct material in quantities 
determined by the Commission through order or regulation to be 
significant to the public health and safety or the common defense and 
security, shall protect Safeguards Information against unauthorized 
disclosure in accordance with the requirements in Sec.  73.21 and the 
requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.

PART 72--LICENSING REQUIREMENTS FOR THE INDEPENDENT STORAGE OF 
SPENT NUCLEAR FUEL, HIGH-LEVEL RADIOACTIVE WASTE, AND REACTOR-
RELATED GREATER THAN CLASS C WASTE

0
35. The authority citation for part 72 is revised to read as follows:

    Authority: Secs. 51, 53, 57, 62, 63, 65, 69, 81, 161, 182, 183, 
184, 186, 187, 189, 68 Stat. 929, 930, 932, 933, 934, 935, 948, 953, 
954, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 
2071, 2073, 2077, 2092, 2093, 2095, 2099, 2111, 2201, 2232, 2233, 
2234, 2236, 2237, 2238, 2282); sec. 274, Pub. L. 86-373, 73 Stat. 
688, as amended (42 U.S.C. 2021); sec. 201, as amended, 202, 206, 88 
Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846); 
Pub. L. 95-601, sec. 10, 92 Stat. 2951 as amended by Pub. L. 102-
486, sec. 7902, 106 Stat. 3123 (42 U.S.C. 5851); sec. 102, Pub. L. 
91-190, 83 Stat. 853 (42 U.S.C. 4332); secs. 131, 132, 133, 135, 
137, 141, Pub. L. 97-425, 96 Stat. 2229, 2230, 2232, 2241, sec. 148, 
Pub. L. 100-203, 101 Stat. 1330-235 (42 U.S.C. 10151, 10152, 10153, 
10155, 10157, 10161, 10168); sec. 1704, 112 Stat. 2750 (44 U.S.C. 
3504 note); Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 
549 (2005).
    Section 72.44(g) also issued under secs. 142(b) and 148(c), (d), 
Pub. L. 100-203, 101 Stat. 1330-232, 1330-236 (42 U.S.C. 10162(b), 
10168(c), (d)). Section 72.46 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). Section 72.96(d) also issued under sec. 145(g), Pub. 
L. 100-203,

[[Page 63573]]

101 Stat. 1330-235 (42 U.S.C. 10165(g)). Subpart J also issued under 
secs. 2(2), 2(15), 2(19), 117(a), 141(h), Pub. L. 97-425, 96 Stat. 
2202, 2203, 2204, 2222, 2224 (42 U.S.C. 10101, 10137(a), 10161(h)).
    Subparts K and L are also issued under sec. 133, 98 Stat. 2230 
(42 U.S.C. 10153) and sec. 218(a), 96 Stat. 2252 (42 U.S.C. 10198).


0
36. In Sec.  72.22, paragraph (f) is added to read as follows:


Sec.  72.22   Contents of application: General and financial 
information.

* * * * *
    (f) Each applicant for a license under this part to receive, 
transfer, and possess power reactor spent fuel, power reactor-related 
Greater than Class C (GTCC) waste, and other radioactive materials 
associated with spent fuel storage in an independent spent fuel storage 
installation (ISFSI) shall protect Safeguards Information against 
unauthorized disclosure in accordance with the requirements in Sec.  
73.21 and the requirements of Sec.  73.22 or Sec.  73.23, as 
applicable.


0
37. In Sec.  72.44, paragraph (h) is added to read as follows:


Sec.  72.44   License conditions.

* * * * *
    (h) Each licensee shall protect Safeguards Information against 
unauthorized disclosure in accordance with the requirements of Sec.  
73.21 and the requirements of Sec.  73.22 or Sec.  73.23, as 
applicable.
0
38. In Sec.  72.212, paragraph (b)(5)(v) is redesignated as (b)(5)(vi) 
and a new paragraph (b)(5)(v) is added to read as follows:


Sec.  72.212   Conditions of general license issued under Sec.  72.210.

* * * * *
    (b) * * *
    (5) * * *
    (v) Each general licensee that receives and possesses power reactor 
spent fuel and other radioactive materials associated with spent fuel 
storage shall protect Safeguards Information against unauthorized 
disclosure in accordance with the requirements of Sec.  73.21 and the 
requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.
* * * * *


0
39. In Sec.  72.236, paragraph (n) is added to read as follows:


Sec.  72.236  Specific requirements for spent fuel storage cask 
approval and fabrication.

* * * * *
    (n) Safeguards Information shall be protected against unauthorized 
disclosure in accordance with the requirements of Sec.  73.21 and the 
requirements of Sec.  73.22 or Sec.  73.23 of this chapter, as 
applicable.

PART 73--PHYSICAL PROTECTION OF PLANTS AND MATERIALS

0
40. The authority citation for part 73 continues to read as follows:

    Authority: Secs. 53, 161, 149, 68 Stat. 930, 948, as amended, 
sec. 147, 94 Stat. 780 (42 U.S.C. 2073, 2167, 2169, 2201); sec. 201, 
as amended, 204, 88 Stat. 1242, as amended, 1245, sec. 1701, 106 
Stat. 2951, 2952, 2953 (42 U.S.C. 5841, 5844, 2297f); sec. 1704, 112 
Stat. 2750 (44 U.S.C. 3504 note); Energy Policy Act of 2005, Pub. L. 
109-58, 119 Stat. 594 (2005).
    Section 73.1 also issued under secs. 135, 141, Pub. L. 97-425, 
96 Stat. 2232, 2241 (42 U.S.C, 10155, 10161). Section 73.37(f) also 
issued under sec. 301, Pub. L. 96-295, 94 Stat. 789 (42 U.S.C. 5841 
note). Section 73.57 is issued under sec. 606, Pub. L. 99-399, 100 
Stat. 876 (42 U.S.C. 2169).


0
41. In Sec.  73.1, paragraph (b)(7) is revised to read as follows:


Sec.  73.1   Purpose and scope.

* * * * *
    (b) * * *
    (7) This part prescribes requirements for the protection of 
Safeguards Information (including Safeguards Information with the 
designation or marking: Safeguards Information--Modified Handling) in 
the hands of any person, whether or not a licensee of the Commission, 
who produces, receives, or acquires that information.
* * * * *

0
42. In Sec.  73.2, new definitions Background Check, Individual 
Authorized Access to Safeguards Information, Individual Authorized 
Access to Safeguards Information--Modified Handling, Quantities of 
Concern, Safeguards Information--Modified Handling, and Trustworthiness 
and Reliability, are added in alphabetical order and the definitions of 
``Need to know'' and Safeguards Information are revised to read as 
follows:


Sec.  73.2  Definitions.

* * * * *
    Background check includes, at a minimum, a Federal Bureau of 
Investigation (FBI) criminal history records check (including 
verification of identity based on fingerprinting), employment history, 
education, and personal references. Individuals engaged in activities 
subject to regulation by the Commission, applicants for licenses to 
engage in Commission-regulated activities, and individuals who have 
notified the Commission in writing of an intent to file an application 
for licensing, certification, permitting, or approval of a product or 
activity subject to regulation by the Commission are required under 
Sec.  73.57 to conduct fingerprinting and criminal history records 
checks before granting access to Safeguards Information. A background 
check must be sufficient to support the trustworthiness and reliability 
determination so that the person performing the check and the 
Commission have assurance that granting individuals access to 
Safeguards Information does not constitute an unreasonable risk to the 
public health and safety or the common defense and security.
* * * * *
    Individual Authorized Access to Safeguards Information is an 
individual authorized to have access to and handle such information 
pursuant to the requirements of Sec. Sec.  73.21 and 73.22 of this 
part.
    Individual Authorized Access to Safeguards Information--Modified 
Handling is an individual authorized to have access to and handle 
Safeguards Information designated as Safeguards Information--Modified 
Handling information pursuant to the requirements of Sec. Sec.  73.21 
and 73.23 of this part.
* * * * *
    ``Need to know'' means a determination by a person having 
responsibility for protecting Safeguards Information (including 
Safeguards Information designated as Safeguards Information--Modified 
Handling) that a proposed recipient's access to Safeguards Information 
is necessary in the performance of official, contractual, licensee, 
applicant, or certificate holder employment. In an adjudication, ``need 
to know'' means a determination by the originator of the information 
that the information is necessary to enable the proposed recipient to 
proffer and/or adjudicate a specific contention in that proceeding, and 
the proposed recipient of the specific Safeguards Information possesses 
demonstrable knowledge, skill, training, or education to effectively 
utilize the specific Safeguards Information in the proceeding. Where 
the information is in the possession of the originator and the NRC 
staff (dual possession), whether in its original form or incorporated 
into another document or other matter by the recipient, the NRC staff 
makes the determination. In the event of a dispute regarding the ``need 
to know'' determination, the presiding officer of the proceeding shall 
make the ``need to know'' determination.
* * * * *

[[Page 63574]]

    Quantities of Concern means the quantities of the radionuclides 
meeting or exceeding the threshold limits set forth in Table I-1 of 
Appendix I of this part.
* * * * *
    Safeguards Information means information not classified as National 
Security Information or Restricted Data which specifically identifies a 
licensee's or applicant's detailed control and accounting procedures 
for the physical protection of special nuclear material in quantities 
determined by the Commission through order or regulation to be 
significant to the public health and safety or the common defense and 
security; detailed security measures (including security plans, 
procedures, and equipment) for the physical protection of source, 
byproduct, or special nuclear material in quantities determined by the 
Commission through order or regulation to be significant to the public 
health and safety or the common defense and security; security measures 
for the physical protection of and location of certain plant equipment 
vital to the safety of production or utilization facilities; and any 
other information within the scope of Section 147 of the Atomic Energy 
Act of 1954, as amended, the unauthorized disclosure of which, as 
determined by the Commission through order or regulation, could 
reasonably be expected to have a significant adverse effect on the 
health and safety of the public or the common defense and security by 
significantly increasing the likelihood of sabotage or theft or 
diversion of source, byproduct, or special nuclear material.
    Safeguards Information--Modified Handling is the designation or 
marking applied to Safeguards Information which the Commission has 
determined requires handling requirements modified from the specific 
Safeguards Information handling requirements that are applicable to 
Safeguards Information needing a higher level of protection.
* * * * *
    Trustworthiness and reliability are characteristics of an 
individual considered dependable in judgment, character, and 
performance, such that disclosure of Safeguards Information (including 
Safeguards Information designated as Safeguards Information--Modified 
Handling) to that individual does not constitute an unreasonable risk 
to the public health and safety or common defense and security. A 
determination of trustworthiness and reliability for this purpose is 
based upon a background check.
* * * * *

0
43. Section 73.8(b) is revised to read as follows:


Sec.  73.8  Information collection requirements: OMB approval.

* * * * *
    (b) The approved information collection requirements contained in 
this part appear in Sec. Sec.  73.5, 73.20, 73.21, 73.22, 73.23, 73.24, 
73.25, 73.26, 73.27, 73.37, 73.40, 73.45, 73.46, 73.50, 73.55, 73.56, 
73.57, 73.60, 73.67, 73.70, 73.71, 73.72, 73.73, 73.74, and appendices 
B, C, and G.
* * * * *

0
44. Section 73.21 is revised to read as follows:


Sec.  73.21  Protection of Safeguards Information: Performance 
Requirements.

    (a) General performance requirement. (1) Each licensee, certificate 
holder, applicant, or other person who produces, receives, or acquires 
Safeguards Information (including Safeguards Information with the 
designation or marking: Safeguards Information--Modified Handling) 
shall ensure that it is protected against unauthorized disclosure. To 
meet this general performance requirement, such licensees, certificate 
holders, applicants, or other persons subject to this section shall:
    (i) Establish, implement, and maintain an information protection 
system that includes the applicable measures for Safeguards Information 
specified in Sec.  73.22 related to: Power reactors; a formula quantity 
of strategic special nuclear material; transportation of or delivery to 
a carrier for transportation of a formula quantity of strategic special 
nuclear material or more than 100 grams of irradiated reactor fuel; 
uranium hexafluoride production or conversion facilities; fuel 
fabrication facilities; uranium enrichment facilities; independent 
spent fuel storage installations; and geologic repository operations 
areas.
    (ii) Establish, implement, and maintain an information protection 
system that includes the applicable measures for Safeguards Information 
specified in Sec.  73.23 related to: Panoramic and underwater 
irradiators that possess greater than 370 TBq (10,000 Ci) of byproduct 
material in the form of sealed sources; manufacturers and distributors 
of items containing source material, or byproduct or special nuclear 
material in greater than or equal to Category 2 quantities of concern; 
research and test reactors that possess special nuclear material of 
moderate strategic significance or special nuclear material of low 
strategic significance; and transportation of source, byproduct, or 
special nuclear material in greater than or equal to Category 1 
quantities of concern.
    (iii) Protect the information in accordance with the requirements 
of Sec.  73.22 if the Safeguards Information is not described in 
paragraphs (a)(1)(i) and (a)(1)(ii) of this section.
    (2) Information protection procedures employed by Federal, State, 
and local law enforcement agencies are presumed to meet the general 
performance requirement in Sec.  73.21(a)(1).
    (b) Commission Authority. (1) Pursuant to Section 147 of the Atomic 
Energy Act of 1954, as amended, the Commission may impose, by order or 
regulation, Safeguards Information protection requirements different 
from or in addition to those specified in this Part on any person who 
produces, receives, or acquires Safeguards Information.
    (2) The Commission may require, by regulation or order, that 
information within the scope of Section 147 of the Atomic Energy Act of 
1954, as amended, related to facilities or materials not specifically 
described in Sec. Sec.  73.21, 73.22 or 73.23 be protected under this 
Part.

0
45. Section 73.22 is added to read as follows:


Sec.  73.22   Protection of Safeguards Information: Specific 
Requirements.

    This section contains specific requirements for the protection of 
Safeguards Information in the hands of any person subject to the 
requirements of Sec.  73.21(a)(1)(i) and related to power reactors; a 
formula quantity of strategic special nuclear material; transportation 
of or delivery to a carrier for transportation of a formula quantity of 
strategic special nuclear material or more than 100 grams of irradiated 
reactor fuel; uranium hexafluoride production or conversion facilities, 
fuel fabrication facilities, and uranium enrichment facilities; 
independent spent fuel storage installations; geologic repository 
operations areas and Safeguards Information in the hands of any person 
subject to the requirements of Sec.  73.21(a)(1)(iii).
    (a) Information to be protected. The types of information and 
documents that must be protected as Safeguards Information include non-
public security-related requirements such as:
    (1) Physical Protection. Information not classified as Restricted 
Data or National Security Information related to physical protection, 
including:
    (i) The composite physical security plan for the facility or site;
    (ii) Site-specific drawings, diagrams, sketches, or maps that 
substantially represent the final design features of the

[[Page 63575]]

physical security system not easily discernible by members of the 
public;
    (iii) Alarm system layouts showing the location of intrusion 
detection devices, alarm assessment equipment, alarm system wiring, 
emergency power sources for security equipment, and duress alarms not 
easily discernible by members of the public;
    (iv) Physical security orders and procedures issued by the licensee 
for members of the security organization detailing duress codes, patrol 
routes and schedules, or responses to security contingency events;
    (v) Site-specific design features of plant security communications 
systems;
    (vi) Lock combinations, mechanical key design, or passwords 
integral to the physical security system;
    (vii) Documents and other matter that contain lists or locations of 
certain safety-related equipment explicitly identified in the documents 
or other matter as vital for purposes of physical protection, as 
contained in security plans, contingency measures, or plant specific 
safeguards analyses;
    (viii) The composite safeguards contingency plan/measures for the 
facility or site;
    (ix) The composite facility guard qualification and training plan/
measures disclosing features of the physical security system or 
response procedures;
    (x) Information relating to on-site or off-site response forces, 
including size, armament of response forces, and arrival times of such 
forces committed to respond to security contingency events;
    (xi) The adversary characteristics document and related 
information, including implementing guidance associated with the Design 
Basis Threat in Sec.  73.1(a)(1) or (a)(2); and
    (xii) Engineering and safety analyses, security-related procedures 
or scenarios, and other information revealing site-specific details of 
the facility or materials if the unauthorized disclosure of such 
analyses, procedures, scenarios, or other information could reasonably 
be expected to have a significant adverse effect on the health and 
safety of the public or the common defense and security by 
significantly increasing the likelihood of theft, diversion, or 
sabotage of source, byproduct, or special nuclear material.
    (2) Physical protection in transit. Information not classified as 
Restricted Data or National Security Information related to the 
transportation of, or delivery to a carrier for transportation of a 
formula quantity of strategic special nuclear material or more than 100 
grams of irradiated reactor fuel, including:
    (i) The composite physical security plan for transportation;
    (ii) Schedules and itineraries for specific shipments of source 
material, byproduct material, high-level nuclear waste, or irradiated 
reactor fuel. Schedules for shipments of source material, byproduct 
material, high-level nuclear waste, or irradiated reactor fuel are no 
longer controlled as Safeguards Information 10 days after the last 
shipment of a current series;
    (iii) Vehicle immobilization features, intrusion alarm devices, and 
communications systems;
    (iv) Arrangements with and capabilities of local police response 
forces, and locations of safe havens identified along the 
transportation route;
    (v) Limitations of communications during transport;
    (vi) Procedures for response to security contingency events;
    (vii) Information concerning the tactics and capabilities required 
to defend against attempted sabotage, or theft and diversion of formula 
quantities of special nuclear material, irradiated reactor fuel, or 
related information; and
    (viii) Engineering or safety analyses, security-related procedures 
or scenarios and other information related to the protection of the 
transported material if the unauthorized disclosure of such analyses, 
procedures, scenarios, or other information could reasonably be 
expected to have a significant adverse effect on the health and safety 
of the public or the common defense and security by significantly 
increasing the likelihood of theft, diversion, or sabotage of source, 
byproduct, or special nuclear material.
    (3) Inspections, audits and evaluations. Information not classified 
as National Security Information or Restricted Data pertaining to 
safeguards and security inspections and reports, including:
    (i) Portions of inspection reports, evaluations, audits, or 
investigations that contain details of a licensee's or applicant's 
physical security system or that disclose uncorrected defects, 
weaknesses, or vulnerabilities in the system. Disclosure of corrected 
defects, weaknesses, or vulnerabilities is subject to an assessment 
taking into account such factors as trending analyses and the impacts 
of disclosure on licensees having similar physical security systems; 
and
    (ii) Reports of investigations containing general information may 
be released after corrective actions have been completed, unless 
withheld pursuant to other authorities, e.g., the Freedom of 
Information Act (5 U.S.C. 552).
    (4) Correspondence. Portions of correspondence insofar as they 
contain Safeguards Information as set forth in paragraphs (a)(1) 
through (a)(3) of this section.
    (5) Other information within the scope of Section 147 of the Atomic 
Energy Act of 1954, as amended, that the Commission determines by order 
or regulation could reasonably be expected to have a significant 
adverse effect on the health and safety of the public or the common 
defense and security by significantly increasing the likelihood of 
theft, diversion, or sabotage of source, byproduct, or special nuclear 
material or a facility.
    (b) Conditions for access.
    (1) Except as the Commission may otherwise authorize, no person may 
have access to Safeguards Information unless the person has an 
established ``need to know'' for the information and has undergone a 
Federal Bureau of Investigation (FBI) criminal history records check 
using the procedures set forth in Sec.  73.57.
    (2) In addition, a person to be granted access to Safeguards 
Information must be trustworthy and reliable, based on a background 
check or other means approved by the Commission.
    (3) The categories of individuals specified in 10 CFR 73.59 are 
exempt from the criminal history records check and background check 
requirements in paragraphs (b)(1) and (b)(2) of this section by virtue 
of their occupational status.
    (4) For persons participating in an NRC adjudicatory proceeding, 
the ``need to know'' determination shall be made by the originator of 
the Safeguards Information upon receipt of a request for access to the 
Safeguards Information. Where the information is in the possession of 
the originator and the NRC staff, whether in its original form or 
incorporated into another document or other matter by the recipient, 
the NRC staff shall make the determination. In the event of a dispute 
regarding the ``need to know'' determination, the presiding officer of 
the proceeding shall determine whether the ``need to know'' findings in 
Sec.  73.2 can be made.
    (5) Except as the Commission may otherwise authorize, no person may 
disclose Safeguards Information to any other person except as set forth 
in this section.
    (c) Protection while in use or storage.
    (1) While in use, matter containing Safeguards Information must be 
under the control of an individual authorized access to Safeguards 
Information. This requirement is satisfied if the

[[Page 63576]]

Safeguards Information is attended by such an individual even though 
the information is in fact not constantly being used. Safeguards 
Information within alarm stations, or rooms continuously occupied by 
authorized individuals need not be stored in a locked security storage 
container.
    (2) While unattended, Safeguards Information must be stored in a 
locked security storage container. The container shall not identify the 
contents of the matter contained and must preclude access by 
individuals not authorized access in accordance with the provisions of 
this section. Knowledge of lock combinations protecting Safeguards 
Information must be limited to a minimum number of personnel for 
operating purposes who have a ``need to know'' and are otherwise 
authorized access to Safeguards Information in accordance with the 
provisions of this Part. Access to lock combinations must be strictly 
controlled so as to prevent disclosure to an individual not authorized 
access to Safeguards Information.
    (d) Preparation and marking of documents or other matter.
    (1) Each document or other matter that contains Safeguards 
Information as described in Sec.  73.21(a)(1)(i) and this section must 
be marked to indicate the presence of such information in a conspicuous 
manner on the top and bottom of each page. The first page of the 
document or other matter must also contain:
    (i) The name, title, and organization of the individual authorized 
to make a Safeguards Information determination, and who has determined 
that the document or other matter contains Safeguards Information;
    (ii) The date the determination was made; and
    (iii) An indication that unauthorized disclosure will be subject to 
civil and criminal sanctions.
    (2) In addition to the markings at the top and bottom of each page, 
any transmittal letters or memoranda to or from the NRC which do not in 
themselves contain Safeguards Information shall be marked to indicate 
that attachments or enclosures contain Safeguards Information but that 
the transmittal document or other matter does not (i.e., ``When 
separated from Safeguards Information enclosure(s), this document is 
decontrolled provided the transmittal document does not otherwise 
warrant protection from unauthorized disclosure'').
    (3) Any transmittal document or other matter forwarding Safeguards 
Information must alert the recipient that protected information is 
enclosed. Certification that a document or other matter contains 
Safeguards Information must include the name and title of the 
certifying official and date designated. Portion marking is required 
only for correspondence to and from the NRC (i.e., cover letters, but 
not attachments) that contains Safeguards Information. The portion 
marking must be sufficient to allow the recipient to identify and 
distinguish those sections of the transmittal document or other 
information containing the Safeguards Information from non-Safeguards 
Information.
    (4) Marking of documents or other matter containing or transmitting 
Safeguards Information shall, at a minimum include the words 
``Safeguards Information'' to ensure identification of protected 
information for the protection of facilities and material covered by 
Sec.  73.22.
    (e) Reproduction of matter containing Safeguards Information. 
Safeguards Information may be reproduced to the minimum extent 
necessary consistent with need without permission of the originator. 
Equipment used to reproduce Safeguards Information must be evaluated to 
ensure that unauthorized individuals cannot access Safeguards 
Information (e.g., unauthorized individuals cannot access Safeguards 
Information by gaining access to retained memory or network 
connectivity).
    (f) External transmission of documents and material.
    (1) Documents or other matter containing Safeguards Information, 
when transmitted outside an authorized place of use or storage, must be 
packaged in two sealed envelopes or wrappers to preclude disclosure of 
the presence of protected information. The inner envelope or wrapper 
must contain the name and address of the intended recipient and be 
marked on both sides, top and bottom, with the words ``Safeguards 
Information.'' The outer envelope or wrapper must be opaque, addressed 
to the intended recipient, must contain the address of the sender, and 
may not bear any markings or indication that the document or other 
matter contains Safeguards Information.
    (2) Safeguards Information may be transported by any commercial 
delivery company that provides service with computer tracking features, 
U.S. first class, registered, express, or certified mail, or by any 
individual authorized access pursuant to these requirements.
    (3) Except under emergency or extraordinary conditions, Safeguards 
Information shall be transmitted outside an authorized place of use or 
storage only by NRC approved secure electronic devices, such as 
facsimiles or telephone devices, provided that transmitters and 
receivers implement processes that will provide high assurance that 
Safeguards Information is protected before and after the transmission 
or electronic mail through the internet, provided that the information 
is encrypted by a method (Federal Information Processing Standard 
[FIPS] 140-2 or later) approved by the appropriate NRC Office; the 
information is produced by a self contained secure automatic data 
process system; and transmitters and receivers implement the 
information handling processes that will provide high assurance that 
Safeguards Information is protected before and after transmission. 
Physical security events required to be reported pursuant to Sec.  
73.71 are considered to be extraordinary conditions.
    (g) Processing of Safeguards Information on electronic systems.
    (1) Safeguards Information may be stored, processed or produced on 
a stand-alone computer (or computer system) for processing of 
Safeguards Information. ``Stand-alone'' means a computer or computer 
system to which access is limited to individuals authorized access to 
Safeguards Information. A stand-alone computer or computer system shall 
not be physically or in any other way connected to a network accessible 
by users who are not authorized access to Safeguards Information.
    (2) Each computer not located within an approved and lockable 
security storage container that is used to process Safeguards 
Information must have a removable storage medium with a bootable 
operating system. The bootable operating system must be used to load 
and initialize the computer. The removable storage medium must also 
contain the software application programs. Data may be saved on either 
the removable storage medium that is used to boot the operating system, 
or on a different removable storage medium. The removable storage 
medium must be secured in a locked security storage container when not 
in use.
    (3) A mobile device (such as a laptop computer) may also be used 
for the processing of Safeguards Information provided the device is 
secured in a locked security storage container when not in use. Other 
systems may be used if approved for security by the appropriate NRC 
office.
    (4) Any electronic system that has been used for storage, 
processing or production of Safeguards Information must be free of 
recoverable Safeguards Information prior to being returned to 
nonexclusive use.

[[Page 63577]]

    (h) Removal from Safeguards Information category. Documents or 
other matter originally containing Safeguards Information must be 
removed from the Safeguards Information category at such time as the 
information no longer meets the criteria contained in this part. Care 
must be exercised to ensure that any document or other matter 
decontrolled not disclose Safeguards Information in some other form or 
be combined with other unprotected information to disclose Safeguards 
Information. The authority to determine that a document or other matter 
may be decontrolled will only be exercised by the NRC, with NRC 
approval, or in consultation with the individual or organization that 
made the original determination.
    (i) Destruction of matter containing Safeguards Information. 
Documents or other matter containing Safeguards Information shall be 
destroyed when no longer needed. The information can be destroyed by 
burning, shredding or any other method that precludes reconstruction by 
means available to the public at large. Piece sizes no wider than one 
quarter inch composed of several pages or documents and thoroughly 
mixed are considered completely destroyed.

0
46. Section 73.23 is added to read as follows:


Sec.  73.23   Protection of Safeguards Information--Modified Handling: 
Specific Requirements.

    This section contains specific requirements for the protection of 
Safeguards Information in the hands of any person subject to the 
requirements of Sec.  73.21(a)(1)(ii) and related to panoramic and 
underwater irradiators that possess greater than 370 TBq (10,000 Ci) of 
byproduct material in the form of sealed sources; manufacturers and 
distributors of items containing source material, or byproduct or 
special nuclear material in greater than or equal to Category 2 
quantities of concern; transportation of more than 1000 Tbq (27,000 Ci) 
but less than or equal to 100 grams of spent nuclear fuel; research and 
test reactors that possess special nuclear material of moderate 
strategic significance or special nuclear material of low strategic 
significance; and transportation of source, byproduct, or special 
nuclear material in greater than or equal to Category 1 quantities of 
concern. The requirements of this section distinguish Safeguards 
Information requiring modified handling requirements (SGI-M) from the 
specific Safeguards Information handling requirements applicable to 
facilities and materials needing a higher level of protection, as set 
forth in Sec.  73.22.
    (a) Information to be protected. The types of information and 
documents that must be protected as Safeguards Information--Modified 
Handling include non-public security-related requirements such as 
protective measures, interim compensatory measures, additional security 
measures, and the following, as applicable:
    (1) Physical Protection. Information not classified as Restricted 
Data or National Security Information related to physical protection, 
including:
    (i) The composite physical security plan for the facility or site;
    (ii) Site specific drawings, diagrams, sketches, or maps that 
substantially represent the final design features of the physical 
security system not easily discernible by members of the public;
    (iii) Alarm system layouts showing the location of intrusion 
detection devices, alarm assessment equipment, alarm system wiring, 
emergency power sources for security equipment, and duress alarms not 
easily discernible by members of the public;
    (iv) Physical security orders and procedures issued by the licensee 
for members of the security organization detailing duress codes, patrol 
routes and schedules, or responses to security contingency events;
    (v) Site specific design features of plant security communications 
systems;
    (vi) Lock combinations, mechanical key design, or passwords 
integral to the physical security system;
    (vii) The composite facility guard qualification and training plan/
measures disclosing features of the physical security system or 
response procedures;
    (viii) Descriptions of security activities which disclose features 
of the physical security system or response measures;
    (ix) Information relating to onsite or offsite response forces, 
including size, armament of the response forces, and arrival times of 
such forces committed to respond to security contingency events; and
    (x) Engineering and safety analyses, security-related procedures or 
scenarios, and other information revealing site-specific details of the 
facility or materials if the unauthorized disclosure of such analyses, 
procedures, scenarios, or other information could reasonably be 
expected to have a significant adverse effect on the health and safety 
of the public or the common defense and security by significantly 
increasing the likelihood of theft, diversion, or sabotage of source, 
byproduct, or special nuclear material.
    (2) Physical protection in transit. Information not classified as 
Restricted Data or National Security Information related to the 
physical protection of shipments of more than 1000 Tbq (27,000 Ci) but 
less than or equal to 100 grams of spent nuclear fuel, source material 
and byproduct material in Category 1 quantities of concern, and special 
nuclear material in less than a formula quantity (except for those 
materials covered under Sec.  73.22), including:
    (i) Information regarding transportation security measures, 
including physical security plans and procedures, immobilization 
devices, and escort requirements, more detailed than NRC regulations;
    (ii) Scheduling and itinerary information for shipments (scheduling 
and itinerary information for shipments that are inherently self-
disclosing, such as a shipment that created extensive news coverage or 
an announcement by a public official confirming receipt, may be 
decontrolled after shipment departure). Scheduling and itinerary 
information for shipments that are not inherently self-disclosing may 
be decontrolled 2 days after the shipment is completed. Scheduling and 
itinerary information used for the purpose of preplanning, 
coordination, and advance notification may be shared with others on a 
``need to know'' basis and need not be designated as Safeguards 
Information-Modified Handling);
    (iii) Arrangements with and capabilities of local police response 
forces, and locations of safe havens identified along the 
transportation route;
    (iv) Details of alarm and communication systems, communication 
procedures, and duress codes;
    (v) Procedures for response to security contingency events; and
    (vi) Engineering or safety analyses, security-related procedures or 
scenarios and other information related to the protection of the 
transported material if the unauthorized disclosure of such analyses, 
procedures, scenarios, or other information could reasonably be 
expected to have a significant adverse effect on the health and safety 
of the public or the common defense and security by significantly 
increasing the likelihood of theft, diversion, or sabotage of source, 
byproduct, or special nuclear material.
    (3) Inspections, audits and evaluations. Information not classified 
as National Security Information or Restricted Data pertaining to 
safeguards and security inspections and reports, including:

[[Page 63578]]

    (i) Portions of inspection reports, evaluations, audits, or 
investigations that contain details of a licensee's or applicant's 
physical security system or that disclose uncorrected defects, 
weaknesses, or vulnerabilities in the system. Disclosure of corrected 
defects, weaknesses, or vulnerabilities is subject to an assessment 
taking into account such factors as trending analyses and the impacts 
of disclosure on licensees having similar physical security systems; 
and
    (ii) Reports of investigations containing general information may 
be released after the corrective actions have been completed, unless 
withheld pursuant to other authorities, e.g., the Freedom of 
Information Act (5 U.S.C. 552).
    (4) Correspondence. Portions of correspondence insofar as they 
contain Safeguards Information designated as Safeguards Information-
Modified Handling, as set forth in paragraphs (a)(1) through (a)(3) of 
this section.
    (5) Other information within the scope of Section 147 of the Atomic 
Energy Act of 1954, as amended, that the Commission determines by order 
or regulation could reasonably be expected to have a significant 
adverse effect on the health and safety of the public or the common 
defense and security by significantly increasing the likelihood of 
theft, diversion, or sabotage of source, byproduct, or special nuclear 
material or a facility.
    (b) Conditions for access.
    (1) Except as the Commission may otherwise authorize, no person may 
have access to Safeguards Information designated as Safeguards 
Information-Modified Handling unless the person has an established 
``need to know'' for the information and has undergone a Federal Bureau 
of Investigation criminal history records check using the procedures 
set forth in Sec.  73.57.
    (2) In addition, a person to be granted access to Safeguards 
Information must be trustworthy and reliable, based on a background 
check or other means approved by the Commission.
    (3) The categories of individuals specified in 10 CFR 73.59 are 
exempt from the criminal history records check and background check 
requirements in paragraphs (b)(1) and (b)(2) of this section by virtue 
of their occupational status:
    (4) For persons participating in an NRC adjudicatory proceeding, 
the ``need to know'' determination shall be made by the originator of 
the Safeguards Information designated as Safeguards Information-
Modified Handling upon receipt of a request for access to the 
Safeguards Information designated as Safeguards Information-Modified 
Handling. Where the information is in the possession of the originator 
and the NRC staff, whether in its original form or incorporated into 
another document or other matter by the recipient, the NRC staff shall 
make the determination. In the event of a dispute regarding the ``need 
to know'' determination, the presiding officer of the proceeding shall 
determine whether the ``need to know'' findings in Sec.  73.2 can be 
made.
    (5) Except as the Commission may otherwise authorize, no person may 
disclose Safeguards Information designated as Safeguards Information-
Modified Handling to any other person except as set forth in this 
section.
    (c) Protection while in use or storage.
    (1) While in use, matter containing Safeguards Information 
designated as Safeguards Information-Modified Handling must be under 
the control of an individual authorized access to such information. 
This requirement is satisfied if the Safeguards Information designated 
as Safeguards Information-Modified Handling is attended by such an 
individual even though the information is in fact not constantly being 
used. Safeguards Information designated as Safeguards Information-
Modified Handling within alarm stations, or rooms continuously occupied 
by authorized individuals, need not be locked in a file drawer or 
cabinet.
    (2) While unattended, Safeguards Information designated as 
Safeguards Information-Modified Handling must be stored in a locked 
file drawer or cabinet. The container shall not identify the contents 
of the matter contained and must preclude access by individuals not 
authorized access in accordance with the provisions of this section. 
Knowledge of lock combinations or access to keys protecting Safeguards 
Information designated as Safeguards Information-Modified Handling must 
be limited to a minimum number of personnel for operating purposes who 
have a ``need to know'' and are otherwise authorized access to 
Safeguards Information in accordance with the provisions of this Part. 
Access to lock combinations must be strictly controlled so as to 
prevent disclosure to an individual not authorized access to Safeguards 
Information designated as Safeguards Information-Modified Handling.
    (d) Preparation and marking of documents or other matter.
    (1) Each document or other matter that contains Safeguards 
Information designated as Safeguards Information-Modified Handling as 
described in Sec.  73.23(a) and in this section must be marked to 
indicate the presence of Safeguards Information with modified handling 
requirements in a conspicuous manner on the top and bottom of each 
page. The first page of the document or other matter must also contain:
    (i) The name, title, and organization of the individual authorized 
to make a ``Safeguards Information designated as Safeguards 
Information-Modified Handling'' determination, and who has determined 
that the document or other matter contains Safeguards Information 
designated as Safeguards Information-Modified Handling;
    (ii) The date the determination was made; and
    (iii) An indication that unauthorized disclosure will be subject to 
civil and criminal sanctions.
    (2) In addition to the markings at the top and bottom of each page, 
any transmittal letters or memoranda to or from the NRC which do not in 
themselves contain Safeguards Information designated as Safeguards 
Information-Modified Handling shall be marked to indicate that 
attachments or enclosures contain Safeguards Information designated as 
Safeguards Information-Modified Handling but that the transmittal 
document does not (i.e., ``When separated from Safeguards Information 
designated as Safeguards Information-Modified Handling enclosure(s), 
this document is decontrolled provided the transmittal document does 
not otherwise warrant protection from unauthorized disclosure'').
    (3) Any transmittal document or other matter forwarding Safeguards 
Information designated as Safeguards Information-Modified Handling must 
alert the recipient that protected information is enclosed. 
Certification that a document or other matter contains Safeguards 
Information designated as Safeguards Information-Modified Handling must 
include the name and title of the certifying official and date 
designated. Portion marking is required only for correspondence to and 
from the NRC (i.e., cover letters, but not attachments) that contains 
Safeguards Information designated as Safeguards Information-Modified 
Handling. The portion marking must be sufficient to allow the recipient 
to identify and distinguish those sections of the transmittal document 
or other information containing the Safeguards Information from non-
Safeguards Information.
    (4) Marking of documents or other matter containing or transmitting 
Safeguards Information with modified handling requirements shall, at a 
minimum include the words

[[Page 63579]]

``Safeguards Information-Modified Handling'' to ensure identification 
of protected information for the protection of facilities and material 
covered by Sec.  73.23.
    (e) Reproduction of matter containing Safeguards Information 
designated as Safeguards Information-Modified Handling. Safeguards 
Information designated as Safeguards Information-Modified Handling may 
be reproduced to the minimum extent necessary, consistent with need, 
without permission of the originator. Equipment used to reproduce 
Safeguards Information designated as Safeguards Information-Modified 
Handling must be evaluated to ensure that unauthorized individuals 
cannot access the information (e.g. , unauthorized individuals cannot 
access Safeguards Information by gaining access to retained memory or 
network connectivity).
    (f) External transmission of documents and material.
    (1) Documents or other matter containing Safeguards Information 
designated as Safeguards Information-Modified Handling, when 
transmitted outside an authorized place of use or storage, must be 
packaged in two sealed envelopes or wrappers to preclude disclosure of 
the presence of protected information. The inner envelope or wrapper 
must contain the name and address of the intended recipient and be 
marked on both sides, top and bottom, with the words ``Safeguards 
Information-Modified Handling.'' The outer envelope or wrapper must be 
opaque, addressed to the intended recipient, must contain the address 
of the sender, and may not bear any markings or indication that the 
document contains Safeguards Information designated as Safeguards 
Information-Modified Handling.
    (2) Safeguards Information designated Safeguards Information-
Modified Handling may be transported by any commercial delivery company 
that provides service with computer tracking features, U.S. first 
class, registered, express, or certified mail, or by any individual 
authorized access pursuant to these requirements.
    (3) Except under emergency or extraordinary conditions, Safeguards 
Information designated as Safeguards Information-Modified Handling must 
be transmitted electronically only by protected telecommunications 
circuits (including facsimile) or encryption by a method (Federal 
Information Processing Standard [FIPS] 140-2 or later) approved by the 
appropriate NRC office. For the purpose of this section, emergency or 
extraordinary conditions are defined as any circumstances that require 
immediate communications in order to report, summon assistance for, or 
respond to a security contingency event or an event that has potential 
security significance. Physical security events required to be reported 
pursuant to Sec.  73.71 are considered to be extraordinary conditions.
    (g) Processing of Safeguards Information-Modified Handling on 
electronic systems.
    (1) Safeguards Information designated for modified handling may be 
stored, processed or produced on a computer or computer system, 
provided that the system is assigned to the licensee's or contractor's 
facility. Safeguards Information designated as Safeguards Information-
Modified Handling files must be protected, either by a password or 
encryption, to prevent unauthorized individuals from gaining access. 
Word processors such as typewriters are not subject to these 
requirements as long as they do not transmit information off-site. 
Note: if Safeguards Information designated as Safeguards Information-
Modified Handling is produced on a typewriter, the ribbon must be 
properly marked and be removed and stored in the same manner as other 
Safeguards Information designated as Safeguards Information-Modified 
Handling.
    (2) Safeguards Information designated as Safeguards Information-
Modified Handling files may be transmitted over a network if the file 
is encrypted. In such cases, the licensee will select a commercially 
available encryption system that the National Institute of Standards 
and Technology (NIST) has validated as conforming to Federal 
Information Processing Standards (FIPS) 140-2 or later. Safeguards 
Information designated as Safeguards Information-Modified Handling 
files shall be properly labeled to indicate the presence of Safeguards 
Information with modified handling requirements and saved to removable 
matter and stored in a locked file drawer or cabinet.
    (3) A mobile device (such as a laptop computer) may also be used 
for the processing of Safeguards Information designated as Safeguards 
Information-Modified Handling provided the device is secured in an 
appropriate locked storage container when not in use. Other systems may 
be used if approved for security by the appropriate NRC office.
    (4) Any electronic system that has been used for storage, 
processing or production of Safeguards Information must be free of 
recoverable Safeguards Information designated as Safeguards 
Information-Modified Handling prior to being returned to nonexclusive 
use.
    (h) Removal from Safeguards Information-Modified Handling category. 
Documents or other matter originally containing Safeguards Information 
designated as Safeguards Information-Modified Handling must be removed 
from the Safeguards Information category at such time as the 
information no longer meets the criteria contained in this Part. Care 
must be exercised to ensure that any document or other matter 
decontrolled shall not disclose Safeguards Information in some other 
form or be combined with other unprotected information to disclose 
Safeguards Information. The authority to determine that a document or 
other matter may be decontrolled will only be exercised by the NRC, 
with NRC approval, or in consultation with the individual or 
organization that made the original determination.
    (i) Destruction of matter containing Safeguards Information 
designated as Safeguards Information-Modified Handling. Documents or 
other matter containing Safeguards Information shall be destroyed when 
no longer needed. The information can be destroyed by burning, 
shredding, or any other method that precludes reconstruction by means 
available to the public at large. Piece sizes no wider than one quarter 
inch composed of several pages or documents and thoroughly mixed are 
considered completely destroyed.

0
47. In Sec.  73.37, paragraphs (f)(2)(iv), (f)(3)(iii) and (iv), and 
(g) are revised as follows:


Sec.  73.37  Requirement for the physical protection of irradiated 
reactor fuel in transit.

* * * * *
    (f) * * *
    (2) * * *
    (iv) A statement that the information described below in Sec.  
73.37(f)(3) is required by NRC regulations to be protected in 
accordance with the requirements of Sec. Sec.  73.21 and 73.22.
    (3) * * *
    (iii) For the case of a single shipment whose schedule is not 
related to the schedule of any subsequent shipment, a statement that 
schedule information must be protected in accordance with the 
provisions of Sec. Sec.  73.21 and 73.22 until at least 10 days after 
the shipment has entered or originated within the state.
    (iv) For the case of a shipment in a series of shipments whose 
schedules are related, a statement that schedule information must be 
protected in accordance with the provisions of Sec. Sec.  73.21 and 
73.22 until 10 days after the last shipment in the series has entered 
or originated within the state

[[Page 63580]]

and an estimate of the date on which the last shipment in the series 
will enter or originate within the state.
* * * * *
    (g) State officials, state employees, and other individuals, 
whether or not licensees of the Commission, who receive schedule 
information of the kind specified in Sec.  73.37(f)(3) shall protect 
that information against unauthorized disclosure as specified in 
Sec. Sec.  73.21 and 73.22.

0
48. In Sec.  73.57 the section heading and paragraphs (a)(1) and (2) 
and (b)(2)(i) and (ii) are revised and paragraph (e)(3) is added to 
read as follows:


Sec.  73.57  Requirements for criminal history records checks of 
individuals granted unescorted access to a nuclear power facility or 
access to Safeguards Information.

    (a) General. (1) Each licensee who is authorized to operate a 
nuclear power reactor under part 50 of this chapter, or to engage in an 
activity subject to regulation by the Commission shall comply with the 
requirements of this section.
    (2) Each applicant for a license to operate a nuclear power reactor 
under part 50 of this chapter or to engage in an activity subject to 
regulation by the Commission, as well as each entity who has provided 
written notice to the Commission of intent to file an application for 
licensing, certification, permitting, or approval of a product subject 
to regulation by the Commission shall submit fingerprints for those 
individuals who will have access to Safeguards Information.
* * * * *
    (b) * * *
    (2) * * *
    (i) For unescorted access to the nuclear power facility (but must 
adhere to provisions contained in Sec. Sec.  73.21 and 73.22): NRC 
employees and NRC contractors on official agency business; individuals 
responding to a site emergency in accordance with the provisions of 
Sec.  73.55(a); a representative of the International Atomic Energy 
Agency (IAEA) engaged in activities associated with the U.S./IAEA 
Safeguards Agreement at designated facilities who has been certified by 
the NRC; law enforcement personnel acting in an official capacity; 
State or local government employees who have had equivalent reviews of 
FBI criminal history data; and individuals employed at a facility who 
possess ``Q'' or ``L'' clearances or possess another active government 
granted security clearance, i.e., Top Secret, Secret, or Confidential;
    (ii) For access to Safeguards Information only but must adhere to 
provisions contained in Sec. Sec.  73.21, 73.22, and 73.23: the 
categories of individuals specified in 10 CFR 73.59.
* * * * *
    (e) * * *
    (3) In addition to the right to obtain records from the FBI in 
paragraph (e)(1) of this section and the right to initiate challenge 
procedures in paragraph (e)(2) of this section, an individual 
participating in an NRC adjudication and seeking to obtain Safeguards 
Information for use in that adjudication may appeal a final adverse 
determination by the NRC Office of Administration to the presiding 
officer of the proceeding. The request may also seek to have the Chief 
Administrative Judge designate an officer other than the presiding 
officer of the proceeding to review the adverse determination.
* * * * *

0
49. Section 73.59 is revised to read as follows:


Sec.  73.59.  Relief from fingerprinting, identification and criminal 
history records checks and other elements of background checks for 
designated categories of individuals.

    Fingerprinting, and the identification and criminal history records 
checks required by section 149 of the Atomic Energy Act of 1954, as 
amended, and other elements of background checks are not required for 
the following individuals prior to granting access to Safeguards 
Information, including Safeguards Information designated as Safeguards 
Information-Modified Handling as defined in 10 CFR 73.2:
    (a) An employee of the Commission or the Executive Branch of the 
United States government who has undergone fingerprinting for a prior 
U.S. government criminal history records check;
    (b) A member of Congress;
    (c) An employee of a member of Congress or Congressional committee 
who has undergone fingerprinting for a prior U.S. government criminal 
history records check;
    (d) The Comptroller General or an employee of the Government 
Accountability Office who has undergone fingerprinting for a prior U.S. 
Government criminal history records check;
    (e) The Governor of a State or his or her designated State employee 
representative;
    (f) A representative of a foreign government organization that is 
involved in planning for, or responding to, nuclear or radiological 
emergencies or security incidents who the Commission approves for 
access to Safeguards Information, including Safeguards Information 
designated as Safeguards Information--Modified Handling;
    (g) Federal, State, or local law enforcement personnel;
    (h) State Radiation Control Program Directors and State Homeland 
Security Advisors or their designated State employee representatives;
    (i) Agreement State employees conducting security inspections on 
behalf of the NRC pursuant to an agreement executed under section 
274.i. of the Atomic Energy Act of 1954, as amended;
    (j) Representatives of the International Atomic Energy Agency 
(IAEA) engaged in activities associated with the U.S./IAEA Safeguards 
Agreement who have been certified by the NRC;
    (k) Any agent, contractor, or consultant of the aforementioned 
persons who has undergone equivalent criminal history records and 
background checks to those required by 10 CFR 73.22(b) or 73.23(b).

0
50. A new Appendix I to part 73 is added to read as follows:

APPENDIX I TO PART 73--CATEGORY 1 AND 2 RADIOACTIVE MATERIALS

                                Table I-1--Quantities of Concern Threshold Limits
----------------------------------------------------------------------------------------------------------------
                                                Category 1                              Category 2
                                --------------------------------------------------------------------------------
         Radionuclides                                      Curies                                  Curies
                                    Terabecquerels       (TBq)(Ci)\1\       Terabecquerels       (TBq)(Ci)\1\
----------------------------------------------------------------------------------------------------------------
Americium-241..................  6 x 10\1\..........  1.6 x 10\3\.......  6 x 10-\1\........  1.6 x 10\1\
Americium-241/Be...............  6 x 10\1\..........  1.6 x 10\3\.......  6 x 10-\1\........  1.6 x 10\1\
Californium-252................  2 x 10\1\..........  5.4 x 10\2\.......  2 x 10-\1\........  5.4
Curium-244.....................  5 x 10\1\..........  1.4 x 10\3\.......  5 x 10-\1\........  1.4 x 10\1\
Cobalt-60......................  3 x 10\1\..........  8.1 x 10\2\.......  3 x 10-\1\........  8.1

[[Page 63581]]

 
Cesium-137.....................  1 x 10\2\..........  2.7 x 10\3\.......  1.................  2.7 x 10\1\
Gadolinium-153.................  1 x 10\3\..........  2.7 x 10\4\.......  1 x 10\1\.........  2.7 x 10\2\
Iridium-192....................  8 x 10\1\..........  2.2 x 10\3\.......  8 x 10-\1\........  2.2 x 10\1\
Promethium-147.................  4 x 10\4\..........  1.1 x 10\6\.......  4 x 10\2\.........  1.1 x 10\4\
Plutonium-238..................  6 x 10\1\..........  1.6 x 10\3\.......  6 x 10-\1\........  1.6 x 10\1\
Plutonium-239/Be...............  6 x 10\1\..........  1.6 x 10\3\.......  6 x 10-\1\........  1.6 x 10\1\
Radium-226.....................  4 x 10\1\..........  1.1 x 10\3\.......  4 x 10-\1\........  1.1 x 10\1\
Selenium-75....................  2 x 10\2\..........  5.4 x 10\3\.......  2.................  5.4 x 10\1\
Strontium-90 (Y-90)............  1 x 10\3\..........  2.7 x 10\4\.......  1 x 10\1\.........  2.7 x 10\2\
Thulium-170....................  2 x 10\4\..........  5.4 x 10\5\.......  2 x 10\2\.........  5.4 x 10\3\
Ytterbium-169..................  3 x 10\2\..........  8.1 x 10\3\.......  3.................  8.1 x 10\1\
----------------------------------------------------------------------------------------------------------------
\1\ The regulatory standard values are given in TBq. Curie (Ci) values are provided for practical usefulness
  only and are rounded after conversion.

Calculations Concerning Multiple Sources or Multiple Radionuclides

    The ``sum of fractions'' methodology for evaluating combinations of 
multiple sources or multiple radionuclides, is to be used in 
determining whether a facility or activity meets or exceeds the 
threshold limits and is thus subject to the physical and/or information 
security requirements of this part.
    I. If multiple sources and/or multiple radionuclides are present in 
a facility or activity, the sum of the fractions of the activity of 
each of the radionuclides must be determined to verify the facility or 
activity is less than the Category 1 or 2 limits of Table 1, as 
appropriate. Otherwise, if the calculated sum of the fractions ratio, 
using the following equation, is greater than or equal to 1.0, then the 
facility or activity meets or exceeds the threshold limits of Table 1 
and the applicable physical and/or information security provisions of 
this part apply.
    II. Use the equation below to calculate the sum of the fractions 
ratio by inserting the actual activity of the applicable radionuclides 
from Table 1 or of the individual sources (of the same radionuclides 
from Table 1) in the numerator of the equation and the corresponding 
threshold activity limit from Table 1 in the denominator of the 
equation. Sum of the fraction calculations must be performed in metric 
values (i.e., TBq) and the numerator and denominator values must be in 
the same units.
R1 = activity for radionuclides or source number 1
R2 = activity for radionuclides or source number 2
RN = activity for radionuclides or source number n
AR1 = activity limit for radionuclides or source number 1
AR2 = activity limit for radionuclides or source number 2
ARN = activity limit for radionuclides or source number n
[GRAPHIC] [TIFF OMITTED] TR24OC08.000

PART 76--CERTIFICATION OF GASEOUS DIFFUSION PLANTS

0
51. The authority citation for part 76 is revised to read as follows:

    Authority: Secs. 161, 68 Stat. 948, as amended, secs. 1312, 
1701, as amended, 106 Stat. 2932, 2951, 2952, 2953, 110 Stat. 1321-
349 (42 U.S.C. 2201, 2297b-11, 2297f); secs. 201, as amended, 204, 
206, 88 Stat. 1244, 1245, 1246 (42 U.S.C. 5841, 5842, 5845, 5846). 
Sec. 234(a), 83 Stat. 444, as amended by Pub. L. 104-134, 110 Stat. 
1321, 1321-349 (42 U.S.C. 2243(a)); sec. 1704, 112 Stat. 2750 (44 
U.S.C. 3504 note); Energy Policy Act of 2005, Pub. L. No. 109-58, 
119 Stat. 549 (2005). Sec. 76.7 also issued under Pub. L. 95-601, 
sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). Sec. 76.22 is also issued 
under sec. 193(f), as amended, 104 Stat. 2835, as amended by Pub. L. 
104-134, 110 Stat. 1321, 1321-349 (42 U.S.C. 2243(f)). Sec. 76.35(j) 
also issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152).

0
52. In Sec.  76.113, paragraph (c) is revised to read as follows:


Sec.  76.113  Formula quantities of strategic special nuclear 
material--Category I.

* * * * *
    (c) The requirements for the protection of Safeguards Information 
pertaining to formula quantities of strategic special nuclear material 
(Category I) are contained in Sec. Sec.  73.21 and 73.22 of this 
chapter. Information designated by the U.S. Department of Energy (DOE) 
as Unclassified Controlled Nuclear Information must be protected in 
accordance with DOE requirements.
* * * * *

0
53. In Sec.  76.115, paragraph (d) is added to read as follows:


Sec.  76.115  Special nuclear material of moderate strategic 
significance--Category II.

* * * * *
    (d) The requirements for the protection of Safeguards Information 
pertaining to special nuclear material of moderate strategic 
significance--Category II are contained in Sec. Sec.  73.21 and 73.22 
of this chapter. Information designated by the U.S. Department of 
Energy (DOE) as Unclassified Controlled Nuclear Information must be 
protected in accordance with DOE requirements.

0
54. In Sec.  76.117, paragraph (c) is added to read as follows:


Sec.  76.117  Special nuclear material of low strategic significance--
Category III.

* * * * *
    (c) The requirements for the protection of Safeguards Information 
pertaining to special nuclear material of low strategic significance--
Category III are contained in Sec. Sec.  73.21 and 73.22 of this 
chapter. Information designated by the U.S. Department of Energy (DOE) 
as Unclassified Controlled Nuclear Information must be protected in 
accordance with DOE requirements.

PART 150--EXEMPTIONS AND CONTINUED REGULATORY AUTHORITY IN 
AGREEMENT STATES AND IN OFFSHORE WATERS UNDER SECTION 274

0
55. The authority citation for part 150 is revised to read as follows:

    Authority: Sec. 161, 68 Stat. 948, as amended, sec. 274, 73 
Stat. 688 (42 U.S.C. 2201, 2021); sec. 201, 88 Stat. 1242, as 
amended (42 U.S.C. 5841); sec. 1704, 112 Stat. 2750 (44 U.S.C. 3504 
note); Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594 
(2005).

[[Page 63582]]

    Sections 150.3, 150.15, 150.15a, 150.31, 150.32 also issued 
under secs. 11e(2), 81, 68 Stat. 923, 935, as amended, secs. 83, 84, 
92 Stat. 3033, 3039 (42 U.S.C. 2014e(2), 2111, 2113, 2114). Section 
150.14 also issued under sec. 53, 68 Stat. 930, as amended (42 
U.S.C. 2073).
    Section 150.15 also issued under secs. 135, 141, Pub. L. 97-425, 
96 Stat. 2232, 2241 (42 U.S.C. 10155, 10161). Section 150.17a also 
issued under sec. 122, 68 Stat. 939 (42 U.S.C. 2152). Section 150.30 
also issued under sec. 234, 83 Stat. 444 (42 U.S.C. 2282).


0
56. In Sec.  150.15, paragraph (a)(9) is added to read as follows:


Sec.  150.15  Persons not exempt.

    (a) * * *
    (9) The requirements for the protection of Safeguards Information 
in Sec.  73.21 and the requirements in Sec.  73.22 or Sec.  73.23 of 
this chapter, as applicable.
* * * * *

    Dated at Rockville, Maryland this 14th day of October 2008.

    For the Nuclear Regulatory Commission.
Annette L. Vietti-Cook,
Secretary of the Commission.
[FR Doc. E8-24904 Filed 10-23-08; 8:45 am]
BILLING CODE 7590-01-P